Provectus Biopharmaceuticals Inc (OTCMKTS:PVCT) is a penny play in the biopharma space that has recently exploded higher on strong volume to close out last week’s action. The company just announced a Definitive Financing Commitment Term Sheet it entered into on March 19 with what the company is calling “The PRH Group” (a group of the company’s stockholders). However, if you take a step back and look at the deal, the reality of the situation becomes clear: this is a reset and effective takeover from within.
We’ve witnessed 130% added to share values of the stock over the past month of action, a rally that has pushed up against longer standing distributive pressure in the stock. This is emblematic of the stock. PVCT has a track record that includes a number of dramatic bounces. What’s more, the listing has seen interest climb, with an increase in recent trading volume of 81% beyond what we have been seeing over the larger time frame.
Provectus Biopharmaceuticals Inc (OTCMKTS:PVCT) identifies itself as a biopharmaceutical company that engages in developing ethical pharmaceuticals for oncology and dermatology indications.
Its prescription drug candidates include PV-10, which is in Phase III study for cutaneous melanoma; completed Phase II study for metastatic melanoma; completed Phase I study for liver and breast cancers; and phase 1b/2 study for pembrolizumab. The company is also developing PH-10 that has completed Phase II randomized study for the treatment of psoriasis and atopic dermatitis. In addition, it develops PH-10 for the treatment of actinic keratosis and severe acne vulgaris.
Further, the company is developing over-the-counter pharmaceuticals, including GloveAid, a hand cream with antiperspirant and antibacterial properties; Pure-ific line of products to prevent the spread of germs on skin; and Pure-Stick and Pure N Clear acne products.
Additionally, it develops medical device technologies for markets comprising cosmetic treatments, such as reduction of wrinkles and elimination of spider veins, and other cosmetic blemishes; and therapeutic uses, including photoactivation of PH-10, other prescription drugs, and non-surgical destruction of various skin cancers.
Provectus Biopharmaceuticals is investigating new therapies for the treatment of skin cancer, liver cancer and breast cancer. Provectus’ investigational oncology drug, PV-10, is an ablative immunotherapy under investigation in solid tumor cancers. The Company has received orphan drug designations from the FDA for its melanoma and hepatocellular carcinoma indications. PH-10, its topical investigational drug for dermatology, is undergoing clinical testing for psoriasis and atopic dermatitis. Provectus has completed Phase 2 trials of PV-10 as a therapy for metastatic melanoma, and of PH-10 as a topical treatment for atopic dermatitis and psoriasis.
The company was formerly known as Provectus Pharmaceuticals, Inc. and changed its name to Provectus Biopharmaceuticals, Inc. in December 2013. Provectus Biopharmaceuticals, Inc. was founded in 2002 and is based in Knoxville, Tennessee.
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As noted in the recent release, under the Definitive Financing, PRH Group would undertake best efforts to arrange for a financing of a minimum of $10 million and a maximum of $20 million, which would be provided to Provectus in several tranches.
It appears, from company communications, as though the structure of the Definitive Financing is set to be structured as a secured loan that will be convertible into a new series of preferreds. This new series comes with special rights, including a liquidation preference upon “the sale, dissolution or liquidation of the Company, a conversion into common stock that prices one common share at approximately $0.29, and customary voting rights on an as-converted basis.”
In other words, the PRH Group is getting an extremely advantageous deal. But that’s coming with more than just money. As part of the deal, the PRH Group will be replacing all five members of the board and finding a new CEO. In other words, they are recapitalizing the company and replacing the oversight and leadership entirely.
It’s a reset.
At this time, carrying a capital value in the market of $21M, PVCT has a significant war chest ($5.2M) of cash on the books, which is balanced by virtually no total current liabilities. The company is pre-revenue at this point. This may be a very interesting story and we will look forward to updating it again soon. For continuing coverage on shares of $PVCT stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!