September 14, 2013

Upping the Volume

Click to enlarge figure.
5- and 10-day average volume of Provectus share crested early this week, after digesting a 1.36MM share day on August 28th, the day after Agora Financial sent out a newsletter alert related to the company. Through the end of the week, trading volume (5- and 10-day averages, again) remained 3-5 times that of May through mid-August.

I highlight 4 "events" (as green dots) on the figure to the right: daily trading volumes for Moffitt's August 22nd PR, Agora Financial's August 27th newsletter alert, Peter's arrival in China on September 3rd (he actually arrived earlier, but the 3rd was the first trading day of his trip) and Peter's return to the office on September 9th. A teaser for Peter's interview with The Wall Street Transcript was made available on the 13th.

Click to enlarge figure.
A graph of cumulative trading volume (left axis, and blue, red, green and purple markers to the left) points to a change in behavior since the Agora Financial alert. You could observe, I suppose rather obviously, that someone(s) is(are) buying in anticipation of something(s). Unfortunately, there has been ample supply of stock for sale, which has kept a reasonable lid on share price (right axis, and blue line to the left).

The crux of the situation for the Provectus management team, and thus the stock, is to demonstrate their ability to manage the regulatory approval process to fruition, without which or until such time there is no credibility of company managers in the eyes of serious life science investors.

There is no doubt is has taken a long time for the company, specifically Eric, to complete the final clinical study report, which has taken the following notable steps over 6 years:
The metastatic melanoma ("MM") Phase 2 final clinical study report has been submitted to the FDA in its entirety.

One could rationalize the pros and cons of the time taken to complete the data analysis process. Here's where my inexperience with, or lack of knowledge of, the clinical trial process (and thus I suppose biotech investing) reveals itself.

Provectus' MM Phase 2 trial process break downs into:
  • Patient accrual and treatment: 2 years,
  • Through data gathering, initial reads and preliminary analysis: 3+ years,
  • Through final analysis: 5 years, and
  • Through final clinical study completion: 6 years.
Without a final clinical study report, it appears there is no process step bridging data set compilation and finalization and regulatory decision-making. In plain English, no final study report, no SPA (con). At least for me, this begs the question of whether Eric was surprised in or before October 2012 that the Company would not receive the SPA (ultimately, regulatory clarity) until the final clinical study report was completed.

No study report facilitates or results in or simply is low profile, which either is intentional or unintentional, particularly when data only is released at medical conferences, and provides an extremely valuable opportunity to scoop other companies and their therapeutic agents with Provectus and Pfizer's September 2012 joint combination therapy patent application: Provectus Pharmaceuticals' Patent Application Published for Combining Local and Systemic Therapies for Enhanced Treatment of Cancer.

Time taken also allowed for two key discoveries, one much more unexpected than the other. First, the orthogonality of PV-10, which Peter describes in last week's The Wall Street Transcript ("TWIST"): "Fortunately, and importantly, our drug PV-10 does not have any negative interactions with literally all the drugs we’ve combined it with to date. It truly works in a synergistic manner, by boosting the patient’s immune system response."

This orthogonality, while key to the pharmaceutical industry, as Peter also comments on in the TWIST interview -- "Pfizer recognizes, as the industry does, that our drug may be valuable when used in combination with other agents." --  also may play a key role in the outcome of regulatory clarity with the FDA, such as breakthrough therapy designation ("BTD") in combination with, say, ipilimumab marketed as Yervoy and/or vemurafenib marketed as Zelboraf for stage IV M1a, b and c MM patients, rather than "just" BTD for loco-regional control of Stage IIIb and IIIc patients.

Second, the very unexpected discovery and proof of a local immune-mediated response, which is the core of Provectus' abstract at ECCO 2013 -- "The new data analysis described in Abstract No. 3,755 further examines these response rates relative to a specific reaction, locoregional blistering...This phenomenon, which generally occurred within seven days of PV-10 injection but with no clear pattern of incidence, typically resolved within four weeks. Appearance of this potentially immune-mediated effect was strongly predictive of outcome." -- may play a key role in potentially a parallel regulatory clarity outcome with the Agency, such as accelerated approval ("AA") or outright approval for stage IIIb and c MM patients with refractory, locally advanced disease.

I think there has been an interesting development with the FDA more broadly, which may greatly benefit Provectus. Last week, "[a] federal advisory committee cleared the way on Thursday for the first approval of a cancer drug that would be used to treat patients before surgery to remove their tumors[:]" Genentech's Perjeta as a preoperative treatment or neoadjuvant therapy.

From the same New York Times article by Andrew Pollack: "About 39.3 percent of patients who received Perjeta plus Herceptin and taxotere had what was called a complete pathologic response, meaning no invasive cancer was detected in their breast tissue or in any removed lymph nodes. For patients who received only Herceptin and taxotere, only 21.5 percent had a complete pathologic response."

Combined with results from Moffitt Cancer Center's ("Moffitt's") Detection of Immune Cell Infiltration Into Melanomas Treated by PV-10, a Feasibility Study, management believes they now have demonstrated to the FDA that "[i]n this patient population refractive to other local treatments such as surgery and radiation, intralesional PV-10 provided a viable strategy to maintain, with minimal intervention, locoregional control of the disease with the potential to delay, reverse or prevent progression to life-threatening visceral disease." This is the last sentence of the company's ECCO 2013 abstract.

Pollack wrote about Perjeta: "It is not clear whether a drug that increases the rate of pathologic complete responses will actually prolong lives or reduce recurrences. For that reason, the F.D.A. would give so-called accelerated approval to Perjeta, subject to confirmation with more data later." Bold is my emphasis.

PV-10's ability to forestall the onset of metastatic disease for melanoma -- that is, to make clear loco-regional control -- may imply patients live longer or not suffer recurrences. If Provectus and Moffitt's cumulative data convinces the Agency, outright approval may be the regulatory outcome. If more confirmation is necessary, AA and a so-called post-marketing study may be the outcome.

You'll recall I previously wrote about good, better, best in regards to regulatory outcome in my post entitled With the FDA, It's Good, Better, Best for PV-10 and $PVCT. There:
  • Good was a special protocol assessment ("SPA"),
  • Better was BTD, and
  • Best was AA.
After gaining more knowledge of and better insight into the situation, it would seem appropriate to revise my own assessment of good, better, best as:
  • Good still equals SPA,
  • Better still equals BTD, but with a much better and swifter conversation with the FDA about what comes with BTD (more specifically, how quickly, specifically and broadly to bring PV-10 to market for metastatic melanoma, like a 50-person trial with certain specifications that would more definitively translate into the most appropriate label for the drug), and
  • Best equals (a) AA for certain Stage III patients and (b) BTD for Stage IV patients with the remaining process to approval and certain defined likely a little later.
Regulatory clarity of pretty much any sort should trigger worldwide license discussions. Best clearly should trigger the acquisition of Provectus.

Management continues to believe clarity will be achieved in 2013. Currently, they profess to not know with what the FDA will come down as it relates to good, better, best (which are my descriptors).

Peter is in New York next week to continue regional license transaction discussions/process with the Chinese (and perhaps the Indians, who are said to be quite close behind in terms of eventually consummating a deal).

There is a rumor circulating that an addition will be made to the company's corporate advisory board, an author, speaker and Fortune 50 company executive.

Peter's TWIST interview was wide-ranging, and I have a number of thoughts on it.

I have more to say about time taken, discoveries, process, Eric, hindsight, foresight, what matters in football (winning, not stats), Craig, accumulated deficit, my support of management, and the like.

For now, from various touch points, it very much feels like the home stretch of one race or process, with the beginning of the next very much in sight.

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