On August 12, 2021 Citius Pharmaceuticals, Inc. ("Citius" or the "Company") (Nasdaq: CTXR), a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products with a focus on anti-infective products in adjunct cancer care, unique prescription products and stem cell therapy, reported financial results for the third fiscal quarter of 2021 ended June 30, 2021, and provided a general business update (Press release, Citius Pharmaceuticals, AUG 12, 2021, View Source [SID1234586481]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Third Fiscal Quarter 2021 and Recent Business Highlights
Received third positive recommendation from independent Data Monitoring Committee to continue the Mino-Lok Phase 3 clinical superiority trial as planned without modifications; no safety concerns identified;
Characterization and expansion of NoveCite’s i-MSC accession cell bank (ACB) underway at Waisman Biomanufacturing at the University of Wisconsin-Madison to create a cGMP master cell bank (MCB);
Received FDA guidance on proprietary Halo-Lido patient-reported outcome (PRO) tool; preparing to submit an investigational new drug (IND) application during the fourth quarter of 2021;
Advanced Mino-Wrap chemistry, manufacturing and controls (CMC) development;
Issued 11.2 million shares of Citius common stock upon the exercise of warrants during the quarter for aggregate proceeds of $16.9 million, and a total of $127.6 million in financing activities during the first half of 2021;
Announced that on June 21, 2021 stockholders approved an increase in authorized shares from 210,000,000 to 410,000,000 and an increase in authorized common shares from 200,000,000 to 400,000,000; and,
Reported $115.7 million in cash and cash equivalents as of June 30, 2021.
"During the quarter, we made progress with all of our programs despite the ongoing challenges of conducting preclinical work and clinical trials during the extended COVID-19 pandemic. We remain encouraged by the positive recommendation of the independent DMC to continue the Mino-Lok Phase 3 pivotal superiority trial as planned and are fully committed to submitting an NDA for the treatment of infected catheters, a potentially life-threatening condition for the nearly 500,000 patients with catheter-related bloodstream infections in the U.S. each year. Given rising COVID-19 infection rates across the U.S., hospitals are, understandably, prioritizing COVID-19 patients and studies. Consequently, we expect recruitment for our Mino-Lok trial will be slower in the near term than we had originally planned. To address this, we are exploring multiple paths to support our patient recruitment and randomization efforts and are confident that we have the resources in place to complete the trial in a timely manner. We look forward to updating you on these efforts in due course," stated Myron Holubiak, President and Chief Executive Officer of Citius Pharmaceuticals.
"The persistence of COVID-19 is a reminder that treatment of acute respiratory distress syndrome (ARDS) will continue to be an important need worldwide. Accordingly, we remain focused on further developing our engineered stem cell program, which holds the potential to offer a novel and scalable therapy for all causes of ARDS. We have initiated a pilot study in mice and are completing our proof-of-concept sheep study, for which we expect to have topline results by the end of this quarter. Additionally, our IND submission for Halo-Lido is on track for later this year and in vitro CMC work for Mino-Wrap is underway. With a solid balance sheet to support our activities, we are now better positioned than ever before to execute our strategy and deliver value to patients and shareholders," added Mr. Holubiak.
Third Fiscal Quarter 2021 Financial Results:
Liquidity
As of June 30, 2021, the Company had $115.7 million in cash and cash equivalents. During the three months ended June 30, 2021, the Company issued 11.2 million shares of Citius common stock upon the exercise of warrants for aggregate proceeds of approximately $16.9 million. During the nine months ended June 30, 2021, the Company received $31.1 million in proceeds from the exercise of common stock warrants.
In January 2021, the Company closed a private placement for common stock and warrants totaling gross proceeds of approximately $20 million. In February 2021, the Company closed a registered direct offering of its common stock and warrants for gross proceeds of approximately $76.5 million.
On June 21, 2021, stockholders approved an amendment to the Company’s Articles of Incorporation to increase the authorized number of shares from 210,000,000 to 410,000,000 and the authorized number of common shares from 200,000,000 to 400,000,000. As of June 30, 2021, the Company had 145,979,429 common shares issued and outstanding.
During the first half of 2021, the Company raised a total of $127.6 million through financing activities. We estimate that we will have sufficient funds for our operations through March 2023.
Research and Development (R&D) Expenses
R&D expenses were $2.2 million and $9.9 million for the three and nine months ended June 30, 2021, respectively, compared to $2.6 million and $7.3 million for the comparable periods in 2020. The decrease in research and development expenses for the quarter ended June 30, 2021, compared to the prior-year quarter reflects decreases in R&D expenses for our Mino-Lok and Halo-Lido product candidates, offset by an increase in R&D expenses for Mino-Wrap and our proposed novel stem cell therapy for acute respiratory distress syndrome (ARDS).
The increase in research and development expenses for the nine months ended June 30, 2021 compared to the prior year period is primarily due to a $5.5 million increase in R&D expenses related to our proposed novel stem cell therapy for ARDS, offset by decreases in R&D expenses for our other pipeline products, including a decrease in manufacturing research and development costs for registration batches of Mino-Lok and a decrease in R&D expenses associated with manufacturing development and our patient reported outcome tool for Halo-Lido.
We expect that research and development expenses will increase in fiscal 2021 as we continue to focus on our Phase 3 trial for Mino-Lok, progress the Halo-Lido product candidate, and continue our research and development efforts related to ARDS and Mino-Wrap.
General and Administrative (G&A) Expenses
G&A expenses were $3.4 million and $7.4 million for the three and nine months ended June 30, 2021, respectively, compared to $1.9 million and $5.7 million for the comparable periods in 2020. The primary reason for the increase is incremental costs associated with investor relations and legal services, as well as additional compensation costs for new employees and performance bonuses. General and administrative expenses consist primarily of compensation costs, professional fees related to our capital raising activities, corporate development services, and investor relations.
Stock-based Compensation Expense
For the three months ended June 30, 2021, stock-based compensation expense was $0.4 million as compared to $0.2 million for the three months ended June 30, 2020. For the nine months ended June 30, 2021, stock-based compensation expense was $1.0 million as compared to $0.6 million for the nine months ended June 30, 2020. The increase reflects expenses related to new grants made by Citius and the recently adopted NoveCite stock option plan.
Net loss
Net loss was $5.8 million and $18.1 million for the three and nine months ended June 30, respectively, compared to a net loss of $4.7 million and $13.4 million for the comparable periods in 2020. The increase in net loss is primarily due to the increase in general and administrative expenses and an increase in our research and development activities related to ARDS.