Executive Summary

Processa reported year-end FY 2022 results alongside its Q4 2022 earnings release, remaining a pre-revenue company while prioritizing Next Generation Chemotherapies; cash was $6.5 million at 12/31/22 and, with a subsequent $6.4 million raise, management projects runway into Q3 2024 .
Net loss expanded to $27.4 million (–$1.70 EPS) for FY 2022, driven by a one-time non-cash intangible impairment of $7.3 million and higher stock-based compensation and clinical trial costs .
Clinical execution advanced: successful Phase 2A for PCS12852 (gastroparesis) positioning for potential out-licensing; dose escalations for Next Generation Capecitabine (NGC-Cap) with no catabolite-related AEs and an FDA meeting set for mid-April to finalize Phase 2B; timelines provided for NGC-Gemcitabine and NGC-Irinotecan .
Street EPS and revenue consensus for Q4 2022 were unavailable via S&P Global; no estimate comparison or beat/miss assessment could be made (consensus not retrievable).

What Went Well and What Went Wrong

What Went Well

“We completed a successful Phase 2A trial of PCS12852 in patients with gastroparesis, positioning the asset well for potential out-licensing or business development opportunities,” highlighting optionality to monetize non-oncology assets .
NGC-Cap dose escalations continued “with no observed adverse events associated with the catabolites of capecitabine” and an FDA mid-April meeting was set to align Phase 2B with Project Optimus, a key regulatory milestone .
Cash runway extended: $6.5 million at 12/31/22 plus $6.4 million raised post year-end; management believes the cumulative $12.9 million funds operations into Q3 2024 .

What Went Wrong

FY 2022 net loss widened sharply to $27.4 million (–$1.70 EPS), mainly due to a $7.3 million non-cash impairment and higher stock-based compensation and clinical costs, increasing burn vs. prior year .
PCS499 trial was discontinued due to enrollment difficulties, underscoring execution risk in non-oncology programs and reinforcing the strategic pivot to oncology NGCs .
Limited external coverage: no S&P Global Q4 2022 consensus estimates available, constraining the ability to benchmark results vs. Street expectations (consensus not retrievable).

Financial Results

Note: The company did not disclose quarterly revenue/EPS figures for Q4 2022; it furnished YTD (6M/9M) and FY metrics. The company is pre-revenue.

Annual Net Loss and EPS Trend

Metric	6M 2021	9M 2021	FY 2021	6M 2022	9M 2022	FY 2022
Net Loss ($USD Millions)	$5.3	$8.2	$11.4	$8.4	$14.4	$27.4
EPS ($USD)	–$0.35	–$0.54	–$0.75	–$0.53	–$0.90	–$1.70

Operating KPIs and Cash Balances

Metric	Q2 2022	Q3 2022	Q4 2022 / FY 2022
Cash And Equivalents ($USD Millions)	$12.1	$9.1	$6.5
Subsequent Equity Raise ($USD Millions)	N/A	N/A	$6.4
Cash Used in Operations ($USD Millions)	$4.1 (6M)	$7.1 (9M)	$9.6 (FY)
Shares Outstanding (Millions)	15.8	15.9	24.6 (as of Mar. 27, 2022)
Revenue ($USD Millions)	$0.0 (pre-revenue)	$0.0 (pre-revenue)	$0.0 (pre-revenue)

R&D and G&A Trend

Metric	6M 2022	9M 2022	FY 2022
Research & Development ($USD Millions)	$5.2	$8.3	$11.5
General & Administrative ($USD Millions)	$3.2	$6.1	$8.8
Non-Cash Compensation Allocated ($USD Millions)	$2.8	$6.1	$8.8

No segment breakdown or margin analysis is applicable given the company’s pre-revenue status .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cash Runway	Corporate	Cash sufficient into Q3 2023	Cash plus raise adequate into Q3 2024	Raised/Extended
NGC-Cap (PCS6422 + capecitabine) Phase 2B	Development Timeline	Phase 2B to be initiated in 2023 after FDA discussion (Project Optimus)	FDA meeting mid-April; initiate Phase 2B in H2 2023; interim analysis mid-2024; enrollment complete by end-2024	Clarified/Timed
PCS12852 (gastroparesis)	Strategy	Plan Phase 2B in 2023	Completed Phase 2A; asset positioned for out-licensing/business development; focus shifts to oncology NGCs	Strategic Shift
NGC-Gemcitabine (PCS3117)	Development Timeline	N/A	FDA mid-2023; submit Phase 2B protocol to IND in Q4 2023; initiate trial in 2024	New Guidance
NGC-Irinotecan (PCS11T)	Development Timeline	N/A	Initiate IND-enabling studies in 2023; complete by end-2024	New Guidance
Investor Relations	Corporate	N/A	Engaged IR/PR group; increase visibility and outreach to oncology KOLs and patient advocacy	New Initiative

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2022, Q3 2022)	Current Period (Q4 2022)	Trend
Project Optimus / Regulatory Science	Align Phase 2B dose optimization for NGC-Cap with FDA’s Project Optimus	Deep emphasis on Project Optimus across NGCs; FDA mid-April meeting to negotiate Phase 2B dosing/design	Strengthening
Pipeline Prioritization	Multiple programs (NGC-Cap, PCS12852, PCS499) progressing	Strategic pivot to oncology NGCs; PCS12852 for out-licensing; PCS499 discontinued due to enrollment	Refocused
Trial Enrollment & Execution	Enrollment efforts expanded; MTD for NGC-Cap targeted early 2023; PCS12852 enrollment near completion	NGC-Cap 300 mg cohort enrollment confidence; Phase 2B multi-arm design contemplated pending FDA	Advancing
Biomarker Strategy (PCS3117)	N/A	Analytical biomarker work ongoing; Phase 2B to clinically validate biomarker mid/late 2023 planning	Emerging
Cash Management & Compensation	Use of equity incentives to conserve cash	Pre-revenue focus; extensive stock-based comp; runway extended via $6.4m raise	Stable/Extended
Shareholder Engagement	N/A	IR/PR engagement; increased visibility; social media presence; outreach to oncology community	Increasing

Management Commentary

“We completed a successful Phase 2A trial of PCS12852 in patients with gastroparesis, positioning the asset well for potential out-licensing or business development opportunities.” (Dr. David Young, CEO)
“Our first NGC to move into Phase 2B will be Next Generation Capecitabine (NGC-Cap)… we look forward to meeting with the FDA in mid-April to discuss our NGC-Cap Phase 2B trial and hope to initiate the Phase 2B trial in colorectal cancer in the second half of 2023.” (Dr. David Young)
“Our cash balance on December 31, 2022 was $6.5 million… we believe the cumulative $12.9 million will be sufficient to… fund our operations into the third quarter of 2024.” (Jim Stanker, CFO)
“For 499, we discontinued the trial due to enrollment difficulties… we are now evaluating other indications with larger populations for future licensees or partners.” (Dr. David Young)
“We are expanding our visibility and public presence… engaging an IR/PR group… and plan to interact more with the oncology community, including key opinion leaders and patient advocacy groups.” (Dr. David Young)

Q&A Highlights

Project Optimus and dosing: FDA mid-April goals are to align on the best dosage regimen and study design for Phase 2B NGC-Cap; exposure monitoring will guide Phase 3 design (not MTD-centric) .
Indication scope for NGC-Cap: initial focus on patients typically prescribed capecitabine (e.g., metastatic colorectal), with broader potential across pancreatic and other solid tumors envisioned over time .
NGC-Cap Phase 1b cohort: confidence in completing the 300 mg cohort enrollment in “the next month or two”; reaching MTD mid-year informs Phase 2B specifics .
Phase 2B design expectations: likely 3–4 dosing arms plus potential control at established dose; final design subject to FDA negotiation .
PCS3117 biomarker plan: analytical validation underway; Phase 2B to clinically confirm biomarker utility; modality specifics withheld due to IP considerations .
NGC-Irinotecan mechanism: prodrug designed to preferentially load SN-38 into cancer cell membranes; improved selectivity anticipated, with quantitative data to be shared later .
Cost visibility: Phase 2B cost estimates deferred pending FDA design specifics; gemcitabine target population selection and market nuances will drive design and spend .

Estimates Context

Wall Street consensus EPS and revenue for Q4 2022 were unavailable via S&P Global; no consensus-based beat/miss analysis can be provided (consensus not retrievable).

Key Takeaways for Investors

Regulatory catalysts are near term: FDA mid-April meeting for NGC-Cap Phase 2B design is a primary stock catalyst; initiation in H2 2023 and interim readout mid-2024 could re-rate execution risk .
Strategic focus sharpened: oncology NGCs (capecitabine, gemcitabine, irinotecan) are now the core; PCS12852 positioned for out-licensing and PCS499 discontinued—expect capital allocation to favor oncology .
Runway extended into Q3 2024 via post-year raise; watch quarterly burn vs. elevated stock-based comp and upcoming trial starts for potential financing needs .
Differentiation via Project Optimus: experience with dose optimization and regulatory science may accelerate development and lower approval risk vs. peers lacking Optimus frameworks .
NGC-Cap safety signal (no catabolite-related AEs to date) supports the thesis of better tolerability at effective exposures; Phase 2B multi-arm design should clarify benefit-risk by dose .
Biomarker work in PCS3117 and selective delivery for NGC-Irinotecan point to potential efficacy/AE separation—data disclosures ahead are key for valuation .
With no Street estimates, trading may hinge on operational milestones and visibility efforts (IR/PR, KOL outreach); headline risk around FDA feedback and trial starts remains elevated .

Processa Pharmaceuticals, Inc. (PCSA)·Q4 2022 Earnings Summary