On August 14, 2023 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 business and financial results for the fiscal third quarter ended June 30, 2023 (Press release, Citius Pharmaceuticals, AUG 14, 2023, View Source [SID1234634403]).

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Fiscal Q3 2023 Business Highlights and Subsequent Developments

Achieved 92 required events for completion of the Mino-Lok Phase 3 trial, subject to confirmation by an independent review committee;
Mino-Lok trial to continue recruiting in the near term; additional patients in active treatment, which may result in additional events;
Citius to engage with the FDA to address enhanced product testing requirements identified in the complete response letter (CRL) for LYMPHIR, received July 28, 2023, in preparation for Resubmission; such efforts are not expected to impact Company’s cash runway, which extends to August 2024;
Citius preparing for an End of Phase 2 meeting with the FDA following positive topline results of Phase 2b trial of Halo-Lido for the treatment of hemorrhoids; and,
$15 million in capital raised 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 $33.3 million as of June 30, 2023
R&D expenses were $3.8 million and $11.9 million for the three and nine months ended June 30, 2023, respectively, compared to $4.9 million and $13.8 million for the three and nine months ended June 30, 2022, respectively;
G&A expenses were $3.7 million and $11.1 million for the three and nine months ended June 30, 2023, respectively, compared to $3.0 million and $9.0 million for the three and nine months ended June 30, 2022, respectively;
Stock-based compensation expense was $1.2 million and $3.5 million for the three and nine months ended June 30, 2023, respectively, compared to $1.0 million and $2.9 million for the three and nine months ended June 30, 2022, respectively; and,
Net loss was $8.5 million and $22.6 million, or ($0.06) and ($0.15) per share for the three and nine months ended June 30, 2023, respectively, compared to a net loss of $8.9 million and $25.6 million, or ($0.06) and ($0.18) per share for the three and nine months ended June 30, 2022, respectively.
"I am pleased to report significant progress in our pipeline and positive milestones on multiple fronts. We believe we have achieved the minimum 92-event threshold required to complete the Phase 3 Mino-Lok trial, pending confirmation by a committee of independent reviewers. We have also made progress in other areas of our business, including announcing positive topline results for the Phase 2b Halo-Lido trial, extending our financial runway through August 2024 with a $15 million capital raise, and clarifying our path toward approval for LYMPHIR (denileukin diftitox)," stated Leonard Mazur, Chairman and Chief Executive Officer of Citius.

"Although we were disappointed to receive the FDA’s complete response letter for LYMPHIR, we are encouraged that no clinical data issues related to safety or efficacy were noted. Rather, the FDA focused primarily on enhanced product testing, which we are already addressing. We plan to work closely with the FDA in preparation for a Resubmission package. The timing of our contemplated spin-off of LYMPHIR will be adjusted in accordance with the asset’s regulatory path. Coupled with our recent financing, we believe we have sufficient funds to advance our pipeline, including efforts to remediate the CRL, and continue to prepare our commercial infrastructure for the ultimate launch of LYMPHIR, if approved," added Mazur.

THIRD QUARTER 2023 FINANCIAL RESULTS:

Liquidity

As of June 30, 2023, the Company had $33.3 million in cash and cash equivalents.

As of June 30, 2023, the Company had 146,211,130 common shares outstanding.

On May 8, 2023, the Company closed a registered direct offering of 12,500,001 common shares 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. The warrants have an exercise price of $1.50 per share, are exercisable six months from the date of issuance, and expire five years from the date of issuance. The Company also issued 875,000 warrants to the placement agent as part of the transaction. Net proceeds of the offering totaled $13.8 million.

The Company estimates that its available cash resources will be sufficient to fund its operations through August 2024. We anticipate the need to raise additional capital in the future to support our operations beyond August 2024.

Research and Development (R&D) Expenses

R&D expenses were $3.8 million and $11.9 million for the three and nine months ended June 30, 2023, respectively, compared to $4.9 million and $13.8 million for the comparable periods ended June 30, 2022. The decrease reflects lower Mino-Lok and LYMPHIR trial costs offset by higher Halo-Lido Phase 2b study costs as the trial was completed during the three months ended June 30, 2023. Additionally, a decrease of $1 million for the three months ended June 30, 2023, reflects NoveCite manufacturing startup costs incurred in the three months ended June 30, 2022, which are no longer realized.

We expect that research and development expenses will stabilize in fiscal 2023 as we focus on the commercialization of LYMPHIR 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 $3.7 million and $11.1 million for the three and nine months ended June 30, 2023, respectively, compared to $3.0 million and $9.0 million for the comparable periods ended June 30, 2022. The increase was primarily due to 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 fiscal quarter ended June 30, 2023, stock-based compensation expense was $1.2 million as compared to $1.0 million for the prior year period. For the nine months ended June 30, 2023, stock-based compensation expense was $3.5 million as compared to $2.9 million for the nine months ended June 30, 2022. The increase reflects expenses related to new grants made to employees (including new hires), directors and consultants.

Net loss

Net loss was $8.5 million, or ($0.06) per share for the three months ended June 30, 2023, compared to a net loss of $8.9 million, or ($0.06) per share for the three months ended June 30, 2022.

The decrease in the net loss was primarily due to a decrease in research and development offset by an increase in general and administrative expenses.

Net loss was $22.6 million, or ($0.15) per share for the nine months ended June 30, 2023, compared to a net loss of $25.6 million, or ($0.18) for the nine months ended June 30, 2022.

The decrease in net loss 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.