Processa Pharmaceuticals(PCSA) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2021, the company reported a net loss of $3.2 million or $0.20 per share, compared to a net loss of $733,000 or $0.13 per share for the same period in 2020, indicating an increase in net loss primarily due to clinical trial costs [11][12] - The net cash used in operating activities increased by $3.5 million to $4.4 million for the first half of 2021 compared to the same period in 2020 [13] - Research and development expenses totaled $1.6 million for Q2 2021, up from $427,000 in Q2 2020, reflecting increased costs related to active clinical trials [14] - General and administrative expenses for the first half of 2021 were $1.3 million compared to $375,000 for the same period in 2020, driven by higher professional fees and stock-based compensation [15] Business Line Data and Key Metrics Changes - The company has two active clinical trials: PCS499 for Ulcerative Necrobiosis Lipoidica and PCS6422 for advanced gastrointestinal tumors, with costs incurred for both trials contributing to the increased net loss [11][12] - PCS3117, a newly in-licensed oral anticancer agent, has shown improved pharmacological profiles compared to existing treatments and has received FDA orphan designation for pancreatic cancer [9][10] Market Data and Key Metrics Changes - The potential market for PCS499 in the U.S. is estimated at approximately $1 billion, targeting 22,000 to 55,000 ulcerative NL patients [26] - The market for PCS6422, in combination with capecitabine, is projected to be a multiple billion dollar market, particularly for metastatic colorectal cancer [39][40] Company Strategy and Development Direction - The company aims to make small bets on potentially large wins, focusing on drugs that address unmet medical needs and improve the benefit-risk profile compared to existing therapies [18][20] - The development strategy includes advancing drugs closer to FDA submission, with a focus on identifying biomarkers for patient selection in clinical trials [22][38] Management's Comments on Operating Environment and Future Outlook - Management anticipates that costs will continue to rise as patient enrollment and development activities for clinical trials progress [12] - The company has sufficient cash reserves of $20.8 million to support operations through 2023, allowing for the completion of ongoing trials and development of biomarker assays [45] Other Important Information - The company has received notification that its PPP loan of $163,000 has been forgiven, providing additional financial relief [13] Q&A Session Summary Question: What are you hoping to see in the interim look for 6422? - Management indicated they will assess if 6422 is affecting metabolism sufficiently to improve safety and efficacy compared to capecitabine [48][49] Question: Can you move from Phase 1B to Phase 3 based on the data? - Management stated that if efficacy is observed, an adaptive design Phase 3 could be pursued, but it depends on the results from Phase 1B [53][56] Question: How many patients do you expect for the interim analysis of necrobiosis lipoidica? - Management expects between 8 and 10 patients for the interim analysis, focusing on the response rate of the placebo group [68] Question: What is the expected cost for clinical trials going forward? - Management estimates that the costs for ongoing studies will range from $3 million to $5 million for each of the current trials [73]