Citius Pharmaceuticals Follow Up

The launch of LYMPHIR is underway.  Citius reported $7.1 million of revenues for the nine months ended June 30.  However, its YTD net loss widened to $49.4 million from $31.0 million a year ago, due mostly to $19.7 million of penalty fees from the termination of a contract with a contract manufacturing organization for nonpayment.  Its YTD cash burn (i.e. negative CFOA) increased to $23.0 million from $14.7 million a year ago, mostly because of the launch.  With license fee payments of $7 million, its total cash outflow was $30 million.  That deficit was more than covered by $25.3 million of common stock offerings, $9.7 million of warrant exercises and $9.6 million of loan proceeds.

Management reports increasing institutional demand (defined as vials ordered from wholesalers by prescribing centers).  In 26Q3, institutional orders of LYMPHIR rose 31% sequentially, from 708 to 926 vials.  Since the launch, 44 institutions have ordered LYMPHIR.  With formulary approvals, institutional adoption and vial demand all on the rise, management has expressed confidence in its outlook for 26Q4.

Even so, Citius has a long road ahead to ensure its viability.  I project that its revenues will rise 35% in fiscal 2027 to $13 million, which may be conservative; its operating loss will narrow from $64.3 million to $43.6 million; and its cash burn will drop from $26.6 million to $21.8 million.  I also have penciled in $8.0 million in additional licensing fee payments.  I assume that its cash flow deficit will be financed with $14 million of additional borrowings, $9.8 million of warrant exercises and $10 million of equity issuances.

My analysis suggests that Citius will not generate enough revenue to reach sustained profitability from its single FDA approved indication: relapsed or refractory CTCL after at least one prior systemic therapy.  Although its commercialization efforts should allow it to carve out a meaningful share of that niche market, it is unlikely that LYMPHIR will unseat ADCETRIS and POTELIGEO, the current market leaders.  Thus, Citius must expand LYMPHIR’s reach to new indications.  This effort is already underway in investigator initiated clinical trials in combination with other therapies.  However, a significant expansion of LYMPHIR’s franchise will require more investment, which also means more dilution.  Its decision in May to enter into a $25 million loan agreement – risky for a company with negative cash flow – may be a sign that, at least for now, the equity market cannot be tapped cost effectively to the degree that Citius has been relying upon.

Despite long-term challenges, LYMPHIR’s near-term growth trajectory may generate a positive response from the market in the months ahead.  CTXR’s stock is down 30.5% YTD, compared with DJ Wilshire U.S. Microcap Index’s 3.1% gain, but its shares have been flat since June, a positive technical sign.  CTXR faces potential delisting after its stock fell below the $1 minimum threshold for 30 consecutive trading days.  It was granted an extension by NASDAQ until February 9, 2027 to regain compliance.  CTOR’s stock received a similar listing notice, but the stock rebounded above $1 for 10 consecutive trading days in September, so it has regained compliance.  My projections assume that CTXR will do the same.

While the near-term prospects look favorable for both CTXR and CTOR, the long-term outlook is still uncertain.  The company needs either a significant investment or CTOR should be sold to a pharmaceuticals company that has the capital and marketing reach to finance LYMPHIR’s growth.  So far, nothing has happened since Jeffries was hired in January 2025 to review strategic alternatives.  An investor or buyer may emerge as LYMPHIR shows progress in CTCL, but in my view, with CTOR’s equity market value of $99.4 million along with $6.4 million book value of debt, $19.7 million owed to the contract manufacturer and $13.7 million of licensing payments still due to Dr. Reddy’s, CTOR is not cheap.  Since I am not reinitiating formal research coverage, I have not assigned a performance ratings to CTXR.

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

October 2, 2026 (Report published on October 2, 2026).

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

© 2015-2026 by Stephen P. Percoco, Lark Research.   All rights reserved.

This blog post (as with all posts on this website) represents the opinion of Lark Research based upon its own independent research and supporting information obtained from various sources. Although Lark Research believes these sources to be reliable, it has not independently confirmed their accuracy. Consequently, this blog post may contain errors and omissions. Furthermore, this blog post is a summary of a recent report published on this subject and that report provides a more complete discussion and assessment of the risks and opportunities of any investment securities discussed herein. No representation or warranty is expressed or implied by the publication of this blog post. This blog post is for informational purposes only and shall not be construed as investment advice that meets the specific needs of any investor. Investors should, in consultation with their financial advisers, determine the suitability of the post’s recommendations, if any, to their own specific circumstances. Lark Research is not registered as an investment adviser with the Securities and Exchange Commission, pursuant to exemptions provided in the Investment Company Act of 1940. This blog post remains the property of Lark Research and may not be reproduced, copied or similarly disseminated, in whole or in part, without its prior written consent.