$PVCT Blog Reader Gets To The Heart Of It (at least some of "it")

A blog reader's questions get to the heart of commercial validation, coinciding with Peter's trip to New York this week, following Eric and his attendance at ASCO 2013 and preceding Peter's trip to Japan the week after next.

Interestingly, Eric also will be in New York. Given his responsibilities over clinical development, intellectual property and manufacturing, as well as the scarcity of his remaining time for other matters (like travel to medical conferences, investigational sites, cancer research centers, etc.), travel to NYC at this time notable.

Blog reader: What do you think is the probability that Pfizer will buy PVCT? And what do you think the market value of the share will be? I am a longterm buyer of PVCT and believe that PV-10 works. Also when are you expecting something to happen? Any thoughts would be appreciated. I am thinking about buying more shares but hesitant right now to do so since we have not heard anything about a deal being finalized.

Pfizer. I think Pfizer is the most likely buyer of the company, which doesn't mean Pfizer ultimately buys the company, but the industry acknolwedges Dr. Craig Eagle has the pole position relative to his counterparts. There are a number of dots that connect Provectus to Pfizer, and the number continues to grow. I've identified several of them in past blog posts. The most visible, of course, are Dr. Eagle's presence on the company's corporate advisory board and the joint patent application the two companies have regarding combination therapies.

Of course, there is no certainty Pfizer buys Provectus.

It's possible, but improbable, Pfizer and Dr. Eagle lose interest in the company. They're captivated by PV-10.

It's possible, but improbable, someone might outbid Pfizer for Provectus. They have the biggest checkbook, nearly double Amgen and more than double Johnson & Johnson and Merck.

To answer the blog reader's first question, I think the probability Pfizer buys Provectus is near 100%. "When" is another story.

Share price. I believe management has the expectation of at least Celgene-Abraxis-like upfront money of approximately $2.9B, which, using certain assumptions that lead to a figure of 175MM fully diluted shares outstanding, leads to a share price of about $17. Reaching this valuation altitude requires greater depth for both regulatory clarity (melanoma, liver and, perhaps, a third indication) and commercial validation (India, China and Japan) as well as the entry of market forces to embrace them (i.e., many more institutions and people buying Provectus stock).

When. A sense of timing of the end-game requires vastly greater certainty about regulatory clarity than we have today. An SPA for a pivotal MM Phase 3 trial? Breakthrough therapy designation leading to a truncated Phase 3 trial, a user friendly safety-oriented trial or accelerated approval? Commercial validation might help, but I don't think Pfizer is interested by or cares about, at this point, another business entity commercially validating Provectus by doing a license deal with the company. If anything, Pfizer could and would facilitate a regional license deal for self-interest in some way.

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A Yahoo! Finance poster made some interesting remarks regarding Peter and Pfizer this week, and I attended a presentation by Craig yesterday. I'll blog about each of these items this weekend.