NEW YORK (TheStreet) -- Trading in Provectus Biopharmaceuticals (PVCT) remains halted early Tuesday morning following Friday's decision by the FDA to reject the company's request to grant Breakthrough Therapy Designation to the experimental melanoma drug PV-10.
At some point today, Provectus shares will start trading again, likely with a hefty dose of volatility. Some things to consider:
1. Provectus and its executives should be the target of an investigation and censure by the FDA.
Provectus Chief Operating Officer Peter Culpepper made several unsubstantiated claims about the efficacy and safety of PV-10 in melanoma patients on a conference call Friday evening. In my opinion, Culpepper's statements were a clear violation of FDA law, which generally forbids companies or its executives from promoting the use of experimental (unapproved) drugs without demonstrably proven clinical evidence or regulatory oversight.
Around the 25:50 mark of Friday night's conference call, Culpepper, in response to a question, says:
"The reason we will be successful is because we do have a drug [PV-10] that works. It works very well..."
PV-10 does not "work" for the simple reason that Provectus has never submitted a new drug application to the FDA. Only drugs that are reviewed and approved by FDA can be deemed to "work" in patients.
Later in the same call, Culpepper digs a deeper hole for himself. At around the 27:15 mark during the Q&A, an investor named Albert says, "We're saving lives here. We're saving lives." Culpepper replies, "Exactly."
Provectus has no data demonstrating PV-10 prolongs survival in melanoma patients. Provectus cannot say PV-10 is "saving lives" because no such clinical data exists.
At 27:45 of the call, Culpepper says the following about PV-10's efficacy:
"We know it's [PV-10] saving lives. We know that the patients we have treated successfully have no evidence of disease years after, so yes, this is absolutely critical we proceed and we have no questions in our minds that we will continued and be successful simply because the drug works."
Again, at the 1 hour and 3 minute mark of the call, Culpepper adds:
"There are forces out there obviously that are not in favor for whatever reason but that's not going to trump at the end of the day something that clearly works on patients and helping literally saves lives and treat disease when to our knowledge, as we know from the data, we are dealing with refractory patients who have failed other therapies and are being treated successfully with PV-10."
I can't decide if Culpepper is mendacious, stupid or a bit of both. Regardless, his reckless, unsubstantiated claims about PV-10 will only serve to anger the FDA and should result in a warning letter and additional mistrust between the company and regulators.
2. Provectus' deliberate decision to delay disclosure of the PV-10 Breakthrough Therapy Designation (BTD) rejection notice deserves greater scrutiny from the SEC and the New York Stock Exchange.
Responding to a question on Friday's conference call, Provectus Chief Technology Officer Eric Wachter claims the company knew nothing about the FDA's PV-10 BTD decision until Weds. May 21, when he called his FDA contact person and was informed of the rejection. Wachter explains away the five-day notification delay by claiming his FDA contact person "forgot" to call him about the rejection decision. The call on Weds. May 21 between Wachter and the FDA was followed up up on the same afternoon by an email from the agency to the company with formal notification of the BTD rejection.
Even if you believe Provectus, the FDA's decision to reject the PV-10 BTD request was known on the afternoon of Weds. May 21.
This is significant and still troubling. On Weds. May 21 at 2:08 pm ET, Provectus issued a press release refuting details of an article published earlier the same day by Seeking Alpha. The Provectus press release states, in part, "The FDA has not reported back to the Company with respect to the Company's application for Breakthrough Therapy Designation."
Provectus admits knowing about the FDA decision on the "afternoon" of Weds. May 21, so was that before or after the company issued the denial at 2:08 pm ET? The SEC should ask for proof.
On Thursday, May 22, Provectus rang the opening bell on the New York Stock Exchange. The company celebrated its new NYSE MKT listing with the full knowledge FDA had rejected the BTD request for PV-10. Provectus hid this material information until Friday afternoon at 1:53 PM ET.
Let's not also forget Provectus removed a description of PV-10 as a "breakthrough cancer drug" from its web site on Tues. May 20.
3. Provectus has been flogging the same non-randomized (single arm) PV-10 phase II study data since 2009. The data are stale, which goes a long way towards explaining why FDA said no to BTD.
May 14, 2009: Provectus announced the completion of patient enrollment in the PV-10 phase II study.
May 18, 2009: Provectus presents interim results from 20 patients in the PV-10 phase II study.
May 21, 2010: Provectus presents another update on 40 patients in the PV-10 phase II study at the ASCO annual meeting.
Nov. 5, 2010: Provectus announces full phase II data on PV-10, presented at the Melanoma 2010 Congress.
June 29, 2011: A full presentation of the PV-10 phase II results made at the 7th European Association of Dermato-Oncology conference. Note: This presentation includes specifics about the design of the PV-10 phase III study which was never started.
June 26, 2012: Provectus again presents final data from PV-10 phase II study at the European Post-Chicago Melanoma Meeting 2012, Interdisciplinary Global Conference on Developing New Treatments for Melanoma.
Oct. 2, 2012: Provectus presents final data from PV-10 phase II study again(!) at the European Society for Medical Oncology 2012 Congress.
Sept. 12, 2013: Deja vu? Provectus presents additional results from PV-10 phase II study at the European Cancer Congress.
May 14, 2014: Provectus previews a subset analysis of the same PV-10 phase II study to be presented at the American Society of Clinical Oncology annual meeting.
4. Provectus is spinning when it tells investors that a short bridging study will be enough to compile the data necessary for FDA to review and approve PV-10.
What is PV-10 designed to do? On Friday's call, Chief Technology Officer Wachter said PV-10 is being developed to improve melanoma "symptoms."
"Our assumption going into the application was that improvement in symptoms... if we make the patients' lesions go away that's tantamount to making the patients' symptoms of that disease go away. We don't seem to have been successful in convincing the agency of that," Wachter said. According to Provectus, symptoms of melanoma include pain, bleeding or infections.
Unfortunately, improving the symptoms of melanoma isn't the same as treating melanoma. Injecting something into a melanoma lesion and making it disappear isn't necessarily a clinical benefit for patients because melanoma is a systemic disease. The most visible manifestation of melanoma are skin lesions, but cancer cells can spread to nearby tissues and lymph nodes even in early stage disease. These cancer cells can survive and spread even if the skin lesion is gone. In more advanced melanoma, the cancer cells spread to distant lymph nodes and other organs.
Every other company developing "intra-lesionally injected" melanoma drugs knows this about the disease, which is why Amgen (AMGN) - Get Report, for instance, designed a large, randomized phase III study of its engineered oncolytic virus T-Vec with a primary endpoint assessing durable overall response (defined as a complete or partial response lasting six months or longer.) T-Vec demonstrated a statistically significant improvement in durable overall response compared to an active comparator, the immune booster GM-CSF. But this positive result wasn't sufficient for Amgen to seek FDA approval of T-Vec. Amgen had to also show T-Vec prolonged survival compared to the active comparator -- something the drug hasn't quite done yet. T-Vec's future is cloudy.
Vical (VICL) also developed a drug injected directly into melanoma lesions. A large phase III study with primary endpoints of overall response rate and overall survival failed last year.
Provectus, Amgen and Vical enrolled similar melanoma patients into their respective clinical studies.
Melanoma doctors aren't interested in a drug which improves melanoma "symptoms" without also impacting the underlying disease. Why would they? Melanoma, left untreated, is fatal. Treating melanoma symptoms only is a waste of time. Provectus knows this, of course, which is why comments made by Wachter and Culpepper Friday are purposefully evasive, and in my opinion, totally misleading.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
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