Historical Background

Citius Pharmaceuticals, Inc. is a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products. The company has undergone several key acquisitions and developments over the years:

• In September 2014, Citius acquired Citius Pharmaceuticals, LLC as a wholly-owned subsidiary. Citius Pharmaceuticals, LLC was later dissolved in December 2023.

• In March 2016, Citius acquired all of the outstanding stock of Leonard-Meron Biosciences, Inc. (LMB), recording $19.4 million in intangible assets related to in-process research and development and $9.3 million in goodwill.

• In September 2020, Citius formed a 75%-owned subsidiary called NoveCite, Inc. to develop a stem cell therapy.

• In August 2021, Citius formed a wholly-owned subsidiary called Citius Acquisition Corp. (later renamed Citius Oncology, Inc.) to acquire the assets related to LYMPHIR, an oncology immunotherapy.

• Through December 2024, Citius has devoted substantial efforts to product development, raising capital, and building strategic alliances, but has not yet realized any revenues from its operations.

Reverse Stock Split

Effective November 25, 2024, Citius executed a 1-for-25 reverse stock split of its common stock.

Patent and Technology License Agreements

Citius has several key licensing agreements:

1. Mino-Lok: LMB has an exclusive, worldwide license from Novel Anti-Infective Therapeutics, Inc. to develop and commercialize Mino-Lok, an antibiotic solution. LMB pays annual maintenance fees, royalties on net sales, and milestone payments.

2. NoveCite: NoveCite has an exclusive, worldwide license from Eterna Therapeutics Inc. (formerly Novellus Therapeutics Limited) to develop and commercialize a stem cell therapy. NoveCite pays milestone payments, royalties on net sales, and a percentage of sublicense fees.

3. LYMPHIR: Citius Oncology has an exclusive license from Eisai and acquired assets from Dr. Reddy’s Laboratories to develop and commercialize LYMPHIR (denileukin diftitox), an oncology immunotherapy. Citius Oncology pays upfront, milestone, and royalty payments.

Results of Operations

For the three months ended December 31, 2024 compared to the three months ended December 31, 2023:

• Revenues: $0 in both periods as Citius has not yet generated any revenue.

• Research and Development Expenses: Decreased by $494,872 to $2,127,038, primarily due to lower costs for the Mino-Lok and Halo-Lido programs, partially offset by higher costs for LYMPHIR.

• General and Administrative Expenses: Increased by $1,727,024 to $5,387,752, primarily due to higher pre-launch sales and marketing costs for LYMPHIR.

• Stock-based Compensation Expense: Decreased by $533,361 to $2,524,824, primarily due to lower costs for the Citius Pharma stock plans.

• Net Loss: Increased by $1,050,061 to $10,281,246, due to the increase in general and administrative expenses, partially offset by lower research and development costs.

Liquidity and Capital Resources

• Citius has incurred operating losses since inception and had a negative working capital of approximately $26.5 million at December 31, 2024.

• Citius had $1.1 million in cash and cash equivalents at December 31, 2024 and expects to have sufficient funds to continue operations through March 2025. However, the company will need to raise additional capital in the future to support operations beyond that point.

• Citius’ primary uses of operating cash have been for in-licensing of intellectual property, product development and commercialization activities, employee compensation, and other operating expenses.

Outlook

Citius expects research and development expenses to continue decreasing in fiscal 2025 as it focuses on the commercialization of LYMPHIR and completes the Phase 3 trial for Mino-Lok. However, the company will need to raise additional capital to support its operations beyond March 2025.