$PVCT: Fight The Power, Or Play The Game?

Information technology, and some other industries, seems so much easier to invest in than life sciences from the perspective of disruptive technology or approaches being able to fully disrupt. To those to whom this is an obvious statement, you are smarter than me.

My experience and ease with information technology has been to focus on how to use technology, not how or why it works. Don't get me wrong. It was, is and probably will be in my nature to figure out the hows and whys, but a childhood friend of mine years ago framed the situation and solution to me very clearly: (paraphrasing) "Figure out what you're going to do with the box and how much (or whether)/how quickly/how long you'll make doing it, and don't sweat too much how or why the box does what it does."

In the same breath (actually, years later, but I figured it out shortly after the above "epiphany"), he said it's important to have a decent or good understanding of how or why technology works the way it does to keep the inventors of it (e.g., academics, scientists, engineers, etc.) honest -- i.e., be able to call bulls@$% when applicable and appropriate.

How important is understanding "mechanism of action" if PV-10 works: so efficaciously, so broadly, so safely, so easily?

Martin Shkreli wrote in his article on TheStreet.com about Oncothyreon's Stimuvax failure that "A drug's mechanism of action is central to its effect. Do not ignore this! Clinical data can be misleading, innocently biased, meaningless, manipulated and sometimes even downright doctored. However, the question, "How does the drug work?" is always critical." I can understand his point of view, because it you think you understand the MOA (or how or why the technology works the way it does), you're more apt to believe that it does indeed do what you see or read it does.

Working still is working.

This March, we read from Moffitt that, via the titles of Provectus PRs, "mechanism of action data on PV-10 demonstrates therapy induces immunologic response" and "intralesional PV-10 treatment leads to the induction of anti-tumor immunity." Will Moffitt, sometime next year, make more profound statements about PV-10?

Like, PV-10: A robust (strong), durable (long-lasting), portable (vaccine-like) immune-mediated response.

Moffitt est argumentum ad verecundiam. "As a statistical syllogism, the argument has the following basic structure:

• Most of what authority A has to say on subject matter S is correct.
• A says P about subject matter S.
• Therefore, P is correct."

Because if, after further, fuller elucidation of PV-10's immunological mechanism of action characterization, you now like the story, or now feel comfortable you think you know why it does what it does, you're more likely to pay a lot more for it, and drive up the price for the folks who just cared that it worked well and safely.

"Come, Watson, come! The game is afoot. Not a word! Into your clothes and come!"

$PVCT: Blog Reader Question

I really appreciate your posts. Please keep them coming. One issue that I am having with the continued lack of any licensing agreement or income, is if perhaps PVCT is pricing itself unrealistically? I have seen this happen to companies before, when they think they know what their product is worth, but no one else is willing to pay so much for it, and they just go on and on without ever signing anything. They go to their graves secure in the knowledge that no one has taken unfair advantage of them, but without ever cashing in their product which does have genuine value. You wrote that " license interest and discussions are heating up." If this is so, then what I am fearing is not a problem.

Great comments and question, and thank you.

I have had prior experience with management or [particularly] founding teams being unrealistic: about technology, the product, valuation, and other issues. It is frustrating as an investor and shareholder to see intransigence, derived from lack of realism or pragmatism (or both), overtake what started out as a great investment opportunity.

My interactions with Provectus management have not caused me to question their realism as it relates to valuation. Craig and Peter will tell you, quickly, often and repeatedly, they routinely seek out counsel in this area, and enjoy the benefit of several very experienced counselors.

While Craig strikes and has always struck me as fundamentally understanding the value of what the team has innovated, he does not seem to be ideological about valuation. While the check will have to be very large, I do not think him a person desirous of extracting every last dollar from a/the would-be acquirer.

That said, I am struck by management's perspective about the potential impact on valuation of PV-10's immunologic potential. Repeating a portion of a post of mine from a couple of days ago:

The conclusions of the forthcoming immunologic mechanism of action characterization work by Moffitt Cancer Center could be profound. Will Moffitt researchers make full-throated statements regarding PV-10's immunologic potential?