Processa Pharmaceuticals has acquired Vidya Therapeutics in a stock-for-stock transaction and entered into an agreement for an approximately $200 million concurrent private placement.
The acquisition adds VT-7208, Vidya’s clinical-stage Bruton’s tyrosine kinase inhibitor, to Processa’s development pipeline. The company plans to evaluate the drug across food allergies, chronic spontaneous urticaria and relapsing multiple sclerosis.
The oversubscribed private placement includes investments from Bain Capital Life Sciences, Janus Henderson Investors, RA Capital Management, SilverArc Capital, ADAR1 Capital Management, Cormorant Asset Management, Integral Health Asset Management, Marshall Wace, Octagon Capital, Soleus Capital, a large mutual fund and other institutional investors.
Processa expects the financing to generate approximately $200 million in gross proceeds before placement-agent fees and other transaction expenses.
The company intends to use the proceeds to advance VT-7208 through several Phase 2 clinical milestones.
Top-line data from a Phase 2 proof-of-concept study involving food allergies is anticipated during the second half of 2027. Results from a study involving chronic spontaneous urticaria are expected during the first half of 2028, followed by relapsing multiple sclerosis data during the second half of 2028.
Processa expects its existing cash and the proceeds from the private placement to fund operations into the second half of 2029.
Chronic spontaneous urticaria is a condition involving recurring hives and swelling that persist for more than six weeks without a clearly identifiable external trigger. Relapsing multiple sclerosis is a form of the neurological disease characterized by episodes of new or worsening symptoms followed by periods of partial or complete recovery.
Vidya plans to pursue the three programs in parallel rather than advancing them sequentially. This approach could allow Processa to evaluate VT-7208’s potential across allergic, autoimmune and neuroinflammatory conditions within a relatively concentrated timeframe.
VT-7208 is a next-generation, once-daily oral BTK inhibitor designed to enter the central nervous system and provide potent, selective and durable inhibition of its target.
BTK is an enzyme involved in the activity of B cells, mast cells and other parts of the immune system. These pathways play important roles in allergic reactions, autoimmune disorders and inflammation affecting the nervous system.
Blocking BTK may reduce disease-driving immune activity. However, earlier BTK inhibitor programs have faced challenges involving safety, selectivity, dosing and the ability to reach sufficient concentrations within the central nervous system.
Vidya designed VT-7208 to overcome some of those limitations by achieving effective target engagement at lower doses and minimizing activity against unrelated enzymes.
The company believes the drug’s selectivity could reduce the risk of liver toxicity relative to less selective BTK inhibitors, although that potential will need to be demonstrated through larger clinical studies.
The drug is described as a covalent inhibitor, meaning it forms a durable bond with its target. This design may support prolonged BTK inhibition even when the drug is administered at relatively low doses.
Its ability to penetrate the central nervous system is particularly important for the relapsing multiple sclerosis program. A therapy must reach the brain and spinal cord in sufficient concentrations to directly address inflammatory processes occurring within the central nervous system.
Processa expects to begin Phase 2 studies in food allergies and chronic spontaneous urticaria during the second half of 2026. The relapsing multiple sclerosis study is expected to begin during the first half of 2027.
Multiple clinical milestones across the VT-7208 pipeline are anticipated over the following 12 to 24 months.
In a completed Phase 1 clinical trial, once-daily low-milligram doses of VT-7208 produced sustained target engagement in both the cerebrospinal fluid and the rest of the body.
The study also demonstrated predictable, dose-dependent pharmacokinetics, which describe how the body absorbs, distributes, metabolizes and eliminates a drug.
No serious adverse events were observed, and the drug was generally well tolerated. Phase 1 studies are typically designed primarily to assess safety, dosing and biological activity rather than establish whether a drug effectively treats a disease.
The Vidya acquisition was completed through the exchange of all outstanding Vidya equity interests for Processa securities.
Vidya equity holders will receive 558,398 shares of Processa common stock and approximately 142,744 shares of newly created Series A non-voting convertible preferred stock.
Those preferred shares represent approximately 142.7 million shares of Processa common stock on an as-converted basis, before applying beneficial ownership restrictions.
The private placement investors will receive approximately 163,775 shares of Series A non-voting convertible preferred stock at a price of $1,221.19 per preferred share.
Each preferred share represents 1,000 shares of Processa common stock, resulting in an as-converted price of approximately $1.22 per common share.
The private placement is expected to close on July 30, 2026.
Subject to Processa shareholder approval under Nasdaq listing requirements, each Series A preferred share will automatically convert into 1,000 common shares. The conversion will remain subject to beneficial ownership limits selected by individual investors.
The acquisition and private placement closings do not require approval from Processa’s existing shareholders. However, shareholder approval is required before the preferred stock can convert into common stock.
Processa is required to hold a shareholder meeting to seek that approval.
The transactions will significantly change Processa’s ownership structure.
On a fully diluted basis, existing Processa shareholders are expected to own approximately 0.9% of the company following the transactions. Former Vidya equity holders are expected to own approximately 46%, while private placement investors are expected to own approximately 52.6%.
Those percentages assume the full conversion of the preferred stock and do not account for individual beneficial ownership limitations.
The ownership figures demonstrate that the transaction functions as a substantial strategic transformation of Processa rather than a conventional acquisition funded primarily with cash.
Vidya’s investors and the new financing participants will collectively hold nearly all of the combined company on a fully diluted basis, while Processa contributes its public listing, development organization, regulatory experience and existing pharmaceutical assets.
Vidya Founder and Executive Chair Sheila Gujrathi has joined Processa’s board of directors following the acquisition.
Processa plans to continue developing its existing assets, including PCS499 and PCS12852, while evaluating strategic opportunities intended to maximize their clinical and long-term value.
Leerink Partners served as Vidya’s exclusive financial advisor and lead placement agent for the private placement. Evercore ISI, UBS Investment Bank and Wells Fargo Securities served as co-placement agents.
Tungsten Advisors advised Processa and provided a fairness opinion to its board. Cooley advised Vidya, Katten Muchin Rosenman represented Processa, and Mintz advised the placement agents.
KEY QUOTES:
“We’re thrilled to have the backing of a stellar group of healthcare investors who see the value in Vidya’s VT-7208 and share our vision for where it can go.”
“This transaction gives us the capital to evaluate VT-7208’s potential, running our food allergy, CSU and RMS programs in parallel rather than sequentially.”
Sheila Gujrathi, M.D., Founder and Executive Chair of Vidya Therapeutics and Board Director of Processa Pharmaceuticals
“This transaction with Vidya represents a compelling opportunity to create meaningful value for our shareholders through the acquisition of a differentiated, clinical-stage BTK inhibitor program with the potential to address significant unmet needs across multiple disease areas.”
George Ng, CEO of Processa Pharmaceuticals
