Seeking Alpha
Healthcare, event-driven, long/short equity, newsletter provider
Profile| Send Message|
( followers)

Summary

  • Provectus is an emerging, but contentious stock within the biopharmaceutical industry.
  • With accusations of stock promoting and "pump and dump" qualities, it is important to gain more insight from management concerning whether these allegations hold merit.
  • In order to attempt to do so, I reached out to CFO/COO Peter Culpepper, and Dr. Eric Wachter, CTO of Provectus.

I recently conducted an email interview with Chief Financial Officer and Chief Operations Officer, Peter Culpepper, and Chief Technology Officer, Dr. Eric Wachter, of Provectus Pharmaceuticals (NYSEMKT:PVCT). The company operates within the biopharmaceutical industry, has roughly a $103 million market cap and is listed on the NYSE MKT. Following are excerpts from the interview:

In layman's terms, could you tell us what Provectus is all about?

CFO/COO Culpepper: Provectus is developing an investigational drug to treat different cancers, and also one to treat different skin diseases.

Could you give a technical explanation?

CTO Wachter: The investigational drug PV-10 is a small molecule chemoablative agent adapted for intralesional injection into solid tumors. Upon injection, it elicits rapid destruction (< 24 hrs) of the tumor. Emerging nonclinical and clinical immunology data indicate that this ablative process can boost cytotoxic CD8+ and other T cells in peripheral blood that may play a role in regression of uninjected tumors. In multiple clinical trials in melanoma, such ablation has shown a strong correlation with regression of uninjected tumors (the so called "bystander effect"). This immunologic response may have value in combinatorial strategies with checkpoint protein inhibitors such as ipilimumab, where it may assist in priming the immune system. PV-10 has completed Phase II testing as a monotherapy for melanoma, and Phase III testing will commence later this year. It is also undergoing Phase I study for percutaneous injection into hepatic tumors (including hepatocellular carcinoma and other tumor types metastatic to the liver).

The investigational drug PH-10 is a topical small molecule agent adapted for application to the skin. It has undergone Phase II testing in patients with atopic dermatitis (eczema) and psoriasis. The clinical features suggest a possible immunomodulatory effect that will be the subject of a mechanism of action study commencing later this year.

Is there any aspect of your business operations that is being overlooked by Wall Street?

CFO/COO Culpepper (remainder of interview): Yes, we have still not been accepted by Wall Street as a relevant clinical-stage development company.

With only four institutions currently invested in Provectus, awareness of the company is pretty low. Do you have any specific plans to increase awareness?

Yes, we plan to use new current and forthcoming data to discuss Provectus' value proposition going forward.

Could you please elaborate on Provectus' risk profile? Granted, it is a clinical-stage company, but is the risk diversified?

Yes, the risk is diversified, since we are developing investigational drugs in two different therapeutic areas, and in various types of diseases within those therapeutic areas. Plus, we have a platform of compounds in the same class of agents that can be used to treat diseases in those different therapeutic areas.

Do you believe Provectus is receiving proper media coverage, and do you think the investor community is optimally aware of the company's current developments and future prospects?

We are not receiving proper media coverage because we have not yet begun Phase III for our lead cancer indication.

What makes Provectus a compelling stock to buy or sell?

Provectus is a compelling stock to buy, since we are undervalued in the market.

What is the next potential value-driving catalyst that investors can broadly expect?

The next potential value-driving catalysts include a license transaction of our cancer agent in both India and China, and also a potential co-development agreement for our cancer agent used in combination with one or more checkpoint protein inhibitors.

Provectus' stock price has declined rapidly, following some recent unexpected events. Investors want to know management's perspective on its lackluster stock performance, as well as Provectus' future prospects?

Management knows the value of its unique drugs to treat cancers and skin diseases. Management is confident that forthcoming data will enable the FDA to approve its drugs and even achieve blockbuster status.

Recent Seeking Alpha articles have consistently bashed management with accusations of stock promoting, inadequate facilities for clinical development, etc. While management already rebuked these claims, do you have any substance you would like to add?

Management has continued to buy its own stock, and has not sold even one share.

A lot of retail investors perceive PVCT as a "pump and dump" stock. Given the stock has plummeted and nearly lost all of its value, why should anyone perceive PVCT as a viable biotech investment?

Provectus has external validation of its approach to treat cancer by the FDA and also by the Moffitt Cancer Center. The company does not need to rely on its own statements.

What is the adequacy of your funding relative to your goals?

Provectus has adequate cash to enable read-out of pivotal randomized data.

What is your current financial position?

Provectus has approximately $19 million in cash on hand.

Given the burn rate, will R&D necessitate a return to the capital market for additional cash raises?

Provectus has adequate cash to fund existing programs to generate data without accessing the capital markets.

What makes Provectus a compelling stock to buy or sell?

Provectus is a compelling stock to buy, because it is undervalued based on comparable companies and for a company with an investigational drug entering Phase III randomized controlled trial.

Who are Provectus' emerging competitors (if any), and what differentiates Provectus' products from others on the market or in clinical development?

At this time, Provectus has no notable competitors, because its products have unique mechanisms of action.

Is there anything else you would like our readers to know about Provectus?

Provectus has an illustrious group of strategic advisory board members comprising executives from Pfizer, Sanofi, Bayer and Boehringer Ingelheim, as well as a combination patent application with Pfizer.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Source: Provectus Management Responds To Accusations