Citius Pharma(CTXR) - 2024 Q2 - Quarterly Report

Lease Liabilities and Expenses - Total lease liabilities decreased to $374,831 as of March 31, 2024, compared to $481,245 in the previous year[71] - Interest expense on lease liability was $17,490 for the six months ended March 31, 2024, down from $25,543 in the same period in 2023[71] - Citius Pharma entered into a 76-month lease for office space in Cranford, NJ, effective July 1, 2019, with variable lease payments for real estate taxes and operating expenses[104] Acquisitions and Licensing Agreements - Citius Pharma paid a $40 million upfront payment for the acquisition of E7777, with potential milestone payments up to $410 million and royalties ranging from 10% to 15% of net product sales[77] - NoveCite is obligated to pay Eterna up to $51,000,000 upon achieving regulatory and developmental milestones, with royalties ranging from low double-digit to upper-single digit percentages of net sales[66] - NoveCite, Inc. was formed on September 11, 2020, with Citius Pharma owning 75% of the issued and outstanding capital stock[112] - NoveCite paid an upfront payment of $5,000,000 and issued 25% of its equity to Novellus Therapeutics Limited for an exclusive license to develop and commercialize a stem cell therapy[116] - Citius Pharma acquired exclusive license rights for E7777 (LYMPHIR) for $40 million upfront, with potential milestone payments up to $410 million and royalties ranging from 10% to 15% of net product sales[123] - NoveCite is obligated to pay up to $51,000,000 in regulatory and developmental milestone payments under the license agreement, with royalties ranging from low double-digit to upper-single digit percentages of net sales[119] Financial Performance and Expenses - Citius Pharma reported no revenues for the three months ended March 31, 2024, and March 31, 2023[130] - Operating loss for the six months ended March 31, 2024, was $(20,311,024), compared to $(17,935,183) for the same period in 2023[147] - Research and development expenses decreased by $1,120,957 to $3,605,898 for the three months ended March 31, 2024, compared to the same period in 2023[136] - Mino-Lok research and development costs increased by $312,163 to $2,529,911 for the six months ended March 31, 2024, due to phase 3 trial close-out costs[151] Stock and Compensation - Stock-based compensation expense for the six months ended March 31, 2024, was $6,136,577, compared to $2,366,676 in the same period in 2023[92] - Stock-based compensation expense increased by $1,912,797 to $3,078,392 for the three months ended March 31, 2024, primarily due to the Citius Oncology stock plan[141] - Citius Oncology has options outstanding to purchase 12,600,000 shares, with a weighted average remaining contractual term of 9.27 years[100] Regulatory and Development Milestones - The FDA accepted the resubmission of the BLA for LYMPHIR on March 18, 2024, with a PDUFA goal date of August 13, 2024[126] - Citius Pharma received a Complete Response Letter from the FDA for LYMPHIR, requiring enhanced product testing and additional controls, but no concerns were raised regarding safety and efficacy[125] - Citius Pharma completed enrollment in its pivotal Phase 3 clinical trial for Mino-Lok, with 241 patients enrolled and 109 catheter failure events observed[151] Goodwill and Intangible Assets - Goodwill of $9,346,796 represents the value of LMB's industry relationships and assembled workforce, which will not be amortized but tested annually for impairment[110] Fundraising and Capital - Citius Pharma raised $15 million in gross proceeds from an offering, with net proceeds of approximately $13.8 million after deducting fees and expenses[57] Compliance and Strategic Agreements - The company is evaluating options to regain compliance with Nasdaq's $1.00 per share requirement by September 9, 2024[51] - Citius Pharma and Citius Oncology entered into a merger agreement with TenX Keane Acquisition on October 23, 2023, with Citius Oncology surviving as a wholly owned subsidiary[111] - Citius Oncology will pay Eisai a $6 million development milestone payment upon initial approval and up to $22 million in commercial milestone payments based on net product sales thresholds[124] Prepaid Expenses and Advance Payments - Prepaid expenses at March 31, 2024, included $107,309 for prepaid insurance and $8,906,815 for advance payments related to drug substance and product costs[82] Patent and Technology Licensing - LMB has a patent and technology license agreement with NAT for Mino-Lok®, with annual maintenance fees increasing from $30,000 to $90,000 and royalties ranging from mid-single to low-double digits on net sales[114]