Citius Pharma(US:CTXR)2025-08-12 20:31markdown [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements for Citius Pharmaceuticals, Inc., covering balance sheets, operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $127.68 million, driven by cash and inventory, while liabilities rose, decreasing equity Metric | Metric | June 30, 2025 | September 30, 2024 | | :-------------------------- | :-------------- | :----------------- | | Cash and cash equivalents | $6,089,126 | $3,251,880 | | Inventory | $17,208,967 | $8,268,766 | | Total Current Assets | $24,611,269 | $14,220,646 | | Total Assets | $127,676,859 | $116,651,751 | | Total Current Liabilities | $51,842,452 | $35,814,803 | | Total Liabilities | $60,115,929 | $42,549,921 | | Total Equity | $67,560,930 | $74,101,830 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) No revenues reported; operating losses decreased for three months but increased for nine months, with improved net loss per share Metric | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues | $0 | $0 | $0 | $0 | | Total Operating Expenses | $8,788,007 | $10,634,179 | $30,088,299 | $30,945,203 | | Operating Loss | $(8,788,007) | $(10,634,179) | $(30,088,299) | $(30,945,203) | | Net Loss | $(9,203,872) | $(10,573,336) | $(30,996,623) | $(28,348,675) | | Net Loss Per Share - Basic and Diluted | $(0.80) | $(1.57) | $(3.27) | $(4.37) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity decreased from $70.08 million to $65.06 million due to net losses, partially offset by stock offerings Metric | Metric | September 30, 2024 | June 30, 2025 | | :----------------------------------- | :----------------- | :-------------- | | Common Stock Shares Outstanding | 7,247,243 | 14,475,029 | | Additional Paid-In Capital | $271,440,421 | $295,888,916 | | Accumulated Deficit | $(201,370,218) | $(230,844,841) | | Total Citius Pharmaceuticals, Inc. Stockholders' Equity | $70,077,450 | $65,058,550 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations decreased, while financing cash increased, resulting in a positive net change in cash Metric | Metric | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net Cash Used In Operating Activities | $(14,671,948) | $(22,288,687) | | Net Cash Provided By Financing Activities | $17,509,194 | $13,718,951 | | Net Change in Cash and Cash Equivalents | $2,837,246 | $(8,569,736) | | Cash and Cash Equivalents - End of Period | $6,089,126 | $17,911,192 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover business, accounting policies, going concern uncertainty, product license agreements, equity, and commitments - Citius Pharmaceuticals, Inc. is a late-stage biopharmaceutical company focused on oncology, anti-infectives, prescription products, and stem cell therapies, operating through its subsidiaries Leonard-Meron Biosciences, Inc., Citius Oncology, Inc., and NoveCite, Inc[28](index=28&type=chunk)[33](index=33&type=chunk) - The company faces substantial doubt about its ability to continue as a going concern beyond September 2025, due to negative cash flows from operations (**$14.67 million** for nine months ended June 30, 2025) and negative working capital of approximately **$27.2 million**[39](index=39&type=chunk)[40](index=40&type=chunk) - Citius Oncology received FDA approval for LYMPHIR in August 2024, triggering milestone payments of **$27.5 million** to Dr. Reddy's (with **$22.5 million** remaining due as of June 30, 2025) and **$5.9 million** to Eisai. Payment schedules have been amended for these obligations[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - A 1-for-25 reverse stock split was effective November 25, 2024, to regain Nasdaq compliance. The authorized common stock was increased from 16,000,000 to 250,000,000 shares on June 9, 2025[68](index=68&type=chunk)[69](index=69&type=chunk) Common Stock Offerings (Net Proceeds) | Offering Date | Net Proceeds | | :------------ | :----------- | | November 15, 2024 | $2,574,051 | | January 7, 2025 | $2,657,167 | | April 1, 2025 | $1,743,757 | | June 11, 2025 | $5,430,836 | | ATM Offering (Q1 2025) | $808,640 | | ATM Offering (Q2 2025) | $3,294,446 | - Total minimum purchase commitments under commercial manufacturing and supply agreements for LYMPHIR amount to approximately **$18.3 million** for drug substance (through 2026) and **$4.5 million** for finished drug products (through 2026)[107](index=107&type=chunk)[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, product development, and results, highlighting LYMPHIR commercialization and financing needs - Citius Pharmaceuticals is transitioning from a development-stage enterprise to a commercial organization, with preparations for the U.S. launch of FDA-approved LYMPHIR for CTCL nearing completion, anticipated in Q4 2025. Distribution agreements with Cardinal Health and Cencora have been executed[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Historical Background](index=27&type=section&id=Historical%20Background) Citius Pharmaceuticals, a biopharmaceutical company, focuses on product development and capital raising with no revenues to date - The company's in-process R&D assets include **$19.4 million** for Mino-Lok (amortized over 8 years post-revenue) and **$73.4 million** for LYMPHIR (amortized over 12 years post-revenue in 2025)[117](index=117&type=chunk) [Reverse Stock Split](index=27&type=section&id=Reverse%20Stock%20Split) A 1-for-25 reverse stock split was executed on November 25, 2024, to meet Nasdaq listing requirements - A 1-for-25 reverse stock split was effective November 25, 2024, to regain compliance with Nasdaq's minimum bid price requirement[119](index=119&type=chunk) [Patent and Technology License Agreements](index=28&type=section&id=Patent%20and%20Technology%20License%20Agreements) Details licensing agreements for key product candidates Mino-Lok, NoveCite, and LYMPHIR, outlining milestone payments, royalties, and obligations - Mino-Lok: Exclusive worldwide license with NAT, requiring annual maintenance fees (**$90,000**), low double-digit royalties on net sales (10-15%), and up to **$1.1 million** in regulatory/sales milestones[120](index=120&type=chunk) - NoveCite: Exclusive worldwide license with Eterna for stem cell therapy, requiring up to **$51 million** in regulatory/development milestones and mid-teens royalties on net sales[123](index=123&type=chunk) - LYMPHIR: Exclusive license (via Citius Oncology) from Dr. Reddy's and Eisai. Requires up to **$40 million** in CTCL development milestones, **$70 million** for additional indications, **$300 million** for commercial sales milestones, and low double-digit tiered royalties (10-15%)[126](index=126&type=chunk) - Following FDA approval of LYMPHIR, a **$27.5 million** milestone payment to Dr. Reddy's (with **$22.5 million** outstanding as of June 30, 2025) and a **$5.9 million** milestone payment to Eisai were triggered. Payment schedules have been agreed upon for these obligations[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) [RESULTS OF OPERATIONS](index=31&type=section&id=RESULTS%20OF%20OPERATIONS) No revenues reported; operating expenses decreased for three months but increased for nine months due to LYMPHIR R&D and G&A [Three months ended June 30, 2025 compared with the three months ended June 30, 2024](index=31&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20compared%20with%20the%20three%20months%20ended%20June%2030%2C%202024) Net loss decreased by $1.37 million, driven by lower R&D and G&A expenses, partially offset by interest changes Metric | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Research and development | $1,621,325 | $2,763,865 | $(1,142,540) | -41.3% | | General and administrative | $4,447,008 | $4,808,551 | $(361,543) | -7.5% | | Stock-based compensation expense | $2,719,674 | $3,061,763 | $(342,089) | -11.2% | | Total Operating Expenses | $8,788,007 | $10,634,179 | $(1,846,172) | -17.4% | | Interest income | $20,637 | $204,843 | $(184,206) | -89.9% | | Interest expense | $(172,262) | $0 | $(172,262) | N/A | | Net Loss | $(9,203,872) | $(10,573,336) | $1,369,464 | -12.9% | - Mino-Lok R&D costs decreased by **$982,327** due to Phase 3 trial completion. Halo-Lido R&D costs decreased by **$25,602** due to Phase 2 study completion. LYMPHIR R&D costs decreased by **$128,370** due to reduced product validation studies[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Nine months ended June 30, 2025 compared with the nine months ended June 30, 2024](index=32&type=section&id=Nine%20months%20ended%20June%2030%2C%202025%20compared%20with%20the%20nine%20months%20ended%20June%2030%2C%202024) Net loss increased by $2.65 million, primarily due to higher G&A and decreased other income, offset by lower R&D and stock compensation Metric | Metric | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Research and development | $7,514,888 | $8,991,673 | $(1,476,785) | -16.4% | | General and administrative | $14,626,882 | $12,755,190 | $1,871,692 | 14.7% | | Stock-based compensation expense | $7,946,529 | $9,198,340 | $(1,251,811) | -13.6% | | Total Operating Expenses | $30,088,299 | $30,945,203 | $(856,904) | -2.8% | | Interest income | $56,658 | $640,686 | $(584,028) | -91.2% | | Gain on sale of NJ net operating losses | $0 | $2,387,842 | $(2,387,842) | -100% | | Interest expense | $(172,262) | $0 | $(172,262) | N/A | | Net Loss | $(30,996,623) | $(28,348,675) | $(2,647,948) | 9.3% | - Mino-Lok R&D costs decreased by **$3,044,652** due to Phase 3 trial completion. Halo-Lido R&D costs decreased by **$463,448** due to Phase 2 study completion. LYMPHIR R&D costs increased by **$2,007,269**, primarily due to the expense of a drug substance batch for pre-license inspection[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=35&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Significant operating losses and negative working capital raise going concern doubts; financing is crucial for operations and LYMPHIR commitments - Accumulated deficit of **$230,844,841** as of June 30, 2025, with net cash used in operations of **$14,671,948** for the nine months ended June 30, 2025[162](index=162&type=chunk) - Negative working capital of approximately **$27.2 million** at June 30, 2025. Cash and cash equivalents were **$6,089,126**[163](index=163&type=chunk) - Citius Oncology completed a public offering on July 17, 2025, raising approximately **$7.44 million** in net proceeds, which is expected to provide sufficient funds for Citius Pharma's operations through September 2025[165](index=165&type=chunk)[167](index=167&type=chunk) - Significant outstanding milestone payments for LYMPHIR include **$22.5 million** to Dr. Reddy's (as of June 30, 2025) and a structured payment plan to Eisai totaling over **$9 million** through December 2025[166](index=166&type=chunk)[172](index=172&type=chunk) - Commercial manufacturing commitments for LYMPHIR total approximately **$18.3 million** for drug substance and **$4.5 million** for finished drug products through 2026[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No applicable quantitative and qualitative disclosures about market risk are reported for the company [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[175](index=175&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[176](index=176&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) No legal proceedings were reported by the company - No legal proceedings were reported[179](index=179&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the last Annual Report on Form 10-K and Quarterly Report on Form 10-Q - No material changes to risk factors were reported since the last Annual Report on Form 10-K and Quarterly Report on Form 10-Q[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - No unregistered sales of equity securities or use of proceeds were reported[181](index=181&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - No defaults upon senior securities were reported[182](index=182&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[183](index=183&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) No director or officer trading plan changes; Board approved a one-year extension for warrants, potentially generating $7.2 million - On August 7, 2025, the Board approved a one-year extension for Investor Warrants (156,863 shares at **$28.75/share**; 111,732 shares at **$19.25/share**) and Placement Agent Warrants (7,577 shares at **$39.8438/share**; 7,774 shares at **$27.9719/share**)[185](index=185&type=chunk) - If fully exercised, these extended warrants could generate approximately **$7.2 million** in cash proceeds for the company[185](index=185&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including amendments, warrants, securities purchase agreements, and certifications