More than 4-out-of-10 chose a China deal as the company achievement that would have the greatest impact on share price in Q1.
Provectus is pursuing a $30B market opportunity in China for melanoma and liver, bladder and lung cancer. The deal, if struck, could be worth about $1 billion or more.
The sketch below outlines a very basic outcome tree.
- He returns with no deal after however long the duration of his trip is, which would suck!
- Peter returns with a consummated license transaction reasonably or objectively valued at more than $1B (and potentially much higher). It is possible the deal and its component parts (i.e., upfront, milestone and royalty payments) are much lower than expected, but probably unlikely. A $1B+ deal would, of course, rock!
- Alternatively, he enters into, on behalf of Provectus, an exclusive letter of intent with the Chinese strategic pharmaceutical company partner for a regional PV-10 license.
The signed letter of intent should be a material event that is important to shareholders, and thus the company would file a Form 8-K.
When Celsion entered into a technology development agreement for ThermoDox for China with Hisun and anticipated the eventual completion of a commercial license, the company filed a Form 8-K and issued a PR that detailed the key provisions of the anticipated license agreement negotiated and agreed to by Celsion and Hisun. Those provisions would provide the basis for a definitive contract between the two parties. As I wrote before, the Celsion deal essentially was a license transaction call option owned by Hisun. Positive ThermoDox results were necessary for Hisun to exercise its option to further negotiate an eventual license transaction for China, Hong Kong and Macau. The two companies never finalized, completed and funded the license deal because Celsion's Phase 3 trial failed and Hisun thus neglected to exercise its option.
For Provectus, should the company announce entry into an exclusive letter of intent to complete a commercial license with a Chinese partner, some 60 days or perhaps less could elapse before the deal is finalized, funded and completed. By or before late-April?
I cannot imagine management would do anything other than a traditional license transaction with the Chinese strategic pharma partner (that is, no Celsion/Hisun or Opexa/Merck Serono call option licensing deal). We'll know soon enough after Peter returns to Knoxville from China. I'll keep an eye out for Provectus 8-K filings on the SEC website starting the week of March 4th.