Article: Despite Political Obstacles, Healthcare Multinationals Flock To China

By Barry S. Cohen at SeekingAlpha. Read the full article here.

$PVCT: January Effect

Before Big Pharma pays billions of dollars for Provectus, value-increasing steps obviously have to drive the company's market capitalization much higher from where it is now (such as to at least above $1 billion). The market cap could get there in January through some combination or permutation of:

• The SPA arrival;

• A regional geographic oncology deal (a "mini-oncology" deal) for China. Signed, but perhaps not closed;

• Visibility into Moffitt's forthcoming mouse and human immunologic MOA characterization work;

• A dermatology deal. Alternatively, we might learn more about the status of the license process: information about PH-10's immunologic MOA characterization, how this MOA work factors into questions about the lack of PH-10 toxicity, the end-of-Phase-2 meeting, and the Phase 3 trial design; and

• Another mini-oncology deal. Such a transaction might be another regional geographic deal, some form of equity investment in Provectus by Big Pharma or an "interesting" license-related/oriented transaction.

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

I previously wrote a blog post entitled Can Management Get A Deal Done In China? I used "can" because I thought management could be able to secure a deal; that is, there is the ability to get or the possibility of getting a deal in China done.

Time passes. More dots connect.

I think the question, for over the next few weeks to the next couple of months, now is: Will management get a deal done in China? I use "will" to query management's intention to do this deal, or another.

Existing shareholders and prospective investors, in my view (through discussions with a variety of them), thought or think of "can" as management's ability -- their skill set -- or PV-10's (or PH-10's) ability -- the facets and features of the drug(s). I have never thought that way. Rather, I have examined and focused on the whether management has the process and pieces of sufficient quality and quantity to get a deal or deals done.

Management has been approached and continues to be approached to do deals. Frankly, anyone can do a deal. The real question -- the real perspective -- is whether the deal is a good or great one. Lots of people can and do do bad deals all of the time. Provectus understands better than most, and now better than ever, the value of the company's portfolio of drug compounds.

It seems we are drawing closer and closer to a seminal event, or more.

There have been previous discussions across and around the table about licensing PH-10 and PV-10. I do not doubt those discussions involved numbers, terms and conditions; however, in my experience, such discussions become "more real" or advance when a term sheet materializes.

From what I can gather (and it may well be a rumor), a term sheet has materialized in China. The parameters probably are not too dissimilar from what I wrote here. There is of course lots we do not know.

Who is the prospective Chinese big pharma partner? For example, is the partner on the list below?

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

Is Pfizer involved in some way? Pfizer's presence in China, from sales to R&D to manufacturing, is notable.

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

I previously wrote that regulatory and governmental agency backing in China was crucial. What kind of backing does Provectus and its prospective Chinese pharma partner have? I had the good fortune of participating in a trade delegation to China several years ago (what a treat!), and met a senior member of the Premier's staff. For pharmaceuticals, I would assume the State Food and Drug Administration and the Ministry of Health are germane regulatory and governmental bodies, among others.

If management elects not to do a deal in China yet, what else is there to take its place?

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

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

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

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

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

Click figure to enlarge it.

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

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

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

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

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

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

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

$PVCT: Travel

Peter is on travel this week.

Updated: Peter is in Asia.

$PVCT: 地理许可证

Provectus' share price has bounced above, below and around the 60-cent level following last month's terminated PVCTP "IPO." The SPA process has taken a toll on the stock in 2012. The market and life science investors' "certain" view the company will be forced to undergo substantial dilution to raise the necessary money for key and pivotal clinical trials (MM Phase 3, HCC expanded Phase 1 and Phase 2/3, pancreas Phase 1) weighs heavily on the share price too.

While management explored the opportunity to execute an "IPO," quarterly filings for Q2 and Q3 2012 indicated other avenues for seeking cash, such as from outlying geographic licenses (e.g., Australia, China, Japan,   MENA).

2Q12 10-Q Filing -- Click on the figure to enlarge it.

3Q12 10-Q Filing -- Click on the figure to enlarge it.

The horse race, which previously had a dermatology transaction and geographic-specific oncology deal in the lead (unless a company-friendly "IPO" could have been had to overtake them; in hindsight, it could not), now might see (for now at least) an outlying geography deal for oncology assume the lead. I am not sure if Provectus is in the homestretch in this regard, but we could shortly see if it is.

$PVCT.OB: Trying to See Provectus' Forest For Its Trees

The SPA: The path to the SPA, from an investor perspective, like mine, has been an interesting and informative one. It also has been a difficult and impatient one. You may recall I linked to this article about pursuing an SPA: Special Protocol Assessment, a Blessing or a Bane? The author's take home messages certainly resonate:

• "Make sure you really need an SPA. It may take longer to obtain one than you think."
• "If you choose to pursue an SPA, be unambiguous in the questions you ask and meticulous in your filing. Be realistic about the timing."
• "Be prepared to explain your reasoning to investors and board members."

You probably have heard different versions, views and reasons of when the SPA will, might or could arrive. From:

• A "final" re-submission sometime in September or October [early- to mid-November], to
• Within 6 weeks or by December 15 [now through mid-December], to
• Foreshadowing by the October 2 PR's specifics regarding the trial design [mid-November], to
• Using math for the September 19 PR first indicating the MM Phase 3 trial would commence in late 2012 or early 2013 [mid-November through at least early-January].

You may recall A, which I blogged here, that ended in the January 18 PR; B, the 45-day count after the end of March and best case Q2; and C, base case Q3. I see A as demonstrating the potential upturn in the share price when the SPA arrives, B as the markets taking a wait-and-see attitude, and C as more increasing skepticism about the SPA rather than simply a commentary on timing.

The person on the management team who has had and continues to have the best perspective on SPA timing is Eric. Management had to waive off their base case Q3 expectations using their September 19 PR. The October 2 PR clearly was intended to affirm the SPA was on its way (using trial design specs and quotes by Eric), but no one knows exactly when the SPA will arrive including, I think, Eric.

"It's not a matter of if, it is a matter of when, and we are much closer to the end than we are to the beginning."

Your and my best bet is to keep an eye out for the SPA over the next few weeks, but do not be surprised if it arrives in December (maybe or possibly) or January (I highly doubt). When it does arrive, those who doubt the potential for the SPA to move the share price, thinking it has been priced into the share price (which I think is incorrect) might be surprised.

License deals. Management reminds us they currently are pursuing PH-10 and PV-10 geographic deals, which they think can happen at any time. They remain very confident one or more of these will happen.

More Moffitt data. The October 29 PR (more specifically, the poster included with the PR) noted more Moffitt data is expected in 2013 (the AACR annual meeting). Management is trying to get some information out about Moffitt's ground-breaking results sooner. Moffitt's Phase 1 MOIA human trial to elucidate the bystander effect should begin in November. Turnaround should be swift (i.e., a few months if that).

Surprises? Perhaps, including certain publications in play and other potential surprises, but we will have to wait and see.

$PVCT.OB: Blog Reader Statement/Question

You stated in your blog entry that the company doesn't need money save to conduct key clinical trials. I'd characterize that as needing money. They are in a corner. They can't do a smart financing with the stock at these levels, they can't use LPC, and they can't fund the Phase III melanoma. What about this is not a corner?

As at June 30, the company had cash and cash equivalents of $4.1MM. Less total annual cash salaries of $500K per Provectus principal (but neglecting benefits) equals ~$2MM, and less projected fixed costs, and less certain variables costs, equals a positive number through early August 2013.

Management can wait for the SPA to arrive, for certain PH-10 toxicity studies to be completed, for the end-of-Phase 2 meeting for psoriasis, for more Moffitt data to be released or revealed, and/or for other events to occur before striking an average (at worst) to good or great (at best) license deal, whether dermatology or oncology in China, Japan, India or Australasia to garner the monies necessary to fund and run the pivotal MM Phase 3 trial (or having the share price rise to a point where a focused secondary offering might have merit) and other oncology trials. These events should occur within several months or less rather than several quarters or more.

I do not share your view that management is in a corner.

$PVCT.OB: Keeping It Simple

I had a very nice e-mail exchange with another share holder, which inspired this post. It might help to simplify the situation, as least the simplicity I see.

The drug works. While getting the drugs approved and bringing them to market are of course no small feats, I think, now, a sufficiently large number of key opinion leaders are on board with how good these drugs are and can be.

Get the SPA. The SPA defines the approval path for PV-10 for a focused label.

Get the funding. Management must consummate either a smart financing or a good geographic license deal to fund the pivotal MM Phase 3 trial.

Get the interim analysis. The interim analysis from the MM Phase 3 trial should be a major but not exclusive step to sell the company.

$PVCT.OB: What we do in life echoes in eternity.

Fratres! Three weeks from now, I will be harvesting my crops. Imagine where you will be, and it will be so. Hold the line! Stay with me! If you find yourself alone, riding in the green fields with the sun on your face, do not be troubled. For you are in Elysium, and you're already dead! Brothers, what we do in life... echoes in eternity. -- Maximus Decimus Meridus in Gladiator

I want to:

1. Share my speculation about what I think happened towards the end of the third quarter and how it relates to the temporal nature of the PVCTP "IPO,"
2. Explain why I will invest a token amount of money in the "IPO" if it happens, and
3. Write about management's poker hand, the hand they have dealt shareholders, and how both of them might be played.

1. Speculation, Will Robinson. Speculation.

I think management was convinced the SPA would arrive by the end of Q3 and the PVCTP "IPO," which was supposed to have been in the right place at the right time, was being teed up to follow it.

As we know, Provectus and Peter have been working several financing options:

• The "IPO,"
• A dermatology license deal,
• One or more geography-specific oncology license deals, and
• A strategic investment from a Big Pharma entity like Pfizer as the sale of common stock at a premium to the share price (or, as mentioned above, an "IPO" led or co-led by a Big Pharma company).

Each of these has its own value proposition (i.e., pros and cons), but the propositions are temporal, having greater or lesser value as a function of time.

For example, the best option today for shareholders would be an optimally valued (i.e., net present value) and structured (i.e., upfront, milestone and royalty payments) dermatology or geographic-specific oncology license deal yielding an upfront payment sufficient to at least pay for the pivotal MM Phase 3 trial. Optimality, however, might be more likely to be achieved later rather than sooner, in November or December.

A sale of common stock to a Big Pharma company would be "more optimal" if the price at which these shares would be sold was much, much higher than Friday's close of $0.59, like at least $4. But why approach or ask a Big Pharma company like Pfizer for this kind of strategic investment unless you have or need to ask? In my view you ask after the SPA is in hand and if you determine (a) the PVCTP "IPO" is not feasible and (b) dermatology or mini-oncology optimality is later rather than sooner.

Up next is the PVCTP "IPO," which, for a certain period of time, provides attractive and pragmatic ways to begin driving company valuation dramatically upwards:

• Attractively: A NASDAQ listing would facilitate new buyers, who could not buy the common while it remained an over-the-counter stock, and more national media attention from major journalists and reporters, who would not cover Provectus until it traded on a major stock exchange and was in Phase 3 trials.

• Attractively: A smart IPO, led by Pfizer (and J&J or a life sciences investor like OrbiMed) and with a conversion ratio and warrant coverage good for existing common shareholders, would draw many more new buyers to the preferred stock listing itself over time.

• Pragmatically: A $15-20MM raise at an acceptably high valuation, while creating dilution that a dermatology or a so-called mini-oncology license deal would not, fully funds the pivotal MM Phase 3 trial. There would be no need to force or rush dermatology or oncology deals, nor completely rely on them to commence the MM trial. The trial could start within 30 days of the SPA PR and move Provectus and its shareholders closer to the interim analysis of at least the first half of the trial's patient population.

A smart PVCTP "IPO" is a better temporal option in October than a dermatology or mini-oncology license. In November, it might not be.

Back to the SPA PR. It was the first domino to have fallen in a hoped for series of them, whether the next temporally best one was a license deal or the "IPO."



But the SPA did not arrive by the end of September, despite very ernest and serious expectations set to the contrary by folks directly interacting with the FDA. It is coming, but it was not nor is not here yet.

To compound these missed expectations were:

• Shorting of the stock (end-of-September short interest was nearly 100% greater than the end-of-August figure) for whatever reason(s),
• Selling of shares (September's monthly amount of traded shares was nearly double that of August's) for whatever reason(s), and
• The PVCTP "IPO" process, and particularly the aspect undertaken by Maxim Group's retail banking side.

Th "alleged" sloppy "IPO" process was made much more so by "alleged" disgusting behavior by some Maxim retails reps spreading baseless "facts" about the "IPO's" details. I used "alleged" because, while Paul LaRosa from Maxim's capital markets part of business agreed Maxim reps should not have been saying what they were saying, the reps themselves probably would say they were doing nothing wrong. "Alleged?" I crack myself up.

The rep revenue model is predicated on the number of transactions they encourage and facilitate. The revenue model is not based on asset appreciation.

I now have what I think is a better handle on the increase in short interest, and will wait until October reporting dates to confirm this. In the interim, am I concerned? No. Am I annoyed and irritated? Yes.

There is the thought one very determined seller has been and is getting out of the stock. Could he/she/it have thrown in the towel for whatever reason(s)? Most likely yes. Does he/she/it know something we do not? I am betting my share ownership (note: no sales of any shares bought) the answer is "no."

Funds holding Provectus preferred and/or common shares have much different pressures than entities and individuals. The quarter-to-quarter reporting to investors and limited partners funds in this group (as opposed to a venture capital or private equity fund) are required to provide make it difficult to hold to an investment thesis because of complaints of poor performance by these very investors and LPs. Such theses turn into trading ones, if they did not start out as such. Did someone's patience runout? Probably.

So, here we are today, observing an IPO that keeps getting pushed out, from the week of:

• October 1st to
• October 8th to
• October 15th to, likely,
• October 22nd.

While the preferential path to financing might be a dermatology deal, the "IPO," for the reasons I presented above and others, is temporally better. I think, however, it needs an SPA PR to launch it, and I do not see the "IPO" occurring until after an SPA PR is issued. As such, if the "IPO" does not occur in October, management will probably pull the plug on it because other financing options would have become temporally better.

2. I got your initial public offering RIGHT HERE! (w/gesture)

If the PVCTP "IPO" goes off, I will participate in a very small way. I prefer buying common stock.

I work hard to maintain an objectively dispassionate investment case to buy and hold Provectus stock, but I am not always successful as emotion does creep in from time to time. I have an emotional attachment to this situation. Seriously folks, who blogs this much about one company or stock if they are not part of it? Participating in a token way in the "IPO" is something to add to "the box" that holds the collection of my life memories.

Emotion aside, however, the ROI from buying common stock should exceed the ROI of buying preferred stock (when compared together and presented as a choice of whether to buy the "IPO" or spend the equivalent amount of money buying the common stock), irrespective of what a Maxim retail rep tells you. Of course, you could always trust Chris Varick.

Let us make some assumptions to frame this analysis -- and please let me know if you disagree with my work below (as I am open to feedback and being corrected). I will toggle these later under certain circumstances to make some illustrative points. Nevertheless, the key assumption underlying my belief of a better common share ROI is that Provectus will not do a dumb IPO.

Let us assume you have $100,000 to either spend on the "IPO" or just buy common stock. In this analysis, you cannot buy both. Furthermore, since you do not know if and when the "IPO" goes off, you have to make a reasonably timely decision: wait for the "IPO" to happen or buy common stock before the SPA PR is issued. The SPA, which management surely knows they now have, should not affect the terms of the "IPO" but should increase the price of the common stock post-announcement.

Do you buy the "IPO" whenever it goes off, or do you buy common stock, say, starting Monday?

I assume about 150MM fully diluted number of shares of non-listed preferred and common stock, stock options and warrants. PVCTP deal terms then suggest some more shares. "As converted" means I used the conversion ratio above (i.e., 1) to convert the PVCTP shares and warrants on PVCTP shares into the appropriate but requisite number of common shares.

On an as converted basis, your $100,000 gets you (a) 35,000 PVCTP-derived common shares or (b) 166,500 common shares.

Let us assume the company is acquired for, among other things, a $1B upfront payment (i.e., the preferred shares you bought when converted into common stock or your common shares you bought are exchanged for your pro rata share of $1B) on December 17, 2013. Let us also assume the IPO still happens: you either participated in it, or you bought common shares and did not. I make this assumption only to simplify the analysis in some ways. If you buy common stock and the IPO does not go off (i.e., it is November and Provectus completes a license deal), the fully diluted shares outstanding figures remains at $150MM and your common stock ROI is higher.

Let us also assume you convert & exercise/sell your preferred shares and warrants, or your common stock, when the acquisition transaction occurs.

The outcome makes sense. A smart IPO implies a healthy valuation at which PVCTP "IPO" shares were sold and, thus, a substantial uptick (about an order of magnitude) from today's market capitalization. Under this scenario, one should of course buy the common stock, say, starting Monday, then wait and buy the IPO.

Hold on a second! Didn't your stock broker, er, Maxim retail rep "allegedly" tell you to flip the preferred shares and hold onto the warrants as "a lottery ticket?"

The flipping-your-preferred-shares ROI is less than the hold-your-preferred-shares ROI, which should be much less than the buy-common-stock ROI.

Maxim's "alleged" story only works -- that is, you make out like a bandit by indeed cashing in a lottery ticket -- if the conversion ratio and, to a lesser extent, warrant coverage is very punitive to existing common stock shareholders, such as 6- or 7- or 8-to-1 and 60%, respectively. That is, the "IPO" is a dumb "IPO."

A 2-to-1 conversion ratio (and, say, 50% warrant coverage), worse than my initial example above but far from punitive more than doubles your return from buying the "IPO;" however, one makes more money, again, by just buying common stock soon.

To be fair, a dumb IPO produces a result where buying PVCTP and eschewing the common stock is the better course of action.

3. "Poker is not a game of cards played with other people, it is a game of people played with cards."

Right now, Provectus only needs money to literally keep the lights on and the water running (note: hyperbole). Fixed costs are low. The burn rate can be turned down and compensation deferred, with a focus on those activities, and whatever variable costs are associated with them, that drive value (e.g., the end-of-phase 2 meeting with the FDA for psoriasis, remaining toxicity study parameter elucidation, etc.) until money targeted for key, pivotal and other trial work is raised or obtained.

In this game of poker, management will play the hand they think they have the way they see fit. I think:

• The company's hand is very strong,
• Management thinks the hand is a royal flush (I think the hand is a royal flush, too),
• Provectus has enough chips (cash on hand, and temporal cash needs) to play it well, and
• Management will play it well (i.e., not raise money in a dumb way).

I am betting my share ownership on this. Of course, I could be quite wrong (note: the usual economist's conviction of "on the one hand, ..." but "on the other hand, ...," which is why we need more one-armed economists).

Now, what kind of poker hand do you think it is: a straight flush, four of a kind, a full house, worse or one that can be beaten? Which hand you have is up to you to determine. How you play it also is up to you.

There is no doubt of the battering the share price has taken since the beginning of September, let alone this year or over the last several years. I see it. I feel it. I understand it.

You got to know when to hold 'em, know when to fold 'em,
Know when to walk away and know when to run. 
You never count your money when you're sittin' at the table.
There'll be time enough for countin' when the dealin's done.

The company needs money, but not in the way the markets and most observers think Provectus does. Management has indicated they will do a smart IPO if they do one at all, and that raising money below $1.12 is not in the cards (pardon the pun). Anonymous wrote "[p]oker is not a game of cards played with other people, it is a game of people played with cards."

Playing your poker hand requires you to ask yourself how management will play their hand.

Disclaimer: This blog is neither intended to be nor is investment advice. The author of this blog (the "Author") is not a registered investment advisor. Under no circumstances should any content from this blog be used or interpreted as a recommendation of a trade or investment in Provectus Pharmaceuticals, Inc. Trading and investing can be hazardous to your wealth, health or both. Any investment decision must, in all cases and without exception, be made by the reader or by his or her registered investment advisor. This blog is only and strictly for educational and informational purposes. The Author may have a position in Provectus Pharmaceuticals, Inc. at any given time that is not disclosed at the time of publication. All opinions expressed by the Author are subject to change without notice. You, the reader, should always obtain current information and perform the appropriate due diligence before making any investment or trading decision. All efforts are made to ensure the information contained in the blog and/or a blog post is factual and accurate; however, the Author does not guarantee its accuracy under any circumstances.

Blog Reader Question

It seems that the plan is to present a series of good news next week in order to drive the SP above USD 2 and keep it there for the 5 days needed to be listed on NASDAQ. How do you see this?

Whether this week or next, a series of PRs (e.g., SPA, liver, ESMO, Moffitt, etc.) could drive the common stock share price onto the NASDAQ.

This news-driven common stock share price rise may be insufficient to effectively raise $20-30MM (via the existing shelf filing) to conduct pivotal, key and other trials. Getting onto the NASDAQ via the common stock is good and important, but a company's currency is its stock and dilution could be substantial or large (a $30MM raise at $2.50 per share is something like a 10-11% dilution).

The possibility exists this near-term series of news could be insufficient to push the common stock onto the NASDAQ. As a result, raising money becomes more expensive.

Management has maintained their first choice to minimize dilution and secure necessary trial monies, obviously, is to use significant or sizable upfront payments from a dermatology deal and/or mini-oncology deals (e.g., China, Australasia, etc.). Getting the right deal (e.g., valuation, upfront and milestone payments, royalty percent, etc.) in the context of completed and contemplated regulatory meetings and clinical data may take more time.

Life sciences players currently not in the stock understand Provectus needs to raise capital soon to run certain trials. These investors want to see how this money is raised -- i.e., understand the risk-reward profile -- before jumping into the PVCT pool: sell common stock, do a license deal or two, sell part of PVCTP to a strategic investor, etc. Once the picture is clear, investors should buy.

The PVCTP preferred stock offering vehicle, if led by a less price/valuation sensitive strategic investor, provide several benefits at once: raises valuation, facilitates effective fund raising, brings some or many investors off the sidelines, gets a Provectus security on the NASDAQ, goes toward reducing dilution, etc.

What is management thinking and what situation(s) are they currently facing?

First-Half 2012 Life Sciences Deal Trends

By Deloitte Recap LLC. The full report is here. A selection of slides is below.

I Saw Mommy Kissing Santa Claus

As a child, did you ever have a not-so-special, frustrating feeling around Christmas time: with presents laid around the Christmas tree with care, you tried your darndest to figure out what exactly was inside those colorfully-wrapped gift boxes, but could not?

You thought you had a pretty good idea. After all, you were nice the entire year. And so you wrote Santa asking for an SPA, a NASDAQ listing, a Pfizer equity investment, a dermatology deal, a mini-oncology deal or two, a double-digit share price, and on and on.

Does it feel like Christmas is coming early? Let's hope so. Eggnog anyone?

Pole Position

None of us can predict or foresee who will acquire Provectus (or, for that matter, who will do a mini-oncology or dermatology deal with the company). Well, maybe Eddie Morra knows. We can try to predict or we can think we're making educated guesses, but it's mostly speculation for now. Management's thoughts on this topic are key.


Craig Eagle's presence on Provectus' corporate advisory board (CAB) is an important data point. Executives within Big Pharma have different degrees of flexibility in their respective business mission, role and responsibilities. How many oncology-focused biotechnology companies have executives from Pfizer's Oncology Business Unit (OBU) associated with them in a formal or informal fashion? How many executives within OBU are associated with oncology-focused companies? For that matter, how about other Big Pharma?

In a world where there are few drug in development that work and fewer still that work well, Big Pharma teams tasked with refilling drug pipelines (outside of internal R&D) keep their eyes on a short list of candidates. No one wants to be uninformed or late to the game when it comes to understanding who has a drug that works and works well. No one wants to be too far down in line when it comes times to act.

Craig Eagle's extensive and germane experience clearly is a very big plus for Provectus to access and from which to benefit. It does strike me, however, that he occupies the pole position on behalf of Pfizer for when it comes time to act.

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

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

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

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

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


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

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


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


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


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


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

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

• An equity transaction by Big Pharma.

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

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

I Can Feel It Coming In The Air Tonight

I can feel it coming in the air tonight, oh Lord 

Well I've been waiting for this moment for all my life, oh Lord 

I can feel it in the air tonight, oh Lord, oh lord 

Well I've been waiting for this moment for all my life, oh Lord 

I can feel it coming in the air tonight, oh Lord 

And I've been waiting for this moment for all my life, oh Lord 

I can feel it in the air tonight, oh lord, oh lord, oh lord 

Well I've been waiting for this moment for all my life, oh lord, oh lord

I'm on a cross-country road trip with the family. We've turned the bend toward home. A few more days remain before we're sleeping comfortably in our own beds. Recently, we stopped over in Jasper, Indiana visiting close friends and their children.

There was a moment, one afternoon, when: Cows and other animals we encountered looked or appeared to look nervous. Lightning bugs, apparently so prevalent in the evening over your lawn and around your property that the night sky teeming with stars seemed to surround you, were scarce. Thunder in a clear but otherwise noticeably different sky rumbled across the horizon. Intermittent flashes of lightning were visible out of the corner of your eye.

There was a distinct, at times almost unreal (surreal?), quiet over the countryside. Storm clouds gathered. Something was coming. You knew it. You sensed it. You felt it.

It got darker. "I can feel it coming in the air tonight, oh Lord."


And then, after a some time elapsed, without warning, other than what had been building above and around us, rain ferociously hammered the ground. Petrichor, that familiar scent of rain on dry earth, filled our nostrils.


We felt the wind gush over us and heard its howl as it blistered the area, buffeting the house and threatening to displace anything not nailed down. 

Really?

The consensus view, based on discussions with certain Big Pharma executives, biotechnology-focused investment bankers and experienced life sciences investors (who, it seems, all think very similarly), is once Provectus "arrives" (i.e., the tipping point) everyone will want them, and will want them at the same time. The crux of the matter is the need for drugs like PV-10 and PH-10 is very intense for Big Pharma.


When the tipping point occurs, it will appear to have happened very swiftly and ferociously. But, for now, we wait. Something wicked[ly profitable] this way comes?

I can feel it coming in the air tonight, oh Lord 

Well I've been waiting for this moment for all my life, oh Lord