Hello, George. This is Craig from RedChip. Wanted to do a sound check, video check, and all the rest. How are you?
I'm doing well, trying to do the video. Can you see me now?
I see you loud and clear. Yeah, you're and we're live. I just wanted to say thank you once again to everybody who came early. We'll be getting started in four minutes. This is the Processa Pharmaceuticals webinar with RedChip. George, the only problem I see right now is the logo is running backwards. Yeah.
I don't know why that's the case. I thought it fixed that. Maybe I'll just do this. Setting. I'll just do this. Does that work? Oh, it's still backwards, right?
No, that's not working either. There are more logos now, and they too are running in the, like a mirror image.
Okay, let me just, I guess, how about I just do a blur? Is that okay?
That is very good. That is just fine.
Okay, thank you.
Okay, George, video and audio are just fine. At 4:14 P.M. Eastern, 1:14 P.M. Pacific, I'll get on and say we're going to be starting in one minute. At 15 after the hour sharp, I will press record. I will say a few words introducing you and this webinar. I'll do the safe harbor statement, and then you will begin your presentation. How does that sound?
Sounds great.
Okay. Best thing to do now would be to cut your video and audio and just wait for about 4:14 and a few seconds thereafter, and we'll get started. Thanks, George.
Thank you.
Good afternoon, everyone. This is the Processa Pharmaceuticals webinar. We'll be getting started in one minute. Hello, everyone. This is Craig Brelsford with RedChip Companies. Thank you for joining today's event with Processa Pharmaceuticals, which trades on the NASDAQ under the ticker PCSA. With us today, we have George Ng, CEO of Processa. We will begin with a brief presentation in a moment, and then we will answer your questions. Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties.
I now turn this webinar over to George. Please go ahead.
Thank you, Craig. I appreciate the opportunity to speak and meet with you all here today. My name is George Ng. I'm the CEO of Processa Pharmaceuticals. Again, NASDAQ-traded company with the ticker symbol PCSA. As Craig mentioned, I likely will be making forward-looking statements today. Please take note of that. At Processa Pharmaceuticals, we develop next-generation cancer drugs, and we do so with a de-risk approach to development. Unlike some of these other companies that have taken a high-risk but high-reward approach, we have decided to take a de-risk approach in that we're not developing wholesale new therapies and treatments and drugs in that sense.
We are taking current cancer therapies and drugs that have issues, and we make them better in that by developing our drugs to either work in concert or altering existing drugs and anti-cancer agents, we make them more effective in terms of higher efficacy, as well as better safety as well. How do we do this? We do this by altering the distribution and/or metabolism of these current cancer therapies, drugs, and anti-cancer agents. We do this using a proprietary regulatory science approach that our seasoned development team has used to the tune of 30 regulatory approvals to date, so very successfully. This regulatory science approach is also compliant with the new FDA Project Optimus requirements that now require pharmaceutical companies to come up with an optimal dose for oncology drugs rather than just a maximum tolerated dose.
Fortunately for us, while some other companies may be scrambling to comply with this new requirement, our development team has been doing this all along, including with our current drugs in our pipeline. Despite decades of advancements and developments in the oncology space, there's still a huge high unmet need. Despite these developments, cancer is still the second leading cause of death. There is a need for better cancer drugs and therapies. In our pipeline, we currently have two oncology drug products: PCS6422 and PCS11T. As for PCS6422, what we do is our PCS6422 drug is given in combination with capecitabine, which is a well-known, widely used chemotherapy drug that has its issues. For example, 35%- 70% of all patients on capecitabine can't tolerate it. Doctors either have them go off of drug altogether or give them a lower dose of capecitabine, which is not optimal.
What we do is when we give it in combination with capecitabine, we actually make it safer and also create higher exposure to the active ingredient, which also makes it more effective. Our phase I-B results, which we previously reported, support this in that, although it was a small study, we had a 67% response rate, which is very high. As I may have mentioned previously, for regular capecitabine, only 20% - 40% of all patients respond, depending upon the cancer indication. We have a much higher response rate. Our progression-free survival is 3 to 11 months. We even had a much better safety profile in that, for example, only 6% of all our patients actually came down with hand and foot syndrome, which is the leading side effect for capecitabine.
For example, for regular capecitabine or capecitabine given alone, about 50% of all patients come down with hand and foot syndrome, with 20 to 30 patients coming down with severe hand and foot syndrome, which is where it's so severe that a patient can't grasp anything and they can't walk. In our case, we had no cases of severe hand and foot syndrome and only one mild case of hand and foot syndrome. We're excited about the results. Because of that, we actually initiated a phase II study last August. We're in the middle of that right now. It is a study that's meant to be done in two parts. We are in the process of treating the first 20 patients. After 20 patients are enrolled and treated, we will do an interim analysis, and then we'll be able to release the interim analysis data.
Right now, we're on track to complete enrollment within the second half of this year and also release preliminary analysis results in that timeframe as well. As for our second oncology drug product, PCS11T, we basically altered SM38, which is the active ingredient in irinotecan and onivyde and a few other drugs as well. The problem with irinotecan, so we altered it to add a chemical transporter that preferentially draws in more of SM38 into the tumor cell over surrounding healthy tissue. The reason why that's important is that irinotecan and onivyde and the other SM38 drug products, they all have black box warnings. That's a case where the side effects are so severe that they could be deadly.
By drawing in more of SM38 into the tumor cell over surrounding healthy tissue, we have less off-target effects and we improve safety, less side effects, less toxicities to the surrounding tissue. Our goal is to try to remove part or all of a black box warning. So far, from preclinical animal studies, we have shown that in both irinotecan and onivyde, we preferentially draw in more of SM38 than those drugs do. We are excited about that. Aside from our two oncology assets, we also have two non-oncology assets that we have partnered or are in the process of partnering and doing collaborations with. The first one is PCS12852, and it was a drug product initially developed for gastroparesis. We recently announced a deal that we did with Intact Therapeutics for an out-licensing deal and a collaboration with Intact Therapeutics.
The basic deal terms are that it was about $454 million in total deal value with about $2.5 million in potential near-term payments and milestone payments. We also received a low double-digit royalty as well. We have also included in the deal a 3.5% equity stake in Intact Therapeutics. Why I'm really excited about that is that the team there at Intact, they're experienced and they are well known in the GI space, especially one individual who is a well-known researcher and expert in GI diseases and in fact was the co-founder and was the technological brains behind what was at one time the largest GI-focused pharmaceutical company in the world before it was acquired for billions by another company. With his involvement, we are very excited about the prospects, and we're confident that Intact and its team can move this asset through development. We are excited about that.
In terms of PCS499, we are fortunate that due to a recent change in regulation, we are able to pivot PCS499 back to the renal and nephropathy space where it was originally developed. The FDA is starting to allow a surrogate endpoint that is easier to meet. Since that time, about four or five drugs have been approved with this new surrogate endpoint, including one by Novartis and one by Travere. Why I'm excited about PCS499 is that from the data that's already been generated, we believe that we can go straight to a phase III adaptive pivotal/registrational study. That would be the only study that we require prior to FDA submission for approval. We are excited about that. We're also excited because out of the drugs that have been approved under the surrogate endpoint, they all have black box warnings.
Our drug would be the only one, if approved, that would not have a black box warning. That gives us a huge advantage over these other drugs in the space, which is pretty hot right now. Right now, we are in the process of designing and coming up with a phase III adaptive study protocol. In the next few months, we plan to submit a pre-FDA meeting package to the FDA regarding the phase III adaptive study, the proposed phase III adaptive study, you know what I mean? We're hoping to get FDA feedback. With FDA feedback, then we go from where we didn't really have much to now a phase III ready study drug. That's why we're really excited about that. We're in the process of speaking and meeting with several potential partners for this drug.
In fact, I was just at the big bio conference, and we had over 30+ meetings just on PCS499. There's a lot of excitement around that. We will begin the process of looking for a partner and negotiating with companies for a partnership for this and collaboration. Just in summary, you know I'm excited, and I think you know everybody should be excited about Processa Pharmaceuticals because of four major reasons. One, again, we're taking a de-risk approach. We're not reinventing the wheel. We're not having to, unlike some of these other companies, show and prove that their drug works. We just have to show that current cancer drugs, that we can make them work better in terms of making them more effective and safer. That's a lower bar and a de-risk proposition. We have a seasoned management team with extensive public company experience.
As I mentioned previously, we have a development team that has 30 regulatory approvals, and we have leadership that have been at other publicly traded companies and executed all the way through to meaningful milestones. We also have multiple drug products with high potential in our pipeline. We're not just one shot at the apple. We actually have multiple shots on goal. Lastly, we have upcoming catalysts. As I mentioned previously with PCS6422, we anticipate doing a phase II preliminary analysis and issuing or releasing data in the second half of this year. We also have potential non-dilutive funding from partnering and deal payments and milestones from PCS12852, as well as from PCS499, pending a deal being done with that drug. I thank you for your time, and I appreciate you taking time out of your busy day to hear me speak.
Thank you, George. Participants, you may submit your question by clicking the Q&A button and typing in your question. I will read it aloud, and George will answer. We can take only written questions today, so please do not use the raise hand button. George, we've already received several questions. One is this: you've presented abstracts at ASCO and have next-generation cancer drug candidates such as PCS6422 and PCS11T. Can you elaborate on the unique value proposition of these drug candidates and their potential market impact?
Yeah, so with PCS6422, it's meant to be given in combination with capecitabine. Capecitabine is a very widely known and used chemotherapy drug that's used in first line, second line, in many different patients. It has its shortcomings. There are high toxicity levels associated with it, and there are also very severe side effects, like with hand and foot syndrome. With our drug given in combination, if we can address those issues, it could be a game changer. On top of that, there are a lot of potential patients that aren't prescribed capecitabine because of these side effects and toxicity levels. Physicians believe that certain patient populations won't be able to tolerate them, like for example, with elderly patients. If we can make capecitabine a lot safer and even more effective, then we can reach patient populations, in fact, even expand the patient population pool.
As for PCS11T, as I mentioned previously, products with the active ingredient SM38 have black box warnings. If we're able to, as shown in preclinical animal studies, draw in more of SM38 into the tumor cell, then there's less off-target effects, less toxicities going to the surrounding healthy tissue. Therefore, if we can remove even part of a black box warning, our key opinion leaders have told us that that's a game changer as well. I mean, if you're a physician, would you prescribe, you know, if you had a choice between two drugs, one that has a black box and one that doesn't, you would likely prescribe the one that does not have a black box or has less of a black box. For those reasons, we believe that PCS6422 and PCS11T have a very high value proposition.
George, in your June 2024 announcement, you reported positive preliminary results from a phase I-B trial in gastrointestinal cancer with 66.7% of the patients showing progression-free survival. Why did you choose to pivot to breast cancer?
That's a great question and an interesting one. It stems from our interactions with the FDA. You know, again, we have this proprietary regulatory science approach that we've used with much success in other situations and with other drugs. In our actions with the FDA, we were able to elicit great feedback from the FDA. They were encouraged by the data. They actually were the ones that encouraged and supported us to pivot over to breast cancer because it is an easier path to possible approval in terms of further development, also because it would be as a monotherapy. Therefore, once you have a drug that proves a monotherapy, it can be used in combination with other drugs as opposed to the other way around. It was for these reasons. Also, because we do have, there is prior published data with PCS6422 being used to treat breast cancer.
We have data also that helps support the pivot over to a breast cancer indication, which is a very large indication in terms of patients and patients treated. It's for all those reasons why we pivoted over to breast cancer for our phase II study.
Next question. The oncology drug market is highly competitive. How does Processa differentiate its next-generation cancer drug candidates from existing treatments, and what is your competitive advantage?
Yeah, I mentioned it previously as well. I mean, we take this de-risk approach. You know, we don't have to show that our drug works. I came from an area and field of immune oncology where they would ask questions as simple as, you know, how do you know your drug actually gets to the tumor cell? We don't have to answer those questions here. We already know how current approved cancer therapies work, including chemotherapy. We know how they work. It's just a matter of, you know, we just need to show that we make them work better and we make them safer to use and to treat. That's a much lower bar. We believe that gives us a competitive advantage. We have a very experienced management and development team with many regulatory approvals to date.
We believe that those aspects are our advantages over a lot of other companies.
What is your current engagement with regulatory bodies such as the FDA, and what milestones do you anticipate in gaining approvals for your drug candidate?
Great. As I mentioned previously, we have this regulatory science approach, and we've used it successfully in the past to interact with and negotiate with the FDA on various matters. Currently, we've used that approach with PCS6422, as I mentioned previously, in the pivot to breast cancer and in successfully getting the FDA to agree with us on a phase II study protocol. Currently, we're in the first part of our phase II study enrollment and treatment of patients. Once we get to the interim, which is after 20 patients are treated, the way it is set up is that 10 of the patients are on a low dose of capecitabine, and 10 patients are on an even lower dose. What I forgot to mention is in our phase I-B study, we actually used a lower dose of capecitabine than what is normally used.
The FDA wanted us to see how low we can really go, which is why we have this first part where we treat 10 and 10. At the interim, we determine which dose to move forward with, and we will interact with the FDA at that time using our proprietary regulatory science approach. Basically, from those interactions, we will determine with the FDA which dose to choose to go with for the remainder of the study and how many more patients we will need to treat at that point in time. With regards to PCS499, we're in the process of preparing our phase III adaptive study protocol. We will request an FDA meeting and interact with them in that way to get feedback from the FDA on the study protocol.
If they largely agree, then we will instantly have a phase III adaptive study ready drug, which will be ready for partnership at that time.
Are you actively seeking or open to strategic partnerships with larger pharmaceutical companies to accelerate your drug development process?
Yes, it should be pretty evident that we are open to partnerships. I already mentioned the Intact Therapeutics deal for PCS12852 and our reasons for doing that deal. Turning now to PCS499, it's pretty exciting because we went from nothing to now having a potential phase III ready drug. Many companies are interested. We are talking to some of the major players in the renal and kidney space. Currently, some companies have moved on to even conducting due diligence. We have a data room set up and a separate pitch deck for PCS499. Right now, we're exploring the deal pathway. We're also looking at potentially putting PCS499 in a wholly owned subsidiary and seeing if we might be able to raise money just for PCS499 into that wholly owned subsidiary. We're exploring all of that. We are open to partnerships.
In addition, for oncology assets, we're also open to partnerships as well. That's part of the reason why we're moving our PCS6422 through to the end of phase II, because by that point, we would have generated enough data that we would then be in the position to do a meaningful partnership or collaboration.
George, we have time for one more question today. Why should investors get excited about Processa right now?
I think it's a good time. I think, I personally believe that we're undervalued. I mean, I've put in my own money into Processa, so I believe in the company. I believe in the management team. I believe in the products. I really like this de-risk approach that the company is taking to drug development, lower risk, higher potential reward. I like the fact that we have a seasoned management team with, as I mentioned previously, a development team that has 30 regulatory approvals under its belt. We have multiple drug products with high potential in our pipeline, such that one binary event isn't going to kill the company. We have multiple shots on goal. We're going to continue to look for other ways to improve upon that as well.
I think we also have upcoming catalysts that are meaningful with the PCS6422, the phase II preliminary analysis, and data that will be coming out. We have also potential non-dilutive funding from partnering and deal payments and milestones for PCS12852 as well as for PCS499.
Thank you very much, George. For more information on Processa Pharmaceuticals, reach us at 1-800-REDCHIP or email us at pcsa@redchip.com. Please visit the information page created by RedChip for Processa. It's pcsainfo.com. There you can view and download the investor presentation and fact sheet and sign up for news alerts on Processa. RedChip is excited to announce the launch of RedChat, our advanced AI assistant designed to empower investors with instant in-depth insights on more than 5,000 small cap and micro- cap stocks. Try it now at red.chat. Watch Small Stocks, Big Money, RedChip's program featuring exciting small cap companies every Saturday night at 7:00 P.M. Eastern on Bloomberg U.S.A. Finally, join RedChip's next webinar with Guerrilla Technology Group tomorrow at 8:30 A.M. U.S. Eastern. Register for all RedChip webinars at redchip.com/events. Thanks again to our many participants today. Thank you very much, George.
Thank you. Appreciate it.