Processa Pharmaceuticals, Inc. (Nasdaq: PCSA) November 8, 2022 3Q2022 Disclaimer: Forward Looking Statements The following summary is provided for informational purposes only and does not constitute an offer or solicitation to acquire interests in the investment or any related or associated company. The information contained here is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for an individual's ...

PART I: FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements, highlighting decreases in cash and assets, increased liabilities, and a widening net loss due to higher R&D expenses [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets | Financial Metric | September 30, 2022 ($) | December 31, 2021 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 9,054,576 | 16,497,581 | | Total Current Assets | 10,886,685 | 18,327,151 | | Total Assets | 18,604,465 | 26,463,505 | | Total Current Liabilities | 1,192,733 | 971,020 | | Total Liabilities | 1,364,440 | 978,405 | | Total Stockholders' Equity | 17,240,025 | 25,485,100 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations | Metric | Three Months Ended Sep 30, 2022 ($) | Three Months Ended Sep 30, 2021 ($) | Nine Months Ended Sep 30, 2022 ($) | Nine Months Ended Sep 30, 2021 ($) | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | 3,136,838 | 1,722,364 | 8,319,907 | 4,806,845 | | General and administrative expenses | 2,920,280 | 1,338,113 | 6,137,674 | 3,391,105 | | Operating Loss | (6,057,118) | (3,111,430) | (14,457,581) | (8,764,533) | | Net Loss | (6,020,410) | (2,987,217) | (14,411,909) | (8,243,740) | | Net Loss per Share (Basic & Diluted) | (0.37) | (0.19) | (0.90) | (0.54) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows | Cash Flow Metric | Nine Months Ended Sep 30, 2022 ($) | Nine Months Ended Sep 30, 2021 ($) | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | (7,107,758) | (5,990,321) | | Net Cash (Used In) Provided By Financing Activities | (335,247) | 9,667,285 | | Net (Decrease) Increase in Cash | (7,443,005) | 3,676,964 | | Cash and Cash Equivalents – End of Period | 9,054,576 | 19,093,188 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company is a clinical-stage biopharmaceutical company with five drugs in its pipeline: **Next Generation Capecitabine (PCS6422)**, **PCS12852**, **PCS499**, **PCS3117**, and **PCS11T**[18](index=18&type=chunk)[24](index=24&type=chunk) - Management believes current cash balances and available financing under the Lincoln Park Purchase Agreement are adequate for at least the next twelve months, but acknowledges that future operations depend on obtaining additional funding[25](index=25&type=chunk) - On March 23, 2022, the company entered into a Purchase Agreement with Lincoln Park Capital Fund, LLC, for up to **$15.0 million** of its common stock[28](index=28&type=chunk)[38](index=38&type=chunk) - Stock-based compensation expense for the nine months ended September 30, 2022, was **$6.05 million**, a significant increase from **$2.29 million** in the same period of 2021[45](index=45&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management analyzes the company's financial performance, detailing its drug pipeline progress, increased net loss from higher R&D and G&A expenses, and current liquidity position [Our Drug Pipeline](index=20&type=section&id=Our%20Drug%20Pipeline) Our Drug Pipeline | Drug | Disease Target | Development Stage | Upcoming Milestones | | :--- | :--- | :--- | :--- | | PCS6422 (Next Gen Capecitabine) | Metastatic Colorectal, Other Cancers | Phase 1B | 1H'23 - Complete Phase 1B Trial; 2023 - Initiate Phase 2B Trial | | PCS12852 | Gastroparesis | Phase 2A/2B | 2H'22 - Complete Phase 2A analysis; 2023 - Initiate Phase 2B Trial | | PCS499 | Ulcerative Necrobiosis Lipoidica | Phase 2B | 2023 - Complete Interim Analysis & Enrollment; 2023-2024 - Initiate Phase 3 Trial | | PCS3117 | Pancreatic, Other Cancers | Phase 2B | 2H'22 - 1H'23 - Define paths to FDA Approval | | PCS11T | Small Cell Lung, Other Cancers | Pre-IND | 2H'22 - Select Manufacturing Sites; Define paths to FDA Approval | - The Phase 1B trial for Next Generation Capecitabine (NGC) is expected to complete enrollment in the **first half of 2023**, with plans to initiate a Phase 2B trial later in **2023**[88](index=88&type=chunk) - The Phase 2A trial for PCS12852 in gastroparesis completed enrollment in **September 2022**, with early results showing improvements in gastric emptying; a Phase 2B study is planned for **2023**[20](index=20&type=chunk)[95](index=95&type=chunk) - Enrollment in the PCS499 Phase 2B trial has been delayed due to COVID-19 and the rarity of the disease; an interim analysis is expected in the **first half of 2023**[22](index=22&type=chunk)[102](index=102&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) - The company currently has no revenue from products[120](index=120&type=chunk) Results of Operations | Expense Category | Nine Months Ended Sep 30, 2022 ($) | Nine Months Ended Sep 30, 2021 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Research and development expenses | 8,319,907 | 4,806,845 | +3,513,062 | | General and administrative expenses | 6,137,674 | 3,391,105 | +2,746,569 | | **Net Loss** | **(14,411,909)** | **(8,243,740)** | **+(5,819,310)** | - The increase in R&D expenses for the first nine months of 2022 was driven by higher payroll and related costs, a **$1.4 million** increase in stock-based compensation, and increased costs for three active clinical trials[123](index=123&type=chunk)[124](index=124&type=chunk) - The increase in G&A expenses for the first nine months of 2022 was primarily due to a **$2.3 million** increase in employee stock-based compensation[129](index=129&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2022, the company had **$9.1 million** in cash and cash equivalents[140](index=140&type=chunk) - Net cash used in operating activities for the nine months ended September 30, 2022, was **$7.1 million**, an increase from **$6.0 million** in the prior-year period, mainly due to payments for clinical trials and increased salaries[135](index=135&type=chunk) - Management believes its current cash balance, along with funds available from the Lincoln Park Purchase Agreement and the ATM Offering, will be adequate for at least the next twelve months[142](index=142&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is omitted as the company qualifies as a smaller reporting company, rendering market risk disclosures not applicable - This item is not applicable to the company as it qualifies as a smaller reporting company[152](index=152&type=chunk) [Controls and Procedures](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of **September 30, 2022**[153](index=153&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control[154](index=154&type=chunk) PART II: OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently involved in any material legal proceedings - The company is not currently a party to any material legal proceedings[155](index=155&type=chunk) [Risk Factors](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors have occurred since the 2021 Annual Report on Form 10-K - There have been no material changes to the risk factors as described in the Annual Report on Form 10-K for the year ended **December 31, 2021**[156](index=156&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered securities were sold during the third quarter of 2022 - There were no sales of unregistered securities during the three months ended **September 30, 2022**[157](index=157&type=chunk) [Other Information](index=36&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company reported a change in its transfer agent during the quarter - On **July 25, 2022**, the company changed its transfer agent from Equiniti Trust Ltd. to Continental Stock Transfer and Trust Company[162](index=162&type=chunk) [Exhibits](index=36&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including management certifications and XBRL data files - The report lists several exhibits filed, including the First Amendment to the Lease Agreement, CEO and CFO certifications under Rule 13a-14(a) and Section 1350, and various Inline XBRL documents[163](index=163&type=chunk)

Financial Data and Key Metrics Changes - The cash balance as of June 30, 2022, was $12.1 million, expected to fund operations into Q3 2023 [8] - The net loss for the six months ended June 30, 2022, was $8.4 million, or $0.53 per share, compared to a net loss of $5.3 million, or $0.35 per share for the same period in 2021, indicating an increase in net loss due to higher clinical trial costs [10][11] - Research and development costs for the six months ended June 30, 2022, totaled $5.2 million, an increase of $2.1 million compared to the same period in 2021 [11] - General and administrative expenses totaled $3.2 million for the six months ended June 30, 2022, compared to $2.1 million for the same period in 2021, primarily due to increases in stock-based compensation [12] Business Line Data and Key Metrics Changes - The company has three drugs in clinical trials: Next Generation Capecitabine (6422), drug 499, and drug 12852, with varying enrollment and progress rates [20][24] - Drug 499 has faced slower patient enrollment, significantly affected by COVID-19, while drug 12852 has performed well in patient enrollment [20][27] Market Data and Key Metrics Changes - The potential market size for each of the five drugs in the pipeline is greater than $1 billion, providing multiple opportunities for significant revenue generation [18] - The company is focused on patients with unmet medical needs, indicating a strategic positioning in a niche market [17] Company Strategy and Development Direction - The company aims to out-license or partner each drug when the benefits outweigh the risks, with interest already expressed by several companies [34] - Funding for future studies is expected to come from licensing deals and additional cash offerings, with a focus on increasing the company's market cap before raising funds [35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in patient enrollment due to COVID-19 but is implementing strategies to improve visibility and recruitment for clinical trials [20][30] - The company expects to complete enrollment for its trials and achieve key milestones within the next 12 months, with positive news flow anticipated [36] Other Important Information - The company has brought in additional staff to manage clinical studies efficiently and is prepared to hire more if necessary [32] - Management emphasized their vested interest in the company's success, having invested their own cash and salaries into the business [37] Q&A Session Summary Question: What is the status of drug 499 regarding patient screening? - Management indicated that the screening failure rate is not high, but there are very few patients coming in for screening, primarily due to COVID-19 [39] Question: Are there signs of increased interest since the launch of the website? - Management confirmed that there has been an increase in patient inquiries following the website launch and other initiatives [41] Question: What is the new timeline for preliminary results of drug 6422? - Management expects to have interim results by late summer, with overall study completion still on track for the end of the year [42] Question: What is the status of drug 3117's assay development? - Management is still working on the assay and plans to meet with the FDA in early 2023, depending on the assay's progress [47] Question: What can be expected from the top-line data for drug 12852? - Management anticipates top-line data regarding gastric emptying rates by October, with a full analysis of symptoms expected later [50]

[PART I: FINANCIAL INFORMATION](index=4&type=section&id=PART%201%3A%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) The unaudited condensed consolidated financial statements for Processa Pharmaceuticals, Inc. as of June 30, 2022, and for the three and six-month periods then ended, show a net loss of **$8.4 million** and **$12.1 million** in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $12,064,142 | $16,497,581 | | Total Current Assets | $13,960,775 | $18,327,151 | | Total Assets | $21,657,590 | $26,463,505 | | Total Current Liabilities | $1,571,068 | $971,020 | | Total Liabilities | $1,575,723 | $978,405 | | Total Stockholders' Equity | $20,081,867 | $25,485,100 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | $3,137,292 | $1,614,954 | $5,181,912 | $3,086,401 | | General and administrative expenses | $2,034,456 | $1,329,213 | $3,218,550 | $2,051,073 | | Operating Loss | $(5,171,748) | $(3,459,797) | $(8,400,462) | $(5,653,104) | | Net Loss | $(5,164,368) | $(3,157,043) | $(8,391,499) | $(5,256,523) | | Net Loss per Share - Basic and Diluted | $(0.32) | $(0.20) | $(0.53) | $(0.35) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,133,439) | $(4,437,494) | | Net cash (used in) provided by financing activities | $(300,000) | $9,852,465 | | Net (Decrease) Increase in Cash | $(4,433,439) | $5,414,971 | | Cash and Cash Equivalents – End of Period | $12,064,142 | $20,831,195 | [Note 1 – Organization and Summary of Significant Accounting Policies](index=8&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) The clinical-stage biopharmaceutical company develops treatments for unmet medical needs, with an accumulated deficit of **$45.2 million** as of June 30, 2022, but believes current cash is sufficient for the next twelve months - The company is a clinical-stage biopharmaceutical company with five drug candidates in its pipeline, focusing on conditions with high unmet medical needs[20](index=20&type=chunk) - The COVID-19 pandemic has caused delays in patient enrollment for the PCS499 Phase 2B trial, potentially increasing costs and extending timelines[23](index=23&type=chunk) - As of June 30, 2022, the company had an accumulated deficit of approximately **$45.2 million**. Management believes current cash is adequate for at least the next twelve months, supported by available financing facilities like the ATM Offering and the Lincoln Park Purchase Agreement[26](index=26&type=chunk) [Note 3 – Stockholders' Equity](index=11&type=section&id=Note%203%20%E2%80%93%20Stockholders%27%20Equity) Key equity activities include increasing authorized common stock to **50 million** shares, establishing a **$15.0 million** purchase agreement with Lincoln Park Capital, and repurchasing **100,000** shares - On January 1, 2022, the company increased its authorized shares of common stock from **30,000,000** to **50,000,000**[37](index=37&type=chunk) - On March 23, 2022, the company entered into a Purchase Agreement with Lincoln Park Capital, which committed to purchase up to **$15.0 million** of the company's common stock[39](index=39&type=chunk) - On March 29, 2022, the company repurchased **100,000** shares of its common stock from Aposense Ltd. for **$300,000**, which are now held as treasury stock[45](index=45&type=chunk) [Note 4 - Stock-based Compensation](index=12&type=section&id=Note%204%20-%20Stock-based%20Compensation) Stock-based compensation expense significantly increased in the first half of 2022, with **$4.0 million** in unrecognized RSU expense and an increase in shares available under the 2019 incentive plan to **6 million** Stock-based Compensation Expense | Period | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Total Expense | $2,838,266 | $1,173,622 | - During the six months ended June 30, 2022, the company awarded **1,363,917** RSUs. As of June 30, 2022, there were **1,777,922** RSUs outstanding[52](index=52&type=chunk) - On July 11, 2022, shareholders approved an increase in the number of shares available under the 2019 Omnibus Equity Incentive Plan by **3,000,000** shares, to a total of **6,000,000**[47](index=47&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=17&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) The MD&A details the company's business strategy, drug pipeline progress, financial results, and liquidity, reporting a **$8.4 million** net loss for H1 2022, but with **$12.0 million** cash deemed sufficient for the next twelve months [Our Drug Pipeline](index=19&type=section&id=Our%20Drug%20Pipeline) The company's pipeline includes five drug candidates, with three in active clinical trials (PCS499, PCS12852, PCS6422) targeting both non-oncology and oncology indications, with key milestones anticipated in late 2022 and 2023 Drug Pipeline and Upcoming Milestones | Drug | Disease Target | Phase | Upcoming Milestones | | :--- | :--- | :--- | :--- | | PCS499 | Ulcerative Necrobiosis Lipoidica | Phase 2B | 1H'23 - Interim Analysis; Complete Enrollment | | PCS12852 | Gastroparesis | Phase 2A | 2H'22 - Complete Enrollment; Top-Line Results | | PCS6422 | Metastatic Colorectal, Other Cancers | Phase 1B | 2H'22 - Complete Enrollment & Preliminary MTD Identification | | PCS3117 | Pancreatic, Other Cancers | Phase 2B | 2H'22 - 1H'23 - Define Possible Paths to FDA Approval | | PCS11T | Small Cell Lung, Other Cancers | Pre-IND | 2H'22 - Select Manufacturing Sites; Define Paths to Approval | - PCS499 (uNL): Phase 2B trial enrollment has been delayed due to COVID-19. An interim analysis is planned for the first half of 2023[87](index=87&type=chunk)[88](index=88&type=chunk) - PCS12852 (gastroparesis): Phase 2A trial enrolled its first patient in April 2022, with top-line results expected by the end of 2022[94](index=94&type=chunk) - PCS6422 (Next Gen Capecitabine): A modified Phase 1B trial restarted in April 2022 to better define the dosing regimen, with enrollment expected to complete by the end of 2022[103](index=103&type=chunk)[104](index=104&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2022, the company reported no revenue and a net loss of **$8.4 million**, driven by increased R&D expenses of **$5.2 million** and G&A expenses of **$3.2 million** Comparison of Operating Expenses (Six Months Ended June 30) | Expense Category | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Research and development | $5,181,912 | $3,086,401 | +$2,095,511 | | General and administrative | $3,218,550 | $2,051,073 | +$1,167,477 | | **Operating Loss** | **$(8,400,462)** | **$(5,653,104)** | **+$(2,747,358)** | - The increase in R&D expenses was mainly due to costs for three active clinical trials, including payments to CROs, regulatory fees, and drug product testing[123](index=123&type=chunk) - The increase in G&A expenses was primarily driven by a **$983,000** increase in employee stock-based compensation and a **$68,000** increase in payroll and related costs[131](index=131&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, the company held **$12.0 million** in cash, with management believing it sufficient for the next twelve months, supplemented by a **$15 million** Lincoln Park agreement and a **$30 million** ATM offering - The company held **$12.0 million** in cash and cash equivalents at June 30, 2022[142](index=142&type=chunk) - Management believes current cash is adequate for at least the next twelve months, without considering potential proceeds from its Lincoln Park agreement or ATM Offering[144](index=144&type=chunk) - Financing facilities include a **$15 million** purchase agreement with Lincoln Park and a **$30 million** ATM offering to provide capital flexibility[143](index=143&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This item is not applicable as the company qualifies as a smaller reporting company - Item 3 is not applicable to the company as it qualifies as a smaller reporting company[153](index=153&type=chunk) [Controls and Procedures](index=31&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2022[154](index=154&type=chunk) - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2022[155](index=155&type=chunk) [PART II. OTHER INFORMATION](index=31&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=31&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[156](index=156&type=chunk) [Risk Factors](index=31&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes to risk factors from the Annual Report on Form 10-K for the year ended December 31, 2021[157](index=157&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU%20RITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no sales of unregistered securities during Q2 2022, but repurchased **100,000** shares of common stock for **$300,000** in the first six months - There were no sales of unregistered securities during the three months ended June 30, 2022[158](index=158&type=chunk) - The company purchased **100,000** shares of its common stock for **$300,000**, which are held as treasury stock[160](index=160&type=chunk) [Other Information](index=31&type=section&id=ITEM%205.%20OTHER%20INFORMATION) On July 25, 2022, the company changed its transfer agent to Continental Stock Transfer and Trust Company - The company changed its transfer agent to Continental Stock Transfer and Trust Company on July 25, 2022[163](index=163&type=chunk)

Processa Pharmaceuticals, Inc. (NASDAQ: PCSA) Clinical Pipeline Update / May 12, 2022 Disclaimer: Forward Looking Statements The following summary is provided for informational purposes only and does not constitute an offer or solicitation to acquire interests in the investment or any related or associated company. The information contained here is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for ...

Processa Pharmaceuticals, Inc. (NASDAQ:PCSA) Q1 2022 Earnings Conference Call May 12, 2022 4:30 PM ET Company Participants Jim Stanker – Chief Financial Officer David Young – Chief Executive Officer Conference Call Participants Robin Garner – Craig-Hallum Naz Rahman – Maxim Group Operator Greetings, and welcome to Processa Pharmaceuticals First Quarter 2022 Earnings Conference Call and Corporate Update. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow ...

Processa Pharmaceuticals, Inc. (NASDAQ: PCSA) Clinical Pipeline Update / May 12, 2022 Disclaimer: Forward Looking Statements The following summary is provided for informational purposes only and does not constitute an offer or solicitation to acquire interests in the investment or any related or associated company. The information contained here is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for ...

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 March 31, 2022 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 ...

Processa Pharmaceuticals Clinical Pipeline Update March 30, 2022 Disclaimer: Forward Looking Statements The following summary is provided for informational purposes only and does not constitute an offer or solicitation to acquire interests in the investment or any related or associated company. The information contained here is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for an individual's speci ...

Financial Data and Key Metrics Changes - As of December 31, 2021, the company had a cash balance of $16.5 million, an increase of $1.1 million compared to December 31, 2020 [8][9] - The net loss for the year ending December 31, 2021, was $11.4 million or $0.75 per share, a reduction from a net loss of $14.4 million or $2.54 per share for the same period in 2020 [13] - Research and development expenses totaled $6.9 million for 2021, compared to $3.2 million for the same period in 2020, indicating a significant increase in R&D costs [15][16] Business Line Data and Key Metrics Changes - The company licensed PCS3117 from Ocuphire for cash and stock totaling $567,000, contrasting with $8.7 million in costs incurred for other licensing activities [14] - General and administrative expenses increased to $4.7 million in 2021 from $3.3 million in 2020, primarily due to higher professional fees and non-cash stock-based compensation [16] Market Data and Key Metrics Changes - The company is focused on five drugs in its pipeline, each addressing a different unmet medical need with a potential market size exceeding $1 billion [21][22] - The market potential for PCS499, aimed at treating necrobiosis lipoidica, is estimated to be around $1 billion, despite the challenges in patient enrollment due to COVID-19 [36][40] Company Strategy and Development Direction - The company is developing five drugs simultaneously, all at different stages, with multiple near-term milestones expected from March to August 2022 [22][23] - The strategy includes a focus on regulatory science to navigate FDA requirements effectively, leveraging past experiences with FDA contracts [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by COVID-19 on patient enrollment but emphasized ongoing efforts to improve recruitment through advertising and physician referrals [50][66] - The company anticipates continued increases in clinical trial costs as it progresses with its drug development activities [15] Other Important Information - A purchase agreement with Lincoln Park Capital LP allows the company to sell up to $15 million worth of common stock over the next three years, serving as a financing insurance policy [12] - The company has modified the Phase 1b protocol for the next-generation capecitabine to better understand DPD inhibition and de novo formation timelines [34] Q&A Session Summary Question: Clarification on PCS499 prevalence estimates - Management noted that while literature suggests a prevalence of 22,000 to 55,000 patients, the actual interest in enrollment has been lower, prompting remedial actions to increase recruitment [49][50] Question: Pricing flexibility based on prevalence - Management indicated that the seriousness of the condition provides pricing flexibility, estimating a potential price range of $30,000 to $50,000 per year for patients [51][54] Question: Update on prescreening patients - Management confirmed that a couple of patients died from COVID before screening, affecting the number of patients in prescreening [55][56] Question: Data expectations for DPD inhibition - Management expects to gather data on DPD inhibition timelines by mid-2022, which will inform dosing regimens for the next-generation capecitabine [58] Question: Efficacy signal for 6422 - Management clarified that the 10% estimate for 5-FU metabolism is based on previous preclinical and clinical studies [63][64] Question: Enrollment criteria for PCS499 - Management stated that the exclusion of patients was not due to strict ulcer size criteria but rather other health conditions [65][66] Question: Therapeutic window for next-generation capecitabine - Management indicated that while monitoring for neurotoxicity and cardiotoxicity, they do not expect these to limit the maximum tolerated dose [78][80] Question: Establishing maximum tolerated dose - Management explained that the focus will be on determining the maximum tolerated dose of capecitabine, with adjustments based on DPD inhibition kinetics [82][85]