Overall Survival

Overall survival (OS) is the so-called gold standard for trial endpoint. Several years back, the FDA issued an oncology guidance document stating that overall survival is usually preferred, but progression free survival (PFS) may be appropriate in some cases (link). Other gold standards include improving “quality of life” measures, reducing toxicity of treatment, and reducing the cost of treatment.

The company has underreported OS; there are snippets of information about OS from the MM Phase 1 trial and the first cohort of the MM Phase 2 trial. Full MM Phase 2 trial data related to OS, however, only will be available when the peer-reviewed article on this trial is published in the globally recognized periodical management says may come out later this year or early next year.

Quite some time back, I wanted to compare what OS data was available for PV-10 (see here and here) to other studies. Korn et al. (2008) performed a meta-analysis of 42 MM phase 2 metastatic melanoma studies (70 arms) that included 2,100 patients.

I did compare. Fully understanding the caveats of comparing trials and comparisons themselves -- comparisons provide useful information, but of course one does not digest them in a vacuum -- I gained robust knowledge.

In Figure 3 of their paper (below), the authors present "event rates for each trial arm versus the sample size in the trial arm: (A) overall survival (OS) rates at 1 year, (B) progression-free survival (PFS) rates at 6 months. The solid lines are 95% confidence bounds. The dotted line is the overall 1-year survival rate (25%) or the overall 6-month PFS rate (15%). (A small number of plotted points have been slightly jittered to avoid complete overlap.)‏"

I added the OS data available for the first cohort of 40 patients of PV-10's MM Phase 2 trial. Note where PV-10 sits on the two graphs for 1-year OS and 6-month PFS.

As a comparison, a couple of years ago, OncoVEX(GM-CSF)'s 50-patient MM Phase 2 trial achieved a 0.58 (58%) 1-year survival figure and compared (positioned) OncoVEX on Korn et al.'s graph.

Amgen acquired BioVex, the maker of OncoVEX, announcing the signing of the deal in January 2011, for an upfront payment of $425 million upfront and [likely up to] $575 million in additional development and sales milestones. At the time, Michael Yee, an analyst with RBC Capital markets, told Bloomberg: "It's a call option on a late-stage, potential blockbuster drug for Amgen." BioVex commenced OncoVEX's pivotal MM Phase 3 trial in April 2009.

Now, it is quite possible that, when the full Phase 2 data is published, the orange dots of PV-10 move upward (better 1-year OS, better 6-month PFS) and to the right (more patients; i.e., n=80). The conservative nature of the principal investigators and, thus, their initial data analyses and presentations could differ (be lower) from the results generated by a suitably conducted, appropriate and extensive data validation process, one that I imagine would or will have been undertaken before the Phase 2 data would have been or will be released for publication.

BioVex heralded OncoVEX's position on Korn et al.'s graph by noting that no study fell outside the 95% confidence intervals denoted by the solid lines.

What would be your perspective of Provectus and PV-10, given the positioning of the orange dots for the first cohort and the entire trial?

• A higher 1-year OS than OncoVEX (upward), and
• A larger trial-arm sample size than OncoVEX (to the right).

2nd European PostASCO Melanoma Meeting 2012

Provectus is a bronze sponsor of and key opinion leaders (e.g., Agarwala, Eggermont, Sondak) associated with the company are attending and speaking at the 2nd European PostASCO Melanoma Meeting 2012 in Munich, from June 21 to 22.

Dr. Sanjiv Agarwala is speaking about PV-10 in an Update on Immunotherapies session on the 22nd.

Further CEO Letter Thoughts: The SPA

During 2011 we held our second and third meetings with the FDA to discuss the design of a pivotal Phase 3 randomized controlled trial ("RCT") suitable for Special Protocol Assessment ("SPA"). In December the FDA provided us further guidance regarding the submission of our Phase 3 protocol for review, notifying us that they did not require an additional end-of-Phase 2 meeting. Using the recommendations that we received from senior FDA officials regarding patient population and primary endpoint, we are requesting SPA review of our protocol. While the review process could occur in as little as 45 days from the date of submission, we expect it will be an iterative process, and thus, more time may be required to work with the FDA on a study design agreement. This, we believe, represents a major step for our company, probably the most significant achievement yet, in our pathway to approval for PV-10.

The paragraph above is from the recent CEO letter.

I think I have a very good understanding of management's work flow, process and approach to matters directly or broadly under their control. I also think I have a very good understanding of their ability to assess situations, and to determine whether situations or processes are typical or atypical (i.e., atypical good = unique, while atypical bad = ugh). Finally, I observed their reflections on working with the FDA; mainly, that agency folks have been collaborative and helpful.

Assume, for now, that management submitted the final protocol before the end of the first quarter (i.e., the last business day was March 30), per their comments in the January 18 PR. If management submitted the final protocol by the end of the quarter (not earlier) and if the 45-day period is a time limit (rather than merely guidance, and not hard and fast), then the earliest date an SPA could be achieved would be around May 15.

Based on guidance from management, the equity research analysts think the SPA could arrive in Q2 (a "best case:" now through the end of June) or Q3 (a "base case:" some time during the period of July to September). I might refine this to late-Q2 or early-Q3.

As I try to better understand the SPA process in which Provectus has been and currently is engaged, it appeared to me, and it still does, that the process was, and is, unique or atypical.

OncoVEX(GM-CSF) and Allovectin-7 received SPAs with progression free survival (PFS)-type primary endpoints for their Phase 3 trials from the Center for Biologics Evaluation and Research's (CBER's) Office of Oncology Drug Products, which was reorganized into the Office of Hematology Oncology Products (OHOP) in 2011. The FDA began the task of moving biological products from CBER to CDER in 2003.

PFS is viewed as an appropriate endpoint for local agents since, by definition, the local agent is not directly treating the patient systemically.

CDER, from whom Provectus initially sought its SPA, had no experience with local agents and the SPA process for melanoma. It was their, CDER's, first time, and the company was making headway with this organization. Both management and their regulatory consultants fully believed and thought CDER was going to award Provectus the SPA last summer (i.e., Q2 or Q3). I might refine this to late-Q2 (June) or early-Q3 (July) of 2011.

Both CBER and CDER staff were reshuffled into DOP1 and DOP2 (but CBER did not become OHOP). The Division of Oncology Products 1 (DOP1) and the Division of Oncology Products 2 (DOP2) lie in OHOP.

Dr. Robert Justice, the head of CDER's former Division of Drug Oncology Products, heads DOP1. He originally was responsible for PV-10 [at CDER].

Dr. Patricia Keegan, formerly of CBER and the head of CDER's former Division of Biologic Oncology Products, heads DOP2. She now is responsible for PV-10.

Many CBER officials and some CDER officials went to DOP2. As a result, Provectus management continued to work with some people with whom they previously worked, and also began working with new people who formerly were in CBER. These new people were familiar with melanoma and local agents in development; namely, OncoVEX(GM-CSF) and Allovectin-7.

If an SPA is to be had in late-Q2 or early-Q3 of 2012, it now appears the FDA's reorganization probably set the company back about a year. Provectus essentially re-started the SPA process by working with a new group, DOP2. Certain DOP2 personnel, not analogous to management's original CDER experience, do have previous experience with local agents and the SPA process for melanoma. It is not completely their, DOP2's, first time. And, like with CDER, management is making headway with DOP2.

I think Provectus is very close to getting its SPA for the pivotal MM Phase 3 trial.

DOP2 quickly came up to speed because the group knew both PV-10 (Rose Bengal) and melanoma. The  DOP2 reorganization did not appear to be completed until December or early-Q1 of this year (thus, the FDA reorganization announced around mid-September 2011 still took more time to be completed).

The working relationship with DOP2 has been and is collaborative and helpful. The SPA process DOP2 has been and is following for PV-10 itself appears to be atypical or unique. The group's interaction with management also appears to be unique. Perhaps as unique as PV-10 itself is.

As such, and since the situation does appear to be truly fluid (and unique), it is hard to set specific expectations on the timing of Provectus' SPA process outside of what guidance management already has given: best case Q2, base case Q3. Or, refined slightly, best case late-Q2, base case early-Q3.

Whether the SPA arrives by May 15, late-Q2 (in June) or early-Q3 (in July), there is all the reason to believe and think it will come.

HemOnc Today - Melanoma and Cutaneous Malignancies Conference (update)

I'm finally getting around to beginning to blog notes from and thoughts about the HemOnc Today - Melanoma and Cutaneous Malignancies Conference.

One of the key items talked about and circulated during and after the conference was a table in a presentation entitled Intralesional Therapy For Systemic Disease: Where Will It Fit In? by Dr. Robert Andtbacka, an assistant professor of surgery at the Huntsman Cancer Institute at the University of Utah. As far as I can tell, Dr. Andtbacka has no connection to or relationship with Provectus.

In the table, below, PV-10 compares very favorably to other intralesional therapies:

Dr. Andtbacka's presentation was thorough, reviewing available intralesional therapies and those in development, response rates of and adverse reactions to intralesional therapies, and the role of intralesional therapies in the Stage IV disease state for melanoma. More later...

CEO Letter Thoughts

PV-10
Metastatic Melanoma


During 2011 we held our second and third meetings with the FDA to discuss the design of a pivotal Phase 3 randomized controlled trial ("RCT") suitable for Special Protocol Assessment ("SPA"). In December the FDA provided us further guidance regarding the submission of our Phase 3 protocol for review, notifying us that they did not require an additional end-of-Phase 2 meeting. Using the recommendations that we received from senior FDA officials regarding patient population and primary endpoint, we are requesting SPA review of our protocol. While the review process could occur in as little as 45 days from the date of submission, we expect it will be an iterative process, and thus, more time may be required to work with the FDA on a study design agreement. This, we believe, represents a major step for our company, probably the most significant achievement yet, in our pathway to approval for PV-10.


⬆ I will address this in a separate post.


As you may recall, too, the Australian Therapeutic Goods Administration ("TGA") has agreed in November 2010 to the same primary endpoint of progression free survival that has been proposed to the FDA. In our meetings with TGA we discussed the use of interim data from the first half of Phase 3 study subjects, in conjunction with safety data collected in earlier studies of PV-10 for melanoma, to allow early evaluation for marketing approval in Australia for metastatic melanoma. TGA agreed that these data should be sufficient for this review if the analysis confirmed efficacy.

⬆ This appears to be just a recap.


In addition, nonclinical studies, designed to characterize the immunologic response to PV-10 chemoablation, have been conducted by researchers at the Moffitt Cancer Center in Tampa, Florida, with initial results reported in March 2012 at the Society of Surgical Oncology Annual Meeting. Paul Toomey, M.D., presented his work and that of his colleagues, confirming that PV-10 chemoablation of melanoma lesions leads to induction of systemic, tumor-specific anti-tumor immunity. Additional nonclinical studies are underway with confirmatory clinical studies planned. This work is fundamental for full characterization of PV-10's systemic benefit and may provide pivotal support for accelerated approval in the U.S.

⬆ I previously posted that the full scope of Moffitt's work -- completed, in-process and in the near future -- makes accelerated approval a real possibility.


Liver Metastasis


In April 2011 we received orphan drug designation from the FDA for Rose Bengal, the active ingredient in PV-10, for the treatment of hepatocellular carcinoma ("HCC"), the most common form of primary liver cancer. This designation entitles Provectus to exclusive marketing rights for PV-10 for HCC in the U.S. for up to seven years if we are the first company to receive marketing approval for this therapeutic drug product. We are also eligible to apply for a waiver from the FDA of certain user fees required by the Prescription Drug User Fee Act ("PDUFA"). In other words, once regulatory approval is received, orphan drug designation provides assurance for the value of our company's proprietary property, grants us market exclusivity, thereby affording us both financial and regulatory benefits. This orphan drug designation for HCC is in addition to that received for metastatic melanoma in December 2006.

⬆ This appears to simply highlight what management has been doing to move PV-10 for HCC along.


We are conducting nonclinical drug-drug interaction studies to verify safety of combining PV-10 with sorafenib, the standard of care for nonresectable locally advanced primary liver cancer. This supports advanced development of PV-10 for HCC in clinical studies comparing PV-10 with the standard of care versus the standard of care alone, to demonstrate an overall survival benefit of treating HCC with PV-10. We expect to provide further guidance on this important indication when we are closer to commencing a Phase 2 or Phase 2/3 clinical study.

⬆ I find it interesting to read that non-clinical drug-drug interaction studies to verify safety of combining PV-10 with sorafenib are ongoing (i.e., confirming the orthogonality of PV-10 and sorafenib). I do not have an expectation of the potential timing of a Phase 2 or Phase 2/3 trial yet.


Breast Cancer and Other Oncology Indications


One of our many objectives during 2011 was to demonstrate that PV-10 has multi-indication potential, and we intend to continue that quest in 2012. We are now in a position for a Phase 2 study in recurrent breast carcinoma, following the completion of our Phase 1 study several years ago. We look forward to being able to report further progress on this indication as well. Furthermore, we have shown success with PV-10 in treating pancreatic cancer in nonclinical studies and are considering a proof of concept clinical study in this equally important indication.

⬆ I take two things away from this. First, the company can start a Phase 2 trial, and second, they appear to me to be assessing whether to start such a trial. I also find it interesting to read about the success in treating pancreatic cancer in non-clinical studies. If you recall, Craig mentioned this in talks late last year.

Compassionate Use Program


I am also pleased to report that our Compassionate Use Program for PV-10 for patients with non-visceral cancers continues, with over 70 patients enrolled in six centers across the U.S. and Australia. The protocol for this program enables subjects to undergo more frequent and extensive treatments with PV-10 over a longer period of time than was allowed under the protocols used for the Phase 1 and 2 trials. We believe this dose regimen serves as a blueprint for our planned Phase 3 clinical trial for metastatic melanoma.

⬆ I previously posted that the utility of Provectus' compassionate use program, outside of the great benefit it has had and continues to have for patients accepted into it, is not fully appreciated.

PH-10
Psoriasis


Our largest clinical trial to date was completed in 2011. The data from this Phase 2C RCT, which enrolled ninety-nine subjects with mild-to-moderate plaque psoriasis, corroborated the potential effectiveness of PH-10 observed in these patients in our earlier clinical study.

⬆ This appears to be just a recap.


Reaching this milestone has also triggered increased efforts for our company to seek a licensure of PH-10 for the treatment of serious dermatological diseases, which would include psoriasis and atopic dermatitis, another indication for which PH-10 has completed Phase 2 clinical trials. We remain on track to secure a term sheet from a potential partner that would lead to a proposed licensing agreement and the engagement of a financial advisor to effect this transaction.

⬆ This also appears to be just a recap.


We have also successfully completed various dermatological toxicity studies which are appropriate at this stage of development of PH-10. We will work with the FDA to design the remaining toxicity studies necessary to support a New Drug Approval (NDA) filing. Because of the well-tolerated safety profile of Rose Bengal, we are enthusiastic about the potential for widespread acceptance of PH-10 upon eventual expected approval.

⬆ Again, another recap. I think management also is sharing their perspective about the licensing process and prospective partner feedback on PH-10.


PRESENTATIONS AT SCIENTIFIC CONFERENCES


PV-10 was the subject of several scientific presentations this year. Of particular note, Dr. Sanjiv Agarwala, Principal Investigator for the Phase 2 melanoma study, presented data at the European Association of Dermato-Oncology ("EADO") Conference in Nantes, France, in June 2011. This audience of prospective European investigators who specialize in dermato-oncology had a special interest in injectable therapies, and we were encouraged by the level of interest this group had in PV-10, particularly as we prepare for a global Phase 3 trial.

⬆ This appears to be just a recap.


In November 2011, Professor Merrick Ross, M.D., a Principal Investigator for our Phase 2 Melanoma trial, delivered a presentation at the 2011 International Melanoma Congress during the 5th Meeting of Interdisciplinary Melanoma/Skin Cancer Centres meeting in Tampa, Florida. His presentation included a discussion on the role of intralesional therapies for controlling both local disease and their possible effect on systemic disease, such as that which has been shown in Phase 2 testing of PV-10.

⬆ At the HemOnc Today conference in NYC earlier this month, Dr. Ross publicly said PV-10 should be approved. I have much more blog post material on PV-10 and the HemOnc Today conference.


We expect additional presentations at scientific conferences this year that will be announced when appropriate, as well as various peer-reviewed publications either this year or next.

⬆ Management is trying to push for the publication of the MM Phase 2 and/or HCC Phase 1 trial results in globally recognized peer-reviewed periodicals in 2012. Only time will tell if they are successful.

CORPORATE DEVELOPMENTS


Prominent leaders joined our Board of Directors and Corporate Advisory Board this year. Alfred E. Smith IV, Senior Advisor for the Marwood Group, joined our Board of Directors. Mr. Smith has extensive financial and healthcare experience. His knowledge of business and medicine has already helped provide our company with guidance on several drug development and corporate strategies.

⬆ This appears to be just a recap.

Dr. Craig Eagle, MD, Vice President of Strategic Alliances and Partnerships for the Oncology unit at Pfizer, and Stuart Fuchs, Chairman and CEO of CognoSPECTi, joined our Corporate Advisory Board. Dr. Eagle's experience in drug development, and Mr. Fuchs's venture capital and investment banking experience in the biotech industry, are great assets to our company as we further our path towards commercialization. Mr. Fuchs joined the Corporate Advisory Board after having served eight years on our Board of Directors. We expect to appoint others to our respective Boards this year and next.

⬆ Comments related to Eagle and Fuchs also appear to be just a recap. I think the comment related to the potential future appointments to the Corporate Advisory Board and the Board of Directors is very interesting to read.

Our balance sheet remains strong, with $7.7 million in cash and cash equivalents, providing us ample cash to fund our operations through 2013. Since we seek to spin-off our non-core subsidiaries, and concentrate our efforts on our drug development activities, in December 2011 we completed an unregistered offering of Units. Each Unit, which included shares of common stock in Pure-ific and a warrant to purchase ¾ share of the Company's common stock, were sold to accredited investors. The net proceeds of this transaction are expected to be used to spin-off Pure-ific as a new publicly traded company. We plan to fund and spin-off the remaining four non-core subsidiaries as well.

⬆ This also appears to be just a recap.

Also, we are in the process of implementing a new executive bonus plan that is expected to be based upon certain additional performance-based criteria, such as stock price and the signing of partnership agreements. This plan will replace the prior one which had been based on the attainment of certain scientific, medical and clinical milestones. We will disclose the details of the new plan once it is finalized.

⬆ I think the comments related to a new bonus compensation plan are interesting to read. I plan to follow-up with more due diligence, analysis and commentary on this topic.

Topics for Future Posts

Mammon at the Silicon Investor stock chat board for Provectus raised severals topics for discussion. I'm going to try to blog my thoughts on these topics:

• What are the pros and cons of doing a pivotal MM phase III trial with or without a partner?
• What a potential dermatology deal might look like?
• How does Provectus compare to other biotechnology companies that have recently been bought out?
• Is there a chance for accelerated approval given Moffitt's immunology-related work?
• How do the psoriasis Phase 2c results compare to other gels (not systemic treatments)?
• How might PV-10 work as a first-line treatment?
• What is big pharma's perception of Provectus?
• When does Provectus' share price start representing its true (or intrinsic) value?

INVEST Tennessee Equity Conference

Management is presenting at the INVESTTennessee Equity Conference on June 21.

Provectus Updates Shareholders in Its Annual CEO Letter

The CEO letter is out. I have several comments about it; however, I am still doing my analysis on the substance of the letter.


More to come...

Clinical Value Proposition (update)

I previously blogged on the clinical value proposition here. Below is an updated version:

Medical Food for Thought...

Since the start of my due diligence, and continuing today, I have routinely questioned and queried:

• Principal investigators and medical researchers associated with the company;
• Physicians and medical researchers unassociated with Provectus but knowledgable about PV-10; and
• "Regular" hematologist-oncologists and oncologists.

I could be well into the double digits of folks with whom I've interacted.

The reaction of these people to PV-10 has been dynamic (or, perhaps better described, fluid), rather than static. Opinions and views change or increase over time. It is eminently clear the typical response now is coalescing around what essentially is the same response: very promising, should be approved, very interesting, how can I get it?, etc.

Widespread acceptance has overtaken and eliminated "witches' brew" or "too good to be true." The data, both local regional and systemic, has driven and will continue to drive the value.

Roth: "The best intralesional drug" [for metastatic melanoma]

Roth's purported statement in The Fly On The Wall news break below (probably derived from Roth analyst Yale Jen) is most likely based on, among other things, a table of intralesional injection response rates shown at the conference that compared intralesional therapies IL-2, BCG, Allovectin-7, OncoVEX and PV-10.

Understanding the caveats of comparing trials, PV-10's response rates for injected lesions, non-injected lesions and non-injected systemic lesions exceeded those of both Vical's Allovectin-7 and Amgen/BioVex's OncoVex.

IL-2 and BCG response rates for injected lesions were higher than PV-10's; however, response rates for these two therapies were zero or smaller than PV-10's for non-injected lesions (zero for IL-2) and non-injected systemic lesions (zero for both).

HemOnc Today & Roth Capital

Itty Bitty Hits for April 15

In addition to Dr. Ross' presentation, PV-10 unexpectedly appeared in 2 other HemOnc Today conference presentations on Friday.


The HemOnc Today conference demonstrated that key opinion leaders now realize the importance of PV-10 by itself, and also in combination with other therapies. As I collect distributable ("postable") material, I will post them for you to read, together with analysis as appropriate.

I don't know whether the CEO letter will come out this week or the following one. I thought it would come out earlier. Nevertheless, I am looking for information about and insight into several items. Based on what I read, I can be more effective with and forthcoming about my analysis.


Because the full psoriasis p2 trial data set has not yet been shared with prospective partners (only the top-line results have been shared), I think some more time must pass before we realistically can expect term sheet discussions (and the auction process of the dermatology business) to begin in earnest.

Thoughts on Moffitt

I have been trying to succintly articulate the narrative of the impact or potential impact of the Moffitt results presented last month, the cancer center & research institute's on-going work that has not yet been presented and contemplated future work.

More than just the impact of the results or the outcome of the work, which appear to be sublime, what are the takeaways?

Moffitt:

• Independently confirmed (demonstrated the reproducibility of) the local and systemic effects (benefits) of PV-10, although the primary focus of the work was the drug's systemic (bystander) effect;
• Identified quintessential immune-mediated response: Splenocytes from PV-10 treated mice produced interferon-γ in response to B16-F10 melanoma cells (p<0.05); and,
• As important as reproducing Craig et al.'s work, demonstrated the veracity of the founders' initial work. Moffitt's work, to me, [continue to] show that Craig, Tim and Eric are accurate and honest. What they say is what we get.

This last is crucial to appreciating the veracity of other ideas, proof-of-concept work, pre-clinical work (e.g., murine models, animal tumors) and non-trial clinical work (e.g., compassionate use program) and, thus, their highly likely potential and value upon eventual implementation.

We have yet to find know if Moffitt has [successfully]:

• Demonstrated multi-indication viability. That is, has Moffitt successfully repeated their approach and shown comparable systemic effects using other cancers besides metastatic melanoma?
• Elucidated the breadth and depth, so to speak, of the immune-mediated response and systemic effect?

Interestingly, I think Moffitt's work also provides:

• A very nice story for some medical academicians and clinicians to better understand, more comfortably grasp onto and/or more heartily embrace the first-line, widespread and pervasive use of PV-10;
• A very nice marketing prop for some big pharma executives to communicate the value proposition and value of the first-line, widespread and pervasive use of PV-10; and,
• Provides internal justification for the FDA to grant accelerated approval for the use of PV-10 to treat metastatic melanoma.

Provectus Pharmaceuticals Started At Buy By Roth Capital

Roth Capital Partners initiated equity research coverage of Provectus this week with a Buy rating and a $3.00 12-month price target. See here for:

• The research note,
• The full report, and
• The financial model.

Roth initiated coverage because of their biotech analyst Dr. Yale Jen, who previously covered Provectus for Maxim and was very knowledgeable of Provectus and PV-10/PH-10. See here (read Provectus has a new lead research analyst covering them at Maxim Group). Jen had a $3.50 12-month price target while he was at Maxim (his last note was January 18).

There are several items of varying interest in Jen's initiation note. One that stands out is this:

"Substantial unmet needs exist for advanced melanoma treatment despite the entrants of two recently-approved drugs. One of the major investor concerns is whether PV-10 would have an appropriate disease setting in the melanoma space to exhibit its value given two new drugs [Yervoy from Bristol-Myers Squibb (BMY – NC) and Zelboraf from Roche (RHHBY – NC)] recently (both in 2011) have been approved in the U.S. and Europe as treatment for late stage (Stage IIIb, IIIc and Stage IV) melanoma. We view this as an overblown concern. First, despite Yervoy demonstrating improved median OS (mOS) benefits from its pivotal clinical study, the shortcoming of the drug is amore serious side effect profile (with a Black Box warning) and high costs (~$120,000 annually). In addition, although Yervoy’s approved indication broadly covers late stage melanoma (Stage III and IV), approximately 90% of patients in the Yervoy pivotal trial were of Stage IV M1b and IV M1c; while Stage III patients accounted for only 1.5%. Together, we believe Yervoy could be used more appropriately for Stage IV melanoma patients if a more fitting therapy is available for Stage III patients and should be reserved for patients as potentially a last-resort option. Further, in current real world practice, Yervoy has been prescribed more for late stage, instead of Stage III, melanoma patients. Zelboraf (vemurafenib) is indicated for the treatment of patients with unresectable or metastatic melanoma with BRAF v600E mutation (account for ~46% of total cases) as detected by an FDA-approved test. Together, given the significant differences of the five-year survival rate exit between Stage IIIC and Stage VI melanoma (40% vs. 15%), in our opinion, it would be valuable to treat and prevent Stage III melanoma patients from advancing into Stage IV. As such, we believe PV-10, if clinically successful, could fulfill this unmet medical need, particularly with its lower cost and relatively easy administration. We estimate annual peak market potential for PV-10 in melanoma could reach $380MM based on a price assumption for PV-10 in the U.S. of $5,100 per vial with average annual treatment of approximately 6 vials, or annual costs of $35,000."

Rodman & Renshaw, Maxim Group and Stonegate Securities currently cover the company. R&R and Maxim have provided investment banking services to the company; primarily or exclusively fund raising or placement services (i.e., PIPEs). All of these investment banks, including Roth, are small boutique banks that cover small cap or smaller companies.

As a reminder, "small cap" is a company with a market capitalization of between $300 million and $2 billion. "Micro cap," a term which more aptly describes Provectus,  is a company with a market capitalization of between $50 million and $300 million. These definitions comes from Investopedia, although people may quibble with the boundaries.

Equity research on Wall Street has been broken for many, many years, pre- and post-2003's Global Research Settlement. And there is no meaningful solution in sight. This is not meant as a criticism of the analysts, but rather the investment banking firms for which they work. There are many good and great analysts who provide insightful and comprehensive coverage of publicly traded companies; however, their salaries and other related expenses still are supplemented or paid for by investment banking revenues. The not-so-dirty-little-secret on Wall Street is "pay-to-play" for non-large companies: Equity coverage in exchange for a deal (e.g., a fund raising or PIPE, an M&A transaction, etc.), or coverage in hopes of a deal.

Getting additional coverage like Roth and, previously, Stonegate, where there is no implicit or explicit promise by Provectus management of investment banking work is no small feat. By investment banking work I am referring to fees generated from fund raising and placements, M&A transactions and deal representation. Investment banking revenues derive from assisting companies involved in raising money and M&A, but also providing ancillary services (e.g., market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities). Roth makes a market in Provectus stock (as does R&R and Maxim).

Another broken aspect of equity coverage is that large cap companies enjoy dramatically more coverage than their smaller counterparts. Goldman Sachs Asset Management (GSAM) produced a white paper in 2011 entitled The Case for a Systematic Approach to Small Cap Investing. In it, they note that small cap firms have less research coverage than large cap firms:

"Large cap firms have over twice the amount of research coverage of small cap firms. As shown in the following chart, small cap firms fall under less analyst scrutiny than their large cap counterparts, as would be expected given their market cap representation as well as the larger number of small cap companies overall. Less coverage in the small cap universe can provide substantial opportunity for active managers to add value in small cap equity investing. We believe a quantitative approach has the ability to effectively track analyst ratings across the entire investment universe and can monitor any changes in analyst sentiment, even for those firms that are less researched, on a daily basis.  

We believe it is more likely that large cap securities, which are more closely followed relative to their small cap counterparts, may have prices that more accurately reflect their intrinsic value. This may provide more return opportunities for small cap equities and lends itself to a quantitative investment approach, where managers can assess the entire universe of securities based on a number of fundamental and behavioral factors."

Coverage by 4 small boutique banks is good. What will be more telling is when coverage comes from larger and top tier investment banks.

It is comforting and impressive to note, however, that the company's unnamed financial adviser is on the list of the link I just provided. Way up the list...

HemOnc Today - Melanoma and Cutaneous Malignancies Conference

The company issued a PR today noting Dr. Ross' presentation at this conference. His presentation, "Update on Intralesional Ablative Therapies," is scheduled to begin at 1:55 p.m. ET. Included in his discussion will be information about PV-10's Phase 2 studies, for which he is a Principal Investigator.

Craig is quoted in the PR as: "We expect Dr. Ross's presentation will give additional information about the Phase 2 trial of PV-10 for metastatic melanoma, and specifically, its systemic effect." Could this additional information be about or related to PV-10's effect on visceral metastases? Ross' update comes on the heels of the release of Moffitt's initial work last month: "...PV-10 chemoablation of melanoma lesions leads to a systemic response and the induction of systemic anti-tumor immunity." (PR)

Dr. Argawala first presented information on Phase 2 visceral metastases at a company meeting/presentation for investors at ASCO 2010:

Triggers

Animals

I am not an elephant! I am not an animal! I am a human being! I am a man! (John Merrick)

I'm revisiting my Repeatability and Reproducibility posts by showcasing (although it is "old" news) the effectiveness of Rose Bengal in animals (cats, dogs, horses) through work carried out by management  and veterinarians.

Recall that, in management stock presentation, we observe a table growing more and more populated by a diverse group of cancer indications that have been successfully treated.

Craig can share numerous stories of dramatic treatment successes of PV-10 in different animals. For example, one of his horse stories is, er, quite long...

The takeaways:

• We see the repeating of local and systemic benefits of PV-10 in animal tumors;

• We see the repeating of this treatment success in animals across a number of indications;

• We see the reproducing of local and systemic benefits by veterianians (not management); and

• We see the reproducing of success by veterianians across multiple indications.

Such as: From East West Veterinary Group in Australia:

Reproducibility

I think of reproducibility as Moffitt Cancer Center & Research Institute attempting to reproduce the features underlying the clinical value proposition of the principal investigators attempting to reproduce the features underlying the clinical value proposition Craig et al. produced.

Did Moffitt reproduce "much better efficacy" in demonstrating the bystander effect that the principal investigators reproduced in human trials that Craig et al. produced in murine trials and animal tumors?


Did Moffitt reproduce "much higher degree of tumor reduction" in demonstrating the bystander effect that the principal investigators reproduced in human trials that Craig et al. produced in murine trials and animal tumors?

Did Moffitt reproduce "both local and systemic effects on diseased tissue" in demonstrating the bystander effect that the principal investigators produced in human trials that Craig et al. produced in murine trials and animal tumors?

Yes, they did.


Were the above -- "much better efficacy," "much higher degree of tumor reduction" and "both local and systemic effects on diseased tissue" -- reproduced across different kinds of indications by Moffitt in demonstrating the bystander effect that different principal investigators reproduced in human trials that Craig et al. produced in murine trials and animal tumors?


We'll have to wait and see...

Repeatability

I want to approach repeatability and reproducibility in a simple, but not simplified, manner.

Let's revisit PV-10's clinical value proposition:

I think of repeatability as Craig et al., the principal investigators and Moffitt Cancer Center & Research Institute attempting to repeat the features underlying the clinical value proposition.

Do we see a repetition of "much better efficacy" in murine trials? In animal tumors? In human trials? In demonstrating the bystander effect? For example, have you examined the comparable disease stage patients from the Phase 1 and 2 metastatic melanoma trials? In particular, the trial population contemplated for the pivotal MM Phase 3 trial? What does efficacy look like?

Do we see a repetition of "much higher degree of tumor reduction" in murine trials? In animal tumors? In human trials? In demonstrating the bystander effect? What if you were to graph the degree of tumor reduction, would the plot look completely and randomly scattered, or would there be a concentration (a pattern, if you will)? How would that pattern look in murine trials? In animal tumors?

Do we see a repetition of "both local and systemic effects on diseased tissue"in murine trials? In animal tumors? In human trials? In demonstrating the bystander effect?

Do the above -- "much better efficacy," "much higher degree of tumor reduction" and "both local and systemic effects on diseased tissue" -- repeat across different kinds of indications? Do we see the same thing? Do we see "much better efficacy," "much higher degree of tumor reduction" and "both local and systemic effects on diseased tissue" in patients sickened by metastatic melanoma? By hepatocellular carcinoma?

Yes, we do.

Compassionate Use Program for PV-10

I do not think we fully appreciate the utility of Provectus' compassionate use program outside of the great benefit it has had for patients accepted into it. Several anecdotal stories of both dramatic and beneficial treatment success have leaked out. Many more have not.

It is up to the doctors running compassionate use programs to publish the results of their treatments. As a result, it is not directly within Provectus management's purvey to publish or formally circulate such information.

We may well have to wait for these doctors (assuming they actually get around to it) to discuss in more depth the success the program has achieved in helping very needy patients, improving trial design (e.g., the pivotal MM Phase 3 trial) and further demonstrating PV-10's clinical value proposition.

The SSO conference was a critically important event in the company's history to date

The Annual Cancer Symposium of the Society of Surgical Oncology in Orlando late last month was a critically important event in the history of the company. As more information comes out about what Moffitt has fully demonstrated, I think it will become clear how seminal Moffitt's work was and is.

Reproducibility. A topic I will blog about in an upcoming post, Moffitt reproduced the outcome of Craig's prior work that first pointed to PV-10 inducing systemic effects (anti-tumor immunologic processes stimulated by PV-10 chemoablation).

Accelerated approval for metastatic melanoma. The full scope of Moffitt's work (completed, in-process and in the near future) makes AA a real possibility. Recall Craig's quote in the company's January PR: "...and whether emerging results from ongoing immunologic mechanism of action studies can be used to support accelerated approval in the U.S."

A systemic treatment. Moffitt's work also buttresses PV-10 as a systemic treatment and, thus, the company's significant valuation hurdle figure.

Questions, questions, questions. More answers now create more questions.

• Moffitt's poster at SSO dealt with metastatic melanoma. Did (Has) Moffitt do (done) work on other indications? If so, what were these other indications: HCC/liver, pancreas, breast, colorectal, etc.?

• When will immunology-related human trials commence (the previously termed Phase 2b trial, I believe)? Q2? Later?

Repeatability vs. Reproducibility vs. Publication

The Nature article provides an opportunity for me to expand upon repeatability and reproducibility, and why these dimensions of Provectus' work underscore my investment thesis.

Repeatability has long been there.

Reproducibility has been as well, but not as much, until now: the results of Moffitt's immunology-related work presented at SSO, and the results of work already done but not yet presented and the results of work to be done.

Publications don't necessarily lead to good products and businesses, or, by themselves, are [clearly] not predictors of good or great outcomes. Repeated and reproduced results generally do and are.

FierceBiotech's take:

"Many Cancer Studies Are Actually Unreliable?"

Littlebits, on the Silicon Investor chat room for Provectus, recently linked to a blog post entitled Many Cancer Studies Are Actually Unreliable? at Pharmalot by Ed Silverman.

Silverman, summarizes a Nature article (the Nature editorial makes a good read, too) as centered around the work of two cancer researchers who reviewed "landmark papers" that were published in leading journals and emanated from reputable laboratories. They observed (a) an overall poor quality of published preclinical data and (b) that the vast majority of this work -- nearly all of it -- could not be replicated.

Bradpalm1 subsequently followed up Littlebits' entry with a link to Derek Lowe's weblog column at Corante on the Nature article entitled Sloppy Science. Lowe's comments are direct, including "I think that this problem has been with us for quite a while, and that there are a few factors making it more noticeable: more journals to publish in, for one thing, and increased publication pressure, for another...But there's no doubt that a lot of putatively interesting results in the literature are not real."

Lowe also links to a Reuters article that provides a damning anecdote:

Part way through his project to reproduce promising studies, Begley met for breakfast at a cancer conference with the lead scientist of one of the problematic studies. 

"We went through the paper line by line, figure by figure," said Begley. "I explained that we re-did their experiment 50 times and never got their result. He said they'd done it six times and got this result once, but put it in the paper because it made the best story. It's very disillusioning." 

Such selective publication is just one reason the scientific literature is peppered with incorrect results.

Publications don't necessarily lead to good products and businesses, or, by themselves, are [clearly] not predictors of good or great outcomes. Repeated and reproduced results generally do and are.