March 2010: In a clinical development overview presentation, Eric discussed the company's licensure pathway for PV-10, and presented the case for and against accelerated approval. "PV-10 is snake oil" must have been a nearly universal impression among the medical oncology community at the time, until recently. At best, this community might have considered PV-10 solely a local ablative agent, since no ablative agent had ever elicited significant systemic effect. The novelty of a local agent providing a systemic benefit surely must have been on the mind of FDA personnel, too.
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Using the decision tree illustrated above, Management approached the FDA to seek accelerated approval ("AA") with "robust" interim metrics based on at least preliminary data on 40 of 80 patients.
April-June 2010: A few months later at the company's initial end-of-phase 2 ("EOP2") meeting with the Agency in April, it would seem, the FDA said no (or, not now) to the company's ask for AA. At the time the rumor, such as it was, was something to the effect that the FDA would seriously consider accelerated approval for PV-10 if the drug's mechanism of action ("MOA") could be further elucidated or understood better. The April press release contained the following quote by Craig, "We are fortunate that our capital resources afford flexibility to consider pursuing both the conventional Phase 3 pathway, as well as an accelerated route to licensure. While we believe the Phase 3 with an SPA represents an industry standard path to approval, we believe the door may still be open for accelerated approval."
At an ASCO 2010 investor event held by Provectus Eric presented the primary path (yellow) management ostensibly was going to pursue. He also presented a summary of the "robust" data presumably also shown to the FDA.
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It seems to me Plan A was to seek accelerated approval for the local-regional treatment of metastatic melanoma ("AA") as the primary path to regulatory clarity. I don't think management thought having to explain how PV-10 did what it did was necessarily germane to using the drug in a local-regional setting, in light of such efficacy results, and given the safety profile and history of PV-10's active pharmaceutical ingredient Rose Bengal. When the FDA informed management the Agency needed to understand PV-10's MOA, however, I believe management determined to meet that deliverable engaging its fall-back or redundant strategy, Plan B. Plan B, pursued in parallel, and so not a back-up from a sequential perspective, was to seek a special protocol assessment ("SPA") for a pivotal Phase 3 trial. The SPA, "...an industry standard path to approval..." as Craig described it in his April 2010 quote, ensured there was not a single point of failure for Provectus' regulatory approval work.
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"While Dr Beyster had no grand plan, the vision and mission of SAIC were very clear. SAIC was going to be built on the notion that each employee was free to pursue his/her idea, once it was done with high ethical standard. Dr Beyster believed that the best way to enforce this vision was to recruit the right people and provide a clear charter for them to follow (SAIC Credo). SAIC’s mission reflected its values: “a long-term dedication to science, national security, and the national interest.” While SAIC wasn’t sure exactly what its next venture would be, it was quite clear on how it was going to get done. If the venture was related to “national security,” then SAIC was going to unleash its “scientific talent pool” to pursue the opportunity for “a fair profit -- nothing more, nothing less...” SAIC was relentless in seeking the best scientific solution to a problem" (Source: Gangaram Singh, Professor of Management, College of Business Administration, San Diego State University, May 2007; a review of The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company, J. Robert Beyster with Peter Economy, March 2007).
I worked in SAIC's CFO's office as a summer intern during business school, and later joined its venture capital investment group, SAIC Venture Capital Corporation ("VCC") while Dr. Beyster was Chairman and CEO of SAIC. While I spent a little time supporting the company's M&A group on specific assignments, I spent more time also supporting SAIC's Technology Commercialization group (where the goal was to work with internal organizations looking to commercialize and/or spin-out innovative technologies and products). As an independent but wholly owned subsidiary, VCC's board of directors ("BOD") included Dr. Beyster (Chairman of the BOD) and independent directors Martin Marietta/Lockheed Martin executive and NASA administrator Tom Young, GEICO and Berkshire Hathaway executive Lou Simpson, and investment banker and defense research analyst Wolfgang Demisch.
SAIC's investment arm was birthed to formalize, continue and expand Dr. Beyster's long history of making minority (venture capital) investments in the companies of entrepreneurs and their innovative technologies and products, and to manage the parent company's growing securities holding in Network Solutions. "Shortly after Network Solutions received the domain name contract from the U.S. government, it was purchased by SAIC...in 1995 for $4.7 million. Five years later, SAIC sold Network Solutions to VeriSign for $19.3 billion..." (Source: Names, Numbers, and Network Solutions: The Monetization of the Internet, J. Robert Beyster with Michael A. Daniels, September 2013). My formative investment management years comprise those as a proprietary currency derivatives trader with a Midwest commercial bank, and those as a venture capitalist with VCC.
Dr. Beyster, among other things, was a research scientist from Los Alamos National Laboratory. Los Alamos, Oak Ridge, Sandia National Laboratories ("SNL") and other Department of Energy ("DOE") national labs are GOCOs. "Industrial, academic, and nonprofit organizations have historically managed the Department of Energy national laboratories and other major government owned/contractor operated ("GOCO") facilities. A GOCO partnership allows each partner to perform duties for which it is uniquely suited: the government establishes mission areas, and the private sector implements the missions, using best business practices" (Source: Sandia's Government Owned/Contractor Operated Heritage).
Lockheed Martin managed the Oak Ridge GOCO during Provectus' founders' time at Oak Ridge. Lockheed's ORNL-focused investment arm Innovative Ventures Group invested appears to have invested in Genase, Dr. Scott's company that was birthed from an ORNL research project on which he worked to develop an enzyme giving denim a stonewashed look. One of his partners in Genase was Craig. I do not know Innovative Ventures; I did, however, work with folks from Technology Ventures Corporation, Lockheed's SNL-focused investment group.
SAIC managed the National Cancer Institute at Frederick, the Department of Health and Human Service's only GOCO facility. "The NCI at Frederick and the Frederick National Lab partner with university, government, and corporate scientists to speed the translation of laboratory research into new diagnostic tests and treatments for cancer and AIDS." SAIC has long been NCI at Fredericks' Operations and Technical Support (OTS) contractor, serving as the infrastructure support for the entire facility and employing more than 1,000 staff, including scientists, research assistants, technicians, engineers, administrative, maintenance, and support personnel. Per Dr. Beyster in The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company (p. 113): "The NCI support contract was an interesting novelty for us because, according to NCI rules, we had to bid the contract at a very low fee (profit) to be considered for award. There were also some restrictions on our using the NCI contract to attract similar contracts from other potential customers. Although we barely broke even with the contract finances, the GOCO contract allowed us to hired outstanding medical researchers exposing us to the forefront of cancer medical research and, as it turned out, positioning us for the biotechnology and bioterrorism thrusts that developed in the early 2000."
While at VCC, I worked with a number of SAIC-Frederick personnel, as I did with folks from SAIC's ORNL campus.
Xconomy's Luke Timmerman wrote about 21 Red Flags to Watch for in a Biotech Company (October 2013), first and foremost among them: "Weak science: Anyone who follows scientific literature knows a shocking number of studies look groundbreaking when they first appear in top peer-reviewed journals, but the findings can’t be reproduced by anybody in outside labs. Investors should be aware of this, and do some digging to find out if they are investing in established science that has been verified and reproduced by outside groups. An analysis done by Amgen’s Glenn Begley last year, published in Nature, found that only 11 percent of the results from 53 published biology papers could be reproduced. If a company has weak science, “there’s nothing that can correct for this,” says John Maraganore, the CEO of Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY)." Bold emphasis mine.
"Weak science" typically does not come out of the National Labs, or derive from folks who've spent significant time there, especially those who have been recognized accordingly, like Craig, Tim and Eric (below, from Provectus' website):
- Craig: Awards include an R&D 100 for an industrial enzyme, an Inventor’s Forum New Product Award for a skincare product, and the first Raymond W. Sarber Award for outstanding research in virology.
- Dr. Scott: Awards include an R&D 100 for an industrial enzyme, the National Laboratory Consortium Award for Excellence in Technology Transfer, the Inventor’s Forum Advanced Technology Award, and the Martin Marietta Energy Systems Inventor of the Year Award.
- Eric: Awards include an R&D 100 for nanosensors, the Inventors Forum Advanced Technology Award, the Excellence in Research Award from the Oak Ridge National Laboratory, and an Upjohn Fellowship.
Speaking of so-called groundbreaking work published in top peer-reviewed journals that cannot be reproduced by anybody from outside labs, Moffitt Cancer Center has done just that, reproduced Craig's work: apoptosis, tissue and cell selectivity, clinically relevant local and systemic effects, tumor-specific immunity, T cells, immune-mediated response, multi-indication viability, mobile immunity, etc. Moffitt also has expanded their translational understanding and knowledge of PV-10 through more preclinical and clinical work. It seems Moffitt's Dr. Weber, influential in the approvals of Yervoy (ipilimumab) and Zelboraf (vemurafenib).
The smallest autonomous business entity at SAIC was a division, which generated annual revenues ranging from $5-50 million and typically were led by very entrepreneurial managers. Several divisions would form a business unit ("BU"), which generated several hundred million dollars of revenue and had its own managerial and administrative layer. Several BUs would form a group; groups were billion dollar plus organizations with their own leadership teams. The real work, solving client problems (turning science into solutions), often was conducted at the division and BU levels, where divisions might team up to tackle larger problems, whether in size or scope or both.
I am reminded of several tenets of Dr. Beyster's business philosophy that remind me of Craig, Dr. Scott, Eric and Provectus: Solve tough problems for your customers, use science (and technology) to create solutions that work, and do so profitably. For years, SAICers simply went about the business of solving hard problems without so much as the name of the company on nondescript buildings out of deference to customers.
I know I don't take a second look at Craig, Dr. Scott and Eric, let alone diligence them as deeply as I did, and maintain my investment in and support of them without, among other things, their ties to, time and results at and certain accreditations from ORNL.
The smallest autonomous business entity at SAIC was a division, which generated annual revenues ranging from $5-50 million and typically were led by very entrepreneurial managers. Several divisions would form a business unit ("BU"), which generated several hundred million dollars of revenue and had its own managerial and administrative layer. Several BUs would form a group; groups were billion dollar plus organizations with their own leadership teams. The real work, solving client problems (turning science into solutions), often was conducted at the division and BU levels, where divisions might team up to tackle larger problems, whether in size or scope or both.
I am reminded of several tenets of Dr. Beyster's business philosophy that remind me of Craig, Dr. Scott, Eric and Provectus: Solve tough problems for your customers, use science (and technology) to create solutions that work, and do so profitably. For years, SAICers simply went about the business of solving hard problems without so much as the name of the company on nondescript buildings out of deference to customers.
I know I don't take a second look at Craig, Dr. Scott and Eric, let alone diligence them as deeply as I did, and maintain my investment in and support of them without, among other things, their ties to, time and results at and certain accreditations from ORNL.
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November 2010. Later that year, at the 4th Interdisciplinary Melanoma & Skin Cancer Centres Meeting in Sydney, Australia, where Pfizer's Dr. Craig Eagle was said by management to first have visited with Provectus principals and principal investigators about the compound, preliminary MM Phase 2 trial was data was presented.
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March 2011. Provectus held its second EOP2 meeting with the Agency. This meeting "...addressed several topics central to definition of the applicable patient population and primary endpoint for the company's planned pivotal Phase 3 randomized controlled trial (RCT) of PV-10 for metastatic melanoma." Presumably, this is where the initial primary endpoint of durable response was changed to progression free survival ("PFS").
Management contemplated running a Phase 3 trial in Australia, in hopes of, it appeared, gaining marketing approval in the country. From the same March PR: "We are also assessing whether a second Phase 3 RCT, tailored to meet the regulatory requirements of Australia, would be helpful in accelerating approval in that important market."
Before Moffitt researchers were paid by Provectus for their pre-clinical work, it is now, in 2011, that Moffitt conducted its own unsponsored work (according to management) on PV-10's MOA and immune response.
June 2011: Dr. Sanjiv Agarwala presented at the 7th EADO (European Association of Dermato-Oncology) Conference in Nantes, France.
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The FDA reorganized in the summer of 2011.
OncoVEX(GM-CSF) and Allovectin-7 received SPAs with their respective primary endpoints for their Phase 3 trials from the Center for Biologics Evaluation and Research's (CBER's) Office of Oncology Drug Products, which was reorganized into the Office of Hematology Oncology Products (OHOP) in 2011. The FDA began the task of moving biological products from CBER to CDER in 2003.
CDER, from whom Provectus initially sought its SPA, had no experience with local agents and the SPA process for melanoma. It was their, CDER's, first time, and the company was making headway with this organization. Management indicated they fully believed and thought CDER was going to award Provectus the SPA in June or July 2011. Did they really?
Both CBER and CDER staff were reshuffled into DOP1 and DOP2 (but CBER did not become OHOP). The Division of Oncology Products 1 (DOP1) and the Division of Oncology Products 2 (DOP2) lie in OHOP.
Later that same month, Provectus reported on its third EOP2 meeting with the FDA. "This meeting was extremely productive in defining the threshold the FDA will require for approval in melanoma, which is a rapidly evolving therapeutic area." Ipilimumab was approved in March. Vemurafenib was approved in August. In this same November PR, Craig mentions a fourth EOP2 meeting has been requested, muses about a Phase 3 trial in Australia again, and notes the same organization (DOP2) reviewing PV-10 and melanoma would review PV-10 and hepatocellular carcinoma ("HCC").
January 2012: At the time, it felt to me, listening to management, that accelerated approval may have been a possible outcome. Moffitt's work had been underway, the first of which would be presented later that March: PV-10 Mechanism of Action Data to Be Presented at the Society of Surgical Oncology Annual Meeting March 21-24, 2012 in Orlando, Florida (January 17 company press release). This data would have been analyzed, prepared and summarized for an abstract previously [to the issuance of the PR] submitted to the SSO conference.
A day after the January 17th Moffitt SSO PR, it would seem not: Provectus Receives Guidance From FDA On Pathway to Approval for Phase 3 Trial of PV-10 For Metastatic Melanoma: Additional End-of-Phase 2 Meeting Not Required, Company to Submit for Special Protocol Assessment (January 18 company PR). Did the reorganization influence this, requiring revisiting the novelty of a local agent providing a systemic benefit?
After an absence, AA appeared once again in company communications. This time, in the January 18th PR: "We also continue to assess whether...emerging results from ongoing immunologic mechanism of action studies can be used to support accelerated approval in the U.S."
March 2012: At SSO, Moffitt concluded "...intratumoral PV-10 causes both a direct anti-tumoral response of the injected tumor and a systemic tumor-specific activation of the immune system."
April 2012: The annual CEO letter noted: "[Moffitt's] work is fundamental for full characterization of PV-10's systemic benefit and may provide pivotal support for accelerated approval in the U.S."
June 2012: Dr. Agarwala presented some new and final MM Phase 2 trial data at the 2nd European Post-Chicago Melanoma Meeting 2012, Interdisciplinary Global Conference on Developing New Treatments for Melanoma, which as was prelude to ESMO 2012.
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The SPA march continued, as Craig noted in the June PR: "The response rate and PFS data presented by Dr. Agarwala underscore our selection of anticipated patient population and primary endpoint for our proposed Phase 3 clinical trial protocol of PV-10 for melanoma, and are supportive of our efforts to successfully complete Special Protocol Assessment with the U.S. Food and Drug Administration (FDA)."
The FDA's breakthrough therapy designation ("BTD") was introduced in the summer of 2012.
October 2012: The month of the PVCTP IPO that did not transpire because something was not achieved still puzzles me. Management alluded to a Pfizer-led investment round that did not materialize, causing a dramatic drop in the share price and tremendous shareholder angst before Provectus pulled the plug on the offering on October 17th.
Before that, on October 2nd, Provectus presented final MM Phase 2 trial data at the ESMO (European Society for Medical Oncology) 2012 Congress in Vienna, Austria.
I've written before about this period of time. The company file a mixed shelf securities offering in July 2012, later followed by the prospectus fully describing the PVCTP "IPO." I think an effective "IPO" was doomed earlier than October, but I cannot get an answer from management on this topic.
Eric noted in the October 2nd PR: "Since our last meeting with FDA in late 2011, we have carefully studied the outcome of different sub-populations of subjects in the Phase 2 study, reviewed the criteria to be used for unambiguous assessment of response, and fostered relationships with key parties that will provide support in execution of the Phase 3 study. We look forward to formal review of the resultant protocol and supportive programmatic elements with FDA under the SPA process." What this all related to the SPA (more trial design minutiae), or was there something here related to AA?
Was the tumult influenced in some respect by the identification, at the time, of blistering?: "A high rate of response in untreated bystander lesions and transient cutaneous locoregional blistering were consistent with the novel tumor-specific immune mediated mechanism of action of PV-10" (ECC 2013 PR from October 2013).
January 2013: Provectus Pharmaceuticals Announces H. Lee Moffitt Cancer Center Initiates Phase 1 Study of PV-10 to Elucidate Bystander Effect. By now, Moffitt is fully onboard with PV-10, with Moffitt's Dr. Amod Sarnaik, M.D. noting Moffitt would verify "...the promising pre-clinical data from our ongoing work in this translational study...," "...elucidate the immunologic basis of the 'bystander effect' noted in previous clinical studies of PV-10...," and "...help optimize PV-10 treatment, particularly in combination with other therapies." Optimize means [t]o make as perfect or effective as possible. One does not optimize something unless one believes there is a sufficiently high enough level of effectiveness -- or efficacy. It was curious, at the time, that Dr. Sarnaik's quote also included: "As Moffitt pursues its mission of contributing to the prevention and cure of cancer, we are pleased to spearhead this important clinical work." The bold emphasis is mine.
April 2013: At the American Association for Cancer Research Annual Meeting in Washington, DC., Moffitt's poster presentation concludes its "...murine studies confirm that PV-10 chemoablation results in both a direct effect on injected lesions as well as a systemic response that leads to regression of uninjected subcutaneous and lung lesions. Intralesional PV-10 treatment leads to the induction of tumor-specific immunity."
This paper was a landmark in the perception of the drug to, among others, the FDA: the local agent now had proof of its systemic benefit.
May 2013: Provectus provided shareholders with an update on its regulatory approval process: "Provectus is finalizing details for submission of a pivotal Phase 3 randomized controlled trial ("RCT") of PV-10 for metastatic melanoma, suitable for Special Protocol Assessment ("SPA"), to the Food and Drug Administration ("FDA"). While preparation for submission of our SPA has taken longer than expected, it is crucial to remember that oncology presents a moving playing field. Fine tuning of the study design is expected to mitigate clinical efficacy risk, optimize patient accrual, and increase FDA's confidence that the study design and protocol will ensure the best possible outcome for our pivotal trial. We have every reason to believe this key milestone will be achieved in 2013.
Provectus is also considering applying for the new Breakthrough Therapy Designation for PV-10 to treat melanoma. This new regulatory pathway was announced with the passage of The Food and Drug Administration Safety and Innovation Act (FDASIA) in July 2012. Breakthrough Therap Designation is intended to expedite the development and review of drugs for serious or life-threatening conditions. The criteria for breakthrough therapy designation require preliminary clinical evidence that demonstrates the drug may have substantial improvement on at least one clinically significant endpoint over available therapy. A breakthrough therapy designation conveys all of the fast track program features as well as more intensive FDA guidance on an efficient drug development program. However, because this program is relatively new, the potential impact of receiving such designation is still unclear, but could be pivotal in achieving an accelerated path for approval of PV-10."
While the first of these two paragraphs supposedly contained a mea culpa from Eric -- "...preparation for submission of our SPA has taken longer than expected..." -- it cryptically described the multi-year pursuit of Plan B, otherwise known as the SPA. The writing of the second paragraph, which described BTD, was other worldly: "However, because this program is relatively new, the potential impact of receiving such designation is still unclear, but could be pivotal in achieving an accelerated path for approval of PV-10." BTD is new but the impact of it is unclear, yet it could help a lot to get PV-10 approved on an accelerated basis. Was this an homage to AA?
Sometime in the first half of the year, the FDA encouraged Provectus to submit for BTD. Like with Moffitt optimizing PV-10, the FDA surely had begun to fully embrace PV-10.
July 2013: Sent in March, accepted in May and published in this month, Moffitt's critical paper Intralesional Injection of Rose Bengal Induces a Systemic Tumor-Specific Immune Response in Murine Models of Melanoma and Breast Cancer formed the second of two pillars underpinning AA (the second being the MM Phase 2 trial results).
August 2013: Single Injection May Revolutionize Melanoma Treatment, Moffitt Study Shows. Single injection. Revolutionize. Heady words from a cancer research center with a national, if not global, reputation. Is the use of the word revolutionize a hop, skip and a jump from the use of the word cure?
September 2013: Dr. Agarwala presented detailed findings of several exploratory analyses of data from Provectus' completed Phase 2 study of intralesional PV-10 in MM at the European Cancer Congress 2013 (ECCO 17- ESMO-38 - ESTRO 32) in Amsterdam, The Netherlands. The poster highlighted clinical and non-clinical evidence that PV-10 induces systemic immunologic activity, and also noted local immunologic activity described as blistering: "A high rate of response in untreated bystander lesions and transient cutaneous locoregional blistering were consistent with the novel tumor-specific immune mediated mechanism of action of PV-10."
Craig noted: "The researchers concluded that PV-10 has a unique immuno-chemoablative profile that offers significant potential due to several important attributes. First, its safety and efficacy compare favorably with existing and emerging therapies. Second, its safety profile makes it an attractive candidate as a combination strategy for treatment of advanced disease. And finally, it provides a powerful combination of rapid reduction of tumor burden with induction of tumor-specific immune response that can achieve rapid disease control in refractory patients with locally advanced melanoma."
"Melanoma patients and their caregivers experience profound discouragement upon recurrence of the serious skin manifestations of this disease. The investigators on this study describe the effect of PV-10 as "rapid, durable response" but as the photographs have documented, many of the PV-10 treated tumors almost appear to have never been present. PV-10 was only injected intermittently, when tumors were present during the first 16 weeks of the study, in stark contrast to typical clinical studies where treatment is given until either resistance is engendered or patients experience unacceptable toxicity. We are gratified that response to PV-10 was demonstrated consistently across all study centers, with minimal intervention in patients refractory to multiple prior treatments. PV-10’s unique mechanism of action, alone or in combination with existing or emerging therapy, has the potential to shift the paradigm in oncology, where an intermittent intervention can dramatically reduce disease burden and may prod the immune system into preventing or arresting the formation of life threatening metastases." Bold emphasis is mine.
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I have spent time trying to understand and record certain history of Craig, Tim and Eric, as ORNL turned into Photogen Technologies turned into Provectus Pharmaceuticals. How did they approach and solve the root of a problem of global importance called cancer? Specificity (at a cellular level). Safety. Route of delivery. A thoughtful choice of Rose Bengal, when it came to the long game of regulatory approval, and drug development expense.
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October 2013: We heard the company's BTD and SPA applications have been submitted. We heard proof of systemic benefit, which was made by Moffitt, and the MM Phase 2 trial results, which had been finalized and submitted, were sufficient to provide the regulatory clarity Provectus has long sought. Eric: "“If we had an ironclad explanation of this bystander effect that they could understand that it was … real and … why it was occurring, they would be more amenable to a more aggressive pathway to approval,” Wachter said of the FDA" (August 2010). Moffitt's PLoS paper, published in July, detailed PV-10's systemic benefit. The final MM Phase 2 clinical study report, all 2,339 pages of it, was submitted in October.
November 2013: Management expects regulatory clarity before the end of the year. The baseline expectation is of course the SPA.
I expect more: AA and/or BTD.
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