June 12, 2012

Why Use A Local Agent To Treat A Systemic Disease?

There is a two-fold reason for why the share price is where it is. The first reason relates to PV-10 being a local agent. The second relates to there being no "name" in the stock (I will address in a subsequent post).

Why use a local agent to treat a systemic disease? This, by far, probably is the biggest issue management must deal with in discussions with very serious life science constituents, including the FDA, Big Pharma, fundamental life science investors and equity research.

To be clear, Provectus is pursuing a focused label, one that enables intralesionally-deliver PV-10 to be local-regionally treat Stage 3 and early Stage 4 patients with metastatic melanoma. The receipt of the SPA, either this month (management's guidance: best case Q2; me: later this month) or next month (management: base case Q3; me: if not late-June, than early-July), describes the specifics of the regulatory path for PV-10 as a local agent. As a result, the share price should pop to reflect the addressable market opportunity of the local agent: use the local agent to treat the local disease.

Should Provectus stock rise to $2 or $3 per share (irrespective of what capital market dynamics occur because of a move from the OTC to the NASDAQ, a $200-300 million market capitalization would not seem unreasonable for a local agent-oriented biotechnology company. Vical, for example, has a market cap of about $265MM.

But, no local agent has ever been approved by the FDA for systemically treating cancer. And the addressable market opportunity to systemically treat MM and other cancer indications is the home run, and when the market cap could rise into the billions.

No one questions now that PV-10 works systemically, but life science constituents simply do not know why the drug works systemically. Until they understand, the default view will be to use the local agent to treat the local disease -- by definition. The release of more information from Moffitt, to elucidate why the drug works systemically, to further demonstrate its systemic efficacy, to further demonstrate is multi-indication viability, and to demonstrate its systemic benefit on humans, greatly informs those who want to understand why the drug works the way it does.

As a result, this kind of elucidation provides a forum for the FDA to analyze, assess and, we hope, approve a local agent for systemically treating cancer: accelerated approval.

This is why coupling the SPA milestone with the additional Moffitt work is important. The proximity to a dramatic rise in the share price, reflective of immense intrinsic value, has never been closer in the history of the company.

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