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 full year ended September 30, 2023.

Fiscal Full Year 2023 Business Highlights and Subsequent Developments

• Completed enrollment in the Mino-Lok^® Pivotal Phase 3 trial; topline results anticipated in 2Q 2024;
• Initiated remediation activities in the second half of 2023 to address comments in the complete response letter (CRL) received from the U.S. Food and Drug Administration (FDA) related to our LYMPHIR biologics license application (BLA); BLA resubmission planned for early 2024;
• Advanced two investigator-initiated trials to investigate LYMPHIR's potential as an immuno-oncology combination therapy with checkpoint inhibitor pembrolizumab at the University of Pittsburgh Medical Center, and prior to CAR-T therapies at the University of Minnesota, Masonic Cancer Center;
• Announced publication in the journal Frontiers in Immunology of positive results from a preclinical solid tumor study (liver cancer and colon cancer) of LYMPHIR in combination with anti-PD-1 (to assess the contribution that transient depletion of Tregs has on the anti-tumor activity of checkpoint inhibition);
• Completed Halo-Lido Phase 2b trial; end of Phase 2 meeting with FDA expected in early 2024;
• Executed definitive agreement to merge our wholly owned subsidiary with TenX Keane Acquisition (Nasdaq: TENKU) to form publicly listed Citius Oncology, Inc.; and,
• Raised gross proceeds of $15 million in a registered direct offering in May 2023.

Financial Highlights

• Cash and cash equivalents of $26.5 million as of September 30, 2023; runway through August 2024;
• R&D expenses were $14.8 million for the full year ended September 30, 2023, compared to $17.7 million for the full year ended September 30, 2022;
• G&A expenses were $15.3 million for the full year ended September 30, 2023, compared to $11.8 million for the full year ended September 30, 2022;
• Stock-based compensation expense was $6.6 million for the full year ended September 30, 2023, compared to $3.9 million for the full year ended September 30, 2022; and,
• Net loss was $32.5 million, or ($0.22) per share for the full year ended September 30, 2023 compared to a net loss of $33.6 million, or ($0.23) per share for the full year ended September 30, 2022.

"In 2023, we made substantial progress in our pipeline, positioning us for an exciting 2024. Concentrating on execution, we completed enrollment in two trials. With the Mino-Lok pivotal Phase 3 trial enrollment completed, we expect topline results to be available in the second quarter of 2024. We also completed the Halo-Lido Phase 2b trial in 2023. Based on the data from the trial, in which more patients receiving the high dose formulation reported meaningful improvement compared to either lidocaine or halobetasol alone, Citius filed patent applications for the formulation and is actively pursuing intellectual property protections for the groundbreaking fit for purpose PRO instrument. In early 2024, we plan to meet with the FDA to discuss the results of the trial and next steps in the Halo-Lido program," stated Leonard Mazur, Chairman and CEO of Citius.

"Despite receiving a complete response letter at the end of July 2023 for our LYMPHIR BLA, we were encouraged that the items noted by the FDA were addressable in a timely manner and unrelated to clinical efficacy or safety. Over the past several months, our team has engaged with the FDA and endeavored to remediate the agency's concerns. Consistent with progress on this front, we plan to resubmit the BLA in early 2024 with a subsequent PDUFA date expected this year. Concurrently, we announced a definitive agreement to merge our oncology subsidiary with TenX Kean Acquisition to form a separate publicly traded company. Now undergoing SEC review, the intent of the spin-out is to align our oncology-related resources and unlock value for Citius shareholders," added Mazur.

"As we begin 2024, Citius will continue to focus on execution. With anticipated topline results for Mino-Lok, the LYMPHIR BLA resubmission and potential approval, additional clarity in our development plan for Halo-Lido, and the planned spin-off of our oncology subsidiary, we believe Citius is well-positioned to deliver value to shareholders in 2024," concluded Mazur.

Full Year 2022 Financial Results:

Liquidity

As of September 30, 2023, the Company had $26.5 million in cash and cash equivalents.

As of September 30, 2023, the Company had 158,857,798 common shares outstanding.

The Company estimates that its available cash resources will be sufficient to fund its operations through August 2024.

Research and Development (R&D) Expenses

R&D expenses were $14.8 million for the full year ended September 30, 2023, compared to $17.7 million for the full year ended September 30, 2022. The decrease of $2.9 million is primarily associated with the completion of the LYMPHIR Phase 3 trial and the completion and submission of the related Biologics License Application to the FDA which was filed in September 2022.

We expect that research and development expenses will continue to stabilize in fiscal 2024 as we continue to focus on the commercialization of LYMPHIR and complete the Phase 3 trial for Mino-Lok and the Phase 2b trial for Halo-Lido.

General and Administrative (G&A) Expenses

G&A expenses were $15.3 million for the full year ended September 30, 2023, compared to $11.8 million for the full year ended September 30, 2022. The increase was primarily due to costs associated with pre-launch and market research activities associated with LYMPHIR. 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 full year ended September 30, 2023, stock-based compensation expense was $6.6 million as compared to $3.9 million for the prior year. The increase of $2.7 million is largely due to the grant of options under the Citius Oncology stock plan. Option expense under the Citius Oncology stock plan was $1.97 million during the year ended September 30, 2023.  In fiscal year 2023, we granted options under the Citius Pharma and Citius Oncology stock plans to our new employees and additional options to other employees, our directors, and consultants.

At September 30, 2023, unrecognized total compensation cost related to unvested options for Citius Pharma common stock of $4.8 million is expected to be recognized over a weighted average period of 1.5 years, unrecognized total compensation cost related to unvested options for Citius Oncology common stock of $18.9 million is expected to be recognized over a weighted average period of 2.6 years, and unrecognized total compensation cost related to unvested options for NoveCite common stock of $0.5 million is expected to be recognized over a weighted average period of 0.7 years

Net loss

Net loss was $32.5 million, or ($0.22) per share for the year ended September 30, 2023, compared to a net loss of $33.6 million, or ($0.23) per share for the year ended September 30, 2022. The decrease in net loss reflects an increase in operating expenses of $3.4 million offset by an increase of $4.5 million in other income.

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