April 29, 2012

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.

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