Processa Pharmaceuticals, Inc. (PCSA)·Q2 2022 Earnings Summary

Executive Summary

• Q2 2022 focused on clinical execution across three active programs, with PCS12852 enrollment “on target to complete by September” and top-line gastric emptying data expected before year-end, positioning clinical catalysts in Q3–Q4 2022 .
• Management reiterated cash of $12.1M at June 30, 2022, sufficient to fund operations and complete ongoing trials into Q3 2023; net cash used in operations was $4.1M in H1 2022 (improved versus $4.4M in H1 2021) .
• H1 2022 GAAP net loss increased to $8.4M ($0.53 per share) versus $5.3M ($0.35 per share) in H1 2021, driven by higher R&D spend for three trials; non-cash compensation was used to conserve cash .
• Near-term stock reaction catalysts: PCS12852 top-line gastric emptying data (target October), PCS6422 interim cohort readout (target August/September) and clarity on maximum tolerated dose (MTD) by late 2022/early 2023; PCS499 interim analysis cohort enrollment targeted by year-end .

What Went Well and What Went Wrong

• What Went Well

  • PCS12852: Rapid enrollment; “almost completely enrolled” with final top-line results expected before year-end and Phase 2B planning for 2023 .
  • PCS6422: Protocol amendments implemented; patients added to screening queue with interim cohort data targeted for summer (Aug/Sept) and MTD by late 2022/early 2023 .
  • Cash discipline: H1 operating cash outflow improved to $4.1M vs $4.4M YoY, aided by equity incentives and use of prior CRO prepayments .

• What Went Wrong

  • PCS499: Enrollment slower than expected due to COVID-related patient reluctance and site delays; management instituted supplemental programs and launched a patient awareness website to mitigate .
  • PCS6422: Regulatory “hoops” to modify the protocol delayed momentum at sites, requiring re-engagement and site refocus, contributing to timing slippage vs original mid-2022 interim timetable .
  • Higher GAAP loss: H1 2022 net loss rose to $8.4M, reflecting increased trial activity across three programs; non-cash items widened GAAP loss versus cash burn .

Financial Results

• Financial Position and Cash Trends

• H1 2022 vs H1 2021 (YoY)

• Prior Quarter (Q1 2022) Reference

Notes:

• PCSA is a clinical-stage company with no commercial revenue cited in the Q2 materials .

• No margin metrics were reported.

• KPIs and Program Status

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We expect to close out enrollment for PCS12852 for Gastroparesis within the next month and present top-line data from the trial before the end of the year.”
• “We… have a sufficient number of patients in the screening queue for PCS6422… We anticipate we will determine the maximum tolerated dose by early 2023.”
• “Patients are beginning to show a willingness to travel… increased patient activity in our PCS499 uNL trial… optimistic that we will enroll our interim analysis cohort before the end of the year.”
• “Our cash balance at June 30, 2022 was $12.1 million… sufficient to complete our 3 ongoing clinical trials and fund our operations into the third quarter of 2023.”

Q&A Highlights

• PCS499 screening dynamics: The issue was patient inflow rather than screening failure; pre-screening and the website are increasing inbound interest as programs mature .
• PCS6422 timing: Interim cohort results targeted for August/September; study completion by year-end; MTD by end-2022 or Jan/Feb 2023 .
• PCS3117 assay and FDA: Ongoing work to optimize sampling (biopsy vs circulating tumor cells); FDA meeting planned for early 2023 after assay progress .
• PCS12852 top-line: October focus on gastric emptying rate, with symptomology analysis later in the year; no open-label portion in current study .

Estimates Context

• Wall Street consensus (S&P Global) for Q2 2022 revenue/EPS was unavailable at time of collection; as a result, we cannot benchmark vs Street for this quarter.
• Implication: With limited Street coverage and development-stage status, near-term price reactions are more likely driven by clinical data timing and operational milestones rather than quarterly P&L comparisons .

Key Takeaways for Investors

• PCS12852 is the nearest catalyst: completion of enrollment by September and gastric emptying top-line targeted for October; symptom data by year-end could be a meaningful inflection for GI franchise narrative .
• PCS6422 de-risking continues: interim cohort readout in Aug/Sep and MTD clarity by late 2022/early 2023 will frame next-generation capecitabine’s dosing strategy and Phase 2/3 path—key for oncology asset valuation .
• PCS499 visibility improving: patient travel willingness and website outreach are beginning to convert into activity; interim cohort enrollment targeted by year-end with interim readout in H1 2023—watch enrollment cadence updates .
• Cash runway into Q3 2023 mitigates financing overhang near term; management highlights dual-track funding (partnering/licensing and offerings) with intent to raise at higher market cap post-data, reducing dilution risk if milestones deliver .
• GAAP vs cash dynamics: Elevated H1 GAAP loss reflects non-cash items; operating cash outflow improved YoY, underscoring disciplined cash management amidst increased trial activity .
• Narrative drivers: Execution on timelines (particularly PCS12852 and PCS6422) and tangible data readouts are likely the primary stock catalysts in the next 3–6 months; slip risks remain tied to regulatory/site processes and COVID-sensitive enrollment .
• Partnership interest exists but is contingent on trial readouts; successful interim/top-line data may unlock strategic options and reduce capital intensity .

Appendix: Additional Financial Tables

• Operating Cash Flow (H1 Comparison)

• Expense Mix (H1 2022)

Sources: Q2 2022 8-K Item 2.02 press release and exhibits ; Q2 2022 earnings call transcript –; Q1 2022 earnings call transcript –; Q4 2021 earnings call transcript –.