PROVECTUS COMPANY OVERVIEW

Provectus (PVCT) is a clinical stage bio-pharmaceutical drug development company. There are 3 key scientific managers running the business along with the CFO, who is also the Chief Operating Officer. They preside over a stable of expert and specialized consultants. The company has two lead drug candidates: PH-10 for significant, often severe, and common skin disorders and PV-10, a dual action, local ablation and immunological anti-cancer drug. PH-10 is currently the subject of post-Phase II trial research into mode of action. PV-10 has successfully completed Phase II trials for malignant melanoma, is currently the subject of independent research on mode of action and efficacy in conjunction with radiation, and it will have a Phase III pivotal trial starting shortly.

Both drugs are based upon a dye that has been in human medical use for over 100 years and has an extraordinarily benign safety profile, especially surprising since most cancer-killing agents tend to be quite toxic and debilitating, to the host: the patient. Provectus has patents on the composition of their drugs, as well as for their use in cancer, and a variety of other human ailments. The patents do not expire until 2031. They also have partnered with Pfizer on a joint patent on the use of PV-10 in combination with other cancer drugs.

The FDA has granted PV-10 Orphan Drug Status for the treatment of highly lethal metastatic melanoma and metastatic liver cancer. It has a successful and expanding Compassionate Use Program in operation and successfully completed trials on metastatic cancer of the breast, liver and melanoma, with positive results in all three. Positive effects in this context is that, if you inject PV-10 into a solid tumor, it kills cancer cells, usually within a week and doesn't harm normal tissue. Many injected tumors actually disappear while others shrink and stop growing. The dual action of the drug is that the destruction of the cancer by direct injection of PV-10 serves to sensitize the patient's immune system to seek out and kill similar cancer throughout the body. There is convincing evidence that untreated cancer distant from the treated cancer is attacked by the patient's immune system after treatment.

MELANOMA RESEARCH:

Provectus has long focused on getting their first FDA approval for PV-10 to treat recurrent melanoma. They successfully completed a Phase II trial on the use of PV-10 in metastatic melanoma. Results showed there were only minimal side effects. The trial showed excellent efficacy results that were better than other treatments even though the average patient in the Provectus Phase II trial had failed a median of 6 other treatments. Both Complete Response (CR: a tumor disappearing) and Overall Response (OR: tumors eliminated+shrinking+not growing) effects were observed in both the treated and untreated tumors (a demonstration of the immunological bystander effect). The 2014 ASCO data presentation indicated that, for the patients who had all tumors treated, CR was 50% and OR was 71%.

The excellent tumor responses prompted Provectus to apply for Breakthrough Therapy Designation in hopes of speeding progress to an NDA submission and ultimate approval. The FDA denied the application, apparently because they wanted more than just tumor-response. Provectus management revealed their alternative path to NDA submission on June 3^rd. Provectus announced that they would conduct a

“...phase 3 randomized controlled trial of PV-10 in patients with unresectable locally advanced cutaneous melanoma will assess response to PV-10 vs that of systemic chemotherapy in patients who have disease limited to cutaneous and subcutaneous sites and who have failed or are ineligible for systemic immunotherapy. Progression-free survival and complete response rate will be assessed using standard criteria (RECIST 1.1). Overall survival and exploratory assessment of patient reported outcomes related to lesion pain and other melanoma symptoms will also be assessed. The study is expected to commence this year, and will allow for interim assessment when 50% of the required events have occurred (i.e., disease progressions).”

While the overall value of Provectus is dependent upon the likelihood and extent of future profits from treatment of both skin disorders and solid tumor cancer of many types, the most near-term value proposition is about the ability of PV-10 to successfully treat melanoma. Efficacy will surely be the determining factor for FDA approval and commercialization, given the well-established benign safety profile of the drug. Direct ablation of tumors by PV-10 injection is tissue-sparing and can be used with patients who are weak and debilitated, especially if they are not candidates for surgery. Given the tendency for melanoma to spread, the immunostimulant effect of PV-10 treatment may be especially helpful for patients with in-transit metastases.

Treatment of recurrent unresectable locally advanced melanoma is just the first FDA approval being targeted by Provectus. Next, without much delay, they plan on doing combination trials with recognized Systemic drugs to widen the indication.

In the June 3rd conference call, Provectus outlined the characteristics of the proposed “...phase 3 randomized controlled trial of PV-10 in patients with unresectable locally advanced cutaneous melanoma.... “

The proposed protocols are standard for this kind of pivotal cancer trial, with Progression Free Survival (PFS) and Overall Survival (OS) as the primary endpoints. About 1/3 of the patients will receive standard dacarbazine (aka DTIC) or temozolomide (aka TMZ & Temodar)) chemotherapy, with the remainder treated with PV-10.

FULL PLAN= 30 MONTHS: Provectus' plan is to start to enroll patients as soon as possible. They also plan to run a scheduled interim analysis 15 months after the initial patient enrollment. As I understand it, the Phase III trial has two stages, with the initial treatment and measurement phase scheduled to last 18 months from initial enrollment. In the subsequent 12 month period, patients will get followup exams to monitor disease progression and survival, but they will not be treated. Provectus could modify this or other aspects of the planned trials, possibly in the planned Conference Call scheduled for after the close on June 19^th. If there are official modifications, I will address them after they have been released by the company. In this article, I will deal with the plans, as they are publicly known, now.

PLANNED INTERIM ANALYSIS: FIRST STOP?. If the planned 15 month analysis shows that PV-10 patients are doing much better than the Chemo-treated patients, so that it would not be fair to the Chemo patients to continue the trial, it will, in all likelihood be stopped. For example, it is possible that there will be an obvious difference in disease progression, symptoms, significant side effects, and even the extent of deaths between the group of patients getting chemotherapy compared to the group who were treated with PV-10 once or twice near the start of their enrollment.

EARLY UNPLANNED TRIAL TERMINATION. We know that the direct cancer-killing effect of PV-10 is very fast. Moffitt Cancer Center research showed that cancer cells were no long viable when biopsies were taken 7 or 14 days after initial treatment. The prompt efficacy of PV-10 could lead to obvious differences in disease progression, symptoms, significant side effects, and even the extent of deaths between PV-10 and Chemo groups of patients long before the planned 15 month Interim Assessment is due.

EXISTING DATA SUGGESTS TRIAL TERMINATION SOONER RATHER THAN LATER

The FDA requires proof that Provectus' PV-10 works better than current treatments, or works as good as current treatments with fewer nasty side effects. Proof for the FDA means that a large number of patients need to be treated with PV-10 and compared to patients treated with something else. Normally, that “something else” would be the “Standard of Care” (SoC). For example, in early Stage melanoma, the SoC is surgical removal of the cancer, which tends to be effective in many cases. In later stages of the disease, there are a number of different treatments used, none of which are as effective as surgery in early stage disease. In fact, in the Provectus Phase II trial, the patients treated with PV-10 had failed a median of 6 different treatments before being dosed with PV-10.

The FDA wants to see a trial where PV-10 has been directly compared with another current treatment for the condition. The pivotal Phase III trial proposed by Provectus will compare the effect of PV-10 with Chemotherapy, a treatment that has been used for quite some time. The existing use of Chemotherapy provides a benefit to those of us trying to understand how the Provectus Phase III trials will turn out, because data already exists about the efficacy and safety of the Chemotherapy.

SIDE EFFECTS. The safety profile and challenges for Chemotherapy are well established.

The American Cancer Society indicates the side effects of DTIC as follows:

Common

• low white blood cell count with increased risk of infection
• low platelet count with increased risk of bleeding
• nausea
• vomiting
• loss of appetite
• irritation of vein used for giving the drug
• flu–like illness up to 7 days after receiving the drug (tiredness, headache, muscle aches, fever)
• hair loss or thinning, including face and body hair

Less Common

• taste changes, including metallic taste of foods
• hardening of vein used for giving the drug
• tiredness (fatigue)
• anemia (low red blood cell count, with tiredness, dizziness, or shortness of breath)
• birth defects if taken during pregnancy
• short-term or long-term infertility (inability to have children)

Rare

• diarrhea
• facial flushing
• liver damage
• redness and itching at injection site
• severe allergic reaction with symptoms like hives, itching, swelling in the mouth, face, or throat, and trouble breathing or swallowing
• extreme sensitivity to sun and UV light for up to 4 days after dose
• death from liver damage, infection, bleeding, or other causes

TMZ is very similar in its action to DTIC and research has shown that it is equivalent, as are the side effects:

Common

• nausea
• vomiting
• diarrhea
• constipation
• loss of appetite
• tiredness (fatigue)
• weakness
• hair loss or thinning, which may include face and body hair
• low white blood cell count with increased risk of infection
• low platelet count with increased risk of bleeding
• pain, itching, warmth, swelling, or redness at the injection site
• bruising or small red or purple spots under the skin

Less common

• mouth sores
• rash
• itching
• tiredness
• headache
• infection
• seizures (may be severe or life-threatening)

Rare

• low red blood cell count (anemia) with tiredness and other symptoms
• trouble walking
• dizziness
• allergic reaction
• infertility, which may be short-term or permanent
• birth defects or fetal harm if a child is conceived during or soon after treatment
• a second type of cancer, which can happen years after this drug is taken
• problems with liver function, including hepatitis
• death due to bone marrow shutdown, infection, or other cause

Chemotherapy designed to kill cancer can often also kill the patient because it kills non-cancer cells.

The safety profile for Rose Begal, the active ingredient in PV-10 is even more established than that for Chemotherapy. While DTIC has been used since 1975, Rose Bengal has been injected in humans for routine diagnostic purposes for well over 100 years. PV-10 targets only cancer cells and has minimal side effects, hardly affecting the quality of life and none of which are life threatening. As noted by, Shari A. Pilon-Thomas, PhD, one of the Moffitt Center researchers, “Almost all adverse events reported with PV-10 are local injection site side effects such as erythema, edema, pain, and blistering.” Blistering, in fact, is one of the signs that PV-10 is killing the cancer cells and that the immune system is being trained and activated to kill untreated cancer cells.

SAFETY CONCLUSION. Because of the existing data, and in spite of the lack of an existing direct trial comparing the safety of (DTIC or TMZ) Chemotherapy with that of PV-10, the planned Phase III trial will be quite straightforward. Chemo disrupts quality of life, at best, and kills you, at its worst. PV-10 causes minor annoyances at the site of injection until it heals.

That means, if the efficacy of PV-10 is only equal to that of Chemotherapy, PV-10 would be a significant treatment advance and the FDA should approve it.

EFFICACY. There is also plenty of very good factual evidence to suggest that Provectus' PV-10 is much more effective than (either DTIC or TMZ) Chemotherapy. The data so far show that Stage 3 Melanoma patients treated with PV-10 do much better on the primary endpoints of Progression Free Survival (PFS) and Overall Survival (OS) than patients treated with DTIC or its oral equivalent, TMZ in other trials.

EXISTING EFFICACY DATA: PV-10 versus CHEMOTHERAPY

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Drug....Overall Survival (mo.).....Progression Free Survival (mo.)

DTIC.........................6.4......................................1.5

TMZ..........................7.7......................................1.9

PV-10.......................12.6......................................9.7+

Note that PV-10 data are from the Phase II trial, for Stage 3 melanoma patients, which I believe will be the “indication” that Provectus' first NDA will aim for. It is also the type of patient that will be enrolled in the Phase III melanoma trials. The Phase II trial only lasted 12 months, so only the patients treated early were followed for more than 12 months, with the latest-treated patients only treated for the 12 months. All PV-10-treated patients were alive when the trial ended. Overall Survival for PV-10 may have been much more than the 12.6 months, but we don't know because the patients were not followed.

Progression-free Survival for the PV-10 data was also limited by the short duration of the trial. In fact, Median PFS for Stage III subjects was not reached during the 12-month study interval.

It is not difficult to look at the Survival data and be able to predict that PV-10 will help melanoma patients more than Chemotherapy. A rational expectation from the data is that Chemo patients will, on average, be getting sicker 2 months after treatment (not counting feeling sicker because of the treatments themselves).

It is also not a stretch to conclude that patients treated with Chemotherapy are likely to be very ill and possibly die, even before the scheduled 15 month Interim Analysis.

It therefore makes sense to check patient progress in the trial after 3 to 6 months has elapsed. The existing data suggests that PV-10 treated patients will have their tumors eliminated or shrunk or stable, with all, or near all, of them showing Progression-free survival. The data also suggests that the Chemo-patients will be getting sicker and sicker. This difference may even be observable after only 2 months. With patients gradually enrolled over the course of months, there may be enough obvious data to halt the trial very prematurely because it is not fair to condemn the Chemo-treated patients to suffer and perhaps die, when they can be given PV-10.

SUMMARY

1. If PV-10 and the Chemotherapies act as the prior data indicate, an NDA for melanoma may be submitted by Provectus in the first half of 2015.

2. If this occurs, the FDA denial of the Breakthrough Therapy designation will not have slowed PV-10's progress to commercialization.

3. Given the relative safety and efficacy of the different drugs, if the trial is not stopped very early for humanitarian reasons, the planned Interim Analysis is likely to result in the cancellation of the trial, prior to the end of 2015.

4. Given PV-10's superior safety and lack of significant side effects, if it is only as good as Chemotherapy, it will deserve FDA approval.

The Phase III pivotal trial will demonstrate the safety and efficacy of PV-10 to the market and to prospective acquirers a lot earlier than many have presumed.