September 28, 2018
David Young
Chief Executive Officer
Processa Pharmaceuticals, Inc.
7380 Coca Cola Drive, Suite 106
Hanover, MD 21076
Re: Processa Pharmaceuticals, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed September 14, 2018
File No. 333-226428
Dear Dr. Young:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments. Unless
we note
otherwise, our references to prior comments are to comments in our August 28,
2018 letter.
Amendment No. 1 to Registration Statement on Form S-1
Prospectus Summary, page 1
1. We acknowledge your response to prior comment 3. As noted in the prior
comment,
please also disclose when PTX was approved, the indication for which it
was approved,
and the fact that it was approved by the FDA.
Liquidity and Capital Resources, page 30
2. We note your disclosure that you anticipate needing an additional
$900,000 to continue
planned operations through the fourth quarter of 2019. Please also
disclose how long you
David Young
FirstName LastNameDavid Young
Processa Pharmaceuticals, Inc.
Comapany 28, 2018
September NameProcessa Pharmaceuticals, Inc.
September 28, 2018 Page 2
Page 2
FirstName LastName
expect your business operations to continue should you not be able to
secure the
additional $900,000.
Description of Business, page 37
3. We acknowledge your revised disclosures in response to prior comment
15. As
referenced in the prior comment, please further expand your revised
disclosure to explain
how you identified Radiation-Induced Fibrosis (RIF) in head and neck
cancer patients as
an indication for which PCS-499 may result in clinical efficacy.
4. We acknowledge your revised disclosure in response to prior comment 16
and that you
acquired prior clinical data. As noted in the prior comment, please
expand your disclosure
to discuss specific trial results for your product candidate on which
you intend to rely,
including the duration of the trials, the number of subjects or
patients in such trials, how
the drug candidate was administered, who conducted the trials, the
dosage used, any
serious adverse events experienced, the primary and secondary
endpoints and whether
they were met.
Intellectual Property, page 38
5. Please further expand your revised disclosure to clarify the type of
patent protection that
you have for your issued patents (as compared to your patent
applications), and identify
all of the foreign jurisdictions in which you have patents or patent
applications.
License Agreement with CoNCERT Pharmaceuticals, Inc., page 38
6. We note your response to prior comment 17. Please explain how the
board observer
rights expired as it does not appear that the amendment to the license
agreement amended
the provision.
Directors, Executive Officers, Promoters and Control Persons, page 43
7. We refer to your disclosure regarding your newly appointed CFO. Please
clarify whether
Mr. Stanker's employment and experience at Grant Thornton is during
the past five years.
If not, please disclose his principal occupations during such period.
Refer to Item
401(e)(1) of Regulation S-K.
Plan of Distribution, page 57
8. We acknowledge your response to prior comment 24. Please note that to
the extent you
expect to seek effectiveness of the registration statement prior to
the filing of your
agreement with PoC Capital in an upcoming Exchange Act report, please
file this
agreement as an exhibit to the registration statement.
David Young
Processa Pharmaceuticals, Inc.
September 28, 2018
Page 3
Financial Statements
Notes to Condensed Consolidated Financial Statements
Note 2 - Intangible Asset, page F-38
9. In your response to prior comment 25 you indicate that the reverse merger
transaction
between Processa Pharmaceuticals (formerly Heatwurx Inc.) and Promet
Therapeutics
was considered an IRC Section 351 tax-free contribution of assets by
Promet solely for
over 80% of the voting stock of Processa. You also indicate that included
in the
Contributed Assets were all rights, title and interest under a certain
option and license
agreement with CoNCERT Pharmaceuticals with respect to certain know-how,
patent
rights and compounds. Please address the following:
Revise your disclosures describing the reverse merger transaction to
clarify that this
transaction was treated as a tax-free contribution under IRC Section
351.
Confirm for us, if true, that as part of the reverse merger
transaction in October 2017
you acquired an option to acquire a license from CoNCERT and that
this option was
subsequently exercised in March 2018. If so, explain how you
determined that the
subsequent exercise of this option should be considered as part of
the initial Section
351 transaction. Provide us with any documentation to support your
accounting
treatment.
For impairment purposes, tell us how you determined that the carrying
amount of this
intangible asset (which includes the $3m in capitalized costs) was
recoverable as of
June 30, 2018.
You may contact Andi Carpenter at 202-551-3645 or Angela Connell at
202-551-3426 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Dorrie Yale at 202-551-8776 or Ada Sarmento at 202-551-3798 with any
other
questions.
Sincerely,
FirstName LastNameDavid Young
Division of
Corporation Finance
Comapany NameProcessa Pharmaceuticals, Inc.
Office of
Healthcare & Insurance
September 28, 2018 Page 3
cc: Neda Sharifi
FirstName LastName