Provectus Pharmaceuticals, Inc. Wall Street Analyst Forum Presentation Transcript

Provectus Pharmaceuticals Inc. (PVCT)

Wall Street Analyst Forum

September 10, 2008 11:50 am ET

Executives

Craig Dees - CEO

Peter Culpepper - CFO

Presentation

Moderator

Good morning, ladies and gentlemen. In our ongoing attempt to adhere to the published schedule as much for the analysts that are here, as for the investors who access the webcast from wherever they maybe, Boston, London, New York, Chicago or the building across the street, I would like to introduce the next company in this program.

As I have alluded to earlier in the day, the webcast are live. They are also retrievable for 30 days. It is both the audio portion of the presentation as well as the PowerPoint part of the presentation.

We also use a firm called seekingalpha.com. They are actually from Israel. They tap into the webcast. They do a transcript of the presentation and the Q&A session, and those are web-searchable on the major financial portals like Google Finance.

So, if some investor from anywhere in the world takes a couple of hours to do it, but say six hours from now looks up for this company on Google Finance under Beijing, China, they will have a transcript of this presentation, including what I am saying right now, word-for-word. I can go back and see that word-for-word in six hours from anywhere in the world.

Some investors find that actually more helpful than the webcast. 40 minutes is a long time to hang on for a webcast whereas you can all tend to get everything you need in 5.5 minutes by going through the key points of the transcript and having that that way. So, it is one more distribution channel for us, using the major financial portals of Google Finance, Yahoo! Finance, AOL Finance, MSN Money and the rest; arguably in some cases more effective than the webcast, because it is so easily accessible.

In any case, I would like to introduce the next company in this morning's program. Provectus Pharmaceuticals is a development stage company that specializes in development of oncology and dermatology therapies that are safer, more effective, less invasive and more economical than conventional therapies. Provectus is currently conducting Phase 2 clinical trials of their proprietary drugs, PV-10, as a therapy for metastatic melanoma and PH-10 as topical treatment for psoriasis and atopic dermatitis.

Information about these and the company's other clinical trials can be found at the NIH Registry, clincaltrials.gov.

The company has received orphan drug designation from the FDA for its melanoma indication. Complementing their suite of proprietary drugs, Provectus has developed a number of intellectual properties and technologies in the areas of imaging, medical devices and biotechnology.

Without any further introduction, I would like to introduce Craig Dees, Chief Executive Officer of the company. He is accompanied by Peter Culpepper, Chief Financial Officer.

Craig Dees

Certainly happy to be here today.

There was a world famous scientist. He was internationally known, tremendous discoveries. One day, they asked him what is his biggest discovery. I must say I was very surprised, he says my research has been Michael Faraday. I have got hundreds of patents, so do my co-partners but some of the biggest discoveries ever made is sitting next to me here, my CFO and my two partners, Eric Wachter and Tim Scott. They are a very much the greatest findings yet, because what you are going to see today without them is not possible.

So what are we? We are going to use some of the most advanced technologies today to show you something like, I think if you say, do not go home using words miraculous, outstanding, I would not have done my job well. So, we are product scientists. It has to be proactive or it has to be protectable. It has to get through regulatory bars, and it has to be economically feasible.

So, we are product scientists, if you will. We make practical products from some of the most revolutionary high tech things that you have ever seen. We are targeting major underserved markets to start with. We have then went backwards, if you will, before we, in some cases, actually sat down and invented something, we would say what is the biggest problem in getting a drug to market. It is always a regulatory hurdle. There is a lot of cost and effort there. So, we sit down and advance, if you will, how we are going to minimize this, time to revenue, right over the box.

We always want superior performance and safety, and I am not talking 20% better. We want orders of magnitude. Not being satisfied with that, I want it to be as inexpensive as I could make it and superior safety. You saw it today. You are not going to see me say, it is something 20% down or is there is a 20% reduction in tumor volume. I am going to show you actually of what the picture is going to address. So, when I look at something, it is very easy to see. So, the cancer is there, and now it is gone, not some reduction in tumor volume.

To introduce us just a little, we are a Nevada Corp on the Bulletin Board. The total shares outstanding around 51 million; and fully diluted, something around 80 million, close to about 32 million. Look at our burn rate. We have chosen to do things in a way to keep our number of employees down, use contractors to keep our burn rate down, as low as we can possibly get it, and still get to the goals as fast as we can.

We do nothing for show. If you want a big fancy building, tinted windows and carpet, you are looking at the wrong company. We take investors and shareholders mainly after that goes into the clinical trial. As we need it, we can get it done. We have about 4.8 million on hand, but against our burn rate that takes us over about a year. So, what are we doing?

In a big general concept, we are treating cancer like it is an infectious disease. So, that is our biggest blockbusters in medicine. Outside of sanitation and saving lives, there are antibiotics and our vaccines. Alright; just what do they do? They take advantage of things that have taken 150 million years of evolution to make their Mother Nature a very practice of doing that. Antibiotics do not cure anyone generally. They hold the infection until the natural systems can not take it.

Our vaccines, what do they do? They are just enhancing a system that is already in there. Generally, you can not make vaccines or something that Mother Nature does not already know how to do it and in there. So, that is what we are doing. There are solutions actually enhancing natural cancer defenses, use them very vaccine-like or not a vaccine. They are a suite of small molecules. What is the big problem with cancer is seeing that several times a day, what the problem with our therapies?

The answer is they do not target the disease specifically. They are broad spectrum. They kill just about everything equally in our current therapy. Now, the world is changing as you saw several of the other companies this morning, trying to get them very targeted very specifically. Many of these targeting solutions are awkward to put it that way. They are either using big monoclonals and other things and capsulation.

What we know how to do is make a stable small tiny suite of molecules that are very safe and stable. They are inexpensive and easy to make at large volumes and have it in a suite once they have a very fast regulatory track. Because getting things to the FDA, they are very concerned with safety, first and foremost of all. So, if you ever approach the FDA, and I have been a regulatory Affairs Officers, you want to be able to say safe to them and first and foremost.

So, the first molecules on the top on the slide here is an old molecule. It is known in stages, been in humans for over 50 years. It is been used as a diagnostic. I have never seen in any of the literature any sort of the thing that is [compliant] with it, no one is safe if you will. It is not the only molecule. We have a whole suite of these. You can see PV-12 here on the bottom. There are a numbers of others, and those are just there to show you that we know how this works.

I am going to do something quite different in the talk today. I am going to show you a probably more science than I normally would. The answer is: one, you are going to go, that is got to be too good to be true. So, I am going to show you how it works, that it is not mysterious. We know what it does, why it does. Then we can build a new drug at will like this one at the bottom, because we know why and what it does.

So targeting. This is actually done at the Harvard. There is a little girl (inaudible) sitting here, and the scientist there has put a human gall bladder tumor in her side. You can see the drug under the CAT scanner for records, it was (inaudible) that tumor up on her left flank there. You can see a lot of the drug that is aggravated that in the tissue. In a week, six days later, you can see the tumor has actually shrunk. It is being killed. The drug is actually concentrating. It is clear that of the normal tissue, and it did not touch anything else.

So why does it do this? How does it kill these tumors? A lot of the drugs we use these days are poisons. They are horrific carcinogen. I used to work for the US Government National Laboratory, and I was head of the Molecular Tox program. What was my job there? It was what causes cancer in Americans. We had a very large project. It is implies that this cell phone causes cancer.

When you test something as a scientist, you have to have what is called a positive control. You always have to have something that causes cancer. What you see here, microscopes working, or in this case, you are using animals sleeping on the cell phone. You have to have ones that are not sleeping on the cell phone and ones that cause cancer in the mice.

So, people asked me and say what did you use when you did these studies to see whether cell phones cause cancer? Your positive control, did I use DDT, dioxin? No I did not, I used the anti-cancer drugs. I used 5-fluorouracil because they are the best cancer companies around. They do in mice and active in mice and D in there and that is really what is wrong. So they are poisons, they are carcinogens. What you are going to see today in this molecule works very differently. If you are looking at left hand panel there, that is a cancer cell.

There is a microscope and you can see that dark hollow in the center there and that is the nucleus for the genetic materials. That glowing stuff you see on the outside is our drug, which is going under the light there. You can see it does not even go into the nucleus, where the genetic material is not located. Therefore it is not [tetrigin], encountering worst effects. It is not a cancer cargo like most of our other compounds. It is not toxic.

So how does it get to kill these cells? Well the answer is, it really do not knows, which is an interesting thing. You see those glowing dark around that [heal] over that fellow there to the top left, those are called lysosomes. So what is a lysosomes? The way to think about it is a stemic of a cell, they have tremendous degradative enzymes inside those lysosomes and is very accurate, PH-4 it will dissolve pennies in there.

Now we are what we eat, our genetic material, our fats and oils and proteins are not different from our food served, things that break them down. If you let those bad boys and girls out of those lysosomes, they will eat you just non-specifically. So they are all pinned up in there at this tremendous acid environment.

What our drug does it partitions is the word, but it moves out of these sailing ocean [modern] environment we have surrounded ourselves, goes into the cell and goes, you can see those glowing darks, they are glowing because our drugs in them, and that is what they go into.

Now if you look at this series here. What happens, if you look at this bottom panel in here, that you can see those glowing darks again, and that is called the lyso-center, it is a marker to see these in there. Here we made, this is a beautiful elegant microscopy by Dr. Eric Wachter, and we put that sensor in thinking what if these cancer cells die and it is not very dramatic.

As we go through the series you can see. What you see here, what goes away first with just in minutes, as our drug goes into there, is those lysosomes, these are lead for ruptures. So these terrible degradative enzymes are out within the cell, and it does it only to the cancer cells. It only penetrates the disease cell. It does not touch normal cells sitting right next to it and these little stemics rupture if you will and the cell eats itself, called autophagy, self eating.

In other words, it is a type of apoptosis, a type of suicide mechanism which we have tripped the cancer cell into literally dissolving itself from the inside. A very natural death, if you will and not a toxic where you damage the neurogenic [material], you poison some metabolic pathways. You could literally order the cell to dissolve itself with these degradative pathways.

So how does this work in a living system? Note this girl (inaudible), a red scab you can see on her left flank there, is where a human prostrate tumor used to be the day before. I have shot her about 18 hours and you can see the tumor is already gone. Now the drug is very bright red. You can see it all down to the left flank, down on her tail, down her leg. That is not on the skin, it is in it. You can see there is not anything going wrong with the side of her.

You wait a little bit longer and you can see the wound where the tumor is, is already healing up. You can see the drug is missing from the normal tissues. There is no damage to her leg or a tail or a flank. It touched one thing, it touched the tumor and killed it in his [mouth] overnight, it did. It is touching none of the normal tissues at all, even though you can see the red drug is very easy to see. One of the best things ever designed in the universe, the human eye and so you can look at yourself and see it did not touch her.

You wait a little bit longer and you can see the wound is resolving and you almost can not see where the tumor ever was, you have to look very closely. We could have done this in, it works for 100% of the time and since there is no side effect, years and years ago, it was used on one of our first actual patient was a 3.5 year old German shepherd, down the University of Tennessee Vet School. She had a recurrent tumor in her [side].

I remember the owner asking the Veterinarian Oncologists, well what if it does not work. He says well there is no side effect, see says I will show you as many times as it takes. That is very different with our current things. I had a Vice President of one of the biggest drugs companies, I used to work for him on the smaller company, and his wife had about a golf ball sized breast metastasis in her liver.

He calls me and he says, she does not have anymore white cells, her white cells were zero, and he says is that possible. I said yes, the 5-fluorouracil has killed her immune system, better then its killing the tumor and they had to stop treating her. Where as you can see this is a very different, no side effects, minimal, if you have to shoot him again and again.

In the last model that I will show you here, they have only shot him once. The beautiful thing about this, what you are seeing is what appears and very much looks like a broad spectrum antibody for cancer. We have never found in the models or in the animal patients and not in human as we are starting to move into those, a tumor that it does not work on.

This mechanism is very different. You do not have to have increased receptors. You can see this list of models at the top here, human breast cancers prostate. I showed you one basal cell in skin. I really like the bottom one here that there is a group in New York that sent an oncologist down from here to Tennessee to do due diligence on us. He said it will never work on multi-drug resistant cancers.

As you can see there, it killed a 100% of them. I, who have a sense of humor, tried to get him before I ran the study to bet his house in mainline (inaudible). Too bad, he did not take it, I have had some Northern property. I told him it would work on these. Also what we had done previously was on spontaneous tumors.

In other words, not just the models, we had taken it out, does it work on spontaneous tumors in horses, patients? Does it work on tumors in cat, patients again? Does it work on history of sarcomas? That is working in there that is done in (inaudible) in there. It is working on spontaneous breast and papillomas or mice. Now, we have moved into higher primates, if you will.

Now, as you can see through this point, the targeting appears to be almost absolute. It just does not touch normal things. Dr. Hersey has shown, presented at The Netherlands about a year or so ago where two cells side-by-side, a cancer one and a normal cell, killed the cancer cell leads (inaudible) alone. I just showed you in a living thing doing the same thing. If that was not enough, this thing also does what you have to be able to get tumor systemic effect.

And as I said, this thing works very much like a vaccine or immunotherapy, even though it is a little small molecule. And if you look at our website at pvct.com, you will see a patient in there and he calls it a vaccine. He is confused. And no, it acts like a vaccine, but it is a little small molecule drug. And I will show that to you, here what we call the (inaudible).

Now, again, if you wanted to work like an infectious disease or a vaccine, you want to bring on natural systems that are very practiced and very specific and tremendously potent to fighting cancer. You want them on your side. You do not want to be poisoned to death with 5-fluorouracil and other drugs or radiation. You want them to helping you.

Now, this little girl sleeping here in the other left hand panel here, you have to have them sleep. They really do not like their picture taken. She will smoke down the bench when she wakes up. You can see she has got a tumor, and this is a hepatocellular carcinoma. You noticed I have switched tumors on you again, showing you the broad spectrum about (inaudible) I will switch tumors, switch sites where they were done, whether I did one, whether Harvey did one, wherever it was done. This shows you the utility of this. It is just not something that happens in our hand.

She has a tumor in each side. You can see she has got circles here, that one putting a scab on it growing necrotic, then she has an untreated tumor on her other side. If you wait and watch, all the tumors go away. This mouth has a functioning immune system. So, the 100% of the tumors in the mice, if we inject and kill one, all of them go away 100%.

It is bringing on the natural health just like a vaccine or an immunotherapy with a small molecule. That is exactly opposite. I know of no study in the entire literature in the world that is ever been reported when you can shoot a single tumor like that, not a systemic injection of a drug and get that effect. I have never been able to find one, so that you can do that.

Now, here is an interesting one to you. I told you that patients were done, and this is a little small County vet in Tennessee. This is a veterinarian dog, and she is a 15-year old Golden Retriever. She is about the equivalent of the 2000-year old human, and she has about 30 of these mass cell tumors on her. You can see our bright red drug is injected on big huge tumors on her and shot exactly four of them, did not treat the rest of them.

About that point, he calls me and says, Craig, did you expect all the other tumors to go away too that I did not treat? I laughed. I said (inaudible) thank you, you have got the first patient ever in a [xenoreactive] dog. The veterinarian that owned this dog called the same day. It is a rather humorous incident. She said, (inaudible), she was hurting my vet practice. She is so old, I did not dare to surge her. I am going to kill her with the anesthesia.

If I used chemotherapy or radiation, I would kill her. She said it was hurting my vet practice. Everybody thought of being (inaudible) by old dog. She says she is walking around now, does not have any tumors on her. So, thank you, Dr. Dees, for the drug on the dog. She lived several of years longer. She was a very old Retriever.

Only graph I am going to show you and in the pictures, but this revolution countered all tumors in the animal, the primary tumor. I get the last slide tumor, as you can see on the graph, I get 100% of the other side tumors in the animals that have an immune system. It does not work at all if the mouse's immune system, like those new ones I showed you, has been knocked out.

So, all the data we have points very much, this is the immune system is what is being brought on board here in the animals that how this works.

Let us get to what we are all interested in, humans. This is Dr. Heresy's patient done in Australia. As you can see up in the upper right hand panel, he has cancers everywhere. If you go in to our website, Dr. Thompson, who is one of the lead investigators talked about these patients, and we did not know what to do with this patient. We had tried everything. He had been given radiation, everything else previously, and so we tried to put him in the trial with our stuff.

As you can see there are tumors all over. This patient, if you look down in this last time, you can see a black one in his neck. They are outside the trial parameters, but he is got his neck full of tumors too. So they treated exactly once. Up in here it was pressing on a nerve, you can see this patient talking on our website in there, instead of getting where it could not be and they shot that one tumor. That sure looks like that mouth does not it. That is not [uncertain] again it is out in the tissue.

You can see in this patient's lymph system, and you take it all the way down his chest. We have had another and it looks like these two carried out of a head and neck tumor. As you can see the (inaudible) on the left hand panels there, that tumor starts to get a scab [ash] on it, very similar as the mice. They go where the tumor was, did not damage the nerve it was pressing on, heals up in that lower panel there, tremendous cosmetic results.

I have heard oncologists talking about it, they did not have it this close, that was done by itself, no it closes very naturally and nice. This graph on the right hand side here is just like that dog I showed you, is the other untreated tumor going away without being treated, treated exactly once at one shot.

So they disappeared overtime, just about almost in the same timeframe as it does in the spontaneous tumors in animals very similarly and including the ones that are outside the clinical trial protocol, I have been told in his neck. That is decent ones that are easier to see, here are some treated lesions, its the 9th patient in there, as you can see the top one was treated similarly goes away.

Down here same thing another lesion going away. So does this bystander affect work in humans, and the answer is yes. Here in the patient where we had treated another tumor and these are very large bystander lesions. You can see the top one did not go away, but it just stopped growing; disease control, stable disease. As you can see in the bottom here, the smaller one is completely gone.

So does that what we have seen is demonstrated in animal patients and experimental models work in humans? Yes it did. That was the Phase I patient. If you can go in to our website again, there was just a large feature on Australian TV, a 60 minutes slide presentation and they have one of our Phase II patients in there. Now this patient is, what we had was reoccurring melanomas in his arm. As I hear Dr. [Thompson] say, that I was getting (inaudible) take a good chunk of his arm off, and it says right behind it was not going to work anyway, if I did that. So he treated him with our drug. As Dr. [Irwin] says, I have never seen the treatment in a group of patients that regularly produce good results, like seeing internally, I have never seen that before. That is what you are seeing in the trails reproducing.

So what does the Phase I results look like roughly of the dose tumor. The first two categories, their complete response and partials, add up to 40% to 50%. Those partials actually, we did not know how long to watch these patients when they first went in the Phase 1. So we chose 12 weeks. It turned out to be too short. So they are going very much just like the animals, the spontaneous tumors take longer.

They go on to resolve for the 12 months. At 12 weeks we had to call them partials, stable disease another 35 represents, 25 is going to be a very late stage returned patients. We did not get a good response, but the adjusted response rate was 40 in there, with disease control up around 75%. The bystander very much corresponds like our animal data, you get control of the disease as targets are leaving, you will get a 100%; 8 out of 8, and you will see this bystander effect.

As a sense down there a number of these tumors were still shrinking after 12 weeks. Side effects are absolutely minimal. The drug is photoactive, and we have seen in one patient that there has been what looked like a little sun burn on them. I remember the surgeon called me and said what you think that is? I said one of your patient's gone to the beach, means you have the sense of humor.

He said he did not know the patient stayed [eight] hours in the sun in their garden though, which they should not done under protocol and should have stayed out of the sun. We have had one other angry response in a lady and its out in the public papers and you can see it in her and Dr. Thompson's response. She has a huge melanoma on her and she got a very large dose, went four hours out in sunshine did not feel so well, whereas she suppose to. She then came back with another four hours in the sun, and they had to put her in the intensive care unit for a little while. If you look at Dr. Thompson's got the whole series on there and you can see this huge tumor disappears and goes away and you can see here smiling and laughing in the last slide. So that is the net result, but that was a breach of protocol.

So what we do now to fix that is, we do not let them go out into the sun and make them stay in a little bit, and so they can not disobey the protocol. That was easily fixed for that going in there. That is really your responses that you see. We are doing dermatology too; I am not going to talk about it really today it is in Phase II trials.

We are currently awaiting increased dosing protocol from the IRB in psoriasis. We have treated our first atopic dermatitis patients. I can tell you it is a (inaudible) with excellent result. Again, that could be just a (inaudible) from what I am hearing from out there.

Again, what is different about using our drug on these diseases? The exact same thing is wrong with how we are treating these chronic diseases. The drugs we are using that are being injected systemically are systemic immunosuppressants. So, you get a big huge box of adverse side effects, one of which is getting cancer, because what you are knocking out, you are knocking the anti-cancer defenses out, not specifically with those drugs and going systemically.

This drug put it [on topically]. It does not go systemically, even the space that it is. I do not care how good the drug it is and (inaudible) tremendous on its focus. I mean diversely only focused on disease tissue. If you do not have to (inaudible) perfectly healthy kidney, do not (inaudible) perfectly healthy kidney with an IV injection. Plus, it will be much more efficacious if you put it right on the site, just like what we are doing.

So, this goes on topically. We are using light activated. This drug is diluted tremendously in there. So, again, you really have no side effects and get increased efficacy.

So, again, in Phase 2 trials for psoriasis and in Phase 2 for atopic dermatitis, there is a tremendous bigger market risk, as I have done in several scientific talks. It will kill the bacteria that we are so scared of MRSA, methicillin resistant staphylococcus aureus with just even the darkened room light in here will take 10 to 8 of them down in just less than a second to zero. The drug will just absolutely slaughter those organisms.

[Kind of Niaspan], having build drugs before and staffing, one of the worst things that can happen to you is during production run that human hair, skin gets often there, contaminates your drug. One that is self-sterilizing is interesting, a bit different.

So, our Phase 2 trials are continuing in melanoma, psoriasis and atopic dermatitis. We are adding on new sites from melanoma, attempted to pick up speed. They are being done with the greatest thought leaders in the area. With Dr. Thompson, we recently announced and very happy to announce again that it is now with my neighbors. It is here in the United States at M.D. Anderson under Dr. Ralph, and trials are continuing there. We are hoping and working on very diligently to open new U.S. sites and more foreign sites that we hope to announce in the near future.

Our breast cancer study done in New Zealand is a very different type study. It is really closer to a safety study. We are really making decisions how we go forward in that or how we do that. We just recently expanded our patent portfolio and continuing to do so. We just added changing our corporate governance too on the Board that we have added Dr. Kelly McMasters who is a tremendous scientist and MD in melanoma, very knowledgeable in the U.S. licensing process. I am very glad to have him on Board with us.

So, as you can see what Dr. McMaster said, he called it extraordinary. Seeing from the company, I would have never dared to say that. As you can see, Dr. Thompson is just [closing] forward, and this was what the coordinator of the meeting said; he called it groundbreaking and said it was not to be missed. As you can see that as Dr. [Erin] said, who is actually treating patients that it has being nothing like that. It does this consistently.

I put to you that the local reason to controlling melanoma, there is nothing out there, there is tons of treatment. If you can get someone to say that they really work, you have really done something. As you can see in our trials in these patients, it is working very consistently and with virtually no side effects similar to the animals.

Thank you for your kind attention.

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