On August 11, 2022 Citius Pharmaceuticals, Inc. ("Citius" or the "Company") (Nasdaq: CTXR), a late-stage biopharmaceutical company developing and commercializing first-in-class critical care products, reported business and financial results for the third fiscal quarter of 2022 ended June 30, 2022 (Press release, Citius Pharmaceuticals, AUG 11, 2022, View Source [SID1234618178]).

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Fiscal Q3 2022 Business Highlights and Subsequent Developments

Mino-Lok Phase 3 trial recruitment approached pre-Covid-19 pace; international trial sites engaged to accelerate trial enrollment; Company reiterates 92 failure events required for trial completion;
Halo-Lido Phase 2b trial initiated; enrollment completion anticipated by end of 2022;
I/ONTAK (denileukin diftitox) topline results show no new safety signals and are consistent with prior formulation (ONTAK);
Pre-BLA meeting held with the FDA for I/ONTAK; biologics license application (BLA) remains on track for submission in the second half of 2022; and,
Announced intention to spinoff I/ONTAK into standalone oncology-focused publicly traded company.
Financial Highlights

Cash and cash equivalents of $48.0 million as of June 30, 2022;
R&D expenses were $4.9 million and $13.8 million for the three and nine months ended June 30, 2022, respectively, compared to $2.2 million and $9.9 million for the three and nine months ended June 30, 2021, respectively;
G&A expenses were $3.0 million and $9.0 million for the three and nine months ended June 30, 2022, respectively, compared to $3.4 million and $ 7.4 million for the three and nine months ended June 30, 2021, respectively;
Stock-based compensation expense was $1.0 million and $2.9 million for the three and nine months ended June 30, 2022, respectively, compared to $0.4 million and $1.0 million for the three and nine months ended June 30, 2021, respectively; and,
Net loss was $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, compared to a net loss of $7.3 million and $19.5 million, or ($0.05) and ($0.20) per share for the three and nine months ended June 30, 2021, respectively.
"Citius made solid progress during the quarter to advance our multiple programs. We expanded the Phase 3 Mino-Lok trial to include international sites with the intention of increasing and accelerating enrollment. Our efforts remain focused on driving patient recruitment, which we believe will hasten trial completion. Based on the current the pace of enrollment and the ramp up of our international sites, we expect to enroll the last patient, to complete the trial by the end of 2022, subsequently with the required number of events," stated Leonard Mazur, Chairman and CEO of Citius.

"Our I/ONTAK program remains on track with an anticipated BLA submission later this year. Topline results for the Phase 3 trial of I/ONTAK were consistent with the prior FDA-approved formulation (ONTAK) and we believe there remains a significant unmet medical need in the market for CTCL patients. We recently completed a pre-BLA meeting with the U.S. Food and Drug Administration (FDA) and appreciate their continued guidance. Additionally, the Halo-Lido Phase 2b trial for the treatment of hemorrhoids was initiated during the quarter and we remain encouraged that we may complete enrollment in this trial by the end of the year," added Mazur.

"Our balance sheet remains strong with $48 million in cash available and no debt, providing us with greater strategic and financing flexibility than many of our peers. We believe these funds are sufficient to allow us to execute our activities through August 2023. To support our value-creating clinical, regulatory and commercial efforts, and to further unlock the value of I/ONTAK and Citius, we announced our intent to explore a tax-free non-dilutive spin-off to create a separate publicly traded oncology company. We believe this remains a viable option, notwithstanding recent market volatility, and will continue to monitor market conditions as we proceed. In addition to a potential spin-off, there are multiple other non-dilutive options available to Citius including out-licensing agreements, asset sales or other strategic arrangements, as well as debt financing. Consequently, we remain encouraged in the progress of our pipeline and confident in our ability to advance each of our key programs," concluded Mazur.

THIRD QUARTER ENDED JUNE 30, 2022 Financial Results:

Liquidity

As of June 30, 2022, the Company had $48.0 million in cash and cash equivalents, no debt, and 146,129,630 common shares issued and outstanding.

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

Research and Development (R&D) Expenses

R&D expenses were $4.9 million and $13.8 million for the three and nine months ended June 30, 2022, respectively, compared to $2.2 million and $9.9 million for the comparable periods ended June 30, 2021. The increase during the quarter is primarily due to additional R&D expenses related to the expansion of the Mino-Lok trial to include sites outside the United States, start-up costs associated with the Halo-Lido Phase 2b trial which enrolled its first patient in April, 2022, and R&D expenses related to I/ONTAK for which a BLA submission to the FDA is being prepared.

During the nine months ended June 30, 2022, ARDS-related R&D expenses decreased by $4.7 million compared to $5.3 million during the prior year period. R&D expense for the nine months ended June 30, 2021 reflected a $5.0 million license fee paid to Novellus.

We expect that research and development expenses will increase in fiscal 2022 as we continue to focus on our Phase 3 trials for Mino-Lok and I/ONTAK, 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 $3.1 million and $9.0 million for the three and nine months ended June 30, 2022, respectively, compared to $3.4 million and $7.4 million for the comparable periods ended June 30, 2021. The decrease during the quarter is primarily due to reduced costs for performance bonuses. The primary reasons for the increase over the nine-month period were additional compensation costs for new employees, increased investor relations costs and additional insurance expense. 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, 2022, stock-based compensation expense was $1.0 million as compared to $0.4 million for the prior year period. For the nine months ended June 30, 2022, stock-based compensation expense was $2.9 million as compared to $1.0 million for the nine months ended June 30, 2021. The increase primarily reflects expenses related to new grants made by Citius to employees (including new hires), directors and consultants.

Net loss

Net loss was $8.9 million, or ($0.06) per share for the three months ended June 30, 2022, compared to a net loss of $5.8 million, or ($0.05) per share for the three months ended June 30, 2021.

Net loss was $25.6 million, or ($0.18) per share for the nine months ended June 30, 2022, compared to a net loss of $18.1 million, or ($0.20) for the nine months ended June 30, 2021.

The increase in net loss is primarily due to an increase in research and development expenses, general and administrative expenses and stock-based compensation.