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12.05.2023 22:30:00
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Citius Pharmaceuticals, Inc. Reports Fiscal Second Quarter 2023 Financial Results and Provides Business Update
$29.1 million in cash and cash equivalents as of March 31, 2023; $15 million registered direct offering in May 2023 extends runway through May 2024
Halo-Lido Phase 2b trial completed with topline results anticipated by end of calendar Q2 2023
CRANFORD, N.J., May 12, 2023 /PRNewswire/ -- Citius Pharmaceuticals, Inc. ("Citius" or the "Company") (Nasdaq: CTXR), a late-stage biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products today reported business and financial results for the fiscal second quarter ended March 31, 2023.
Fiscal Q2 2023 Business Highlights and Subsequent Developments
- Achieved 85 of 92 required events in the Mino-Lok® Phase 3 trial as of April 24, 2023, with 16 patients in active treatment or pending study completion data review;
- Completed Phase 2b trial of Halo-Lido for the treatment of hemorrhoids with data analysis under way; topline results anticipated by the end of calendar Q2 2023;
- Continued efforts to spin off oncology asset, I/ONTAK, into a standalone public company; the biologics license application (BLA) for I/ONTAK is under review by the FDA, with a targeted decision date (PDUFA) set for July 28, 2023; and,
- Raised $15 million in capital through a registered direct offering of common stock and warrants at a purchase price of $1.20 per share on May 8, 2023.
Financial Highlights
- Cash and cash equivalents of $29.1 million as of March 31, 2023; $15 million in gross proceeds from equity financing as of May 8, 2023;
- R&D expenses were $4.7 million and $8.2 million for the three and six months ended March 31, 2023, respectively, compared to $3.5 million and $8.9 million for the three and six months ended March 31, 2022, respectively;
- G&A expenses were $4.8 million and $7.4 million for the three and six months ended March 31, 2023, respectively, compared to $3.1 million and $6.0 million for the three and six months ended March 31, 2022, respectively;
- Stock-based compensation expense was $1.2 million and $2.4 million for the three and six months ended March 31, 2023, respectively, compared to $1.0 million and $1.9 million for the three and six months ended March 31, 2022, respectively; and,
- Net loss was $10.5 million and $14.1 million, or ($0.07) and ($0.10) per share for the three and six months ended March 31, 2023, respectively, compared to a net loss of $7.6 million and $16.8 million, or ($0.05) and ($0.11) per share for the three and six months ended March 31, 2022, respectively.
"The Citius team continues to focus on execution as we move through 2023. With the Halo-Lido Phase 2b trial now complete, we are on track to have topline results available by the end of this quarter, ahead of plan. Additionally, as we recently reported, we have achieved 85 of 92 required events in the Mino-Lok Phase 3 trial, with additional patients in treatment, and sites in the U.S. and India continuing to enroll patients. We remain encouraged that the momentum in enrollment will enable us to complete the trial this year, achieving another key value-creating milestone for Citius. And, importantly, we continue to advance our I/ONTAK (E7777) program on multiple fronts. As the targeted July 28, 2023 BLA decision date (PDUFA) approaches, we remain actively engaged in the regulatory review process and continue to lay the commercial and manufacturing foundation for a successful product launch, if approved. Moreover, we believe that at this time, a spinoff of I/ONTAK into a separate publicly traded company would be in the best interest of Citius shareholders and allow us to maximize the value of this asset. To that end, we have worked diligently with financial advisors to advance those efforts and look forward to sharing additional details, as appropriate, in the coming months," stated Leonard Mazur, Chairman and CEO of Citius.
"Given the challenging financial environment for small biopharmaceutical companies, we took the opportunity earlier this month to raise $15 million from two institutional funds. With this additional capital, we believe that, as of March 31, 2023, our cash runway extends through May 2024. Our priority remains to advance our leading programs and deliver on the multiple value-driving catalysts we outlined for 2023," concluded Mazur.
SECOND quarter 2023 Financial Results:
Liquidity
As of March 31, 2023, the Company had $29.1 million in cash and cash equivalents.
As of March 31, 2023, the Company had 146,357,797 common shares outstanding.
On May 4, 2023, the Company entered into definitive agreements with certain healthcare-focused and institutional investors for the purchase of an aggregate of 12,500,001 shares of its common stock and accompanying warrants to purchase up to an aggregate of 12,500,001 shares of its common stock, at a purchase price of $1.20 per share and accompanying warrant in a registered direct offering. The warrants have an exercise price of $1.50 per share, will be exercisable six months from the date of issuance, and will expire five years from the date of issuance.
The closing of the offering occurred on May 8, 2023, in which the aggregate gross proceeds were $15.0 million before deducting the placement agent fees and other offering expenses payable by the Company.
The Company also issued 875,000 warrants to the placement agent as part of the transaction.
The Company estimates that its available cash resources will be sufficient to fund its operations through May 2024. We anticipate the need to raise additional capital in the future to support our operations beyond May 2024.
Research and Development (R&D) Expenses
R&D expenses were $3.5 million and $8.9 million for the three and six months ended March 31, 2023, respectively, compared to $1.6 million and $7.7 million for the comparable periods ended March 31, 2022. The increase primarily reflects incremental Mino-Lok trial costs related to the expansion of the trial to include sites outside of the U.S. and higher Halo-Lido Phase 2b study costs as the trial approached completion in April 2023, offset by lower I/ONTAK expenses due to the completion and filing of the BLA with the FDA in September 2022.
We expect that research and development expenses will stabilize in fiscal 2023 as we focus on the commercialization of I/ONTAK and complete our Phase 3 trial for Mino-Lok and our Phase 2b trial for Halo-Lido.
General and Administrative (G&A) Expenses
G&A expenses were $4.8 million and $7.4 million for the three and six months ended March 31, 2023, respectively, compared to $3.1 million and $6.0 million for the comparable periods ended March 31, 2022. The increase was primarily due to pre-launch and market research activities associated with I/ONTAK. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.
Stock-based Compensation Expense
For the fiscal quarter ended March 31, 2023, stock-based compensation expense was $1.2 million as compared to $1.0 million for the prior year period. For the six months ended March 31, 2023, stock-based compensation expense was $2.4 million as compared to $1.9 million for the six months ended March 31, 2022. The increase reflects expenses related to new grants made under the Citius and NoveCite equity incentive plans and new grants made to employees (including new hires), directors and consultants.
Net loss
Net loss was $10.5 million, or ($0.07) per share for the three months ended March 31, 2023, compared to a net loss of $7.6 million, or ($0.05) per share for the three months ended March 31, 2022.
The increase in the net loss was primarily due to an increase in research and development and general and administrative expenses.
Net loss was $14.1 million, or ($0.10) per share for the six months ended March 31, 2023, compared to a net loss of $16.8 million, or ($0.11) for the six months ended March 31, 2022.
The decrease in net loss for the six months ended March 31, 2023 primarily reflects an increase in other income from the $3.6 million gain recognized in connection with the sale of certain New Jersey income tax net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program offset by increased operating expenses during the period.
About Citius Pharmaceuticals, Inc.
Citius is a late-stage biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products, with a focus on oncology, anti-infectives in adjunct cancer care, unique prescription products, and stem cell therapies. The Company's diversified pipeline includes two late-stage product candidates, Mino-Lok®, an antibiotic lock solution for the treatment of patients with catheter-related bloodstream infections, which is currently enrolling patients in a Phase 3 Pivotal superiority trial, and I/ONTAK (E7777), a novel IL-2R immunotherapy for an initial indication in CTCL, for which a BLA is under review by the FDA. Mino-Lok® was granted Fast Track designation by the FDA. I/ONTAK has received orphan drug designation by the FDA for the treatment of CTCL and PTCL. At the end of March 2023, Citius completed enrollment in its Phase 2b trial of CITI-002, a topical formulation for the relief of hemorrhoids. For more information, please visit www.citiuspharma.com.
Safe Harbor
This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are made based on our expectations and beliefs concerning future events impacting Citius. You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "plan," "should," and "may" and other words and terms of similar meaning or use of future dates. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated are: risks relating to the results of research and development activities, including those from existing and new pipeline assets, including Mino-Lok; our ability to commercialize our products if approved by the FDA; our dependence on third-party suppliers; our ability to procure cGMP commercial-scale supply; the estimated markets for our product candidates and the acceptance thereof by any market; the ability of our product candidates to impact the quality of life of our target patient populations; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; uncertainties relating to preclinical and clinical testing; the early stage of products under development; our need for substantial additional funds; market and other conditions; our ability to attract, integrate, and retain key personnel; risks related to our growth strategy; patent and intellectual property matters; our ability to identify, acquire, close and integrate product candidates and companies successfully and on a timely basis; government regulation; competition; as well as other risks described in our SEC filings. These risks have been and may be further impacted by Covid-19 and could be impacted by any future public health risks. Accordingly, these forward-looking statements do not constitute guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements. Risks regarding our business are described in detail in our Securities and Exchange Commission ("SEC") filings which are available on the SEC's website at www.sec.gov, including in our Annual Report on Form 10-K for the year ended September 30, 2022, filed with the SEC on December 22, 2022, and updated by our subsequent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.
Investor Contact:
Ilanit Allen
ir@citiuspharma.com
908-967-6677 x113
Media Contact:
STiR-communications
Greg Salsburg
Greg@STiR-communications.com
-- Financial Tables Follow –
CITIUS PHARMACEUTICALS, INC CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||
March 31, | September 30, | |||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 29,065,522 | $ | 41,711,690 | ||||
Prepaid expenses | 5,835,602 | 2,852,580 | ||||||
Total Current Assets | 34,901,124 | 44,564,270 | ||||||
Property and equipment, net | 2,639 | 4,100 | ||||||
Operating lease right-of-use asset, net | 552,205 | 646,074 | ||||||
Other Assets: | ||||||||
Deposits | 38,062 | 38,062 | ||||||
In-process research and development | 59,400,000 | 59,400,000 | ||||||
Goodwill | 9,346,796 | 9,346,796 | ||||||
Total Other Assets | 68,784,858 | 68,784,858 | ||||||
Total Assets | $ | 104,240,826 | $ | 113,999,302 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 2,725,593 | $ | 1,165,378 | ||||
Accrued expenses | 2,250,836 | 1,405,394 | ||||||
Accrued compensation | 1,025,777 | 1,762,251 | ||||||
Operating lease liability | 207,471 | 196,989 | ||||||
Total Current Liabilities | 6,209,677 | 4,530,012 | ||||||
Deferred tax liability | 5,849,800 | 5,561,800 | ||||||
Operating lease liability – noncurrent | 374,831 | 481,245 | ||||||
Total Liabilities | 12,434,308 | 10,573,057 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity: | ||||||||
Preferred stock – $0.001 par value; 10,000,000 shares authorized; no shares issued | — | — | ||||||
Common stock – $0.001 par value; 400,000,000 shares authorized; 146,357,797 | 146,358 | 146,211 | ||||||
Additional paid-in capital | 234,867,917 | 232,368,121 | ||||||
Accumulated deficit | (143,808,137) | (129,688,467) | ||||||
Total Citius Pharmaceuticals, Inc. Stockholders' Equity | 91,206,138 | 102,825,865 | ||||||
Non-controlling interest | 600,380 | 600,380 | ||||||
Total Equity | 91,806,518 | 103,426,245 | ||||||
Total Liabilities and Equity | $ | 104,240,826 | $ | 113,999,302 | ||||
CITIUS PHARMACEUTICALS, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2023 AND 2022 (Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues | $ | — | $ | — | $ | — | $ | — | ||||||||
Operating Expenses | ||||||||||||||||
Research and development | 4,726,855 | 3,452,210 | 8,172,370 | 8,910,059 | ||||||||||||
General and administrative | 4,792,850 | 3,117,417 | 7,396,137 | 6,014,166 | ||||||||||||
Stock-based compensation – general and administrative | 1,165,595 | 1,020,998 | 2,366,676 | 1,925,602 | ||||||||||||
Total Operating Expenses | 10,685,300 | 7,590,625 | 17,935,183 | 16,849,827 | ||||||||||||
Operating Loss | (10,685,300) | (7,590,625) | (17,935,183) | (16,849,827) | ||||||||||||
Other Income | ||||||||||||||||
Interest income | 303,275 | 29,571 | 517,824 | 63,553 | ||||||||||||
Gain on sale of New Jersey net operating losses | — | — | 3,585,689 | — | ||||||||||||
Total Other Income | 303,275 | 29,571 | 4,103,513 | 63,553 | ||||||||||||
Loss before Income Taxes | (10,382,025) | (7,561,054) | (13,831,670) | (16,786,274) | ||||||||||||
Income tax expense | 144,000 | — | 288,000 | — | ||||||||||||
Net Loss | $ | (10,526,025) | $ | (7,561,054) | $ | (14,119,670) | $ | (16,786,274) | ||||||||
Net Loss Per Share - Basic and Diluted | $ | (0.07) | $ | (0.05) | $ | (0.10) | $ | (0.11) | ||||||||
Weighted Average Common Shares Outstanding | ||||||||||||||||
Basic and diluted | 146,251,945 | 146,041,852 | 146,231,313 | 146,026,847 | ||||||||||||
CITIUS PHARMACEUTICALS, INC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 2023 AND 2022 (Unaudited) | ||||||||
2023 | 2022 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net loss | $ | (14,119,670) | $ | (16,786,274) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Stock-based compensation expense | 2,366,676 | 1,925,602 | ||||||
Issuance of common stock for services | 102,000 | 273,884 | ||||||
Amortization of operating lease right-of-use asset | 93,869 | 86,619 | ||||||
Depreciation | 1,461 | 1,461 | ||||||
Deferred income tax expense | 288,000 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (2,983,022) | 238,295 | ||||||
Accounts payable | 1,560,215 | 428,033 | ||||||
Accrued expenses | 845,442 | 714,669 | ||||||
Accrued compensation | (736,474) | (1,112,750) | ||||||
Operating lease liability | (95,932) | (86,253) | ||||||
Net Cash Used In Operating Activities | (12,677,435) | (14,316,714) | ||||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from common stock option exercise | 31,267 | — | ||||||
Net Cash Provided By Financing Activities | 31,267 | — | ||||||
Net Change in Cash and Cash Equivalents | (12,646,168) | (14,316,714) | ||||||
Cash and Cash Equivalents - Beginning of Period | 41,711,690 | 70,072,946 | ||||||
Cash and Cash Equivalents - End of Period | $ | 29,065,522 | $ | 55,756,232 | ||||
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SOURCE Citius Pharmaceuticals, Inc.
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