Form DEFA14A Processa Pharmaceuticals

 

---

In July, Processa acquired Vidya Therapeutics and completed a concurrent private placement financing of approximately $200 million supported by leading institutional healthcare investors. This transaction established a new strategic direction for the company focused on advancing differentiated therapeutic programs for immunological and inflammatory (I&I) diseases, led by VT-7208, Vidya’s lead investigational product candidate.

 

We believe this combination creates a meaningful opportunity for Processa and its stockholders: a lead clinical-stage program addressing large patient populations, a growing I&I pipeline, a clear development plan with multiple potential value-driving milestones, and financing expected to support the company through key development milestones. Since closing the transaction, we have begun to deliver against that plan, including advancing VT-7208 into Phase 2 development, expanding the company’s pipeline and strengthening its leadership.

 

With this letter, we want to explain the opportunity, how we are funded to execute and what stockholders should expect next.

 

---

VT-7208 is an oral, once-daily investigational product candidate that inhibits Bruton’s tyrosine kinase, or BTK. BTK is a protein involved in signaling within immune cells. When that signaling becomes dysregulated, it can contribute to autoimmune and inflammatory disease. BTK has already been clinically validated as a therapeutic target across several diseases.

 

VT-7208 was designed to reach both the immune system throughout the body and the central nervous system, which includes the brain and spinal cord. The company is initially advancing the product candidate in three conditions where there remains significant unmet medical need:

 

•

Food Allergy: approximately 17 million people in the United States, including an estimated 3.6 million children, are affected by some form of food allergy. For many patients, management still relies heavily on avoiding allergens and being prepared to treat potentially serious reactions if exposure occurs.

 

 

•

Relapsing Multiple Sclerosis (MS): a chronic autoimmune disease in which the immune system damages the central nervous system, potentially affecting movement, vision and other functions. Approximately 1 million people in the United States are estimated to have relapsing MS, and disease progression can continue despite available treatments.

 

These patient populations illustrate the large unmet need we are targeting and why we believe VT-7208 has substantial commercial potential if its profile is validated in clinical development.

 

---

The July financing generated approximately $183.3 million in net proceeds and is expected to fund operations into the second half of 2029, including support for the previously disclosed Phase 2 proof-of-concept development plan across the three indications we are initially pursuing: food allergy, CSU and relapsing MS.

 

Beyond VT-7208, we are building a broader pipeline of differentiated therapies for immune-mediated diseases. Our second program is a novel, oral macrocyclic peptide-based neonatal Fc receptor, or FcRn, antagonist program being advanced through a research collaboration and exclusive option agreement with Generian Pharmaceuticals.

 

FcRn is a clinically validated target in autoimmune disease, and inhibition of this target is designed to reduce circulating IgG antibodies, including pathogenic antibodies that contribute to a number of autoimmune diseases. The preclinical data supports the development of differentiated oral therapeutic alternatives to injectable FcRn therapies and complements VT-7208 within our broader immunology pipeline.

 

Since the July transaction, we have continued to advance the company’s strategy and build the leadership team for what comes next. Dr. Sheila Gujrathi has been appointed Executive Chair of the Processa Board, and we are adding four experienced biotechnology leaders to the team: Gregory J. Flesher as Chief Operating Officer; Craig Coburn, Ph.D., as Executive Vice President, Head of Research; Ashley Hall, J.D., as Executive Vice President, Development; and Michael P. Cruse as Executive Vice President, Business Operations.

 

Mr. Flesher will play a central role in leading Processa through its next stage of growth, alongside a team with complementary strengths across discovery, development and operations. Dr. Coburn also brings a unique connection to our lead program as one of the scientists who helped invent VT-7208, giving the team deep continuity from the program’s origins through its next stage of clinical development.

---

The transaction changed Processa’s expected capitalization. The table below summarizes the current common shares outstanding and the expected share count on an as-converted basis.

 

 

* Subject to stockholder approval and applicable beneficial ownership limitations. Excludes outstanding options, restricted stock units, warrants and any potential reverse stock split.

 

The approximately 2.8 million common shares currently trading represent only a small portion of the company’s expected share count after conversion of the preferred stock. We believe the approximately 309.3 million-share as-converted figure provides a more complete picture of Processa’s expected capital structure.

 

Over the course of the next few months, we will solicit stockholder approvals of several matters, including an approval to permit conversion of the Series A non-voting preferred stock that was issued in connection with the Vidya acquisition and private placement into shares of common stock, and several other proposals to support continued compliance with Nasdaq listing standards, an increase to our equity incentive plans to help the company recruit and retain qualified talent, and matters necessary to continue operating as a public company. 

 

We will be holding two separate special meetings and soliciting two separate stockholder votes. The proxy materials for each special meeting will set forth the specific proposals, the Board’s recommendations and the rationale for each recommendation, and detailed voting instructions. The definitive proxy materials for the first meeting were filed on October 22, 2026, and we have commenced mailing. Definitive proxy materials for the second special meeting are forthcoming. Once filed and delivered, we encourage stockholders to please read the definitive proxy materials carefully and in their entirety before voting. Stockholders will receive separate proxy materials for each special meeting and must vote separately at each: a vote cast at one special meeting will not count as, or substitute for, voting at the other.

 

---

Our focus is now on executing our broader I&I strategy: advancing the planned Phase 2 proof-of-concept programs for VT-7208, progressing our FcRn program, selectively expanding the pipeline, managing our capital responsibly and communicating clearly as the company progresses.

 

The Vidya transaction gave Processa a lead clinical-stage program, the foundation for a broader I&I pipeline, a defined development strategy and financing expected to support operations for the planned Phase 2 proof-of-concept clinical trials in all three initial indications. With our first regulatory milestone now achieved following FDA clearance of the IND for the planned Phase 2 clinical trial of VT-7208 in CSU and additional clinical milestones ahead with sufficient funds to advance our clinical trials towards such milestones, we believe stockholders have a clear framework for evaluating our progress.

 

We appreciate your continued support and look forward to keeping you informed.

 

Sincerely,

 

George Ng		Sheila Gujrathi, M.D.
Chief Executive Officer		Executive Chair
Processa Pharmaceuticals		Processa Pharmaceuticals Board of Directors

---

Certain statements in this stockholder letter, other than purely historical information, may constitute “forward-looking statements” within the meaning of the federal securities laws, including for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, concerning Processa, Vidya, the concurrent private placement financing and the acquisition of Vidya by Processa (the “Transactions”) and other matters. These forward-looking statements include, but are not limited to, express or implied statements relating to the company’s expectations, hopes, beliefs, intentions or strategies regarding the future including, without limitation, statements regarding: the Transactions, including the expected effects, perceived benefits or opportunities and related timing with respect thereto; the potential benefits of VT-7208 and other clinical and preclinical programs; the perceived benefits of the research collaboration and exclusive option agreement with Generian Pharmaceuticals; and expectations regarding the use of proceeds from the private placement financing and cash runway expectations therefrom, including such proceeds funding the company into the second half of 2029. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “opportunity,” “potential,” “milestones,” “pipeline,” “can,” “goal,” “aim,” “strategy,” “target,” “seek,” “anticipate,” “achieve,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “predict,” “project,” “should,” “will,” “would” and similar expressions (including the negatives of these terms or variations of them) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments affecting the company or the Transactions will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to those uncertainties and factors described under the heading “Risk Factors” in the company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on October 5, 2026, as well as discussions of potential risks, uncertainties, and other important factors included in other filings by the company from time to time, as well as risk factors associated with companies, such as Processa, that operate in the biotechnology industry. Should one or more of these risks or uncertainties materialize, or should any of the company’s assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Nothing in this stockholder letter should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this stockholder letter, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. The company does not undertake or accept any duty to release publicly any updates or revisions to any forward-looking statements. This stockholder letter does not purport to summarize all of the conditions, risks and other attributes of an investment in the company.