On December 22, 2022 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 reported its business and financial results for the fiscal full year ended September 30, 2022 (Press release, Citius Pharmaceuticals, DEC 22, 2022, View Source [SID1234625555]).

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Fiscal Full Year 2022 Business Highlights and Subsequent Developments

Completed Pivotal Phase 3 trial of I/ONTAK (E7777) and submitted biologics license application (BLA) to the U.S. Food and Drug Administration (FDA);
FDA confirmed Prescription Drug User Fee Act (PDUFA) target action date of July 28, 2023;
Advanced Mino-Lok Phase 3 trial:
Expanded trial to additional sites in India for an anticipated total of 35 clinical trial locations globally,
Enrolled 169 patients to date, exceeding recruitment goal of 144 patients,
Observed 72 of 92 required catheter failure events, with 17 patients in active treatment or pending study completion data review (which may contribute additional failure events);
Initiated Phase 2b trial of Halo-Lido for the treatment of hemorrhoids in April 2022; patient enrollment ongoing with data readout expected 2H 2023;
Initiated clinical collaboration with the University of Pittsburgh to evaluate regulatory T-cell (T-reg) depletion with I/ONTAK (E7777) in combination with pembrolizumab in recurrent or metastatic solid cancer tumors in a Phase 1 investigator-initiated trial, with first patient enrolled in November 2022; and,
Approved for $3.6 million in non-dilutive capital through the New Jersey Economic Development Program to support ongoing research and development efforts.
Financial Highlights

Cash and cash equivalents of $41.7 million as of September 30, 2022;
R&D expenses were $17.7 million for the full year ended September 30, 2022, compared to $12.2 million for the full year ended September 30, 2021;
G&A expenses were $11.8 million for the full year ended September 30, 2022, compared to $9.8 million for the full year ended September 30, 2021;
Stock-based compensation expense was $3.9 million for the full year ended September 30, 2022, compared to $1.5 million for the full year ended September 30, 2021; and,
Net loss was $33.6 million, or ($0.23) per share for the full year ended September 30, 2022 compared to a net loss of $23.1 million, or ($0.23) per share for the full year ended September 30, 2021.
"In 2022, we focused on execution across our key development programs: I/ONTAK, Mino-Lok and Halo-Lido. These efforts, combined with a prudent use of funds, enabled us to meaningfully advance our pipeline. We believe we have sufficient runway through December 2023 to realize additional value-creating milestones, including a potential FDA approval and two anticipated trial completions in the coming calendar year," stated Leonard Mazur, Chairman and CEO of Citius.

"Our Phase 3 Mino-Lok trial is now significantly closer to completion. While we expected to achieve 92 catheter failure events with 144 patients by the end of 2022, the trial’s observed catheter failure event rate has proven to be lower than anticipated. Consequently, we must continue recruiting patients. By successfully re-engaging with our U.S. trial sites as they recovered from the impact of Covid, we were able to drive patient recruitment. We have now exceeded our targeted enrollment and have achieved 72 of the required catheter failure events, with additional patients under review. To augment our recruitment efforts and continue the positive momentum in enrollment, we expanded the Mino-Lok trial to include sites in India. Once all new trial sites are fully activated, we will have nearly doubled our clinical site footprint. With these additional sites helping to drive incremental enrollment, we anticipate that the 92-event threshold required to complete the trial is achievable in the coming months," added Mazur.

"During the year, we also completed a Phase 3 trial and submitted a BLA for I/ONTAK, an oncology asset we in-licensed just over a year ago. Upon further discussion with the FDA, the PDUFA target date has been set for July 28, 2023. We remain committed to establishing a robust commercial infrastructure to support I/ONTAK’s successful product launch, if approved. In the second half of 2022, we also extended our support for a Phase 1 investigator-initiated study of I/ONTAK in combination with pembrolizumab (Keytruda1) to treat patients with recurrent or metastatic solid tumors. This study has begun recruiting patients and is the second investigator-initiated trial to explore I/ONTAK’s potential as a combination therapy in much larger immuno-oncology markets. We continue to believe I/ONTAK’s value extends beyond a potential initial indication in persistent or recurrent cutaneous T-cell lymphoma. Earlier in the year, we announced our intention to spin off I/ONTAK. Given broader market conditions, we continue to evaluate opportunities to further unlock this asset’s value," continued Mazur.

"In addition to advancing our Phase 3 trials, we initiated a Phase 2b trial for Halo-Lido, our prescription strength topical formulation for hemorrhoids. The trial began enrolling patients with symptomatic Grade II or III hemorrhoids in the second quarter of 2022. Recent recruitment has accelerated and we expect complete trial data available in the second half of 2023," added Mazur.

"As financial stewards, we continuously evaluate the optimal capital structure for the company. We believe our anticipated catalysts, along with a healthy cash position, provide us with several strategic and financial options with which to continue advancing our pipeline. This may include the previously announced potential spinoff of I/ONTAK into a standalone oncology company, pending market conditions, and other standalone financing alternatives available to us. We are encouraged by the multiple value-driving catalysts anticipated in calendar 2023, including a potential drug approval and two trial completions, and look forward to extending our positive momentum in the months ahead," concluded Mazur.

KEYTRUDA is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA

FULL YEAR 2022 FINANCIAL RESULTS:

Liquidity

As of September 30, 2022, the Company had $41.7 million in cash and cash equivalents.

As of September 30, 2022, the Company had 146,211,130 common shares outstanding.

The Company estimates that its available cash resources will be sufficient to fund its operations through December 2023.

Research and Development (R&D) Expenses

R&D expenses were $17.7 million for the full year ended September 30, 2022, compared to $12.2 million for the full year ended September 30, 2021. The increase of $5.5 million is primarily associated with the completion of the I/ONTAK (E7777) Phase 3 trial and the preparation and submission of the related Biologics License Application to the FDA, incremental Mino-Lok Phase 3 trial costs related to the addition of a global clinical research organization, Biorasi, and the opening of international sites in India, as well as costs associated with the initiation of the Halo-Lido Phase 2 study. The increase was offset primarily by a one-time $5 million license fee paid to Novellus in the year ended September 30, 2021, which did not recur.

We expect that research and development expenses will continue to increase in fiscal 2023 as we continue to focus on the anticipated commercialization of E7777, our Phase 3 trial for Mino-Lok, our Phase 2b trial for Halo-Lido, and accelerate our research and development efforts related to Mino-Wrap and ARDS.

General and Administrative (G&A) Expenses

G&A expenses were $11.8 million for the full year ended September 30, 2022, compared to $9.8 million for the full year ended September 30, 2021. The increase was primarily due to additional compensation costs for new employees and investor relations expenses. General and administrative expenses consist primarily of compensation costs, consulting fees for our financing activities and corporate development services, and investor relations expenses.

Stock-based Compensation Expense

For the full year ended September 30, 2022, stock-based compensation expense was $3.9 million as compared to $1.5 million for the prior year. The increase reflects expenses related to new grants made by Citius and the NoveCite stock option plan. In fiscal year 2022, we granted options to our new employees and additional options to other employees, directors, and consultants. Stock-based compensation expense includes options granted to directors, employees, and consultants.

At September 30, 2022, unrecognized total compensation cost related to unvested options for Citius common stock of $5.3 million is expected to be recognized over a weighted average period of 1.9 years and unrecognized total compensation cost related to unvested options for NoveCite common stock of $0.2 million is expected to be recognized over a weighted average period of 1.5 years

Net loss

Net loss was $33.6 million, or ($0.23) per share for the year ended September 30, 2022, compared to a net loss of $23.1 million, or ($0.23) per share for the year ended September 30, 2021. The increase in net loss is primarily due to the $5.4 million increase in our research and development expenses, a $1.9 million increase in general and administrative expenses, and a $2.4 million increase in stock-based compensation expense.