UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number 001-39531 Processa Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) Delaware 45-1539785 (State ...

VERO BEACH, Fla., Aug. 07, 2025 (GLOBE NEWSWIRE) -- Processa Pharmaceuticals, Inc. (Nasdaq: PCSA), a clinical-stage biopharmaceutical company developing Next Generation Cancer (NGC) therapies for cancer patients, today announced that it has secured a strategic investment and that it is evaluating corporate cryptocurrency treasury strategies as part of its broader financial and growth objectives. We believe that strategic engagement with emerging financial technologies, including select cryptocurrencies with ...

VERO BEACH, Fla., Aug. 07, 2025 (GLOBE NEWSWIRE) -- Processa Pharmaceuticals, Inc. (Nasdaq: PCSA), a clinical-stage biopharmaceutical company developing Next Generation Cancer (NGC) therapies for cancer patients, today announced that it has secured a strategic investment and that it is evaluating corporate cryptocurrency treasury strategies as part of its broader financial and growth objectives. We believe that strategic engagement with emerging financial technologies, including select cryptocurrencies with ...

Summary of Processa Pharmaceuticals (PCSA) Update / Briefing July 09, 2025 Company Overview - **Company**: Processa Pharmaceuticals - **Ticker**: PCSA - **Industry**: Pharmaceuticals, specifically oncology drug development Core Points and Arguments 1. **Derisked Approach**: Processa Pharmaceuticals adopts a derisked approach to drug development, focusing on improving existing cancer therapies rather than creating entirely new drugs. This strategy aims to enhance efficacy and safety of current treatments [15][29][40] 2. **Regulatory Science**: The company has a proprietary regulatory science approach that has led to 30 regulatory approvals, aligning with FDA's new project optimist requirements for oncology drugs [15][16][30] 3. **Pipeline Overview**: - **PCS 6422**: A combination therapy with capecitabine, showing a 67% response rate in a phase 1b trial, significantly higher than the 20-40% response rate for capecitabine alone. The drug also demonstrated better safety, with only 6% of patients experiencing hand and foot syndrome compared to 50% for capecitabine alone [18][19][34] - **PCS 11T**: An altered version of SN-38, aiming to reduce off-target effects and improve safety by preferentially drawing the drug into tumor cells. The goal is to potentially remove black box warnings associated with existing drugs [22][35] - **PCS 12852**: Recently partnered with Intact Therapeutics, with a deal valued at approximately $454 million, including milestone payments and royalties [24][25] - **PCS 499**: Pivoting back to renal and nephropathy space, with plans for a phase 3 adaptive study, potentially being the only drug in its category without a black box warning [26][27][45] Market Position and Competitive Advantage 1. **High Unmet Need**: Despite advancements in oncology, cancer remains the second leading cause of death, indicating a significant market opportunity for better therapies [16] 2. **Competitive Differentiation**: Processa's derisked approach allows it to focus on enhancing existing therapies, which is seen as a lower bar compared to developing new drugs from scratch. This strategy is supported by a seasoned management team with extensive experience in public companies and regulatory approvals [30][40][48] 3. **Strategic Partnerships**: The company is actively seeking partnerships to accelerate drug development, particularly for PCS 499 and oncology assets, with ongoing discussions with major players in the renal space [44][46] Upcoming Catalysts 1. **Phase 2 Preliminary Analysis**: Expected results for PCS 6422 in the second half of the year, which could provide significant data for future partnerships [31][49] 2. **FDA Interactions**: Ongoing engagement with the FDA regarding study protocols and potential approvals, particularly for PCS 499 and the phase 2 study for PCS 6422 [41][43] Additional Important Information 1. **Market Potential**: The ability to make capecitabine safer and more effective could expand the patient population, particularly among those who are currently not prescribed the drug due to its side effects [34][38] 2. **Investor Sentiment**: The CEO expressed confidence in the company's undervaluation and the potential for significant returns due to the derisked approach and multiple drug candidates in the pipeline [47][48] This summary encapsulates the key points from the Processa Pharmaceuticals update, highlighting the company's strategic focus, pipeline developments, and market positioning within the oncology sector.

Core Insights - Processa Pharmaceuticals is focusing on oncology assets with strong differentiation and commercial opportunity to enhance shareholder value [4][9] - The company is actively enrolling patients in a Phase 2 clinical trial for its lead oncology asset, PCS6422, targeting metastatic breast cancer, with initial data expected in the second half of 2025 [2][7] - Processa has signed a binding term sheet with Intact Therapeutics for PCS12852, which could yield up to $454 million in milestone payments and a 12% royalty on future sales [7] Company Updates - The company is streamlining its development pipeline and optimizing capital allocation to focus on programs with the highest potential for clinical success [2][4] - A new adaptive pivotal Phase III study for PCS499 is being designed, following preliminary positive results in kidney disease [7] - Processa has terminated the license agreement for PCS3117 due to high costs and time requirements, returning rights to the original licensor [7] Financial and Strategic Developments - Processa has strengthened its balance sheet with a $7 million capital infusion [6] - The company is establishing a dedicated subsidiary for PCS499 to enhance strategic flexibility in capital raising and partnership exploration [7] - An investor webinar is scheduled for July 9, 2025, to discuss the company's strategic pipeline realignment and milestones [5]

Core Viewpoint - Processa Pharmaceuticals, Inc. has announced a public offering of 28 million shares of common stock at a price of $0.25 per share, aiming to raise approximately $7 million for clinical trials and general corporate purposes [1][2]. Group 1: Offering Details - The public offering includes 28 million shares of common stock or pre-funded warrants, along with common warrants to purchase an additional 28 million shares at an exercise price of $0.25 per share [1]. - The offering is expected to close around June 18, 2025, pending customary closing conditions [1]. - H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering [2]. Group 2: Use of Proceeds - The net proceeds from the offering will be utilized to continue the Phase 2 clinical trial for NCG-Cap, as well as for working capital and general corporate purposes [2]. Group 3: Company Overview - Processa Pharmaceuticals is a clinical-stage pharmaceutical company focused on developing Next Generation Cancer (NGC) therapies that enhance safety and efficacy [5]. - The company's NGC drugs are modifications of existing FDA-approved oncology therapies, aiming to improve the metabolism and distribution of these drugs while retaining their cancer-killing mechanisms [5].

Core Viewpoint - Processa Pharmaceuticals has entered into a binding term sheet with Intact Therapeutics for the exclusive option to license PCS12852, a 5-HT4 receptor agonist aimed at treating gastroparesis and other gastrointestinal motility disorders [1][3]. Financial Terms - Processa is set to receive a $2.5 million option exercise fee, up to $20 million in development and regulatory milestone payments, and over $432.5 million in commercial milestone payments based on net product sales [2][8]. - Intact will pay Processa a double-digit royalty on worldwide net sales of licensed products, excluding South Korea, and provide an equity stake of 3.5% in Intact upon closing [2][8]. Clinical Significance - PCS12852 has shown a favorable safety and efficacy profile in clinical studies, particularly in a Phase 2a trial for diabetic gastroparesis, a condition with limited treatment options [3][4]. - The drug is designed to restore normal gastric emptying without the cardiovascular and central nervous system side effects associated with older agents in this class [3]. Strategic Partnership - The partnership is expected to unlock the value of Processa's non-oncology assets while focusing on developing next-generation cancer therapies [3]. - Intact Therapeutics aims to address significant unmet clinical needs in gastrointestinal diseases, enhancing patient quality of life through innovative therapies [3][5]. Company Background - Intact Therapeutics is a clinical-stage biopharmaceutical company focused on next-generation therapies for gastrointestinal diseases, leveraging proprietary thermal hydrogel technology [5]. - Processa Pharmaceuticals specializes in developing next-generation cancer drugs with improved safety and efficacy, modifying existing FDA-approved oncology therapies [7].

Core Insights - Processa Pharmaceuticals, Inc. is participating in the 2025 BIO International Convention to showcase its Next Generation Cancer (NGC) therapies [1][4] - The company will provide updates on its strategic direction and clinical progress, particularly focusing on its lead asset NGC-Cap, which is in a Phase 2 trial for metastatic breast cancer [2][3] - The CEO emphasized the opportunity to engage with potential partners committed to developing safer and more effective cancer treatments [3] Company Overview - Processa Pharmaceuticals is a clinical-stage pharmaceutical company focused on developing NGC drugs that enhance safety and efficacy [5] - The NGC drugs are modifications of existing FDA-approved oncology therapies, aiming to alter metabolism and distribution while maintaining cancer cell-killing mechanisms [5] - The company's strategy combines a novel oncology pipeline with proven active molecules and a Regulatory Science Approach to improve therapy options for cancer patients [5]

Core Insights - Processa Pharmaceuticals, Inc. announced the acceptance of three abstracts for the 2025 ASCO Annual Meeting, showcasing its Next Generation Cancer (NGC) drug candidates, including PCS6422 and PCS11T [1][6] Abstract Summaries - The first abstract discusses the safety and efficacy of Eniluracil + Capecitabine (6422 + Cap) in a Phase 1b trial, highlighting its improved safety profile and anti-tumor activity compared to standard capecitabine [3][4] - The second abstract outlines a Project Optimus-aligned approach for the preclinical study of PCS11T, a tumor-targeted pro-drug of SN-38, aimed at increasing drug concentration in tumors while minimizing systemic toxicity [4][5] - The third abstract presents an overview of an ongoing Phase 2 adaptive design trial evaluating the safety and efficacy of PCS6422 combined with capecitabine in patients with advanced or metastatic breast cancer, focusing on optimal dosing regimens and personalized medicine [9]

Part I. Financial Information [Financial Statements](index=3&type=section&id=Item%201%3A%20Financial%20Statements) Unaudited Q1 2025 financial statements show a **$2.83 million** net loss and increased assets, raising going concern doubts Condensed Consolidated Balance Sheets (unaudited) | | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,897,072 | $1,191,325 | | Total Current Assets | $3,757,886 | $1,873,619 | | Total Assets | $4,809,574 | $3,229,289 | | **Liabilities and Stockholders' Equity** | | | | Total Current Liabilities | $1,282,966 | $1,532,631 | | Total Liabilities | $1,282,966 | $1,533,118 | | Total Stockholders' Equity | $3,526,608 | $1,696,171 | | Total Liabilities and Stockholders' Equity | $4,809,574 | $3,229,289 | Condensed Consolidated Statements of Operations (unaudited) | | Three months ended March 31, 2025 ($) | Three months ended March 31, 2024 ($) | | :--- | :--- | :--- | | Research and development expenses | $1,588,540 | $1,539,070 | | General and administrative expenses | $1,258,450 | $1,270,528 | | Operating Loss | ($2,846,990) | ($2,809,598) | | Net Loss | ($2,834,405) | ($2,726,381) | | Net Loss Per Common Share - Basic and Diluted | ($0.30) | ($1.11) | Condensed Consolidated Statements of Cash Flows (unaudited) | | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,729,848) | ($2,048,884) | | Net cash provided by financing activities | $4,435,595 | $6,263,050 | | Net Increase (Decrease) in Cash | $1,705,747 | $4,214,166 | | Cash and Cash Equivalents - End of Period | $2,897,072 | $8,920,363 | - The company has incurred losses since inception, with an accumulated deficit of **$90.1 million** as of March 31, 2025. Management has expressed substantial doubt about the company's ability to continue as a going concern for one year, as current cash of **$2.9 million** is only expected to fund operations into mid-2025[22](index=22&type=chunk)[24](index=24&type=chunk)[27](index=27&type=chunk) - In January 2025, the company raised net proceeds of **$4.4 million** from a public offering of common stock and various warrants[23](index=23&type=chunk)[36](index=36&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 saw a net loss of **$2.8 million** and increased R&D expenses, with current cash only funding operations into mid-2025, necessitating additional financing - The company's strategy is to develop Next Generation Cancer (NGC) therapies by modifying existing, well-understood cancer drugs to improve their therapeutic effect and reduce toxicity. The pipeline includes NGC-Cap, NGC-Gem, and NGC-Iri[58](index=58&type=chunk)[59](index=59&type=chunk) Comparison of Operations for the three months ended March 31, | | 2025 ($) | 2024 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Research and development expenses | $1,588,540 | $1,539,070 | $49,470 | | General and administrative expenses | $1,258,450 | $1,270,528 | ($12,078) | | Net Loss | ($2,834,405) | ($2,726,381) | ($108,024) | - R&D expenses increased slightly due to higher preclinical and clinical trial costs for NGC-Cap's Phase 1B and Phase 2 trials, partially offset by a decrease in salaries from employee departures[67](index=67&type=chunk) - G&A expenses decreased slightly, primarily due to lower professional fees, offset by salary increases for C-suite executives and higher stock-based compensation expense[71](index=71&type=chunk) - The company's cash and cash equivalents of **$2.9 million** as of March 31, 2025, are projected to fund operations only into mid-2025, raising substantial doubt about its ability to continue as a going concern without securing additional funding[80](index=80&type=chunk)[81](index=81&type=chunk) - Net cash used in operating activities increased by approximately **$681,000** in Q1 2025 compared to Q1 2024, primarily due to increased clinical trial costs and a paydown of accounts payable[76](index=76&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - As a smaller reporting company, this item is not applicable and has been omitted[91](index=91&type=chunk) [Controls and Procedures](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[92](index=92&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control[93](index=93&type=chunk) Part II. Other Information [Legal Procedures](index=19&type=section&id=Item%201.%20Legal%20Procedures) The company is involved in two significant legal proceedings: a dispute with Elion Oncology, Inc. over a license agreement and a lawsuit alleging fraud from a 2021 private offering - The company is in a legal dispute with Elion Oncology, Inc. regarding the termination of a license agreement. The company believes Elion's claims are without merit and has filed a complaint seeking damages and injunctive relief[94](index=94&type=chunk) - A lawsuit was filed against the company by two investors from a February 2021 private offering, alleging fraud and negligent misrepresentation. The company has filed a motion to dismiss the complaint[96](index=96&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting potential FDA disruptions and Nasdaq delisting risk due to failing to maintain the minimum bid price - A new risk factor was added concerning potential disruptions at the FDA, such as funding cuts and staffing issues, which could hinder the timely approval of new products[99](index=99&type=chunk)[100](index=100&type=chunk) - On February 4, 2025, the company received a deficiency letter from Nasdaq for failing to maintain a minimum bid price of **$1.00** per share. The company has until August 4, 2025, to regain compliance[101](index=101&type=chunk) - Potential delisting from Nasdaq could lead to significant adverse consequences, including reduced liquidity, classification as a "penny stock," and a decreased ability to obtain future financing[101](index=101&type=chunk)[108](index=108&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=20&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company issued **6,252** shares of common stock to Berg Capital Markets, LLC as part of a consulting agreement, relying on registration exemptions - During the quarter ended March 31, 2025, the company issued **6,252** shares of common stock to Berg Capital Markets, LLC in connection with a consulting agreement[103](index=103&type=chunk) - The shares were issued as restricted securities, exempt from registration requirements in reliance on Section 4(a)(2) of the Securities Act[103](index=103&type=chunk) [Defaults Upon Senior Securities](index=20&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[104](index=104&type=chunk) [Mine Safety Disclosures](index=20&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[105](index=105&type=chunk) [Other Information](index=20&type=section&id=Item%205.%20Other%20Information) During Q1 2025, no directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during the three months ended March 31, 2025[106](index=106&type=chunk) [Exhibits](index=20&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including warrants, agreements related to the January 2025 financing, and officer certifications - The report includes exhibits related to the January 2025 public offering, such as the forms for Series A and B Common Warrants, Pre-Funded Warrants, the Securities Purchase Agreement, and the Placement Agency Agreement[107](index=107&type=chunk)[109](index=109&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer are also filed as exhibits[109](index=109&type=chunk)