December 7, 2012

$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?

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