All a Flitter (sort of) on Twitter about $PVCT

Moffitt's August 22nd PR, Single Injection May Revolutionize Melanoma Treatment, Moffitt Study Shows (and perhaps the Agora Financial Breakthrough Technology Alert-sparked volume and share price rise) sparked several tweets yesterday from life sciences-focused folks I follow and/or read on Twitter.

This is just the public discourse the company and stock need to and should have, as folks of varying influence following and opining about the biotechnology sector start, I hope, weighing in more frequently and regularly on PV-10, Provectus and the stock.

Too good to be true. Snake oil.
@JPZaragoza1: Total BS
Understandable. Moffitt's headline is, after all, pretty heady: "Single injection," "may revolutionize." As a DVM, I would be interested in getting his perspective on the use of rose bengal in animals, such as the case studies posted by Australia's East West Vets.

No progress.
@chasingthealpha $PVCT been around forever, still no real progress
Understandable. Consider the metastatic melanoma Phase 2 final clinical study report only recently was completed, with limited data availability and no Phase 3 trial has started yet. 6 years. I suppose, could be considered "forever:"

• The trial started in September 2007: Begins Phase 2 Clinical Trial for Metastatic Melanoma,
• Preliminary data was released at Melanoma 2010 in November: Full Phase 2 Study Data on PV-10 for Metastatic Melanoma,
• Final trial data was released at ESMO in October 2012: Final Phase 2 Melanoma Data,
• A complete data set (as well as local observations as yet unreported) should be released at ECCO in September 2013: PV-10 Data on Locoregional Disease Control in Metastatic Melanoma.

No proof of systemic benefit.
@JPZaragoza1 smells of $VICL all over. Crap.
Understandable. Predecessor local (intralesional) agents T-Vec (talimogene laherparepvec) and Allovectin-7 have produced modest to no systemic benefit, and certainly not robust and/or immune-mediated ones, and not to mention modest to failed Phase 3 clinical results.

High profile, peer-reviewed publications, please.

@MaverickNY when there’s a NEJM or JCO article, I pay attention #brutalhonesty
Understandable. There has been no validation of Provectus and third party research and clinical trial results many folks require by virtue of publication in high profile journals like the New England Journal of Medicine or Journal of Clinical Oncology.

KOL skepticism.

@MaverickNY if I’m really honest, the ones not in the trial don’t. really sorry (in response to @JSwatercooler ‏Ouch. KOLs love PV-10. Read the PLOS ONE article.)
Interesting. I would like to understand the veracity of Dr. Church's perspective about KOLs' views of PV-10 not "related" to the drug (i.e., principal investigators like Agarwala, Ross or Thompson, or researchers like Sondak and Weber). According to Provectus, management has been told by top clinicians [unnamed to me] in very clear terms they will use PV-10 to treat all manner of cancer stricken patients – melanoma, liver cancer, breast cancer, bladder cancer and pancreatic cancer – because the drug is very user friendly (i.e., it has a favorable adverse event profile and is easy to administer). These clinicians want to use it earlier and if other treatments fail. So, who's right...?

Too good to be true. Snake oil. No progress. No proof of systemic benefit. No high profile peer-reviewed publications. Key opinion leader skepticism. I think management has heard all of this before.

It's always good to know the other side. This early Twitter discussion is more banter than actually the other side of the/a trade...for now.

Regulatory clarity and commercial validation cure a lot, and it would seem both are on the way.

I Think it's a Good Time to be a $PVCT Shareholder

Shareholders are closer to the end-game for the stock than to their journey's beginning. The company's  life sciences technology is head and shoulders above its peers. The lead compound presents a compelling clinical value proposition capable, perhaps, of indeed shifting the paradigm of cancer treatment (and treatment of inflammatory skin disorders). The drug already is productized, with a product business proposition to match that of the underlying technology. Provectus appears to be nearing transparency regarding regulatory clarity for oncology. The company also appears to be nearing certain license deals that will provide initial market validation. In sum, management, Provectus and its shareholders are nearing the end-game.

Provectus' technology is a game changer, productized to effect the change, and can be delivered and scaled to profit from the change to come.

The technology, PV-10 for oncology, is an effective local treatment capable of as effectively treating distant disease and visceral metastases. The drug, through expression of antigens in context in tumors into which PV-10 is injected fortifies the immune system against cancerous agents. Immunization occurs because PV-10's chemoablation causes rapid, complete, durable necrosis of tumor lesions.

"Scientists have been trying for decades to understand why the body's immune system didn't see cancer cells as the enemy and attack them. Recent discoveries revealed that tumors are adept at cloaking themselves by hijacking the body's own mechanism for preventing the system's T-cells, the infection- and disease-fighting cells of the immune system, from running amok against healthy tissue."

The above quote from Wall Street Journal (WSJ) article New Cancer Drugs Harness Power of Immune System (5/15/13) is not quite on-point. Rather, the quote below from Bloomberg article Human Immune-Boosting Cancer Drugs Seen Extending Lives (5/12/13) is more to the point.

"Now many believe that by strengthening the immune system’s ability to identify and kill cancer cells, they can broaden the attack so it will fight any dangerous malignancy. “You’re setting up a fair fight” with the disease, said Nils Lonberg, a senior vice president at Bristol-Myers, in a telephone interview. “The immune system is just as adaptable as the cancer.”"

How do you strengthen the immune system? Medical science has done it before with infectious diseases. Immune systems can be overwhelmed and, thus, are unable to help the human body fight back. Antibiotics themselves do not cure patients of infectious diseases that have afflicted them. Rather, the immune system cures the hosts with the help of antibiotics. Treating infectious diseases requires that antibiotics should have near absolute specificity for the infectious agent. Tough infections require multiple agents.

I think it's a good time to be a Provectus shareholder.

The volume of the conversations about immunotherapy has grown much, much louder. Take Xconomy's Luke Timmerman's article Genentech Follows Fast at ASCO as Cancer Immunotherapy Picks Up (5/15/13) for example.

"Genentech made its name in cancer by creating targeted antibody drugs that zero in on tumor cells while mostly sparing healthy tissue. Now it’s seeking to compete in the next wave of cancer immunotherapies, which are designed to spark the immune system to attack tumors like a virus."

Or take NBC's Nightly News report Immunotherapy targets cancer cells with remarkable results (5/15/13).

"Cancer cells typically put up a chemical shield to protect against the body’s disease-fighting T cells. But immunotherapy can break down the shield and let the T cells get to work."

The more the biopharmaceuticals industry, investing community and general public talk about immunotherapy, the better the environment or atmosphere for PV-10 and Provectus to flourish.

From the same WSJ article above: "More broadly, Leerink [Swann, a middle market investment bank] believes the "immuno-oncology" drug market could amount to a $20 billion category annually, putting it on a par with the cholesterol-lowering statin market at its height."

From dendritic cells (Dendreon's Provenge) to antitumor antibodies (Bristol-Myers' anti-CTLA-4 agent Yervoy) to immune checkpoint blockades (ASCO 2013's anti-PD1 and anti-PDL-1 agents):

"The immunotherapy of cancer has made significant strides in the past few years due to improved understanding of the underlying principles of tumor biology and immunology...[t]he pillars of human cancer therapy have historically been surgery, radiotherapy, and chemotherapy, but a fourth modality of immunotherapy has been well documented since 1890..." (Kirkwood et al.).

Big Pharma is tacking closer to the ultimate goal, but they mostly still are sailing wide of the objective.

"If the new generation of immune therapies lives up to its promise, “this is going to be a paradigm shift for treating cancer,” said Merck senior vice president Gary Gilliland in an interview. “We are pretty good at shrinking tumors, but not good at getting rid of them. Immune therapy is a way to begin to approach that.”"

Yes, Big Pharma is pretty good at shrinking cancerous tumors, but not yet good enough at making them go away.

Craig's postulation that you treat cancer like you treat an infectious disease requires a/the drug treatment to possess near absolute specificity for diseased tissue (spare normal tissue and clear rapidly from it) and induce a host response (combined apoptosis-autophagy of treated targets because intralesional delivery produces a “vaccine-like” systemic effect that enhances normal human body defenses) over a very wide range of activity (broad spectrum antibiotic-like)


PV-10 chemoablation causes rapid, complete, durable necrosis of tumor lesions.

I think it's a good time to be a Provectus shareholder.

The general discourse at the moment about immunotherapies, however, is far from well understood or a consensus. Take last week's exchange on Adam Feuerstein's Twitter feed @adamfeuerstein below.

Feuerstein had been explaining the fundamental bear case for Vical's Allovectin-7, but aside from perhaps some valid trial design questions, his "red flags" included a lack of positive statements by melanoma experts and institutional healthcare investors as well as a lack of immune-related toxicity by Allovectin-7. Church is not a fan of immune-related toxicity because of the long-term dangers of altering the immune system in order to use it. All of this despite the on-point replies of other respondents: directing T-cells to attack tumors rather than a broad uncontrolled response, the beauty of local treatment is limited toxicity, revolutionary if the local treatment works on visceral mets, etc.

Many monoclonal immunotherapies do cause terrible toxicities, which are related not just related to "taking the brakes off" the immune system. Their target antigens are not only on/in the immune cells they wish to suppress. Just like chemotherapy agents, immunotherapy agents also can cause collateral damage with more adverse side effects like cancer and death.

The nature of the conversation Feuerstein, Church and the others need to have has to be deeper and more substantive. It's too simplistic to say Allovectin-7 does or will not work. Whether it's Allovectin-7 or talimogene laherparepvecone (T-Vec, formerly OncoVEX), or PV-10 itself, one has to balance positive effects with side effects. Think of it as a biological signal-to-noise ratio. One can titer up dosages until one sees bad things happen.

I think Pfizer probably refused to do this with its anti-CTLA-4 agent tremelimumab, which is why it has a greater failure record in clinical trials than it's Bristol-Myers' ipilimumab. Bristol-Myers probably had a higher tolerance for "bad things to happen" in order to suss out the optimal or near-optimal signal-to-noise or benefit-to-side-effect ratio.

Remind yourself of Provectus' combination therapy work at AACR 2013 utilizing PV-10 and a systemic anti-CTLA-4 antibody. The highest dose of the latter killed the murine subjects more quickly. Lower doses were less effective but also less dangerous. Interestingly, the results the company concluded that while PV-10 is highly effective when all existing tumor is accessible for injection, for visceral or other inaccessible disease the combination of PV-10 with CTLA-4 blockade has important potential synergy. Nevertheless, the apparent toxicity at high doses of the anti-CTLA-4 antibody markedly reduced the effect of the antibody alone and the combination of PV-10 and the antibody.

If an immunotherapy is working, there has to be some response (e.g., inflamation, redness, blistering, itching, etc.). These "side effects" come with the territory, and merely are signs the immune system is now in the game. So, while one indeed is generating a toxic response by recruiting the immune system, the key is focusing this toxicity as much as possible.

The problem with Yervoy, and perhaps immunotherapies like anti-PD-1, anti-PDL-1 agents and other treatments, is the collateral damage they cause to the body. PV-10's great strength has been and is its ability to the target only what it kills and kill only what it targets. Another strength is the drug's ability to generate a very specific, targeted, immune response with very little collateral damage to anything but the tumor itself. So, some blistering occurs, body temperature rises, etc. Nothing more.

I think it's a good time to be a Provectus shareholder.

Still, regulatory clarity has to become transparent. Is it an MM Phase 3 trial under SPA powered for for a 6-month progressional free survival for PV-10 vs. 2-month plus PFS for the comparator DTIC?Or is it breakthrough designation therapy and accelerated approval or another accelerated pathway?

Further still, commercial validation through one or more meaningful license transactions (global, regional, dermatology) is required. For example, will it be Hisun-Pfizer Pharmaceuticals in China? Or another company or entity? The Hisun-Pfizer joint venture was established in 2012 to sell off-patent medicines in China and other emerging markets. But economics are economics. Pfizer's 49% equity ownership and thus 49% ownership of any PV-10 sales in China would be a strong inducement to widening the entity's mandate through a license deal with Provectus.

Who will it be in India? In Japan? When will PH-10 be licensed, and to whom?

Provectus is squarely in the eye of key cancer patient advocates. The company participated in Melanoma Research Alliances' (MRA's) Fifth Annual Scientific Retreat in February. In April Peter joined MRA's President and CEO Wendy Selig, LiveSTRONG's President and CEO and Provectus corporate advisory board member Doug Ulman, Moffitt Cancer Research Center's Dr. Shari Pilon-Thomas and some media for dinner.

Key opinion leaders like Moffitt's Dr. Jeff Weber and Dr. Vernon Sondak and Pfizer's Dr. Craig Eagle are enthused about PV-10 as both a monotherapy and combination therapy.

More data is on the way. And data is driving and will drive the deals.

Yes, I think it's a good time to be a Provectus shareholder.

$PVCT's PV-10 and $VICL's Allovectin-7

I know this comparison is spurious because apples are not being compared to apples. Nevertheless, it's interesting [at least to me] to consider. Both companies, Provectus and Vical, released information at conferences regarding combination therapies.

In November 2012 Vical released animal data at the 9th International Congress of the Society for Melanoma Research documenting the benefits of combining Allovectin-7 with anti-CTLA-4, anti-PD-1 and anti-PD-L1 antibodies. The poster is here.

In April 2013 Provectus released data at the American Association for Cancer Research (AACR) Annual Meeting documenting the benefits of combining PV-10 with an anti-CTLA-4 antibody. The poster is here.

Vical's methodology was:

Provectus' low dose (of the anti-CTLA4 antibody) methodology was:

Allovectin's survival graph:

PV-10' low dose (of 9H10) survival graph:

The PV-10 legend is to the left.

@PropThinker's Undervaluation of Vical’s Full Pipeline Allows A Cheap Bet on Cancer Trial (and $PVCT)

PropThink provides actionable analysis of publicly-traded, emerging growth companies in the healthcare sector to retail and institutional investors. Recently, the firm put out work on Vical (and Allovectin-7), taking (initiating, perhaps) a long position in VICL because: "The market is discounting Vical on the basis of underestimating the probability of Allovectin success and is completely overlooking a broad pipeline with shorter developmental timelines. These oversights have created what we consider a cheap call option on Allovectin data given the pipeline strength. In the context of the overall success rate of Phase III oncology studies, the existing data supporting a positive trial outcome for Allovectin is alluring."

A blog reader directed me to this. Thank you. It's an interesting article by PropThink, and very worth reading.

The investment thesis, buying Vical shares as a the "cheap call option," appears to be centered around (paraphrasing) the market significantly underestimating the probability of success of Allovectin's MM Phase 3 trial, which [in PropThink's view] creates a near-term, high-return opportunity coupled with a pipeline safety net.

I found several aspects of the author's analysis interesting (aside from the discussion of Vical's non-Allovectin pipeline):

• The market opportunity and addressable market size there still exists to treat Stage 3/4 melanoma, including "Approximately one-third of all melanoma patients will experience disease recurrence. In patients with advanced metastatic melanoma, median survival typically ranges from six to ten months."
• Further recognition of Yervoy and Zelboraf's shortcomings: "Both drugs are associated with significant side effects, and neither is considered a cure for melanoma."
• Allovectin’s novel immunotherapeutic approach to metastatic melanoma: "...cause recognition of the tumor at the local site (break tolerance) to allow a then-sensitized (boosted) immune response to recognize un-injected tumors at distant metastatic sites" and "induces an immune response to multiple melanoma associated antigens."
• Phase II data is much better than top-line data suggests, because the "...key to the Phase II data is to understand the objective response rate of 11.8% on an intent-to-treat basis. This response rate is clinically meaningful on its own, but when analyzed in the context of the Phase II study and Phase III trial design it points to potentially stellar results."
• Response rate in context: "If the response rate for Allovectin of 11.8% were extrapolated to a trial population without a 60% dropout rate, then it would be at least 22-24%."
• Reasons why the Phase 3 trial be a success: "Patients are healthy enough to receive a minimum of two treatment cycles, Patients have functional immune systems, Patients on study for more than 2 treatment cycles, Designed to capture immunotherapy advantages"

The takeaways, among several, for me include:

• The continued recognition of the growing importance and value of intralesional immunotherapies (e.g., Amgen's T-Vec, Vical's Allovectin-7),
• The continued recognition of Yervoy and Zelboraf's shortcomings, and that there still remains a clear unmet need for melanoma,
• The more frequent an immunotherapy is applied, the more likely a better outcome (i.e., more than two treatment cycles in the case of Allovectin), and
• The still only incremental benefit Allovectin and T-Vec offer. Allovectin and T-Vec receive attention, in many respects rightfully so, because the drugs are in Phase 3 testing. Nevertheless, the drugs are incremental in their benefit when compared to PV-10.

Recall Dr. Andtbacka's comparison on these therapies and PV-10 at the HemOnc conference in New York in March:

PV-10 simply is superior. The above table compares Phase 2 trial data across therapies, where treatment was limited -- limited by the number of Allovectin treatment cycles and number of PV-10 injections.

The attention paid to Allovectin-7 and T-Vec is good for PV-10; however, not including a key intralesional therapy like PV-10 of which medical practitioners and key opinion leaders are fully aware and for which they are very excited makes me wonder about the depth and thoughtfulness of PropThink's Dr. Kotak's article's research or diligence.

Was Dr. Kotak ignorant or unaware of Provectus and PV-10, or unwilling to include an OTC stock in his analysis and article? He included OncoSec Medical (ONCS.OB).

Aside
As for the author's cheap call option description, the current Vical market capitalization (per Yahoo! Finance) is about $310MM ($3.58 per share). The author suggests "The Vical pipeline, excluding Allovectin and cash (~$75M at March 31), could support a valuation in the $200-250M range, thus we believe that Vical’s pipeline provides a real backdrop to the Allovectin trial." I read this as his description of downside protection, or down to $2.31-2.89 per share.

A Vical trial success, which many are betting against, raises the share price to, what, $6-8 per share? Higher?

From a risk-reward perspective, your downside is $0.69-$1.27 a share ($3.58 minus $2.31 or $2.89), while your upside could be $2.42-$4.42 a share ($6-8 minus $3.58), for a downside-upside multiple ratio of about 2-4x:3.5-6.5x. As a former currency derivatives (read: options) trader, that risk-reward is not endemic of a "cheap call option."

The notion of buying a call option, cheap or otherwise, is the upside if the option becomes in-the-money (or volatility rises to increase the value of the option) is many multiples of the option premium you pay (and are prepared to lose in its entirety if the trade goes awry). The risk-reward has to be worth it: the potential return you expect to generate is equal to or vastly higher than return commensurate with the risk you believe you are taking.

In Dr. Kotak's example, I ultimately see the risk-reward range as 2-6x (with 3.5x in the middle), which I do not consider cheap. A call option (speculating, where you get more leverage by buying the option rather than the underlying common stock) or cheap call option is smart or cheap at a number of at least 10x (for the risk you're taking).

$PVCT: Current Status of Injectable Therapy

Dr. Robert H.I. Andtbacka, Assistant Professor of Surgical Oncology, Huntsman Cancer Institute at the University of Utah in Salt Lake City: "Current Status of Injectable Therapy" at the HemOnc Today - Melanoma and Cutaneous Malignancies Conference on March 22, 2013.

$PVCT & $AMGN: T-VEC vs. PV-10

This week, Amgen released partial study results of T-Vec's melanoma Phase 3 trial that compared talimogene laherparepvec (formerly OncoVex) against control therapy GM-CSF.

Some articles on this can be found below:

• Novel Amgen virus-vaccine shrinks melanoma tumors (Linda A. Johnson, Huff Post Business),
• Amgen Trains Herpes Virus to Shrink Skin Cancer (Adam Feuerstein, TheStreet), and
• Amgen scores PhIII success with BioVex virus against melanoma (Ryan McBride, FierceBiotech)

"[16%] of the T-Vec patients reported meaningful tumor shrinkage for at least six months, compared to 2% for patients treated with GM-CSF. The difference in durable tumor response was statistically significant in favor T-Vec, achieving the primary endpoint of the study." (Adam Feuerstein)

Reaction is mixed.

"Until Amgen produces some solid OS rates, though, a number of analysts will remain on the sidelines as to whether the biotech giant has a shot at market success. Amgen likely will have to wait until the arrival of OS data later this year before it can file for an approval, said ISI's Mark Schoenebaum in a note to investors. "In our view, OS is the single most important data point to track for this trial (both from regulatory and commercial perspective)."" (Ryan McBride)

"RBC Capital Markets analyst Michael Yee wrote to investors that he's "cautious" on the likelihood the full survival results later this year will show T-VEC is better than a couple of existing treatments – and they [Yervoy and Zelboraf] don't have to be injected into a tumor every two weeks."" (Linda Johnson)

"UBS Securities analyst Matthew Roden noted T-VEC's 16 percent durable response rate in this study, as well as its 58 percent one-year survival rate in an earlier, mid-stage study, both exceed study results for Yervoy, Bristol-Myers Squibb Co.'s melanoma drug. Roden added that T-VEC doesn't have that drug's severe gastrointestinal side effects."" (Linda Johnson)

"However, Mara Goldstein of Cantor Fitzgerald called the findings "a win for immunotherapy." "We can't help but feel encouraged for other agents in development," she wrote to investors, "particularly in light of the failure" of a study of experimental cancer vaccine Stimuvax, being tested by Merck KGaA of Germany." (Linda Johnson)

Coverage and commentary by biotechnology journalists of Amgen and T-Vex can only help facilitate a more open assessment of PV-10 when the time comes, helping them to better understand treatments that prime or "...activate a patient's immune system enough to target and eliminate tumors that are not directed injected...[the] so-called off-target or systemic response..." (Adam Feuerstein)

""While the regulatory strategy is current unclear, today's news is an incremental positive and T-Vec is not currently in our/Street models, due to overall low expectations for the drug and the practical/commercial limitations of immunotherapies. We await presentation at ASCO and OS data to better assess the clinical and commercial profile of T-Vec," said J.P. Morgan biotech analyst Geoff Meacham in a note to clients Tuesday night." (Adam Feuerstein)

My key takeaway from the Amgen news is Goldstein's comments about the results being a win for immunotherapy. T-Vex, Allovectin-7 and PV-10 have been considered the 3 cancer immunotherapy treatments to watch.

Put into context, and presented again at the HemOnc Today conference in New York, PV-10 possesses a superior response rate advantage over T-Vec (and Allovectin) for injected lesions, non-injected lesions and non-injected systemic lesions.

And on April 8th Moffitt raises the curtain on PV-10's systemic benefit.

"Two recently approved skin cancer drugs -- Roche's Zelboraf and Bristol Myers' Yervoy -- both prolong survival significantly. In order to compete and perhaps even to be approved at all, Amgen will have to demonstrate that T-Vec can help skin cancer patients live longer and not just shrink tumors."  (Adam Feuerstein)

Zelboraf was approved with PFS as primary endpoint. Yervoy was approved with OS as primary endpoint. PFS and OS of course are both considered survival endpoints, and both are described as “time to event” endpoints versus “proportional endpoints” (e.g., ORR, DR, BORR, etc.).

PV-10 already demonstrated shown tremendously robust PFS in Provectus' MM Phase 2 trial. Patients, by definition, are living longer “progression free.” Management, however, believes the Moffitt forthcoming data is all they need prove PV-10 works systemically.

Amgen acquired BioVex in March 2011 for $425 million upfront and up to $575 million milestones. BioVex's purchase should put a firm floor of about $1B under the value of Provectus (or about $5-7 per share fully diluted).

$PVCT.OB: Vical, Allovectin-7 and How They Matter and Relate to Provectus and PV-10

When Vical reported third quarter 2012 earnings on November 7, the company commented on its financial results and progress in key development programs. Vical management effectively guided the eventual release of results for the company's pivotal MM Phase 3 trial would be delayed (again) to mid-2013 or into 2H13.

Amgen's talimogene laherparepvec or T-Vec (formerly BioVex's OncoVEX), Vical's Allovectin-7 and Provectus' PV-10 are emerging intralesional immunotherapies the melanoma community has wanted to see more results for and now want to be combined with other immunomodulatory agents.

Dr. Robert Andtbacka profiled these therapies and compared their local-regional and systemic efficacy at the HemOnc Today conference in his presentation entitled Intralesional Therapy for Systemic Disease: Where Will It Fit In?

More potentially promising therapies and options than less are better for cancer-stricken patients. With Vical's announcement on Wednesday, however, it seems another promising therapy is going to fall by the wayside.

I previously wrote about Amgen and T-Vec here. Amgen acquired BioVex in early-2011 for $1B, more than 80% of which was an upfront payment. It later shut down OncoVEX's head & neck cancer P3 trial, and delayed the release of the drug's pivotal MM P3 trial results into 2013. Amgen makes less and less mention of T-Vec in its earnings calls. No mention on the Q3 call. 1 mention on the Q2 call. 2 mentions on the Q1 call. 2 mentions on the Q4 2011 call.  3 mentions on the Q3 2011 call. 6 mentions on the Q2 2011 call. T-Vec's shrinkage causes one to question whether the drug met either its primary or secondary endpoints.


In the same blog post, I also suggested Vical's Allovectin-7 primary endpoint, and thus the trial, was not well designed and wondered if the primary or secondary endpoints were met. Like with Amgen's T-Vec, it appears Allovectin-7 did not meet it primary endpoint -- objective response rate at ≥24 wks. The historical response rate for comparator DTIC at ≥24 weeks is <4%. Allovectin-7's Phase 2 response rate at ≥24 weeks was 11.8% and its Phase 2 response rate for the Phase 3 target population was 17%. The Phase 3 trial was 90% powered to detect a ≥10% difference in response rate.
Vical appears to be hoping it can eke out a survival advantage to meet their secondary endpoint -- overall survival: the historical median OS for DTIC is ~9 months. The median OS for Allovectin-7 in Phase 2 was 18.8 months and the median OS for the Phase 3 target population was 22.5 months. The Phase 3 trial was 90% powered to detect a survival difference; hence, the focus now on the number of events, where the goal is to have is to have sufficient deaths or events to read out the secondary endpoint. This is complicated because Vical would have needed to modify the trial design because they presumably did not meet the primary endpoint and are, therefore, relying on the secondary endpoint. Then, there has to be a delta on the Kaplan-Meier survival curves that is statistically significant to therefore meet the modified secondary endpoint.

Which brings me back to the focus on the trial design for PV-10 and Provectus management's strategy. The pivotal MM Phase 3 trial paves the way for the drug to be approved for a focused label and just reinforces what is already known: PV-10's tremendous local-regional benefit. The company selected Progression Free Survival (PFS) as the trial's primary endpoint PFS, carefully and thoughtfully designed certain others aspects of the trial, and understands the failure of DTIC/TMZ in the comparator arm should occur within 2 to 3 months because the comparator cannot prevent the progression of the disease. By virtue of the pivotal trial designed to focus on loco-regional demonstration, management ensures (through past experience in trials and from the compassionate use program) the near certainty of how and when the trial would end.

There is a belief Allovectin-7's benefit is marginal when compared to DTIC. As a result, that is why a statistical advantage in terms of the number of events has not been reached. Adam Feuerstein summed it up this way: "The latest delay tells you the melanoma assumptions upon which Vical designed the phase III study are worthless. The study is a mess. If allovectin manages to demonstrate a survival benefit (miracles happen occasionally) it will be small and clinically meaningless."


Nevertheless, OncoVEX (T-Vec) and Allovectin-7 historically were important to beginning the conversation of local-regional treatments having systemic benefits. While their MM Phase 2 trial results were good enough locally, their systemic potential captivated the melanoma community. The local benefit is not key for either T-Vec or Allovectin-7, it is their systemic potential.

Provectus leaves to Moffitt and historical trial data to explore and demonstrate the systemic benefit.


A important preparatory observation for when the trial commences, and one I will return to at the appropriate time, is the the number of patients that ultimately are needed to be enrolled and treated before the trial is stopped. The number of patients is driven more from the hazard ratio and powering. Patients will have events, which is bad. Since PV-10 works so well, it has much less events as a result, and events in the Phase 3 trial's PV-10 arm should come much less quickly. More events should occur in the DTIC/TMZ arm, which will enroll and treat 1 patient for every two that are enrolled and treated in the PV-10 arm.

How many patients ultimately would be required to be enrolled and treated, out of the contemplated 180 patient study size, before the study could be be terminated on the basis of an interim read-out concluding the unquestioned superiority of PV-10? 20, 40, 90, etc.?

Intralesionally-Delivered Local Agents with Potential Systemic Benefits: PV-10, Allovectin-7 and T-Vec (formerly OncoVEX)

As you will recall, Vical's Allovectin-7 and BioVex's OncoVEX, now Amgen's T-Vec (or talimogene laherparepvec), were profiled by Dr. Merrick Ross in his Update on Intralesional Ablative Therapies presentation at The HemOnc Today Melanoma and Cutaneous Malignancies meeting in April.

Dr. Robert, Andtbacka, in his Intralesional Therapy for Systemic Disease: Where Will it Fit in? presentation at the same conference, presented the critical comparison table for these three emerging therapies (PV-10, Allovectin-7 and T-Vec):

Clearly, each of the companies with a dog in this hunt -- Provectus, Vical and Amgen -- are pursuing local agents they believe to have systemic benefits.

Vical & Allovectin-7. One month ago, Theodore Cohen wrote an article at SeekingAlpha about Vical's pivotal MM Phase 3 trial for Allovectin-7. The author has written a few articles on Vical, including a more recent interview with this company's CEO. I encourage you to read them. Author Cohen wrote about the delay in Vical releasing data from its MM P3 trial. This trial began enrolling patients in January 2007 and completed enrollment by February 2010 (a total of 390 patients). Final treatments were completed in February 2012.Trial results are slated for late-2012, although timing may see a 2013 release of information depending on the trial reaching the target number of event deaths.

Mr. Cohen theorizes the delay is due to the trial using healthier patients. An historical review of dacarbazine (DTIC) or temozolomide (TMZ) use shows patients given this treatment have a median overall survival in the range 6 to 11 months. It is possible the median overall survival in the control arm could be greater than 11 months.

It also makes you wonder why the trial has not been stopped by now. According to Mr. Cohen, the trial's safety board only had access to safety data, not efficacy data: "Put another way, the board did not have the ability to halt the trial except for serious safety issues."

In reading and re-reading Mr. Cohen's articles and Vical's CEO's explanations, as well as asking the author about the design of the trial's primary endpoint, I come away more skeptical.

Most studies have large patient numbers because their effect size is lower, which means very incremental improvement. Vical probably did not design an interim analysis or efficacy read into their design (and, thus, did not provide patients in the control arm with a cross-over benefit) because it probably would have put a greater burden on the trial's efficacy outcome. If Vical were supremely confident about the fundamental improvement and significance of the drug's results (vis a vis the primary endpoint), management would have included an interim look. Ultimately, for Allovectin-7, it probably will boil down to [median] overall survival, the original assumption for which was 18 months.

I cannot help but think the primary endpoint was not well designed and wonder if the endpoint was indeed met. As the analyst from Cowen & Company asked on yesterday's Q2 earning's call, paraphrasing: If overall survival (the secondary endpoint) is good, isn't this a drug you would expect to be approved regardless of the success on the primary endpoint. Vice versa, if the overall survival is poor, does primary endpoint data have any chance of rescuing Vical?

Amgen & T-Vec. Similar to The Curious Case of Benjamin Button, T-Vec gets smaller and smaller. Amgen acquired BioVex for $1B, more than 80% of which was an upfront payment. It later shut down OncoVEX's head & neck cancer P3 trial, and delayed the release of the drug's pivotal MM P3 trial results into 2013. Amgen, it would seem, makes less and less mention of T-Vec in its earnings calls. 1 mention on the Q2 call. 2 mentions on the Q1 call. 2 mentions on the Q4 2011 call.  3 mentions on the Q3 2011 call. 6 mentions on the Q2 2011 call.

While one might question whether Allovectin-7 met its primary endpoint (it's possible the company met it's secondary endpoint), T-Vec's shrinking causes one to question whether the drug met either its primary or secondary endpoints.

Nevertheless, all things being equal from when Amgen acquired BioVex in January 2011 to now, nearly 18 months later, I think Amgen would have paid a higher price for the local agent it believed would have systemic benefits.

Which brings us back to Provectus and PV-10. The comparison of the Company's contemplated pivotal MM Phase 3 trial to Allovectin-7 and T-Vec's is stark. A primary endpoint of progression free survival. 180 patients; a higher effect size drives a lower study size, meaning a fundamentally large improvement. A response assessment after 12 weeks, which allows patient cross-over from the comparator arm to the PV-10 treatment arm. An historical review of DTIC/TMZ use shows progression free survival in the range 2 to 3 months.

Given the apparent challenges facing Allovectin-7 and T-Vec, it seems clear PV-10 is pulling ahead because it is swimming faster and the others are falling behind because they are swimming slower.