Processa Pharmaceuticals, Inc. Q4 FY2021 earnings call

Drug Pipeline Highlights - Processa is a drug development company focused on improving patients' quality of life/survival with unmet medical needs. - Five drugs in pipeline, each with potential market >$1B. - Simultaneously developing all five drugs at different stages using regulatory science approach. - Near-term milestones expected from March to August and end of 2022 for the five drugs. ### Specific Drug Updates - Next-generation capecitabine (6422): Modified Phase 1b protocol submitted to FDA in Feb 2022, expecting to restart dosing in Q2 2022, preliminary DPD timeline results mid-2022, MTD determination end of 2022. - PCS499: Enrolled three patients in Phase 2b blinded trial, preliminary findings show complete wound closure and improvement, facing enrollment challenges due to COVID, initiating remedial efforts like advertising and MD referral programs. - PCS12852: Activating clinical sites for Phase 2a trial, expect first patient dosed in Q2 2022, trial completion and top-line results by end of 2022/early 2023. - PCS3117 and PCS11T: Both cancer drugs with clinical efficacy, defining development programs and roadmaps to approval.

As of December 31, 2021, Processa Pharmaceuticals had a cash balance of $16.5 million, an increase of $1.1 million from December 31, 2020. For the year ended December 31, 2021, the net loss was $11.4 million ($0.75 per share) compared to $14.4 million ($2.54 per share) in 2020. Research and development expenses for 2021 were $6.9 million, up from $3.2 million in 2020. General and administrative expenses totaled $4.7 million in 2021, compared to $3.3 million in 2020. Overhead expenses (general and administrative plus salaries for development and admin teams) for the year ended December 31, 2021 were $3 million, and the cash portion of the six executive team members was $525,000.

Forward-Looking Statements - Near-term milestones for five drugs expected from March to August and end of 2022. - Executed a purchase agreement with Lincoln Park Capital LP to sell up to $15 million worth of common stock over three years as a financing insurance policy for pipeline development.

Risks - COVID impact on clinical trial enrollments, e.g., patients with ulcerative NL not willing to travel due to COVID, some patients dying from COVID before screening. - Uncertainty in capital markets affecting potential financing for pipeline activities. - Potential issues with enrolling patients in clinical trials due to various medical conditions and COVID-related concerns.

Q: On PCS499, what's the basis for thinking the prevalence might be smaller than literature suggests?

A: David Young mentioned literature supports 22,000 to 55,000, but enrollment issues and patient unwillingness to travel due to COVID make them think it might be smaller; initiated remedial efforts like advertising and MD referral programs.

Q: On 6422, what data are expected midyear regarding DPD inhibition?

A: David Young stated midyear expected to have enough patients to better understand the timeline of DPD inhibition and de novo formation, which will help predict when to give another dose of 6422.

Q: On 6422's MTD establishment later this year, will it involve increasing Eniluracil or Capecitabine?

A: Jim Stanker mentioned there will be a fixed dose of the 6422 component, and they'll be escalating the Capecitabine as they go, with the next stage telling them the appropriate timing and dosing regimen for the 6422 portion, and the MTD is really the MTD of Capecitabine not the MTD of 6422.