$PVCT: Can Management Get A Deal Done In China?

From what I can gather, Peter traveled to Singapore and China on his latest trip to Asia. I don't yet why he was in Singapore. I think there are shareholders in the country, and Singapore has long been a source of global financing for companies in many industry sectors. Peter's time in China relates to the company seeking outlying geographic licenses, as it wrote in its last two 10-Qs.

There is no doubt China has vast potential for any company, now particularly in pharmaceuticals

Click figure to enlarge it. Source: China's Pharmaceutical Industry - Poised For The Giant Leap. KPMG, 2011.

Click figure to enlarge it. Source: China's Pharmaceutical Industry - Poised For The Giant Leap. KPMG, 2011.

Click figure to enlarge it.

If Provectus were to get a mini-oncology deal done in China, the lead indication would be liver cancer, the market for which there is enormous: there are about 350,000 new liver cancer cases each year, or half of the world's total (see blog post here).

Lung cancer is comparable, as you can see from the table immediately above. A recent article on lung cancer in Beijing can be found here. I think the company has demonstrated PV-10 success with small cell lung cancer in murine models. Craig has show more results for this indication by creating and injecting lung tumors.

I suppose a potential deal could be in the order of at least $1 billion (top-line figure), comprised of:

• An upfront payment (e.g., $25-50MM),
• Milestone payments (e.g., $100-150MM), and
• Royalty payments (e.g., double digit percentage).

Aside from a large, well structured deal, the choice of the partner -- the domestic Chinese pharma entity -- and securing the backing of the government are both critical.

I worked with a company in China for a few years. Because it was in the financial services space, it sought the support/imprimatur/backing of the State Administration of Foreign Exchange (SAFE) and the People's Bank of China (PBOC).

I would assume, like with Australia's Therapeutic Goods Administration (TGA), Provectus is working closely with a regulatory body and/or, more critically, a governmental agency to seek or secure backing of some sort to increase the likelihood and scope of success in China.

#NYTimes: Ruling Is Victory for Drug Companies in Promoting Medicine for Other Uses

"In a case that could have broad ramifications for the pharmaceutical industry, a federal appeals court on Monday threw out the conviction of a sales representative who sold a drug for uses not approved by the Food and Drug Administration. The judges said that the ban on so-called off-label marketing violated the representative’s freedom of speech."

Full article here.

Blog Reader Questions

You mention that management believes the company is worth between $7-10 billion. At 113 million shares outstanding, that would indicate a price per share between $62 and $88. Is this plausible?

The figure you should use in the denominator is about 155 million shares fully diluted, which would includes preferred and common shares, stock options and warrants. Using, for example, the 2011 10-K:

• 3,531,665 preferred shares,
• 110,596,798 common shares,
• 14,890,956 options, and
• 25,119,247 warrants.

$7 billion ÷ 154 million = $45 per share. At $10 billion, $65. 

Since there will be a difference between the strike or exercise price and the share price at the time either a stock option or warrant are exercised, as well as cashless exercises features, the total number of options and warrants included in the denominator typically would not be the figures above, but a lesser amount. So, the per share range is a rough estimate.

I think you approach the answer to plausibility in two ways by asking: at what price would management sell, and for what price would Big Pharma pay?

You won't pry the company out of Craig's cold dead hands for less than $50-60. That is the easy answer. If you think you have a/the near cure for a number of cancer indications (and can validate it as such), at what price would you sell?

As for what Big Pharma would pay, I think it ultimately depends on the intensity of the auction. The corporate development or M&A folks at a Big Pharma company will do their respective valuation work to arrive at a range of valuations for Provectus (e.g., Comparable Company Analysis, Discounted Cash Flows Analysis, Precedent Transactions). They will use this (and knowledge about the size of their respective checkbooks) in their discussions with the company, but also in the context of negotiating against other Big Pharma companies interested in buying Provectus. Management's valuation work along these lines informs their own expectations of value.

Why did they need the IPO for a Nasdaq listing if a derm or geographic deal was in the cards? Or the SPA, for that matter?

I think management thought they could secure a NASDAQ listing through the PVCTP "IPO" for the sake of the listing itself: the greater awareness it would bring the stock and company, and the greater accessibility to the stock for a wider swath of buyers. Management had a valuation threshold below which they would not consummate a deal (i.e., pricing) for the IPO. If they got the terms they wanted, they would do an "IPO." If they did not get acceptable terms, they would not do an "IPO," and continue exploring deals for dermatology or oncology in certain geographies. The latter, of course, is what transpired.

Blog Reader Question

I agree with your recent blog post that the fireworks will all go off in one day (or week) to catapult the share price. Yet, in your opinion, why hasn't the share price reflected anticipation? Perhaps the fear of dilution?

The above is from a reader with whom I regularly and very enjoyably e-mail back-and-forth about all things Provectus.

There is market confusion regarding the PVCTP "IPO." The company is in control of the process by which terms are set; that is, management is negotiating with the prospective lead investor(s). Of three potential investing entities (two strategics, one financial), one or two of them would lead or co-lead the round and account for about of half of its proceeds.

Maxim, in order to gauge whether there are 300 or so fellow round lot holders to follow the lead investor(s), is circulating "not established" deal terms of a potential "IPO" that are (a) very attractive for prospective investors subscribing for it and (b) very unattractive for existing shareholders and prospective pre-"IPO" buyers of the common stock.

Specifically, the "at market" conversion ratio -- the purported $4 per share PVCTP offering price divided by the PVCT.OB share price when the "IPO" closes, which at today's closing price of $0.67 would yield a conversion ratio of 6 -- and warrant coverage -- at least 40-50% to perhaps as high as 100% -- indicate drastic dilution of about 25-30%. I do not think nor do I believe management would allow existing shareholders, particularly long-time and very long-time supporters, to incur such pain. Market uncertainty, however, is being created.

As a result, some existing shareholders may be selling some or all of their share ownership and/or refraining from buying more shares. This group believes it sees likely dilution ahead. There may be other contributors to selling in September, too. Prospective new investors may be refraining from buying more shares because of the dilution they too believe will result from the PVCT "IPO."

There also is, more broadly, a continued "show me" attitude with prospective investors who are not confused by nor care about the PVCTP "IPO" and a dilution bogeyman: Show me the SPA. Show me the final MM Phase 2 trial data. Show me more Moffitt data. Show me more about the Pfizer interest. Show me. Show me. Show me.

Yes, kalkoen-man, the SPA did not show up this week. I admit, pabo-tao, that Q3 effectively ended today. You may commence the grief giving indioilar-man.

In all seriousness, however, I am focused on the outcomes of next week following ESMO 2012. As arguably the biggest event in the company's history, I expect management to use the venue as a platform for Provectus and PV-10. What is more critical to the common stock is not the nervous nellies, nor is it sharp investors looking for a good deal. Rather, it is the Missourians in the crowd who, upon reading the SPA PR, the ESMO PR(s), the Moffitt PRs, etc., come off the sidelines and buy, buy, buy.

Let us circle up towards the end of next week and take stock.

$PVCT.OB's PVCTP "IPO:" Maxim (update)

The current Maxim presentation of some of the deal terms:

• There appear to be 2 lead investors who would subscribe for one-half of the deal.

• A closing next Wednesday or Thursday,

• A $4 offering price,

• An "at market" conversion ratio, where the ratio is based on the common share price at closing/final pricing of the PVCTP "IPO," and
• i.e., conversion ratio = $4 ÷ closing PVCT.OB share price at PVCTP deal closing
• The conversion ratio may be lower. That is, a higher-than-actual common share price could be used.

• At least 40% warrant coverage at an exercise price of a 10% premium to the offering price
• i.e., $4.40
• The coverage percent may increase.

Management needs to know if it can secure a sufficient number of round lot shareholders to meet the minimum NASDAQ listing requirement. Maxim investment bankers and stock brokers are not directly privy to the company's discussions with prospective PVCTP lead investors, but the underwriter is a management tool for this piece of information discovery. The process to determine if there are 300 round lot shareholders to participate in the PVCTP "IPO," should management ultimately decide to utilize it is what it is. The uncertainty it may cause to the common stock share price in the process is an irritant.

On the topic of the SPA PR, I continue to hold to management's Q3 guidance as my baseline expectation (until I am required my expectation). I am certain to get grief from Hr. Tyrkiet, a chief Investor Village poster, reader of this blog and periodic e-mailer (bring it on Señor Pavo!), about this should no SPA is announced in Q3. Today (last evening to this evening) is Yom Kippur, and I would imagine not an appropriate day on which to issue an important PR. 

Blog Reader Statement About $PVCT.OB

A view from The Peak, Hong Kong

The price is making me ill. Was the preferred share option a mistep by management? I emailed the company and they seemed to think it would raise the stock price, but this is clearly not true at this point. It's just extraordinarily discouraging after holding the stock for so many years to see it at this point.

I will have more comments later tonight (my evening in Hong Kong, and your afternoon in Europe or morning in the U.S.) after I return from a reception and dinner at Cafe Deco on The Peak.

The preferred share offering of PVCTP is a vehicle that would be (i) used to bring a name into the shareholder base, either a corporate (like Pfizer or J&J or another Big Pharma company) or financial (like a well-known life sciences fund) investor, (ii) led by said name, either corporate or financial investor and (iii) at acceptable terms to management that would be beneficial or not punitive or overly dilutive to existing shareholders -- all of which would lead to a NASDAQ-listed security.

The preferred stock offering may end up going unused for a variety of reasons, such as the common stock makes its way onto the NASDAQ by itself or potential terms of a PVCTP offering are not acceptable.

Blog Reader Question About $PVCT.OB

The company didn't list "raising money" in the public market in any news release. They said possible dermatology deal or strategic investment. If this preferred is for the latter then why list it? How can we have a listed security if there is only 1 owner. I think you have to have 300 investors for a security to list on the NASDAQ. If that is the case then some of the details of this could be much less important. What are your thoughts?

Yes, the preferred stock offering (the "Offering" or PVCTP) must have at least 300 round lot shareholders to list on the NASDAQ, so there will be multiple initial owners of the Offering if and when it is utilized.

The NASDAQ requires an underwriter for a stock exchange listing, like Maxim. Any investment bank could be brought on as a co-underwriter ("co-manager") alongside or a secondary underwriter below Maxim.

I think the Offering facility is important for several reasons, and refer to it as a facility to mean a tool that can be used, as opposed to a live offering.

The PVCTP filing is a preliminary, placeholder document that does not specify the conversion ratio (i.e., the number of shares of common stock into which one share of preferred stock converts) or prospective warrant coverage, which help ascertain the valuation at which the deal will be done and the dilution that would ensue. Management, with feedback from Maxim and based on the interactions with and feedback from corporate and/or financial investors who subscribe to the deal, will set the conversion ratio. Maxim called prospective financial investors about the Offering at least beginning this past Thursday to gauge indications of interest to buy preferred stock.

As I wrote at the outset of this blog post, there is no certainty Provectus ultimately utilizes the Offering. It is an optional strategy. Being on NASDAQ enables much more visibility and awareness of the stock and company, an obvious observation on my part that refers both to PVCT.OB, when it trades on the major stock exchange, and PVCTP.

PVCTP is one of several plays that could be run. Some of these plays could be run standalone, and others in some kind of chronological order:

A. The SPA and/or more Moffitt data may be sufficient to propel the common stock to the NASDAQ. PVCT.OB requires 5 consecutive days above $2 to move to the major stock exchange. 

B.  The Offering could be used to "up list" the common stock onto the NASDAQ. PVCT.OB would trade higher (i.e., over $2 per share) if PVCTP were sold for $4 per share or higher with a favorable [to the company and existing shareholders] preferred stock conversion ratio. Perhaps the SPA and/or Moffitt PRs were insufficient to move the common stock as high as though, hoped for or needed. Life sciences investors who then would feel comfortable coming off the sidelines could buy a NASDAQ listed security. PVCTP then "drags" PVCT.OB onto the NASDAQ. 

C.  The Offering could be used to turbo charge the common stock once PVCT.OB trades on the NASDAQ. Management could offer PVCTP after the common stock lists on the NASDAQ. Buyers of the preferred stock likely would include life sciences investors, where the preferred stock conversion ratio probably is more favorable for the company than in B.

One of several securities could be sold to a Big Pharma company as part of a strategic equity strategy or program:

• Common stock, likely when PVCT.OB trades on the NASDAQ. Like with J&J's JJDC deal with Genmab, there will be a premium to the then current common stock share price. J&J paid a 30% premium. The transaction price, however, will be anchored ultimately by where the common stock is trading. Duh!: The higher the common stock, the higher the transaction price;

• A non-listed preferred stock security that either exists today or will be constructed; and

• PVCTP. Since 300 round lot holders are required, any use of the Offering for a Big Pharma company or its development corporation also would include financial investors.

Do not dismiss the corporate governance and compliance housekeeping stamp of approval the NASDAQ provided Provectus by its PVCTP listing approval. The process management undertook to complete NASDAQ's process was non-trivial, and takes corporate governance (and all related matters) off the due diligence checklist for serious life sciences (and other institutional) investors.

$PVCT.OB Files A Preferred Share Prospectus

Here is my follow-up to my post on today's prospectus filing.

Management filed a preliminary prospectus supplement for the issuance of:

• Series A 8% convertible preferred stock, and
• Series D Warrants to purchase Series A 8% convertible preferred stock.

Note the above preferred stock is different -- it has a different CUSIP number; that is, it is a different security -- than the convertible preferred stock, which had its own CUSIP number and warrants to purchase common stock, Provectus issued in March 2010.

The filing had blanks for numbers of shares and warrants, warrant exercise price, etc. Basically, the filing was a placeholder. This filing, the specifics such as they are, and the process behind it are a big deal [to me]:

• As I mentioned earlier today, this new preferred stock security will list on the NASDAQ CM (Capital Market) under the symbol PVCTP.
• Note, again, that the other preferred stock security is not related to the new preferred stock security and, thus, will not list.
• PVCTP also is ready to list, if and when the company issues it to fund raise; that is, there is no waiting period. Like an IPO, when the security is issued for money, the "paper" goes live.
• The new preferred stock will be priced above at least $4 per share, and the associated warrants to buy PVCTP will have an exercise price of at least $4. The $4 level is the minimum requirement of NASDAQ to list any new security (e.g., like an IPO).
• Final PVCTP pricing likely would be influenced by the price of the common stock at the time the issuance is finalized or "goes public." If the common stock is below $4 per share, PVCTP would be sold for no less than $4 per share. If the common is higher or much higher than $4 per share, PVCTP could or would be priced above $4.
• The bookrunner or underwriter is Maxim Group (again, note the different language of prospectus supplements and placement agents, versus underwriters and this issuance).
• By approving Provectus to list this new preferred stock security, the NASDAQ undertook a due diligence process that included vetting the security, management, the board of directors and the company.
• While the new preferred stock certainly could be issued to life sciences investors, name or otherwise, I think it is clear the security is targeted at and destined for a Big Pharma company as part of the strategic investment strategy Provectus noted in its second quarter 10Q filing. If I had to, er, guess, the Big Pharma company is Pfizer.

With the mechanics already in place for a minority equity investment from a corporate like Pfizer or J&J or other Big Pharma company, now the focus turns to closing such an investment.

Strategic Investment Strategy?

Provectus filed a prospectus to raise money through the issuance of Series A preferred shares and warrants on these preferred shares today. No announcement of the actual sale and, thus, fund raising, has been made.

These preferred shares will trade on the NASDAQ as PVCTP (see below).

More later...

A Similar Deal?

My thanks to a blog reader who informed me of Genmab's licensing deal with J&J's Janssen subsidiary, which was announced last week on August 30. The structure of the deal has several features that I think could be similar to what Pfizer, or another Big Pharma company, might employ with Provectus (if indeed such a deal is consummated).

J&J's Janssen unit licensed, on an exclusive global basis, daratumumab, a human CD38 monoclonal antibody, from Genmab. Daratumumab currently is in Phase 1/2 trial development for multiple myeloma. Genmab also granted Janssen a license for a backup human CD38 antibody.

I thought it would be instructive to review the Genmab-J&J deal. Genmab received or will receive:

• An upfront license fee of $55MM (DKK* 327MM);

• An equity investment of $80MM (DKK 475MM) from J&J venture capital subsidiary Johnson & Johnson Development Corporation (JJDC) for 10.7% of Genmab. JJDC's cost basis for these new shares was DKK 88 per share. Genmab's closing share price on August 29 was DKK 67.85, so the equity investment was made at a 30% premium to the share price. CPH:GEN closing share price today was DKK 83.30. Together, the upfront license fee and equity investment infused Genmab with about $135MM in immediate capital;

• Development, regulatory and sales milestones of up to $1 billion; and

• Royalties of tiered double digit percentages (i.e., >10%). This assumes I understood the various descriptions of the deal structure in terms of royalty payments being in excess of milestone payments.

* DKK is the symbol for the Danish krone. At the time of reporting, US$1 = 5.9272 DKK.

According to Reuters, "[t]he deal led Genmab to raise its guidance for 2012 revenue to 435-460 million Danish crowns from 375-400 million, and cut its full-year operating loss forecast to 140-190 million from 200-250 million." The deal appears to be responsible for a 15-16% positive increase in top-line and a 32-43% less negative decrease in bottom-line guidance.

Genmab had about a DKK 3B market capitalization before the deal was announced. As of today's closing share price, the market cap was about DKK 3.7B.

J&J:

• Will own an equity stake in Genmab via JJDC;
• Will be fully responsible, via Janssen, for all costs associated with developing and commercializing daratumumab going forward, including the costs of two ongoing Phase 1/2 studies;
• While Genmab will be responsible for phase I/II trials (GEN501 and GEN503) with daratumumab, other development, clinical and regulatory filing activities will be handled by Janssen.
• Will explore at least 10 new studies, including phase 3 trials: Besides multiple myeloma, daratumumab may be evaluated for acute myeloid leukemia, diffuse large B-cell lymphoma, plasma cell leukemia, follicular lymphoma, acute lymphoblastic leukemia, and mantle cell lymphoma.

What's Going On? In Actuality, Not Much, For Now.

Today's share price drop spooked some shareholders, while continuing to frustrate others.

An intraday low of $0.67 on much heavier than [recent] normal volume (337K v. 70K) suggests either indiscriminate (i.e., a shareholder raising cash for whatever reason) or determined (i.e., one's thesis or reason for buying no longer is there, therefore one sells) selling.

Management thinks Provectus is at an inflection point. It thinks the company has been at this inflection point for some time (i.e., refer to Provectus' corporate presentations since last year). The data and value support "external validation" and, therefore, a meaningful event. The tipping point, then, is when such value actually is recognized, and should occur after the receipt of the SPA, which paves a clear path towards the approval of PV-10 for local (loco-regional) use, and the release of more Moffitt work, which clearly substantiates PV-10's systemic use. PV-10's multi-indication viability goes without saying

Provectus is a broken stock, saddled by having to trade over-the-counter and legacy decisions regarding cash bonuses. An independent board now oversees compensation decision-making.


A familiar mantra remains: The value proposition of the business has never been stronger. The value proposition of the stock in the near-term remains dangerously weak.

With no strong buying interest (thus, a weak bid), indiscriminate or determined selling can easily push the share price lower. With no new news as yet, the fear of a cascade affect on selling remains: Some shareholders sell. The price drops. More shareholders sell. The price drops even further. And so on.


Has anything changed in one day? Five days? One month? Three months? Six months? Year-to-date? Click on this Google Finance chart of PVCT. The share price's period loss ranges from -8% to -13%. Ironically, for the share price, nothing really has changed, save more of the same: stagnation, or more accurately, a painfully slow drift downwards.


For the business, the value proposition has increased dramatically. The SPA is in the bag; however, I cannot foresee when it is received, and can only rely on management's Q3 guidance. More Moffitt data should be very highly anticipated, and put a final nail into the coffin of criticism of or skepticism about PV-10 not being a systemic agent.


So how does the stock become unbroken? A move to the Nasdaq reforms and refreshes the stock, but certain events must be triggered.


Some kind of transaction or related event is in the offing. I cannot divine the timing. What kind of transaction?

• A mini-oncology deal (a geography-specific, indication-specific license transaction). Perhaps two such deals.

• An equity transaction by Big Pharma.

A dermatology deal will occur when prospective partners get full comfortable with the data. There, PH-10 data will drive the time frame and the value (as PV-10 data has for oncology).

My investment thesis remains sound. My analysis, which is constant and continuous, remains positive. The stock price performance, while dismal, remains a non-factor for now.

I Love It When A Plan Comes Together

(I liked the movie remake, despite being a fan of the original series.)

I've enjoyed immensely interacting and sharing information with other large shareholders over the course of my share ownership of Provectus. The blurb below, from the Medical Technology Stock Letter, was e-mailed to me by one of these folks (underlined emphasis below is this person's):

Amylin is being bought for $31 per share by Bristol-Myers who upped their bid from $22 last weekend to close the deal. And then in a stunning and unusually creative move for Big Pharma, Bristol went out and teamed up with Astra-Zeneca who bought half of AMLN for $3.4 billion. The fact that another biotech has been bought for a substantial premium by Big Pharma is positive as it signals that M&A in biotech remains hot. Bristol is really stepping up their M&A pace as this is the second big deal for them in 2012, they paid $2.5 billion to acquire the hepatitis C company, Inhibix. The company is trying to replace their top selling drug Plavix which went generic last year and represented $7.1 billion in sales. Big Pharma is in big trouble as last year they lost patent protection on drugs valued at $34 billion in annual sales, an amount that is estimated to grow to $147 billion by 2015 according to data compiled by Bloomberg. The Bristol deal is the fifth sealed in 2012 for more than $1 billion, almost doubling the rate of the previous two years. We are clearly on the cusp of a long-term trend as there are not enough new drugs in Big Pharma’s pipelines to drive top-line growth. 

Another important positive from the deal is Big Pharma’s willingness (at least Bristol-Myers & Astra-Zeneca) to work together and be creative as they slice and dice up the best of biotech’s developed drugs. Bristol and Astra also helped themselves by avoiding a bidding war as they could have easily driven the price for AMLN higher if either party had been too stubborn to ink a 50/50 partnership.

In my view, the essence of the blurb rather aptly summarizes the company's current situation.

To answer a blog reader question: I do not know when Provectus will announce receipt of the SPA. I still speculate mid-July [for an official announcement] (recall I previously speculated as early as late-June), but management's guidance was base case Q3. Q3, rather obviously, comprises the months of July, August and September. If no more details are to be hammered out, what only should remain is official notification. There is, however, a difference between agreeing with the FDA on the SPA, and announcing its official receipt.

I close with another much appreciated blurb from the same shareholder [who provided me the one above]. It's from a SeekingAlpha article on Gleevac in which the author's comments crystalize the opportunity with Provectus (in the view of the shareholder):

$100M Mixed-Securities Shelf (update)

After filing a $100MM mixed-securities shelf (i.e., common and preferred stock), Provectus now has a total of $200MM in shelf filings:

• It's first $50MM common stock shelf filed June 30, 2010;
• A second $50MM common stock shelf filed July 15, 2011; and,
• This morning's $100MM common and preferred stock filing.

A practicality: Given today's filing, it's possible management may cancel the other two shelfs. The goal of the today's shelf was to have a preferred security [easily] available for sale; however, the structure, easily replaces common stock features of the prior shelfs.


One fact: 3.4MM preferred shares are outstanding out of an authorized amount of 25MM; thus, some 21.6MM remain available for issuance.

A reminder: Issuing a dollar-based shelf, rather than a number of securities-based one, means eventual dilution is market capitalization-based and, thus, calculated.

In the company's March 2010 private placement, Provectus issued 8% convertible preferred stock to a number of institutional investors. At the time, aside from raising money to fund operations, it appeared management's strategy was to bring institutional names into the stock and provide these investors with a security (preferred stock) that would have and hopefully further induce a longer-term holding period than issuing common stock.

The mixed-security shelf, by virtue of the preferred stock component, provides a mechanism for a strategic minority investment by Big Pharma. Although it is possible such stock could be issued to institutional investors, a strategic investment is more likely given where Provectus and PV-10's clinical, business and regulatory value propositions currently and future propositions are.

With the involvement of a strategic (e.g., a corporate investor like PFE or JNJ or "insert name") in a shelf issuance, the mechanism and features of preferred stock can facilitate a transaction in ways common stock cannot to the benefit of both buyer and issuer; such as, to provide the necessary structure and rationale [for the buyer] to support a premium to [the seller's] share price.


For example, PFE, a possible strategic given, among other things, Dr. Eagle's presence on Provectus' corporate advisory board), or another big pharmaceutical company could buy 4 to 5 million shares (maybe a lower amount) at $5 per share (maybe at lower price, too).

I'll address (speculate) what a strategic investment does to the perception, options and outcomes for the company in a subsequent post.

Provectus Pharmaceuticals Files $100M Mixed-Securities Shelf

The filing is here.

PFE, JNJ

It is interesting to note that oncology contributed less than 2% of Pfizer's Q1 2012 revenues.

For JNJ, the figure is less than 4%.