PROVECTUS BIOPHARMACEUTICALS, INC. 10-K

ITEM 1. BUSINESS. General Provectus Biopharmaceuticals, Inc., a Delaware corporation incorporated in 2002 (together with its subsidiaries, “Provectus” or the “Company”), is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases, based on a family of small molecules called halogenated xanthenes (“HXs”). Our lead HX molecule is named rose bengal sodium (“RBS”). Science The prerequisite mechanistic step for these immunotherapies is direct contact between HX, such as RBS, and disease, which may lead to disease death or repair, HX treatment-specific innate immune activation, and a disease-specific functional adaptive immune response. HX 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 standard of care and emerging medical treatments. 2 Intellectual Property (“IP”) 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 11,058,664 In vitro and xenograft anti-tumor activity of a halogenated-xanthene against refractory pediatric solid tumors July 13, 2021 May 15, 2039 11,071,781 Combination of local and systemic immunomodulative therapies for enhanced treatment of cancer July 27, 2021 March 9, 2032 3 We received two patent awards from the U.S. Patent and Trademark Office (USPTO) in 2021, U.S. patent numbers 11,058,664 and 11,071,781. Five patent applications were published on the USPTO’s website: ● Composition and Method for Treating Hematologic Cancers (USPTO application number 16/688319), ● Composition and Method for Oral Treatment of Leukemia (17/232393), ● Treatment of Solid Cancerous Tumors by Oral Administration of a Halogenated Xanthene (17/214590), ● Novel Uses of Halogenated Xanthenes in Oncology and Virology (17/212723), and ● In Vitro and Xenograft Anti-Tumor Activity of a Halogenated-Xanthene Against Refractory Pediatric Solid Tumors (17/344418). International Patents In 2021, the Canadian Patent Office granted the Company’s patent application “Method of ex vivo enhancement of immune cell activity for cancer immunotherapy with a small molecule ablative compound. PV-10 Product Pipeline PV-10 is an injectable pharmaceutical formulation of RBS and registration study-ready investigational drug product (“PV-10 DP”). Provectus has developed two clinical-stage formulations of PV-10: an intralesional (IL) administration for oncology (10% RBS) for the treatment of cancers of the skin and cancers of the liver, and topical (“top.”) application for dermatology (0.01% RBS) for the treatment of inflammatory dermatoses (e.g., psoriasis, atopic dermatitis, and actinic keratosis). A third formulation is under development for a currently proprietary disease area. Research into new routes of RBS administration and formulations of PV-10 is ongoing, including oral ( per os or “PO”), intranasal (“IN”), inhaled top., and/or intravenous (“IV”) for hematology, oncology, virology, microbiology, ophthalmology, and animal health. For additional information on the disease areas in which the Company is targeting, please see Note 1 to the Company’s Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Data. 2021 Activity In January, H. Lee Moffitt Cancer Center released a preprint manuscript describing how PV-10 in combination with gemcitabine may enhance the chemotherapy’s efficacy against pancreatic tumors: “ Intralesional injection of Rose Bengal augments the efficacy of gemcitabine chemotherapy against pancreatic tumors .” Chemotherapy regimens that include gemcitabine are the standard of care for the treatment of pancreatic cancer. In March, Melanoma Research published results from an investigator-led, single-center study of Australian in-transit melanoma patients who received IL PV-10 under a Company-sponsored expanded access (“EAP;” aka compassionate use) program. The Melanoma Research article, entitled “Treatment of in-transit melanoma metastases using intralesional PV-10,” detailed the experience of investigators at Melanoma Institute Australia (formerly the Sydney Melanoma Unit) in Sydney, Australia who treated 48 patients from 2008 to 2016. The State of Tennessee, as part of its fiscal year 2021-2022 budget, directed funding in the amount of $2.5 million to the Company to develop animal health drug products through partnerships with state universities that have agriculture and veterinary medicine programs and the Company. Data from the Company’s Phase 1 clinical trial of PV-10 for the treatment of neuroendocrine tumors (“NET”) metastatic to the liver (“mNET”) refractory to somatostatin analogs (“SSAs”) and peptide receptor radionuclide therapy (“PRRT”) (NCT02693067) was presented at the American Society of Clinical Oncology (“ASCO”) 2021 Annual Meeting, held June 4-8 online: “Phase I study of autolytic immunotherapy of metastatic neuroendocrine tumors using intralesional rose bengal disodium.” 4 Data from the Company’s research on oral delivery of PV-10 for the treatment of adult solid tumors were published as an abstract as part of ASCO 2021 “ Pre-clinical evaluation of PV-10 for in vitro anti-tumor activity in refractory and high-risk adult solid tumors .” Data from an ongoing clinical trial of PV-10 for the treatment of mNET refractory to SSAs and PRRT (NCT02693067) was presented at the European Society for Medical Oncology (“ESMO”) Congress, held online from September 16-21: “ Phase I study of hepatic intralesional rose bengal disodium (PV10), an autolytic immunotherapy, in metastatic neuroendocrine neoplasms .” Data from the Company’s ongoing Phase 1b clinical trial of PV-10 in combination with Keytruda® (pembrolizumab) for the treatment of advanced cutaneous melanoma in patients refractory to immune checkpoint blockade (“CB”) (NCT02557321: first expansion cohort) was presented at the SMR 2021 Virtual Congress (the Society for Melanoma Research annual meeting), held online from October 28-31: “ PV-10 and anti-PD-1 in cutaneous melanoma refractory to checkpoint blockade .” Results from a meta-analysis of the Company’s Phase 2 and 3 clinical trials (NCT00521053 and NCT02288897, respectively) and EAP (NCT01260779) of single-agent PV-10 for the treatment of Stage III cutaneous melanoma was presented at the SMR 2021 Virtual Congress: “ Lesion-Level Response to Single-Agent PV-10 in Stage III Cutaneous Melanoma .” 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. Supply Chain Recently, many companies across a variety of sectors have reported disruptions, shortages, and other supply chain-related issues. In the biopharmaceutical sector, delays and interruptions in the supply chain have been particularly pronounced. During 2021, we were able to effectively manage our supply of prescription drug candidates in a manner that avoided any significant interruptions to our clinical programs. 5 Federal Regulation of Therapeutic Products All of the prescription drug candidates we currently contemplate developing will require approval by the U.S. Food and Drug Administration (“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 require 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. Additional Regulation We are subject to various federal, state and local laws and regulations relating to the protection of the environment, human health and safety in the U.S. and in other jurisdictions in which we operate. If we violate these laws and regulations, we could be fined, criminally charged or otherwise sanctioned by regulators. Environmental laws and regulations are complex, change frequently and have become more stringent over time. We believe that our operations currently comply in all material respects with applicable environmental laws and regulations. Human Capital Resources We have four 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. During the past two years, employees have worked remotely to ensure their safety, while continuing to perform their duties as they would have. 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