PROVECTUS BIOPHARMACEUTICALS, INC. 10-K

ITEM 1. BUSINESS. General Provectus Biopharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, “Provectus” or the “Company”), is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases, with the aims of maximizing the curative impact of these medicines and achieving immunity from treated disease. These investigational drugs are based on an entire, wholly-owned, family of small molecules called halogenated xanthenes (“HXs”); our lead HX molecule is named rose bengal disodium (“RBD”). Former scientists from the U.S. Department of Energy’s Oak Ridge National Laboratory founded Provectus in 2002, identifying and advancing RBD’s dark-effect therapeutic potential and developing RBD and HXs into proprietary molecules. Starting in 2017, new science and business leadership pivoted and then expanded drug discovery and development, targeting global patient populations in a number of disease areas and indications made viable by RBD’s immunotherapeutic potential and new routes of administration. Science RBD possesses an innovative physical chemistry science with broad-spectrum prophylactic and therapeutic medical applications. The prerequisite mechanistic step for these immunotherapies is direct contact between RBD and disease that may lead to disease death repair, RBD treatment-specific innate immune activation, and disease-specific functional adaptive immune response. RBD displays consistent mechanistic behavior across different indications of a disease and across different disease areas, with the potential to be a multi-disease treatment platform and a universal contributor to different medical treatments. Drug Discovery and Development Strategy New company leadership has a compelling vision of accessible and affordable, safe, broad-spectrum small molecule immunotherapies. Provectus’ legacy intralesional (IL) oncology clinical program was pivoted and enhanced to pursue U.S. Food and Drug Administration (“FDA”) and/or Australia’s Therapeutics Good Administration (“TGA”) regulatory advancement for rare or refractory cancers of the skin and cancers of the liver in both single-agent and combination therapy settings. Drug development was expanded to pursue proof-of-concept of systemic RBD administration. Routes of administration and target diseases being developed include oral (“PO”) hematology in relapsed and refractory adult and pediatric leukemias, and PO oncology for prophylactic and/or therapeutic RBD in high-risk adult solid tumor cancers. Drug discovery into RBD treatment has also been deepened to explore different disease areas. Target diseases include virology, such as SARS-CoV-2 (COVID-19); microbiology, such as antibiotic-resistant gram-negative bacteria; ophthalmology, such as diseases of the cornea; and dermatology, such as combination therapy with systemic biologics for psoriasis and atopic dermatitis. 2 RBD and HX Intellectual Property (“IP”) RBD, the active pharmaceutical ingredient (API) in our current investigational immunotherapy medicines, is a systemically-active, environmentally-adaptive stable, and selective small molecule. RBD has a nominal formula of 4,5,6,7-tetrachloro-2’,4’,5’,7’-tetraiodofluorescein disodium. Rose bengal drug substance (“RB DS”) is produced by Provectus’ Quality-by-Design (“QbD”) manufacturing process, which avoids the formation of uncontrolled impurities generally (and also proprietarily) known to be present in commercial-grade rose bengal, and follows International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (“ICH”) Guidelines for pharmaceutical ingredients and current Good Manufacturing Practices (“cGMP”) regulations. Multiple Provectus cGMP RB DS lots have surpassed multi-year stability testing. The Company’s science and molecules are currently protected by global intellectual property that includes composition of matter, manufacturing methods and techniques, pharmaceutical synthesis standards, trade secrets, and concomitant combination therapy use for different disease areas. U.S. Patents We hold a number of patents covering the technologies we have developed and are continuing to develop for the production of investigational drugs and other technologies. All patents material to an understanding of the Company are included in the table below: U.S. Patent No. Title Issue Date Expiration Date 7,201,914 Combination antiperspirant and antimicrobial compositions April 10, 2007 May 15, 2024 8,470,296 Improved intracorporeal medicaments for high energy photodynamic treatment of disease June 25, 2013 July 28, 2022 8,530,675 Process for the synthesis of rose bengal and related xanthenes September 10, 2013 April 21, 2031 9,107,887 Combination therapy for cancer August 15, 2015 March 9, 2032 9,273,022 Process for the synthesis of rose bengal and related xanthenes March 1, 2016 September 17, 2030 9,422,260 Process for the synthesis of rose bengal and related xanthenes August 23, 2016 September 26, 2030 9,808,524 Combination of local and systematic immunomodulative therapies for melanoma and liver cancer November 7, 2017 March 9, 2032 9,839,688 Combination of rose bengal and systemic immunomodulative therapies for enhanced treatment of cancer December 12, 2017 March 9, 2032 10,130,658 Method of ex vivo enhancement of immune cell activity for cancer immunotherapy with a small molecule ablative compound November 20, 2018 December 18, 2035 10,471,144 Combination of local rose bengal and systemic immunomodulative therapies for enhanced treatment of cancer November 12, 2019 November 12 2034 3 International Patents The Indian Patent Office granted the Company’s patent application on May 29, 2020 for the combination of investigational autolytic cancer immunotherapy PV-10 and systemic immunomodulatory therapy, such as immune checkpoint blockade. Pfizer, Inc. is a co-assignee on this patent. The Japan Patent Office granted the Company’s patent application on October 5, 2020 for ex vivo enhancement of immune cell activity for cancer immunotherapy with small molecule ablative compound. H. Lee Moffitt Cancer Center is a co-assignee on this patent. PV-10 Product Pipeline PV-10 is an injectable pharmaceutical formulation of RBD and registration study-ready investigational drug product (“PV-10 DP”). Multiple lots of PV-10 DP have surpassed multi-year stability testing, respectively. PV-10 DP is shipped, stored, and used at room temperature. Provectus has developed two clinical-stage formulations of PV-10: an IL administration for oncology (10% RBD) for the treatment of cancers of the skin and cancers of the liver, and topical (“top.”) application for dermatology (0.01% RBD) for the treatment of inflammatory dermatoses (psoriasis, atopic dermatitis, and actinic keratosis). A third formulation is under development for a currently proprietary disease area. Research into new routes of RBD administration and formulations of PV-10 is ongoing, including PO, intranasal (“IN”), top., and/or intravenous (“IV”) for hematology, oncology, virology, microbiology, and/or ophthalmology. 2020 Activity Data from the Company’s clinical trial of PV-10 as a single-agent and in combination with immune checkpoint blockade for the treatment of primary or metastatic tumors of the liver (NCT00986661) was uploaded to the SIR 2020 ePoster Gallery of the canceled Society of Interventional Radiology (“SIR”) 2020 Annual Scientific Meeting, held March 28-April 2, 2020 in Seattle, Washington: “Oncolytic immunotherapy of hepatic tumors with intralesional rose bengal disodium.” Data from ongoing preclinical study of PV-10 was presented at the American Association for Cancer Research (“AACR”) 2020 Virtual Annual Meeting II, held online June 22-24, 2020: “Association of heat shock proteins as chaperone for STING: A potential link in a key immune activation mechanism revealed by the novel anti-cancer agent PV-10.” Updated data from the first cohort of the Company’s autolytic cancer immunotherapy PV-10 were published as an abstract as part of the American Society of Clinical Oncology (“ASCO”) 2020 Virtual Scientific Program, held online May 29-31, 2020: “ Cohort 1 results of a phase I study of autolytic immunotherapy of metastatic neuroendocrine neoplasms using intralesional rose bengal disodium.” Updated data from the Company’s expansion cohort of patients with uveal melanoma metastatic to the liver (“mUM”) in its Phase 1 cancers of the liver “basket study” of PV-10 were presented at ASCO: “Percutaneous hepatic injection of rose bengal disodium (PV-10) in metastatic uveal melanoma.” The Company expanded its sponsored research program with Aru Narendran, MD, PhD, Professor, Departments of Pediatrics, Oncology, Biochemistry & Molecular Biology, and Physiology & Pharmacology at the Cumming School of Medicine of the University of Calgary in Calgary, Alberta, Canada. Under ongoing collaboration with Provectus, the Narendran research team has produced preliminary findings that show oral dosing of RBD is effective and well tolerated in an in vivo pediatric leukemia murine model. Data from this work are currently being prepared for publication. As part of the sponsored research expansion, the Narendran team would investigate oral dosing of RBD in in vivo murine models for the treatment of refractory adult solid tumors that are high-risk phenotypes and have high metastatic potential. These cancer types will include head and neck, breast, pancreatic, liver, and colorectal. The Company initiated a new sponsored research program with Michio Kurosu, PhD, Professor, Department of Pharmaceutical Sciences at the College of Pharmacy of the University of Tennessee Health Science Center (“UTHSC”) in Memphis, Tennessee to investigate RBD targeting of multi-drug resistant (“MDR”) bacteria. Dr. Kurosu’s team would undertake in vitro studies on the spectrum of RBD activity against drug-susceptible and drug-resistant bacterial strains, synergistic activity of combinations of RBD and FDA-approved antibiotics for Gram-negative bacteria, the mutation frequency of RBD against bacterial strains, measuring spontaneous bacterial mutations for RBD and these combinations, and gene analyses of mutant bacterial strains to understand resistance mechanisms. 4 Two-year landmark survival, response, and safety data from the Company’s Phase 1b/2 study of PV-10 in combination with KEYTRUDA (pembrolizumab) for the treatment of advanced cutaneous melanoma in patients naive to immune checkpoint blockade (CB) was presented at the European Society for Medical Oncology (“ESMO”) Virtual Congress 2020, held online from September 19-21, 2020: “A phase 1b study of rose bengal disodium and anti-PD-1 in metastatic cutaneous melanoma: results in patients naïve to immune checkpoint blockade.” Preliminary response, safety, and immune correlative data from the Company’s Phase 1b/2 study of PV-10 in combination with KEYTRUDA for the treatment of advanced cutaneous melanoma in patients refractory to immune checkpoint blockade was also presented at ESMO: “A phase 1b study of rose bengal disodium and anti-PD-1 in metastatic cutaneous melanoma: initial results in patients refractory to checkpoint blockade.” In October, the Company announced completion of enrollment of 12 patients into Provectus’ Phase 1 study of PV-10 for the treatment of symptomatic mNET refractory to somatostatin analogs (“SSAs”) and peptide receptor radionuclide therapy (“PRRT”). Non-clinical data from ongoing research on PV-10 as a single-agent and in combination with gemcitabine chemotherapy for the treatment of pancreatic cancer at the Society for Immunotherapy of Cancer’s (“SITC”) 35 th Anniversary Annual Meeting & Pre-Conference Programs (“SITC 2020”), held online from November 9-14, 2020: “Intralesional injection of rose bengal augments the efficacy of gemcitabine chemotherapy against pancreatic tumors.” Updated preliminary patient response, safety, and immune correlative data, as well as new preliminary PV-10-treated lesion response data, from the Company’s ongoing Phase 1b/2 study of PV-10 in combination with KEYTRUDA for the treatment of advanced cutaneous melanoma in patients refractory to CB was presented at Melanoma Bridge 2020, held online from December 3-5, 2020. The oral presentation, entitled “Response for combination of PV-10 autolytic immunotherapy and immune checkpoint blockade in checkpoint-refractory patients,” was presented by Dr. Jonathan Zager, Chief Academic Officer at Moffitt Cancer Center, and a surgical oncologist and Senior Member in Moffitt’s Departments of Cutaneous Oncology and Sarcoma. Competition In general, the pharmaceutical and biotechnology industries are competitive, characterized by steady and sometimes disruptive advances in products and technology. A number of companies have developed and continue to develop products that address the areas we have targeted. Some of these companies are pharmaceutical companies and biotechnology companies that are international in scope and very large in size, while others are small companies that have been successful in one or more areas we are targeting. Existing or future pharmaceutical, device, or other competitors may develop products that accomplish similar functions to our technologies in ways that may be less expensive, receive faster regulatory approval, or receive greater market acceptance than our products. Many of our competitors have been in existence longer than we have, have greater capital resources, broader internal structure for research, development, manufacturing and marketing, and may be further along in their respective product cycles. 5 Federal Regulation of Therapeutic Products All of the prescription drug candidates we currently contemplate developing will require approval by the FDA prior to sales within the U.S. and by comparable international governmental healthcare regulatory agencies prior to sale outside the U.S. The FDA and comparable international agencies impose substantial requirements on the manufacturing and marketing of pharmaceutical products. These agencies and other entities regulate, among other things, research and development activities and the testing, manufacturing, quality control, safety and effectiveness claims, labeling, storage, record keeping, approval, advertising, and promotion of our prescription drug candidates. While we attempt to minimize and avoid significant regulatory bars when formulating our products, some degree of regulation from these regulatory agencies is unavoidable. The regulatory process required by the FDA, through which our prescription drug candidates must successfully pass before they may be marketed in the U.S., generally involves pre-clinical laboratory and animal testing, submission of an application that must become effective before clinical trials may begin, adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for its intended indication, and FDA approval to market a given product for a given indication after the appropriate application has been filed. For pharmaceutical products, pre-clinical tests include laboratory evaluation of the product, its chemistry, formulation and stability, as well as in vitro and animal studies to assess the potential safety and efficacy of the product. We will require sponsored work to be conducted in compliance with pertinent local and international regulatory requirements, including those providing for Institutional Review Board approval, national governing agency approval, and patient informed consent, using protocols consistent with ethical principles stated in the Declaration of Helsinki and other internationally recognized standards and delineated by ICH Good Clinical Practice (“GCP”) standards. If the FDA is satisfied with the results and data from pre-clinical tests, it will authorize human clinical trials. Human clinical trials traditionally are conducted in three sequential phases which may overlap. Each of the three phases involves testing and study of specific aspects of the effects of the investigational product on human subjects, including testing for safety, dosage tolerance, side effects, absorption, metabolism, distribution, excretion, and clinical efficacy. Phase 1 clinical trials include the initial introduction of an investigational new drug into humans, or via a new route of administration or new organ system if previously investigated in humans. These studies are closely monitored and may be conducted in patients but may also be conducted in healthy volunteer subjects. These studies are designed to determine the metabolic and pharmacologic actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. While the FDA can cause us to end clinical trials at any phase due to safety concerns, Phase 1 clinical trials are primarily concerned with safety issues. We also attempt to obtain sufficient information about the drug candidate’s pharmacokinetics and pharmacological effects during Phase 1 clinical trials to permit the design of scientifically valid, Phase 2 studies. Phase 1 studies also evaluate drug metabolism, structure-activity relationships, and the mechanism of action in humans. These studies also determine which investigational drugs are used as research tools to explore biological phenomena or disease processes. The total number of subjects included in Phase 1 studies varies with the drug but is generally in the range of 10 to 80. Phase 2 clinical trials include early controlled clinical studies conducted to obtain preliminary data on the effectiveness of the drug for a particular indication or indications in patients with the disease or condition. This phase of testing also helps determine the common short-term side effects and risks associated with the drug. Phase 2 studies are often randomized controlled studies that are closely monitored and conducted in a relatively small number of patients, usually involving up to several hundred people. Phase 3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness of the drug has been obtained in Phase 2 and are intended to gather definitive information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug. Phase 3 studies also provide an adequate basis for extrapolating the results to the general population and transmitting that information in the physician labeling. Phase 3 studies usually include several hundred to several thousand people. We have established a core clinical development team and have been working with external and FDA-experienced consultants to assist us in developing product-specific development and approval strategies, preparing the required submittals, guiding us through the regulatory process, and providing input into the design and site selection of human clinical studies. 6 The testing and approval process requires substantial time, effort, and financial resources, and we may not obtain FDA approval on a timely basis, if at all. Success in preclinical or early-stage clinical trials does not assure success in later-stage clinical trials. The FDA or research institution conducting the trials may suspend clinical trials or may not permit trials to advance from one phase to another at any time for various reasons, including a finding that the subjects or patients are being exposed to an unacceptable health risk. Once issued, the FDA may withdraw a prescription drug approval if we do not comply with pertinent regulatory requirements and standards or if problems are identified after the product reaches the market. If the FDA grants approval of a prescription drug candidate, the approval may impose limitations, including limits on the indicated uses for which we may market a drug product. In addition, the FDA may require additional testing and surveillance programs to monitor the safety and/or effectiveness of approved drug products that have been commercialized, and the agency has the power to prevent or limit further marketing of a product based on the results of these post-marketing programs. Further, later discovery of previously unknown problems with a drug product may result in restrictions on the product, including withdrawal from the market. Marketing our prescription drug candidates abroad will require similar regulatory approvals by equivalent national authorities and is subject to similar risks. To expedite development, we may pursue some or all of our initial clinical testing and approval activities outside the U.S., and in particular in those countries where our prescription drug candidates may have substantial medical and commercial relevance. In some such cases, any resulting drug products may be brought to the U.S. after substantial offshore experience is gained. Accordingly, we intend to pursue any such development in a manner consistent with U.S. and ICH standards so that the resultant development data is maximally applicable for potential global approval. Board of Director Change On July 11, 2020, the Company announced that Jan Koe had resigned from the Board of Directors (the “Board”). His resignation was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Koe’s resignation was contemplated by the Amended and Restated Definitive Financing Commitment Term Sheet effective as of March 19, 2017, entered into between the Company and a group of the Company’s stockholders (the “PRH Group”), which set forth the terms on which the PRH Group would provide financing to the Company (the “2017 Term Sheet”). On July 20, 2020, the Company added Webster Bailey to fill this vacant spot on the Board. Human Capital Resources We have two full-time employees. We also engage independent contractors, who currently serve as COO, director of clinical operations, senior scientist, clinical research associates, project manager, information technology manager, controller, patient advocacy manager, and database manager. We believe the Company’s success depends on its ability to attract, develop and retain key personnel. The skills, experience and industry knowledge of key employees and contractors significantly benefit our operations and performance. The Company’s Board of Directors and management oversee various employee and contractor initiatives. Employee health and safety in the workplace is one of the Company’s core values. The COVID-19 pandemic has underscored for us the importance of keeping our employees and contractors safe and healthy. In response to the pandemic, the Company has taken actions aligned with the World Health Organization and the Centers for Disease Control and Prevention to protect its workforce so they can more safely and effectively perform their work. Available Information Our website is located at www.provectusbio.com . We make available free of charge through this website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Reference to our website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this document. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC as we do. The website is http://www.sec.gov. 7