Maxim starts Processa Pharma at buy; PT $9

Maxim Group initiated coverage of Processa Pharmaceuticals (NASDAQ:PCSA) with a “buy” rating and $9 price target. The stock closed at $2.87 on April 18.

Processa is a clinical-stage company developing therapies for multiple indications including a rare dermatological condition, a gastrointestinal disease, and multiple oncology indications. 

The company’s programs include:

  • PCS499, for treating ulcerative necrobiosis lipoidica.
  • PCS12852, for treating gastroparesis.
  • PCS6422 as a combination therapy with capecitabine for various cancers.
  • And PCS3117 for treating metastatic pancreatic cancer and other cancers for patients who are gemcitabine resistant. 

Analyst Naz Rahman writes that each of the assets has already shown a signal of efficacy in various indications and the company is currently working to optimize the treatment regimen prior to initiating potentially multiple Phase 3 studies in 2023. 

As Processa advances these assets, “we may see multiple readouts over the next 12-to-18 months. Furthermore, the management team is always evaluating potential new assets,” Mr. Rahman said. 

The combined market opportunities of these assets total billions of dollars, and “we believe, based on the modestly de-risked assets, that Processa is undervalued at its current market cap of about $46-million,” he added.