Showing posts with label Adam Feuerstein. Show all posts
Showing posts with label Adam Feuerstein. Show all posts

March 29, 2016

Trying to Understand Provectus' Clinical Development Program (e.g., trial design, protocols, data, etc.)

Reference article: "How to Spot Red Flags in Clinical Trial Data," Adam Feuerstein, Biotech Stock Mailbag, TheStreet.com, March 24, 2016

Adam Feuerstein wrote the above article, which resulted from a conference call he held with Dr. Mark Ratain, MD on March 22nd (conference link in the article) to discuss "a checklist of things to think about when a biotech or drug company announces clinical trial results." Feuerstein and Rattain covered, presumably among other things:
  • Single arm vs. randomized controlled trials (SATs vs. RCTs),
  • Communication of trial results (press releases, and the information contained therein),
  • Changes to trial protocols, and
  • The importance of N (the number of patients enrolled in a trial).
Feuerstein concluded with a comment on the importance of more and further questions, research and due diligence, but noted: "Despite all that work, you can still end up being totally wrong."

Given the potential of a promising investigational oncology drug like PV-10 (active pharmaceutical ingredient [API]: Rose Bengal), together with key intellectual property (IP) protection (e.g., patents and trade secrets covering Rose Bengal's second medicinal use as a therapeutic, method of use, formulation, synthesis, and combination with other therapeutics), clinical trial protocols could be viewed as a biotechnology company's crown jewels. Well-designed clinical trials could be prognostic of outcome; should, as successful early-stage studies, facilitate the transition to pivotal trials; and should, as successful later-stage registration studies, provide eventual labels for drug compounds if and when approved by the FDA.

Diligencing clinical development programs (CDPs) precedes the generation and communication of clinical trial data. So, it's very important to understand Provectus' decision-making, choices and execution of solid tumor cancer indications, supporting preclinical murine model work, eventual patient populations, clinical trial designs and protocols, etc. in advance of sought after study results.

CDPs are intertwined with the FDA, and vice versa. Opaque as the Agency's process may appear to be, and generalized as my analogy below is, it is an understatement to say Provectus' past, present and future has been, is and will be about the company's CDP process. Current emphasis is, of course, finally on the step of generating and presenting more and randomized trial data. This is especially so for a molecule like PV-10 (and API Rose Bengal), and Provectus' approach to treating cancer; the former being very novel and the latter being historically unsuccessful (that is, treating disease locally [i.e., making the tumor your friend] in order to defeat it locally and then, in so doing, systemically) until now.

A door is built when a company achieves a consensus design for a pivotal trial with the FDA. The door is closed of course. But, with its design and construction complete, the drug company can commence a registration study in pursuit of the key the regulator holds to open it. A successful study that also leads to drug approval yields the key from the Agency to unlock the door, opening into the room of a market opportunity for the company to commercialize its therapeutic. Drugs fall down before they reach their doors' respective thresholds by failing their pivotal studies, and thus they are unable to obtain the key.

Designing and building the door, traveling the path to secure the key from the FDA, opening of the door, and entering the room are just steps in the Agency's process. Everyone does not follow the process all of the time. When they do, and if they are successful, the process works, in my view. The FDA's process could be observed as nearly agnostic to the investigational drug going through it. See August 12, 2015 blog post The Door.

Takeaways:

In 2016 Provectus should generate and present data for each PV-10 CDP:
  • As a monotherapy for advanced melanoma,
  • In combination (also: as part of a combination regimen) with pembrolizumab (Keytruda) for metastatic melanoma, and
  • As a monotherapy for hepatic cancers.
Also in 2016 the company should produce mechanism of action (MOA) data that may enable Provectus to advance its investigational dermatology drug PH-10 into pivotal Phase 3 trials for psoriasis and/or atopic dermatitis.

Summary:
  • Melanoma CDP, part 1. Provectus' pivotal Phase 3 trial (a registration study) of PV-10 as a monotherapy (a single agent) for patients with locally advanced cutaneous melanoma (AJCC* Stages III B-C and IV M1a):
    • It is a well-designed trial with a unique feature (clinical assessments every 4 weeks), and
    • Recent protocol changes, made as the study enrolls and treats patients, potentially make it easier to recruit into. 
  • Melanoma, CDP, part 2. The company's Phase 1b trial of PV-10 and Merck & Co.'s immune checkpoint blockade drug pembrolizumab for patients with metastatic melanoma (AJCC Stage IV):
    • It is a well-designed trial that is "enrolling well," 
    • The study's design is flexible enough to pair another checkpoint blockade drug or drug compound with PV-10, like ipilimumab, nivolumab, other anti-PD-1 agents, anti-PD-L1 agents, etc., utilizing their respective prescribing or potential prescribing information,
    • The design also is flexible enough to pair PV-10 with a targeted therapy,
    • It is possible by now that a Phase 1b safety assessment has been successfully completed (or is nearing completion), which then would allow for advancement into an expanded Phase 2 RCT of PV-10 + pembrolizumab vs. pembrolizumab alone; that is, PV-10 + standard of care (SOC) vs. SOC, and
    • A Phase 2 RCT (very likely a registration study) would be well-positioned in a post-monotherapy approval world of PV-10.
  • Liver CDP. Provectus' original clinical (Phase 1) testing of PV-10 in liver cancer explored unresectable hepatocellular carcinoma (HCC) and hepatic metastases in an initial group of patients: 13 patients, or 15 patient-tumors -- a single hepatic lesion was treated [injected] with PV-10; two patients with multiple tumors were enrolled twice to allow additional treatment of their second tumors.
    • At July 2015, 10 of 13 patients were alive after up to 54 months. Three deaths occurred; one due to cardiac comorbidity, one due to a serious adverse event (possibly thromboembolism), and one due to HCC progression,
Click to enlarge. ESMO 17th World Congress on Gastrointestinal Cancer, Abstract #P-116, July 2015
    • The company expects to present more data from this Phase 1 study in July 2016,
    • Initial clinical testing was expanded to (a) continue assessing HCC and potential tumor indications in additional patients and (b) begin assessing HCC patients on a stable dose of sorafenib, with patients still receiving PV-10 treatment of a single hepatic lesion,
    • The advancement of the expanded Phase 1 trial should take the form of a Phase 1b/2 clinical trial approach similar to that Provectus' melanoma CDP (i.e., PV-10 + SOC of pembrolizumab), where after and assuming a Phase 1b safety assessment is successfully completed, the CDP would advance into a Phase 2 RCT of PV-10 + SOC vs. SOC, where SOC would depend on geography (e.g., sorafenib, local ablation technologies like TACE or RFA, etc.).
* AJCC = American Joint Committee on Cancer

Provectus' overall CDP, led from inception (I believe) by the company's CTO Dr. Eric Wachter, PhD, is comprised of at least 5 parts:
  • Oncology (PV-10, a 10% solution of Rose Bengal) (parts 1 to 3)
    • Melanoma
      • Earlier stages of advanced melanoma: Stage III B-C and IV M1a
      • Later stage: Stage IV (visceral: IV M1b-c)
      • Mechanism of action
    • Hepatic cancers
      • HCC (aka primary liver cancer)
      • Cancers metastatic to the liver (aka secondary liver cancer)
      • MOA
    • Other solid tumor cancers (e.g., breast cancer, etc.)
  • An active compassionate use program (CUP)/expanded access protocol (EAP) for cutaneous or subcutaneous tumors (mostly, but not limited to, melanoma) (part 4)
  • Dermatology (PH-10, a 0.001% to 0.01% gel of Rose Bengal) (part 5)
    • Psoriasis
    • Atopic dermatitis
    • MOA
Quotations below are drawn from the above mentioned Feuerstein article. Bolded, underlined and/or italicized emphases in them, or in quotations of other people, are mine. As background, Provectus' two-prong approach to treating cancer comprises, first, making the cancer patient's tumors his or her friends by treating all accessible (injectable) lesions and tumors with PV-10. Second, this direct attack on the patient's tumor burden educates or awakens the immune system to fight back, hold off or destroy cancer elsewhere in the body.

 [Quote A]
"Generally speaking, single-arm clinical trials are difficult to interpret because they lack a comparator arm. A single-arm study could produce credible evidence of drug activity in certain circumstances -- a study measuring response rate in deeply refractory cancer patients, for example. Be very skeptical, however, of single-arm studies with progression-free survival or overall survival endpoints. Likewise, the use of an historical control is suspect."
Eric's approach with the FDA prior to the approval of immunotherapy ipilimumab (Yervoy) in 2011 was to seek accelerated approval on the basis of PV-10's "robust response" in metastatic melanoma patients from a Phase 2 SAT. Response rate means objective response (OR) rate (ORR), which equals complete response (CR) rate (CRR) plus partial response (PR) rate: OR = CR + PR. Company presentations from 2009 and 2010 outlined this, prior to agreement with the Agency to undertake a Phase 3 RCT. Relevant slides from these presentations are below:
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Co-opting Feuerstein's language from Quote A above: Eric initially sought drug approval on the basis of an SAT that produced credible evidence of drug activity by measuring response rate in deeply refractory cancer patients. It should be noted in addressing Feuerstein's comments that Provectus' SAT, Phase 2 Study of Intralesional PV-10 for Metastatic Melanoma, had:
  • A primary endpoint of ORR (modified RECIST v 1.0**), and 
  • Secondary endpoints of ORR of untreated bystander lesions (see **), progression-free survival (PFS) (see **) (measured for only 52 weeks), and 1-year overall survival (OS).
The following excerpt is from Provectus' November 2010 press release Reports Full Phase 2 Study Data on PV-10 for Metastatic Melanoma. Presentation of preliminary clinical trial results was made at SMR [November] 2010.
"A Complete Response (CR) of PV-10 injected lesions was achieved in 24% of subjects, Partial Response (PR, requiring at least a 30% reduction in tumor volume) in 25% of subjects and Stable Disease (SD, requiring less than 20% increase in tumor volume) in 18% of subjects, with 23% of subjects experiencing disease progression (PD, 20% or greater increase in tumor volume); 
Response was considerably higher in the 55 subjects with cutaneous or nodal disease only (55% OR and locoregional disease control in 78% of subjects) than in the 25 subjects with visceral metastases (35% OR with a 56% rate of disease control); 
An OR was achieved in untreated bystander lesions in 37% of subjects having an evaluable bystander lesion at baseline, with 55% of subjects achieving locoregional disease control in their bystander lesions; 
Bystander response was closely correlated with successful ablation of injected lesions, with 67% of subjects achieving an OR of their bystander lesions if they achieved an OR in their injected lesions vs. 5% in subjects who did not achieve an OR in their injected lesions; 
Mean Progression Free Survival was 8.2 months for all subjects, while the OR cohort had a significantly longer PFS estimated to be 11.7 months vs. 4.1 months for SD or PD subjects; subjects with cutaneous or nodal disease achieved a mean PFS of 8.8 months vs. 6.2 months for subjects with visceral metastases: 
Adverse Experiences ("AE") during the study interval were generally mild to moderate, locoregional and transient, with no deaths or life-threatening experiences attributable to PV-10."
All patients in this Phase 2 trial "had recurrent, locally advanced melanoma after a median of 6 previous interventions (range 1–19), and most had received multiple classes of treatment" (source: journal article below), such as surgical excision, nodal biopsy, regional chemotherapy, immunotherapy, radiotherapy, investigational agents, systemic chemotherapy, distal amputation, and other. Related references include:
The underlined portion of the Phase 2 trial results press release above will be relevant to another Feuerstein comment as well as later in this blog post; that is, the subgroup analysis of the patient population of PV-10's initial pathway to approval. Returning to our story and saga, the FDA directed Provectus to undertake a Phase 3 RCT. Relevant slides from a 2010 company presentation are below:
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See also April 2010 press release Reports on Successful End-of-Phase 2 Meeting with U.S. FDA and Gains Clarity for Licensure of PV-10 for Metastatic Melanoma.

Recall comments of melanoma, intralesional agent (IL) and PV-10 key opinion leader (KOL) Dr. Sanjiv Agarwala, MD of St. Luke's Cancer Center at the 2016 HemOnc Today Melanoma and Cutaneous Malignancies conference and in March 19th article "Intralesional therapy ‘here to stay’ for melanoma:"
"“If we’re going to show monotherapy with PV-10 works, you have to design a randomized trial,” Agarwala said. “It is not easy to design a randomized trial for a monotherapy intralesional agent, when you have all of these drugs available. This trial is designed in a very specific way, and it will be very interesting to see the results of this trial compared to the talimogene laherparepvec [Imlygic, Amgen] trial, because that trial was designed in a different era.”"
The primary endpoint identified in the slide immediately above (Phase 3 Study Overview) is durable response (DR) rate (DRR) for at least 6 months, which was the primary endpoint of BioVex's (Amgen's) Phase 3 RCT for intralesional (IL) agent OncoVEX (GM-CSF) (talimogene laherparepvec), A Randomized Phase 3 Clinical Trial to Evaluate the Efficacy and Safety of Treatment With OncoVEX^GM-CSF Compared to Subcutaneously Administered GM-CSF in Melanoma Patients With Unresectable Stage IIIb, IIIc and IV Disease. BioVex's pivotal trial (prior this company's acquisition in 2011 by Amgen) started in 2009, which was about a year before the FDA directed Provectus towards a Phase 3 RCT of IL PV-10.

Returning briefly to Feuerstein's comment of "credible evidence of drug activity," the Agency acknowledged such activity while at the same time denying Provectus' breakthrough therapy designation (BTD) application in May 2014 for patients with locally advanced cutaneous melanoma, the sub-group noted in the November 2010 press release above (but by a different name). BTD was denied because Eric's Phase 2 SAT, designed in c. 2009, did not collect sufficient quality of life and/or patient reported outcome data:
"The preliminary clinical data provided in your request for Breakthrough Therapy designation are indicative of drug activity in the treatment of local, satellite or in-transit recurrence of malignant melanoma; however, the preliminary clinical data do not demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. This determination is based on the paucity of data on endpoints indicative of clinical benefit (e.g., pain, infection, significant bleeding) and our inability to determine the clinical significance of the reduction in the size in one to 10 target lesions in patients with locally advanced melanoma, who may have additional untreated cutaneous, subcutaneous, or visceral sites of disease. " (Source: FDA BTD denial letter, May 16, 2014; see also May 24, 2014 blog post The FDA Response)
Paucity means not enough data. Paucity does not mean the data are not good or not good enough.

It is also important to note, with the benefit of hindsight, that Eric's discussions with the FDA on a prospective Phase 3 RCT were hindered to no small degree (I believe he was reluctant to agree with the Agency) because, first, there was no agreement on the patient population he thought appropriate and applicable. Second, I think he felt there was insufficient IP protection of the therapeutic use of Rose Bengal (and thus PV-10) as well as their (Rose Bengal and PV-10's) manufacture for therapeutic use. Third, I think Eric felt there was inadequate supply of both drug substance (Rose Bengal) and drug product (PV-10) for a pivotal trial and in a post-approval world. See May 30, 2014 blog post "Why did it take four years...to arrive at this point?". I still also think in a post-ipilimumab approval world and pre-Provectus December 2013 Type C meeting with the FDA, there still was debate over the role and utility of an IL agent for treating cancer.

[Quote B]
"Ratain very much likes randomized, controlled studies (preferably blinded as well) for the converse of the reasons stated above."
Almost four years to the date of presenting Phase 2 SAT data (November 4, 2010), Provectus initiated its pivotal melanoma RCT (November 10, 2014) for Stage III B-C disease, PV-10 Intralesional Injection vs Systemic Chemotherapy for Treatment of Locally Advanced Cutaneous Melanoma Without Distant Metastases. Elements of this design were communicated by company management as early as 2013; see the relevant slide below from a March investor presentation:
Click to enlarge.
Provectus understood there was a difference between (a) treating earlier stages of advanced melanoma (Stage III B-C and IV M1a), where all of the disease's lesions and tumors should be accessible to a PV-10-filled needle (e.g., manifested in or pursued by the on-going Phase 3 RCT of PV-10 as a monotherapy or a single agent) and (b) treating much later stages (Stage IV M1b-c), where disease has spread out of the reach of the needle (e.g., now manifested in or pursued by the ongoing Phase 1b/2 program combining PV-10 and immunotherapy pembrolizumab, A Phase 1b/2 Study of PV-10 Intralesional Injection in Combination With Systemic Immune Checkpoint Inhibition for Treatment of Metastatic Melanoma). Relevant slides from Dr. Argawala's SMR 2010 presentation show:
Click to enlarge.
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The trial's patient population was expanded from Stage III B-C to include IV M1a in March 2016, via a new trial protocol, when Eric added fellow IL drug talimogene laherparepvec (T-Vec), which was approved in October 2015, as a comparator, PV-10 Intralesional Injection vs Systemic Chemotherapy or Oncolytic Viral Therapy for Treatment of Locally Advanced Cutaneous Melanoma Without Distant Metastases.

 [Quote C]
"When the company's press release hits the tape, do these things:
Read the press release. The whole thing. If the headline of the press release states results are "positive," "outstanding" or uses some other superlative, assume there are problems hidden somewhere in the waning paragraphs until proven otherwise. Read the press release again.

The design of the clinical trial, including number of patients enrolled, the type of patient enrolled and the endpoints (primary, secondary), should be explained clearly. There will be a paragraph discussing the study results. Look for these re-assuring words/terms: Intent-to-treat analysis, statistical significance, achieved the primary endpoint. More details, more specific data are better than less.

Be wary of companies which describe "positive" clinical trial results using wishy-washy adjectives."
Although not a comprehensive list of Provectus press releases about preclinical and clinical PV-10 data, let's look at some press releases for melanoma, liver cancer, breast cancer, and dermatology:
    • 4th paragraph: "At final evaluation after injection with a single dose of PV-10, the following results were obtained: 20% of subjects achieved CR of their injected tumors, 20% achieved PR, 35% achieved SD and 25% achieved PD, corresponding to an objective response (CR+PR) in 40% of subjects and local disease control (CR+PR+SD) in 75% of subjects. Among those subjects achieving an objective response of their treated tumors, 25% achieved an objective response of their untreated bystander tumors, and 100% exhibited disease control in their bystander tumors. In contrast, for those subjects failing to achieve an objective response of their treated tumors, only 8% achieved an objective response of their bystander tumors, and 92% exhibited progressive disease in their bystander tumors. These differences in response of bystander lesions as a function of response of target lesions were statistically significant and support the occurrence of a bystander effect in subjects whose target lesions have been responsive to PV-10 chemoablation."
    • 2nd paragraph: "Key interim data from the first 40 subjects in the Phase 2 study included: Objective response of PV-10 treated lesions was observed in 60% of subjects. Locoregional disease control of treated lesions was observed in 75% of subjects. Response of untreated bystander lesions was consistent with observations from Phase 1 testing. Interim safety data were comparable to Phase 1, with transient mild to moderate locoregional pain, vesicles, edema or swelling most common."
    • 3rd paragraph: "Summary data on 20 subjects, including initial data on 4 subjects from the final 40 subjects in the study, who had evidence of macroscopic metastases of the lung, liver, brain or lymph nodes at screening, were presented. Among the first 40 study participants, 7 of the 16 subjects (44%) with visceral or macroscopic nodal metastases at screening exhibited stasis or regression of their lesions, including complete regression of multiple pulmonary metastases measuring up to 1.1 cm in one subject. Detailed data were presented on one Stage IV subject who experienced complete regression of multiple lung metastases and partial regression of multiple brain metastases over the study interval."
    • 2nd paragraph: See above.
    • 4th paragraph: "Dr. Agarwala and co-authors from 7 prominent melanoma centers in the United States and Australia studied the safety and efficacy of IL PV-10 in an 80 patient international, multicenter, single arm phase 2 trial. A subgroup analysis of 28 patients with all existing melanoma lesions injected and an additional 26 patients with only 1-2 uninjected bystander lesions showed that these patients experienced an exceptionally high rate of response. The best overall response rate (BORR) in the 28-patient "all treated" subgroup was 71% (confidence interval of 51-87%), with 50% complete response (CI 31-69%). Among the 54 patients in both of these subgroups (i.e., patients who had all of their disease monitored in the study), CR (Complete Response) was achieved in 232 of 363 injected lesions (64% CR). Furthermore, CR was achieved in 121 lesions after a single injection of PV-10; 84 lesions required 2 injections to achieve CR; 22 lesions required 3 injections; and 5 lesions required all four allowed injections."
    • Data was presented on the poster; however, the press release noted in its 4th and 5th paragraphs: "In the initial study cohort, six subjects received PV-10 injections in two successive escalating dose cohorts of 0.25 and 0.50 mL per cm3 lesion volume. Significant adverse events were limited to injection site and photosensitivity reactions that resolved without sequelae. All injected tumors were stable in size at 28 days, and among four of the initial six tumors that had longer-term assessment, two had partial response. Based on these data, the researchers concluded that preliminary efficacy in treatment of liver tumors with PV-10 was observed with acceptable tolerability. The study is continuing at three study centers with two expansion cohorts to further assess safety and response in HCC and other cancers metastatic to the liver."
Provectus' approach to communication of clinical trial progress and data via press release headlines and content could be described as mixed: sometimes wanting, proper or silent, while at times inconsistent and confusing. For example:
  • Some of the releases above used superlatives, such as "encouraging," capitalization, and "exceptional." Others did not. As to whether the headline superlatives matched the clinical results in the releases, one's stock position (i.e., long, short or none) could dictate or lead one's interpretation,
  • For the company's metastatic melanoma Phase 2 SAT, Provectus press released the opening of each of the trial's seven trial sites, as well as the trial's commencement, enrollments of 25%, 50% and all of the trial's 80 patients, and completion of treatment,
  • Aside from July 2015 medical conference presentations of initial hepatic cancers data (where the company disclosed treatment of 13 patients or 15 patient-tumors), Provectus has not yet communicated the progress of its liver CDP, such as the total number of patients enrolled and treated to date, in which expansion cohorts these patients were treated, etc., and
[Quote D] 
"Other red flag words/terms to watch for: per protocol, retrospective analysis, responder analysis, subgroup(s), modified intent-to-treat, trend, grade five toxicity (that means a patient died.) 
Were any changes made to the trial design, including endpoints? Did the company fully enroll the study as planned? Don't rely on the company to tell you. Compare the company's description of the trial with information listed on ClinicalTrials.gov. You'd be amazed how many times they don't match up."
In the intervening years between (a) the presentation of preliminary full metastatic melanoma Phase 2 trial data (November 2010) and (b) an agreement between the FDA and Provectus on the applicable patient population for PV-10 as a monotherapy (December 2013, see January 2014 press release PV-10 Path to Initial Approval in U.S. Now Clear Per FDA Meeting Minutes) and who would form the basis for the Phase 3 RCT, the company undertook retrospective/subgroup/certain responder analyses of the subset of patients in the metastatic melanoma Phase 2 SAT who had all of their disease treated:
    • 2nd paragraph: "The data presented on response rate and progression free survival corroborated previously presented preliminary data on these topics. Key results include: An Objective Response Rate (OR) of 51% in subjects' target lesions (25% Complete Response and 26% Partial Response); 69% disease control in these lesions (combined Complete, Partial and Stable Response subjects); 33% of subjects having an untreated bystander melanoma lesion achieved an OR in their bystander lesions while 50% achieved disease control in these lesions; Response of bystander lesions was highly correlated with outcome in treated target lesions, with a bystander lesion OR of 61% in subjects achieving complete or partial response in their target lesions versus 18% bystander lesion OR in subjects that did not achieve this level or response in their target lesions; Stage III subjects experienced a substantially higher target lesion response rate (60% OR and 79% disease control) versus Stage IV subjects (22% and 33%, respectively); Similar trends were noted in response metrics for bystander lesions between these two subpopulations; Analysis of temporal data showed that Stage III subjects also experienced significantly greater mean Progression Free Survival (PFS) of at least 9.7 months, versus 3.1 months for Stage IV subjects (median PFS for Stage III subjects was not reached during the 12-month study interval); Overall survival (OS) data were also presented by disease stage, with Stage III subjects achieving a mean overall survival of at least 12.6 months (median not reached during the study interval) versus 7.3 months for Stage IV subjects. Case studies on several subjects illustrated potential stasis or regression of untreated visceral lesions following PV-10 treatment of their cutaneous lesions, while data on long-term treatment of one study participant demonstrated successful management of the disease over a period exceeding 3 years."
    • 6th and 7th paragraphs: "Results showed that for all subjects, BORR was 51% (26% CR, 25% PR) with the amount of tumor burden accessible to PV-10 injection prognostic for outcome. In the majority of subjects (68%) the lesions treated with PV-10, together with the up to two untreated bystander lesions, constituted all disease present, and these subjects achieved a BORR of 63%. In subjects where all disease was treated (35% of subjects) BORR further increased to 71% (with 50% achieving CR). Additional new data analyses explored response rates relative to locoregional blistering, a specific reaction observed in 40% of subjects. This phenomenon generally occurred within seven days of PV-10 injection but with no clear pattern of incidence, and typically resolved within four weeks. Appearance of this potentially immune-mediated effect was strongly predictive of outcome. Subjects who developed blisters had 66% BORR (44% CR) vs. 42% (15% CR) for those not developing blisters. The correlation between occurrence of blisters and locoregional disease control was even stronger: among subjects with blisters, 91% achieved stable disease or better vs. 54% of subjects without blisters."
    • 4th and 5th paragraphs: "In the phase 2 PV-10 trial, when all existing lesions were injected with PV-10, tumors were no longer detectable (complete response) in 50% of the patients (Confidence Interval: 31-69%). This subgroup analysis supports the potential of PV-10 as a single agent and provides a rationale for a PV-10 phase 3 randomized controlled trial in locally advanced melanoma patients. This phase 3 randomized controlled trial of PV-10 in patients with unresectable locally advanced cutaneous melanoma will assess response to PV-10 vs that of systemic chemotherapy in patients who have disease limited to cutaneous and subcutaneous sites and who have failed or are ineligible for systemic immunotherapy. Progression-free survival and complete response rate will be assessed using standard criteria (RECIST 1.1). Overall survival and exploratory assessment of patient reported outcomes related to lesion pain and other melanoma symptoms will also be assessed. The study is expected to commence this year, and will allow for interim assessment when 50% of the required events have occurred (i.e., disease progressions)."
As noted above, the pivotal melanoma Phase 3 RCT design was changed, expanding the trial's patient population from its initial population of Stage III B-C patients (November 2014) to include those with Stage IV M1a disease (March 2016).

 [Quote E]
"Assuming the study was enrolled fully, can you track all the patients from beginning to end? I always pay attention to the "Ns" -- slang for the number of patients in each arm of the study. Look out for patients missing from analyses for inexplicable reasons. It's not unusual for patients to drop out of a study, but they still need to be accounted for in whatever efficacy analysis is being used. Patients "disappeared" are a red flag."
In Provectus' metastatic melanoma Phase 2 SAT the company noted the number and impact on efficacy of patients withdrawing from the trial.

More importantly, N has been, is and continues to be a critical letter and number for PV-10 and Provectus trials, primarily as it relates to the potential treatment effect or effect size of PV-10 when compared to control drugs in the Phase RCT of systemic chemotherapy and IL T-Vec, and the eventual Phase 2 RCTs of pembrolizumab (compared to PV-10 + pembrolizumab) and sorafenib (cf. PV-10 + sorafenib).

Big Pharma beats multi-efficacy look pivotal clinical trials of somewhat better drugs  (i.e., having smaller effect sizes) by using large numbers of patients. The immune checkpoint inhibitors represent notable relative improvement over prior patient options; however, patient trial numbers were not insubstantial. Effect size is a measure of strength (of something over something else). In the context of a clinical trial where the responses of two groups (a control group and a test drug one) are being compared, the difference in response between that of the control group and that of the test drug group is known as the effect size.

Should the control and test (treatment) groups be close in response, and thus the test drug has a small effect (i.e., it is a less efficacious agent), a large or larger number of patients are needed in order for the test drug to distinguish itself; that is, for the confidence interval (say 90% or 95% interval) of the test drug to not overlap or run into the confidence interval of the control. Conversely, if the test drug is very effective, a large effect size may anticipated, and thus a relatively small number of trial patients are needed; that is, the confidence interval of the test arm, in this case, may be large without overlapping the confidence interval of the control arm. The fact Provectus only is utilizing 225 patients in its pivotal Phase 3 trial signals this study assumes a relatively large effect size for PV-10 (i.e., PV-10 is very efficacious). Generally speaking, the more effective a drug is the less patients would be needed (without taking into account other factors that might influence clinical trial design) in a trial.

A more effective drug, less study or trial patients are needed. Less effective, more patients needed. See June 23, 2014 blog post Trial Math: Meeting the Primary Endpoint, Pt. 1 and July 16, 2015 blog post Assessing Provectus' Pivotal Melanoma Phase 3 Trial, Part II.

Feuerstein's comments about N are made in the context of communicating trial results. When Eric changed the melanoma Phase 3 RCT's protocol to include patients with Stage IV M1a disease, and allow T-Vec as a comparator, better interpretation for "not candidates for" and less restrictive lesion size entry criteria, he did not change the trial's N of 225 at the time. It is possible he could change this figure in the future, although I doubt it.

Eric's original N=180 (when his initial patient population was Stage III B-C), with a hazard ratio (HR) of 0.545; see the slide entitled Planned Phase 3 trial under Quote B. Eric's "final" N=225 was 25% higher. Did he subsequently increase his "final" HR too? Higher HRs are worse than lower HRs. The goal of a clinical trial is to generate an actual HR that is lower than the projected HR for the study. As I noted above, higher Ns make it easier for trials to win and meet endpoints. But PV-10's efficacy, all things being equal (e.g., the Phase RCT protocol for patient treatment of and follow-up with PV-10), would not have changed between the time of his original N and his final one -- thus potentially lowering the trial's hurdle by some, most or all of the 25% associated with the increase in N.

[Quote F]
"A lot of clinical trials fail. This is the bane of biotech... 
Not every subgroup analysis is fraudulent. But getting comfortable with the potential credibility of a subgroup analysis requires asking a lot more questions and research. The press release will only be the start of that journey. This is an incomplete list, but it should get you started. I'll end with a depressing truth. You can work through this checklist and do a lot more in-depth research that validates your investment thesis. 
Despite all that work, you can still end up being totally wrong. This is why we love and curse biotech stocks." 
In June 2014, on an investor conference call, Eric said in regards to Provectus' Phase 3 RCT:
"We firmly believe that Phase 3 testing should not be started unless you can adequately predict the outcome. It's critical to understand what the drug is doing, which patients are most likely to benefit, what other options those patients have, and which endpoints would be most convincing for government agencies to approved the labelled indication for the drug."
Time will tell. 
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January 24, 2014

A Paradigm Shift vs. Obsolescence

In my September 22, 2013 investment letter (you can find it under the blog’s Why I'm Long tab) I wrote:
PV-10, a novel oncology compound being developed by Knoxville, Tennessee-based Provectus Biopharmaceuticals, Inc. (“Provectus” or the “Company”) (OTCMKTS: PVCT), exemplifies innovation over incrementalism, meaningful over marginal, productized technology over hypothetical, and changing the world over accepting the status quo, with not an insignificant amount of serendipity over contrivance. In sum, these form the quintessential essence of a paradigm shift in the treatment of cancer. 
This is where my investment thesis begins and ends: a novel drug compound with a pristine safety profile, a treatment well tolerated by and easily administered to patients, a ready made product inexpensively produced at scale, and a vast addressable market of unmet need that should be fully and very profitably met over time...
PV-10, a 10% solution of small molecule Rose Bengal (“RB”), which already has an established FDA safety profile, is a very safe and efficacious therapy that when injected intralesionally into accessible cancerous lesions rapidly reduces local tumor burden and stimulates the immune system to systemically shrink or eliminate non-injected distant tumors and visceral metastases. Broadly applicable to a wide variety of solid tumor cancer indications, like metastatic melanoma (“MM”), liver cancer or hepatocellular carcinoma (“HCC”), lung cancer, breast cancer, bladder cancer, pancreatic cancer, and colorectal and other cancers that metastasize to the liver, this drug generates tumor-specific immunity tantamount to in situ vaccination against cancer. Bold emphasis is mine.
I believe Provectus' drug is a paradigm shift in the treatment of cancer. By that I mean utilizing local agent PV-10 and its active pharmaceutical ingredient ("API") Rose Bengal ("RB") to treat cancer by injecting and killing accessible tumors (ultimately harnessing body's own immune system to attack and kill remote tumors), rather than applying systemic therapies like radiotherapy, chemotherapy and some immunotherapies that require the patient's body to be toxically bathed in these treatments.

I think the FDA eventually will approve PV-10 for the treatment of recurrent melanoma on a local-regional basis, with no cancer grade or stage specification or requirement, because there still remains a very large unmet need for this disease, PV-10's pristine safety profile and robust local-regional efficacy has demonstrated its ability and potential to help meet that need, and the drug's efficacy per unit cost is very high (high efficacy, low cost).

On Thursday Adam Feuerstein published an article about Provectus entitled The Obsolescence of Provectus' Skin Cancer Drug Means Current Speculative Run Ends Badly. The article cast Provectus and PV-10 in a negative light.

Feuerstein's use of the word obsolescence ("thing of the past") is striking because it is the antithesis of my use of the phrase paradigm shift, which is about the future. His characterization of PV-10 and its prospects could not be farther or more diametrically opposite from mine. He writes Provectus has nothing comparable to Merck's lambrolizumab, an anti-PD-L-1 agent, nor will Provectus have anytime soon. I contend PV-10, which in a local-regional disease control setting (for now) can prevent recurrent melanoma from becoming metastatic, is like nothing Merck or any Big Pharma currently possess.

 It seems to me the themes of Adam's article are: PV-10 is obsolete, PV-10 will get neither BTD nor accelerated approval. More generally, the drug will not receive an accelerated path to approval from the FDA, and Provectus' share price and market capitalization were too high, and far from warranted.

 I think what speculation there is and currently continues to be relates to whether Provectus might receive either breakthrough therapy or accelerated approval for recurrent melanoma; more specifically, for local-regional control of the disease before it becomes metastatic.

 Provectus' business strategy as it relates to PV-10's clinical development and regulatory affairs has been to demonstrate the drug's ability to arrest or destroy local-regional melanoma lesions and tumors before the disease goes metastatic, using a drug whose API has an established safety profile with the FDA for prior human use in a previously FDA-approved product (future use of halogenated xanthene progeny that further extends patent life, drug utility and profitability of course would require more clinical trial testing).

 Here's the thing about PV-10 today: Hit a tumor with enough drug -- either a suitable injection by volume relative to the size of the tumor, or more than one injection if the tumor still abounds -- and the tumor goes away, entirely.

 It is incredible for a bulletin board stock with less than 1% institutional investor ownership to have Moffitt Cancer Center issue a press release in August 2013 entitled Single Injection May Revolutionize Melanoma Treatment, Moffitt Study Shows, and two Pfizer executives on its corporate advisory board, Dr. Craig Eagle, M.D., head of the oncology therapeutic area global medical group, and Bob Miglani, senior director of external medical affairs.

 The company delivered a clear press release on December 18th, followed by an associated 8-K filing. Provectus management expects to receive either breakthrough therapy designation ("BTD") or accelerated approval ("AA"). The former could require a small additional study, while the same study could be a confirmatory one or post-marketing requirement for the latter. In either case, the endpoint likely could be a symptom-based one related to tumors given PV-10's value proposition of achieving local-regional disease control for patients whose melanoma has recurred -- delay, reverse or prevent progression to life-threatening visceral disease.

 Provectus made an 8-K filing on January 15th to say final FDA meeting minutes management hoped to receive by the same date (by virtue of a capitalized byline in their December 18th press release) had not arrived. Management should not have set this expectation for the market by the inclusion of the/a date if there existed even the possibility the minutes would be delayed (for whatever good reason).

 Peter should not have canceled the call with Adam once scheduled. Bill Gordon, who is employed by Provectus' investor relation/public relations firm Porter, LeVay & Rose, should not have entertained a discussion with Feuerstein on behalf of Peter in the first place. Gordon is not the company's spokesman.

 Why is the notion the FDA would grant BTD or AA to PV-10 absurd, and what does an "'anything goes' biotech investment climate" have to do with the FDA? What is absurd is not analyzing clinical data in comparison to existing approved treatments and those vying for FDA approval for melanoma. There still remains a very large unmet need for melanoma, recent drug approvals notwithstanding. The discussions between the FDA and Provectus relate to PV-10's attractive clinical value proposition of achieving local-regional disease control for patients whose melanoma has recurred -- delay, reverse or prevent progression to life-threatening visceral disease. There is no true standard of care for non-metastatic melanoma patients refractory to treatment.

 RB, the API in both PV-10 and PH-10 (Provectus' lead indication for dermatology), has an established safety profile with the FDA for prior human use as intravenous hepatic diagnostic Robengatope, approved by the Agency prior to 1982 (New Drug Application Number 016224), and topical ophthalmic diagnostics Rosettes and Minims®. RB has been safely used in liver function studies for more than 90 years.

 RB can be readily bought at chemical supply companies such as Sigma Aldrich. Provectus' synthesis patent Process for the synthesis of 4,5,6,7-tetrachloro-3',6'-dihydroxy-2',4',5',7'-tetraiodo-3H-spiro[isoben- zofuran-1,9'-xanthen]-3-one (rose bengal) and related xanthenes, awarded in September 2013, protects the RB API until 2031, and "...is in accordance with International Conference on Harmonisation (ICH) guidelines for manufacture of API suitable for phase 3 clinical trial material and commercial pharmaceutical use" (Source: company press release Provectus Novel Synthesis Patent Issued by United States Patent and Trademark Office, September 2013). This means Provectus' stuff is the only stuff for cancer treatment.

 Further, from the aforementioned Provectus press release, "The patent also covers any hypothetical process that controls the amount of transhalogenated impurities in Rose Bengal through the awarded Jepson style claims." This should mean other companies cannot buy gallons of RB directly from chemical supply companies, maybe or maybe not do something to it, and then sell it for use as a cancer therapy.

 It's worthwhile to expand on Provectus data provided in the article. First, what he uses, which is for patients: The 51% overall response rate ("ORR") is comprised of 26% complete response ("CR") -- the tumor went away -- and 25% partial response -- the tumor shrank by at least a certain amount. 18% were labeled stable disease ("SD") -- the tumor did not increase in size. Local-regional disease control -- the tumor is destroyed, shrunk or controlled -- was 69% (i.e., CR + PR + SD). PV-10 kills tumors, much more so than other therapies and treatments.

 In September 2013 Provectus provided "findings of several exploratory analyses of data from its completed Phase 2 study of intralesional PV-10 in metastatic melanoma during the Poster Session on "Melanoma and Skin Cancer" on Monday, September 30 at the European Cancer Congress 2013 (ECCO 17- ESMO-38 - ESTRO 32) in Amsterdam, The Netherlands (the poster is here). Here, the company provided patient- and tumor-level data from its Phase 2 study.

 At a patient or subject level, focusing specifically on the subset of patients for whom all lesions were treated (i.e., all disease burden), ORR was 71%; 50% CR and 21% PR. Local-regional disease control was 82%. These figures derive from a patient subset, and not the entire patient population, which included Stage IIIB-C and Stage IV M1a-c patients refractory to treatment. I think it's reasonable, however, to focus on the above patient subset only in the context of the regulatory pathway to approval being sought by Provectus: local-regional control of recurrent melanoma.

 At a tumor level, the ECC 2013 poster provided insight into PV-10's effectiveness killing, shrinking and arresting tumors. Among 491 target lesions -- that is, injected lesions -- CR was 53% and PR was 5%. Thus, ORR was 58%. "Local-regional disease control," or CR + PR + SD, was 70%.

 Associated with these figures, consider the company's comments in its ECC 2013 press release: "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." Bold and underlined emphasis is mine. When a patient's entire disease burden was treated (i.e., all lesions and tumors were injected), local-regional disease control was achieved 7 out of 10 times despite intermittent injection.

 Recall Moffitt's August 22nd press release. Albeit a mouse study, which currently has been followed up by a study on humans, Moffitt noted: "In the initial study, researchers injected a single dose of PV-10 into mice with melanoma. The result was a significant reduction in the skin cancer lesions, as well as a sizable reduction in melanoma tumors that had spread to the lungs. The researchers said the dye solution appeared to produce a robust anti-tumor immune response and may be safer than existing immunological agents." Bold and underlined emphasis is mine. 

Key opinion leaders in the medical community have taken special notice of the PV-10 melanoma data. For example, consider Bristol-Myers Squibb's Yervoy-, Roche's Zelboraf-, GlaxoSmithKline's combination of Tafinlar-Mekinist- and Merck's lambrolizumab-investigator Dr. Jeffrey S. Weber of Moffitt Cancer Center. He wrote to me in September 2013 saying: "I think the drug has some serious potential as an immune modulator, and would be very interesting to combine with checkpoint inhibitors." Bold emphasis is mine. "The drug" in his response is PV-10.

 As a side note, adjusting for likely operating spend, assuming a small fundraising under usual terms in the first week of October, and estimating the amount of warrant exercises since the 2012 10-K (particularly over the last month or so), Provectus should have up to if not more than $20 million of cash on its balance sheet come January 31, 2014. The company reported $8.3 million as at 9/30/13.

 Company management has not agreed to a development partner for PV-10, or a regional license transaction or two for that matter, because no one yet has bid a price sufficiently high enough to reflect PV-10's potential (likely) economics.

 I imagine Provectus met with the FDA on December 16th to discuss whether local therapy PV-10 was a viable treatment for systemic disease cancer (melanoma). I think the FDA considered the sum total of the data and information presented to it, and agreed this local therapy could be used to treat cancer (melanoma). It is understandable that casual observers and skeptics consider "no news" to be or mean "bad news." Based on the due diligence I have conducted, no news (as yet) is not bad news as it relates to my investment thesis.

Provectus is mum because the final FDA meeting minutes the company expected, and effectively advertised would arrive by January 15th despite the rather weak caveat of "Under FDA rules, the agency should issue official minutes to the Company within 30 days after such a meeting; in this case by January 15, 2014," have not. When the minutes arrive, I'm sure the company will speak.

 The melanoma treatment landscape certainly has changed. More options for cancer patients always is a good thing. Big Pharma is getting better: "We are pretty good at shrinking tumors, but not good at getting rid of them" (Merck senior vice president Gary Gilliland). See also this post. This incrementalism still is not enough.

 Despite the so-called huge advances in melanoma care today I think the FDA recognizes there still remains a very large unmet need for this disease. I can understand skepticism regarding the use of PV-10 for late-stage and heavily diseased patients; however, Provectus for now has proven local-regional control of the disease before its turns metastatic is consistently achievable. I believe the FDA told Provectus there is a need for PV-10.

A proper comparison of PV-10 would both Vical's Allovectin-7 and Amgen's intralesional agent talimogene laherparepvec ("T-Vec"), formerly BioVex's OncoVEX, which also is injected directly into tumors just like PV-10 (PV-10, Allovectin-7 and T-Vec are intralesional agents). Robert Andtbacka, M.D., assistant professor, University of Utah Huntsman Cancer Institute historically has compared the Phase 2 trial results of these drugs (see below). The FDA likely is aware that T-Vec, often compared to PV-10, met its Phase 3 trial's primary endpoint.
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Roche's vismodegib (Erivedge) also might be considered a relevant and more appropriate precedent.

Making comparisons between a systemic drug, lambrolizumab, and a local therapy (with systemic properties and benefits), PV-10, are problematic, particularly when Provectus is seeking approval for its lead compound for local-regional control of the disease before it becomes metastatic. Interestingly, lambrolizumab generated less than 10% CR, below Ashdown and Coventry's presistent CR ceiling. Killing tumors, not just shrinking them, matters because of the malicious virility of tumor heterogeneity. If you don't kill cancer, it comes back angrier.

PV-10 is not obsolete. Far from it.
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January 1, 2014

Provectus’ Worth

When I’m asked the question “What do you think Provectus is worth,” more often than not the person asking wants to know at what price do I plan to sell our shares. Much less often does the person ask the question with the intent of wanting to understand my view of the company’s value, and share his or hers (and their underlying thinking and rationale) with me.

In the past I’ve written, albeit sparingly, about my view of Provectus’ worth. On the Silicon Investor stock board several years ago I wrote (under the handle pvct investor) the company was worth, generically speaking, about $15-20 per share. At the time the math worked out to a billion dollar value. Back then a simplified version of my investment thesis was management had created at least a billion dollar company when sufficient regulatory clarity was achieved and a commercialization timeline was set forth. Since then I’ve used the same per share figure in rare conversations on the topic, irrespective of increased dilution (i.e., more shares times the same dollar range) over time.

I think Provectus is worth a lot.

A lot more than its December 31, 2013 share price of $2.41. The company now sports a small cap valuation of $337 million (enterprise value is $197 million, per Yahoo! Finance). Think about that for a moment. Entering 2014 the company is a small cap one; "...a company with a market capitalization of between $300 million and $2 billion." 12 months ago, the share price entered 2013 at $0.56, making Provectus a micro cap company ($50-300 million), barely.
2013. What a year for the company, and for the stock. A one-year stock performance of +314%.
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Some perspective: A five-year stock performance of +150%.
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More perspective: The share price began to move in ernest in August (still, it was green throughout), going parabolic in December.
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August 22nd: Single Injection May Revolutionize Melanoma Treatment, Moffitt Study Shows

December 18th: Provectus Type C Meeting With FDA Oncology Division Held December 16, 2013

To value, or not to value. Up until this point I’ve been circumspect about blogging detailed posts about my views on Provectus’ value, valuation, per share price, worth, etc. The time has not been right. Although I have commented from time to time about relative valuation, such as the company’s market capitalization at a point in time compared to where I thought it might or should be (i.e., Provectus’ valuation at/compared to the so-called biotech valuation curve), the blog to date has been focused on the drug’s clinical and business value propositions, and market awareness and validation of them. Market in this instance speaks to a large set of constituents: the FDA, Big Pharma, medical community key opinion leaders, physicians, patients, life sciences investors, the generalist investment community, retail investors, media, etc.

All of this changed with Moffitt's August 22nd PR and Provectus' December 18th one; public declarations by the respective parties of important, milestone-like steps or achievements on the way to an eventual regulatory conclusion and accomplishment. It felt like two simple questions finally were being answered: Would the FDA acknowledge a local therapy could be a treatment for cancer? Would the Agency consider PV-10 for approval?

This time its different. Now, December 2013 entering January 2014, does have a different feel to it. Like the share price, awareness measured by blog visitation and readership statistics went parabolic in December, and correlated unsurprisingly with visitation to and readership of Provectus' website, www.pvct.com.
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December 2013. January 2014. 2,720 unique visitors (94% over the previous high), 10,040 visits (58%) and 20,085 page views (103%) from 50 U.S. states and the District of Columbia (11%), 894 U.S. cities (99%), 70 countries (59%) including the U.S., and  173 international (non-U.S.) cities (41%).
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I present these blog statistics merely to reinforce the seeming phase change in the stock and company awareness that appears to have taken place last month. More eyes than ever are turned towards Provectus. With their December 18th PR, management clearly is setting the table for and the market up for a key announcement about or much more insight into regulatory clarity. The signs appear to be there: "Official minutes expected by January 15, 2014," "The purpose of the meeting was to determine which of the available paths that Provectus' novel oncology drug PV-10 will take in pursuit of FDA approval and commercialization," "The minutes will clarify the available regulatory paths and, therefore, allow the Company to better estimate a time-line to commercialization of PV-10," no mention of a Phase 3 trial or the special protocol assessment that consumed shareholders' thinking (guessing) about regulatory clarity in 2012, and "This meeting with the FDA is a significant step forward in establishing a pathway to initial U.S. approval of PV-10 for the treatment of melanoma. There are different possible routes to approval of PV-10 such as a breakthrough therapy designation or accelerated approval, and each of these has different requirements and time lines."

Breakthrough therapy designation ("BTD") is not a pathway or route to approval. Past BTD grants have led to further steps in the processes of the respective grantees in regards to their own drug approval pathways. Accelerated approval ("AA") is a pathway, often comprising release of the drug, and some post-marketing requirement(s) by the FDA and post-marketing commitment(s) by the sponsor. There is no certainty with the Agency, as drug candidate evaluation for approval can be a long, arduous, shifting, intense, substantive, uncertain, persistent, collaborative process.

It's easy to treat January 15th (more generally, the week of January 13th) with skepticism or not the least amount of doubt, even as a blogger about Provectus, long-time shareholder, long-term investor like myself. It would disingenuous to say I have no trepidation about that date or week. What will the outcome be? What if anything will management say? How will what they do or do not say, via PR, affect my investment thesis? I admit to a little trepidation, but much more excitement. The December 18th PR, adjusting for there-are-no-certainties, appears to suggest two potential outcomes, A or B, and the always present but likely improbable [note, not impossible] outcome C.

You can't handle the truth! Today Adam Feuerstein is out with an article entitled Biotech 2013 By the Numbers: A Blockbuster Year, noting: "In a year where the markets outperformed, the biotech sector performed even better, posting returns not seen since 1999. Phenomenal. No wonder we saw a huge influx of generalist investors into healthcare stocks in 2013." Putting Provectus' 2013 stock performance in more perspective, Feuerstein also writes: "A single biotech and drug stock (Lannett) posted a six-fold bump in share price this year. Nine stocks increased in value by five times, 3 stocks quadrupled in value and 26 stocks tripled in value, according to S&P CapitalIQ."

A blog reader recently wrote to me: "Does it scare you that Adam Feuerstein tweeted this? I'm stunned he would make such an arrogant statement. He does have a lot of influence." 'This' refers to the tweet below on December 17th, following the company's PR Provectus Announces Name Change to Provectus Biopharmaceuticals, Inc. and Reincorporates in Delaware. No, it does not scare me. I also don't feel he is being arrogant but rather just superficial, cursory or dismissive in a passing way.

Feuerstein's business model is one of a skeptical, truth-telling, snarky, biotech journalist. I follow him on Twitter and regularly read his columns as part of my ongoing, situational due diligence of Provectus (my only biotech investment). As I've written a few times, and he routinely reminds his readers, it's important to thoughtfully and actively engage skeptics and the "other side of the trade" in order to ensure one's investment thesis, long or short, remains sound and relevant.

I'm not troubled by the essence of Adam's tweet's snark. It's not unreasonable to criticize management for a name change and a name change PR, however "better" the potential for future branding, when information releases about a host of other substantive topics and issues (reasonably within their control of or decision making for comment) go unaddressed, such as updates on or discussions about:
  • The publication of the final metastatic melanoma Phase 2 trial in a high impact cancer-focused journal or periodical,
  • The compassionate use program (HIPAA compliance notwithstanding),
  • The status of PH-10 (Rockefeller study progress or results related to completing additional research into the unique properties of PH-10 regarding its mechanism and lack of toxicity, so as to schedule an End-of-Phase 2 meeting with the FDA to review PH-10 for psoriasis and atopic dermatitis and plan a transition to Phase 3 testing, and to complete discussions with potential licensees, hire a financial advisor and sign a licensing agreement that covers dermatological indications for PH-10),
  • The expanded Phase 1 liver trial (in order to meeting with the Agency and begin Phase 2/3 clinical trials of PV-10 for liver carcinoma),
  • Investigating new oncology indications for PV-10, such as bladder cancer (what about pancreatic cancer?), and
  • Additional immunology studies at Moffitt Cancer Center regarding PV-10's mechanism of action.
I think the re-jurisdiction, while not overly crucial in my mind (Nevada and Delaware attorneys can agree to disagree), was an important signal from management, who remain very clinical in the legal dimension of their business practices and process (of which I am not critical for the most part, and do appreciate). A skeptic might dismiss the 8-K filing associated with the December 18th PR as nothing or next to nothing. I would not.

To Feuerstein's other comment about Provectus' crappy drugs, I take it as more general snark than specific opining on PV-10 (or PH-10). Even the most cursory evaluation of the publicly available pre-clinical and clinical data from the company and various third parties (e.g., Moffitt, other researchers in the U.S., the Middle East, Australia, etc.) should elicit at least an "interesting-but-I-need-to see/know-more" comment from an intellectually honest, industry savvy skeptic. Feuerstein's business model requires him to be aware of or superficially cover a lot of companies (more than a hundred?), approach tens of companies with some depth and, from time to time as the situation presents itself, focus on a handful of companies in great detail. Like other analysts (good journalist equals good analyst), including myself, he employs pattern recognition to discern good from bad (his pattern recognition is different from mine because of our respective professional experiences). If one doesn't have or take or require the time to diligence Provectus, it's not unreasonable to arrive at the same skeptical-flavored conclusion: PV-10 is or might be snake oil upon first impression (because it is so improbable with respect to conventional wisdom). Crappy, not so much. That the drug is too good to be true or snake oil was a nearly universal impression among the medical oncology community until recently (or at best that PV-10 was solely a local ablative agent), because no ablative agent had ever elicited significant systemic effect.


I’ve been loath to encourage blog readers only to focus or anchor themselves on share price when visiting and reading the blog. As I wrote under the blog's Disclosure tab, I of course “talk my book” by expounding on the merits of Provectus, the drug, management and the stock. The difference between what you may read elsewhere on the Web (mostly, but not exclusively) and “Connecting the dots…Provectus Biopharmaceuticals” is that I’ve told you who I am. I’m open to being corrected, and to being wrong (even though I don’t think or believe I am). I've not been able to incur transparent (i.e., not anonymous) debate and discussion on the pros and cons of the drug and stock sufficient enough yet to push back on my investment thesis, or make me re-think its core. That may well come in time with even more awareness. What makes a market are buyers and sellers. Stating the very, very obvious: If buyers are right, price goes and stays up. If sellers are right, price goes and stays down.

Revisiting the Feuerstein-Ratain rule, its essence (while constructed from the premise of the likelihood of success of large and small companies undertaking Phase 3 clinical trials) is this: "The stock market is known to anticipate future events, as opposed to reacting to the past. Thus, it is not surprising that sophisticated investors are able to judge the probability of success, which is reflected in the share price." For the longest time, as Provectus lay mired as a nano or micro cap company, the market spoke that it judged management not to be successful, and not having a high probability of success. Moffitt's August 22nd PR changed some minds (the valuation went higher). Provectus' December 18th PR (give or take the actual date itself) changed many more minds (the valuation went even higher). The story is not over, and those minds are free to change them back again. Which leads us once more to January 15th (more generally, the week of January 13th).

China. Dalam Disember 18 PR, Craig mengulas "Di samping itu, perbincangan kami dengan beberapa rakan pelesenan antarabangsa yang berpotensi tidak terjejas dalam apa jua cara." Terdapat khabar angin dalam proses mencapai transaksi lesen serantau bagi China telah datang ke penghujungnya, dan kita dapat belajar lebih minggu depan.

A not-so-final word on worth. My estimation of Provectus’ worth is a large number. To what you’re asking of me? Assuming I am right (which, in truth, means if management is right) I hope to and think I will sell my shares for a very high price. Inevitably you take what the market or buyer gives you. More on this as the new year unfolds.

As I wrote in my September 22nd investment letter about why I'm long Provectus Biopharmaceuticals, the key downside risk (as for any investment, understanding risk and reward) at this point is management being unable to monetize the company at a valuation commensurate with their innovation. There undoubtedly are other risks, as I highlighted in the Seeking Alpha version of my investment letter: "There are common risks most if not all biotechnology company stocks face: dealing with the FDA can be at times a complex and opaque process, clinical trials fail, seeking funding can be a long, arduous and dilutive process, and the industry itself is prone to bubbles and busts that contribute to generically rising and falling share prices."

2014.
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