Dear Stockholders: October 15, 2015
With the opening of our phase 3 trial for PV-10 as a treatment for Stage III melanoma, commencement of our phase 1b/2 trial combining PV-10 with Merck’s Keytruda® as a treatment for Stage IV melanoma, progress being made to bring PV-10 to Chinese and other markets as a treatment for cancers of the liver, and completion of enrollment in our mechanism of action studies for PV-10 and PH-10, 2015 has already been extremely important to Provectus. We believe that the remainder of 2015 and early 2016 will be highly significant in our corporate history, and this is, therefore, an opportune time both to review the recent past and to look ahead to what the balance of the year holds for us.
In our most recent quarterly investor conference call, we laid out the five clinical and business value proposition pillars of PV-10 and PH-10, as well as our three key focus areas. As we progress, these will continue to be useful guideposts to our overall business strategy and implementation of our plans.
The first pillar is our intellectual property. We hold a number of patents covering both PV-10 and PH-10 in the U.S. and overseas. Such patents form the basis for success for any biotech firm, and we believe the patents awarded, allowances received and future patents for which we will apply will allow us to maximize the financial rewards that will accrue to us if and when our investigational drugs receive regulatory approval. Our patents extend back to 2002, and recently we jointly received with Pfizer U.S. Patent number 9,107,887. We believe this patent protects the use of PV-10 in combination with certain other types of drugs in the treatment of melanoma and cancers of the liver. Specifically, the patent covers the use of PV-10 in combination with systemic inhibitors of immune system down-regulation, such as anti-CTLA-4, PD-1 and PD-L1 antibodies, along with enhancers of immune system up-regulation, such as IL-2 and interferon-gamma. Pre-clinical testing of PV-10 used in combination with these important classes of drugs demonstrated potential importance for treatment of advanced cancers.
The second pillar is our control of the drug substance and drug product supply chain. Patents only protect drugs so much. Control of the supply chain offers added protection, and we believe that we have made certain there is sufficient PV-10, which we have manufactured, available for those wishing to use it in their research. We understand the value of our investigational drugs, and we appreciate the potential of reverse engineering, which could lower their worth. By controlling the supply chain, and the intellectual property underlying that supply chain, we strive to minimize that risk.
Our third pillar is the regulatory guidance we receive from the FDA in the U.S. and its counterparts in other nations. We believe that the relationship between a drug company and its regulators should not be adversarial; indeed, we believe that we have worked very hard to ensure that we achieve clear communication with our regulatory authorities. No regulator wants sick people to go untreated, and no drug company wants to treat people with compounds that don't work or worse are counter-productive. Our responsibilities are not identical, but we consider them to have substantial overlap. As we expand our clinical development efforts across multiple regions around the globe a productive relationship can help avoid bureaucratic delays and can help ensure that Provectus works with our regulators to establish the safety and efficacy of our investigational drugs for a wide variety of indications.
The fourth pillar is the mechanisms of action for both PV-10 and PH-10. Research into their effects is well-advanced, and we are working diligently to determine precisely what it is they do when used in patient treatments. Increasing our understanding of the activity of PV-10 and PH-10 should help us better understand how to optimize their use and guide advanced development in oncology and dermatology.
Forming our fifth and final pillar are the clinical study designs that generate clinical data. We went into a great deal of detail about this on our last quarterly investor conference call, and so a brief reiteration of what we said should be enough to illustrate our point. Our currently phase 3 melanoma trial, phase 1b/2 melanoma combination trial and upcoming phase 1b/2 liver trial are three examples of well-established study designs intended to generate randomized data to support potential approval of PV-10 for the respective indications.
During the first quarter, Provectus opened its phase 3 study of PV-10 for locally advanced cutaneous melanoma. We estimate a primary completion date of September 2017. Meaningful clinical data may potentially be available via a planned interim analysis on a shorter timeline. Since the study opened we have focused on opening key sites in the U.S. and implementing the necessary regulatory and operational framework to open sites in strategic regions internationally, including Australia, China, Brazil, Mexico and Europe. Study rollout is a major undertaking that we expect to continue into 2016.
Provectus also recently began the initial clinical study of PV-10 in combination with immune checkpoint inhibition in patients with advanced, metastatic melanoma. The anti-PD-1 drug, pembrolizumab (also known as Keytruda), is the checkpoint inhibitor selected for this important study. As anticipated in the Company's joint patent with Pfizer, the two drugs have largely unrelated side effect profiles but could function cooperatively to enlist the patient’s immune against his or her cancer.
Scientifically, combination therapy in cancer treatment is a rapidly maturing area, where rational combination of agents is replacing the empirical approaches of the past. Commercially, this is the second of three steps that we hope will significantly strengthen our hand in negotiating a co-development transaction with an immunotherapy-focused partner. Our joint patent with Pfizer was the first; the phase 1b/2 combination study of PV-10 with Keytruda is the second; and the third is our immune mechanism of action clinical study, which is being finalized at the Moffitt Cancer Center now that enrollment is complete.
With regard to the liver cancer indication, data on PV-10 were presented in July at two international liver cancer conferences, in Europe and in Japan. We believe our relationship with Boehringer Ingelheim, also announced in July and centered on advancing development of PV-10 for hepatocellular carcinoma, a major concern in many parts of Asia as well as certain parts of Europe, will grow in significance as the year continues. In particular, Boehringer employees have been exceptionally helpful in advancing our mutual interests in China.
Discussions have also continued on the basis of the Memorandum of Understanding signed last year with Sinopharm-China State Institute of Pharmaceutical Industry, CSIPI, the leader among all pharmaceutical research institutes in China, and Sinopharm A-THINK Pharmaceutical Co., Ltd., the only injectable anti-tumor drug research and development manufacturer and distribution integrated platform within Sinopharm Group. The status of our relationship is best expressed by Dr. Zhidan Jia, Chief Executive Officer of Sinopharm A-THINK, who stated that, "We continue to work closely with Provectus to arrive at an agreement which defines the terms of our collaboration in bringing PV-10 to the Chinese Market. We hope to come to terms in the near future."
We have had similar discussions with several firms and experts in India and Brazil, including face-to-face meetings as well as electronic correspondence. We are clearly not as far along in India or Brazil as we are in China, but we believe that the environment for a regional deal is promising in both countries.
Provectus retained healthcare communications company PharmaHEALTHLabs to coordinate and facilitate an Investigator Advisory Board meeting during the 11th Brazilian Melanoma Conference in mid-August in Goiania, Brazil. This meeting introduced our PV-10 development program to leading investigators in Brazil and allowed us to critically review the phase 3 protocol for suitability in the Brazilian healthcare environment.
The development of PV-10 as an investigational treatment for melanoma is the most advanced of our programs, and we are also making headway in our development of PV-10 to treat cancers of the liver, and other uses of PV-10. We expect further data to be communicated at major conferences and published in peer-reviewed publications in coming months.
At the beginning of the year, enrollment began in the phase 2 mechanism of action study of PH-10 in up to 30 patients with mild to moderate psoriasis, and accrual at our three study centers in the U.S. was completed in mid-September. We expect data collection to be completed by the end of the year. We anticipate that this study will provide us with the data necessary to clarify the clinical path to phase 3 and to further discussions with potential PH-10 partners with monetization and commercialization of PH-10 as our corporate objective.
On June 24, 2015, we announced that we had completed a public offering of common stock and warrants that raised $13.1 million. We believe that this enables us to now continue as a going concern into 2017. We continue to state that we will raise funds as necessary to ensure adequate cash on hand for purposes of our interaction with BDO, our external auditors, and NYSE MKT, as well. As of June 30, 2015, we have over $23 million in cash and cash equivalents, and in July we refreshed our $100 million shelf registration statement with the SEC to ensure that we continue to meet our obligations as a public company.
It has been a long road for Provectus, but bringing a local cancer treatment to market on a global scale is a project that is very promising and very much worth completing. We are investigating whether Rose Bengal, in the form of PV-10, will help treat cancerous tumors and inflammatory skin conditions. We have laid out our exit strategy, which is to establish the intellectual property portfolio required, prove the preparations work, and find a partner that sees the value of these drugs the same way we do.
We are grateful for your patience and support over the years, and we believe that the best is yet to come for Provectus. Thank you for choosing to be a part of it.
Provectus Biopharmaceuticals, Inc.
FORWARD-LOOKING STATEMENTS: This correspondence contains "forward-looking statements" as defined under U.S. federal securities laws. These statements reflect management's current knowledge, assumptions, beliefs, estimates, and expectations and express management's current views of future performance, results, and trends and may be identified by their use of terms such as "anticipate," "believe," "could," "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. Readers should not place undue reliance on forward-looking statements. Such statements are made as of the date hereof, and we undertake no obligation to update such statements after this date.
Risks and uncertainties that could cause our actual results to materially differ from those described in forward-looking statements include those discussed in our filings with the Securities and Exchange Commission (including those described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2014) and the following:
our determination, based on guidance from the FDA, whether to proceed with or without a partner with the fully enrolled phase 3 trial of PV-10 to treat locally advanced cutaneous melanoma and the costs associated with such a trial if it is necessary to complete (versus interim data alone);
our determination whether to license PV-10, our investigational drug product for melanoma and other solid tumors such as cancers of the liver, if such licensure is appropriate considering the timing and structure of such a license, or to commercialize PV-10 on our own to treat melanoma and other solid tumors such as cancers of the liver;
our ability to license PH-10, our investigational drug product for dermatology, on the basis of our phase 2 atopic dermatitis and psoriasis results, which are in the process of being further developed in conjunction with mechanism of action studies; and
our ability to raise additional capital if we determine to commercialize PV-10 and/or PH-10 on our own, although our expectation is to be acquired by a prospective pharmaceutical or biotech concern prior to commercialization.