$PVCT: More Data Is Necessary Until It Isn't

On the one hand, Provectus has a $64MM market capitalization (as at Wednesday's closing price). On the other, Moffitt might say PV-10 is the nearest thing they have seen as a cure for cancer, or Pfizer might consider PV-10 the holy grail*. There's a lot of space between those two hands. Cures and grails obviously have not yet translated into a commensurate company valuation. And therein lies the answer, I think. You see it separately with PV-10 and PH-10.

PV-10: Big Pharma clearly recognizes a group of drug compounds have local and distant effects on lesions, substantiating the hypothesis injections of these drugs in local tumor lesions result in systemic effects. PV-10 works more easily and effectively. It took Moffitt time, effort and work to begin to wrap their heads around this "phenomena." In the process, they could confirm the first, second and last solution PV-10 may well be (e.g., a pre-surgery treatment).

PH-10: If the premise is that PH-10 has no toxicity, and that the "normal rules" of treatment do not apply, what then? Even though Provectus likely has sufficient directionally positive clinical data for a dermatology transaction, immunologic MOA characterization work, as I previously wrote about, would be helpful with the FDA in designing toxicity studies appropriate for an approved drug. This work should make dermatology companies more desirous of PH-10. The immunologic MOA characterization work came to the forefront when management was working on the remaining toxicity studies for the FDA. When they had difficulty finding any dose limiting toxicity (DLT) or maximum tolerable dose (MTD), they sought to better understand PH-10's unique lack of toxicity.

The answer? Big Pharma just might need more data than otherwise would have been necessary before pulling the trigger(s).

* "The holy grail for cancer would be to trigger the body’s own immune system to fight off the cancer, so that you somehow stimulate the antibodies in a way that that happens." Fareed Zakaria, Fareed Zakaria GPS

$PVCT.OB: The First Anniversary of This Blog

I wrote my first blog post on November 16, 2011. At the time of that post: "The share price is $0.88. 14,700 shares have traded." Today, it closed at approximately $0.53, down about 40%, and traded about 54,000 shares.

Click on the figure to enlarge it.

In the past 12 months, Provectus' notable PRs included:

• October 29, 2012: Provectus Presents Nonclinical Data on Antitumor Immune Response to PV-10 Immuno-Chemoablation (very key),
• October 17, 2012: Provectus Pharmaceuticals Terminates Proposed Convertible Preferred Stock Offering (the failed IPO),
• October 2, 2012: Provectus Pharmaceuticals Presents Final Phase 2 Melanoma Data at ESMO 2012 (key),
• September 28, 2012: Provectus Pharmaceuticals' Patent Application Published for Combining Local and Systemic Therapies for Enhanced Treatment of Cancer (the joint Pfizer-Provectus patent app),
• September 27, 2012: Provectus Expands Protocol for Phase 1 Liver Cancer Study (important),
• June 26, 2012: Provectus Pharmaceuticals Presents Final Phase 2 on PV-10 At 2nd European Post-Chicago Melanoma Meeting 2012 on June 22, 2012 (visibility),
• May 30, 2012: Doug Ulman, National Cancer Survivorship Advocate, Joins Provectus Pharmaceuticals' Corporate Advisory Board (a great get),
• May 14, 2012: Provectus Pharmaceuticals Forms Independent Board to Meet Corporate Governance Requirements (an important corporate governance advance),
• April 10, 2012: Phase 2 Data on Provectus's PV-10 to Be Presented at the HemOnc Today - Melanoma and Cutaneous Malignancies Conference on April 13, 2012 (visibility),
• March 26, 2012: Intralesional PV-10 Treatment Leads to the Induction of Anti-Tumor Immunity  (very key),
• March 23, 2012: Mechanism of Action Data On PV-10 Demonstrates Therapy Induces Immunologic Response (very key),
• March 19, 2012: Provectus Announces Top Line Phase 2 Data For PH-10 in Its First Randomized Controlled Psoriasis Study (important), and
• January 18, 2012: Provectus Receives Guidance From FDA On Pathway to Approval for Phase 3 Trial of PV-10 For Metastatic Melanoma (important regulatory step).

As for the blog itself, readership has steadily grown.

Click on the figure to enlarge it.

Thank you for visiting and reading!

Getting To Yes

There's time and space between now and an equity investment by Pfizer or another Big Pharma company, between now and a license deal with one of them, between now and the acquisition of Provectus.

How much? It's unclear, of course, but perhaps not as much as you might think.

In a prior post, I presented an etheric-like plane in which the company exists, between a world where no one moves unless someone moves and one where someone moves because they have to move.

So, when/why does someone move? It is a result of several things:

1. PV-10 is in strategy and aligned with commercial capabilities,
2. The drug has reached sufficient technical maturity to be sufficiently de-risked to the point that it is worth a bet (e.g., SPA, technical data, clinical data,  KOL support), and
3. There is a menu/revenue gap in the strategic plan of the pharma company interested in Provectus.

Big pharma is there, so to speak, with nos. 1 and 3. That leaves no. 2:

• The timing of the SPA is base case Q3.

• Technical data refers to a large category of data, from immunology-related murine study work by Moffitt to toxicity to manufacturing (CMC: Chemistry, Manufacturing and Control) to direct and indirect data. Moffit's next round of murine results is inbound (perhaps available as early as late-Q3 but more likely some time in Q4). Other technical data is at or nearing sufficiency.

• Clinical data refers to all PV-10 clinical study and compassionate use program data. Clinical data should be at or nearing sufficiency (although that's not to say more data cannot be generated from other new and later stage trials such as pancreas and liver), likely culminating at ESMO 2012.

• Key opinion leader (KOL) support is in process. It should reach sufficiency with the announcement of the SPA and the full characterization of PV-10's systemic benefit, which could be the next round of Moffitt data.

As you can see, I am trying to understand why and when someone like Dr. Eagle at Pfizer or his counterparts at other Big Pharma companies will move.

It's halftime at Provectus. The company's second half is about to begin.

This ad was first shown during the televised 2012 Superbowl. I'm going to borrow from it gratuitously for this post.

It's halftime at Provectus. The company's second half is about to begin. All that matters now is looking ahead and finding a way forward. Management is in their locker room discussing what they can do to win this game in the second half. Shareholders are hurting. And they're all wondering what management is going to do to make a comeback. They're all scared, because this isn't a game.

Monthly volume grinds lower and lower.

Quarterly volume paints an even more pathetic picture.

To add insult to injury, short interest, a mostly useless statistic at this point, creeps higher.

And the stock price has been cut in half over five years.

Despite a bleak stock picture, there became something very real, very palpable, about Rose Bengal, PV-10 and Provectus in 2012's first half:

• On January 18, the FDA indicated an additional end-of-Phase 2 meeting with Provectus was not required, allowing the company to submit a design for a Special Protocol Assessment.
• On March 19, Provectus released top line Phase 2 data for PH-10's first randomized controlled psoriasis study, corroborating the drug's effectiveness in mild-to-moderate plaque psoriasis.
• On March 26, H. Lee Moffitt Cancer Center & Research Institute confirmed PV-10 chemoablation of melanoma lesions leads to a systemic response and the induction of systemic anti-tumor immunity, finding higher levels of interferon-γ, which is thought to be the quintessential cytokine mediating an immune response to melanoma.
• On April 13, MD Anderson Cancer Center's Dr. Merrick Ross updates HemOnc Today Conference attendees about intralesional ablative therapies and PV-10. What has been said in private for months and months now is said more and more in public: PV-10 should be approved as a first-line therapy now.
• On May 14, Provectus forms an independent board of directors with the addition of Jan Koe and the stepping down of the company's Dr. Eric Wachter. Earlier, in April, the NASDAQ formally lowers the requirements for stocks like PVCT to list on its exchange. In Provectus' case, a greater-than-$2-bid for 5 consecutive days only is needed.
• On May 30, the company adds Doug Ulman, national cancer survivorship advocate and president and CEO of LIVESTRONG, to its corporate advisory board.
• On June 22, Provectus releases top-line final data from its phase 2 clinical trial of PV-10 for metastatic melanoma. Dr. Agarwala's presentation also reveals overall disease burden is reduced, PV-10's response is durable, and the FDA is helping to get the drug approved with an easily beatable hurdle for PV-10 in the Phase 3 trial.
• On June 26, an article in Cancer Watch highlighted Moffitt Cancer Center's studies confirming the direct effects of PV-10 chemoablation as well as its systemic response, and including powerful statements from key opinion leaders: PV-10 generates the quintessential immune response for melanoma, PV-10's induced antigen response is a surgical strike, there is no question there is a clinical need for PV-10, and the father of intralesional therapy acknowledging PV-10's promise.
• On June 29, Provectus files a mixed securities shelf of both common and preferred stock, potentially setting the stage for a strategic minority investment by a bug pharmaceutical company.

All that matters now is what's ahead. How does management come from behind? How do shareholders win?

• The SPA
• A geographic-specific, indication-specific deal (or two)
• A strategic minority investment, or perhaps a larger deal of some sort including the sale of Provectus shares to a corporate
• A dermatology deal
• More Moffitt murine study results
• Moffitt human study results
• Commencement of the MM Phase 3 trial
• Progress towards accelerated approval
• More intellectual property
• A NASDAQ listing

Yeah, it's halftime shareholders. And, Provectus' second half is about to begin.

2nd European Post-Chicago Melanoma Meeting 2012 (more)

My summary conclusions from, among other things, Dr. Agarwala's presentation, management's presence at the Munich conference, data analysis, further information gathering and due diligence:

• Provide a patient enough PV-10, whether through more re-treatments or delivering more drug in general, and MM (cancer) goes away;
• The trial did not sufficiently positively impact several patients because the limited treatment regimen, by trial design, handcuffed PV-10;
• The implication (of the two points above) is that doctors should/must/will try PV-10 first, before either surgery or another non-surgical therapy, to illicit an efficacious result for the patient before determining what other treatment option to utilize;
• There is a clear systemic benefit;
• Overall disease burden is reduced;
• PV-10's response is durable;
• The FDA is helping to get the drug approved; and
• For FDA regulatory purposes only, PV-10 will be used for Stage 3 disease. As soon as PV-10 is approved, the drug will be used for Stage 2 and Stage 4 disease.

Provectus Pharmaceuticals Presents Final Phase 2 on PV-10 At 2nd European Post-Chicago Melanoma Meeting 2012 on June 22, 2012

Today, the company released Dr. Agarwala's presentation of top-line final data from Provectus' MM Phase 2 clinical trial at the 2nd European Post-Chicago Melanoma Meeting 2012, Interdisciplinary Global Conference on Developing New Treatments for Melanoma in Munich, which was made this past Friday.

I will be blogging my analysis of the data, information gathering and due diligence in several posts.

PV-10 will be approved for Stage 3 melanoma (focused regulatory label). As soon as PV-10 is approved, the drug will be used for Stage 2 and 4 disease.

Munich, And Beyond

Provectus' clinical data to date paints a very clear and very promising treatment picture of injected lesions. Inject PV-10 directly into a melanoma lesion (i.e., deliver the drug intralesionally), and the lesion shrinks a lot. Injected lesions shrink a lot of the time. The preliminary objective response of the metastatic melanoma Phase 2 trial, both complete and partial response, was 49% (55% for unresectable Stage 3 and early-Stage 4 (i.e., M1a), which is the target patient population for the label management seeks for PV-10 from the FDA). The trial's local-regional control, comprised of complete and partial response and stable disease, was 77%; here again, loco-regional application is part of the desired label. There is no doubt the FDA thinks PV-10 should be used as a local agent to treat metastatic melanoma. With an SPA in hand, patients and their doctors will be a major step closer to broadly accessing the drug for local treatment of melanoma.

Craig frames Provectus' approach to treating cancer in the following way: the harder you punch the immune system, the greater the response. He references a lecture by a veterinary virologist who showed a picture of a cow with a basketball-sized papilloma hanging from its stomach. The professor said, paraphrasing: "Cut that off aseptically and cleanly, and it will grow back every time. Tear it off, make it bleed, kick dirt into the wound, and it will never come back." Shock the heck out of the immune system with tissue destruction (wake it up), break tolerance and encourage a large-scale release of tumor antigens into the system so they can be seen in context. 

The clinical data to date also has provided a perspective on PV-10's effect on bystander lesions. If injected lesions had a positive objective response, patients' bystander lesions did as well: preliminarily, a 67% objective response and 72% loco-regional control. To many, the "problem" is the available data does not provide a clear picture of the reduction of patients' overall disease burden. It is not possible to tell from the Phase 2 clinical data if PV-10 provided an overall clinical benefit. It's one thing to clear up an injected lesion, but it's another thing to positively impact cancer that has spread to other parts of the body, like internal organs or lymph nodes.

What does the final data for the metastatic melanoma Phase 2 trial show? Did injected lesion response rates improve over preliminary results? If so, how much and why [did they improve]? Did bystander lesion response rates improve over preliminary results? If so, how much and why? What was the response from the overall disease burden? How long did responses; how durable were responses? Munich results should be available on Tuesday.

Dirt (in the story above), like a vaccine adjuvant, riles up the immune system causing it to attack. Much of what Provectus  is doing is treating cancer like an infectious disease, and recruiting immune system help. There's another explanation, besides "PV-10 did not work," for non- or poorly responsive injected lesions and bystander lesions that responded poorly or did not respond at all. PV-10's mechanism of immune response is an autophagy-induced, system-wide anti-tumor one. Sufficiently inject the lesion (or tumor); induce autophagy and shrink or eliminate the lesion; and, induce the immune system, via the antigens released from successfully treating the injected lesion(s), to successfully treat bystander lesions and remote cancerous locations. In other words, effectively punch the target lesion enough so the immune system can more effectively punch cancer around the patient's body enough. Proper action. Beneficial reaction.

In their first model, Moffitt treated C57BL/6 mice with PV-10 and saw 3 of 5 mice with 3 or less lung metastases (3, 0 and 1, respectively) while all control mice treated with PBS had over 250 lung metastases. Moffitt's goals were to see if PV-10 produced a systemic response, since any such response for an intralesional (local regional) agent is unheard of, and, more importantly, understand the nature of tumor-specific immunity and the interferon gamma production assessment.


If they wanted to (i.e., if the goal of the work was to cure the mice), Moffitt could have gone 5-for-5, by injecting more drug directly, with additional re-treatments, or simply more in general.


The Munich presentation and Moffitt's work marks the beginning of a much better understanding by the broader market (e.g., FDA, big pharma, key opinion leaders, medical community, serious life sciences investors, etc.) of the vast potential for systemic benefit PV-10 delivers to patients.

Perhaps even the beginning of the end-game?

Quick Hits for June 20

I don't expect to blog much, if at all, until the beginning of next week. In the interim, some quick hits...


For readers who know me, you also know I'm currently on a family summer road trip, which I also refer to as our 4th annual Griswoldesque vacation. The road trip is a uniquely American rite of passage.

 

Dr. Agarwala's Munich presentation is at the end of this week, on Friday, June 22 (morning, Munich time). The MM P2 data being finalized, which this presentation marks, is important. Like Maxim noted on June 8, I [obviously] expect positive results. Much more importantly, I also expect such positive results to be very interesting.

My current expectation is the company could (should) report receipt of the SPA for the MM pivotal Phase 3 trial by the end of June, which is next week. It is possible we do not hear until the middle of July (I hope not much later than this). Management's current guidance is best case Q2 and base case Q3.

While Provectus' pursuit of the SPA for MM is designed around a clinical and business strategy to pursue approval for the intralesional delivery of PV-10 for local-regional treatment of Stage 3 and early Stage 4 MM, Moffitt's work is directly aimed at validating and further demonstrating the systemic benefit of the drug and therefore its use as such. This underscores the nature of the pursuit of accelerated approval for PV-10, a parallel path to management's work with the FDA to achieve the SPA. As a result, more information on Moffitt's work is very highly anticipated. Does Moffitt know their place in history?

While one cannot project timing of the regulatory path, one could argue PV-10 approval, now, is a certainty.

Craig is presenting at InvestTennessee on Thursday, June 21 at 10:45 am ET. Eric and Peter are in Munich.

The path to and timing of a dermatology deal likely will hinge on a review of the final psoriasis Phase 2 data by prospective partners as well as their take on the FDA's view of PV-10 toxicity or, more to the point, lack thereof. While it does not appear we're quite there yet, it does appear it might be soon.

The annual meeting is next Thursday, June 28 at 4 pm ET. If you have not yet voted your shares, you should. Voting allows you to voice your opinion of management and their approach, whether you agree  or disagree with them, and agree or disagree with some or all of their business tactics and strategy.

Current cash balances, combined with likely monthly cash burn estimates, suggest a comfortable situation (operating runaway) for the near- to medium-term until one or more triggers or catalysts play out. Big pharma understands management has the ability to raise the money it needs (of course, money comes at a price).

Why Use A Local Agent To Treat A Systemic Disease?

There is a two-fold reason for why the share price is where it is. The first reason relates to PV-10 being a local agent. The second relates to there being no "name" in the stock (I will address in a subsequent post).

Why use a local agent to treat a systemic disease? This, by far, probably is the biggest issue management must deal with in discussions with very serious life science constituents, including the FDA, Big Pharma, fundamental life science investors and equity research.

To be clear, Provectus is pursuing a focused label, one that enables intralesionally-deliver PV-10 to be local-regionally treat Stage 3 and early Stage 4 patients with metastatic melanoma. The receipt of the SPA, either this month (management's guidance: best case Q2; me: later this month) or next month (management: base case Q3; me: if not late-June, than early-July), describes the specifics of the regulatory path for PV-10 as a local agent. As a result, the share price should pop to reflect the addressable market opportunity of the local agent: use the local agent to treat the local disease.

Should Provectus stock rise to $2 or $3 per share (irrespective of what capital market dynamics occur because of a move from the OTC to the NASDAQ, a $200-300 million market capitalization would not seem unreasonable for a local agent-oriented biotechnology company. Vical, for example, has a market cap of about $265MM.

But, no local agent has ever been approved by the FDA for systemically treating cancer. And the addressable market opportunity to systemically treat MM and other cancer indications is the home run, and when the market cap could rise into the billions.

No one questions now that PV-10 works systemically, but life science constituents simply do not know why the drug works systemically. Until they understand, the default view will be to use the local agent to treat the local disease -- by definition. The release of more information from Moffitt, to elucidate why the drug works systemically, to further demonstrate its systemic efficacy, to further demonstrate is multi-indication viability, and to demonstrate its systemic benefit on humans, greatly informs those who want to understand why the drug works the way it does.

As a result, this kind of elucidation provides a forum for the FDA to analyze, assess and, we hope, approve a local agent for systemically treating cancer: accelerated approval.

This is why coupling the SPA milestone with the additional Moffitt work is important. The proximity to a dramatic rise in the share price, reflective of immense intrinsic value, has never been closer in the history of the company.

Quick Hits for June 2

Blog reader contribution: You can find out new board member and outsider Jan Koe's beneficial ownership of Provectus stock here. He directly or indirectly owns 636,300 shares and 100,000 warrants ($1.25 exercise price).


ASCO 2012: Management is in Chicago for meetings with key relationships.


Is it possible...that longtime (and historically large shareholder) Donald Adams and/or related parties (Joan Adams) were selling into the buying interest (as he or they have in the past) on the day Doug Ulman was added to the corporate advisory board? While this action does not abrogate management's role and responsibility to generate awareness of the company and buying interest in its stock, it certainly is unfortunate and frustrating.


Blog reader question: So considering all the info/news we have seen in the past couple of months, what can go wrong? It seems they should/will get the SPA. They have enough cash till next year. They have a slight chance of getting the A.A. from the FDA. They have shelf stock as a safety net. They should get a derm deal = more $. They should be able to sell the company / drug. They are ready to jump to the NASDAQ. Its cheap. Its easy to produce. Maybe the phase III results wont be that attractive: I doubt it because with the Compassionate use program their results where better since they where able to use as much of PV-10 as they wanted. And the list goes on... From a pessimistic POV why should i NOT BUY more shares? As an investor i am always looking for the "catch", the downside.

The "catch" -- really, the challenge and opportunity -- is whether Provectus can harness recent and future triggers or catalysts to raise the share price to a height that is near or exceeds what management deems to be fair value for the company. 

An acquirer should (and likely would) pay a premium to the then current share price to buy Provectus. But if the share price is not high enough, even a healthy premium may not get still provide a valuation well below the implied share price management thinks is the right number. Let's say the company offered itself to Pfizer right now. Pfizer would pay about $300MM, or a couple of hundred million dollars as a premium to the current market capitalization of $99MM (as of Friday's close), plus some kind or form of contingent value right. That figure is well below the $3B expectation for an upfront payment (plus a/the CVR).

The fairly obvious point of getting on to the NASDAQ is to harness the catalysts to foster as much irrationale exuberance in the stock to drive the share price up to at least about $1-2B, or about $10-20 per share (rough math), so that when Pfizer (or some other big pharmaceutical company) decides to buy Provectus, they'll pay at least $3B upfront. Funds and institutions that cannot or will not buy the stock on the over-the-counter exchange will initiate positions once it is available on the NASDAQ. Other entities will enter above $5 based on their respective charters or constraints.

The catch, then, is simply whether all of the company's intrinsic value is successfully manifested in a higher share price.

Do (should) I you worry about:

• The dance cards of prospective acquirers filling up without Provectus (i.e., do I worry about M&A chairs being filled when the music stops? No, because the pipeline needs of Big Pharma are so significant, and the potential of both PV-10 and PH-10 is so vast. Many solid tumor indications still are very much wide open for emerging therapies for blockbuster impact, and there is no topical drug like PH-10 on the market or in development.

• A loss of Big Pharma interest in PV-10 and Provectus, or about the drug and the company being overtaken by some as yet unnamed or named competitor or drug or therapy flavor of ASCO or the year? No, because Rose Bengal is so unique, and Big Pharma readily acknowledges such uniqueness. Management has created a new class of therapy for both PV-10 and PH-10.

• Big Pharma playing hardball with the company in the event the cash balance is not has high as management would hope whenever Provectus tells Pfizer and other suitors the company is interested in doing a deal (either license or full-on acquisition? No, given that the company has the Lincoln Park Capital agreement in place, along with two effective S-3s.

• Big Pharma could (would) call Provectus' bluff about acquisition and say "go develop PV-10 yourself," as a way of driving valuation down for them to buy the company later? No, because as Big Pharma business development folks will tell you, “we’re desperate.”

Recall...that management has turned down several license offers or curtailed license interest because the initial valuation overtures did not meet Provectus' own valuation hurdle figures.


Moffitt data...is a very significant part of the company's future.

Triggers/Catalysts (update)

With the corporate advisory board addition, updating triggers and catalysts (from the initial post here) below:

Stock Value Proposition (update)

An updated version of the stock value proposition is below. Click on the picture (table) to enlarge it. My initial version is here.

Clinical Value Proposition (update)

An updated version of the clinical value proposition is below. Click on the picture (table) to enlarge it. My initial version is here.

Triggers/Catalysts

You may recall I constructed and posted a similar illustration to the one below in order to elucidate the potential and possible triggers or catalysts for the company (and its share price) along the way to the end-game. I added a few more triggers/catalysts to the original illustration/post.

Click on the picture to enlarge it on your screen.

Of these, the company announced an addition to its board of directors, forming an independent board in the process.

In the U.S., it is Memorial Day weekend, where citizens remember the men and women who died while serving in the United States Armed Forces. With no trading on U.S. stock exchanges Monday, this week there remain 3 trading days in May before the first trading day of the last month of the second calendar quarter.

How time flies...

Picture source here.

My expectations for the remainder of the second quarter? I'm keeping an eye out for:

• The SPA for the pivotal MM Phase 3 trial;
• More Moffitt immunology-related work results;
• Final MM Phase 2 trial results; and
• Addition(s) to the corporate advisory board.

While I don't rule out a dermatology deal, or the process of arriving at such, being announced, I think more time might be required for this item to play itself out.

Should the SPA or two or more of the other items arrive in June, it is possible the share price may hurdle the threshold for a NASDAQ listing.

Blog Reader Comment

The patients enrolled in the different studies were very different with regard to stage and extent of disease - as a result the data can't be compared in this way, nor can they really be compared to Korn at all. Of the 3 studies, Biovex had the patients with the most advanced and extensive disease, Vical the next, and Provectus the patients with the least advanced and extensive disease. This is reflected in the graphs above, which would have been much the same with respect to PV-10 'looking better' irrespective of any treatment effect for any of the drugs.

A blog reader contributed the above comment in regards to my post PV-10 vs. OncoVEX, Allovectin-7. Thank you.

⊃ The patients enrolled in the different studies were very different with regard to stage and extent of disease...Of the 3 studies, Biovex had the patients with the most advanced and extensive disease, Vical the next, and Provectus the patients with the least advanced and extensive disease.

I agree (comparing all MM P2 trials, below):

Provectus management has maintained their focused label approach throughout the clinical trial, which is to apply PV-10 as a local-regional (loco-regional) treatment for early stage patients (Stage 3 and early-Stage 4 (i.e., 4a). As I recall, PV-10's MM P1 trial comprised 20 Stage 3 patients.

⊃ ...- as a result the data can't be compared in this way...

I agree. Even if one attempts to make an apples-to-apples comparison, which in the case of the reader's comment would be, at a minimum, to compare stage-by-stage rather than study-by-study numbers, if that, it would not be a true comparison and there is only so much information one can gain from it (i.e., the information should augment your thesis, long or short, not substantiate it. Comparisons, like analogies, should not be taken too far.

But, if we're comparing...

⊃ ...nor can they really be compared to Korn at all.

I disagree. Korn et al.'s graph was from the authors' meta-analysis of 42 phase 2 metastatic melanoma studies. The authors of this study did compare, by definition (i.e., confidence intervals). I think it is indeed valid for BioVex and Vical to compare themselves on this graph. Further, both BioVex and Vical chose to compare their results to Korn et al.'s study because they, BioVex and Vical, felt the comparison provided beneficial information (in reality, promotional in nature) to the medical and investor communities.

It is interesting to note Provectus management did not make such comparisons. Rather, they left it to the medical community to make their own comparisons and draw their own conclusions, however obvious such are or should be.

⊃ This is reflected in the graphs above, which would have been much the same with respect to PV-10 'looking better' irrespective of any treatment effect for any of the drugs.

Maybe, maybe not. The reader's comment appears to suggest that increasing stage and extent of the disease leads to lower efficacy, and that the stage and disease extent of patients in the respective trials dictated the companies' placement on the Korn et al. graph. Perhaps. Higher disease or tumor burden is an important concern for the patient and his or her physician.

But, what if inferior performance contributed to placement on the graph? If OncoVEX and Allovectin are not as good as PV-10, then they will reside lower on the graph. That is, OncoVEX and Allovectin produce lower overall survival than PV-10 because PV-10 is more efficacious.

Jan Koe: A Tactical Move, With Strategic Motivations

I've received several e-mails and blog comments regarding the announcement yesterday of Jan Koe's addition to Provectus' board of directors.

"Mr. Koe, age 61, has a 30-year track record of success in consulting, asset management, real estate and public company governance, and has represented major insurance firms, national retailers and Fortune 500 companies. He is President of GoStar, which is the manager of Real Solutions Opportunity Fund 2005-I and Real Solutions Fund Management LLC and Real Solutions Investment LLC. He is also Principal of Method K Partners, Inc., a commercial real estate firm, which he founded in 1988. He has served on the Board of Directors of ONE Bio, Corp. where he was Chair of the Compensation Committee and a member of the Financial Audit Committee. He holds a degree in Business Administration and Psychology from Luther College."

Mr. Koe's professional history (based on a more comprehensive search of the Web) paints the picture of an entrepreneurial individual who has a good amount of experience and enjoyed success as a principal of and investor in a number of businesses spanning several industry sectors. I think his corporate governance experience is a strength.

The key takeaway is that Koe's addition, which enabled the formation an independent board, is a strategically-motivated tactical move. Simply put, it facilitates the listing of the stock on the NASDAQ in advance of a potential myriad of expected regulatory, business and clinical news that will have greater impact on the share price if the stock is listed on a major exchange rather than over-the-counter.

At a closing price today of $0.865, the stock is well below the $2 per share threshold. One key piece of news (e.g., the SPA, a dermatology term sheet, etc.) should do the trick, thrusting the share price across this threshold.

Just some speculation on my part...

Board member Dr. Kelly McMasters has much more medical and clinical trial experience. Board member Al Smith IV has much more name recognition. The company could have added a much higher profile name than Jan Koe (and, for that matter, Al Smith) in due course. These are not rash actions, but deliberate and deliberated decisions.

Why form an independent board, now?

As I wrote a few days ago, the pipeline of catalysts is backing up, and the clock is ticking on when these catalysts will catalyze the share price: the MM Phase 3 SPA, a dermatology term sheet, more Moffitt immunology data, the Munich MM Phase 2 data, accelerated approval for MM, an addition to the corporate advisory board, and an HCC Phase 2/3 trial suitable for an SPA.

Maybe something or some things (i.e., catalysts) are inbound.

Musings on May 13

For a little while I've been trying to pull together certain necessary pieces in order to purchase a large number of Provectus shares at current prices (current = somewhere in the range of where the share price has been for the last 3 to 6 months).

As part of this process, I called the markets makers on Friday looking for pricing on a 5MM share block. The goal is (was) to ascertain what average price they thought could buy (and ultimately, if engaged, would commit to buying) on my behalf such an amount in what reasonable period of time.

It is (has been) easy and straightforward to accumulate tens and hundreds of thousands of shares at a time in the current market. Sit on the bid at various levels during various times of the day, and you get hit. Occasionally pay the offer (buy shares offered at various prices and times of the day), but not often enough to let the price runaway from you.

Why is price important? My expectation and experience suggested it was nearly or effectively impossible to by 5MM shares -- at current prices, this only is $4-5MM -- without moving the price into the $1.50 to $2.00 range, or higher (set aside for the moment the impact of warrants being exercised at these prices, or going directly to warrant holders and negotiating to buy their warrants).

If I think I will get $25-50 or more per share in the end-game, should I quibble over cost bases of $0.80-$0.95 or $1.50-2.00? Absolutely. My ROI gets cut in half or more. The outcome still is robust and I could acquiesce, but it is hard to give in and so I doubt it: "A George divided against itself cannot stand!"

As I expected, the market makers could not follow through. Perhaps when my query is addressed substantively next week, they may have a different response. But right now, I cannot get such size at an attractive fixed price in a reasonable time frame. One market maker observed there were some willing sellers in the 80s and 90s (cents) but not enough to fill my size. If another potential investor wants to do a similar size (to my desired amount), there's not enough to go around right now.

Why is time important? Time matters now more than ever. I can try to sit around and slowly, very slowly,  accumulate my desired position at my desired price target range ($0.80-$0.95). Or, I can more aggressively act.

But the pipeline of catalysts is backing up, and the clock is ticking on when these catalysts will catalyze the share price. Among them, the usual suspects:

• The MM Phase 3 SPA;
• A dermatology term sheet;
• More Moffitt immunology data;
• The Munich MM Phase 2 data;
• Accelerated approval for MM
• Additions to the board of directors and corporate advisory board;
• A NASDAQ listing;
• An HCC Phase 2/3 trial suitable for an SPA;
• Etc.

Time is not on my side.

An interesting cascade effect. Take a look at the current table of outstanding warrants (not including, of course, those issued in Q1 2012) here: nearly 12MM at exercises prices of $0.95 and $1.00, and about 12.5MM at $1.12, $1.25 and $1.50, all at terms or durations of 2 to 4 years (from December 31, 2011)

As the share price runs over the next weeks, months and quarters from the catalysts in the pipeline through these exercise prices, the company enjoys significant cash infusions for contemplated operations when these warrants are exercised.

Blog Reader Question

Why is characterizing why PV-10 works systemically so important?

The HemOnc Today conference last month displayed the momentum in and recognition by the medical community for PV-10's application to systemically treat melanoma. I posted a comparison by Dr. Andtbacka's comparison of IL-2, BCG, Allovectin-7, OncoVEX and PV-10. If you use the search bar along the right hand side of the blog, towards the bottom, and enter keywords "hemonc today," you'll be able several more related posts.

It's clear, and has been for a while, that PV-10 is a robust local regional ("loco-regional") treatment, particularly among intralesional therapies. Local treatments for disease have a place in the oncologist's tool kit, and there is a nice but modest valuation for companies that produce drugs of such limited use.

But when you are able to demonstrate deploying a drug effectively systemically treats disease, the utility and thus the value of the drug dramatically increases. Dr. Zager's presentation from HemOnc Today does a nice job (towards the end of the presentation) illustrating the application of systemic and other therapies (based on systemic tumor burden and and loco/regional tumor burden).

Utility increases because the physician can easily pick out the tool out of his or her kit for the job, rather than having to rummage around. Utility increases because surgery may not always have to be the first or best treatment option. Utility increases because diseases in far flung, remote, hard-to-find or detect parts of the body receive much-needed treatment, and help mitigate relapse or insufficient cleansing.

Do all or a lot of the above, and the drug's value provide tremendous valuation for the company that produces it.

Aside from the clinical demonstration of such systemic success, Moffitt's immunology-related work is helping to characterize that PV-10 works systemically, and works very effectively systemically. Thus, better for physicians and their patients, and, eventually, better for shareholders.

10-Q for Q1 FY/CY 2012 (update)

Recall in the 10-Q that certain consultants received more than 1MM warrants. The company has issued common stock and warrants to consultants in exchange for services in the past. Read the 10-K for instances of this in 2011 (see pages 17-18).

Provectus has issued large amounts in the past: 641,500 warrants in Q1 2011, 649,518 in Q2 (to Network 1 Financial), 293,500 in Q3, and 752,000 in Q4.

Warrants outstanding as of the end of 2011 are below. This table should become much more relevant later, and I will blog about that in due course.

Who are these consultants, because 1MM is a large number?

• Is it one consultant, or more?
• Is it Network 1? If so, why not say so, as management did in the paragraph noting the Q2 2011 capital raise in the 10-K?
• What kind of consultant or vendor could or would warrant (pardon the pun) the issuance of 1MM warrants?
• Is the Q1 2012 issuance related to the Q4 2011 issuance, or previous issuances of warrants?
• Etc.

Lots of questions. No answers quite yet.

Reuters: U.S. may speed approval of "breakthrough" drugs

An article making its way around (forwarded to me earlier today, and posted on a PVCT stock chat board), which is an interesting read.