Processa Pharmaceuticals, Inc. Q2 FY2021 earnings call

• On June 16, 2021, Processa entered a license agreement with Ocuphire Pharma for RX-3117 (PCS3117), an oral anticancer agent with orphan designation for pancreatic cancer and patents extending to 2036.
• Drug development progress: PCS499 Phase 2B trial has 2 patients enrolled, with 3 of 9 sites recruiting; PCS12852 Phase 2A trial plans to submit an IND by end of September; PCS3117 has begun biomarker development to identify responsive patients; PCS6422 Phase 1B trial enrolled first patient; PCS11T is identifying contract manufacturing organizations.
• Details on specific drugs: PCS499 targets Ulcerative Necrobiosis Lipoidica with Phase 2B trial ongoing; PCS12852 is a 5HT4 agonist for gastroparesis with IND submission planned; PCS3117 shows efficacy in gemcitabine-resistant pancreatic cancer patients; PCS6422 is a chemotherapy modifier for colorectal cancer in combination with capecitabine.

For the second quarter of 2021, Processa reported a net loss of $3.2 million or $0.20 per share, compared to a net loss of $733,000 or $0.13 per share in the same period of 2020. Research and development expenses in Q2 2021 totaled $1.6 million, up from $427,000 in Q2 2020. General and administrative expenses for the 6 months ended June 30, 2021, were higher due to increases in professional fees and stock-based compensation. As of June 30, 2021, the company had $20.8 million in cash and cash equivalents.

Expect costs to continue increasing as we enter the execution phase of our most advanced programs. Our cash as of June 30, 2021, of $20.8 million is enough to support our efforts through 2023 while completing the 499 Phase 2B trial, the 12852 Phase 2A trial, identifying the maximum tolerated dose of capecitabine when administered with 6422 in the Phase 1B trial, and the development of the 3117 biomarker assays.

• Risks detailed in annual reports and quarterly reports with the potential for actual results to differ from forward-looking statements due to various uncertainties and factors.

Q: On 6422 interim look and biomarkers, what are you hoping to see and any info on biomarkers?

A: We're looking at metabolism effect to see if 6422 improves safety/efficacy of capecitabine. Biomarkers like DPD are being evaluated but specific details on biomarkers aren't shared yet.

Q: On 6422 commercial opportunity, can you move to Phase 3 from Phase 1B and importance of safety/efficacy?

A: Better to have both efficacy and safety; safety alone might require larger sample size. Phase 3 depends on data from Phase 1B; if efficacy is seen, could move to Phase 3, possibly adaptive design.

Q: On 3117 Phase 3 design, how will you approach it?

A: Will use biomarkers from the 2B study to determine the Phase 3 approach, targeting patients likely to respond to 3117 over gemcitabine.

Q: On PCS499 patient enrollment criteria, which criteria didn't meet?

A: Mixture of reasons like patients not wanting to travel for tests/visits, or criteria not met such as ulcers being too small or not actual ulcers (e.g., erosions).

Q: On PCS499 interim analysis patients and hopes, how many patients and what's hoped to reveal?

A: Expect 8-10 patients in interim analysis; key is to see response rate of placebo group, as natural healing of ulcers is poor, which helps in designing Phase 3 study.

Q: On 3117 Phase 3 length and comparison to 6422 Phase 3, when can we expect?

A: Difficult to determine yet; depends on results from Phase 1B/2B studies. 3117 is more advanced but 6422's Phase 3 depends on Phase 1B data.