Provectus Pharmaceuticals, Inc. The Wall Street Analyst Forum Call Transcript

Provectus Pharmaceuticals, Inc. (NYSEMKT:PVCT)

The Wall Street Analyst Forum Call Transcript

November 18, 2008, 12:30 pm ET


Craig Dees – CEO

Unknown Speaker

Good afternoon ladies and gentlemen, and our ongoing attempt to adhere to the published schedule as much, to the physical attendees and the webcast attendees, I would like to introduce the next company in this afternoon's healthcare component of our three-day financial analyst conference.

Provectus Pharmaceuticals specializes in developing cancer therapies that are safer, more effective, and less invasive than conventional therapies. Provectus utilizes small molecule drugs that target disease tissue, while leaving healthy alone. Its unique ability to target only disease tissue may enable the drug to be utilized in a broad range of cancers. Currently, the industry utilizes systemic attacks, which can kill both good and bad cells, and weaken the patient’s natural ability to fight the cancer. Provectus is currently conducting a phase 2 clinical trial of this proprietary drug, PV-10, as a therapy for metastatic melanoma and a Phase 1 clinical trial for recurrent breast cancer. Provectus also has a Phase 2 clinical trial being conducted at Mount Sinai School of Medicine in New York for PH-10, a topical acumen for psoriasis. The PV-10 for metastatic melanoma has received orphan drug designation from the Food and Drug Administration. Clinical trials for liver cancer are expected to begin in the second half of 2008. Some further details can be found on their clinical trials at for perspective.

So, without any further introduction, I would like to introduce Craig Dees, Chief Executive Officer of the company.

Craig Dees

Pleased to be here. So one thing about us, we use some of the highest-tech science. However, high-tech doesn't make a product or a product scientist will focus from day one on how to get the thing to market, to a growing big market, at the least possible time, least possible expense in a practical fashion. So, what we are really, really skilled at is taking this high-tech science and turning it in a very practical fashion into a product.

What you are going to see today; you are going to see a suite of drugs that resolve some of the most difficult problems in cancer and dermatology in the world. And I say the problem is actually fairly easy to fix, if you just fix one thing, which we have, it has just nearly absolute specificity for diseased tissue. It doesn't have to be encapsulated, it doesn't have tons of molecule antibodies hanging on it in there, we know how to do this with a small molecule drug, very stable, inexpensive to build and produce. And it spares normal tissue, almost absolutely; so side effects, the best way to say it, are absolutely trivial. There are just virtually few and none with the drug.

Given this new drug works by a different mechanism that you have seen before, particularly in cancer and even those that are big news for dermatology, it is not a proven, if you will. It is not designed to damage genetic material and be a carcinogen itself. It works by an entirely new mechanism, and it is going by a different delivery route. The current delivery is when you pour drugs in, 16 or 18 in a cocktail, it causes DNA damages, (inaudible), very poisonously going in a systemic way. As you will see today that this is going intra-lesionally to start with. Doesn’t mean we can’t use it later going systemically or IV, but right now to get it to market quickly, quick approval, and we will show you today that it does give systemic effect, even given intra-lesionally.

So the presentation today is quite different than others. So last time I spoke here, the whole presentation was very different. Well, the presentation is different from the normal when you might see and just to accommodate this absolute uniqueness of the drug and how it works.

So what is different in the presentation today? You are going to see a lot more science than normal. Because why, because it is so different, the mechanism is different. How it works, and I really want to impress you, we know how it works. And what is (inaudible) is I can build another drug like this at will. I can make other ones the target. Say for an indigent agent, lots of other things. You are going to see lots of pictures today. You are going to see the patients themselves in there. And you are going to see lots and lots of different tumors today, not just one, even though where it relates in the clinical trials, only one indication at the moment. We are very focused, but you are going to see the broad spectrum potential as well. And you are going to is the meds, you are going to see lots of different sites, different investigators, different tumors, and just to give you an idea of how broad a spectrum this really is.

We are traded on the Bulletin Board, fully diluted 80 million shares. The float is about 35 million. The thing that I really like to emphasize here is the burn rate. We keep it down, we are very stingy in how we use our funds and we are focused very, very heavily when we spend something on getting the drug to market. And so, we don’t do anything for show. If you want a fancy building, you do not want to come down and visit us. You will see a very functional building packed with millions of dollars of machinery and we spend the money on getting the product out to market at the fastest possible time rate.

We have a very experienced team. We are different and the key secret is, and that allowed us to actually do this, is our different discipline. Because I think the industry that I have a background in is regulatory affairs besides research and development, a manager in both those issues that I have a lot of other people taking more products to market with me, but you will never find one who has made a new law that often, that I have been a world first in changing law of regulations, and getting drugs out quickly, and particularly in the biotech sector.

Tim Scott came from the Oak Ridge National Laboratory. He has many patents, products out there, he has been involved with a huge contract in the past and he is an asset to the company besides being one of the co-inventors of the drug.

Eric Wachter is a tremendous chemist again. He has a rack of awards that are too numerous to mention, he runs our clinical trials program; and then Pete Culpepper, who was here with me last time, is a very, very experienced CFO. So we do have a tremendously experienced management team.

Now what is so different on what we are doing is on cancer, and the answer is that we are treating it exactly like it is infectious disease. Our most significant medicines in the world save most lives are two things, antibodies and vaccines. Antibodies do not carry, they hold the disease until the body's mechanisms can clear the infection. If we have tremendous immune system problems, antibodies may not save you, because you must have the natural help. And what do vaccines do? Vaccines stimulate the well-practiced 150 million year old evolution, if you believe that, very practiced defense system by just stimulating it. So our solutions work the same way in cancer. They don't crush the immune system defenses, they actually enhance them; and you will see that today.

So we have a suite of small molecules, and again as I try to tell you about the design, the more it will. Team has asked whether we could do something at the contract stages, I have called (inaudible) as well, those are not new and in 30 days we will get another patent. I guess it will work better if we went this way. But you don’t see big biotech things, vehicles on it, you don't see 160 killer molecular antibodies hanging out. We know how to make that small molecule, they target very specifically by itself, which makes it safe, stable, it is inexpensive and easy to make at large volumes, and it is well known, the first one we have chosen, it has a fast regulatory track, because the safety of the first molecule is known. But there are other speedy trials down here for modification of it in the various way more licensing, it would be very nice as a replacement in derm applications in the future, but we are always starting work on that. Those are not the only ones, there are others.

Now this was done at Harvard. (inaudible) method here. This was done elsewhere, the only thing to show you here, a mouse is sitting here asleep. This is human gallbladder tumor on the side there that we have circled. And you can see the drug, bright light into the tumor layer in that second panel, and we can see it has started into the tissue, and if you see down here, it is gone, but the drug is still targeted in the tumor, which is actually shrinking, the drug was killing it in there. This is something that we never talked about too much, the drug can be seen in the CAT scanner, it is radio-opaque. Therefore, it has diagnostic applications, but also makes it very nice when you put it in, you can see where the drug is, because it is very easily visualized by current techniques, current scanners that are already there.

So how does it work? Many of our drugs work by going into the dark center in this left hand, that is where the genetic material is. That dark central core is where the DNA is in there, and many of them say (inaudible) the genetic material and hence they are mutagens or carcinogens in their own right. In fact, many of our cancer drugs right now are terrific carcinogens by themselves. That is some of the worst.

And if you look in that next panel, you see bright glowing dots up around that area in that section. That's our drug growing. With flourescent white, we are visualizing it and those structures are called lysosomes. To just really explain this to you, that's (inaudible) of a cell, they are full of tremendous (inaudible) enzymes, and you can (inaudible) genetic material, our proteins, our carbohydrates, just like our food. If they get out, they will eat you and (inaudible) the cell. In fact, that's a mechanism to destroy a cell, how to commit suicide, or if you got a broken organ, how do you do it, you digest it. You give it to these lysosomes, you cut it up back to component materials.

So what this drug does is it goes right into those and you can see those bright burning dots, contrary to anything else you have seen before goes right into those lysosomes. And if you look at this bottom panel here, you can see those bright glowing dots again, the lysosomes (inaudible) and you see the time goes there two minutes, they are fading and disappearing. And the answer is the drug is making those lysosomes either weak or rupture. (inaudible) the cancer cell by itself leaves the normal cell right next to or totally alone, eats itself from the inside. It causes a self destruct sort of pathway. It hydrolizes itself. Technical word would be autophagy is probably the best way to say it.

So, what does it do moving things? Let's start with animals first. I'll switch to tumors here again. This is a human prostate cell tumor. It has been transplanted into this mouse. (inaudible) the day before, where you see that scab, that's actually our formation, you can see that overnight it's gone. And you can see where the drug is, now that is not on your skin, it is in your skin. It has migrated out of her, it's injected and the tumor is down her leg there.

(inaudible) you get to use one of the world’s most sensitive instruments there. You don’t need a microscope, a human eye is tremendously sensitive, and you go down in the next panel below and you can see the drug has left her leg and left the skin, and the only thing that got touched was that human prostrate tumor. It didn’t touch another thing in the normal tissue. Wait some more days and you can see a peeling up and we get a tremendous cosmetic result in the mouse here. It is really hard to even find where the wound was.

(inaudible) slide, this is one of my favorites. This is one of the very first patients that was ever treated. Her name was Ricky, there on the left. She was 3.5 year old German Shepherd. She had a big, huge fibrous (inaudible) carcoma up in her sinus. Eight months before the vets at the University of Tennessee, they had treated her with a nearly lifetime dose of radiation and did $10,000 worth of surgery, all to her jaw. And when we started was nine months later. And if you don’t know many of our current techniques, if you miss, if you don’t get a cure, the tumor comes back worse. And (inaudible) are growing faster, they are multi-drug resistance. The techniques that we use now, if you don’t get a kill, it is worse the second time around. And we got a look at the histopath in her tumor that was awful and the oncologist just told the owner (inaudible) to take the dog home to die.

She was brought in and we happened to run into her at the vet school and we said, why don’t we take a chance on this dog, even though she is so far advanced. And we made the tumor go away, I don’t know why don't I have the slide of it (inaudible) not know in there and the oncologist said, this has got to be too good to be true. Nothing works this way. And we've (inaudible) when she got discharged and said, get another dog, just in case. So I would still like to pull the slide out and show this was 3.5 years later. That’s her on the left and that is the other dog on the right, the replacement. That was probably the very first spontaneous tumor patient; it fact, it was, it was not a laboratory animal. We did a number of these.

So what we have here is very different than a very specific drug or (inaudible) very limited subset of tumors. This is very, very similar to a broad spectrum antibody, like ampicillin, that has a very wide spectrum of kill on bacteria, but does nothing to the host. I mean as you can see here, this tremendous list, there is a whole list of models that we have gone down there on the top there (inaudible) on these mice, children, all the way down this list.

In fact, the list is incomplete, but we also did something else. We thought Ricky that you saw, if this was going to jump into humans, it has got to work on spontaneous tumors in veterinary patients too. So the full (inaudible) to humans needed quite a number of spontaneous tumors like Ricky and (inaudible) animals and so we have done melanomas in horses, squamous epithelial in cats, bladder tumors, mast cell leukemias have been done, murine spontaneous breast and papilomas, there is one we will show you now that has been used in humans.

Now, this drug is going in a very different route. It is being injected into the tumor right now. Doesn’t mean it can’t go systemically later, but right now, this is the way it is going in for maximum impact. And this little girl's got it first, she has got an intact immune system as she is sleeping there. If you look at the left hand panel, there is a tumor up there, and look very carefully, I have changed tumors again, this is a hepatocellular carcinoma. We have switched tumors again, and just about every slide I show you, it'll give you an idea of how broad spectrum this is, I am going to change tumors.

Now if you want to see 300 or 400 of these (inaudible), I will send you disks, if you want to know, that that is not the animal. But, it would be very boring if we did that. As you can actually see here, the tumor is going and getting a scab on it in there. But if you look in the bottom left hand corner, there is another tumor in the right side we didn’t treat. (inaudible) both tumors go away including an untreated one, because we had 100% in the animals. And how it works, it has something to do with the immune system. The animal data says very specifically it has something to do with the immune system. There may be other mechanisms we don’t know yet, but if you take those mice with no fur immune defecience good mice and try and do this phenomena, it doesn’t happen at all.

The mouse does not have a working anti-cancer immunity just like my anti-bacterial analogy and (inaudible) that to work, that to work, it has got to have the natural system. Working just seems to enhance it. You can transplant the system, you can take an animal, get a tumor in him, take out immune cells from your spleen, move it to another animal and it goes with the immune system. So all the data we have right now in these (inaudible) this has something to do with stimulating and trading anti-tumor immunity.

Another patient here, and this is a 15 year old I believe, (inaudible) she’s very old. She was a veterinarian’s dog out in (inaudible), came to us three years ago. She has about – she has mast cell tumors on her. And the veterinarian, as you can see, injected for. He has got her dragged all over the place in here. And a month or two later he calls us up and said, did you expect all the rest of the tumors untreated to go away, we had never published the data you have mentioned here shown it before, and I thank (inaudible) and I said, you've done the first spontaneous tumor to demonstrate that.

We shot four of them and the rest of the tumor shrunk down and disappeared in these. She was so old, the veterinarian and owner of the dog did not get a (inaudible) on her. Figured she would die in an anesthesia. Of course (inaudible) radiation or chemotherapy, she is a very old dog. And all the tumors disappeared and she went another two or three years (inaudible) with hip problems and was cancer-free.

Now, let’s go higher primates, humans. This patient was down in Australia. He has got melanomas and he has been treated tremendous things with radiation (inaudible) surgery, and just about everything. He’s got a very high number of tumors on that. And if you look at (inaudible) you can see there are tumors (inaudible) going down in his cheek and face. We are also (inaudible) you look at this panel through the middle far right of you, you will see that black spot around his neck. There is another one down there that’s not in the protocol and there are others in his neck. So there were no tumors. And exactly one, in that upper left hand panel was treated by Dr. Heresy. And look at that – remarkably, it looks like the results are in the mouth. We see there is tumor (inaudible) it ran down deep into his chest, the red color didn’t hurt that tissue. Just like the mices you get it down to the (inaudible) made a whole where the tumor was (inaudible) left everything surrounded with this new tumor alone and (inaudible) tremendous cosmetic effect in there. It is almost hard to see here the tumor was. Treated exactly one. And all the others, as you can see in this graph here, those other remote tumors, over time disappeared also just like the immunocompetent mice, exactly in humans.

Now it’s a little dissimilar, easier to see than the ones in that patient. You can see these are lesions we are treating, disappearing, both the top and bottom panels going away with intralesional injections. These are some untreated lesions like we were looking at in the mice. You can see the top one didn’t go away, but it stopped growing. This is a good effect. And you can see the smaller one below without being treated disappeared just like the mice, exactly, with immune system.

This is a Phase 1 patient and we are now deep – about half-way point in Phase 2 and this one whose physician said he has never seen the treatment that (inaudible) the patient regular introduce good results like in this patient here. As you can see on the website in there it was done in “The 7:30 Report” very similar to 60 Minutes in Australia and he says I’ve never seen that before and that’s a Phase 2 patient.

As you can see in Phase 1 that complete response 20% partial and 20 got disease controlled, up to 75%, and 25% disease progressed. The bystander’s response is highly correlated to (inaudible) control of the tumor route injected, we got eight out of them in there and eight of those eight we saw a bystander effect. In some (inaudible) shrinking after we outside the protocol in there. And again they are absolutely minimal side effects.

However, we do have survival data. And as you can see here, in the top line are the patients there that has survived in 29.7 months. I am hoping that Dr. Thompson, who is speaking at the end of this week that he updates this, because the patients will be – a number of more months in. But you can see the bottom line really don’t get controlled, how different the response is. Very highly statistically significant. And one thing a lot of people don’t understand here is that this (inaudible) watching the rejecting response rate what this data tremendously says is that the (inaudible) endpoint predicts life span extension. And that’s very significant in going to asking for accelerated approval. If I was the one doing that not the clinical trials that has piece of data I really want to show I have my (inaudible) to FDA and says our surrogates predict survival. And (inaudible) number has gone up some number of months with those patients who are still here.

That’s very difficult and (inaudible) anything else that’s out there (inaudible) trials are different as they are not being done side-by-side, different drugs, different techniques, different patient groups. It’s hard to line them up side-by-side. However, you can look at the (inaudible) yourself and get a rough idea and look at ours medium survival time and there is out in the 30 months range roughly out there. I believe six out of eight of those eight patients still in here. And you can look at the p value number out there is already out 0.001. And the one thing in biology, if you state the deviations of 0.05 is considered good, you can see that already we are way out there on statistical significance as predictability value, and that will get better.

And so again, just to reinforce how this is combined, the drug is photoactive. And we are using it that way and dermatology and again so we switched tumors here. Again – I mean this time we are going to use light, which we don’t need to (inaudible) the drugs. (inaudible) give a little (inaudible) Tim might (inaudible) just fine. And so wait until the next day. I mean this time use the laser. The drug was given systemically, like I told you it can be given systemically. In this case we used a green light activated. Looks like it happened again. Similar results. (inaudible) tumor. Can't even see where it is by panel day. So even if I use it as a photoactive agent, use the drug systemically with the right timings, you won't touch normal tissue, you get only decreased to reinforce that.

So, as part of that – we don’t have time today to go here into dermatology, but we are in Phase 2 trial both for atopic dermatisis and psoriasis. We are using it as the light activated drug. The drug’s been diluted tremendously in a different carrier (inaudible). It is 0.001 I believe. And been used a PVT [ph] agent to treat psoriasis and atopic dermatisis.

So, the way we are at, finished two trials, our melanoma and psoriasis and atopic dermatitis are continuing. I hope (inaudible) half way point here and as you see some extended data, Dr. Thompson will speak later in the week at the COSA meeting and (inaudible) who is the world authority in melanoma to speak first. He is physician (inaudible) so hope you will be seeing even interesting things like life span data and more interesting data and hopefully some more stuff out of the Phase 2 and Phase 3.

We have finished our Phase 1 breast cancer – Phase 1 trial and now currently debating how we are going to go forward with that, what we are going to do. We are currently working on getting the protocols in place to start into metastatic decrease in liver patients. And will then continue our expansion of our patent portfolio and again continue to make corporate changes as the Company continues to grow.

And I certainly appreciate your kind attention.

Question-and-Answer Session

Unidentified Participant


Craig Dees

And you can look at on our website if you have anything and see what the people saying is in there, what the world of (inaudible) is saying about this. And as Phase 2 – again, I hope you hear a lot of it and you will hear from Dr. Thompson later in the week. And again I thank you.

Unidentified Participant

Thank you. So, I think everyone knows the management will be sticking around for 40 minutes or longer for additional questions during the break out session. Thank you.

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