Citius Pharmaceuticals (CTXR) 22Q3 Update

Citius Pharmaceuticals reported a third quarter loss of $8.9 million or $0.06 per share, compared with last year’s loss of $7.3 million or $0.05 per share.  As an early stage drug development company, Citius currently generates no revenues.  The loss was in line with expectations, reflecting the company’s expanding development efforts, including I/ONTAK, which was acquired last year.

Citius reported that recruitment for its Phase 3 clinical trial of Mino-Lok, an antibiotic lock solution for infected central venous catheters, has approached the pre-pandemic pace.  The trial now includes international sites.   A Phase 2b trial of Halo-Lido, a prescription treatment for hemorrhoids, has been initiated with enrollment completion expected by the end of the year.  Topline results from a Phase 3 clinical trial for I/ONTAK, an oncology immunotherapy, show no new safety concerns and are consistent with those of ONTAK, the prior formation of the drug.  Submission of I/ONTAK’s Biologic License Application (BLA) to the FDA is anticipated in 22H2.

In April, Citius announced a proposed spin-off of I/ONTAK.  Details have not been provided.  The spin-off will require sufficient capital to complete I/ONTAK’s commercialization and future development plus the additional operating costs associated with being an independent, publicly-traded company.  Citius must also raise capital to continue development of Mino-Lok and Halo-Lido, so it was not immediately clear where and upon what terms it would be able to obtain all of this capital.  Its common stock therefore fell on the news and traded around $1 for most of the past three months.  Despite the stock’s volatility, Citius says that it is continuing to pursue the spin-off, but it is also exploring other options, such as an out-licensing agreement, a sale of the asset or a partnership.

Citius ended the quarter with $48 million in cash and no debt.  It believes that this cash is sufficient to fund its operations until August 2023.

Citius’s stock rallied sharply last week on the progress in its clinical trials and the update on the strategic options for I/ONTAK.  Since my previous report on April 26, the stock has advanced 16.5%, outperforming the S&P Small Cap 600 Index, which is up 5.8%.  I am maintaining my strong outperformance rating on CTXR.  As more details about I/ONTAK and Mino-Lok emerge later this year or early in 2023, I intend to reconsider my previous hypothetical price target, which was $3.20 for 2026 (for Mino-Lok alone, before the acquisition of I/ONTAK).

This is a summary of my recent report on Citius Pharmaceuticals, Inc. (CTXR). For a copy of the full report, please reach out to me using the contact information provided below.

August 16, 2022

Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250

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