Investigation Finds Ex-Provectus CEO Did Not Produce Travel Documentation, May Have Altered Receipts
Published: Mar 16, 2016
March 16, 2016
By Alex Keown, BioSpace.com Breaking News Staff
KNOXVILLE, Tenn. – An internal investigation of expenses from H. Craig Dees, former chief executive officer of Provectus Biopharmaceuticals found some irregularities, including the altering of receipts in relation to some travel documents.
The internal review, conducted by the audit committee of Provectus’ board of directors, said Dees, who resigned from the company in February, did not produce receipts for most of the travel expense advances he received. Additionally, the committee said some receipts produced by Dees appear to have been altered. “Documentation of Dr. Dees' travel related expenses, in general, have not been sufficient to prevent abuse, misconduct, the appearance thereof, or may not satisfy IRS requirements,” the committee said.
Provectus said it will seek reimbursement for the questionable expenses from Dees. The threat of a lawsuit was not ruled out if Dees is not cooperative. Provectus also said it could refer the matter to regulatory authorities.
The investigation was completed with independent counsel and an advisory firm with forensic accounting expertise. The investigators reviewed the company’s financial policies and procedures, including management expenses.
“While these changes are undesirable and some of the findings of the committee certainly are disappointing, the company remains optimistic about the progress being made toward the approval of drugs that offer so much hope to cancer victims. The company’s work on that front continues unabated and undeterred,” Alfred Smith, chairman of Provectus’ board of directors said in a statement.
Provectus said it does not anticipate the investigation to have a negative impact on the company’s financial reporting.
The investigation was prompted following Dees’ resignation, which was initially reported as being due to health reasons. Following the announcement of Dees’ departure, the company said it designated the audit committee to review a number of company procedures, policies and practices, including executive compensation and expenses.
In its findings, the committee emphasized the “necessity that the company put in place more clearly defined, tighter controls, including a clear process for limiting, approving and documenting advances and expenses and appropriately managing them.”
Provectus is in the process of recruiting a new CEO, as well as attempting to fill other executive positions.
Provectus specializes in the development of therapies for use in oncology and dermatology. The company’s investigational cancer drug PV-10 is designed for injection into solid tumors. Provectus completed Phase II trials of PV-10 as a therapy for metastatic melanoma. Provectus has received orphan drug designations from the FDA for its melanoma and hepatocellular carcinoma indications.
Provectus’s investigational topical dermatology drug PH-10 is in clinical development for treating atopic dermatitis and psoriasis.