Buy Provectus Pharmaceuticals, Inc. (PVCT)   Leave a comment

Ever heard of rose bengal? The first line from Wikipedia describes it nicely: “Rose bengal…is a stain.” More specifically:

Its sodium salt is commonly used in eye drops to stain damaged conjunctival and corneal cells and thereby identify damage to the eye. The stain is also used in the preparation of Foraminifera for microscopic analysis, allowing the distinction between forms that were alive or dead at the time of collection.

Long story short, rose bengal has been used safely for decades, and was approved by the FDA long ago. But now it is being tested as a potential treatment for cancer, as well as skin conditions such as eczema and psoriasis.

One of my biggest problems with investing in drug companies has always been my lack of faith in their drug’s side effects. It is rare to find a company testing a drug which was 75% effective in early human trials, but also has few side effects. The main side effect they have discovered for PV-10 (Provectus’s rose bengal cancer treatment) is an immunological response, basically swelling around the treated area. Even more rare is when the drug has a positive side effect, namely the patient’s immune system also begins to attack untreated tumors. (For a good summary of the company as well as its drugs, read “Why I’m Long Provectus Pharmaceuticals” by Dominic Rodrigues at Seeking Alpha.)

How does Provectus compare to my favorite former penny stock, NanoViricides (NNVCD)? Obviously, they are both working in different areas, since NanoViricides is working on a virus treatment. Financially, they both have ugly financials, which is to be expected. The main difference I see is that Provectus is farther along in testing than NanoViricides, yet Provectus’s stock price hasn’t reflected it yet. Considering Provectus already has ties to Pfizer (PFE), Provectus is a strong buyout candidate. Even if Provectus doesn’t get bought out, their product is much cheaper and easier to manufacture. From a growth potential perspective, Provectus is actually in a much better position than NanoViricides, ergo I would call it underpriced, at least relative to NNVCD.

Because Provectus is still a penny stock, I am adding an extra-small position to my IRA portfolio today. This way, I can still double it later and it will only be a small position in my portfolio.

I bought PVCT at $1.04 today.

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Posted September 24, 2013 by edmcgon in Portfolio Moves, Stocks

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