Processa Pharmaceuticals, Inc 10-K for FY2021

Processa Pharmaceuticals, Inc. (PCSA)

10-K 2022-03-30 For: 2021-12-31

Added on April 10, 2026

About this 10-K

Processa Pharmaceuticals, Inc filed this 10-K on March 30, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Headline figures

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $0
Net loss: $11.43M; compared with a net loss of $14.41M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Title of Each Class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		PCSA		The Nasdaq Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

Part I
Item 1.	Business.	5
Item 1A.	Risk Factors	29
Item 1B.	Unresolved Staff Comments	45
Item 2.	Properties.	46
Item 3.	Legal Proceedings.	46
Item 4.	Mine Safety Disclosures.	46

Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and issuer Purchases of Equity Securities.	46
Item 6.	[Reserved]	47
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	48
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	57
Item 8.	Financial Statements and Supplementary Data	F-1
Item 9.	Changes in and Disagreements with Accountants	58
Item 9A.	Controls and Procedures	58
Item 9B.	Other Information	60
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspection	60

Part III
Item 10.	Directors, Executive Officers and Key Employees	60
Item 11.	Executive Compensation	60
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	60
Item 13.	Certain Relationships and Related Transactions, and Director Independence	60
Item 14.	Principal Accounting Fees and Services	60

Part IV
Item 15.	Exhibits, Financial Statement Schedules	60
Item 16.	Form 10-K Summary	61

	●	our ability to obtain funding for our future operations;

	●	the impact of the COVID-19 pandemic on our business, operations or ability to obtain funding;

	●	our ability to obtain and maintain regulatory approval of our product candidates;

	●	our ability to contract with third-party suppliers, manufacturers and other service providers and their ability to perform adequately;

	●	the potential market size, opportunity and growth potential for our product candidates, if approved;

	●	our ability to build our own sales and marketing capabilities, or seek collaborative partners, to commercialize our product candidates, if approved;

	●	the initiation, timing, progress and results of our pre-clinical studies and clinical trials, and our research and development programs;

	●	our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;

	●	our ability to advance product candidates into, and successfully complete, clinical trials;

	●	our ability to recruit and enroll suitable patients in our clinical trials;

	●	the timing or likelihood of the accomplishment of various scientific, clinical, regulatory filings and approvals and other product development objectives;

	●	the pricing and reimbursement of our product candidates, if approved;

	●	the rate and degree of market acceptance of our product candidates by physicians, patients, third-party payors and others in the medical community, if approved;

	●	the implementation of our business model, strategic plans for our business, product candidates and technology;

	●	the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

	●	developments relating to our competitors and our industry;

	●	the accuracy of our estimates regarding expenses, capital requirements and needs for additional financing; and

	●	our financial performance.

	●	addressing an unmet or underserved clinical need,
	●	having demonstrated evidence of efficacy in humans, and
	●	leveraging our regulatory science approach to improve the probability for approval.

	●	The drug must represent a treatment option to patients with a high unmet medical need condition by improving survival and/or quality of life for these patients;

	●	The drug or its metabolite or a drug with similar pharmacological properties must have demonstrated some evidence of efficacy in the target population, and;

	●	The drug presents opportunities to be developed such that within 2-4 years, critical value-added clinical milestones can be achieved while advancing the drug closer to commercialization and adding to the potential for a high return on investment.

	●	an increase in the cytidine deaminase (CDA) enzyme which breaks down gemcitabine and PCS3117,
	●	a deficiency in transportation of gemcitabine or PCS3117 across the cell membrane,
	●	down regulation of the activation enzyme (dCK for gemcitabine, UCK2 for PCS3117),
	●	a change in ribonucleotide reductase activity, and
	●	non-genetic influences that alter gene expression.

	●	obtain and maintain international and domestic patent and other legal protections for the proprietary technology, inventions and improvements we consider important to our business;

	●	prosecute and defend our future patents, once obtained;

	●	preserve confidentiality of our own and our licensed methods, processes and know-how; and

	●	operate without infringing the patents and proprietary rights of other parties.

	●	completion of pre-clinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (GLP) regulations;

	●	submission to the FDA of an IND application, which must become effective before human clinical trials may begin;

	●	approval by an independent Institutional Review Board (IRB), at each clinical site before each trial may be initiated;

	●	performance of adequate and well-controlled human clinical trials in accordance with good clinical practices (GCP) requirements to establish the safety and efficacy of the proposed drug product for each indication;

	●	submission to the FDA of an NDA;

	●	satisfactory completion of an FDA advisory committee review, if applicable;

	●	satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

	●	FDA review and approval of the NDA, including consideration of the views of any FDA advisory committee, prior to commercial marketing or sale of the drug in the United States; and

	●	compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (REMS) or to conduct a post-approval study.

	●	Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability and safety of the drug.

	●	Phase 2 clinical trials involve studies in disease-affected patients to determine the dose required to produce the desired benefits. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified and a preliminary evaluation of efficacy is conducted.

	●	Phase 3 clinical trials generally involve a larger number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product approval. These trials may include comparisons with placebo and/or other comparator treatments. The duration of treatment is often extended to mimic the actual use of a product during marketing.

	●	restrictions on the marketing or manufacturing of the product;

	●	complete withdrawal of the product from the market or product recalls;

	●	safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warning or other safety information about the product;

	●	fines, warning letters or holds on post-approval clinical trials;

	●	refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; product seizure or detention, or refusal to permit the import or export of products; or

	●	injunctions or the imposition of civil or criminal penalties.

	●	the federal Anti-Kickback Statute, which makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. Moreover, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the ACA), provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

	●	federal civil and criminal false claims and civil monetary penalties laws, including the civil False Claims Act that can be enforced by private citizens through civil whistleblower or qui tam actions, prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

	●	the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which prohibits, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
	●	HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and their implementing regulations, which also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

	●	federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

	●	the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices;

	●	the federal Physician Payments Sunshine Act, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information regarding payments and other transfers of value to physicians and teaching hospitals as well as information regarding ownership and investment interests held by physicians and their immediate family members; and

	●	analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require biotechnology companies to comply with the biotechnology industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require biotechnology companies to report information on the pricing of certain drug products; and state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Name	Age	Position
Executive Officers:
David Young, Pharm.D, Ph.D.	69	Chairman of the Board of Directors and Chief Executive Officer
Sian Bigora, Pharm.D.	61	Chief Development Officer
Michael Floyd	66	Chief Operations Officer
Wendy Guy	57	Chief Administrative Officer
Patrick Lin	56	Chief Business and Strategy Officer
James Stanker	64	Chief Financial Officer

		CoNCERT				Yuhan				Aposense				Elion				Ocuphire				Total
U.S. patents			9				4				3				3				6				25

	●	demonstration of clinical safety and efficacy;

	●	relative convenience, dosing burden and ease of administration;

	●	the prevalence and severity of any adverse effects;

	●	the willingness of physicians to prescribe our product candidates, and the target patient population to try new therapies;

	●	efficacy of our product candidates compared to competing products;

	●	the introduction of any new products that may in the future become available targeting indications for which our product candidates may be approved;

	●	new procedures or therapies that may reduce the incidences of any of the indications in which our product candidates may show utility;

	●	pricing and cost-effectiveness;

	●	the inclusion or omission of our product candidates in treatment guidelines;

	●	the effectiveness of our own or any future collaborators’ sales and marketing strategies;

	●	limitations or warnings contained in approved labeling from regulatory authorities;

	●	our ability to obtain and maintain sufficient third-party coverage or reimbursement from government health care programs, including Medicare and Medicaid, private health insurers and other third-party payors or to receive the necessary pricing approvals from government bodies regulating the pricing and usage of therapeutics; and

	●	the willingness of patients to pay out-of-pocket in the absence of third-party coverage or reimbursement or government pricing approvals.

	●	withdrawal of clinical trial participants;

	●	termination of clinical trial sites or entire trial programs;

	●	the inability to commercialize our product candidates;

	●	decreased demand for our product candidates;

	●	impairment of our business reputations;

	●	product recall or withdrawal from the market or labeling, marketing or promotional restrictions;

	●	substantial costs of any related litigation or similar disputes;

	●	distractions of management’s attention and other resources from our primary business;

	●	substantial monetary awards to patients or other claimants against us that may not be covered by insurance; or

	●	loss of revenue.

●	manage all our development efforts effectively, especially our clinical trials;

●	integrate additional management, administrative, scientific, operation and regulatory personnel;

●	maintain sufficient administrative, accounting and management information systems and controls; and

●	hire and train additional qualified personnel.

	●	relatively low trading volume, which can result in significant volatility in the market price of our common stock based on a relatively smaller number of trades and dollar amount of transactions;

	●	changes in estimates or recommendations by securities analysts, if any, who cover our common stock;

	●	the timing and results of our current and any future preclinical or clinical trials of our product candidates;

	●	the entry into or termination of key agreements, including, among others, key collaboration and license agreements;

	●	the results and timing of regulatory reviews relating to the approval of our product candidates;

	●	the initiation of, material developments in, or conclusion of, litigation to enforce or defend any of our intellectual property rights;

	●	failure of any of our product candidates, if approved, to achieve commercial success;

	●	general and industry-specific economic conditions that may affect our research and development expenditures;

	●	the results of clinical trials conducted by others on products that would compete with our product candidates;

	●	issues in manufacturing our product candidates or any approved products;

	●	the introduction of technological innovations or new commercial products by our competitors;

	●	developments or disputes concerning patent applications, issued patents or other proprietary rights;

	●	future sales of our common stock by us, our insiders or our other stockholders;

	●	a negative outcome in any litigation or potential legal proceeding;

	●	additions and departures of key personnel;

	●	negative publicity or announcements regarding regulatory developments relating to our products;

	●	actual or anticipated fluctuations in our financial condition and operating results, including our cash and cash equivalents balance, operating expenses, cash burn rate or revenue levels;

	●	our filing for protection under federal bankruptcy laws; or

	●	the other factors described in this “Risk Factors” section.

	●	delaying, deferring or preventing a change in control;

	●	entrenching our management and the Board of Directors;

	●	impeding a merger, consolidation, takeover or other business combination involving us that other stockholders may desire; and/or

	●	discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

	●	providing that the number of members of our Board is limited to a range fixed by our bylaws;
	●	establishing advance notice requirements for nominations of candidates for election to our Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings; and
	●	authorizing the issuance of “blank check” preferred stock, which could be issued by our Board of Directors to issue securities with voting rights and thwart a takeover attempt.

	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)			(b)		(c)

Equity compensation plans approved by security holders		280,724	⁽¹⁾	$	11.45		1,899,696

Equity compensation plans not approved by security holders		47,772			19.88		-

Total		328,496					1,899,696	⁽²⁾

	(1)	Includes stock options to purchase 7,143 shares of our common stock issued under the prior equity compensation plan.
	(2)	Consists of shares available for issuance under the 2019 Omnibus Incentive Plan.

	i.	The drug must represent a treatment option to patients with a high unmet medical need condition by improving survival and/or quality of life for these patients,

	ii.	The drug or its metabolite or a drug with similar pharmacological properties must have demonstrated some evidence of efficacy in the target population, and

	iii.	The drug presents opportunities to be developed such that within 2-4 years, critical value-added clinical milestones can be achieved while advancing the drug closer to commercialization and adding to the potential for a high return on investment.

	Year Ended December 31,
	2021			2020			Change
Operating Expenses
Research and development costs	$	6,878,021		$	3,172,385		$	3,705,636
Acquisition of in-process research and development		566,583			8,700,000			(8,133,417	)
General and administrative expenses		4,688,939			3,264,474			1,424,465

Operating Loss		(12,133,543	)		(15,136,859	)
Other Income (Expense)
Forgiveness of Payroll Protection Program loan and related accrued interest		163,771			-			163,771
Interest expense		(362	)		(281,122	)		280,760
Interest income		11,989			3,174			8,815
Total other income (expense)		175,398			(277,948	)
Net Operating Loss Before Income Tax Benefit		(11,958,145	)		(15,414,807	)		3,456,662
Income Tax Benefit		530,611			1,001,019			(470,408	)
Net Loss	$	(11,427,534	)	$	(14,413,788	)

	●	the cost of clinical trials for PCS499, PCS6422 and PCS12852, and the cost of third-party manufacturing;

	●	the cost of developing the biomarker assay and clinical trials for PCS3117;

	●	the delays in patient enrollment due to the COVID-19 pandemic;

	●	the initiation, progress, timing, costs and results of drug manufacturing, pre-clinical studies, and clinical trials of PCS11T and any other future product candidates;

	●	the number and characteristics of product candidates that we pursue;

	●	the outcome, timing, and costs of seeking regulatory approvals;

	●	the costs associated with hiring additional personnel and consultants as our pre-clinical and clinical activities increase;

	●	the emergence of competing therapies and other adverse market developments;

	●	the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending, and enforcing patent claims, including litigation costs and the outcome of such litigation;

	●	the extent to which we in-license or acquire other products and technologies; and

	●	the costs of operating as a public company.

	For the Year Ended December 31,
	2021			2020
Net cash provided by (used in):
Operating activities	$	(8,717,291	)	$	(3,143,196	)
Financing activities		9,798,648			17,867,884
Net increase in cash and cash equivalents	$	1,081,357		$	14,724,688

	Payments Due by Period
			Less than		1-3		3-5		More than
	Total		1 Year		Years		Years		5 Years
Operating lease obligations	$	83,754	$	75,969	$	7,785	$	-	$	-

Total	$	83,754	$	75,969	$	7,785	$	-	$	-

	Page
Report of Independent Registered Public Accounting Firm (PCAOB: 6143)	F-2

Consolidated Financial Statements
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)	F-5
Consolidated Statements of Cash Flows	F-6
Notes to the Consolidated Financial Statements	F-8

	December 31, 2021			December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents	$	16,497,581		$	15,416,224
Due from related party		-			154,730
Due from tax agencies		70,274			77,024
Prepaid expenses and other		1,759,296			554,708
Total Current Assets		18,327,151			16,202,686
Property and Equipment
Software		19,740			19,740
Office equipment		9,327			9,327
Total Cost		29,067			29,067
Less: accumulated depreciation		29,067			28,583
Property and equipment, net		-			484
Other Assets
Operating lease right-of-use assets, net		74,181			158,558
Intangible assets, net		8,056,638			8,847,126
Security deposit		5,535			5,535
Total Other Assets		8,136,354			9,011,219
Total Assets	$	26,463,505		$	25,214,389

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Note payable – Paycheck Protection Program, current portion	$	-		$	117,574
Current maturities of operating lease liability		71,078			87,200
Accrued interest		-			950
Accounts payable		218,905			320,694
Due to licensor		400,000			400,000
Due to related parties		1,772			69,858
Accrued expenses		279,265			224,676
Total Current Liabilities		971,020			1,220,952
Non-current Liabilities
Note payable – Paycheck Protection Program		-			44,885
Non-current operating lease liability		7,385			78,463
Non-current due to licensor		-			400,000
Net deferred tax liability		-			530,611
Total Liabilities		978,405			2,274,911

Commitments and Contingencies		-			-

Stockholders’ Equity
Common stock, par value $0.0001, 30,000,000 shares authorized; 15,710,246 and 14,181,734 issued and outstanding at December 31, 2021 and 2020, respectively		1,571			1,419
Additional paid-in capital		62,306,861			48,333,857
Accumulated deficit		(36,823,332	)		(25,395,798	)
Total Stockholders’ Equity		25,485,100			22,939,478
Total Liabilities and Stockholders’ Equity	$	26,463,505		$	25,214,389

	2021			2020
	Years Ended December 31,
	2021			2020
Operating Expenses
Research and development expenses	$	6,878,021		$	3,172,385
Acquisition of in-process research and development		566,583			8,700,000
General and administrative expenses		4,688,939			3,264,474

Operating Loss		(12,133,543	)		(15,136,859	)

Other Income (Expense)
Forgiveness of Payroll Protection Program loan and related accrued interest		163,771			-
Interest expense		(362	)		(281,122	)
Interest income		11,989			3,174

Net Operating Loss Before Income Tax Benefit		(11,958,145	)		(15,414,807	)
Income Tax Benefit		530,611			1,001,019

Net Loss	$	(11,427,534	)	$	(14,413,788	)

Net Loss Per Common Share - Basic and Diluted	$	(0.75	)	$	(2.54	)

Weighted Average Common Shares Used to Compute
Net Loss Per Common Shares - Basic and Diluted		15,319,463			7,499,678


	Shares			Amount			Additional Paid in Capital			Stock Dividend Payable			Accumulated Deficit			Total
Balance, January 1, 2020		5,486,595		$	549		$	18,994,008		$	3		$	(10,982,010	)	$	8,012,550
Shares issued in connection with our 2020 offering, net of transaction costs of $2,099,363		4,800,000			480			17,100,157			-			-			17,100,637
Shares issued in connection with license agreements		1,950,000			195			7,799,805			-			-			7,800,000
Shares issued due to full-ratchet anti-dilution adjustment		1,156,487			116			(116	)		-			-			-
Conversion of LOC Agreement into shares of common stock		199,537			19			718,314			-			-			718,333
Conversion of 8% Senior Convertible Notes into shares of common stock		247,088			25			889,488			-			-			889,513
Stock dividend distributed due to full-ratchet anti-dilution adjustment		28,971			3			-			(3	)		-			-
Fair value of warrants issued in the sale of our 2019 Senior Notes		-			-			197,403			-						197,403
Stock-based compensation		336,860			34			2,730,008			-			-			2,730,042
Shares issued in private placement, net of transaction costs
Shares issued in private placement, net of transaction costs, shares
Shares withheld to pay income tax on stock-based compensation		(23,804	)		(2	)		(95,210	)		-						(95,212	)
Shares issued in ATM purchases, net of transaction costs
Shares issued in ATM purchases, net of transaction costs, shares
Net loss		-			-			-			-			(14,413,788	)		(14,413,788	)
Balance, December 31, 2020		14,181,734			1,419			48,333,857			-			(25,395,798	)		22,939,478
Stock-based compensation		50,270			5			3,288,010			-			-			3,288,015
Shares issued in private placement, net of transaction costs		1,321,132			132			9,875,418			-			-			9,875,550
Shares issued in connection with license agreements		144,689			14			699,986			-			-			700,000
Shares withheld to pay income taxes on stock-based compensation		(9,176	)		(1	)		(64,395	)		-			-			(64,396	)
Shares issued in ATM purchases, net of transaction costs		21,597			2			173,985			-			-			173,987
Net loss		-			-			-			-			(11,427,534	)		(11,427,534	)
Balance, December 31, 2021		15,710,246		$	1,571		$	62,306,861		$	-		$	(36,823,332	)	$	25,485,100

	Years Ended December 31,
Supplemental Cash Flow Information:	2021		2020
Cash paid for interest	$	-	$	-
Cash paid for income taxes		-		-

Non-Cash Investing and Financing Activities:
Right-of-use asset obtained in exchange for operating lease liability	$	-	$	(17,772	)
Operating lease liability		-		17,772
Net	$	-	$	-

Issuance of 100,000 shares of common stock in connection with a licensing agreement which had previously been recorded as a due to licensor	$	400,000	$	-
Conversion of $805,000 of Senior Convertible Debt and related accrued interest of $84,513 into 247,088 shares of common stock	$	-	$	805,000
Conversion of $700,000 of Line of Credit Payable with related party and related accrued interest of $18,333 into 199,537 shares of common stock	$	-	$	700,000
Issuance of 1,185,458 shares of common stock due to triggering the full-ratchet anti-dilution provision of common stock sold in our 2018 Private Placement Transactions	$	-	$	119

	●	Our most advanced product candidate, PCS499, is an oral tablet that is a deuterated analog of one of the major metabolites of pentoxifylline (PTX or Trental®). We completed a Phase 2A trial for PCS499 in patients with ulcerative and non-ulcerative necrobiosis lipoidica (NL) in late 2020, and in May 2021 we enrolled the first patient in our Phase 2B trial for the treatment of ulcerative NL. We expect to complete our interim analysis and complete enrollment of the Phase 2B trial by the end of 2022; and, depending on the results, begin a pivotal Phase 3 trial in 2023.

	●	PCS12852 is a highly specific and potent 5HT4 agonist which has already been evaluated in clinical studies in South Korea for gastric emptying and gastrointestinal motility. In October 2021, the FDA cleared our IND application to proceed with a Phase 2A trial for the treatment of gastroparesis. We anticipate beginning to enroll patients in the first half of 2022, complete enrollment in the second half of 2022 and complete final analysis in the first half of 2023.

	●	PCS3117, which we licensed in June 2021, is a cytosine analog, similar to gemcitabine (Gemzar®) but different enough in chemical structure that some patients are more likely to respond to PCS3117 than gemcitabine. We are evaluating biomarkers to elucidate specifically which patients are more likely to benefit from PCS3117 compared to gemcitabine and other chemotherapy agents to provide a more targeted, precision medicine approach to the treatment of various types of cancer, such as pancreatic and/or non-small cell lung cancer. Over the next 6-12 months, we will be developing, refining and qualifying these biomarker assays for use in our clinical trials as well as define the potential paths to approval for different types of cancer. We anticipate initiating a Phase 2B or adaptive designed Phase 3 in 2023.

	●	PCS6422 is an orally administered irreversible enzyme inhibitor administered in combination with capecitabine. When combining capecitabine with PCS6422 (the “Next Generation Capecitabine”), capecitabine becomes a more potent cancer chemotherapy agent than current FDA approved capecitabine. On August 2, 2021, we enrolled the first patient in our Phase 1B dose-escalation maximum tolerated dose trial in patients with advanced refractory gastrointestinal (GI) tract tumors and our interim analysis of Cohorts 1 and 2 found no dose-limiting toxicities (DLTs), no drug related adverse events greater than Grade 1, and no hand-foot syndrome. In addition, the interim analysis revealed when PCS6422 inhibits DPD enzyme activity, 5-FU metabolism is significantly decreased (<10% metabolized to F-Bal compared to typically 80%) and the potency of capecitabine is significantly increased (at least 50 times greater 5-FU potency based on systemic exposure per mg of capecitabine administered). The single dose of PCS6422, however, did not sustain the DPD inhibition throughout 7 days of capecitabine dosing which was needed to maintain the improved potency of capecitabine. Therefore, we have modified the existing protocol to obtain more data on DPD inhibition and de novo formation. We anticipate that this additional data will allow us to select PCS6422 dosage regimens that will maintain DPD inhibition for each patient treated with this Next Generation Capecitabine (i.e., combination of PCS6422 and capecitabine). After interacting with the FDA and making protocol modifications, we expect to restart the Phase 1B study in the second quarter of 2022 and complete enrollment while defining the Next Generation Capecitabine regimen (i.e., the PCS6422 regimens and the corresponding capecitabine regimens) by the end of 2022. We expect that our overall timeline has not changed with a Phase 2B or 3 trial starting in 2023-2024 and NDA submission in 2027-2028.

	●	Our only nonclinical drug candidate is PCS11T, an analog of SN38 (SN38 being the active metabolite of irinotecan) and a next generation irinotecan drug for multiple types of cancers. PCS11T is presently in the IND pre-clinical toxicology stage. We hope to submit an IND in the first half of 2023, followed by a Phase 1B maximum tolerated dose trial.

	2021			2020
Gross intangible assets	$	11,059,429		$	11,059,429
Less: accumulated amortization		(3,002,791	)		(2,212,303	)
Total intangible assets, net	$	8,056,638		$	8,847,126