Alright, folks, let’s talk about a stock that’s lighting up the market today—Processa Pharmaceuticals (Nasdaq: PCSA). As of this writing, PCSA is up a jaw-dropping 150% in pre-market trading, and it’s all thanks to a blockbuster announcement that’s got investors buzzing. The company just inked a binding term sheet with Intact Therapeutics, giving them an exclusive option to license PCS12852, a drug candidate that could shake up the world of gastrointestinal treatments, particularly for gastroparesis. This is a big deal, and it’s a perfect chance to dive into what’s driving this move, why it matters, and what it means for traders navigating the wild world of biotech stocks.

The Catalyst: A Licensing Deal with Big Potential

So, what’s got everyone so excited? Processa announced today, June 17, 2025, that it’s teaming up with Intact Therapeutics to potentially license PCS12852, a selective 5-HT4 receptor agonist designed to tackle gastroparesis—a condition where the stomach takes too long to empty, causing nausea, vomiting, and a whole lot of discomfort. This isn’t just any deal; it’s loaded with upside for Processa. We’re talking a $2.5 million option exercise fee, up to $20 million in development and regulatory milestone payments, and a whopping $432.5 million in potential commercial milestone payments based on sales. Plus, Processa gets double-digit royalties on global net sales (excluding South Korea) and a 3.5% equity stake in Intact. That’s a lot of cash flow potential for a small-cap biotech like Processa, which closed yesterday at $0.2251 per share.

Now, let’s break this down. Gastroparesis is a tough condition with limited treatment options, affecting millions—especially those with diabetes. PCS12852 has already shown promise in a Phase 2a trial, with solid safety and efficacy signals, meaning it could fill a massive gap in the market. Intact Therapeutics, a company spun out of Stanford with backing from heavy hitters like Y Combinator, brings its own innovative delivery platform to the table, making this partnership a match made in biotech heaven. The deal isn’t finalized yet—there are still definitive agreements and conditions to meet—but the market is clearly betting on this being a home run.

Why the Stock Is Moving

Let’s get real: biotech stocks like PCSA are volatile. They can sit quietly for months, then explode overnight on news like this. Today’s 150% pre-market surge as of 9:19 AM EDT reflects the market’s excitement about the potential cash influx and the validation of PCS12852’s value. For a company with a market cap of just $52.6 million as of yesterday’s close, the prospect of hundreds of millions in milestone payments is huge. Plus, the equity stake in Intact could be a hidden gem if Intact’s GI-focused pipeline takes off.

But here’s the flip side: Processa has to share 60% of cash payments with its licensor, which cuts into the windfall. And with only $1.2 million in cash as of December 31, 2024, the company has noted it’ll need more funding to keep the lights on past mid-2025. That raises the risk of dilution if they issue more shares or take on debt. Still, this deal shows Processa’s knack for unlocking value from its non-core assets while keeping its main focus on next-generation cancer therapies.

The Bigger Picture: Trading Biotech Stocks

This kind of move in PCSA is a textbook example of why biotech trading can feel like a rollercoaster. When a small company lands a deal with big milestone payments or gets positive clinical trial results, the stock can soar. Just look at Processa’s recent history—they announced Phase 2 breast cancer trial data at ASCO 2025 on May 30, which also sparked investor interest. But the downside is just as real. Yesterday, PCSA closed down 12.92%, showing how quickly sentiment can shift. Biotech stocks are driven by news, and when the news dries up, or if a trial fails, the stock can tank just as fast as it spikes.

For traders, the lesson here is timing and discipline. Chasing a stock up 150% can be tempting, but it’s risky—stocks like PCSA often pull back after big pops as early investors take profits. On the flip side, dips can create entry points for those who believe in the long-term story. The key is to understand what you’re betting on: with PCSA, it’s the potential of PCS12852 and their broader cancer pipeline, balanced against the reality of a cash-strapped biotech needing more funding.

Risks and Rewards of PCSA

Let’s talk benefits first. Processa’s strategy is smart—they’re not just a one-trick pony. Their focus on next-generation cancer drugs (like PCS6422 and PCS11T) aims to improve existing therapies by tweaking how they’re metabolized or distributed, potentially making them safer and more effective. The ASCO presentations in May showed they’re making progress, and today’s deal with Intact proves they can monetize non-core assets like PCS12852 without losing sight of their cancer mission. That kind of flexibility is rare in small biotechs. Plus, the massive milestone payments and royalties could transform their financial picture if PCS12852 hits the market.

Now, the risks. Biotech is a high-stakes game. Processa’s low cash reserves mean they’ll likely need to raise more money, which could dilute existing shareholders. The Intact deal isn’t a sure thing yet—closing conditions could trip things up. And while PCS12852 looks promising, it’s still in development, and clinical trials can fail. Gastroparesis is a tough market, too, with competition from existing treatments, even if they’re not perfect. Plus, the broader market’s been jittery lately, with pharma stocks taking a hit after talk of tariffs from the Trump administration. That kind of macro noise can crush small-cap stocks like PCSA, regardless of their fundamentals.

How to Stay Ahead in the Market

Moves like today’s PCSA surge are why traders need to stay on top of the news. Whether it’s a licensing deal, a clinical trial update, or a broader market shift, information is power. Want to keep your finger on the pulse? Sign up for free daily stock alerts delivered straight to your phone. Tap here to join over 250,000 traders getting AI-powered tips and market updates. These alerts won’t tell you what to do with PCSA specifically, but they’ll keep you in the loop on stocks making waves across the market.

The Bottom Line

Processa Pharmaceuticals is stealing the spotlight today with a deal that could be a game-changer for its balance sheet and its gastroparesis drug candidate. The stock’s 150% pre-market jump as of this writing shows the market’s betting big on this move, but traders need to weigh the risks—cash needs, dilution, and the long road to commercialization. Biotech investing is not for the faint of heart, but for those who can stomach the volatility, stocks like PCSA offer a shot at big rewards. Keep an eye on the news, stay disciplined, and maybe, just maybe, you’ll catch the next big mover before it takes off.