Provectus Biopharmaceuticals' (PVCT) CEO Peter Culpepper on Q2 2016 Results - Earnings Call Transcript

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Provectus Biopharmaceuticals, Inc. (OTC:PVCT) Q2 2016 Earnings Conference Call August 10, 2016 4:00 PM ET


Michael Porter - President, Porter, LeVay & Rose, Inc.

Peter Culpepper - Interim CEO, COO & CFO

Eric Wachter - CTO


Steve Jensen - Jensen Capital Management


Welcome to Provectus Biopharmaceuticals, Inc. Second Quarter 2016 Business Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded.

I would now like to turn the conference over to Michael Porter. Thank you. Please go ahead.

Michael Porter

Greetings and welcome to the Provectus Biopharmaceuticals first quarter 2016 business update call. Thank you, Brenda. Good afternoon and welcome to our call. At this time, I must advice all listeners that this call contains forward-looking statements as defined under the U.S. Federal Securities Laws. These statements reflect management’s current knowledge, assumptions, beliefs, estimates and expectations and express management’s current view of the future performance, results and trends and such forward-looking statements may be identified by the use of terms such as anticipate, believe, could, should, estimate, expect, intend, may, plan, predict, project, will, and other similar terms.

Forward-looking statements are subject to a number of risks and uncertainties that could cause our actual results to materially differ from those described in the forward-looking statements. You should not place undue reliance on forward-looking statements. Such statements are made as of the date of such statements. We undertake no obligation to update such statements after this date. Risks and uncertainties that could cause our actual results to materially differ from the described in forward-looking statements including those discussed in our filings with the Securities and Exchange Commission, including those in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC.

It is now my pleasure to turn the call over to Peter Culpepper, Interim CEO and COO of Provectus. Good afternoon, Peter.

Peter Culpepper

Thank you, Mike. Welcome everyone to Provectus Biopharmaceuticals’ second quarter 2016 business update conference call. As we have been watching this program Game of Thrones you will be familiar with the phrase Winter is Coming. On TV that is supposed opposite but for us at Provectus we thank the approach of winter to bring with us the interim data from our Phase 3 study of PV-10 as a treatment their locally advanced cutaneous melanoma. I said in our last call, "this coming November we will be in an excellent position to discuss the status and having the data and the effect on our business becomes whatever advanced clinical data."

As the second half of the year progresses we will develop more clarity on our research timelines as well as on our corporate evolution to advance to the results that are on the way. Eric will provide further guidance regarding the company's activity during the interim period. During the second quarter of 2016 we took steps to increase the number of sites engaged in our Phase 3 setting. They are now six sites actively recruiting according to five in the U.S. and one in Australia, another in America is listed on the site as not yet recruited. As I’ve repeatedly said that even though there may be other sites in the process of opening and to the list on site we are not able to publicly comment on them with any specificity.

In addition to increasing the number of sites we have expanded the pool of potential patients in the trial by amending the protocols. In major form in February and in a much more targeted manner in June of this year. Specifically in February we added the newly approved melanoma drug [indiscernible] as a competitor and in February and June we added and extend eligibility to include stage four M1A patients having no active nodal disease. These patients have disease characteristics and cognizes similar to that of the Phase 3b and 3c patients that initially define the study patient population. The amended protocol also clarify eligibility for patients not having access to the immune checkpoint inhibitors due to standard of care and those not having assess to targeted therapy due to standard of care as well as inclusion of patients with targeted therapy.

So there are more potential participants based on their medical condition, their geography and our demographics. As Eric noted in our last conference quarterly call these changes are necessary in an era of graphic evolving treatment options and oncology and while they have resulted in some delays from our initial [indiscernible] we continue to push that interim available as soon as possibly before the end o the year. Meaningful we’re actively moving ahead in clinical development or other indications. We’re all scheduled with our Phase 1b2 study in more advanced melanoma that uses PV-10 as combination with pembrolizumab, and PD-1 approved by the FDA and marketed by Merck as Keytruda

The final data collection date for the primary outcome measure continues to be projected at November 2018. There are currently three sites engaged in this study, two in the U.S. and one in Australia. We’re making final preparations to open additional U.S. sites this quarter if possible position of two more sites in the secnd half of the year to keep the initial Phase 1b portion of the study moving along to [indiscernible] and commencement of the Phase 2 portion of the study. In both portions of the study Pembrolizumab will be administered at 21-day 3- week intervals per prescribing information label commencing on study Day 1 for up to 24 months or until disease progression, toxicity requiring discontinuation of study treatment or study termination. With treatment lasting 24 months, late 2018 is built into the study as the final data collection date.

In the last couple of days, we all learned the news about Bristol-Myers Squibb's Opdivo. As the Wall Street Journal put it, “Bristol-Myers said its drug, Opdivo, wasn’t significantly better than chemotherapy in a study of patients with newly diagnosed lung cancer.” The Journal went on to say, “Merck’s immunotherapy, Keytruda, prolonged survival in a separate study of patients with newly diagnosed lung cancer, compared with chemotherapy. Merck hasn’t yet released the full results of that study.”

The Journal also said, “Keytruda also is currently approved to treat skin cancer, and lung-cancer patients who have already tried chemotherapy. On Friday, the U.S. Food and Drug Administration approved expanding Keytruda’s use to include treating patients with head and neck cancer.”

Now, Eric will get deeper into the difference in the drugs and the studies, but I want to say a couple things here. Both drugs are immune checkpoint inhibitors – they are closely related compounds. Keytruda is a standalone, but after Friday’s news, Opdivo probably will not be, at least not for lung cancer.

However, this could be an opportunity for Provectus, in that, we are doing a study of PV-10 in combination with Keytruda. We believe patient outcomes may be better if both drugs are used. The same logic applies to Opdivo, right now, the recent study show that it is not better than chemo when sued alone as first line therapy of lung cancer, but perhaps in might be when used in combination with PV-10. A successful study of the two together could change Opdivo’s future, and it would be consistent with the widespread belief in the industry that drugs used in combination are likely to get better immune system results.

PV-10 appears to be a significantly opportunity in the combination therapy because it's mechanism is so different to other agents, is orthogonal to the other agents and in multiple preclinical tumor models it has been shown to create a very strong activation of immune system against injected tumors. These laboratory results has also been repeated in melanoma patients and are the basis for a combination work with Keytruda and possibly with Opdivo, It is for reasons like Friday’s developments that we keep a close contact with other researchers and with Big Pharma.

Next, I want to touch on our works related to cancers of the liver. We have a study officially called A Phase 1 Study to Assess the Safety, Tolerability and Pharmacokinetics of PV-10 Chemoablation of Cancer Metastatic to the Liver or Hepatocellular Carcinoma Not Amenable to Resection or Transplant. This study has been expanded several times since the first patient was treated in 2010 and has grown from a single center to three centers in the U.S. We will open a fourth U.S. center later this month in this study and provided us a way to test PV-10 in primary liver cancer and hepatocellular carcinoma and in a number of other types of cancers that have been tested to deliver. In this way we’re assessing whether there are attractive opportunities for more advanced development of PV-10 in liver cancer. An example of a lead we developed, [indiscernible] is a Phase 1 study we recently opened in South Australia designed to assess the Safety, Tolerability and Effectiveness of PV-10 for Chemoablation of Symptomatic Neuroendocrine Tumours or NET tumors Metastatic to the Liver . In this study we’re assessing not only the objective response of injected tumors that is whether they are destroyed but also the potential impact on biochemical markers and symptoms caused by these tumors. This continues our work building the foundation for future development of PV-10 as a treatment for cancers of the liver much as we have done for melanoma.

In addition, we have been developing a Phase 1b/2 protocol to pursue development of PV-10 to treat hepatocellular carcinoma, HCC. Eric, will comment further on this during his remarks. Turning briefly to our work with PH-10, our investigational dermatologic drug, I noted in our last conference call that we anticipated reporting results this year on our Phase 2 mechanism of action setting in [indiscernible] patients. The clinical portion of this work was completed at the end of December, biomarkers samples has subsequently then analyzed and we have recently reviewed this data with the team that did the analysis. Eric will comment on this during his remarks and the implications for projected in the Phase 2 meeting with the FDA and toxicology work necessary to support PH-10 approval.

I want to turn now to our conference participation this quarter and subsequently. These conferences are important for at least two reasons. From a scientific standpoint, sharing data about PV-10 with researchers involved in cancer studies is part of the professional responsibilities that come with being a research scientist. Medical research is a team effort, and the more everyone knows about what everyone else is doing the better treatment patients will get in the long run.

From a corporate point of view, these conferences are an important platform for us to market PV-10 and Provectus to potential partners. They help establish our credibility, and they allow us to meet face-to-face with decision makers who may be useful to us in the future. For instance, in April 2015, we were awarded a joint patent with Pfizer that protects the use of PV-10 in combination with certain other types of drugs in the treatment of melanoma and cancers of the liver. Without the participation at these conferences, Pfizer most likely would never have worked with us, perhaps never even have heard of us. So, while our investigators are discharging their professional duties at these conferences, they are also helping us build corporate partnerships that will eventually translate into greater shareholder value.

In April, Shari Pilon-Thomas, Ph.D., who leads a research team at Moffitt, presented data on PV- 10 in combination therapy and T-cell mediated immunity at the American Association for Cancer Research’s annual meeting. She told the attendees, noted, "Our results show that combining intralesional PV-10 with anti-PD-1 co-inhibitory blockade not only suppresses tumor growth versus either agent alone but also yields marked increases in tumor-specific T cell activation against injected tumor."

This non-clinical study reaffirm the crucial role T cells play in response to tumor ablation with intralesional PV-10, and further demonstrate the potential value of combining PV-10 with T cell directed checkpoint inhibition, such as the anti-PD-1 agent pembrolizumab. Intriguingly, these data also highlight possible strategies for augmenting this paradigm by harnessing additional targets in T cell signaling.

Also in April, we attended the Third International Conference on the Progress of Regenerative Medicine and its Cultural Impact at the Vatican, which was hosted by the Vatican's Pontifical Council for Culture, The Stem For Life Foundation and the STOQ, Science, Theology and the Ontological Quest Foundation. One of our main investigators, Grant Arthur, was with us, and he leads investigations into new cancer treatments that control cell growth, division and differentiation. Our research into the mechanism of action for PV-10 suggests that there are treatments that harness the body's own disease fighting powers that could bring new tools to the medical profession in treating many kinds of disease.

Another of our investigators, Dr. Sanjiv Agarwala, presented a poster at the Annual Meeting of the American Society of Clinical Oncology in June. Dr. Agarwala's presentation reviewed both the phase 3 clinical trial of PV-10 as a single agent therapy for locally advanced cutaneous melanoma and the phase 1b/2 study of intralesional PV-10 in combination with immune checkpoint inhibition.

This meeting was particularly useful because we have had numerous discussions with key investigators over the several months since our phase 3 protocol underwent significant updating earlier this year to address changes in standard of care for patients with locally advanced cutaneous melanoma. These discussions identified several small but important changes to patient eligibility to align protocol requirements more closely with typical patient characteristics, and we intend to implement these in the near future, particularly in light of the positive feedback we received to these at the meeting."

The changes in the Phase 3 setting were premiered at the meeting and implemented later that night. On the last day of the quarter, Dr. Agarwala was a participant in a symposium at the 6th European Post-Chicago Melanoma/Skin Cancer Meeting in Munich, Germany. His presentation covered the status of clinical trials of leading oncolytic agents for the treatment of soft tissue and skin metastases, including the ongoing phase 3 study of PV-10 and the phase 1b study of PV-10 in combination with Keytruda. Subsequent to the quarter’s end, we learned that the European Society for Medical Oncology's Scientific Committee has accepted an abstract for a poster presentation detailing the use of PV-10 as a treatment for stage III and IV melanoma as part of ESMO's 2016 Congress in October. We will tell you more about that as the conference approaches. Conferences, of course, are just one method of getting the word out in the scientific community. Publications are important as well.

In April, two abstracts two abstracts related to research into IL PV-10 for treatment for melanoma were published in a special issue of the ANZ Journal of Surgery detailing the Royal Australasian College of Surgeons 85th Annual Scientific Congress, in May 2016, in Queensland, Australia. A full article on one of these, "Intralesional PV-10 for In-Transit Melanoma - A Single Centre Experience," was published in a special issue of the ANZ Journal of Surgery. In May, we had an abstract called "A phase 2 study of intralesional PV-10 followed by radiotherapy for localized in transit or recurrent metastatic melanoma" published in conjunction with the ASCO Meeting.

Also in May, article was published detailing the immuno-ablative mechanism of action of PV-10, the article titled "Intralesional Rose Bengal in Melanoma Elicits Tumor Immunity Via Activation of Dendritic Cells by the Release of High Mobility Group Box 1," appears in Oncotarget, a high impact Open-Access journal in a title notwithstanding comprehensively documents the intervention of PV-10 with cancer cells and the downstream signaling of [indiscernible] that occurs in wake of the primary ablated process.

As we continue to expand awareness for Provectus and PV-10 we have been featured in a number of media outlets including, Oncology News, [indiscernible] and also Surgical Oncology, Small Cap Nation and Stock News Now.

Additionally our participation in notable conferences has allowed us to meet with attending journalist to build relationships and explore future news opportunities. These recent conferences include American Society of Clinical Oncology, Bio International Convention, Tumor and Cancer Immunology and Immunotherapy 2016 Conference, among others. In addition we’re pleased to be with melanoma research foundation to co-host a Stage III patient webinar this fall and look forward to sharing progress on this initiative.

Lastly on the public relation side of things we’re underway creating a company video that tells the incredible story of Provectus and PV-10, and expect it to debut this fall. We remain committed to building top tier media relationships that will ultimately secure more news coverage, as well as creating content that drives awareness and connection.

Subsequent to the end of the quarter, we enhanced out intellectual property portfolio when we received a Notice of Allowance from the U.S. Patent and Trademark Office covering additional aspects of our process for synthesizing halogenated xanthenes, the family of compound to which rose bengal belongs. The allowed claims cover use of certain halogenated xanthenes in pharmaceutical compositions and as medicaments. Without getting too technical, we got a patent in September 2013 that covers our novel process for synthesizing rose bengal and related analogs. This daughter case confers protection to use of a wide range of those analogs in or as therapeutic products.

Since the daughter case covers pharmaceutical use of novel rose bengal analogs that can be made using our patented synthesis process, it provides a significant potential commercial lifetime for these analogs. Such patent strategy is common in our industry, building on original innovation by allowing value to be derived from next generation pharmaceutical products, thereby driving further innovation.

Another point on the corporate side, which occurred in July, was the establishment of an Australian subsidiary, Provectus Biopharmaceuticals Australia Pty Ltd. and the announcement that we are opening a Sydney office in New South Wales. With a subsidiary in Australia, we are bringing our corporate structure in line with our scientific work. Our research and development program has been international from the very beginning, and now, Provectus is an international company. The new unit should make it easier to work with the Australian regulatory authorities, and having an office in the region may facilitate our work in Asian markets as Sydney is just two hours ahead of Beijing, Hong Kong and Singapore. If and when PV-10 receives approval in Australia and other nations in the region, we will have pre-positioned ourselves to develop a sales and marketing force.

As to our cash position, we note that we are considering a optimal manner to finance the company this quarter as we continue our efforts to enter a co-development partnership that provides non-dilutive cash inflows. We believe the data we’re now generating will enable our one or more co-development partnerships. However we believe we will continue to finance the company otherwise until such data is available. At this time with over 6 million in stockholder equity we exceed our lithium requirements with the nearest stock exchange NTT [ph]. We suspended the Cantor ATN facility in order to focus on more traditional financing structures. We offered the second warrant exchange transaction to capture any positive stock movement and we will consider another warrant exchange transaction if the markets allowed it. We our efforts, search efforts to identify a permanent CEO and CFO and each of our recent calls I’ve outlined Provectus' business strategy which rests on five clinical and business value proposition pillars of PV-10 and PH-10, as well as our company’s four key focus areas.

For those first time listeners, let me review these quickly. The first pillar is our intellectual property portfolio. The second comes our management and control of the drug substance and drug product supply chain. Third is the regulatory guidance and support we receive from the FDA in the U.S. and our counterparts in other nations. Our fourth pillar is the knowledge of the mechanisms of action of--for both PV-10 and PH-10, which we continue to better understand and more comprehensively discuss publicly. And fifth is the clinical study designs that generate randomized pivotal and otherwise significant clinical data to support potential approval of PV-10 and PH-10 for the respective indications.

The four focus areas in business and corporate development are a higher public profile for both Provectus and PV-10, co-development discussions, other strategic activity, such as regional licenses, collaborations, investments, et cetera. And grant programs, including those in the EU, Singapore, and Australia via R&D expense in fact offsets. Although there can be no assurance that such events will occur, we do pursue them.

At the corporate level, we are making preparations for the commercialization and marketing of PV-10 and PH-10. Data from the Phase 3 and Phase 1b/2 clinical studies in melanoma should give us the ammunition needed to secure regulatory approval. We don’t want to wait to figure out the best path to approval and start forming relationships to market these drugs. We want to be ready to hit the ground running. So, we continue to review our options with the FDA here and the TGA in Australia to find the quickest route to the market and be prepared before the data are complete.

Furthermore, we need to be ready to move forward in places like China, India and Brazil, where we have been building relationships and learning the local terrain. Those three nations are home to more than one third of the entire human race. To maximize the value of our drugs, we need to be in those markets as soon as possible. We are working with Boehringer in China to be prepared for action there – it is a slow process but we cannot afford, and cancer patients certainly can’t afford, a delay due to inattention to regulatory options and requirements. We have establish similar, but less developed and formalized, relationships in India and Brazil, and as those advance, we will keep you informed.

In order to keep you better informed, and in order for you to be able to access information about our activities more easily, we have worked on updating our social media efforts. Since we aren’t a software firm and since most of us are closer to sixty than twenty, we didn’t take to this as quickly as others, but we do see the value to it, and we are working to do social media better than we have. Our newly redesigned website,, has been showcasing our mission for several weeks now, and the feedback has been positive.

We also have received good reports about our new Facebook page, which serves as another communications platform for us. We invite you to connect with us through these new platforms, and all feedback on them is welcome.

At this point, our Chief Technology Officer, Eric Wachter, wants to share a few things about this quarter at Provectus from his unique perspective. Eric?

Eric Wachter

Thanks as always Pete for that overview. I will start with a brief synopsis major topics before going into detail on key elements. As Pete noted, in the first quarter we announced a major update of our phase 3 clinical trial for locally advanced cutaneous melanoma. And this is followed by a minor update in the second quarter. This is expanded patient eligibility and Imlygic, the first intralesional agent for melanoma approved by FDA as an option for comparator. Since we start our combination trial in late stage melanoma patients in the second half of 2015 assessing safety and preliminary efficacy of PV-10 in combination with pembrolizumab, also known as Keytruda. We have opened three to our projected 4 to 6 sites with the fourth one about to open. Tumors of the liver, we have continued to add patients to our Phase I study of hepatocellular carcinoma and metastases to the liver and continue working with investigator community throughout Asia to expand this program to this important region and we opened enrollment in the companion study to assess potential PV-10 in symptomatic neuroendocrine tumors, or NETs, metastatic to liver. Additional mechanism data on PV-10 was presented in April, further advancing our understanding of the immunologic signaling that can occur after ablation of tumors with PV-10. And possible strategies for combining PV-10 with other classes of immune-oncology agents, beyond that of anti-PD-1 like Keytruda. And the [indiscernible] Journal article is published and walks through the entire immuno-ablative mechanism PV-10, talk about these later.

And Pete, noted we have completed analysis of biomarker samples collected during the clinical portion or recent mechanism of action study last in December and working with the team conducted these analysis to determine the significance of the study data. And on the intellectual property front, we continued to expand on our most recent test families, covering the manufacturing process for Rose Bengal, an important aspect for eventual commercialization of PV-10 and PH-10.

Now some details, starting with our phase 3 clinical trials PV-10 for locally advanced melanoma, we announced in March the protocol for randomized control Phase 3 trial was amended to reflect current and evolving standards of care in applicable patient population for a global study in melanoma. This included addition of talimogene laherparepvec aka Imlygic as an option for use as comparator and extension and clarification criteria for patient eligibility. After additional meetings with global key opinion leaders we followed this with a much smaller amendment that further clarifies eligibility criteria appropriate for such a global setting.

As I noted in May these kinds of amendments are a common place in Phase 3 studies are certifying tune the patient population study procedures that’s changing care standards to our large global study. In our case these two amendments address evolving options in care standards for patients with [indiscernible] Australia, Europe, Latin America and China.

Also as I have noted in May, the evolving options in care standards [indiscernible] patients necessitated the major changes implemented through the first of these amendments and that lead to some delay in execution study. With that behind us, and incremental changes we have instituted in June, the study remains to support life insurer of PV-10. Part of this evolution options of care standards has required us to look carefully at our options to enroll patients and despite the recent discouraging news about Opdivo that Pete mentioned earlier this evolution oncology is rapid and far reaching particularly with regard to melanoma in the U.S. and Australia.

We have made changes to the study to address normality's in the clinic and since last year have been working on options with our lead contract research organization, CRO, that’s charged with implementing study outside the U.S. and Australia to implement additional measures to minimize the impact of this constantly shifting playing field.

This includes the expansion of our plans for Europe with additional sites in the startup process in few countries, particularly Germany and expansion of the reach of the study to other countries with an appropriate patient population such as Argentina. We held our final Advisor Board meeting for Europe in June and have a motivated team in melanoma [indiscernible] at top centers ready for the study. After months of preparation we expect to begin filing applications with local regulatory authorities in Europe later this month. We’re also continuing to work with the investigator community in our traditional territories in the U.S. and Australia to build part of very solid basis sites and enrolling throughout all of this. Pete he noted in his May conference call remarks that we will be in a good position as a November call to be more precise on timelines and I will state that we currently have no updates regarding timeline that -- timelines while we're in the midst of opening these global sites. But before I move on to our other studies I would like to comment on the Opdivo news Pete brought up earlier both regard to the Phase 3 study and as a segue to our combination work. Opdivo as Bristol-Myers anti-PD-1 that is [indiscernible] antibody that serves enhanced tumor fighting ability of T cells, it's often described as taking the brakes off the immune system. Opdivo and Merck's closely related Keytruda or pembrolizumab another anti-PD1 antibody that targets the same immunological mechanism. Our leading the way in many of the evolutions I alluded to earlier in oncology including in melanoma. Like PV-10 Opdivo and Keytruda have potentially used against the number of tumor types and both are now routinely used to treat melanoma in the U.S. And besides the size and importance of this melanoma market system, Bristol-Myers and Merck have developing Opdivo and Keytruda for a much larger market in lung cancer.

Opdivo's recent fairly to meet study end points of pivotal Phase 3 testing as a first line single agent therapy for lung cancer highlights the critical nature of study design in drug approval and services of cautionary detail of the risks inherent in all steps of drug development. With the exception of exploratory studies aimed at initial assessment of safety and efficacy in two indications. We strive to implement strategies that minimize such risk while highlighting the competitive features of our investigational products. For example we designed our Phase 3 melanoma study based on enrollment to patients with stage 3b to 4 M1A disease the patient population for which we have considerable experience.

Our Phase 1b2 combination study, we’re focused on patients with more advanced disease who require a more aggressive approach and I think this is a unique aspect of our finical development plan that is very careful design of our trials that the fundamental level to maximize likelihood of success through very careful patient selection. Despite the changes we've made this year to Phase 3 study we have not deviated substantially from patient population or treatment strategy we delineated at the outset of this study and this is also the case with our combination study. I mention this because it is fundamental to our clinical development strategy and allows to remain focused on execution of our studies like the potential distractions of this changing playing field.

I also mention this since it clearly demonstrates that despite tremendous progress in oncology it is not time to declare "Mission Accomplished". Pete, mentioned that the Opdivo situation highlights the need for combination strategies and we certainly believe that this is the case for patients with the advanced cancers. This is the fundamental implication of our immunologic work on PV-10 and as a basis for our combination study of PV-10 with Keytruda in melanoma.

As I noted we’re opening our fourth center in Phase 1b portion of the study and I'm pushing our clinical operations teams to expand the six centers hope to surely time completion of the Phase 1b portion of the study and as I said it's ready to commence Phase 2 presumably early in the New Year. Non-clinical data strongly supports the strategy and have a high degree of confidence this study will be successful.

Before I move on from melanoma, I will note that as I stated in May we closed our expanded access program for PV-10 to new enrollment effective at the end of June. Over the course of this program over a 150 melanoma patients primarily just like those ones eligible for our current Phase 3 study received PV-10. Pete mentioned the data on some patients who reported earlier this year in Australia, and I note that a few -- and as I noted few minutes ago this experience shaped our Phase 3 and Phase 1b programs.

Turning to tumors to liver, we continue to have patients into our Phase 1 study at the hepatocellular carcinoma and the test we delivered. And as I noted in May we expect to add one or two additional centers in the U.S. this year to facilitate completion of enrollment. One of these centers is slated to open for enrollment later this month and the second is expected in September or October. The primary focus of both these new centers will be see non-HCC [indiscernible] allowing us to continue exploring potential new indications for PV-10. We also expect present updated data on the study later this year at a major oncology conference in Asia and to get a companion journal article into the literature.

As I've noted in previous quarterly calls, we’re working to move the emphasis for HCC development in Asia where it is a major health issue. Following up on meetings in the first quarter with investigators in Singapore and India we held critical follow up meetings in [indiscernible] Chicago and back in Singapore and in Hong Kong. The message from these and proceeding meetings in late 2015 for or example in Shanghai are clear. It is time to move PV-10 development for HCC to Asia. As a result of this effort we've identified investigators and institutions to move this forward and I expect to be in a position to detail this in the next call in November.

As I noted last time these meetings point the way to one or more Phase 1b/2 studies of PV-10 alone or PV-10 plus standard of care. I'm grateful to our colleagues [indiscernible] China and Singapore and in the U.S. who continue to facilitate this effort, the crucial advice and contacts throughout the region.

As noted earlier we've opened the companion study assessing potential PV-10 in symptomatic [indiscernible] deliver. This study builds always learned so far from our initial Phase 1 liver study has been opened now to patient enrollment. We will follow progress with this study and it's initial results are encouraging, we may elect to expand the study to additional sites to accelerate completion.

Between Pete's comments my introductory remarks we have stated most of what [indiscernible] regarding documentation of the [indiscernible] properties of PV-10 and years of work conducted by Moffitt Cancer Center both in [indiscernible] was detailed in a pivotal paper published by this team in May. After a long haul it's now clear they took out his that tumor ablation with PV-10 can lead to simulation of useful anti-tumor response. We’re continuing our search activities along this line of reasoning at a fundamental level this is probably the most important paper published to-date on the truck.

Turning to PH-10 we’re sorting through the immunologic and pathologic data from our mix of action study topical PH-10. Unfortunately can't go into detail yet about what we're learning but in general my assessment is these results will be as important to PH-10 as the Moffit work has been to PV-10. For new kinds of therapy come along everyone likes to understand the biologic story underlying clinical observations and it appears that this maybe a very interesting story that explains observations we have had throughout clinical development of the drug.

I look forward to sharing details on this with our stakeholders in the next few months. I will note that the observation from this study should play an important role in anticipating discussions with FDA to assess strategies for advancing the program from the Phase 1 and start from Phase 2 to Phase 3. So to summarize we continue to make stride pursuing existing clinical programs in support of our core development mission melanoma while moving towards implementation of companion programs in related areas such as our Asia HCC initiative.

Our knowledge and the mechanism of PV-10 and PH-10 continues to expand and as illustrated by our Phase 1b/2 combination study in melanoma allows us to plan appropriate strategy for future work. And our focus on it, we remain very active in both U.S. and global intellectual property matters.

We appreciate your continued patience while we endeavor to move Provectus forward and I would like to remind everyone that the most important stakeholders in all of this are patient. I’ve always been mindful that unmet patient need and if current studies are successful patients may gain more options. We encourage patients and their care givers to consider clinical trials whether with our products or others and we encourage everyone to remember that as Pete has noted when patients win we all win. With that I believe we’re ready for questions. Operator?

Question-and-Answer Session


[Operator Instructions]. Our first question comes from the line of [indiscernible] of Lake Street Capital Markets. Please proceed with your question.

Unidentified Analyst

Just a real question for the [indiscernible], with respect to PV-10 and Keytruda the Phase 1b/2 trial, you’re not giving any guidance with respect to when complete enrollment is anticipated, that’s my first question and next 24 month progressive free survival primary end point just want to clarify. Thanks.

Peter Culpepper

That is correct, that’s the primary endpoint for the Phase 2 portion of the study for Phase 1 it is safety and tolerability so we have a much earlier read out in that case but after 15 weeks of treatment. We generally never provide ongoing patient accrual data and we don’t expect that it will change that. We have provided as we have done in the past periodic guidance on data timeline. So as I noted in my prepared comments we have not notified those as of today and we expect to be able to update this guidance by the time of the next shareholder call in November.


Our next question comes from the line of Steve Jensen of Jensen Capital Management. Mr. Jensen, please proceed with your question.

Steve Jensen

Mr. Culpepper I would like to know how you personally feel about the current status of the company.

Peter Culpepper

For my part and I think this is something I could say I itself really since the beginning of this journey at Provectus. I joined the company as many of you will know 12 years ago and I’ve asked and I think Eric concluded nicely I'm very passionate about what we’re doing for patients. We know we have everyone on the call is going to appreciate this, we know we have such a -- it's fundamentally profound opportunity to change the course of how we’re treating answers and [indiscernible] terminological indications as well. We have a unique set of count down investigational agents and to my knowledge there is nothing it. So I came to the company and I wanted to find a solution to how we’re treating disease. And I'm thrilled that there are innovators, along that path that the innovators here were the ones we saw something that nobody else sustained and I think through the years of the struggle and the challenges we’re now coming through to the very end of this year, we’re in the position right now with interacting ourselves on a regular basis this top medical professionals literally globally and it's very gratifying to see this play out.

I very much as a stockholder are very focused on the value of --the valuation but I do know that we will persevere and we will see this through and I firmly believe that because of promise of PV-10 and PH-10 and from the analogs [ph] I firmly believe we’re going to be very successful in our efforts.

Eric Wachter

I would like to add to that Pete that from a technology side I think it's very interesting that we have maintained a consistent pattern throughout the company starting with hypothesis in the laboratory that we test simple model systems and then move as quickly as possible into the clinic. We differ from conventional companies in the -- we haven't invested the time and efforts into -- understanding the mechanism of those processes at the minute level until we have seen that there is a clinical signal to justify that additional work and what's remarkable to me is the way in which the immunologic mechanism that we have amassed on PV-10 has guided our understanding how to move the drug from early stage clinical development to late stage clinical development and we’re seeing exactly that same pattern been repeated with PH-10. I think from the technology perspective there has never been a better time for the company.

Steve Jensen

I was wondering if you can comment about the current acquisition and what your plans are to raise money.

Peter Culpepper

The cash obviously for everybody on the call is a concern. As a biopharma company until we can get a partnership we do need to raise money, that’s the way the reality is in the industry. We’re very, very encouraged by the progress but we have to keep going, generating data. We have something extremely unique with PV-10 and PH-10 and you need to generate enough data and context to get the nod them into financing. We’re confident we can get there. We believe we’re much, much closer than the market possess but we have to keep going and the sooner we’re there we are going to have to raise money and in the 10Q we filed yesterday we did make clear we will need to raise money this quarter. I don’t have any data about that, I'm very appreciative and I'm gratified, we have many dedicated stockholders. We know them personally, we have known many of them for years. We have some -- in my opinion some of the best people possible with our intensive and involved and committed to our success and that’s really [indiscernible].

So I'm confident we can get the financing that we need. Obviously and I want to emphasize this we really are focused on doing the kinds of financing that is the least dilutive possible. As we can appreciate that’s a challenge, it's honestly today is a tough day and we have been through tough days, we have been through tough times in the company but I have no doubt we’re going to get through it. I want everybody on the call to know that we’re as committed to being successful as any human being could possibly be and we’re going to have people that we know very well, that will finance us and those people know the value, they know us well. We have known them for years and we’re dedicated, we dedicated, we’re in it ourselves and we’re going to be committed to getting the task that we need to get it to the data we need so this is drug c, the promise that we all know is there.


Our next question comes from the line of Peter Ekelhof [ph], a Private Investor. Please proceed with your question, Peter.

Unidentified Analyst

Pete, you pretty much answered the question about funding raising but clear we’re about half way through the third quarter and you’re saying unequivocally that by 9:30 there will be additional cash funds in your coffers to continue the progress that you’re on.

Peter Culpepper

I can certainly say that I cannot tell you or anybody with a 100% guarantee anything, licenses don’t work that way. I can't say that I know investor bankers who have funded yes for years, I know them very well, I know the stockholders who have wired money to our bank accounts, I know them very well. I can tell you that as hear as I'm talking to you and everyone now we feel very good about that but our effort at Provectus has been a every single day for me for over 12 years for Eric and it's Co-Founders for much longer than that. We have been able to keep moving forward and I'm telling you that we said in the filing we are going to seek financing, I'm very confident on that absolutely. As you know Eric and I and the others have personally funded the company. I can also say that it's clear that we have gone through even tougher times than this if we go at the beginning of the company. So I’ve no doubt that we’re going to get there, my focus is on minimizing the time the drug to see the benefit for many, many more patients than we already have. So in other words getting the funds that we need to get the [indiscernible] that we need to get PV-10 and PH-10 and the position for appropriate approvals through the regulatory funds.

So funding I can tell you this is clear we’re going to do that this quarter until that happens I cannot commit to you any more than commit to you that the Phase 3 is going to be a success. We’re very, very confident that it is with every week we expect it. I believe the data the way PV-10 works is that out and publication and conferences has got us to this point, that’s how we have the Pfizer patent and the [indiscernible] collaboration and that’s why we’re able to show all the second -- that we do in the three different areas and we’re going to keep going. You’ve that commitment from us.

Unidentified Analyst

Can I follow-up, Peter? I just want to switch gears a little bit, I believe your relationship with VI is under a LOI is my understanding, can you just tell most the investors which are retail investors and what is the role of VI and is it possible that VI can change from advisory role to something which could be more of a partnership roll do they have the insight, look at the because I believe they want to build their oncology portfolio and happy to add the markets that you want to be in?

Eric Wachter

Peter, this is Eric before Peter responses to that question, I would just like to point out that I work very closely with our colleagues at VI and we have a very open relationship with them. They have the opportunity to see the data which is not publically available as a consequence of that LOI, they also have provided us which -- it's on multiple fronts and the comment [ph] that I gave I think in the last conference call was organized in a meeting of key opinion leaders in Shanghai in October where they identified the individuals. They identified individuals and managed the logistics for that meeting so that we could present PV-10 to the hepatocellular carcinoma community in China and hear their input into our program. That’s had an incredible input into our design subsequent work for the study. We had a meeting in April of this year in India, similarly organized with the assistance of VI we had meeting with ACC, KOLs and ASCO [ph] and subsequent to that in Asia again organized by VI. So they provided us with the advice with contacts, with support and so I think that’s probably not just out their -- they are not a charitable organization. So I will hand over to Pete.

Peter Culpepper

I appreciate that. VI is a great forward-looking statements indicator in the way big pharma looks at Provectus in my view, so what I'm glad you raised it because VI is one of the top pharmaceutical companies in the world. They are very well-respected in the industry, certainly they are the largest private pharmaceutical company in the world. They are well respected in the industry. They did a tremendous amount of due diligence in the data room before we entered into the formal LOI. They are well known and well respected and forward-looking statements from our standpoint because they are the first company that’s actually shown the ability to provide soft dollar cost but you don’t see them in the balance sheet invaluable to help us advance PV-10 in a meaningful way. So in my view they are like many other potential partners Merck and Bristol and Pfizer with German Merck and Roche and Novartis that are very closely monitoring everything we do. We know that ourselves as we interact with them. We’re very close with a number of potential partner executives. And so VI just has to be the first one to go public but I believe that we’re so closely monitored that data that comes more and more we continue, Eric and I were both in New York city just yesterday meeting with very credible individuals that are very networked into the global on the [indiscernible] and dermatology markets so just a question when we have enough data to trigger these register it through something financially meaningful to the stock and covenant.


Our next question comes from the line of Bruce Brindle [ph], a Private Investor. Please proceed with your question, Bruce.

Unidentified Analyst

This question is for Eric. Eric you made it clear that you will not release information on the enrollment of the Phase 3, I don’t believe that you’ve made it clear that interim analysis will be triggered after 1.5 of them are required of that. If I heard right, the November date is that the interim analysis triggered so you expect one half of the required event on that date and then working back from that I'm assuming a required event is either reaching 18 months debt or progression and the progression is measured every three months and so anybody that you’re expecting can progress by November, what effectively needed to be enrolled by now. So I read the November progression as saying that you’ve already enrolled one half of the required number as of this date. Can you either agree with me or tell me where I went wrong on my logic?

Eric Wachter

Okay. I would like to walk you through that Bruce. So when we began designing the study several years ago we looked at the issue of how to schedule an interim assessment and while that was rather uncommon idea we looked at that very carefully. We even had discussions with FDA on that topic and they were adamant that they were strongly opposed to any sort of efforts to schedule and interim assessment. Our hypothesis at that for example because the interim assessment and the final assessment are based on a number of progressions of their model using standard statistical model if there was a longer progression free survival in the PV-10 arm than expected. They would not pay the required number of progressions in that arm to add to the required number of events. Interim assessment is triggered by a progression that would occur in all the patients. The final assessment is triggered by a number of progressions events that are occurring in all the patients.

The statistician assumes that they will be equally divided between the two arms that’s no hypothesis that is there is no difference between the two and these studies are designed to disprove that long hypothesis that is the share the various impact at different in progression between the two arms. So we have worked with FDA on that topic and we were unable to get them to move substantively on that position.

We ended up working through with some language that allows us to end the study if after enrollment of all of our patients are looking at this primal endpoint. The study continues along for rather like period of time that the study is ended -- outcome is looked at by the review committee and the outcome of the study is determined based on what has happened to patients of that target at the point in time.

So it's not a correct hypothesis to say that every payment is going to contribute to interim analysis would have to be enrolled at this time but there isn't a specific time that lasted before that interim assessment occurs. It's one of the reasons why we can't project with the high degree of certainty at this point when that’s going to happen while we make periodic predictions about when we expect that to happen but you will continue to hear us use the sorts of statements that Mike Porter alluded to in the beginning that we expect, we anticipate, we project rather than we can say with certainty that interim assessment have no certain point because we don’t control it, it happens it's controlled by the patients biology how they respond to treatment.

So we’re continuing to as I said in my comments we’re continuing enroll patients in our existing centers, at centers in the U.S. and Australia and expand the study throughout other regions of the world that we have identified to bring us to that interim timepoint that eventually to final outcome of the study.

Peter Culpepper

I just have a quick comment to add on to Eric and that’s to say that to be precise we said we would have more of that refined, understanding we believe communicate on the November call. The actual -- I believe it's fair to say from the comments interim assessment would by the end of the year at the earliest but we have the more refined assessment for you and for stockholders on the November call.

Now [indiscernible] as on a lot of the say activity that Eric just allowed to that we should have a better handle on communicating more precisely on the November call, keep that mind the dialogue and the communication it's something we care about ourselves as we know how important it is for partners, for FDA, for patients and for market.

Eric Wachter

Bruce, I will add to that, we’re like every other pharmaceutical company and I’ve said previously to certain parties maybe on one of these quarterly calls but one of our crown jewels is our study protocol. So they represent everything we have invested in the company upto that protocol was issued. So I’ve mentioned that we amended our protocol twice this year for the Phase 3 study, once in February, once on the 25th on June of this year and sponsors never share those publically until they are forced to do so because as I’ve said the crown jewels -- they need to explain how you build a clinical trial. Now when pivotal studies lead to drug approval published in major journals one of the requirements were those journals in modern times is that clinical trial protocol. But I just wanted to highlight from section 4.9 of the Phase 3 protocol this is the section on interim analysis and I hope that this will clarify for you and for other interested parties on this topic.

Interim assessment of efficacy and safety will be performed on the IRC, that’s independent [indiscernible] committee we talk about the IRC, when 50% of the events required for the primary endpoint that is 81 disease progressions as defined in the city [ph] protocol have occurred and so that’s explains to you that there is number, it's designed at the beginning of the setting and that’s the point when that number of progressions have occurred. It doesn’t matter if you’re all in the PV-10 arm, they are all in the compared arm which is possible if there aren't enough patients in the current arm, we have to have enough progressions to hit that metric.

Now we had hoped as I said to have some sort of mechanism in the study that would allow that to be triggered early if for example we’re going along and we’re not seeing progressions as we expected and so while we work on that with the agency that said they are adamant that that was not appropriate for a pivotal study. So while we manage to compromise on was that inflection 4.10 study duration that subjects we monitored until survival for survival until death lost a follow-up withdraw their consent or study termination by the sponsor and so we’re able to monitor at terminal end of the study and if the clinical trials that have monitoring committee determines that it's in the best interest in the study and before we had follow-up progression events occurring.

I doubt that will happen, it would be very in useful circumstance but it would probably be positive for the drug because it would suggest that a large number of patients aren't progressing because a majority of the patients are [indiscernible] in my study of PV-10 probably would apply that the PV-10 were progressing but this is all speculation but I think it helps you to understand a randomized trial is based on number of events that statisticians set on the study is initially designed and the study continues until that number of events occurs.

Unidentified Analyst

See I'm a statistician so I do understand and then I certainly understand the lack of progressions if they occur in the act environment that’s a great news but I think I heard from Pete that there is -- did I misunderstood that there is no projection at the interim analysis will be triggered in November and then your comment my question on the three months are November 15th, is my understanding nobody triggers a progression in less than three months. You’re only using that or what's the 12 week scan to determine whether somebody progressed, is that right? Every 12 weeks you do a scan and determine whether it's progression or not?

Peter Culpepper

We have talked about in the past but I think it makes sense to outline couple of the unique features to study. So we’re originally designing this study. We looked at a number of modern clinical trials in melanoma. We looked at typical study design for immunologic which is used to prove that drug recently and we looked at the study designs that were used for [indiscernible] trade name of that but it's kind of ace inhibitor and in those studies there was a standard pattern that’s very common in oncology because it's typical in almost all of our practice which is the patients are scanned, they receive CT, MRI or both on a 12 week timeline as they are being followed by status of their disease and so understanding the salient features of PV-10 we felt that that was potentially detrimental to patients and so we use that standard paradigm scanning every 12 weeks for full risk assessment that we included periodic clinical assessment in the original study design every four weeks because PV-10 and the Chemo are both patients were treated on a four week schedule to allow the investigator to identify unambiguous progression in the patients.

We’re talking about the disease of the skin and so it's obvious if the patient is developing new lesions for example. You don’t have to run a CT scan on the patients that detect us in the skin. Those are photo documented every weeks and so we have a way to conduct basically an interim progression assessment between the 12 week mile post when entered immunologic things got a little bit more complicated because there is an initial five week treatment cycle that basically everything lines up the same with immunologic or with PV-10 or of course chemo patients with that clinical assessments every four or five weeks during that 12 or 13 week indication with immunologic, an initial treatment cycle.

So we have the opportunity with patients that have local advanced melanoma to identify what's going on with those documented in a objective fashion because we’re taking photographic data on every patient in each of those entering time points and so we can then assess progression on a peer basis applied across patients be respective of what drug they are receiving on the study.

So we’re taking as I said a conventional study design and we have invited their own wrinkle [ph] and that’s large measure on experience that we gained from work in Phase 2 and from the 150 plus melanoma patients that receive PV-10 under expanded assess.

Unidentified Analyst

If I understand you right, progression can occur either at the 12 week scan or every four weeks on the clinical scan?

Eric Wachter

Yes that’s right. So we require patients to be assessed at the first four weeks and it would be theoretically possible for them to be progressive at that point.


Our next question comes from the line of Tedd Kidd [ph], a Private Investor. Please proceed with your question.

Unidentified Analyst

I wanted to just add to what is the projected cash slate is to get to Eric's projected goals and I’ve a follow-up on that.

Peter Culpepper

So we haven't communicated within guidance. We really want to make sure at a minimum the $6 million stockholder equity requirement and if you meant to refer to in regards to the New York stock exchange NKT, we are at slightly more than 9 million at the end of Q2 so we certainly want to continue to be above the $6 million in stockholder equity, that’s lower GAAP. From a cash standpoint we certainly as we know from the burn rate perspective have a certain burn which different people has done a good job and it's of course clear from the 10Q that we filed yesterday what the burn rate is. I think we want to do is get a minimum get enough cash this quarter to cover a quarter burn. I think it's probably fair to say this is going to be, we’re going to be very transparent with stockholders, how we’re effective and moving forward.

We all know that we’re focused in our filings as talked to you on the phone and on the conference call we’re very focused on non-dilutive cash to a potential partnership. We know that our co-developments transactions on the basis of the Phase 1b/2, PV-10 and Merck Keytruda study is at near term on the 1b piece which we said last call would be the 1b would be at the end of this year or next year in the 1b data with this [indiscernible] that’s very important for potential partners which we discussed in September press release last year when we commenced that study. We also know that the same store of immune signaling, understanding and work on the liver and liver PV-10 program that’s also very helpful in most discussions. So I think initially in the quarter of burn and that’s arrive we project and then we will continue to assess this and would be transparent to stockholders and we want to make sure to get to again enough data that have been non-dilutive financing through one or more corporate co-development partnerships.

Unidentified Analyst

Okay. So when you’re starting non-dilutive of course you’re not able to issue additional shares but what policy it's going to be for borrowings. My concern is that the share price is now close to a point where which should have a potential [indiscernible] come in and prior to starting the company and let the shareholders up cold.

Peter Culpepper

Yes, we’re very aware of that. We do have certain let's just say provisions that we can if we believe the effective employing to weren’t any sort of company take over and benefit an unacceptable level. I don’t think that the potential partners that we’re working with are talking to and are interacting with. They are focused on the data they know that there is a tremendous upside opportunity in this sort of stage so I don’t think we’re going to see that I think it's just a question of getting an update out of these studies. We have active dialogue with potential partners. In particular over the last 15 to 18 months so essentially really got into Phase 3 in April last year. We had very active dialogue that continues to build the momentum and the potential partners that really just interested in making sure they understand how PV-10, it is unique, same with prior to PV-10 although we can see a lot more gain now with PV-10 so potential partners are interested in what we all interested is optimizing the use of PV-10 and from that standpoint we want to just get an update to trigger that.

Unidentified Analyst

So in the arena something like that will not come to fruition. As the company entertains the presenting to existing stockholders additional shares with one [indiscernible] would be appropriate at this point but say you’ve needed a couple more hoards [ph] of cash burn $10 million you know you’ve to issue between 55 million and 60 million shares at today's closing price so in order to change you there. That should something about that or along those lines will get the company through that mid-time data wouldn’t you think?

Peter Culpepper

I think I appreciate that and I can say that the Board and myself were very active, we’re very much focused together as a unit the Company is right now in very close contact, entire company Board and officers on insuring that we have a unified united department dealing with this, we’re very focused on stockholders we know these people and I can say that we have every stakeholder in mind and trying to go forward and get this done right. I can't be too precise other than to say we know we’re going to focus on getting some case this quarter but I also can say that we’re very cognizant of the importance of involving stockholders to the extent that we can.


Our next question comes from the line of John Schuhmann [ph], a Private Investor. Please proceed with your question.

Unidentified Analyst

My questions for Eric, Eric can you unpack the statement or the reference you made to the about the research that was recently done compared to related properties to the a useful immune response and that’s what I'm more interested in this study useful immune response because it's not clear to me if PV-10 is stimulating the adaptive immune systems for antibodies after the tumors are removed, can you shed some light on that, color I would appreciate it.

Eric Wachter

I have left to that, in fact Pete suggested that rather than giving a set of talking points that we go through a very detailed presentation, the webinar I resisted that because I don’t know it would be of interest to us investors but in the case of the immune response to PV-10 there is a immuno-oncology has become extremely popular in industry and in the medical community that describes it sounds like it seven step process from destruction of tumor to triggering the immune system to come around and destroy tumor, so you’re using in the case of the classic example you might be using a chemotherapy agent to cure tumor cells leading to recruitment of the true antigen presenting itself collection of tumor debris, educating a T cells generating of functional T cells against that tumor antigenic material and then trafficking of T cells to other tumor tissue ultimately leading to destruction of that tumor issue by the cytotoxic T cells and when we began the modern era of immunology of PV-10 we started working with the group the Moffitt Cancer Center and their particular expertise was one of the steps in that process which is considered to be very important as an indicator of functional immune response against tumors which is the infection of tumor infiltrating [indiscernible]. So T cells penetrating into tumor and interacting with tumor cells.

Ironically we ran into problems immediately when we started that work because the related process that first step the destruction of tumor effort essentially robust nature that in examples that we looked there basically was no remaining tumor so there was something to look at for infiltration of lymphocytes. So we took a step back and we looked at the entire cycle it's called the [indiscernible] immuno-oncology cycle and began working their way through that cycle and I believe there is representation of this on the company website as choose that over the last several years we have worked with colleagues at Moffitt Cancer Center, we have done some work internally and have done some work at the University of Illinois, Chicago to show that PV-10 unambiguously triggers that first step of destruction of tumor and that is performs all of the expected downstream signaling at the immune system leading eventually to a function of immune response against untreated tumor.

So when we started this work in Australia, in the clinic in 2005 we described that as a bi-standard response which was a common terminology at the time. Immuno-oncology was not particularly well regarded at that period, got to be even less than an important area of investigation as we approach the end of the first decade in the 21st century and then it became very hot area with the approval of the [indiscernible] and substance approvals of a number anti-PD1s and eventually anti-PDL1s [ph] all drugs that harness T cell to have a functional -- approve their functional response with regards to tumor tissue.

So I think that the story is now very well documented in literature. We have shown that this occurs in varying models of melanoma, we have shown this occurs in varying models of colorectal carcinoma. We have evidence to show that this happens in varying carcinoma and most important we have shown that key elements of this signaling are occurring in melanoma patients. That was one of the key aspects that’s worked with Moffitt, I’ve counted it many times they are experts at translational medicine which is taking top results into the clinic and then taking what's weren’t in the clinic back to the bench top back and forth and I’ve worked with them over the last seven years it's been a perfect example that we have got back and forth between now us and them multiple times trying to understand all with similar process.

I can say that we now have an equivocally demonstrated that for melanoma. Our next tumor on the radar will be hepatocellular carcinoma because there are challenges in HCC that comparable to those in melanoma. We already know that we can destroy HCC with this ablated process and my hypothesis is that that should lead to similar signaling which can have implications for both single agent therapy or lesion PV-10, HCC but more importantly for combination with things like anti-PD1 Keytruda or Opdivo.

We have already shown that the basic immunology occurs in HCC model. So I will say that among the things that I'm having confident in, I'm highly confident that we will show that we will show the same functional and the signaling functions in HCC and I use that as an opportunity to comment on something that I did mention in my prepared remarks which is we have talked about our HCC strategy for Asia and I made some comments about that during the prepared remarks that we’re looking at is both single agent and in combination. I firmly expect that that will playout as a combination strategy at two levels. First is a successor to our current study where we’re using PV-10 with sorafenib and there is from our interactions with KOLs around Asia there is from our interactions with KOLs around Asia, there is no recent nod to proceed with that to a larger study in Asia and that’s what we expect to do with a work in Hong Kong, Taiwan and Singapore that I alluded to.

But we’re also looking adopting the non-clinical studies to show that that channel enrollment is signaling the seven steps occur in HTC and might to justify them a second pronged approach which is particularly relevant for the U.S. which would be a combination of PV-10 with the checkpoint inhibitor in that anti-CTLA-4, anti-PD1 or anti-PDL1 so that works, we’re starting and I expect that will considerably lead to similar development in HCC that we have seen in melanoma which is 1a2 combination where PV-10 plus checkpoint inhibitor for HCC.

Unidentified Analyst

Well thank you as that was a very detailed explanation and I appreciate you taking the time to do that.

Eric Wachter

Yes I probably should listen to Pete and use the slides so that I can talk much more efficiently from slide than I can -- we have talked about this various -- it's very central element of cycle -- very expensive [Technical Difficulty]. It's really important of the story at this point.


Our next question comes from the line of Ted Goleman [ph], a Private Investor. Please proceed with your question.

Unidentified Analyst

There two questions, two areas that I need to address. We saw the warrant exchange program number one with an extension, nothing really done and then we saw the warrant exchange program too with another extension and nothing really done. To an investor we’re anticipating some news breaking event to make this happen and we didn’t see it and that’s -- and of time [indiscernible]. Was there something that didn’t materialize, is it still in the works or can you elaborate on that a little bit more and then I just had one more question.

Peter Culpepper

I can't say that certainly when we put up those the warrant exchange one which resulted in 3.9 million as you know in Q1 that Eric did go over to one our Board members and myself all participated in as well as other warrant holders and then the warrant exchange too. We did expect and had hoped for a response on that based on current activities. These structures were designed to capitalize on potential stock. There are very active we have alluded very active efforts with co-development through the time period of Q2, AACR, the conference doesn’t have fundamental data on PV-10 combination before [indiscernible]. We also have ASCO, we have BIO International, we had both Chicago, multiple conferences and interaction with potential partners. We did want and expected more stock renewed out of those events to be sure. I think it's fair to say those efforts are very much continuing and building all of the data that we have discussed. What we’re trying to do is be sensitive in minimizing dilution until we can get enough of data in context for potential partners. Those structures in our view, in the company's view the least offensive to the stocks that we can come up with which is why we try them and at this point we will work very hard to continue to minimize solutions and likely -- with other questions until we can get the kind of data that we need to get non-dilutive financing.

So I think there is no question that we want all of us want the stocks perform better, I think it's our partners activity that speaks our media relations efforts, and investor relations efforts, it speaks to all the conferences pretty much that we can say our prepared remarks and we’re going to keep that down until we can get the type of visibility and activity in stocks that we’re all based of.

Unidentified Analyst

You know what Peter, as we’re focusing on minimizing the dilution we need to address the share because as the share price decreases it just augments or makes dilution that more susceptible based on a current market share price. The other question that I’ve is if you’re in constant communication with the New York stock exchange officials regarding our listing status, do these officials have more information than shareholders regarding whatever other than just put your cash balance, what's the share price, certain parameters that they are interested in only or are there other information that keeps them perhaps at bay from acting. I don’t know how else to put it.

Peter Culpepper

Sure. We have communicated with them real time and I can engage with press releases with regard to our interaction to and our openness to comply with all the NYT and NTT [ph] regulations. Our visit on the floor with our specialist of exchange officials, so we were active in that relationship building and maintenance in the regulatory framework with the exchange so they don’t get any initial or special information, the stockholders are not aware of. They think it more real time in terms of when a press release is done so that happens. I can't say after we lost a breakthrough designation, going back May 2016 we were active in communicating them with our way forward. We were very in that case went over our business plan with them, make sure they understood what we were doing on the spec moving forward in Phase 3 and the assurance that we will work closely with them. So they knew we had a viable opportunity here in advancing PV-10 and of course PV-10 is there with them, we ran over that in detail.

That’s very important, so we have a various tactical relationship because we’re transparent and we’re open. We know we have an opportunity to move forward. We absolutely agree with the stock price is critical for minimizing dilution and that’s where the effort on Al' and partners is really our open this year and investment in question to having kind of in this call. We want stockholders to feel good about what we’re doing and we really believe that this is a the most compelling source that there is once compelling opportunity there in biopharmaceutical development and I think that is going to win the day.

It's very unusual example of a company against all of our peer companies that we thrashed [ph] in my knowledge we have the most unusual set of circumstances on the way or the detected compounds, the ways it's been used, the way it's been developed and even going to the fact that we did not the traditional way of finance in the companies into their beginning but there is many unusual aspects, but what we do have is a very promising set of compounds and analogs that we’re developing and that’s what's going to win today. We see this first hand and that’s what we’re trying to convey to you, we as in Eric and myself and others in the company, we can just first-hand in who we’re interacting with. It's the institutions that’s just the regulatory bodies but the -- on allergy and dermatology focused research and development institutions, institutions that are very well-known. Eric alluded to Moffitt Cancer Center as one there is University of Chicago, it's other hot profile well-respected institutions that have been very active in their involvement with PV-10 and I'm confident the more we will become public and we’re thrilled with the reception and what this speaks to how we’re more bullish than ever and seen this through.

What we’re trying to convey to stockholders is we should feel good about what we’re going and we are going to power right through a successful conclusions as we can.

Unidentified Analyst

I appreciate that and I can see both you and Eric hard at work, you set out on a strategy, you’re implementing that strategy and that’s the way it should be. I only wish that we had 50 million in the bank to make sure that get there. I think the reason why the stock went down today drastically and the market investors are hungry for data, hungry for results, hungry for something that will move the share price and I'm concerned as an investor, I think I heard your earlier comment on April 30 and you’ve investors on the sidelines waiting to help us along with ATS position. I think if you’re listening please act soon rather than later and that’s it gentlemen. Thank you so much for all you do. I appreciate it and I really want to win on this thing.

Peter Culpepper

Yes. And that’s what we’re going to do, when patients win, we’re all going to win and we’re very focused on that.


Our next question comes from the line of [indiscernible]. Please proceed with your question.

Unidentified Analyst

So I’ve a few questions here but I will try to be very quick. What is the status of the Sinopharm relationship I'm assuming it's not going to proceed?

Peter Culpepper

Sure. So [indiscernible] except it's not a formal relationship, a very focused like a lot of global potential partners and exactly what we’re doing in Sinopharm case in Asia. So we’re working through and we alluded to in the prepared comments, we’re working through the regulatory bodies in Asia including China and the matter fact we met Sinopharm twice in Q2 so the Sinopharm executive know the potential for PV-10 as an injectable for multiple cellular tumors in China. Of course the liver cancer is very high profile in China, Sinopharm and the particular anti-tumor subsidiaries that we’re directly working with the wholly owned subsidiaries. Sinopharm is focused on PV-10 understand injectable the appreciating injectable to understand the relationship with Ingelheim, Sinopharma has a relationship with Boehringer as they do with Pfizer.

That interaction and those discussions with Sinopharma continue, we will continue, we will continue to meet with them, we know them well and quite frankly we are going to continue to work with Boehringer and Ingelheim as Eric alluded because they are providing that invaluable support whatever we do with Sinopharma will very much include Boehringer and Ingelheim discussions. We don’t want to cut off our noses so to speak with regard Boehringer and Ingelheim but we’re also we’re cognizant of the inter-relationships of different companies.

Pfizer has a relationship with Sinopharma, Boehringer and Ingelheim has relationship. So there is lot of room for growth in this industry in a good way because people are suffering in China, we know that, people are suffering in most parts of the world with inadequate cancer treatments and it's a growing problem. In China the instance of liver cancer continues to increase, the incidence of numerous cancer types and we think we have a real opportunity here and this goes for most geographies in the world there is a real unique opportunity for PV-10, it's a chemical stable molecule. We have a very significant manufacturing, logistic, set of ability to operate globally at biologics and the more complicated other cancer therapies just do not have. So we know that that’s enrolling in organization like ours can understand that.

Unidentified Analyst

Nobody disputes opportunity, Peter, I think so I just want to know where we are signed up on. How long have we had relationship with Boehringer? How long has it been?

Peter Culpepper

Well we formerly signed the LOI with them in Barcelona on July 2nd, 2015 we were talking to them before that so the next one the formal it's LOI for commercialization for PV-10 in Mainland, China, Hong Kong and Taiwan. So that were times like I think 2015.

Unidentified Analyst

Okay, switching gears if I could. PH-10, my understanding is that all the raw data is being collected, there was a mention and I just didn’t follow it on the call I apologize. So if you’ve to repeat please forgive me. Is there an expectation of a time frame where there will be PH-10 news?

Eric Wachter

So we have recently met with the investigational team that you’re saying that saying prominence in the immunology expert, dermatology in New York to review the immunologic and we corrected that in the study. I would like to [indiscernible] experience because we had some hypothesis about how PH-10 might be working and this certainly has confirmed some of those hypothesis and I'm hoping some near areas of investigation. So we’re wrapping up the analysis what I think was interesting, you referred to the basic analysis dataset in the next weeks we will assess whether there is a way to fast track that information into the public domain and we’re also moving to conduct a secondary more detailed analysis of those same that we collected from the stations. We rolled between 20 and 30 patients in that stuff last year and we have perhaps these specimens that they provided various end points in the study, the initial analysis of those looks very encouraging. We will report on those as soon as possible and we’re going to conduct it at this point more detailed analysis to get a finer point on that mechanism. It does appear that we have potentially a very unique mechanism of action that would be possibly quite valuable.

Peter Culpepper

And related to that we have had numerous guests with potential dermatology partners numerous guests with potential dermatology partners we even discussed that, it's related to that, we have had numerous guests with potential dermatology partners. We even discussed even that this is recent interaction there, we were referring to with this very connected dermatologist. We all know that we have sent our advisory report. So we were poised to take this sort of information and have dialogue with potential partners in the industry and this is exactly kind of data just like on PV-10 this invaluable for potential partners. A real characterization of the unique anticipation in this case.

Unidentified Analyst

And I think it's very exciting. I mean you know this is a very strange situation, there is more momentum in Provectus today than ever before. There is a lot of good stuff going on, you’re alluding to many things, you guys are alluding to many more things and yet we kind of in the downs with valuation and it seems to me the only thing that’s driving the decline in the valuation is the knowledge of some that we need to raise money. I don’t think these two things are unrelated. I'm just hoping when you raise money it's from the brand you source if I could be very honest.

Peter Culpepper

Thank you.


Our next question comes from the line of Bill Watterson [ph], a Private Investor. Please proceed with your question.

Unidentified Analyst

Do you expect any Phase 1b combo that should be released to the major commerce this year and then could you explain how you got to 81 progression events for the Phase 3 trial with the trial population under a 225 and finally how would you explain reaching that progression event it's probably really we want to believe that patients in the comparison arm [indiscernible] Chemotherapy at which they are 75 are likely to generate a progression of that within some reasonable amount of time but with the protocol is hitting all accessible their fees in PV-10 arm -- there is probably a less likelihood of hitting progression, is that fair? Thank you.

Peter Culpepper

Bill, I will address to those in the order of that they were asked. It's possible that we would report some initial data from the Phase 1b portion of the study this year if that’s the case it would be some form of inter-data it's much more likely that will be in the first half of next year picking I think into the 2017 oncology cycle. If we submit an abstract today to a major meeting that wouldn’t be reported until sometime late in the fourth quarter so we have the technology that’s likelihood, public readout of those data would not be until sometime in the first half of next year. That’s not to say that in the context of confidential discussions with potential corporate partners there may not be some opportunity to share those data with partners in that and also you can show speculation at this point.

Turning to the 81 events, the 81 events for the interim analysis so that is when half of the total events necessary for the primary endpoint occurs, so the primary end point study would occur when 162 patients have progressed. This is why it maybe important at the end of the study for the data monitoring committee to look at study data at some period after allocations have been removed in the study, if those events have not occurred and find in some cases and some arm of the study or maybe in several arms of the study, I think all we have to study are not progressing at the rate that these projected when the study was designed.

Unidentified Analyst

So are you suggesting that all through 25 patients have to be enrolled in order to undertake the interim analysis front?

Peter Culpepper

I will give you a ludicrous example and that is if we enroll the 162 patients and this is a under [indiscernible] occurred everyone of those progressed on day one, the study stops. We hit those milestone, we are not having to enroll 225 patients. The statisticians will take a model of this study, we give them projections on the progression free survival in the different parts of the study and based on calculations of the necessary power of the study, statistical power of the study and they can run classic models to understand how large this study -- it's powering the study. You hear in oncology discussion about the powering the study.

And so we use standard models for design of the study and expecting certain rate of progression in the comparator arms based on industry data that was available and projected based on our experience in Phase 2 what the rate of progression would be for patients who receive PV-10 and I mentioned previously in one of these calls that in addition to that we then took us two rates of progression. We have multiplied the time we expected for the comparator arm to have by a factor of two and we divided the time that we expect the PV-10 arm to occur by a factor of two. Fed those numbers into model and we assumed 20% Phase 2 drop out of the study because they didn’t see a result for example in the comparator arm or they didn’t like some of the aspect, the PV-10 that we’re having which is consistent with rates of patient drop out that occurred in some earlier recent Phase 3 melanoma studies. So all of those are considerations went into powering the study and that’s how product statistician that we worked with for design study came up required for 225 patients overall, a 162 events leading to the primary endpoint half of that is 81 events necessary for the interim assessment.

Unidentified Analyst

Last question, with regard to PH-10 previously you would mentioned or discussed or disclosed publically that Moffitt was or the Moffitt Cancer Center was working on or conducting work at least on your mechanism of action. Why haven't you done that with respect to the investigator you named but not up on this call. Why didn’t you disclose or being transparent about that?

Peter Culpepper

Normally we become transparent in those matters but that information is publically available so we did not talk about until they presented data in a meeting and at that point it was clear to McKenzie [ph] who that was and so at that point it was no longer necessary to protect their anonymity. While this process is playing out in terms of PH-10 we will protect the anonymity of the team that we’re working on with the immunology there if we are able to turn that into some sort of publishable form that will become public knowledge as well. I will use that as an option to jump on it but I hate to bring this stuff but one was the problem that plagues Provectus is we have got a lot of very interested stakeholders and occasionally some of the stakeholders do inappropriate things like for example they might contact an investigator in a clinical program or a non-clinical program and under some pretense try to probe for inside information and I consider that to be very unethical and it's one of the reasons that we try to protect the interested [ph] parties that we work and it's something that I feel very passionate about.

We’re not trying to be deceptive, we’re simply trying to protect individuals until it's no longer possible to do that. We have responsibilities to report the names and locations of our clinical investigators when they go in, we have responsibility to report newsworthy items, publications, conference presentations for example when those become publically available and at that point where we’re no longer able to protect those individuals but I would encourage all of our stakeholder to respect the sanctity of those relationships with those third parties. We count on them not only to do legitimate objective, independent work but to remain motivated and not become irrigated in their relationship with Provectus and with stakeholders.

Eric Wachter

Also I will note that the company did press release on this engagement and the mechanism of action and then prior to the first publication of the paper. Thank you. Dr. Margret [ph].


There are no further questions in audio portion of the conference. I would now like to turn the conference back over to management for closing remarks.

Peter Culpepper

Thank you. Operator, before I conclude I do want to point out that there will be a full version of this transcript of prepared remarks of myself and Eric Wachter as well as the Q&A and an outstanding entire set of Q&A, most appropriated. I do apologize. I believe there was an incorrect version of the transcript on the line prematurely there was just part of the prepared remarks so the full prepared remarks and the full Q&A will be posted as well as a replay audio to those who want to listen.

I very much want to thank everyone for listening in for all the questions and as always you can contact Marlon Nurse, at Porter, LeVay & Rose if you want additional information, it is available as with Porter, LeVay & Rose team. I'm available to the extent I can. Our next call will cover the third quarter and we expect it to hold that in November and we expect to have a handle again on the timing of our results at that time and until then thank you very much and good luck for now.


This concludes today's teleconference.

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