Why Provectus Biopharmaceuticals Inc. Shares Plummeted

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Provectus Biopharmaceuticals (NYSEMKT: PVCT  ) , a clinical-stage biopharmaceutical company focused on developing therapies to treat oncologic and dermatologic conditions, plunged as much as 20% after the company issued a press release refuting claims made against the company from an investment community blog.

So what: According to Provectus' response, it refuted what it believed to be numerous inaccuracies in the blog. Specifically, Provectus notes that PV-10, its investigational metastatic melanoma therapy, hasn't failed the breakthrough therapy designation, but is awaiting a decision from the Food and Drug Administration as to the status of its request. Provectus also denies any affiliation with stock promoters, and assured its investors that the most important patent covering PV-10 expires in 2031 and not 2016. In response, at least two law firms have opened investigations into potential wrongdoing as of yesterday afternoon.

Now what: Thanks to high-profile short-sellers like Citron Research and Muddy Waters the ability to tear a company apart in a public format has never been easier. Provectus shares were absolutely clobbered on these allegation which, as of now, the company vehemently denies.

So what should you do? I'd suggest sticking to your current investment thesis in the company because all that really matters is whether or not Provectus can get its phase 3 study of PV-10 off the ground. The initial phase 2 results were encouraging and are the primary reason Provectus' share price saw such rapid appreciation. However, it reported its final top-line data from this trial in Oct. 2012, and shareholders have to be wondering what's with the hold-up? If Provectus is simply hoping for a breakthrough therapy designation and then to find a partner based on that designation that's one thing. But if Provectus fails to get the breakthrough designation, then what? For now, given the speculation surrounding Provectus, I'd personally suggest remaining on the sidelines until we have more clarity about when a phase 3 trial for PV-10 is scheduled to begin.

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Read/Post Comments (10) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On May 22, 2014, at 3:47 PM, dorismydog wrote:

    PVCT - PV-10 - This therapy has been proven to actually provide a Complete Response to tumors that have previously been treated and failed with the 'leading' melanoma drugs available. The drug, PV-10, via a single injection into a melanoma tumor, within days eliminates the tumor, killing it completely with little or no side effects, but also enables the body to go out and kill other tumors that may have metastasized anywhere in the body. Akin to a 'cancer vaccine' (my terminology).

    The technology has not changed, but it is being questioned recently when nothing in the company has wavered. Provectus continues to deliver, with recent major additions to the Strategic Advisory Board by member from most of the major pharmas around the world. They are being highlighted at ASCO. They are getting endorsements from the medical community by doctors of the highest caliber and qualifications. Some of these same doctors will be presenting the data from recent testing from at ASCO.

    There are some great research web sites that detail the technology in detail. These are posted below.

    I agree with you to research the company and technology, and determine for yourself what is right and what is wrong.

    It's not often one can find the golden nugget, one stock that makes your portfolio for years or even a lifetime. For me, I believe PVCT is that golden nugget. For cancer victims, it is proving to be a lifesaver.

  • Report this Comment On May 22, 2014, at 4:49 PM, chasemate wrote:

    I suggest that people look at the outstanding staff and board. High tech companies are notoriously late on new products-usually 18mo to 3 yrs

  • Report this Comment On May 22, 2014, at 6:29 PM, Wiley wrote:

    Thanks for the balanced article.

    Provectus management believes they have an extraordinary drug in PV-10. They have taken an unorthodox development path to try to avoid the cost and time of phase3 trials and having to share profits with a partner. I hope trying to develop PV-10 by themselves has not seriously delayed a very promising cancer treatment.

  • Report this Comment On May 23, 2014, at 8:35 AM, Professorredbag wrote:

    It's bit deceptive to mention Citron and Muddy Waters when neither of them has ever covered PVCT as far as I could tell researching these companies' web-sites. The company is awaiting a decision on a Breakthrough Therapy Designation (BTD) where, if granted, may not have to involve a Phase III investigation.

  • Report this Comment On May 23, 2014, at 11:31 AM, TMFUltraLong wrote:

    Neither Citron or Muddy Waters are covering Provectus to my knowledge. I'm merely pointing out how easy it's become for short-sellers to tear apart a company these days via the internet, and Citron & Muddy Waters are simply great examples of firms that have done just that.


  • Report this Comment On May 23, 2014, at 12:04 PM, foolgabby wrote:

    "Thanks to high-profile short-sellers LIKE Citron Research and Muddy Waters the ability to tear a company apart in a public format has never been easier."

    The key word is LIKE and all those who short stocks are SELFCENTERED, DISPICABLE, PARASITIC THEIVES.

    The investment world is infested with them.

  • Report this Comment On May 23, 2014, at 12:48 PM, dorismydog wrote:

    Sean - there is a story here. Care to have a ghost written copy?

  • Report this Comment On May 23, 2014, at 12:49 PM, dorismydog wrote:

    Sean there is a story here. Care to break it? (Pardon if this is a repeat)

  • Report this Comment On May 23, 2014, at 3:43 PM, Wiley wrote:

    Well BTD denied. The FDA letter shows management cutting corners. Too bad such a great drug is in such incompetent hands.

  • Report this Comment On May 24, 2014, at 11:30 AM, taladro wrote:

    More than a comment, my question is: what will happen now that the trading is being halted?

    Thanks for your reply. Regards

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Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

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9/2/2015 1:09 PM
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