That's essentially the reaction I expect many institutional investors and other folks to have should the company receive the FDA's breakthrough therapy designation ("BTD") for PV-10 and metastatic melanoma ("MM"). Peter has made the rounds several times with a number of fund managers; because of his spade work, those ones are more likely to react more quickly than their completely unaware brethren and sistren. I think receiving the SPA could result in an initially muted response, but a very material one over time.
Sponsor companies ("sponsors"), or recipients of BTD, herald the potential for the new regulatory pathway to shave years off the traditional drug approval process. Seventeen BTDs have been identified by sponsors as of July 12, 2013. With 24 total BTDs awarded, there are seven that have not been identified by their sponsors. Nearly all recipients have market capitalizations in excess of several billions to many tens of billions of dollars.
In May's Annual CEO Letter, management wrote about the long sought after special protocol assessment ("SPA") that they "...have every reason to believe this key milestone will be achieved in 2013..." About BTD, they wrote they are "...also considering applying for [it]..." The communication felt obfuscated or seemed opaque at the time. We know Provectus simultaneously has asked for accelerated approval ("AA") and the SPA and now is asking for BTD of the same organization within the FDA, the Division of Oncology Products 2 ("DOP2"), formerly the Center for Drug Evaluation and Research ("CDER"). Same group, likely the same review members, and three different application requests for the same compound and the same indication (although distinctly different labels).
Although shareholders would appreciate more insight into the regulatory clarity process in which the FDA and Eric is involved, the situation boils down to management not wanting to publicly pre-empt or appear presumptuous with the Agency. It's debatable whether management could more easily or directly communicate their interaction with the FDA or help shareholders understand the prioritization of their (management's) efforts, energy and hoped for outcome without appearing to articulate the Agency's decision before it officially has been made. Management thinks they have appropriately communicated the status of the regulatory process they've undertaken. I would not disagree with them in the context of not wanting to pre-empt the FDA.
My thoughts about regulatory status include:
No. 1, management could have had the SPA they've sought if they wanted it, vis a vis prioritization of resources and the time value of money,
No. 2, they've been pursuing and thus prioritized the BTD.
Pursuing BTD does not mean eschewing the SPA. The SPA is a consensus design based on parameters specific to an appropriate patient population, while AA is based on evidence of PV-10's systemic benefit (or its mechanism of action in this case). The construct of BTD now significantly increases the likelihood of getting AA. The time value of money to Provectus is greater pursuing AA than the SPA, particularly if the assessment is that AA, especially via BTD, has a high likelihood. Management, having assessed the situation and received various feedback, seems to have prioritized matters,
No. 3, PV-10 should be awarded BTD,
No. 4, BTD should mean, or come with, AA, because I think current thinking is that AA is the most likely of the potential accelerated paths available to them with BTD,
No. 5, if the FDA awards Provectus BTD but not also AA, I think the Agency then would ask management to run a modified, truncated MM Phase 3 trial that could translate into a shorter trial, such as a single arm trial with a smaller number of patients than contemplated in the SPA trial design, and
No. 6, the so-called "worst case," which I think is unlikely, would merely be the receipt of the SPA. And that's fine too.Should No. 6 materialize, management thinks funding would be the combination of a regional transaction waiting for clarity and subsequent warrant exercises to provide sufficient capital at low dilution (by definition, warrant exercises cause some dilution) for a 180-patient MM Phase 3 trial under the SPA design. From there, the clock would tick regarding interim analysis, and thus influence the likely actions of Big Pharma thereafter. More importantly, Provectus could then commence the expanded hepatocellular carcinoma ("HCC") Phase 1 trial (sorafenib v. sorafenib + PV-10), among other clinical things.
Thought No. 5, because of the BTD "stamp," should draw much more market attention than "just the SPA." Speed to approval should be swifter, and trial funding requirements should be much lower. Third party behavior and actions are more likely to be adjusted or different from No. 6.
Outcome No. 4 is the game changer.
It appears management has appropriately shifted regulatory affairs resources to PH-10, an asset whose value only has grown as the third party validation and understanding of PV-10's mechanism of action and mechanism of immune response has grown. There should be more information to come on this item.
I think the target date for an announcement by the Provectus about regulatory clarity, at this point, could be around or before the European Cancer Congress ("ECCO") 2013, which runs from September 27th to October 1st. Let's see.