April 30, 2013
$PVCT: China vs. The World
On page 20 of the recently filed S-1: "The geographic areas of interest for PV-10 principally include China, India, Japan and Middle East and North Africa (MENA). We are also considering the global licensure of PV-10 as well since it has come to our attention that this is of interest to potential partners."
The world continues to get smaller and smaller. Big Pharma operates where it does and can -- mainly, the U.S. and Europe, and also elsewhere -- but with an eye to so-called developing markets (recall the now or near obsolete BRIC moniker for Brazil, Russia, India and China), and beyond, where it has entered as foreign wholly owned subsidiaries together with partnerships and joint ventures with as well as acquisitions of local players.
I appreciate management's enthusiasm and persistence in pursuing a regional license deal in China. In the S-1 mentioned above: "According to Global Cancer Facts & Figures, 2nd Edition, liver cancer is the fifth leading cause of deaths related to cancer in the world in men and seventh in women. Approximately 750,000 people are newly diagnosed annually with primary liver cancer, also known as Hepatocellular carcinoma (HCC), with China alone accounting for about 55% of the cases diagnosed each year. The world market for liver cancer drugs is projected to exceed $2.0 billion by 2015 and does not include the full impact of the China market potential." Like with most things China-related, it is Big Pharma's new frontier, and a monstrously-sized addressable market at that.
I also understand and appreciate management having to balance enthusiasm for and the potential of near-term cash upfront with China with Big Pharma interest in a global PV-10 license.
I don't want management to do a premature or cheap China deal simply for the cash or to bump up the share price, and diminish the value of a global license and/or the end-game. On the other hand, I don't want management to pursue a global license without taking into consideration sufficiently raising valuation through a string of regional deals before giving way to a global license and/or the end game. I don't think management is doing either.
Rather, regional deals like China (and others) are being considered in the context of a global license and the end game, and vice versa.