For $PVCT, it's the FDA's move

Just the weekend is left in the month of June. Saturdays and Sundays typically are historically low visitorship days for the blog. Yet, it's on track for another record high in unique visitors. The number of visits should fall 10% from May because I blogged about 40% less in June.

As a refresher for those who might not know, I speak to Peter on a monthly basis. During these conversations, which last between one and two hours, we cover a lot of ground and discuss a number of topics. I also routinely communicate with Craig and Peter via e-mail; 10,403 as of this post (about 2,600 a year), and counting...

I caught up with Peter earlier in the week for one of these monthly calls. There's a lot that can be written about.

In this post, I want to write about whose move it is.

When I ask Peter why Big Pharma, particularly Pfizer, has not moved on a global license with the company, he responds by framing the situation this way: No one moves unless they have to move. Everyone moves when somebody moves.

While Craig will say Pfizer only will move after interim metastatic melanoma ("MM") Phase 3 results of a contemplated trial under a special protocol assessment ("SPA") with the FDA, when the SPA was the more likely path, and which I get and understand (now, and given the implications of breakthrough therapy designation ("BTD")), I want to be "more macro" or "big picture."

Let's look at this using game theory. According to Peter, the "rules" are:

1. No one moves unless they have to move.
2. Everyone moves when somebody moves.

Essentially, in a two-player game, a player moves or doesn't move, as in the matrix or table below.

Click on the figure to enlarge it.

At any moment in current time, with no impetus to act (i.e., no one moves unless they have to move), the optimal outcome for the players is the fourth quadrant (bottom-right) Doesn't Move-Doesn't Move, where the players expend no money (0,0). Because everyone moves when someone moves, Provectus enjoys the best outcome (-3,-3) because the ensuing auction drives up the price of the target.

{No one moves unless they have to move, Everyone moves when someone moves} This is circular, is it not, in the absence of an exogenous event?

Because if no one will move unless they have to move, at the moment no one will move, what event, outside this system, causes someone, and thus everyone, to move? No one wants to move until there is regulatory clarity.

The event is the FDA providing that clarity for a metastatic melanoma ("MM") indication. Clarity comprises:

• An MM Phase 3 trial under SPA,
• Accelerated approval ("AA"), for which the company regularly asks the FDA, which means skipping the P3 trial altogether (a post-marketing study, however, would be required),
• BTD, which then translates into AA, followed by a post-marketing study
• BTD, and a truncated P3 trial (i.e., shorter, in some form or fashion, such as a smaller number of patients),
• BTD, and a modified P3 trial (i.e., a single-arm study),
• BTD, and a quicker response on the above mentioned SPA-designed/agreed upon trial, or
• Outright approval of PV-10.

That's a lot of choices, the range of which suggests a different FDA perspective for each one. If you consider it historically, the range of options reflect the data provided by Provectus over time to make the case for PV-10 (I think we can rank some higher than others, and I'll get to that later).

It seems clear the path to regulatory clarity has put questions about safety and efficacy to rest. If you think about the drugs the FDA has evaluated and approved over time, they've had increasingly incremental benefit (although, over time, increments add up), where the approval decision really does appear to boil down to weighing the side effects of a drug in the context of the incremental efficacy it may provide. PV-10 has a pristine safety profile, and efficacy never seen before.

With questions of safety and efficacy distant in the rear view window, the regulatory path approached and eventually cleared questions about mechanism of action ("MOA") with the help of Moffitt. Although it might have been said MOA never really was needed to secure the SPA, it became clear with a drug so novel and data so new (and never really seen before, in terms of how fundamentally better it was over other treatments) that understanding MOA was necessary. Nearly 3 years later, Provectus had fully answered the FDA's questions regarding proof of systemic properties and benefit for PV-10, thanks to Moffitt. The validation of this third party, with a world-class reputation, led by someone in Dr. Jeffrey Weber who had been responsible for the approval of drugs like ipilimumab and vemurafenib, appears to have been crucial to the FDA's consideration of PV-10.

What remains? Safety and efficacy established beyond question. MOA understood. Proof of systemic properties and benefit shown.

It's no longer about whether the drug should be approved, but rather how it should be approved. This brings me to the list of possible clarity options above. Any item on that list could be a potential and viable outcome, and I'd be happy with it because the company, the drug and the share price require regulatory clarity.

In truth, I think the company has moved well past the SPA. As I wrote before, I think any discussion between Provectus (Eric) and the FDA is about when to use it, in which situations, and in what combinations with other drugs. Having moved beyond safety and efficacy, beyond MOA and systemic-ness, I think we're now in a more nuanced discussion of how to maximize or optimize the use of PV-10: when to use it, in which situations, and in what combinations with other drugs.

A more likely outcome (but how probable I cannot yet assess) is accelerated approval to smaller or faster Phase 3 trials to, perhaps, outright approval of PV-10.

Let's return to Peter's Provectus' game theory "rules:"

1. No one moves unless they have to move.
2. Everyone moves when somebody moves.

"No one" and "everyone" includes Big Pharma, life sciences investors and, as importantly, Provectus. If we're then waiting for the FDA to move -- to provide regulatory clarity -- then why would global players, regional players and Provectus itself all not simply wait until the FDA moves by making a decision (all potential outcomes being positive), whatever that decision turns out to be?

When the SPA was the more likely pathway, an SPA, a Phase 3 trial, regional deals in China, India and Japan, interim Phase 3 results and stock market uptake seemed like the approach to raising valuation to management's expectations of a sizable upfront payment.

I'm not saying management is waiting to see the outcome of regulatory clarity to negotiate from an even better position. With BTD now the more likely pathway, with potentially accelerated approval or an accelerated (or, even, direct) path to market on tap, the choice of license suddenly becomes much different. The time value of money, as Peter would say, means a much more immediate path to market and thus sales dollars. Different players now have different levels of urgency to get a deal done with Provectus than under the scenario of "a plain old" SPA.

I'm not sure whether it's checkers or chess for management when you have drug like PV-10. Safety and efficacy established beyond question. A pristine safety profile. Efficacy never seen before. MOA understood. Proof of systemic properties and benefit shown. A unique MOA. A unique pathway.

No one, not Big Pharma, not regional players, not life sciences investors and, not least of all, not Provectus management has to move until the FDA moves. Then, I think, expect and suspect, everyone moves.

@adamfeuerstein: What Wall Street's Watching at ASCO (The Burrill Report)

This podcast, featuring Adam Feuerstein, senior columnist for TheStreet.com, is worth hearing. Click on this link: The Burrill Report (May 28, 2013): What Wall Street's Watching at ASCO.

Notes:

• ASCO 2013 likely will be about so-called "second generation" immunotherapies: anti-PD-1 and anti-PDL-1 agents. Ipilimumab (and, I suppose, vemurafenib) were/are first generation,
• Combination therapies, like ipi + nivo (both Bristol-Meyers drugs), have potential utility if/because you get synergism,
• Cancer disguises itself or is cloaked from the immune system? Craig's view (when treating cancer like an infectious disease) is the immune system is overwhelmed by cancer, not hidden or disguised from it. I don't think this is a semantic difference. Uncloaking, better distinguishing, etc. suggest artificial solutions or constructs.
• Key abstracts include Amgen's T-Vec.

Anything positive about T-Vec enhances the view the pharmaceutical industry has about intralesional agents in general.  So, we all should root for T-Vec. That said, if Amgen's compound bombs, the view still remains that intralesional agents are back, and PV-10 is the leader of the pack.

$PVCT's PV-10 Verified, Translated, Elucidated and Optimized by Moffitt

When Provectus issued a PR in January 2013 about Moffitt's Phase 1 feasibility study to elucidate PV-10's bystander effect, Moffitt's Dr. Amod Sarnaik, MD was quoted as "We look forward to verifying the promising pre-clinical data from our ongoing work in this translational study. These results should help elucidate the immunologic basis of the 'bystander effect' noted in previous clinical studies of PV-10 and help optimize PV-10 treatment, particularly in combination with other therapies. As Moffitt pursues its mission of contributing to the prevention and cure of cancer, we are pleased to spearhead this important clinical work."

It appears this work has been completed, preliminary results or interim analysis are available, the bystander effect has been elucidated, and Moffitt already has moved on to combining PV-10 with other notable categories of treatments, such as immunotherapies (i.e., anti-CTLA-4, anti-PD-1 and anti-PDL-1 agents).

Moffitt and, more specifically, Dr. Weber, are critical and key to PV-10 and Provectus, having been notably involved in translational studies and other work contributing greatly to the approvals of, among other treatments and therapies, ipilimumab (Yervoy) and vemurafenib (Zelboraf).

Daiichi Sankyo: A Dark Horse Challenger to Big Pharma Buying $PVCT

Earlier this month I identified visits from Daiichi Sankyo in Tokyo spending many, many hours on the blog. Later, I confirmed visits from Daiichi's U.S. headquarters in Parsippany, New Jersey. I think Daiichi Sankyo is interested in a multi-faceted relationship with Provectus.

Plexxikon reported interim analysis of its MM Phase 3 trial for vemurafenib (Zelboraf) in January 2011. In February, the following month, the company announced it was being acquired by Daiichi Sankyo. When a corporate approaches a target, the dance generally begins with an introduction typically 3 to 6 months or more before an acquisition, if achieved, is announced. By this math, Daiichi may have begun speaking with Plexxikon around mid-2010. Plexxikon treated the Phase 3 trial's first patient in January 2010.

Daiichi, one could argue, acted aggressively. "Just a few months after Daiichi Sankyo Co. Ltd. purchased biotech Plexxikon Inc. of Berkeley, Calif., for nearly $1 billion, the Japanese pharmaceutical company is reaping the benefits. A drug developed by Plexxikon and now owned by Daiichi, vemurafenib, was approved for treating metastatic melanoma by the U.S. Food and Drug Administration, the company said Wednesday." (Source here)

Think about it. Daichii approaches Provectus before Moffitt's data has been presented at AACR in April. Before Provectus' contemplated pivotal MM Phase 3 trial is finalized -- where "finalization" means the receipt of the SPA -- and well before enrollment is commenced. That should come as no surprise because PV-10 is far superior to vemurafenib (Zelboraf) and has more multi-indication potential already (whereas vemurafenib did not).

Daiichi has the balance sheet to pay what Provectus desires. In 2008 Daiichi announced that it would pay up to $4.6 billion for a controlling stake in Ranbaxy Laboratories, one of the largest manufacturers of drugs in India; this deal valued all of Ranbaxy at $8.5 billion (a 31% premium to its stock market capitalization prior to the announcement).

Daiichi also has a Japanese cultural approach to M&A that might force Pfizer's hand. That is, it could push Pfizer to act because it has to act to protect an asset (Provectus) it values but heretofore has no impetus to acquire.

"Global studies of M&A point out that once executives dive into the transaction process, they often become so invested in the deal that they cannot pull out even when necessary. In most markets today, however, common wisdom prevails that being able to walk away is a hallmark of M&A sophistication. That notion is rare among Japanese practitioners of outbound M&A." (Source here)

"The demands of Japanese-style consensus building, requiring the hard-won agreement of many parties, make abandoning a deal particularly hard. The potential loss of face in such a decision makes participants reluctant to suggest it, even if the logic of proceeding is undermined by new information."

Daichii was agressive in acquiring Plexxikon, paying more for the company than anyone else offered or was willing to pay. From all accounts, the acquisition is or eventually should be accretive.

If Daiichi executives set their mind to licensing PV-10 (or PH-10) or acquiring Provectus, then Big Pharma (including, in particular, Pfizer) might lose the asset to the Japanese if they're not willing to counter bid.

$PVCT: What Could A Relationship with Daiichi Sankyo Mean?

Daiichi Sankyo's interest in Provectus might range from something simple or narrow to something more robust.

You can read about Daiichi Sankyo's new 5-year business plan here.

$PVCT: Daiichi Sankyo

It appears Daiichi Sankyo is interested in Provectus (based on some very specific information I unearthed that leads me to speculate this). It is not yet clear whether such interest is limited to Japan (and possibly India, through its ownership in Ranbaxy), or whether the Japanese global pharmaceutical company's interest extends to a global license of PV-10.

In February 2011, Daiichi Sankyo announced its acquisition of Plexxikon for $805 million up-front and near-term milestone payments associated with the approval of PLX4032 (vemurafenib, now Zelboraf) for up to an additional $130 million. The deal closed in April.

Other acquisitions include Zepharma (2006), the OTC drugs unit of Astellas Pharma, a majority stake in Indian generic drug maker Ranbaxy (2008) valued at ~$4.6 billion, and U3 Pharma (2008) for the company's anti-HER3 antibody. (See Wikipedia)

Liver Toxicity Halts #Vemurafenib-#Ipilimumab Combo Melanoma Study

"Unexpected liver toxicity derailed a phase I melanoma trial of concurrent treatment with the first two targeted agents approved for the disease, according to a brief communication from investigators." Charles Bankhead, Staff Writer, MedPage Today

The NEJM piece on this trial is here.

Takeaway: Two wrongs don't make a right. Don't expect two crappy drugs to make a dramatically better one when combined.

@MoffittNews' Dr. Jeffrey S. Weber, MD, PhD -- $PVCT KOL

Moffitt's Dr. Amod Sarnaik, MD said, in Provectus' January 8, 2013 PR, "We look forward to verifying the promising pre-clinical data from our ongoing work in this translational study. These results should help elucidate the immunologic basis of the 'bystander effect' noted in previous clinical studies of PV-10 and help optimize PV-10 treatment, particularly in combination with other therapies."

On the bio page of Dr. Jeffrey Weber, MD, PhD, the director of the Donald A. Adam Comprehensive Melanoma Research Center at Moffitt Cancer Center, you will read "As a tumor immunologist & immunotherapist, I focus on translational clinical trials including development of novel trials in melanoma based on my lab work."

What does a translational study in cancer research mean? A translational study turns knowledge from the laboratory into a treatment for patients.

Such is the gravity of what Moffitt should say.

According to the October 2002 paper from the immediately prior link, "[T]he concept of translational research addresses what would be an efficient and orderly way of applying the advanced understanding and technology of the field of biology to cancer treatment. The essence of translational research lies in coming to understand the biological features of a cancer so as to translate molecular biological evidence into clinical anticancer strategies. In other words, "translational research" can simply be defined as the process of determining a treatment solely on the basis of molecular biological characteristics."

The paper goes on to say: "There has been much debate over many years as to the best approach to stimulate immunity against tumors. Previously, researchers involved in immunotherapy ground up tumors and simply gave them back to the patients they were removed from or to other patients. This is not really translational research. At present, there is an understanding that the tumor antigens can be isolated and grouped as to which are more or less likely to provoke an immune response by collaborating with HLA antigens. Knowledgeof this resulted from an understanding of the biology of how antigens are processed. We can now define which peptides in which the antigens have a likelihood of inducing a response when they are presented either as cells or with dendritic cells or in other ways. It can be said that to merely give tumor vaccines without consideration of immune response is not translational. But it is translational to have a selection of antigens based on our understanding of how the immune system operates and which antigens are likely to be or actually are expressed in a tumor, because we are incorporating the biology into the clinical trial design."

Dr. Weber was instrumental in the approval of Vemurafenib (now Zelboraf), saying in April 2012 the success of Vemurafenib represented "the single most dramatic improvement in the treatment of melanoma in 20 years."

According to more of his Moffitt biographic information, Dr. Weber is charged with "...bringing together basic scientists, clinical and translational investigators and prevention/epidemiology scientists in an integrated overall melanoma research effort that rapidly brings new drugs and ideas to the clinic."

"He works extensively with [Dr.] Vernon Sondak...[and] has an extensive history of conducting translational and investigator-initiated clinical trials."

"Dr. Weber’s research interests lie in the monitoring and characterization of T cell responses to vaccination in cancer patients, and in the establishment of in vitro models to facilitate the understanding of how immune modulating antibodies amplify T cell responses in patients. He is also interested in the mechanisms by which achieving autoimmunity induces regression of cancer."

Such is the gravitas of Moffitt's Dr. Weber.