The authors write that PCYC highlighted key qualifications for BTD including:
Serious condition,
Lack of standard of care and/or poor outcome of current treatment,
Substantial improvement,
Acceptable safety, and
Scientific rationale for targeting a molecular driver.
An expectation for "knock your socks off" benefits in tough to treat patients. The ESMO 2012 poster presentation highlighted that Stage III subjects, where there only is the pseudo standard of care of chemotherapies dacarbazine (DTIC) or temozolomide (TMZ), experienced Progression Free Survival (PFS) of at least 9.7 months, a number which I think is longer and should again be highlighted at a European cancer conference in the fall. DTIC and TMZ PFS' are a couple of months or thereabouts.
Many of these drugs could get to market on single-arm studies alone. Single-arm sufficiency or near-sufficiency.
Patient numbers matter almost as much as effect size. More than 100: 20 cancer patients treated with PV-10 in a Phase 1 melanoma study, 80 in the Phase 2 study, and more than 80 patients enrolled in the Compassionate Use Program (although I cannot for PV-10.
"Precision" medicine with a diagnostic component is preferred, particularly for the oncology division. The imaging capability of PV-10's active pharmaceutical ingredient, rose bengal, is key to and a primary feature of its diagnostic advantage.
Scientific rationale for targeting a molecular driver. I presume this to be or contributed to by Moffitt's expansive murine and human study work.
Finally, the Leerink authors write: "A key component of the [BTD] program is that all aspects of the programs will be accelerated and a comprehensive discussion involves not only planned clinical trials generate substantial evidence to support accelerated or regular approval, but also plans for expediting manufacturing, co-development of diagnostic, and Expanded Access Programs."
Sarepta wrote what I thought was a cogent PR, such as noting among other things "The FDA has requested that Sarepta provide additional information from the existing eteplirsen dataset to inform a decision on the acceptability of this dataset for a New Drug Application (NDA) filing under the Subpart H Accelerated Approval regulatory pathway."
Feuerstein's piece quotes Baird analyst Brian Skorney: "On the surface it appears that the FDA is requesting information that would normally be part of the NDA review process," he writes in a research note. "This appears to be a bit of a departure from precedent and shows the FDA's willingness to remain flexible (at least publicly) on this review. We believe that the agency is essentially doing the bulk of the review on this application prior to submission and would view a recommendation by the agency to file based on the available data as a very strong indication that it will result in an approval."
He then concludes: "Exactly. Once you get your head around the FDA reviewing a drug that's not officially filed for approval, the Sarepta situation makes more sense."
I think the rumor the FDA suggested/asked/etc. Provectus to submit an application for breakthrough therapy designation ("BTD") is true. Another rumor, which I cannot as yet validate, is that Provectus used Pfizer’s palbociclib BTD application as a guide.
Whether the FDA has indeed been proactive with Provectus is unlikely to be validated until we gain a measure of regulatory clarity, as I do not think management will alter is communications approach to regulatory matters. By proactive I mean the FDA granting BTD (only securing the SPA is insufficient to frame the outcome as proactive).
The abstract is: "Immunotherapeutics include drugs and biologics that render therapeutic benefit by harnessing the power of the immune system. The promise of immune-mediated therapies is target specificity with a consequent reduction in off-target side effects. Recent scientific advances have led to clinical trials of both active and passive immunotherapeutic products that have the potential to convert life-ending diseases into chronic but manageable conditions. Clinical trials investigating immunotherapeutics are ongoing with some trials at advanced stages of development. However, as with many products involving novel mechanisms of action, major regulatory and scientific issues arising with clinical use of immunotherapeutic products remain to be addressed. In this review, we address issues related to different immunotherapeutics and provide recommendations for the characterization and evaluation of these products during various stages of product and clinical development."
I think the FDA's BTD decision translates into either a safety/truncated trial or accelerated approval. Better and best. Time will tell. But, it strikes me the effort and path Provectus has engaged in to prove and elucidate the systemic properties and benefits, as well as the immune system properties and benefits, of local-regional agent PV-10 have been high and far from straight/straight forward. The path does seem like it is coming to some end soon.
It does appear the discussion of systemic proof and benefit has expanded to a discussion of the proof and benefit of the stimulation of the immune system. Moffitt has much more information to convey about PV-10, which we await in the form of a peer-reviewed publication. Provectus will present proof of a local immune effect at a European cancer conference this fall.
Much or a good amount of the Pfizer-Provectus-related activity recently in New York appears to be related to China, and what appears to be an effort by Pfizer to encourage or establish a transaction/relationship between Hisun-Pfizer Pharmaceuticals and China. Again, time will tell, as I think more time is needed here.
I include the year-to-date stock chart of PVCT and the Nasdaq Biotechnology Index to be consistent with the illustrations provided in Feuerstein's article.
Bold emphasis below is mine. The "Eric" below refers to/is Dr. Eric Von Hofe, President of Antigen Express, Generex's wholly owned subsidiary (and not Provectus' Dr. Eric Wachter).
Thanks Eric. For the people on the phone, my name is Craig Eagle, and I’m an MD by training in Australia, and I’ve been working with Generex for the last six to nine months as part of its Scientific Advisory Board, and really what I want to do and discuss today was two very high-level concepts particularly around Antigen Express and the immune portfolio. And the first is around the science. We all every day depend upon the immune system to protect us from diseases whether it be cancer or infections. And we know, and certainly many companies in the field of cancer technology are looking at ways to augment the immune system to attack cancer. One of the things that Antigen Express is working on is looking at it from two angles. One is to stimulate the immune system in itself, that’s (two key) protein, and the other is to (inaudible) direct and stimulate the immune system to a specific target. Now the beauty of this approach and the reason that I think there’s a lot of potential research required here to prove whether these compounds achieve treatment in cancer centers around the fact that, as Eric mentioned, the platform.
In particular the platform of stimulating the immune system and directing it is a platform that has been recommended in the scientific world of (immuno-) oncology, and at the moment, the forerunner is looking at HERC2 breast cancer. Now the beauty of looking at HERC2 breast cancer as the forerunner is that Antigen Express, I believe, has designed the right experiments to test whether the vaccine works, but also HERC2 expression breast cancer is an area that has already shown and been well defined to have benefit from treatment, in particular, people may be familiar with a product called Herceptin, and Herceptin was a breakthrough for treating patients with that particular cancer. And so the vaccine will then add and be able to augment potentially the immune system in a (robified) cancer population that still needs further treatment. Also, what makes it exciting from the Antigen Express point of view, in my view, is related to the fact that they can build on that cancer immunology to then branch out to other cancers where there could be positive results. In particular, the signs would suggest that the HERC2 expression, just like Herceptin, has been used in other cancers, could be explored with further research on its benefit there.
Finally I just want to move along to other areas, and Eric mentioned those, and that is the immune system could be used in (antigen effectives (ph) or as an immune modulator for areas like diabetes. So now when you look across multiple and different biotech companies, and certainly from a research point of view, there are probably three criteria that are key to remember. The first is that, as Eric mentioned, in the Antigen Express space there’s a platform. A platform to stimulate the immune system to achieve what it needs to achieve to control cancer, infections and other diseases, and it’s just a case of producing, testing and doing the right research to develop those products forward. The second area, then, is to do the right experiments and the right testing, and Eric and the team at Antigen Express have been working very hard to make sure that the trials that they are doing are trials that we (to the) right questions from a scientific point of view.
So the quality of the trials has to be paramount and above all very important to show whether the (products) worth or not. And finally the third area is actually an overall direction for the potential treatment of patients in a (robified) population. So I’ve already mentioned that HERC2 breast cancer is well defined and there is a very significant unmet medical need with women with cancer of the breast who get their cancer progressing despite the best standard of care, and so there’s certainly potential here to actually save lives and help women with breast cancer. So all in all I think that Antigen Express creates a great, stable platform to actually explore and research these compounds moving forward. I’ll hand over now to Gerry Bernstein who can then further discuss the metabolic aspects of Generex. Gerry?
Dr. Eagle's interest in or perspective of stimulating the immune system with great specificity seems very consistent with Provectus' path to immuno-oncology.
Pfizer announced the signing of a memorandum of understanding ("MOU") with Hisun Pharmaceuticals in June 2011 to establish their joint venture ("JV"), Hisun-Pfizer Pharmaceuticals, which no doubt took many months to construct before signing. The JV was contributed to/funded in September 2012, nearly 15 months later.
Recent articles about Hisun-Pfizer suggest a very independent company from Pfizer. The economics of the JV are notable for Pfizer, which owns 49% of it versus Hisun's 51% controlling stake. Kevin Xiao is CEO of Hisun-Pfizer, with whom Peter interacted this week.
Whether a deal gets done with Hisun-Pfizer for China more than likely is up to the Chinese, and not exclusively Pfizer, who I think are encouraging a transaction for this geography between the JV and Provectus parties. I think that because I think, after Peter and Eric's recent trip to New York and various meetings with Pfizer there, Dr. Eagle has more recently taken a more active role in his interactions with Provectus (although I'm sure he's been a contributing SAB member since he joined).
In illustrating the horse race, I mean to convey or say "crossing the finish line" implies a funded transaction. So, while it will be interesting to watch if Provectus inks an MOU with Chinese pharmaceutical company Hisun-Pfizer (or another Chinese company) this week, the funding of this transaction might more likely occur within 30-60 days after the MOU is signed/announced.
The current perspective is an Indian company is more likely to consummate (i.e., fund) a regional transaction, and thus deliver the upfront payment to Provectus first, followed by a Japanese pharmaceutical company. At the moment, it would seem the Chinese upfront payment is viewed as arriving third behind the Indian and Japanese payments.
I will review the situation after Peter returns from Japan.
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The above written or said, a regional transaction may not occur until the FDA provides regulatory clarity to Provectus. As I wrote in my "$PVCT is Going for BTD. BTD is Tantamount to Approval." post, the company sought this clarity through its original, initial pursuit of accelerated approval ("AA"), followed by initiating a parallel path to pursue a special protocol assessment ("SPA") and eschewing a traditional "non-SPA" MM Phase 3 trial. While both paths, AA and SPA, remain viable, the breakthrough therapy designation ("BTD") arrived last year and now appears the more active or likely path to clarity.
While management certainly could be blown away by the pricing and structure of a regional transaction from an interested party, it is not unreasonable to think these companies, as do potential investors, also are waiting for regulatory clarity before they present Provectus with terms and conditions.
As I wrote in my "#PVCT's #China #Arbitrage Opportunity post," on the one hand, while many Western Big Pharma companies are very interested in the drug, they still desire to understand the story of how and why a very effective local agent can have as comparable systemic and immunologic benefit. Thus, we waited for Moffitt. On the other hand. the Chinese (and the Indians and the Japanese) are much more interested in understanding whether PV-10 works and works cost-effectively. Both hemispheres agree the drug is safe, and both acknowledge PV-10 is effective. It is possible, however, that cultural differences might contribute to each party's thinking and decision-making processes. One wants to know why and how, while the other wants to know how much.
But Moffitt arrived in early-April. So what gives?
It is not unreasonable to think these regional pharmaceutical companies are waiting for regulatory clarity before they present Provectus with terms and conditions. It's also not unreasonable to think management also is waiting for regulatory clarity before they accept any terms and conditions on regional and/or global license transactions.
If the path of clarity is a decision of "better" (a truncated MM P3 trial) or "best" (AA), with "good" (SPA) available but not chosen, it strikes me that all parties -- management, regional pharmaceutical companies, Pfizer and Big Pharma -- have their respective reasons and rationale to wait until regulatory clarity is made transparent.
Wouldn't you think the topic of what "we" (Provectus & Pfizer) do after BTD is attained (and then, more specifically, AA or a truncated trial) might have been discussed?
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Take for example the "non-unique" story of a fund that desires to put money into Provectus via an open market purchase of common stock (i.e., the shares you and I own), by dipping its toe in the water to establish an initial position of 1.5 to 4.5 million shares.
Without regulatory clarity, there's no clear exit for the fund and its managers. They cannot and do not buy, but merely wait on the sidelines. As do many others.
To most, including the above mentioned fund, the question of regulatory clarity -- in its mind and most others -- boils down to Provectus attaining the SPA from the FDA and then having to run a $30-$50 million Phase 3 trial. In the minds of this fund, dip its toes in the water now, at 63 cents, and following the clarity of an SPA, suffer 20-40% dilution (roughly) when Provectus raises aforementioned money to fund the trial. Better to wait and buy after the fund raising or, better, participate in it at the lower price with the prospect of warrant coverage too -- a much more attractive risk-reward.
As I previously wrote in my "With the FDA, It's Good, Better, Best for PV-10 and $PVCT," the closer you are to the company, the greater your awareness of Provectus' situation, the higher expectations or anticipation you have of an SPA, BTD or AA. The less familiar you are with the company or situation, the lower your level of expectations. The FDA's decision will validate Provectus and PV-10 in some form and fashion.
The above mentioned fund has done due diligence, but doesn't have the perspective Provectus watchers do. The fund, like its sistren and brethren, invests broadly across a variety of companies, diversifies risk, plays the numbers, is not early, and endeavors to generate alpha (which for the vast majority of such funds merely and actually is beta).
Provectus watchers would tell you they believe the situation now is an outcome between "better" and "best." The consensus view appears to be the company already has submitted a/the BTD application. Opinions vary as to when, from early-May to early-June, which would indicate a result as late as early-August (perhaps early-September if one leaves room for summer vacation and/or the dog days of summer) and as early as "now."
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An e-mail from a blog reader:
My PVCT buddies and I have long since learned to take your predictions with a handful of salt BUT - we're sure going to be prepared when that Great Day finally arrives and it will be because you have prepared us so well in advance. I don't think I need to tell you how very much I appreciate all that you put into the Blog. Reading it every day has made hanging on to this losing position this past year and a half almost a pleasure.
Following the week of June 10th, during which Peter spent a considerable amount of time in New York and Eric later did as well, it appears to me the situation with Pfizer, the relationship, such as it was and now is, changed.
Call it what you wish: The situation or relationship evolved. The relationship was taken to a new level. The situation escalated in a positive way. Etc.
However you wish to describe or frame it, Eric being brought further into the picture points to a discussion that very likely broadened and deepened from what it only was the week before when Peter and Eric were at ASCO with Pfizer's Craig Eagle.
From what I have discerned thus far, and I certainly do not have anywhere near the entire picture, Peter again met with Dr. Eagle, a member of Pfizer's Oncology Business Unit ("OBU"), which is part of the Specialty Care and Oncology organization that also includes the Specialty Care Business Unit ("SCBU"). Eric's visit included, at least, meetings with OBU senior leadership. Peter also met with senior corporate leadership (not, however, Pfizer's Chairman and CEO Ian Read).
There were more meetings, too.
Peter's role encompasses represents the first-line of and continuing business development interaction and communications with potential license partners, both regional and global. Given the demands on Eric's time, bringing him into New York City for further discussions with Pfizer is not atypical of a relationship that has grown, poised to grow or being considered for growth.
The question for me is the nature of the discussions, both the ones Peter had and the one(s) Peter and Eric had. Did discussions include or address regulatory clarity, commercial validation, and/or business strategy of one sort or another? Time only will tell.
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Click to enlarge the picture.
I also understand Peter met with the company's Chinese intermediaries. I believe Pfizer is encouraging, as best it can or in a manner consistent with and in its own interests, a relationship between Hisun-Pfizer Pharmaceuticals, Pfizer's Chinese joint venture with Zhejiang Hisun Pharmaceuticals, and Provectus.
Since no press release was made nor 8-K filed last week, it would seem more work is needed and/or more time is required for a relationship to be consummated, if at all.
Peter leaves for his trip to Japan next week. If a deal is to be had, it will require him to take a side trip to Taizhou Zhejiang, China, where Zhejiang Hisun Pharmaceuticals is headquartered (and where I presume Pfizer-Hisun has its China location, although not necessarily). I think it is more likely Peter returns with an MOU and no upfront payment. Recent chatter suggests the upfront payment is lower than I first expected, at $10 million, but with two healthy-sized, regulatory-oriented milestone payments of $50 million each.
Should Peter secure the MOU, it is possible the company announces the event via a PR on June 18 at the earliest. If this happens, I would not be surprised if Maxim Group equity research analyst Dr. Echo Yinghui He, MD, PhD, then issues a research note describing the deal and valuing it at $1 billion on a net present value (i.e., taking into account upfront and milestone payments, royalties, market penetration, indications, cash flows).
If we hear nothing upon or shortly after his return, then follow-up is required.
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Moffitt Cancer Center has definitively and unambiguously concluded PV-10 has systemic properties and benefits, which the FDA wanted to understand before considering accelerated approval.
We're now trying to digest a larger truth, that local chemoablation of a cutaneous lesion with PV-10 leads to transferable immunity. As described in Provectus' recent white paper, according to Moffitt's Dr. Shari Pilon-Thomas, "We think that when you inject PV-10 into a tumor, it destroys the tumor, releasing tumor fragments that are then taken up by immune cells. The immune cells travel to the lymph nodes where they ‘educate’ or activate T-cells which can in turn travel anywhere in the body."
The question of PV-10's systemic properties and benefits has been answered. Academics and researchers will read it in a peer-reviewed journal in the coming months, now that the manuscript has been approved for publication.
The next question for Moffitt is how does it maximize the process by which PV-10 generates immunity. Moffitt's Dr. Jeffrey Weber, the driving force behind the approvals of immunotherapy treatments ipilimumab (Yervoy) and vemurafenib (Zelboraf) for Stage IV metastatic melanoma patients (and considered a/the "god" of immunotherapy), is now firmly behind PV-10. The landscape for treatment therapies for Stage III patients is barren, and wide open for PV-10, which is and has been the point of the regulatory path Provectus chose for its drug. Stage I, II and IV are, of course, also in play.
Dr. Pilon-Thomas now searches for answers to questions like “Is it just because you inject the drug and it goes everywhere and then kills tumor cells at other sites? Or is injecting PV-10 inducing
a T-cell response, such that T-cells travel throughout the body and kill tumors in their various locations?”
To Pfizer's Dr. Eagle and his Big Pharma counterparts, none of what Dr. Pilon-Thomas asks matters as much as the massive creation of antigens that PV-10 causes, and how can PV-10 be optimized to treat and cure all stages of cancer.
PV-10 creates antigens. It creates a lot of them. The creation of lots of antigens is the key to the successful, sustainable treatment of cancer and, thus, its cure.
PV-10 creates an "antigen storm." Provectus' drug compound is more powerful than any other antigen-creating material for the expression of antigens to the immune system.
Dr. Eagle knows this, and his counterparts at Big Pharma are quickly learning this too.
The not-so-incremental innovation of Abraxane's nanotechnology delivery system -- the albumin-bound formulation of, say, paclitaxel may help you understand the paradigm shift that is PV-10 better. PV-10's genius and innovation is its stimulation of the immune system. PV-10's storm of antigen creation is singularly unique.
For Dr. Eagle and others, the question now is how to optimize the use of PV-10 by itself and in combination with other therapies, when, and with what specific therapies for what situation. How. When. With what.
Even when PV-10 is an approved, Pfizer will be use it in combination (typically for late/end stage patients) until it does not have to because PV-10 is then able to run the entire race and not be handed the baton to cross the finish line. Thus, the very intent of the joint Pfizer-Provectus combination patent application is strategic, financial and commercial.
The Pfizer-Provectus relationship has changed. How much is the question now.
Dr. Perlmutter was responsible for Amgen's acquisition of BioVex and its principal drug compound OncoVEX, now T-Vec (talimogene laherparepvec). T-Vec is a competitor of PV-10.
Perlmutter now runs Merck's R&D organization. Merck's licensing group/function now reports to him, and Dr. Perlmutter is keenly interested in business development and licensing.
Thank you to the blog reader who indicated the prior $MRK posts were hazy in their implication.
Implication: Merck may well be a serious contender [to Pfizer] to license PV-10.
In April 2010, in response to Provectus' routine request for accelerated approval ("AA"), the Agency request proof of PV-10's systemic properties and benefit. Of note, Craig said "While we believe the Phase 3 with an SPA represents an industry standard path to approval, we believe the door may still be open for accelerated approval."
It would have seemed that, at the time, for a "mere" local-regional drug, showing PV-10 worked and worked well was insufficient to attain AA. Provectus learned it also had to show systemic benefit.
So, later in 2010, Provectus engaged Moffitt Cancer Center about conducting the necessary work to explain PV-10's mechanism of action ("MOA") and prove the compound's systemic benefit. MD Andersen Cancer Center also was considered as a potential partner for work.
By early 2011, Moffitt had begun conducting murine model work at its own expense, demonstrating [even back then] how excited the cancer center was to explore PV-10's MOA. Such work boded well for the eventual full-scale study work and publication of the data.
Into mid-2011, Moffitt was generating success from its work, such as demonstrating the so-called bystander effect in a very harsh lung metastases mouse model.
On January 17, 2012, Provectus issued a PR about the beginning of Moffitt's work, which was presented at the Society of Surgical Oncology Annual Meeting in March 2012.
Just recently, Moffitt presented more results of its work at AACR in April 2013: clear, unambiguous, unequivocal proof of PV-10's systemic properties and benefit. The FDA's request, it would seem, had been answered.
A parallel pursuit of a special protocol assessment
At the same April 2010 meeting with the FDA, the first end-of-Phase 2 ("EOP2") meeting, the journey towards a Phase 3 trial under a Special Protocol Assessment ("SPA") for metastatic melanoma began.
On January 18, 2012, the FDA provided guidance to (told) Provectus no further end-of-Phase 2 meetings were required, and to submit the company's Phase 3 protocol for review, either via standard review or a request for Special Protocol Assessment ("SPA").
It seemed the first half of 2012 was spent finalizing the protocol for the trial, which was first noted in June 2012 (and discussed in more detail in October)
The second half of the year seemed to encompass, among other things, getting supportive programmatic elements into place, which was first noted in October 2012.
In 2013 I have been left unsatisfied by management's explanation for the time taken in attaining the SPA. Their description of the process has been lacking, most recently in the annual CEO letter circulated in May 2013: "While preparation for submission of our SPA has taken longer than expected, it is crucial to remember that oncology presents a moving playing field."
By early June 2013, there seemed to be clear feedback the SPA had not yet been submitted.
The arrival of the breakthrough therapy designation
The Food and Drug Administration Safety and Innovation Act ("FDASIA") was signed into law in July 2012. Through FDASIA, the breakthrough therapy designation ("BTD") was offered.
Intended to expedite the development and review of drugs for serious or life-threatening conditions, the pharmaceutical industry now believes BTD is tantamount to approval.
Having been stalled in their circa 2010 and previous efforts to attain AA, opportunity in the form of BTD fell into management's lap.
By, I think, February 2013, management has begun to explore BTD as yet a third path to regulatory clarity, the first being AA and the second being the SPA.
As early as March 2013, management said they would submit a BTD application.
There was more than speculation earlier this year that the FDA asked Provectus to submit a BTD application. This "speculation" was confirmed in early June 2013.
Moffitt's upcoming peer-reviewed publication was thought to have been a fundamental component of the company's BTD application.
The criteria for breakthrough therapy designation require preliminary clinical evidence that demonstrates the drug may have substantial improvement on at least one clinically significant endpoint over available therapy. NCCN guidelines for patients with Stage III melanoma indicate the primary (main) treatment as systemic therapy, such as chemotherapy, which is dacarbazine (DTIC) or temozolomide (TMZ). Progression free survival ("PFS") for these drugs is about 2-3 months.
PFS for PV-10's Stage III patients in the company's Phase 2 trial, reported at ESMO in October 2012, was about 10 months, a substantial improvement over the available therapies of DTIC and TMZ. PFS is the primary endpoint of the contemplated MM Phase 3 trial for which the SPA is being sought.
A collaborative and supportive FDA
Provectus has described its relationship with the FDA as a collaborative and supportive one.
At the time, summer 2011, the new Division of Oncology Products 2 ("DOP2") took over review responsibility of PV-10 for melanoma after an extensive reorganization of the FDA. DOP2 personnel would review both the SPA and BTD submissions (and, I suppose, an AA request or submission).
It seems odd that DOP2 would evaluate three concurrent, parallel but different requests. It would seem there would or has to be some prioritization of these paths in the eyes of or by the FDA.
Moffitt, its already published work, work yet to be published and the results of ongoing work (e.g., the Phase 1 feasibility study, much more murine model work) seems to have dramatically changed for the positive the perception or view of PV-10 and Provectus in the eyes of the Agency.
There is preliminary clinical evidence that demonstrates PV-10 has substantial improvement on PFS over available therapy.
Is a collaborative and supportive FDA being proactive, guiding the company towards a BTD application submission (rather than an SPA one) that would translate into either a safety/truncated trial (less likely) or AA (more likely)? Better and best.
I think the FDA is being proactive with Provectus and PV-10
PV-10 is a paradigm shift in the treatment of cancer. "In the eyes of Richard Pazdur, a breakthrough cancer drug should be "transformative." "It's really for transformative therapies that are a marked improvement, where there is no therapy, or a drug has a significant advance over what is out there," based on preliminary evidence, Dr. Pazdur said in an interview."
Management, it would seem, clearly is going for BTD.
BTD, according to the industry, is tantamount to approval.
For PV-10 and Provectus, the outcome is clear: approval.
Provectus' recent white paper effectively is a PR and primarily if not exclusively about getting the FDA's breakthrough therapy designation.
The central message of the paper is part of the uniqueness of PV-10's MOA is the way it works to harness the immune system (the other part of the uniqueness is the very effective chemoablation MOA when delivered intralesionally).
Much like in a fancy restaurant, where you might receive an amuse bouche prior to ordering or receiving food, the paper is an amuse bouche. The appetizer is Moffitt's eventual PR about their upcoming peer-reviewed publication paper describing their murine model work to elucidate PV-10's stimulation of the immune system. The paper itself, thus, is the entree.
The paper describes that PV-10 works very effectively by stimulating the immune system. When stimulation is less effective or ineffective, it is primarily due to excessive tumor burden, an assist is needed to reduce such burden until PV-10 can stimulate the immune system. It is possible, however, that enough PV-10 to further chemoablate could be enough without the need for an assist even in the heaviest tumor burden situations, but more trials likely would have to be run to maximize PV-10's utilization on its own through the entire race.
Notably, more than few people believe PV-10 could provide synergistic results when combined with anti-CTLA4 and anti-PD-1 agents, whereas merely additive results are achieved combined with kinase inhibitors.
The white paper speaks to the overriding focus of oncology (e.g., FDA, Big Pharma, KOLs, clinicians, researchers, etc.), which is harnessing the immune system to treat and cure cancer, and the uniqueness of how PV-10 works in that regard.
I think the paper makes several tremendous points, and I will blog my thoughts in due course.
I hope to have some fun with the first part of this three-part post. Indulge me.
As you know, I beat the drum from time to time about Provectus and Pfizer. The relationship, as I see it, has steadily grown in depth, but has not yet been consummated.
Summer/Fall-2011: There is/was the rumor of a cash bid by Pfizer for the company, which management denied (to me) was made and that would have valued Provectus at approximately $1B ($7 in cash per share) at the time. Earlier that year, BioVex (T-Vec) and Plexxikon (Zelboraf) were acquired by Amgen and Daiichi Sankyo, respectively, for approximately $1B (top-line figure) each.
September 2012: The company made an SEC filing for a preferred stock offering, the rationale and structure of which purportedly was to facilitate a strategic equity investment by Pfizer in Provectus.
October 2012: Pfizer supposed role as co-lead on the PVCTP "IPO" did not materialize.
The stock market, some/many in the Wall Street community, some/many potential investors and some/many existing shareholders do not believe in nor trust management, and thus do not believe in the data. If they did, they would buy or buy more shares. These disbeliefs, the first more problematic and resulting in the second, have led to the obscuring of value that clearly exists in Provectus and that Big Pharma very much sees and desires.
Although disbelief in or lack of trust in management mostly results from self-inflicted wounds, these wounds are far from fatal, and there should be no doubt about the immense value management has created in its innovation of PV-10.
Simple, angelic or divine regulatory clarity will transform disbelief in both management and PV-10 overnight.
One has to assume disbelief of Provectus extends to or has enveloped the notion and reality of a Pfizer relationship, too. Clarity about a monetary relationship with this Big Pharma also will additively transform disbelief in both management and PV-10 overnight.
June 2013: Which brings us to last week and Provectus' Empire State of Mind, where there apparently/purportedly were several meetings between Provectus principals (Peter, Peter and Eric) and Pfizer folks (broadly speaking), as there has been since the relationship began. I think I have a good idea of who, what, where and when, but not why.
It's fair to say there is no small amount of anticipation or expectation brewing for something to happen, soon, whether it is some portion of regulatory clarity or commercial validation through a regional license transaction.
I can't help but think of, anticipate or expect a monetary relationship finally being put into place between Provectus and Pfizer. Without regulatory clarity of any sort (e.g., SPA, breakthrough therapy designation, accelerated approval), it's too early for a global license with or the end game by Pfizer.
But how does Provectus get from here to there, from Friday's 63 cent share price to a multi-billion dollar upfront payment from Pfizer? I wrote the Empire State of Mind post to clarify some things. I also understand there was some chatter about a strategic equity investment by Pfizer last week. I would have to believe the topic of investment has been a longstanding discussion between the two companies.
Maybe, now, whenever now becomes today, and today becomes a PR, there might/could/will be an investment in Provectus by Pfizer (or possibly but less likely some other Big Pharma). Why "now?" With regularity clarity in the offing, potentially simple leading to angelic or divine, an investment from Pfizer assists Provectus to get from here to there.
A substantial investment (say, $25-$75MM) investment by Pfizer at a significantly higher share price (say, $3.50-4 per share) should put a floor under the stock.
The upcoming annual meeting of shareholders on June 27 potentially will help resolve the issue and company proposal to increase the number of shares of common stock Provectus is authorized to issue from 200-250 million shares. As of March 31, the total shares of common stock issued and outstanding and reserved for issuance for outstanding warrants, options and preferred stock totaled 188 million (no shares of common stock are held in treasury), leaving about 12 million shares for a strategic equity investment by Pfizer (or another Big Pharma). Maybe 11,853,076 unreserved shares of common stock available for issuance is enough.
If an equity investment starts the ball rolling, then one hopes that event is followed by some regulatory clarity, like the receipt of the SPA. Leveraging Provectus board member Al Smith, among others, to build greater awareness in the financial and investment management communities creates more momentum. A regional license deal or two, next, like for India and then China, or for China and then India, helps more. More regulatory clarity, like BTD or AA, speeds up the ball's rolling. And then...
But it's very early Sunday morning at my favorite Starbucks (this blog will post Monday morning at midnight EST), it's just the here and now, and I'm having a little fun.
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A Chicago stockbroker organized a conference call for his clients holding Provectus stock with Peter before ASCO 2013. The broker also invited me to join the call, which lasted about an hour. There were about 50 people on the call. Peter used the company’s website presentation as his talking points, providing informative comments about the company's progress or situation on several fronts. Below are notes that, while not meant to be an exhaustive description of the call or a transcript of it, essentially were a list of things Peter said that I found to be interesting to varying degrees.
Peter used the company’s website presentation as his talking points, providing informative comments about where the company is several fronts as well as some very candid commentary.
The mechanisms of action of PV-10 for oncology and PH-10 for dermatology are not the same but have interesting similarities and high profile researchers are currently investigating.
The synthesis patent application has been approved. Peter described some of the implications of the now approved patent. Provectus will issue a press release next week where I expect the company will describe several key aspects that drive significant shareholder value.
A Phase 3 trial under the SPA that should be agreed to with the FDA, should such a trial ultimately be run, would have treatment without any limits of any concern (i.e., as many retreatments of as many visible tumors as necessary).
In addition to breast cancer and melanoma for which Moffitt (a) confirmed from its murine studies that PV-10 chemoablation resulted in both a direct effect on injected lesions as well as a systemic response that leads to regression of uninjected subcutaneous and lung lesions and (b) concluded intralesional PV-10 treatment led to the induction of tumor-specific immunity, Moffitt also has done work in other indications.
Moffitt seeks to finish its Phase 1 feasibility study of human patients as quickly as possible.
The FDA and Big Pharma realize that to kill cancer one has to effectively kill tumors in a clinically relevant manner. PV-10 is singularly unique in the approved and emerging cancer agent universe.
Peter mentioned they are having license talks with global and regional pharmaceutical companies, including active dialogue with Dr. Craig Eagle of Pfizer.
"“If you look five years out, most of this meeting [ASCO] will be about immunotherapy,” said Dr. Mario Sznol, a professor of medical oncology at Yale."
"“I think all of you recognize this is a very special moment in oncology,” Dr. Roger M. Perlmutter, head of research and development at Merck, told analysts Sunday at a standing-room-only meeting."
When Dr. Perlmutter was with Amgen, he (among others) was responsible for the acquisition by Amgen of BioVex's OncoVEX, now T-Vec: "Doctors inject T-Vec directly into tumors unlike most cancer drugs that are administered orally (as a pill) or intravenously into a vein. In Jan. 2011, Perlmutter explained that BioVex wouldn't have been worth Amgen's investment if OncoVex proved capable of only eliminating tumors via direct injection. The tumor burden in advanced cancer patients, especially those with skin cancer, is too great to treat them effectively. T-Vec, however, appears to activate a patient's immune system enough to target and eliminate tumors that are not directed injected. This so-called off-target or systemic response is what grabbed Amgen's attention and ultimately led to the company's decision to acquire BioVex."
"But there are reasons to be cautious. This is cancer, after all. Many other hoped-for miracles have failed to materialize. This is a conference that has hailed drugs that extend lives by only a few weeks as breakthroughs. “We’re so used to failure, we get excited very easily,” said Dr. Kim Margolin, an expert on melanoma and immune therapies at the Seattle Cancer Care Alliance."
"The PD-1 drugs tackle the second problem of immune system suppression. How many cancers this will work for is still unclear. Much of the early work has been in melanoma, which is known to be more susceptible than many other tumors to immune system attack. There are cases, though rare, in which the immune system vanquishes melanoma on its own."
"This isn't a chart of real data but it's the best slide of the ASCO meeting because it explains why cancer immunotherapy is winning over targeted therapies, particularly in melanoma. It's the long survival tail! Targeted therapies work fast but responses tend to be transient as cancer cells develop resistance. This means that early, impressive survival benefit aren't sustainable. Cancer immunotherapy, on the other hand, works slower. It takes time for the patient's immune system to identify and kill cancer cells. But once a patient's T-cells get a taste for cancer cells, their appetite is insatiable. That means tumor responses that are more durable and (hopefully) sustained and prolonged survival."
"The discussant at the Clinical Science Symposium on PD1/PDL1 pathway immunotherapy, Dr. Walter Urba of the Providence Cancer Center (Portland, OR), summed up the stunning progress that has been made in immunotherapy for melanoma with the bold statement that “immunotherapy is now the first-line treatment for metastatic melanoma regardless of mutation status.”"
The company had designed its MM Phase 2 trial in hopes of securing accelerated approval. I have no doubt management knew, following the April EOP2 meeting, that it had to provide proof of PV-10's systemic properties and demonstrate the drug's systemic benefit. Even though Provectus' goal was to seek accelerated approval for PV-10 as a local-regional drug for Stage 3 melanoma patients.
The FDA may have told the company to explain PV-10's MOA and provide proof of system properties and benefits in order to get AA. Rather than seek a regular MM Phase 3 trial, and in addition to seeking an SPA for this trial, management sought to answer the FDA's queries in hopes of eventually achieving AA.
Moffitt has explained PV-10's MOA, and provided proof of the drug's systemic properties and systemic benefit.
So, information was requested, and it's likely been or shortly will be delivered. Now, it's simply up to the FDA to decide. Notwithstanding what the FDA decides, there really is no bad outcome to me.
An SPA is terrific. A breakthrough therapy designation (some truncated trial or shorter path) is fantastic. AA is mind blowing.
Good, better, best.
The closer you are to the company, the greater your awareness is of Provectus' situation, the higher expectations or anticipation you have of an SPA, BTD or AA. The less familiar you are with the company or situation, the lower your level of expectations are. The FDA's decision will validate Provectus and PV-10 in some form and fashion.
From here, the first day of the next phase for Provectus begins in ernest.
Craig presented in town to about 40 biotech and life sciences industry folks, together with a handful of investment management people, this week. I learned several interesting things, such as...
Craig's murine work on bladder cancer appears to have successfully demonstrated what he had intended with treated and untreated lesions.
He also indicated success with the bystander for pancreatic cancer in, I presume, murine models.
The number of Big Pharma in due diligence with Provectus has increased to at least 4 companies.
(Empire State of Mind by Jay-Z, featuring Alicia Keys)
First, now, I want to blog about Peter's week in New York (with a particular focus on Pfizer), which ends today (although I don't know if he'll return to Knoxville tonight or tomorrow morning). There are some items that should be discussed. Others require further explanation.
Second, on Saturday, perhaps, I'll blog about Craig's presentation here in town Wednesday night. I learned several interesting things.
Third, on Sunday, I'll blog about the FDA's pending regulatory decision about the SPA, accelerated approval, and breakthrough therapy designation that translates into either accelerated approval or a truncated Phase 3 trial. In my mind, it's good, better, best. The FDA's validation, at this point, is more important than the validation of a regional or worldwide deal, transforming (or nearly so, depending on the outcome) disbeliefs overnight.
There lies, or will lie, a common thread in these blogs, and the thread is "disbelief."
Dilution, on a fully diluted basis (i.e., preferred stock, common stock, stock options, warrants), from December 31, 2009 to December 31, 2012 [to make the math easier], totals nearly 70% (although warrant net exercises might, in due course, reduce comparable dilution to 60%).
Yet, in the intervening period, from April 2010 to June 2013, PV-10's efficacy has increased, the drug still maintains a pristine safety and adverse event profile, PV-10's mechanism of action is understood, and there now is proof of the drug's systemic properties and benefits.
I posit, that despite the above mentioned dilution, shareholders are better off in 2013 than 2010. Depending on the assumptions one uses for intrinsic value then and now, you should come up with a reasonable, objective increase in value or valuation (5-15x).
Again, to make the math easier, I used 2012 and 2009 year-end numbers from Provectus' 10-K. A $2.5B intrinsic value is, in reality, emblematic of a post-AACR PV-10.
But, for most shareholders, what matters only is the change in their share price (or market capitalization), and that's been downward, a lot (-60%).
The stock market, some/many in the Wall Street community, some/many potential investors and some/many existing shareholders do not believe in nor trust management, and thus do not believe in the data. If they did, they would buy or buy more shares. These disbeliefs, the first more problematic and resulting in the second, have led to the obscuring of value that clearly exists in Provectus and that Big Pharma very much sees and desires.
Although disbelief in or lack of trust in management mostly results from self-inflicted wounds, these wounds are far from fatal, and there should be no doubt about the immense value management has created in its innovation of PV-10.
Simple, angelic or divine regulatory clarity will transform disbelief in both management and PV-10 overnight.
Peter is in New York this week working with various parties regarding regional license transactions in India, China and Japan, as well as having follow-up meetings with shareholders, analysts and Big Pharma.
Peter has had and will have meetings with Pfizer and Pfizer-related people. Eric is NYC on Friday to join Peter in Pfizer-related, and perhaps Pfizer, meetings. It is unintelligent to think Pfizer is not interested in PV-10 and Provectus. I think more pertinent questions are when, under what circumstances and for how much Pfizer will buy, rather than why or for what reason.
Pfizer's M&A strategy [subscription to The WSJ is required to access the preceding link] is more likely to comprise "biotech bolt-ons and small tie-ups" (like acquiring Provectus) rather than "megamergers" or the ilk (like acquiring Celgene).
Pfizer's threshold for these smaller purchases is $4B. That is, it won't pay more than $4B in an upfront payment for a biotech bolt-on or small biotechnology company like Provectus.
Healthcare investment bankers suggest the acquisition premium paid for public companies in the space range mostly from 30-50%, but can be as high as 100%. "Premium" means the per share price paid for a company in excess of its then current, pre-acquisition announcement, share price.
Pfizer is not unwilling to pay a 100% premium. For example, if Company XYZ's current share price is $4, Pfizer may be willing to pay $8 per share.
Celegene bought Abraxis BioScience for a $2.9B upfront payment (net of Abraxis' cash on hand). Provectus management has the expectation of at least a Celegene-Abraxis value for its acquisition by, say, Pfizer. Should Pfizer be willing to pay a 100% premium for Pfizer, Provectus' market capitalization must reach at least $1.45B, through regulatory clarity (the greater the better) and, more than likely, regional license deals, before Pfizer might consider bidding $2.9B for the company (using the Celgene-Abraxis example).
If Provectus seeks a $4B payment from Pfizer, the market cap must reach $2B.
Peter utilizes Pfizer, when he discusses this Big Pharma, as a proxy for significantly increased Big Pharma interest in Provectus post-AACR. He also brings up Pfizer because of the recent focus on immunomodulatory agents and the company's joint patent application with Pfizer for these agents in combination with PV-10.
Pfizer is captivated by PV-10. Among a variety of other touch points and situations, Craig Eagle first engaged Provectus when he traveled to Australia for Dr. Agarwala's presentation preliminary MM Phase 2 trial data in November 2010. Pfizer and Dr. Eagle proffered a unique deal to Provectus that ultimately did not materialize. Craig joined the company's corporate advisory board in August 2011. The joint patent application worked its way through Pfizer in 2012 before being filed in October of that same year. Eric and Peter spent time with Dr. Eagle at ASCO 2013. Which brings us to this week, where topics of discussion and meetings include China.
There should be no doubt about Pfizer's interest in Provectus. Of course, there is no certainty that Pfizer will buy Provectus, or buy it at a Celgene-Abraxis-like valuation.
There also should be no doubt about other Big Pharma and Big Biotech's interest in the company as well. Of course, there is no certainty that any of these companies will buy Provectus, or buy it at a Celgene-Abraxis-like valuation.
Regulatory clarity awaits. Disbelief must be transformed.
There is, however, without a doubt, in front of your eyes, significant Big Pharma interest in Provectus.
A blog reader's questions get to the heart of commercial validation, coinciding with Peter's trip to New York this week, following Eric and his attendance at ASCO 2013 and preceding Peter's trip to Japan the week after next.
Interestingly, Eric also will be in New York. Given his responsibilities over clinical development, intellectual property and manufacturing, as well as the scarcity of his remaining time for other matters (like travel to medical conferences, investigational sites, cancer research centers, etc.), travel to NYC at this time notable.
Blog reader: What do you think is the probability that Pfizer will buy PVCT? And what do you think the market value of the share will be? I am a longterm buyer of PVCT and believe that PV-10 works. Also when are you expecting something to happen? Any thoughts would be appreciated. I am thinking about buying more shares but hesitant right now to do so since we have not heard anything about a deal being finalized.
Pfizer. I think Pfizer is the most likely buyer of the company, which doesn't mean Pfizer ultimately buys the company, but the industry acknolwedges Dr. Craig Eagle has the pole position relative to his counterparts. There are a number of dots that connect Provectus to Pfizer, and the number continues to grow. I've identified several of them in past blog posts. The most visible, of course, are Dr. Eagle's presence on the company's corporate advisory board and the joint patent application the two companies have regarding combination therapies.
Of course, there is no certainty Pfizer buys Provectus.
It's possible, but improbable, Pfizer and Dr. Eagle lose interest in the company. They're captivated by PV-10.
It's possible, but improbable, someone might outbid Pfizer for Provectus. They have the biggest checkbook, nearly double Amgen and more than double Johnson & Johnson and Merck.
To answer the blog reader's first question, I think the probability Pfizer buys Provectus is near 100%. "When" is another story.
Share price. I believe management has the expectation of at least Celgene-Abraxis-like upfront money of approximately $2.9B, which, using certain assumptions that lead to a figure of 175MM fully diluted shares outstanding, leads to a share price of about $17. Reaching this valuation altitude requires greater depth for both regulatory clarity (melanoma, liver and, perhaps, a third indication) and commercial validation (India, China and Japan) as well as the entry of market forces to embrace them (i.e., many more institutions and people buying Provectus stock).
When. A sense of timing of the end-game requires vastly greater certainty about regulatory clarity than we have today. An SPA for a pivotal MM Phase 3 trial? Breakthrough therapy designation leading to a truncated Phase 3 trial, a user friendly safety-oriented trial or accelerated approval? Commercial validation might help, but I don't think Pfizer is interested by or cares about, at this point, another business entity commercially validating Provectus by doing a license deal with the company. If anything, Pfizer could and would facilitate a regional license deal for self-interest in some way.
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A Yahoo! Finance poster made some interesting remarks regarding Peter and Pfizer this week, and I attended a presentation by Craig yesterday. I'll blog about each of these items this weekend.
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