May 5, 2013

Sell in May and go away? April showers bring May flowers, and June flowers, and July flowers, and...

This is a follow-up to my January 27th March Madness post. I added other items denoted by the + prefix to the bolded item title.

Early-April's AACR annual meeting provided the forum for both Moffitt and Provectus to provide definitive clinical relevance for the drug. In the case of Moffitt, tumor-specific immunity. In the case of Provectus, combination therapy effectiveness. In both cases, systemic benefit. Definitive for the FDA. Definitive for Big Pharma.

PV-10 + “other stuff”
I think but cannot fully validate combination therapy interest in PV-10 includes anti-CTLA4 agents (Bristol-Myers Squibb, Pfizer, Astrazeneca), anti-PD-1 agents (Merck, BMS, Roche, GlaxoSmithKline and Teva Pharmaceuticals), BRAF inhibitors (Daiichi Sankyo and GSK), and kinase inibitors (Bayer).

The liver trials
The expanded liver P1 trial report must be complete before the company can apply for BTD for liver. How many of the "up to" number of patients are required; up to 24 patients receiving PV-10 and up to 12 patients receiving sorafenib and PV-10. 24 and 12, respectively? Or a subset? Assuming the company achieves breakthrough therapy designation (see below), would a subset and interim analysis, rather than the full set and preliminary final data, be sufficient as the FDA's EOP2 further builds up their understanding and knowledge of PV-10?

Management guidance is Q2. At this point, I think June may be when we see the SPA achieved. Is management submitting applications for both the SPA and BTD (see below)?

+Breakthrough Therapy Designation

The company regularly has asked the FDA for accelerated approval. The manner in which the company has sought to demonstrate PV-10 and PH-10's value proposition (and, thus, rose bengal's value proposition) -- very safe, very efficacious, multi-indication potential -- also is consistent with trying to accomplish an accelerated path to market for the drugs (i.e., efficient and effective use of capital). It seems to me BTD is more like a badge (as the "designation" in the title denotes), and should or must be followed by a pathway. The accelerated pathway may be either accelerated approval or a "faster Phase 3" trial. It seemed Moffitt data presented at AACR was very important to making the case for BTD. Such data may have been available starting in early-April when the AACR conference commenced. Whether the data was transmitted to the FDA then, or remains to be sent in the near-term is unclear. At this point, I think Q3 (July) may be when we see BTD achieved.

Shelf filings
The two $50MM common stock filings were pulled in early-April (here and here). The $100MM mixed securities shelf remains.

The regional license deal for China
I think Chinese officials, whether governmental and/or pharmaceutical, were present at AACR. I also think Peter met with Chinese officials in Europe during his recent trip there.

+Wall Street vs. Main Street

It will be interesting to see what may unfold in the next 60-90 days. When the share price pushes through $2 and the stock lands on the NASDAQ thereafter, a number of retail investors holding Provectus shares are very likely to close their positions (sell their holdings) between $2 and $4 per share. I think there will be an intense turnover of the company's shareholder base. That is, unfortunately, the way of this capital markets world, as institutional/professional investors (hedge funds, mutual funds, etc.) will buy what retail folks sell. I hope they (retail investors) don't, but I think they will. We are, after all, the "dumb money" to them.

A visit to India likely will be made by Peter in the near-term. Japanese-headquartered Daichii Sankyo owns a majority stake in India-based Ranbaxy Laboratories. There are other interested local Indian companies, too. Pfizer India is an autonomous body capable of its own deal making.

Nearly 20 companies are interested in a regional PV-10 license. Visitors to the blog from Japan are frequent and corporate (pharmaceutical and otherwise) of late.

AACR (see PV-10 above). I think human work is moving ahead faster than expected.

+Value Prop vs. Clinical Relevancy vs. MOA

To me, value proposition is and has been the most important aspect of my investment thesis: very safe, very efficacious and multi-indication potential. It helps to underscore the risk-return of an investment in Provectus. Clinical relevancy is critical to the FDA and Big Pharma's understanding of where PV-10 fits in, as much as MOA is critical.

More valuation-raising work to be done
See below for a sample. I will elaborate on this sketch in a subsequent post.

Peer-based management compensation proposal coming
This was not included in the company's proxy statement.

I think translational work done at a world-renowned university in a laboratory whose head has a world-class reputation with the FDA probably now is complete.

+Sell to Cheap? Hardly.

I bet management could and would protect Rose Bengal’s economics in a size and scope commensurate with the depth and breadth of their innovation. There are sufficient blocks of share ownership, when rallied in a coordinated manner, that will support a takeout (end game) valuation management believes is appropriate and sufficient. My reach across the shareholder base is both broad and deep, and growing. Make no mistake of the value of Provectus these blocks recognize and want to see achieved. Make no second mistake of my intensity, determination, capability and competence to ensure this value is realized and monetized...

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