Article: Oops! 5 Retracted Science Studies of 2012

Article by Christopher Wanjek of LiveScience Bad Medicine.

When you read about medical breakthroughs in the newspapers, you shouldn't get your hopes up. This is not because of journalistic hyperbole or even the fact that cures often are years away from the initial publication of result. 

It seems that an increasing number of scientific studies are just plain wrong and are ultimately retracted. Worse, a study published in October 2012 in the Proceedings of the National Academy of Sciences (uh, if it's true) claims that the majority of retractions are due to some type of misconduct, and not honest mistakes, as long assumed. 

The blog Retraction Watch tracks such retractions and has notified its readers of hundreds of journal-article withdrawals in 2012 alone. The king of retractions, according to Retraction Watch, is Japanese anesthesiologist Yoshitaka Fujii, who falsified data in 172 of 212 of his papers published between 1993 and 2011. All of this came to light in 2012. 

Sadly, fudged studies create false hopes, and they also sully the reputation and publication record of the co-authors, often students, who weren't aware of the fraudulent behavior.

$PVCT: Well, I'll ask him, but I don't think he will be very keen. Uh, he's already got one, you see.

King Arthur: Go and tell your master that we have been charged by God with a sacred quest. If he will give us food and shelter for the night, he can join us in our quest for the Holy Grail. 
French Soldier: Well, I'll ask him, but I don't think he will be very keen. Uh, he's already got one, you see. 
King Arthur: What? 
Sir Galahad: He said they've already got one! 
King Arthur: Are you sure he's got one? 
French Soldier: Oh yes, it's very nice! 

Google {"holy grail" cancer} and you get a long list of stuff. Like with many phrases, the "Holy Grail of [insert of what here]" often (usually, always) is far from the Grail itself. The phrase is ill-used, misused and overused.

What is the Grail? A dish, plate, stone, or cup used by Jesus Christ during The Last Supper and, possibly, later used by Joseph of Arimathea to collect Jesus' blood upon his removal from the cross upon which he had hung. Grail literature divides into two classes. The first concerns King Arthur’s knights visiting the Grail castle or questing after the object; the second concerns the Grail’s history in the time of Joseph of Arimathea. I sourced and copied most of this from the Holy Grail's Wikipedia entry.

In our current lexicon, what does "holy grail" mean? "An object or goal that is sought after for its great significance" Example: "Finding a cure for cancer is the holy grail of medical researchers."

What does "the holy grail for cancer" mean?

• "'Holy Grail' of Cancer Treatment May Have Arrived" (August 11, 2011) -- Using a patient's own immune system
• Holy Grail Of Cancer Research? (July 25, 2009) -- Targeted chemotherapy is able to target and kill cancer cell and leave healthy cells alone
• The “holy grail” of cancer treatment may have arrived (August 12, 2011) -- A cancer patient’s own immune cells can be genetically re-engineered to target and kill cancer cells
• 'Holy Grail' cancer vaccine that blasts tumours in weeks hailed as huge leap in fighting disease (May 17, 2010) -- The vaccine contains DNA and fragments of tumor; these activate only the specific immune cells which target melanoma
• Maltese doctor finds 'holy grail' of cancer treatment (June 27, 2009) -- Maltese doctor finds 'holy grail' of cancer treatment
• The Holy Grail For Cancer (November 10, 2010) -- The “Holy Grail” for bone cancer treatment could be in the form of bacteria modified to kill cancerous cells
• Proteomics is the Holy Grail for Cancer (March 14, 2011) -- Proteomics give us the ability to build a causative model of why the body is not dealing with the cancering like it normally does.
• Medarex's 'Holy Grail' Against Prostate Cancer Causes Surge in Share Price (June 23, 2009) -- Dr Eugene Kwon, of the respected Mayo Clinic in Minnesota, said: 'This is one of the Holy Grails of prostate cancer research. We have been looking for this for many years.'

Holy Grail this. Holy Grail that. Multiple Holy Grails (i.e., Kwon's comment above). "The Grail is, or becomes, all things to all seekers."

The treatment that is holy grail for cancer is very effective and very safe. Since there was only one grail, cancer's holy grail also is viable for for multiple indications. Many of the illustrative stories and links above suggest their respective grail targets only diseased, cancerous tissue, and avoids or leaves untouched normal or healthy tissue.

Fareed Zakaria, in a December 10, 2012 interview on Fareed Zakaria GPS of Dr. Ronald DePinho, M.D., President of MD Anderson's cancer center, said "The holy grail for cancer would be to trigger the body’s own immune system to fight off the cancer, so that you somehow stimulate the antibodies in a way that that happens." The treatment that is the holy grail for cancer is not the grail itself. Rather, the grail is what the treatment inspires, produces, engenders, induces, etc.: a strong, durable, portable immune-mediated response.

Is the Grail priceless in material terms? Think about the scene from Indiana Jones and the Last Crusade, and Walter Donovan, the wealthy American industrialist and collector of antiquities who allied himself with the Nazis in order to get the Holy Grail.

Just like Indy's not-so-poor choice of nondescript chalice, the treatment that is holy grail for cancer is inexpensive to make and produce.

The grail is a story about the grail itself, and the journey or quest to seek and find it. For example, the grail is first featured in Chrétien de Troyes' Perceval, le Conte du Graal (The Story of the Grail). de Troyes "...refers to the story as the greatest ever told in any court. His opening scenes are full of color and verve. He tells of his hero's blunders and gaucheries with a keen comic sensitivity of effect. He invests the encounter with the Fisher King with just the right amount of awe and reverence mixed in with the mystery and strangeness. And Chretien is equally successful with the startling appearance of the Loathly Damsel and her violent denunicaion of Perceval, whose growth from boyish boorishness to knightly grace has been well drawn and realized."

The story of the grail is a hero's journey. "The hero is challenged to step out of everyday life and to search for a "treasure": a greater understanding. After many trials and with unexpected help, the hero finds the treasure and he goes back home to share it with others and -- in doing so -- contributes something substantial."

Knights over decades and centuries have sought their own holy grail. The climax of the quests, it would seem, is when the protagonists ask, among other questions: "“What validates the quest?” Why am I doing this?"

P. L. Travers, long a student of the mythic and symbolic dimensions of the human search and the author of the ­wonderful “Mary Poppins” stories, gives us a glimpse of one of the heroes of the Arthurian cycle, the young Perceval, as he learns for the first time of the final stage of the knight’s quest. In her powerful story, “Le Chevalier Perdu”, Perceval meets a mysterious cowled figure that describes the three stages of Knighthood. The stages of Induction and Action hold no mystery even for the simpleton. But Perceval has not yet understood the last phase of the journey.

"Inwards. Into the heart of your­self. This is the third degree of Knighthood. It is known as Contemplation. This does not mean retreat from the world...rather that in undertaking his worldly adventures he encounters them also inwardly. “Who am I?’ he will enquire of himself, ‘this man who goes about righting wrongs?” Echo alone will make reply....So it is with the dragons, the ill-famed knights, the dis­tressed damsels, the fiends. They have their reflections in the inner selves that need to be struggled with, exorcised, and, indeed, accepted. The quest from the very beginning has had as its aim the knight’s self-transformation. Only one made new by grace or made anew by his own efforts will find what he has sworn to find, a glimpse of the Sangreál."

Ultimately, the grail is just a story of a journey. Perhaps in this case, the journey is the journeys of many different individuals and constituents (principals, a No. 4, shareholders, etc.) within the fabric of one journey itself: Provectus Pharmaceuticals.

What the hero’s tale – echoed in countless cultures – may most powerfully suggest is that we all stand at the threshold, having heard the call. Still reluctant, we know at the deepest level that the journey beckons and that we must set out. (Jim Kenney, The Hero's Quest & the Holy Grail)

$PVCT: China Process

Previously having written about the possible make-up of a potential deal here, below are thoughts about what the process might entail.

Click figure to enlarge it.

$PVCT: J.P. Morgan 31st Annual Healthcare Conference

$PVCT: Blog Reader Comment

(comment received Thursday, December 27)

Article: Despite Political Obstacles, Healthcare Multinationals Flock To China

By Barry S. Cohen at SeekingAlpha. Read the full article here.

Lawyers (update)

Prior posts here: Initial. Subsequent. Follow-up. A visit to Levi & Korsinsky's website (see below) does not appear to show Provectus' name on the law firm's Investigations list. Provectus' corporate (outside) counsel and management continue to monitor and assess the situation.

$PVCT: The Challenge. The Opportunity. The Total Addressable Market.

Source material: "Black swan theory," Wikipedia. "The black swan theory or theory of black swan events is a metaphor that describes an event that is a surprise (to the observer), has a major effect, and after the fact is often inappropriately rationalized with the benefit of hindsight. The theory was developed by Nassim Nicholas Taleb to explain:

• The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology
• The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities)
• The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs."

"Taleb regards almost all major scientific discoveries, historical events, and artistic accomplishments as "black swans"—undirected and unpredicted." Taleb introduced black swan events in his 2004 book Fooled By Randomness.

I think the pervasive use of PV-10 -- first, second, last and everywhere in between during the treatment of cancer patients -- as a potential black swan event.

Click figure to enlarge it. Source map here.

Assume:

• A PV-10 treatment price (for the necessary cycles of RB to treat a particular indication), using a number of injections per vial, a number of vials per cycle, a number of cycles per treatment (the number of cycles will vary from indication to indication), the price per vial of PV-10, etc.,
• The treatment of a percentage of annual, global, new incidences of cancer,
• An average annual royalty rate,
• Initial penetration rates that grow to their respective equilibrium levels, and
• Perhaps some fine tuning on a per indication basis (although I am fan of a McKinsey'ish 8-20 to garner a perspective of the size of the potential black swan event.

The result is a very large total addressable market.

My point is this: A dispassionate and objective case can be made for a good return on investment outcome for Provectus shareholders, including myself. My investment, while founded on this outcome, is, however, more focused and a play on the potential of a PV-10 black swan.

Merry Christmas, Happy Holidays, and Happy New Year!

$PVCT: Horse Race (updated)

Last updated here. The horse race above is a snapshot in time. Horses surge ahead, they fall behind and, sometimes, they come out of nowhere.

$PVCT: My Imaginary Conversation With $PFE's Dr. Craig Eagle

Me: Why have you not already acquired Provectus?

Dr. Eagle: That is not the right question to ask.

Me: What question should I ask?

Dr. E: Please continue.

Me: What do you think about PV-10?

Dr. E: It is unique.

Me: What more do you need before Pfizer will acquire the company?

Dr. E: The more data I have the better I can properly assess the drug's potential value when it is commercialized.

Me: Is Moffitt human data the final data you need?

Dr. E: Human Moffitt data is no more important than properly run non-clinical studies at Moffitt.

Me: What more data do you need?

Dr. E: What is most important to me is more data, in general. But, there already might be enough data.

Me: What would you pay for Provectus today?

Dr. E: I don't believe the conversation would be relevant to approach that way at this time.

Me: ?

Dr. E: This is the right answer until I am forced to say something different, which means someone else is prepared to outbid me or I am forced now by the better understanding of the exit (i.e., the approval path of PV-10 by the FDA).

Me: Thank you Dr. Eagle.

$PVCT: Fight The Power, Or Play The Game?

Information technology, and some other industries, seems so much easier to invest in than life sciences from the perspective of disruptive technology or approaches being able to fully disrupt. To those to whom this is an obvious statement, you are smarter than me.

My experience and ease with information technology has been to focus on how to use technology, not how or why it works. Don't get me wrong. It was, is and probably will be in my nature to figure out the hows and whys, but a childhood friend of mine years ago framed the situation and solution to me very clearly: (paraphrasing) "Figure out what you're going to do with the box and how much (or whether)/how quickly/how long you'll make doing it, and don't sweat too much how or why the box does what it does."

In the same breath (actually, years later, but I figured it out shortly after the above "epiphany"), he said it's important to have a decent or good understanding of how or why technology works the way it does to keep the inventors of it (e.g., academics, scientists, engineers, etc.) honest -- i.e., be able to call bulls@$% when applicable and appropriate.

How important is understanding "mechanism of action" if PV-10 works: so efficaciously, so broadly, so safely, so easily?

Martin Shkreli wrote in his article on TheStreet.com about Oncothyreon's Stimuvax failure that "A drug's mechanism of action is central to its effect. Do not ignore this! Clinical data can be misleading, innocently biased, meaningless, manipulated and sometimes even downright doctored. However, the question, "How does the drug work?" is always critical." I can understand his point of view, because it you think you understand the MOA (or how or why the technology works the way it does), you're more apt to believe that it does indeed do what you see or read it does.

Working still is working.

This March, we read from Moffitt that, via the titles of Provectus PRs, "mechanism of action data on PV-10 demonstrates therapy induces immunologic response" and "intralesional PV-10 treatment leads to the induction of anti-tumor immunity." Will Moffitt, sometime next year, make more profound statements about PV-10?

Like, PV-10: A robust (strong), durable (long-lasting), portable (vaccine-like) immune-mediated response.

Moffitt est argumentum ad verecundiam. "As a statistical syllogism, the argument has the following basic structure:

• Most of what authority A has to say on subject matter S is correct.
• A says P about subject matter S.
• Therefore, P is correct."

Because if, after further, fuller elucidation of PV-10's immunological mechanism of action characterization, you now like the story, or now feel comfortable you think you know why it does what it does, you're more likely to pay a lot more for it, and drive up the price for the folks who just cared that it worked well and safely.

"Come, Watson, come! The game is afoot. Not a word! Into your clothes and come!"

Cancer Vaccines

"Some researchers believe that cancer cells routinely arise and are destroyed by the healthy immune system;[2] cancer forms when the immune system fails to destroy them.[3]" Source article here from Wikipedia (from where preceding quote was taken).

Footnote [2]: Shankaran V, Ikeda H, Bruce AT, White JM, Swanson PE, Old LJ, Schreiber RD. (2001-04-26). "IFN and lymphocytes prevent primary tumour development and shape tumour immunogenicity." Nature 410 (6832): 1107–1111.

Abstract: After a century of controversy, the notion that the immune system regulates cancer development is experiencing a new resurgence. An overwhelming amount of data from animal models—together with compelling data from human patients—indicate that a functional cancer immunosurveillance process indeed exists that acts as an extrinsic tumor suppressor. However, it has also become clear that the immune system can facilitate tumor progression, at least in part, by sculpting the immunogenic phenotype of tumors as they develop. The recognition that immunity plays a dual role in the complex interactions between tumors and the host prompted a refinement of the cancer immunosurveillance hypothesis into one termed “cancer immunoediting.” In this review, we summarize the history of the cancer immunosurveillance controversy and discuss its resolution and evolution into the three Es of cancer immunoediting—elimination, equilibrium, and escape.

Footnote [3]: Dunn GP, Old LJ, Schreiber RD. (2004). "The three Es of cancer immunoediting." Annual Rev Immunology 22 (1): 329–360.

Abstract: Lymphocytes were originally thought to form the basis of a 'cancer immunosurveillance' process that protects immunocompetent hosts against primary tumour development, but this idea was largely abandoned when no differences in primary tumour development were found between athymic nude mice and syngeneic wild-type mice. However, subsequent observations that nude mice do not completely lack functional T cells and that two components of the immune system—IFN and perforin—help to prevent tumour formation in mice have led to renewed interest in a tumour-suppressor role for the immune response. Here we show that lymphocytes and IFN collaborate to protect against development of carcinogen-induced sarcomas and spontaneous epithelial carcinomas and also to select for tumour cells with reduced immunogenicity. The immune response thus functions as an effective extrinsic tumour-suppressor system. However, this process also leads to the immunoselection of tumour cells that are more capable of surviving in an immunocompetent host, which explains the apparent paradox of tumour formation in immunologically intact individuals.

#NYT: Is the Cure for Cancer Inside You?

Steinman knew he wouldn’t live to see that field reach its full potential. It has been almost 40 years since he discovered the dendritic cell, and doctors have only now begun to make immunotherapies that work. By all accounts, that sluggish pace was deeply frustrating to Steinman, even before he got sick. “His mind went so fast, and he always wanted everything done yesterday,” Schlesinger says. Years ago, the two of them were on their way to their lab, and Steinman was in a foul mood because a trial they hoped to run was taking longer than expected. After some back and forth about the details, he stopped to consider what he had accomplished in his long career. “He said to me, ‘You know, all this time has gone by, and we haven’t cured cancer or found a vaccine for H.I.V.’ ” And then he paused, and told her, “We’ve got to get to work.”

Full article by Daniel Engber here.

$PVCT: What Could An Autopsy of Failed Drug $ONTY Tell Us About $PVCT

I found Martin Shkreli's article on TheStreet.com about Oncothyreon's Stimuvax failure a few days ago interesting. Shkreli wrote an earlier article too on the same topic in July 2011. It's the second article and the section on Mechanism of Action that I want to focus on (bold is my emphasis).

Stimuvax is often referred to as a MUC1 “cancer vaccine”. The problem with this terminology is Stimuvax is not a vaccine in any way, shape or form.­­ Vaccines typically stimulate an immune response against an introduced antigen. This allows the immune system to fight off this antigen in the future. 

MUC1 is widely expressed in humans. Stimuvax is liposomal MUC1, so Stimuvax can’t be a MUC1 vaccine because the immune system won’t know that MUC1 is an antigen to fight off. 

Without some leukopheresis/immune-training process, a-la Dendreon or a specialized adjuvant, it is difficult to generate a vaccine to an endogenously found peptide. A MUC1 antibody or small molecule antagonist would make a lot more sense. Indeed, several companies are attempting to improve the immune response for prospective MUC1 vaccines as well as attempting targeted payload strategies for MUC1. MUC1 is certainly a good marker for cancer, but it still isn’t useful. MUC1 tests are no longer used. MUC16, which you may know better as CEA125, is widely used to determine ovarian cancer staging and status. Antibodies, armed antibodies and vaccines to CEA125 went nowhere.
According to the NIH’s protein database, mucin 1 (MUC1) is a 1255 amino acid protein. Stimuvax is the common repeat found in mucin 1. I wonder if the inventors assumed this will serve as an antigen to the immune system and T cells will destroy any cell with mucin 1 expression. It doesn’t take a cell biologist to appreciate this is not a good idea given the widespread expression of MUC1. 

Furthermore, without legitimate immune response data and with no side effects, my supposition that Stimuvax is inert is likely correct. The tandem repeat found in Stimuvax is no different from native MUC1. While the glycosylation patterns may be different, it’s hard to see MUC1 inducing a potent immune response. Indeed, the failure of the similar MUC16 to generate a viable anticancer candidate bodes poorly for MUC1 and Stimuvax.
Getting back to the question of whether Stimuvax is an effective vaccine, we noticed that only 21% of Stimuvax patients in the Phase IIB study had an immune response to Stimuvax. Because the only way Stimuvax could have any anti-cancer effect would be through immune recognition of the MUC1 tandem repeat, and a subsequent immune response strong enough to destroy MUC1 expressing cells (a long shot), a 21% immune response (forget evidence of a CR/PR) is not promising. 

Most good vaccines have to have 100% immune responses or close to it. The immune response data is uncontrolled and hazy at best. For a drug billed as a vaccine, Stimuvax doesn’t do a great job of proving it is a vaccine. Even in a small n=22 trial that tested a new formulation of Stimuvax, immune response results were not disclosed.

Oncothyreon tried the Dendreon approach of cherry picking antigens to generate immune responses. Immunotherapuetic advancements need to harness much more comprehensive immune-mediated response than limiting selection criteria.

I think Moffitt will have a lot more to say about vaccine-like PV-10.

Sonodynamic Excitation of Rose Bengal for Eradication of Gram-Positive and Gram-Negative Bacteria

Read more here.

$PVCT: More Data Is Necessary Until It Isn't

On the one hand, Provectus has a $64MM market capitalization (as at Wednesday's closing price). On the other, Moffitt might say PV-10 is the nearest thing they have seen as a cure for cancer, or Pfizer might consider PV-10 the holy grail*. There's a lot of space between those two hands. Cures and grails obviously have not yet translated into a commensurate company valuation. And therein lies the answer, I think. You see it separately with PV-10 and PH-10.

PV-10: Big Pharma clearly recognizes a group of drug compounds have local and distant effects on lesions, substantiating the hypothesis injections of these drugs in local tumor lesions result in systemic effects. PV-10 works more easily and effectively. It took Moffitt time, effort and work to begin to wrap their heads around this "phenomena." In the process, they could confirm the first, second and last solution PV-10 may well be (e.g., a pre-surgery treatment).

PH-10: If the premise is that PH-10 has no toxicity, and that the "normal rules" of treatment do not apply, what then? Even though Provectus likely has sufficient directionally positive clinical data for a dermatology transaction, immunologic MOA characterization work, as I previously wrote about, would be helpful with the FDA in designing toxicity studies appropriate for an approved drug. This work should make dermatology companies more desirous of PH-10. The immunologic MOA characterization work came to the forefront when management was working on the remaining toxicity studies for the FDA. When they had difficulty finding any dose limiting toxicity (DLT) or maximum tolerable dose (MTD), they sought to better understand PH-10's unique lack of toxicity.

The answer? Big Pharma just might need more data than otherwise would have been necessary before pulling the trigger(s).

* "The holy grail for cancer would be to trigger the body’s own immune system to fight off the cancer, so that you somehow stimulate the antibodies in a way that that happens." Fareed Zakaria, Fareed Zakaria GPS

Possible $PVCT Publications In 2013

2012 produced the following investigator & researcher and sponsor abstracts/poster presentations and presentations:

• 2012 Society of Surgical Oncology Annual Meeting (Subject: Immunologic MOA Characterization, Author: Moffitt [several authors], Medium: Abstract/Poster presentation),
• HemOnc Today - Melanoma and Cutaneous Malignancies Conference (MM Phase 2 data, Dr. Merrick Ross, Presentation),
• 2nd European Post-Chicago Melanoma Meeting 2012, Interdisciplinary Global Conference on Developing New Treatments for Melanoma (Final MM Phase 2 Data, Dr. Sanjiv Agarwala, Presentation),
• European Society for Medical Oncology) 2012 Congress (Final MM Phase 2 Data, Dr. Sanjiv Agarwala et al., Poster Presentation), and
• Society for Immunotherapy of Cancer (SITC) 27th Annual Meeting (Immunologic MOA Characterization, Craig et al., Abstract/Poster Presentation).

Expectations for 2013 are:

• Subject: Final MM Phase 2 Data, Authors: Investigators (Agarwala, etc.) & Sponsor (Eric), Medium & Venue: Global Medical Journal
• Immunologic MOA Characterization, Moffitt [several authors], Journals and/or conferences
• HCC Phase 1 Data, Dr. Goldfarb-? & Eric, ?
• Psoriasis Phase 2c Data, Dr. Lebwohl-? & Eric, ?
• Compendium of the Use of Rose Bengal, Eric et al., ?
• PV-10 Compassionate Use Program, Site doctors-? & Eric et al., ?

A $PVCT Vignette

I think management acknowledges serious life sciences investors to whom they have spoken are the waiting for the SPA, at a minimum, to arrive before they begin buying -- the "time value of money" perspective for these kinds of fund investors. They are event-driven, quarter-to-quarter animals that need a clearer path. The share price performance in 2010 (starting in Q2), 2011 and 2012 that punished generalist funds (i.e., non-life sciences ones) in the stock is what serious life sciences folks avoided by waiting for the events they deem necessary to have occurred before entering the fray.

A $PVCT Vignette

Big Pharma is paying attention to Provectus and PV-10 because of data that is available publicly (and under CDA). All of the companies on the above list save two previously had been in contact with the company to varying degrees. One of the remaining two recently reached out to Provectus after the MM Phase 2 data was made final at ESMO 2012.

$PVCT: SPA?

October 2, 2012 PR

The finer point of this press release and paragraph could be: "We look forward to formal review of the resultant protocol and supportive programmatic elements with FDA under the SPA process."

Has management truly (not technically) filed the SPA (i.e., filed for submission with no thought of withdrawing it)? If so, when (so we might apply the erstwhile "45-day clock")? I know not...

Receiving consensus for a Phase 3 SPA from the FDA is a 2012 company goal. While management gets the concerns of shareholders asking when the SPA will arrive, they seem unperturbed and unconcerned (i.e., not worried) about situation.

Maybe the 45-day clock, is like Barbossa's view of the Code of the Pirate Brethren: It's more what you'd call "guidelines" than actual rules. Welcome aboard the Black Pearl, Miss Turner...Arr!

$PVCT: January Effect

Before Big Pharma pays billions of dollars for Provectus, value-increasing steps obviously have to drive the company's market capitalization much higher from where it is now (such as to at least above $1 billion). The market cap could get there in January through some combination or permutation of:

• The SPA arrival;

• A regional geographic oncology deal (a "mini-oncology" deal) for China. Signed, but perhaps not closed;

• Visibility into Moffitt's forthcoming mouse and human immunologic MOA characterization work;

• A dermatology deal. Alternatively, we might learn more about the status of the license process: information about PH-10's immunologic MOA characterization, how this MOA work factors into questions about the lack of PH-10 toxicity, the end-of-Phase-2 meeting, and the Phase 3 trial design; and

• Another mini-oncology deal. Such a transaction might be another regional geographic deal, some form of equity investment in Provectus by Big Pharma or an "interesting" license-related/oriented transaction.

$PVCT: Just Bloggin'

In trolling through Adam Feuerstein's Twitter feed for data and information, I read this:

I am not a fund manager as it relates to my holdings of Provectus shares; however, in writing this blog I of course am "talking my book." You may recall I initially wrote about my stock position here. When I write SeekingAlpha Instablogs from time to time, copying there blog posts from here, I regularly disclose: "I am a large shareholder of Provectus Pharmaceuticals. I have not sold any shares as of this Instablog submission." I expect to post on this blog within 24 hours when I sell shares.

"Large" is a substantial seven-figure holding, with a cost basis of $1.1722 per share. My position as at Friday's closing price of $0.55 is underwater by 53%.

I thought this author's blog post of why he blogs very much articulates my own feelings and reasons for doing so, too. I blog to:

• "Record my thoughts with a timestamp and no benefit of hindsight,
• Improve the thoroughness of my thoughts through the Hawthorne Effect, and
• Get feedback to improve my thoughts."

$PVCT: Comparing illustrative $CLSN bull and bear cases, and how they help inform us about $PVCT

Two informative articles recently appeared about Celsion Corp. (NASDAQ: CLSN). The stock has had quite a run-up in 2013.

Click figure to enlarge it.

The first article, by Alex Daley, presents the bull case. The second article, by Adam Feuerstein, includes a short-side fund manager's bear case.

I want to set aside CLSN's headlines, stock performance and trading angles (whether long or short) in approaching, structuring and writing this post. Both authors and article undoubtedly are focused on the near-term, and there thought processes are useful and informative. More broadly, their comments also are applicable to longer-term views.

In Daley's article, "...there is a simple set of tests we apply to ensure that we've found a stock that can deliver significant, near-term upside." Summarized, this is:

• Improving outcomes or lowering costs: "...it must improve outcomes, by improving patients' length or quality of life, or lower costs while maintaining quality of care, or both;"
• Market size: "...the market must be measurable and addressable;"
• Payer acceptability: "...payers should be easily convinced to cover the new therapy at profitable rates;" and
• Time to market: "...there must a clear path to market in the short term."

Daley and Mr. Short CLSN are arguing asynchronously about the first half of Daley's first criterion: More improvement. Daley thinks CLSN is:

• A better lysolipid thermally sensitive liposome (LTSL) technology,
• A better approach with chemotherapy than just chemotherapy alone, and
• A better solution with radiofrequency ablation (RFA) than RFA alone.

CLSN -- more improvement (greater, equal or lesser cost) or lower cost (no lesser improvement)? Ultimately, the synthesis of the above is CLSN improves outcomes (before progressing to discuss the other items). Mr. Short CLSN, on the other hand, thinks CLSN will be shown not to improve outcome and "be unable to demonstrate a significant benefit on delayed tumor progression in the phase III study" (because "more often than not, tumors grow back in distant parts of the liver away from the lesion(s) that's been ablated using RFA" and CLSN/Thermodox).

If CLSN does not improve outcome, cost or price is not relevant. If it does, cost then is relevant; however, Daley does not provide sufficient information to understand pricing magnitude and flexibility (i.e., treatment price, cost and, thus, gross margin) and address either (i) incremental improvement per unit price (and cost and gross margin) or (ii) lower cost with no lesser improvement.

Provectus has not released sufficient information to prove the claim PV-10 improves outcomes. At least that what traditionalists, purists, skeptics and others have said. I suppose, then, a Daley-like proponent of the company or Mr. Short PVCT really having nothing to argue about, let alone debate the merits other criteria. Perhaps...

Check One. I posit PV-10 dramatically improves outcome. That outcome comes at a dramatically lower cost compared to either competitors or standards of care. Length of life improves. Quality of life improves. A lot.

Check Two. I posit the addressable market is very large. The addressable markets of individual indications like melanoma or metastatic melanoma, or HCC are substantial in their own right. Considering PV-10 as a true multi-indication treatment, whether individually or in combination with other therapies and approaches at the appropriate rung of the treatment ladder, proposes a monstrously large addressable market.

Check Three. I posit payer acceptability will be inevitable. This, of course, goes back to the cost of manufacturing PV-10 and, subsequently, the pricing of the drug. The rather large gross margin the drug permits provides tremendous flexibility is smartly pricing it. Pricing impacts profitability and thus valuation. Pricing also impacts the competitive landscape is a very large way as well.

Check Four? Not quite yet. While the company is much closer to the end of of the path to market than it has ever been, the finish line has not yet been reached. I can yet posit anything here...yet.

$PVCT: Blog Reader Question

I really appreciate your posts. Please keep them coming. One issue that I am having with the continued lack of any licensing agreement or income, is if perhaps PVCT is pricing itself unrealistically? I have seen this happen to companies before, when they think they know what their product is worth, but no one else is willing to pay so much for it, and they just go on and on without ever signing anything. They go to their graves secure in the knowledge that no one has taken unfair advantage of them, but without ever cashing in their product which does have genuine value. You wrote that " license interest and discussions are heating up." If this is so, then what I am fearing is not a problem.

Great comments and question, and thank you.

I have had prior experience with management or [particularly] founding teams being unrealistic: about technology, the product, valuation, and other issues. It is frustrating as an investor and shareholder to see intransigence, derived from lack of realism or pragmatism (or both), overtake what started out as a great investment opportunity.

My interactions with Provectus management have not caused me to question their realism as it relates to valuation. Craig and Peter will tell you, quickly, often and repeatedly, they routinely seek out counsel in this area, and enjoy the benefit of several very experienced counselors.

While Craig strikes and has always struck me as fundamentally understanding the value of what the team has innovated, he does not seem to be ideological about valuation. While the check will have to be very large, I do not think him a person desirous of extracting every last dollar from a/the would-be acquirer.

That said, I am struck by management's perspective about the potential impact on valuation of PV-10's immunologic potential. Repeating a portion of a post of mine from a couple of days ago:

The conclusions of the forthcoming immunologic mechanism of action characterization work by Moffitt Cancer Center could be profound. Will Moffitt researchers make full-throated statements regarding PV-10's immunologic potential?

Cancer Immunotherapy

Cancer has a “game-changing” moment (Mary Elizabeth Williams/Salon)

Yet when I read Emma’s story, I thought of a mother who gets to watch her little girl grow up now. I thought of the people in my trial: the college student, the young tech guy. I thought of what a gift it is to know that this week when my daughter sings at her school’s holiday assembly, her mom will be in the audience cheering for her. And I remembered what my friend Brian at the Cancer Research Institute says, that “this is only the beginning.”

GlaxoSmithKline taps MD Anderson for cancer immune therapy in potential $335M deal (Ryan McBride/FierceBiotech)

The prized antibodies in the deal act on OX40 receptors on T cells, helping the ninjas of the immune system recognize tumor cells as enemies in need of an ass kicking.

$PVCT: Immunologic Potential, and thus Value

"The holy grail for cancer would be to trigger the body's own immune system to fight off the cancer so that you somehow stimulate the anti-bodies in a way that that happens." Fareed Zakaria, CNN GPS, from a December 9, 2012 interview with Dr. Ronald DePinho, President, M.D. Anderson Cancer Center

The progression of PV-10 & Provectus potential value

Click figure to enlarge it.

My expectation (above) most certainly is a very lofty one.

The conclusions of the forthcoming immunologic mechanism of action characterization work by Moffitt Cancer Center could be profound. Will Moffitt researchers make full-throated statements regarding PV-10's immunologic potential?

PV-10: A robust (strong), durable (long-lasting), portable (vaccine-like) immune-mediated response.

$PVCT: Horse Race (updated)

The geographies Provectus identified above probably represent the limit of the company's potential oncology end-game partners' disinterest. There likely is no appetite to geographically segment the licensure of PH-10.

$PVCT: Logic, logic, logic. Logic is the beginning of wisdom, Valeris, not the end.

The only emotion I wish to convey is gratitude. Thank you, Ministers, for your consideration. [In a tone reserved for telling someone to 'Go to Hell'] Live long and prosper.

Pfizer's presence in China is notable. See below:

Click figure to enlarge it. Source: China's Pharmaceutical Industry - Poised For The Giant Leap. KPMG, 2011.

If Provectus is pursuing a geographical license of PV-10 in China, it seems logical to me (given Dr. Eagle's role and responsibilities at Pfizer and his presence on Provectus' corporate advisory board) that management would have discussed the situation with Dr. Eagle to make informed decisions (e.g., partnership selection, R&D needs, sales & marketing approaches, pricing thoughts, manufacturing options, distribution resources, etc.).

$PVCT: If Not China, Then What?

In a prior post, I illustrated the then current snapshot of the horserace.

There may be a second geographic region in play (Australia?, India?*). My take on a comparison of license or deal headline numbers is below:

If the company wanted to hold onto oncology longer, a cost breakdown of the contemplated pivotal, key and other trials appears to be:

A China deal (or whatever possible combination of outlying geographic deals) that net a $25-50MM upfront payment goes a long way to providing the necessary funding for Provectus to make even more clinical trial progress.

Could dermatology nose out oncology at the finish line? Sure.

Recall the path Provectus traveled with PV-10 and oncology: clinical trials and regulatory discussions, followed by immunologic mechanism of action characterization work by a world-class institution. The early spadework to demonstrate efficacy, safety and multi-indication viability was followed and enhanced by Moffitt's past and future murine model results (not including, yet, human immunologic work). And while shareholders wished for Big/International Pharma to snap to attention (i.e., license PV-10) because of outstanding early-phase trial results, it now appears the immunology work already presented by Moffitt at SSO and Craig at SITC, followed by forthcoming work to be presented by Moffitt, is accelerating license interest and discussions of both regional and global natures.

Could PH-10 be following a similar path?

The "hang-up" with PV-10 appeared to have been with Big Pharma folks being unable to wrap their heads around how well PV-10 worked. They needed help to understand something they had never seen before. They appear to understand now, or at least are getting closer. As such, license interest and discussions are heating up.

It is not unreasonable to analogize PV-10's path to PH-10's, and thus potentially explain the delay in getting to a dermatology license or sale transaction. Perhaps immunologic mechanism of action characterization work is being done on PH-10 by a world-class institution to complete the understanding of prospective dermatology licensees before they fully commit to jumping into the pool. I think this immunology mechanism of action work is being at The Rockefeller University (the Laboratory for Investigative Dermatology?).

Once this PH-10 immunologic mechanism of action characterization work is completed and provided to prospective partners (I do not know when the work was started and when it and the subsequent analysis was or will be completed), and assuming this knowledge concludes their thinking, dermatology might well beat oncology to the finish line.

In this horse race, however, the more horses that cross the finish line -- Provectus licenses deals -- the better.

* I suspect PV-10's extremely low cost structure, and thus tremendous pricing flexibility, helps facilitate country discussions without fear or risk of patent loss (or too much of it).

$PVCT: Will Management Get A Deal Done In China?

I previously wrote a blog post entitled Can Management Get A Deal Done In China? I used "can" because I thought management could be able to secure a deal; that is, there is the ability to get or the possibility of getting a deal in China done.

Time passes. More dots connect.

I think the question, for over the next few weeks to the next couple of months, now is: Will management get a deal done in China? I use "will" to query management's intention to do this deal, or another.

Existing shareholders and prospective investors, in my view (through discussions with a variety of them), thought or think of "can" as management's ability -- their skill set -- or PV-10's (or PH-10's) ability -- the facets and features of the drug(s). I have never thought that way. Rather, I have examined and focused on the whether management has the process and pieces of sufficient quality and quantity to get a deal or deals done.

Management has been approached and continues to be approached to do deals. Frankly, anyone can do a deal. The real question -- the real perspective -- is whether the deal is a good or great one. Lots of people can and do do bad deals all of the time. Provectus understands better than most, and now better than ever, the value of the company's portfolio of drug compounds.

It seems we are drawing closer and closer to a seminal event, or more.

There have been previous discussions across and around the table about licensing PH-10 and PV-10. I do not doubt those discussions involved numbers, terms and conditions; however, in my experience, such discussions become "more real" or advance when a term sheet materializes.

From what I can gather (and it may well be a rumor), a term sheet has materialized in China. The parameters probably are not too dissimilar from what I wrote here. There is of course lots we do not know.

Who is the prospective Chinese big pharma partner? For example, is the partner on the list below?

Click figure to enlarge it. Source: China's Pharmaceutical Industry - Poised For The Giant Leap. KPMG, 2011.

Is Pfizer involved in some way? Pfizer's presence in China, from sales to R&D to manufacturing, is notable.

Click figure to enlarge it. Source: China's Pharmaceutical Industry - Poised For The Giant Leap. KPMG, 2011.

I previously wrote that regulatory and governmental agency backing in China was crucial. What kind of backing does Provectus and its prospective Chinese pharma partner have? I had the good fortune of participating in a trade delegation to China several years ago (what a treat!), and met a senior member of the Premier's staff. For pharmaceuticals, I would assume the State Food and Drug Administration and the Ministry of Health are germane regulatory and governmental bodies, among others.

If management elects not to do a deal in China yet, what else is there to take its place?

PVCT: A Reminder of Property Rights

Click figure to enlarge.

Provectus News earlier this week noted an article on Provectus' combination therapy patent application (made jointly with Pfizer).

Click figure to enlarge.

While management included the combination of PV-10 and anti-CTLA-4 antibodies like ipi (Bristol-Myers) and tremi (Pfizer/MedImmune-AstraZeneca) in Provectus' patent application, Bristol-Myers did not include PV-10 in its patent of combination therapies with Yervoy.

$PVCT: Can Management Get A Deal Done In China?

From what I can gather, Peter traveled to Singapore and China on his latest trip to Asia. I don't yet why he was in Singapore. I think there are shareholders in the country, and Singapore has long been a source of global financing for companies in many industry sectors. Peter's time in China relates to the company seeking outlying geographic licenses, as it wrote in its last two 10-Qs.

There is no doubt China has vast potential for any company, now particularly in pharmaceuticals

Click figure to enlarge it. Source: China's Pharmaceutical Industry - Poised For The Giant Leap. KPMG, 2011.

Click figure to enlarge it. Source: China's Pharmaceutical Industry - Poised For The Giant Leap. KPMG, 2011.

Click figure to enlarge it.

If Provectus were to get a mini-oncology deal done in China, the lead indication would be liver cancer, the market for which there is enormous: there are about 350,000 new liver cancer cases each year, or half of the world's total (see blog post here).

Lung cancer is comparable, as you can see from the table immediately above. A recent article on lung cancer in Beijing can be found here. I think the company has demonstrated PV-10 success with small cell lung cancer in murine models. Craig has show more results for this indication by creating and injecting lung tumors.

I suppose a potential deal could be in the order of at least $1 billion (top-line figure), comprised of:

• An upfront payment (e.g., $25-50MM),
• Milestone payments (e.g., $100-150MM), and
• Royalty payments (e.g., double digit percentage).

Aside from a large, well structured deal, the choice of the partner -- the domestic Chinese pharma entity -- and securing the backing of the government are both critical.

I worked with a company in China for a few years. Because it was in the financial services space, it sought the support/imprimatur/backing of the State Administration of Foreign Exchange (SAFE) and the People's Bank of China (PBOC).

I would assume, like with Australia's Therapeutic Goods Administration (TGA), Provectus is working closely with a regulatory body and/or, more critically, a governmental agency to seek or secure backing of some sort to increase the likelihood and scope of success in China.

#NYTimes: Ruling Is Victory for Drug Companies in Promoting Medicine for Other Uses

"In a case that could have broad ramifications for the pharmaceutical industry, a federal appeals court on Monday threw out the conviction of a sales representative who sold a drug for uses not approved by the Food and Drug Administration. The judges said that the ban on so-called off-label marketing violated the representative’s freedom of speech."

Full article here.

$PVCT: Form 4 Filing -- Insider Buying

Peter filed a Form 4 today in which he bought another 133,333 of common stock, a cash expenditure of $100K.

This purchased related to Eric and Peter's prior purchases of common stock at $0.75 per share in the October raise for which Form D filings by each of them previously were made. Investors in this fund raising placement were issued one 5-year warrant for each common stock share purchased (i.e., 1-to-1). The warrants have a $1.00 strike price.

Nathan Sadeghi-Nejad: Thoughts on Bio-Pharma Investor Sentiment Going Into 2013

Full article here.

"From my conversations with investors, I came away with optimism about the future of healthcare, mainly because medical innovation seems to be picking up again."

"There is a general consensus the U.S. Food and Drug Administration has loosened up a bit."

"Investors expect next year to be a "stock picker's market," a term that always initially strikes me as tautological but simply suggests the biotech sector may be directionless or overly volatile. I agree, but would add my view that the market will increasingly reward only true medical innovation going forward."


"Cost pressures on the healthcare system will invariably increase over time. Eventually, I think these dynamics will force more widespread adoption of cost-effectiveness analysis such as the roughly $50,000 Quality Adjusted Life Year (QALY) threshold used by the U.K.'s National Institute for Health and Clinical Excellence (NICE).

Company executives always complain that increased use of cost-effectiveness analyses will quash innovation. I call shenanigans. No other segment of the economy benefits from annual "inflation driven" price hikes in perpetuity for a stagnant product, yet innovation abounds. It's becoming increasingly clear that the salad days of healthcare pricing are over and executives need to adjust accordingly."