Processa Pharmaceuticals, Inc. Q1 FY2021 earnings call

• Clinical trial progress: Selected clinical sites for PCS499 Phase 2b Ulcerative NL trial and began screening patients; selected sites for PCS6422 Phase 1b trial and initiating them. Completed pre-IND FDA meeting for 12852 and begun working on protocol and IND for gastroparesis. Begun evaluating contract manufacturing organizations for 11T cancer drug.
• Corporate goals: Raised $10.2 million in a private offering in Q1 2021, providing cash to support studies and overhead through 2023. Added drug development staff and plan to hire more.
• Drug selection criteria: Must have patient need and competitive advantage, evidence of clinical efficacy, efficient development using regulatory science approach, capital efficiency, and acceptable risk-reward balance.

For the quarter ended March 31, 2021, Processa reported a net loss of $2.1 million or $0.14 per share, compared to a net loss of $874,000 or $0.16 per share in the same period of 2020. Research and development expenses totaled $1.5 million in 2021 compared to $502,000 in 2020. General and administrative expenses were $717,000 in 2021 versus $484,000 in 2020. Net cash used in operating activities increased to $2.2 million in 2021 from $0.5 million in 2020. As of March 31, 2021, the company had $23 million of cash and cash equivalents. R&D costs increased primarily due to costs related to preparing for Phase 2b trial for PCS499 and Phase 1b trial for PCS6422.

• Anticipates burn rate to increase as trials progress. Expect to enroll first patient with Ulcerative NL in 499 trial in 10-45 days and six to 10 patients over next six months. First cancer patient in 6422 trial to be enrolled in 30-60 days, with data from cohorts one and two analyzed at end of six months. Anticipate FDA IND clearance for 12852 by end of six months.
• Projected enrollment in 499 trial's third quarter with data available in first half of 2022.

• Actual results may differ from forward-looking statements due to various risks and uncertainties detailed in annual reports and other SEC filings. Risks include those related to clinical trial outcomes, regulatory approvals, and market acceptance of drugs.

Q: Could you give an update on the total number of clinical sites enrolled so far for 499 and 6422 and anticipated sites needed?

A: For 499, already have five U.S. sites with plan to add 3-4 more, totaling 6-10 sites. For 6422, have a couple of sites initiating with plan for 4-5 U.S. sites.

Q: What kind of data to expect from interim analysis of 6422 and 499?

A: For 6422, expect to confirm dosing regimen works, PK information, and metabolite info. For 499, expect differences between treated and placebo groups with treated group showing responses.

Q: Anticipate treating patients with other cancer types besides colorectal in 6422 study?

A: End indication is metastatic colorectal cancer, but MTD study includes wider patient group to determine tolerability regardless of cancer type.

Q: Timing for professional milestones and projections for next call?

A: Expect updates on enrollment progress for 499 and 6422. Unlikely to complete enrollment of trials by end of next quarter, but will have enrollment updates and any serious adverse events info.