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Citius Pharmaceuticals, Inc. Reports Third Fiscal Quarter 2021 Financial Results and Provides General Business Update

08/12/2021

$115.7 million in cash and cash equivalents as of June 30, 2021 to develop pipeline and invest in long-term growth

Mino-Lok® Phase 3 superiority trial advancing following independent Data Monitoring Committee recommendation to proceed without any modifications

CRANFORD, N.J., Aug. 12, 2021 /PRNewswire/ -- 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, today reported financial results for the third fiscal quarter of 2021 ended June 30, 2021, and provided a general business update.

Citius Pharmaceuticals, a late-stage biopharmaceutical company

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.

About Citius Pharmaceuticals, Inc.

Citius is a late-stage biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products, with a focus on anti-infectives in adjunct cancer care, unique prescription products, and stem cell therapy. The Company's lead product candidate, Mino-Lok®, an antibiotic lock solution for the treatment of patients with catheter-related bloodstream infections (CRBSIs), is currently enrolling patients in a Phase 3 pivotal superiority trial.  Mino-Lok® was granted Fast Track designation by the U.S. Food and Drug Administration (FDA). Through its subsidiary, NoveCite, Inc., Citius is developing a novel proprietary mesenchymal stem cell treatment derived from induced pluripotent stem cells (iPSCs) for acute respiratory conditions, with a near-term focus on acute respiratory distress syndrome (ARDS) associated with COVID-19.  For more information, please visit www.citiuspharma.com.

Safe Harbor

This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are made based on our expectations and beliefs concerning future events impacting Citius. You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "plan," "should," and "may" and other words and terms of similar meaning or use of future dates. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price.  Factors that could cause actual results to differ materially from those currently anticipated are: our ability to successfully undertake and complete clinical trials and the results from those trials for our product candidates; risks relating to the results of research and development activities; uncertainties relating to preclinical and clinical testing; the early stage of products under development; our need for substantial additional funds; the estimated markets for our product candidates and the acceptance thereof by any market; the ability of our product candidates to impact the quality of life of our target patient populations; market and other conditions; risks related to our growth strategy; patent and intellectual property matters; our ability to attract, integrate, and retain key personnel; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; our ability to identify, acquire, close and integrate product candidates and companies successfully and on a timely basis; our dependence on third-party suppliers; our ability to procure cGMP commercial-scale supply; government regulation; competition; as well as other risks described in our SEC filings. These risks have been and may be further impacted by Covid-19. Accordingly, these forward-looking statements do not constitute guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements. Risks regarding our business are described in detail in our Securities and Exchange Commission ("SEC") filings which are available on the SEC's website at www.sec.gov, including in our Annual Report on Form 10-K for the year ended September 30, 2020, filed with the SEC on December 16, 2020 and updated by our subsequent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.

Investor Relations for Citius Pharmaceuticals:

Ilanit Allen
Vice President, Corporate Communications and Investor Relations
T: 908-967-6677 x113
E: iallen@citiuspharma.com

-- Financial Tables Follow –

 

CITIUS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
   

June 30,

   

September 30,

 
   

2021

   

2020

 

ASSETS

           

Current Assets:

           

Cash and cash equivalents

 

$

115,663,976

   

$

13,859,748

 

Prepaid expenses

   

1,271,395

     

122,237

 

    Total Current Assets

   

116,935,371

     

13,981,985

 
                 

Property and equipment, net

   

7,754

     

1,577

 
                 

Operating lease right-of-use asset, net

   

864,865

     

986,204

 
                 

Other Assets:

               

Deposits

   

38,062

     

57,093

 

In-process research and development

   

19,400,000

     

19,400,000

 

Goodwill

   

9,346,796

     

9,346,796

 

    Total Other Assets

   

28,784,858

     

28,803,889

 
                 

    Total Assets

 

$

146,592,848

   

$

43,773,655

 
                 

LIABILITIES AND STOCKHOLDERS' EQUITY

               

Current Liabilities:

               

Accounts payable

 

$

1,354,664

   

$

1,856,235

 

Accrued expenses

   

366,736

     

164,040

 

Accrued compensation

   

1,539,813

     

1,654,919

 

Accrued interest

   

1,974

     

89,970

 

Notes payable – related parties

   

     

172,970

 

Note payable – paycheck protection program

   

164,583

     

 

Operating lease liability

   

172,540

     

158,999

 

    Total Current Liabilities

   

3,600,310

     

4,097,133

 
                 

Note payable – paycheck protection program

   

     

164,583

 

Deferred tax liability

   

4,985,800

     

4,985,800

 

Operating lease liability – non current

   

724,785

     

855,471

 

    Total Liabilities

   

9,310,895

     

10,102,987

 
                 

Commitments and Contingencies

               
                 

Stockholders' Equity:

               

Preferred stock – $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding

   

     

 

Common stock – $0.001 par value; 400,000,000 shares authorized; 145,979,429 and 55,576,996 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively

   

145,979

     

55,577

 

Additional paid-in capital

   

227,622,330

     

104,208,958

 

Accumulated deficit

   

(91,086,736)

     

(70,593,867)

 

Total Citius Pharmaceuticals, Inc. Stockholders' Equity

   

136,681,573

     

33,670,668

 

Non-controlling interest

   

600,380

     

 

    Total Equity

   

137,281,953

     

33,670,668

 
                 

    Total Liabilities and Equity

 

$

146,592,848

   

$

43,773,655

 

 

CITIUS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2021 AND 2020

(Unaudited)

 
   

Three Months Ended

   

Nine Months Ended

 
   

June 30,

   

June 30,

   

June 30,

   

June 30,

 
   

2021

   

2020

   

2021

   

2020

 

Revenues

 

$

   

$

   

$

   

$

 
                                 

Operating Expenses

                               

Research and development

   

2,203,748

     

2,644,244

     

9,946,268

     

7,324,730

 

General and administrative

   

3,407,088

     

1,869,636

     

7,389,269

     

5,690,953

 

Stock-based compensation – general and administrative

   

373,570

     

175,011

     

993,114

     

554,228

 

Total Operating Expenses

   

5,984,406

     

4,688,891

     

18,328,651

     

13,569,911

 
                                 

Operating Loss

   

(5,984,406)

     

(4,688,891)

     

(18,328,651)

     

(13,569,911)

 
                                 

Other Income (Expense)

                               

Other income

   

59,917

     

     

59,917

     

110,207

 

Interest income

   

103,413

     

13,018

     

186,224

     

44,463

 

Interest expense

   

(2,932)

     

(4,245)

     

(10,839)

     

(12,216)

 

Total Other Income, Net

   

160,398

     

8,773

     

235,302

     

142,454

 
                                 

Net Loss

   

(5,824,008)

   

$

(4,680,118)

   

$

(18,093,349)

   

$

(13,427,457)

 

Deemed dividend on warrant extension

   

1,450,876

     

     

1,450,876

     

 
                                 

Net Loss Applicable to Common Stockholders

 

$

(7,274,884)

   

$

(4,680,118)

   

$

(19,544,225)

   

$

(13,427,457)

 
                                 

Net Loss Per Share Applicable to Common Stockholders - Basic and Diluted

 

$

(0.05)

   

$

(0.11)

   

$

(0.20)

   

$

(0.38)

 
                                 

Weighted Average Common Shares Outstanding

                               

Basic and diluted

   

137,151,269

     

41,600,428

     

96,002,039

     

35,017,739

 

 

CITIUS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED JUNE 30, 2021 AND 2020

(Unaudited)

 
   

2021

   

2020

 

 Cash Flows From Operating Activities:

           

Net loss

 

$

(18,093,349)

   

$

(13,427,457)

 

Adjustments to reconcile net loss to net cash used in operating activities:

               

       Stock-based compensation expense

   

993,114

     

554,228

 

       Issuance of common stock for services

   

68,000

     

428,770

 

       Amortization of operating lease right-of-use asset

   

121,339

     

112,605

 

       Depreciation

   

761

     

632

 

Changes in operating assets and liabilities:

               

       Prepaid expenses

   

(1,149,158)

     

(3,471)

 

       Deposits

   

19,031

     

 

       Accounts payable

   

(501,571)

     

(901,918)

 

       Accrued expenses

   

202,696

     

(82,361)

 

       Accrued compensation

   

(115,106)

     

(180,374)

 

       Accrued interest

   

(87,996)

     

12,216

 

       Operating lease liability

   

(117,145)

     

(85,736)

 

Net Cash Used In Operating Activities

   

(18,659,384)

     

(13,572,866)

 
                 

Cash Flows Used In Investing Activities:

               

       Purchase of property and equipment

   

(6,938)

     

(1,831)

 

Net Cash Used In Operating Activities

   

(6,938)

     

(1,831)

 
                 

Cash Flows From Financing Activities:

               

       Proceeds from note payable – paycheck protection program

   

     

164,583

 

       Principal paid on notes payable – related parties

   

(172,970)

     

 

       Proceeds from sale of NoveCite, Inc. common stock

   

500

     

 

       Net proceeds from private placement

   

18,450,410

     

 

       Net proceeds from registered direct offering

   

70,979,842

     

6,877,100

 

       Net proceeds from common stock warrant exercises

   

31,130,134

     

7,156,549

 

       Net proceeds from common stock option exercises

   

82,634

     

 

Net Cash Provided By Financing Activities

   

120,470,550

     

14,198,232

 
                 

Net Change in Cash and Cash Equivalents

   

101,804,228

     

623,535

 

Cash and Cash Equivalents - Beginning of Period

   

13,859,748

     

7,893,804

 

Cash and Cash Equivalents - End of Period

 

$

115,663,976

   

$

8,517,339

 
                 

Supplemental Disclosures Of Cash Flow Information and Non-cash Activities:

               

Operating lease right-of-use asset and liability recorded upon adoption of ASC 842

 

$

   

$

1,137,724

 

 

 

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SOURCE Citius Pharmaceuticals, Inc.

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