i.am.a.pvct.inv...'s  Instablog

Taken From Connecting The Dots...Provectus Pharmaceuticals (April 26, 2013).

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

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

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

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

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

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

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

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

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

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

Disclosure: I am long PVCT.OB.

Additional disclosure: I am a large shareholder of Provectus Pharmaceuticals, have not sold any shares as of this Instablog submission, and also author the blog "Connecting the dots...Provectus Pharmaceuticals."

Taken From Connecting The Dots...Provectus Pharmaceuticals (March 21, 2013).

It is without a doubt a fool's game to predict the regulatory path to approval of a drug. True to form, and in no small part because of a need to be right (a trait that drives my passion for investment management), I tried many times to do so. If I had a much deeper background in life sciences investing, perhaps I could have spared myself and the readers of this blog errors and inefficiency in thinking and analysis.

Then again, while more informed, shrewd and knowledgeable money in this space - classic examples of conventional-thinking money - very often are on the cutting edge of being in the right place at the right time, I do not think they understand paradigm shifts any more than other like-minded, industry-oriented money.

A blog reader asked me to describe how I arrived at my stock position in Provectus. Greatly simplifying the answer, I reply by saying I made a two-bet parlay. First, I bet that management could demonstrate the tremendous, multi-indication efficacy of an incredibly safe drug compound. Second, I bet that management could and would protect Rose Bengal's economics in a size and scope commensurate with the depth and breadth of their innovation.

The risk-reward of my investment in the company eventually matched the clinical and commercial risk-reward of the drug.

PV-10 (as well as PH-10 and the family of halogenated xanthenes) is the culmination of Craig's scientific career, a quest of three principals that (as far as I know) began at Oak Ridge National Labs, was and continues to be facilitated by No. 4, and includes numerous professional, personal, emotional and financial ups and downs.

This company and this situation also represent a quest for me: the eventual realization of a seminal investment in my career to date; the never-ending hunger to be right; the tangible and intangible satisfaction, results and provision of future professional and personal means that only a financial moonshot yield; and, a unique opportunity to continue to successfully build my investment management career as, how and when I see fit if ultimately right.

In further answering the reader's inquiry, there reached a point in my due diligence, analyses and conclusions when and where I found that, over time by periodic buying of shares, I had pushed every discretionary dollar I (we) owned into a capital pool with the express purpose and intent of owning as many shares as I (we) possibly could.

I never imagined the first bet of my parlay would turn out to be epic in nature. On April 8th, Moffitt raises the curtain on PV-10.

Management's next task is to optimize ROI, an effort that is no small feat. And while thus far they have protected the economics of the opportunity, which could be enormous, a great outcome is not yet assured.

I await the outcome of the second bet of my parlay after AACR, because in Vegas you can't cash in your ticket at the window until the results of all bets are tallied.

Disclosure: I am long PVCT.OB.

Additional disclosure: I am a large shareholder of Provectus Pharmaceuticals, have not sold any shares as of this Instablog submission, and also author the blog "Connecting the dots...Provectus Pharmaceuticals."

Taken From Connecting The Dots...Provectus Pharmaceuticals (March 10, 2013).

Chemoablation via PV-10 Ablation Causes Antigenization

& Antigenization Causes Immunization

[I encourage you to click on the hyperlinks for certain words and phrases to attain more information on them.]

PV-10 causes antigenization. Antigenization causes immunization.

Antigenization is the expression of antigens, in a tumor into which PV-10 has been injected, in context. Immunization is "the process by which...[the] immune system becomes fortified against an agent."

PV-10 facilitates the relationship between antigenization and immunization.

Ablation: "In medicine, ablation is the same as removal of a part of biological tissue..." "Biological ablation is the removal of a biological structure or functionality."

Chemoblation: A process whereby cells undergo a form of cell death that mimics features of both necrosis and apoptosis.

PV-10 is an immuno-chemoablative agent.

The process of immunization (immuno-) is unlocked by PV-10 chemoablation (-chemoablative), which causes the rapid, durable necrosis of the tumor lesions.

PV-10 is both a metabolic agent (a chemoablative, and in the same general class as inhibitors) and also
an immunotherapeutic agent (in the same general class as immunomodulatory agents like ipilimumab, tremelimumab, PD-1, PD-L1, etc.).

PV-10 elicits cell destruction naturally; that is, apoptosis-like, which Provectus refers to as autolysis.

Unlike like necrosis, "which is a form of traumatic cell death that results from acute cellular injury,"apoptosis "is the process of programmed cell death." Autolysis, "more commonly known as self-digestion, refers to the destruction of a cell through the action of its own enzymes."

The key to PV-10 is diseased (cancerous) tissue cells are destroyed the way the body intended to destroy deficient or unnatural cells in the first place. PV-10 neither denature these cells nor changes their DNA.

The activity PV-10 induces in diseased cells causes antigenization, or the showering of antigens, whereby many, many, many antigens are shown to antigen presenting cells ("APCs"). These APCs then can choose which of the antigens to show (present) to the body's T cells, natural killer T("NKT") cells, Tumor-infiltrating lymphocytes ("TILs"), etc.

This work is done, thus, in situ, or in the tumor. Provectus and Moffitt Cancer Center have demonstrated PV-10 induces tumor-specific T cell-mediated immunity, and referred to the application of PV-10 as an in situ vaccination. PV-10 itself is the vaccine, or vaccination.

• Society of Surgical Oncology (March, 2012)
• European Society for Medical Oncology (September/October 2012)
• Society for Immunotherapy of Cancer (October 2012)
• American Association for Cancer Research (April 2013): Moffitt and Provectus

Induction: Bring about, initiating, increasing.

Immunity: "The state of having sufficient biological defences to avoid infection, disease, or other unwanted biological invasion."

Vaccination: "The administration of antigenic material (a vaccine) to stimulate an individual's immune system to develop adaptive immunity to a pathogen.

Is PV-10, itself, the "Holy Grail?"

Fareed Zakaria, in a December 10, 2012 interview on Fareed Zakaria GPS of Dr. Ronald DePinho, M.D., President of MD Anderson's cancer center, said "The holy grail for cancer would be to trigger the body's own immune system to fight off the cancer, so that you somehow stimulate the antibodies in a way that that happens." The treatment that is the holy grail for cancer is not the grail itself. Rather, the grail is what the treatment inspires, produces, engenders, induces, etc.: a strong, durable, portable immune-mediated response.

Does PV-10 immunize the treated patient against his or her cancer?

Immunization: The process by which an individual's immune system becomes fortified against an agent.

Is PV-10 an immunization for cancer? Is PV-10 the "penicillin for cancer?"

Only time can and will tell.

Peter is fond of saying the discovery process of PV-10 is akin to peeling back or away the layers of the onion. It appears to me the core of this onion is the actuality of PV-10 as an immunization for cancer. In this moment in time, the world is peeling away the layers in the direction of this, but it still is some distance from it.

"The development of penicillin for use as a medicine is attributed to the Australian Nobel laureate Howard Walter Florey, together with the German Nobel laureate Ernst Chain and the English biochemist Norman Heatley."

Disclosure: I am long PVCT.OB.

Additional disclosure: I am a large shareholder of Provectus Pharmaceuticals, have not sold any shares as of this Instablog submission, and also author the blog "Connecting the dots...Provectus Pharmaceuticals."