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Citius Pharmaceuticals, Inc.

Citius Pharmaceuticals, Inc.CTXR财报

Nasdaq · 医疗保健 · 药物制剂

Citius Pharmaceuticals, Inc. is a late-stage biopharmaceutical company focused on developing and commercializing innovative prescription therapies addressing unmet medical needs across critical care, oncology, anti-infective treatment, and supportive care segments, primarily serving the U.S. healthcare market.

What changed in Citius Pharmaceuticals, Inc.'s 10-K — 2021 vs 2022

Top changes in Citius Pharmaceuticals, Inc.'s 2022 10-K

302 paragraphs added · 266 removed · 235 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

100 edited+44 added−14 removed171 unchanged
We are developing five proprietary products: Mino-Lok, an antibiotic lock solution used to treat patients with catheter-related bloodstream infections by salvaging the infected catheter; Mino-Wrap, a liquifying gel-based wrap for reduction of tissue expander infections following breast reconstructive surgeries; Halo-Lido, a corticosteroid-lidocaine topical formulation that is intended to provide anti-inflammatory and anesthetic relief to persons suffering from hemorrhoids; NoveCite, a mesenchymal stem cell therapy for the treatment of ARDS; and I/ONTAK, in-licensed in September 2021, a engineered IL-2 diphtheria toxin fusion protein, for the treatment of patients with persistent or recurrent cutaneous T-cell lymphoma (“CTCL”).
We are developing five proprietary products: I/ONTAK, in-licensed in September 2021, a engineered IL-2 diphtheria toxin fusion protein, for the treatment of patients with persistent or recurrent cutaneous T-cell lymphoma (“CTCL”); Mino-Lok, an antibiotic lock solution used to treat patients with catheter-related bloodstream infections by salvaging the infected catheter; Halo-Lido, a corticosteroid-lidocaine topical formulation that is intended to provide anti-inflammatory and anesthetic relief to persons suffering from hemorrhoids; Mino-Wrap, a liquifying gel-based wrap for reduction of tissue expander infections following breast reconstructive surgeries; and NoveCite, a mesenchymal stem cell therapy for the treatment of ARDS.
A drug that receives Fast Track designation is eligible for the following: ● More frequent meetings with FDA to discuss the drug’s development plan and ensure collection of appropriate data needed to support drug approval; ● More frequent written correspondence from FDA about the design of the clinical trials; ● Priority review to shorten the FDA review process for a new drug from ten months to six months; and ● Rolling review, which means Citius can submit completed sections of its New Drug Application (“NDA”) for review by FDA, rather than waiting until every section of the application is completed before the entire application can be submitted for review.
A drug that receives Fast Track designation is eligible for the following: ● More frequent meetings with the FDA to discuss the drug’s development plan and ensure collection of appropriate data needed to support drug approval; ● More frequent written correspondence from the FDA about the design of the clinical trials; ● Priority review to shorten the FDA review process for a new drug from ten months to six months; and ● Rolling review, which means Citius can submit completed sections of its New Drug Application (“NDA”) for review by the FDA, rather than waiting until every section of the application is completed before the entire application can be submitted for review.
In the United States, the overall rate of mastectomies, combining single and double mastectomies, has increased 36% from 2005 to 2013. Additionally, the incidence of post-mastectomy breast reconstruction, following breast cancer treatment, has been increasing on an annual basis.
In the United States, the overall rate of mastectomies, combining single and double mastectomies, increased 36% from 2005 to 2013. Additionally, the incidence of post-mastectomy breast reconstruction, following breast cancer treatment, has been increasing on an annual basis.
Reddy’s, we are required to (i) use commercially reasonable efforts to make commercially available products in the CTCL indication, peripheral T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator initiated immuno-oncology trials, (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) to complete each specified immuno-oncology investigator trial on or before the four-year anniversary of the effective date of the definitive agreement.
Reddy’s, we are required to (i) use commercially reasonable efforts to make commercially available products in the CTCL indication, peripheral T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator initiated immuno-oncology trials, (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) complete each specified immuno-oncology investigator trial on or before the four-year anniversary of the effective date of the definitive agreement.
The Company amended the Phase 3 study design to remove the saline and heparin placebo control arm and to use an active control arm that conforms with today’s current standard-of-care. Patient enrollment commenced in February 2018. The Mino-Lok Phase 3 Trial was originally planned to enroll 700 patients in 50 participating institutions, all located in the U.S.
The Company amended the Phase 3 study design to remove the saline and heparin placebo control arm and to use an active control arm that conforms with today’s current standard-of-care. Patient enrollment commenced in February 2018. 6 The Mino-Lok Phase 3 Trial was originally planned to enroll 700 patients in 50 participating institutions, all located in the U.S.
We may terminate the license agreement upon 180 days’ notice. The license agreement may also be terminated upon our and NAT’s mutual consent. Mino-Lok is covered in relation to the composition by issued U.S. patent No. 7,601,731, entitled “Antimicrobial Flush Solutions,” which was issued on October 13, 2009.
We may terminate the license agreement upon 180 days’ notice. The license agreement may also be terminated upon our and NAT’s mutual consent. 16 Mino-Lok is covered in relation to the composition by issued U.S. patent No. 7,601,731, entitled “Antimicrobial Flush Solutions,” which was issued on October 13, 2009.
We will also pay to Dr. Reddy’s an amount equal to a low-thirties percentage of any sublicense upfront consideration or milestone payments (or the like) received by us and the greater of (i) a low-thirties percentage of any sublicensee sales-based royalties or (ii) a mid-single digit percentage of such licensee’s net sales. Also under the agreement with Dr.
We will also pay to Dr. Reddy’s an amount equal to a low-thirties percentage of any sublicense upfront consideration or milestone payments (or the like) received by us and the greater of (i) a low-thirties percentage of any sublicensee sales-based royalties or (ii) a mid-single digit percentage of such licensee’s net sales. 15 Also under the agreement with Dr.
In April 2021, CorMedix and the CMO met with the FDA to discuss proposed resolutions for the deficiencies identified in the CRL and the Post-Application Action Letter received by the CMO from the FDA for the NDA for DefenCath. There was an agreed upon protocol for the manual extraction study identified in the CRL, which has been successfully completed.
In April 2021, CorMedix and the CMO met with the FDA to discuss proposed resolutions for the deficiencies identified in the CRL and the Post-Application Action Letter (“PAAL”) received by the CMO from the FDA for the NDA for DefenCath. There was an agreed upon protocol for the manual extraction study identified in the CRL, which has been successfully completed.
We intend to license our mass audience, non-specialty product candidates to such companies for sales and marketing. Intellectual Property We rely on a combination of patent, trade secret, copyright, and trademark laws, as well as confidentiality, licensing and other agreements, to establish and protect our proprietary rights.
We intend to license our mass audience, non-specialty product candidates to such companies for sales and marketing. 14 Intellectual Property We rely on a combination of patent, trade secret, copyright, and trademark laws, as well as confidentiality, licensing and other agreements, to establish and protect our proprietary rights.
The objectives of this study were to: (1) demonstrate the safety and efficacy of the formulations when applied twice daily for two weeks in subjects with Grade I or II hemorrhoids, and (2) assess the potential contribution of lidocaine hydrochloride and hydrocortisone acetate, alone or in combination for the treatment of symptoms of Goligher’s Classification Grade I or II hemorrhoids. 9 Symptom improvement was observed based on a global score of disease severity (“GSDS”) and based on some of the individual signs and symptoms of hemorrhoids, specifically itching and overall pain and discomfort.
The objectives of this study were to: (1) demonstrate the safety and efficacy of the formulations when applied twice daily for two weeks in subjects with Grade I or II hemorrhoids, and (2) assess the potential contribution of lidocaine hydrochloride and hydrocortisone acetate, alone or in combination for the treatment of symptoms of Goligher’s Classification Grade I or II hemorrhoids. 10 Symptom improvement was observed based on a global score of disease severity (“GSDS”) and based on some of the individual signs and symptoms of hemorrhoids, specifically itching and overall pain and discomfort.
Issam Raad, Antimicrobial Agents and Chemotherapy, June 2016, Vol. 60 No. 6, Page 3429 4 Phase 3 Trial In November 2016, the Company initiated site recruitment for Phase 3 clinical trials.
Issam Raad, Antimicrobial Agents and Chemotherapy, June 2016, Vol. 60 No. 6, Page 3429 Phase 3 Trial In November 2016, the Company initiated site recruitment for Phase 3 clinical trials.
They also agreed that a 28-day toxicology study appears appropriate and that microbiology support through existing data is acceptable. We are pursuing these studies and anticipate filing an IND for Mino-Wrap in 2022. Market Opportunity Breast cancer is the most frequent cancer in women worldwide representing 25% of all cancer diagnoses with the exception of non-melanoma skin cancer.
They also agreed that a 28-day toxicology study appears appropriate and that microbiology support through existing data is acceptable. We are pursuing these studies and anticipate filing an IND for Mino-Wrap in 2023. Market Opportunity Breast cancer is the most frequent cancer in women worldwide, representing 25% of all cancer diagnoses with the exception of non-melanoma skin cancer.
Citius holds the exclusive worldwide license which provides access to this patented technology for development and commercialization of Mino-Lok. 6 Market Opportunity In spite of best clinical practice, catheters contribute to approximately 70% of blood stream infections that occur in the intensive care unit or are associated with hemodialysis or cancer patients (approximately 470,000 per year).
Citius holds the exclusive worldwide license which provides access to this patented technology for development and commercialization of Mino-Lok. 8 Market Opportunity In spite of best clinical practice, catheters contribute to approximately 70% of blood stream infections that occur in the intensive care unit or are associated with hemodialysis or cancer patients (approximately 470,000 per year).
Within the first few days of treatment, the combination products (containing both hydrocortisone and lidocaine) were directionally favorable versus the placebo and their respective individual active treatment groups (e.g., hydrocortisone or lidocaine alone) in achieving ‘almost symptom free’ or ‘symptom free’ status according to the GSDS scale. These differences suggest the possibility of a benefit for the combination product formulation.
Within the first few days of treatment, the combination products (containing both hydrocortisone and lidocaine) were directionally favorable versus the placebo and their respective individual active treatment groups (e.g., hydrocortisone or lidocaine alone) in achieving ‘almost symptom free’ or ‘symptom free’ status according to the GSDS scale. These differences suggested the possibility of a benefit for the combination product formulation.
I/ONTAK Overview In September 2021, the Company announced that it had entered into a definitive agreement with Dr. Reddy's Laboratories SA, a subsidiary of Dr. Reddy's Laboratories, Ltd. (collectively, "Dr. Reddy's"), to acquire its exclusive license of E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma.
I/ONTAK Overview In September 2021, the Company announced that it had entered into a definitive agreement with Dr. Reddy’s Laboratories SA, a subsidiary of Dr. Reddy’s Laboratories, Ltd. (collectively, “Dr. Reddy’s”), to acquire its exclusive license of E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma.
Before any of our drug product candidates may be marketed in the United States, it must be approved by the FDA.
Before any one of our drug product candidates may be marketed in the United States, it must be approved by the FDA.
As a result of this study, we believe that the performance of the active arms of the study relative to the vehicle could be improved by re-formulating our topical preparation. Therefore, we initiated work on vehicle formulation and evaluation of higher potency steroids.
As a result of this study, we determined that the performance of the active arms of the study relative to the vehicle could be improved by re-formulating our topical preparation. Therefore, we initiated work on vehicle formulation and evaluation of higher potency steroids.
Previously, he was one of the founders and Chief Financial Officer of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius. Myron Czuczman , Chief Medical Officer and Executive Vice President – Dr. Czuczman, 62 was appointed as Chief Medical Officer and Executive Vice President in July 2020. Dr.
Previously, he was one of the founders and Chief Financial Officer of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius. Myron Czuczman , Chief Medical Officer and Executive Vice President – Dr. Czuczman, 63, was appointed as Chief Medical Officer and Executive Vice President in July 2020. Dr.
The company’s lead platform product includes MultiStem cell therapy, an allogeneic stem cell product, which has an ongoing Phase 2/3 clinical trial for the treatment of ARDS and has an ongoing clinical trial on Japan for the treatment of RDS.
The company’s lead platform product includes MultiStem cell therapy, an allogeneic stem cell product, which has an ongoing Phase 2/3 clinical trial for the treatment of ARDS and has an ongoing clinical trial in Japan for the treatment of RDS.
In 2011, the FDA Office of Orphan Products Development granted E7777 orphan drug designation status for the treatment of Peripheral T-Cell Lymphoma (“PTCL”).
In 2011, the FDA Office of Orphan Products Development granted E7777 orphan drug designation status for the treatment of Peripheral T-Cell Lymphoma (“PTCL”). In 2013, the FDA Office of Orphan Products Development granted E7777 orphan drug designation status for the treatment of CTCL.
These tools can be used in clinical trials to evaluate the patients’ conditions and to assess the performance of the test articles. In March 2018, we announced that we had selected a higher potency corticosteroid in our steroid/anesthetic topical formulation program for the treatment of hemorrhoids.
This tool can be used in clinical trials to evaluate the patients’ conditions and to assess the performance of the test articles. In March 2018, we announced that we had selected a higher potency corticosteroid in our steroid/anesthetic topical formulation program for the treatment of hemorrhoids.
This includes rights to U.S. Patent No. 9,849,217, which was issued on December 16, 2017. We intend to develop Mino-Wrap as a liquefying, gel-based wrap containing minocycline and rifampin for the reduction of infections associated with breast implants following breast reconstructive surgeries.
Patent No. 9,849,217, which was issued on December 16, 2017. We intend to develop Mino-Wrap as a liquefying, gel-based wrap containing minocycline and rifampin for the reduction of infections associated with breast implants following breast reconstructive surgeries.
Once the COVID-19 patients advance to ARDS, they are put on mechanical ventilators. Death rate among patients on ventilators can be as high as 50% depending on associated co-morbidities. There are no approved treatments for ARDS, and the current standard of care only attempts to provide symptomatic relief.
The COVID-19 pandemic has added significantly to the number of ARDS cases. Once COVID-19 patients advance to ARDS, they are put on mechanical ventilators. Death rate among patients on ventilators can be as high as 50% depending on associated co-morbidities. There are no approved treatments for ARDS, and the current standard of care only attempts to provide symptomatic relief.
Upon execution of the license agreement, NoveCite paid an upfront payment of $5,000,000 and issued to Licensor shares of Novecite’s common stock representing 25% of Novecite’s currently outstanding equity.
Upon execution of the license agreement, NoveCite paid an upfront payment of $5,000,000 and issued to Licensor shares of NoveCite’s common stock representing 25% of NoveCite’s currently outstanding equity. We own the other 75% of NoveCite’s currently outstanding equity.
Item 1. Business Overview Citius Pharmaceuticals, Inc. (the “Company,” “Citius” or “we”), headquartered in Cranford, New Jersey, is a specialty pharmaceutical 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 mesenchymal stem cell therapy.
Item 1. Business Overview Citius Pharmaceuticals, Inc. (the “Company,” “Citius” or “we”), headquartered in Cranford, New Jersey, is a late-stage pharmaceutical company dedicated to the development and commercialization of first-in-class critical care products with a focus on oncology, anti-infectives in adjunct cancer care, unique prescription products and stem cell therapy.
Pursuant to the terms of the license agreement, Eisai is responsible for completing the current CTCL clinical trial, and chemistry, manufacturing and controls development activities through the production of the BLA that we will file with the FDA while we are responsible for the costs of correcting any major deficiencies in the BLA as well as the costs of any necessary companion diagnostic or pediatric study.
Pursuant to the terms of the license agreement, Eisai is responsible for completing the current CTCL clinical trial, and chemistry, manufacturing and controls development activities through the production of the BLA, which we filed with the FDA in September 2022, while we are responsible for the costs of correcting any major deficiencies in the BLA as well as the costs of any necessary companion diagnostic or pediatric study.
We are unaware as to the progress or results of these studies. In addition, we are not aware of any IND being filed in the U.S. for B-Lock, nor are we aware of any clinical studies to support salvage of infected catheters in bacteremic patients. There has been no further public information available on GLP.
In addition, we are not aware of any IND being filed in the U.S. for B-Lock, nor are we aware of any clinical studies to support salvage of infected catheters in bacteremic patients. There has been no further public information available on GLP.
In the third quarter 2021, the Company completed the characterization and expansion of its NC-iMSC accession cell bank (ACB) at Waisman Biomanufacturing at the University of Wisconsin-Madison to create a cGMP master cell bank (MCB). In July 2021, Novellus was acquired by Brooklyn ImmunoTherapeutics, Inc. (“Brooklyn”).
The study was conducted in a widely accepted large animal model. In the third quarter of 2021, the Company completed the characterization and expansion of its NC-iMSC accession cell bank (ACB) at Waisman Biomanufacturing at the University of Wisconsin-Madison to create a cGMP master cell bank (MCB). In July 2021, Novellus was acquired by Brooklyn ImmunoTherapeutics, Inc. (“Brooklyn”).
The FDA considered this a new product with a new IND being filed. In ensuing discussions, the FDA agreed to a development plan that included a single arm, open label study to conclude safety and efficacy of E7777 and a CMC development plan that demonstrates the new process results in a comparable drug product.
In ensuing discussions, the FDA agreed to a development plan that included a single arm, open label study to conclude safety and efficacy of E7777 and a CMC development plan that demonstrates the new process results in a comparable drug product.
Median age at diagnosis was 56 years (range: 21-73 years). In all patients, prior to the use of lock therapy, systemic treatment with a culture-directed, first-line intravenous antibiotic was started. Microbiological eradication was achieved at the end of therapy in all cases. None of the patients experienced any serious adverse event related to the lock therapy.
Median age at diagnosis was 56 years (range: 21-73 years). In all patients, prior to the use of lock therapy, systemic treatment with a culture-directed, first-line intravenous antibiotic was started. Microbiological eradication was achieved at the end of therapy in all cases.
Mino-Wrap Competition The primary competition for Mino-Wrap would be the existing standard of care treatment, which includes a systemic perioperative antimicrobial agent with the perioperative immersion of the implant or irrigation of the surgical pocket with an antimicrobial solution prior to insertion of the tissue expander device. This is also administered with immediate postoperative oral antimicrobials.
Mino-Wrap Competition The primary competition for Mino-Wrap would be the existing standard of care treatment, which includes a systemic perioperative antimicrobial agent with the perioperative immersion of the implant or irrigation of the surgical pocket with an antimicrobial solution prior to insertion of the tissue expander device.
The 75% interim analysis was completed in June 2021. In July 2021, the Company announced that following an unblinded data review of safety and efficacy, the independent DMC for the trial recommended proceeding with the trial as planned.
In July 2021, the Company announced that following an unblinded data review of safety and efficacy, the independent DMC for the trial recommended proceeding with the trial as planned.
Human donor-derived MSCs are sourced from human bone marrow, adipose tissue, placenta, umbilical tissue, etc. and have significant challenges (e.g., variable donor and tissue sources, limited supply, low potency, inefficient and expensive manufacturing).
We believe them to be differentiated and superior to donor-derived MSCs. Human donor-derived MSCs are sourced from human bone marrow, adipose tissue, placenta, umbilical tissue, etc. and have significant challenges (e.g., variable donor and tissue sources, limited supply, low potency, inefficient and expensive manufacturing).
There were interim analyses at both the 50% and 75% points of the trial as measured by the number of patients treated. As of November 30, 2021, there are 21 active sites currently enrolling patients including such academic centers as MDACC, Henry Ford Health Center, Georgetown University Medical Center, and others. There are two additional medical centers in startup mode.
There were interim analyses at both the 50% and 75% points of the trial as measured by the number of patients treated. As of November 30, 2022, there are 18 active sites in the United States currently enrolling patients including such academic centers as MDACC, Henry Ford Health Center, Georgetown University Medical Center, and others.
In December 2020, the Company announced the receipt of a written response and guidance from the FDA Division of Anti-Infective Products to the Company's Pre-IND consultation request for its Mino-Wrap briefing package.
On August 4, 2020, we announced that we had submitted a briefing package to the FDA for a pre-IND consultation on Mino-Wrap. 12 In December 2020, the Company announced the receipt of a written response and guidance from the FDA Division of Anti-Infective Products to the Company’s Pre-IND consultation request for its Mino-Wrap briefing package.
There are no other remaining sites in feasibility. In September 2019, the Company announced that the FDA agreed to a new primary efficacy endpoint of “time to catheter failure” in comparing Mino-Lok to the antibiotic lock control arm.
In September 2019, the Company announced that the FDA agreed to a new primary efficacy endpoint of “time to catheter failure” in comparing Mino-Lok to the antibiotic lock control arm.
The FDA stated that the review timeline would be determined when the NDA resubmission is received and that it expected all corrections to facility deficiencies to be complete at the time of resubmission so that all corrective actions may be verified during an onsite evaluation of the manufacturing facility in the next review cycle, if the FDA determines it will do an onsite evaluation.
The FDA stated that the review timeline would be determined when the NDA resubmission is received and that it expected all corrections to facility deficiencies to be complete at the time of resubmission so that all corrective actions may be verified during an onsite evaluation of the manufacturing facility in the next review cycle, if the FDA determines it will do an onsite evaluation. 20 On February 28, 2022, CorMedix resubmitted the NDA for DefenCath to address the CRL issued by the FDA.
The Phase 1 study consists of two components: dose finding to establish a maximum tolerated dose (“MTD”) of E7777 in combination with CART-T Therapy, and a small extension component to provide an estimate of efficacy at that MTD.
The Phase 1 study consists of two components: dose finding to establish a maximum tolerated dose (“MTD”) of E7777 in combination with CART-T Therapy, and a small extension component to provide an estimate of efficacy at that MTD. A second Phase 1 Study was initiated in September 2022 at the University of Pittsburg Medical Center, Hillman Cancer Center.
In addition to the safety and dose-ranging information, information was obtained relating to the use of the GSDS as an assessment tool for measuring the effectiveness of the test articles. Individual signs and symptoms were also assessed but can vary from patient to patient.
As part of this Phase 2 trial, information was obtained relating to the use of the GSDS as an assessment tool for measuring the effectiveness of the test articles. Individual signs and symptoms were also assessed but can vary from patient to patient.
We paid a one-time upfront licensing fee upon execution of the agreement. Under the agreement, we are required to use commercially reasonable efforts to commercialize Mino-Wrap under several regulatory scenarios and achieve milestones that are associated with these regulatory options leading to an approval from the FDA.
Under the agreement, we are required to use commercially reasonable efforts to commercialize Mino-Wrap under several regulatory scenarios and achieve milestones that are associated with these regulatory options leading to an approval from the FDA.
The second phase to the pivotal trial was a 70-patient study administered at the 9 mcg/kg/dose rate for 5 consecutive days in 21-day cycles, The inclusion criteria was identical to the lead-in study and the primary objective was to evaluate the ORR. Investigator Initiated Trials A Phase 1 trial has been initiated at the University of Minnesota, Masonic Cancer Center.
The second phase to the pivotal trial was a 70-patient study administered at the 9 mcg/kg/dose rate for 5 consecutive days in 21-day cycles, The inclusion criteria was identical to the lead-in study and the primary objective was to evaluate the ORR.
Brentuximab vedotin, sold under the brand name Adcetris, is an antibody-drug conjugate medication used to treat relapsed or refractory Hodgkin lymphoma and systemic anaplastic large cell lymphoma, a type of T-cell non-Hodgkin lymphoma. It selectively targets tumor cells expressing the CD30 antigen, a defining marker of Hodgkin lymphoma and ALC.
Brentuximab vedotin, sold under the brand name Adcetris, is an antibody-drug conjugate medication used to treat relapsed or refractory Hodgkin lymphoma and systemic anaplastic large cell lymphoma, a type of T-cell non-Hodgkin lymphoma.
In 2014, commercial sales of Ontak were discontinued when the product was voluntarily withdrawn from the market due to manufacturing issues at the contract manufacturer. In 2015, the last patient enrolled exited the lead-in phase of the E7777 U.S. CTCL clinical trial. In March 2016, Dr.
In 2013, the first patient was enrolled into the lead-in phase of the pivotal study for the E7777 U.S. CTCL clinical trial. In 2014, commercial sales of Ontak were discontinued when the product was voluntarily withdrawn from the market due to manufacturing issues at the contract manufacturer.
NoveCite is focused on the development and commercialization of its proprietary mesenchymal stem cells for the treatment of acute respiratory disease syndrome (“ARDS”). On August 23, 2021, we formed Citius Acquisition Corp. as a wholly-owned subsidiary in conjunction with the acquisition of I/ONTAK, but no activity has occurred to date.
NoveCite is focused on the development and commercialization of its proprietary mesenchymal stem cells for the treatment of acute respiratory disease syndrome (“ARDS”). On August 23, 2021, we formed Citius Acquisition Corp. (“Citius Acq.”) as a wholly-owned subsidiary in conjunction with the acquisition of I/ONTAK, which began operations in April 2022.
Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all of the original terms and conditions in the exclusive license agreement. Market Opportunity Globally, there are 3 million cases of ARDS every year, out of which approximately 200,000 cases are in the United States. The COVID-19 pandemic has added significantly to the number of ARDS cases.
Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all of the original terms and conditions in the exclusive license agreement. In October 2022, Brooklyn changed its name to Eterna Therapeutics Inc. Market Opportunity Globally, there are 3 million cases of ARDS every year, out of which approximately 200,000 cases are in the United States.
Employees As of September 30, 2021, we had fifteen employees and various consultants providing support. Through our consulting and collaboration arrangements, and including our Scientific Advisory Board, we have access to more than 30 additional professionals, who possess significant expertise in business development, legal, accounting, regulatory affairs, clinical operations and manufacturing.
Through our consulting and collaboration arrangements, and including our Scientific Advisory Board, we have access to more than 30 additional professionals, who possess significant expertise in business development, legal, accounting, regulatory affairs, clinical operations, and manufacturing. We also rely upon a network of consultants to support our clinical studies and manufacturing efforts.
Due to our limited resources, we may not be able to compete successfully against these organizations, which include many large, well-financed and experienced pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies.
Due to our limited resources, we may not be able to compete successfully against these organizations, which include many large, well-financed and experienced pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies. I/ONTAK Competition The following products are approved for the systemic treatment of advanced CTCL.
We also learned about the factors that drive patients to seek medical attention for hemorrhoids in an effort to understand the disease impact on quality of life. The results of this survey are able to help us develop patient reported outcome evaluation tools.
We also learned about the factors that drive patients to seek medical attention for hemorrhoids in an effort to understand the disease impact on quality of life. The results of this survey, along with the information from the Phase 2b trial, allowed us to develop our patient reported outcome evaluation tool, ePro.
During the term of the license agreement, each party is prohibited from soliciting any employee of the other party, subject to certain exceptions. In July 2021, Novellus was acquired by Brooklyn.
During the term of the license agreement, each party is prohibited from soliciting any employee of the other party, subject to certain exceptions. In July 2021, Novellus was acquired by Brooklyn. Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all of its original terms and conditions.
This study is a single-arm non-randomized trial which has an estimated enrollment of 30 participants who will be administered E7777 prior to tisagenlecleucel Chimeric Antigen Receptor, (“CAR-T”) therapy.
A Phase 1 trial was initiated in June 2021 at the University of Minnesota, Masonic Cancer Center. This study is a single-arm non-randomized trial which has an estimated enrollment of 30 participants who will be administered E7777 prior to tisagenlecleucel Chimeric Antigen Receptor, (“CAR-T”) therapy.
NC-iMSCs overcome these challenges because they: ● Are more potent and secrete exponentially higher levels of immunomodulatory proteins; ● Have practically unlimited supply for high doses and repeat doses; ● Are from a single donor and clonal so they are economically produced at scale with consistent quality and potency, as well as being footprint free (compared to viral reprogramming methods); and ● Have a significantly higher expansion capability. 11 Several cell therapy companies using donor-derived MSC therapies in treating ARDS have demonstrated that MSCs reduce inflammation, enhance clearance of pathogens and stimulate tissue repair in the lungs.
NC-iMSCs overcome these challenges because they: ● Are more potent and secrete exponentially higher levels of immunomodulatory proteins; ● Have practically unlimited supply for high doses and repeat doses; ● Are from a single donor and clonal so they are economically produced at scale with consistent quality and potency, as well as being footprint free (compared to viral reprogramming methods); and ● Have a significantly higher expansion capability.
Mino-Lok ® Overview Mino-Lok is a patented solution containing minocycline, disodium ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which act synergistically to treat and salvage infected central venous catheters (“CVCs”) in patients with catheter related bloodstream infections (“CRBSIs”).
Mino-Lok ® Overview Mino-Lok is a patented solution containing minocycline, disodium ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which act synergistically to treat and salvage infected central venous catheters (“CVCs”) in patients with catheter related bloodstream infections (“CRBSIs”). Mino-Lok breaks down biofilm barriers formed by bacterial colonies, eradicates the bacteria, and provides anti-clotting properties to maintain patency in CVCs.
Romidepsin sold under the brand name Istodax, is a histone deacetylase (“HDAC”) inhibitor indicated for the treatment of CTCL in adult patients who have received at least one prior systemic therapy.
It selectively targets tumor cells expressing the CD30 antigen, a defining marker of Hodgkin lymphoma and ALC. 19 Romidepsin sold under the brand name Istodax, is a histone deacetylase (“HDAC”) inhibitor indicated for the treatment of CTCL in adult patients who have received at least one prior systemic therapy.
There are limitations in these targeted therapies, which often are discontinued due to toxicity and adverse events as well as a limited duration of response due to resistance over time. Supply and Manufacturing We do not currently have and we do not intend to set up our own manufacturing facilities.
There are limitations in these targeted therapies, which often are discontinued due to toxicity and adverse events as well as a limited duration of response due to resistance over time.
Specifically, we are seeking to develop and commercialize the NoveCite mesenchymal stem cells (“NC- i MSCs”) to treat acute respiratory conditions with a near term focus on ARDS. NC- i MSCs are the next generation mesenchymal stem cell therapy. We believe them to be differentiated and superior to donor-derived MSCs.
Under this worldwide exclusive license, we are focused on developing cellular therapies. Specifically, we are seeking to develop and commercialize the NoveCite mesenchymal stem cells (“NC- i MSCs”) to treat acute respiratory conditions with a near term focus on ARDS. 13 NC- i MSCs are the next generation mesenchymal stem cell therapy.
After locking the catheter for two hours, the Mino-Lok solution is aspirated, and the catheter is flushed with normal saline. At that time, either the infusion will be continued, or will be locked with the standard-of-care lock solution until further use of the catheter is required.
At that time, either the infusion will be continued, or will be locked with the standard-of-care lock solution until further use of the catheter is required.
Most were also concerned that viable venous access may not be available in patients who were vitally dependent on a central line. 7 Mino-Wrap Overview On January 2, 2019, we entered into a patent and technology license agreement with the Board of Regents of the University of Texas System on behalf of MDACC, whereby we in-licensed exclusive worldwide rights to the patented technology for any and all uses relating to breast implants, specifically the Mino-Wrap technology.
Mino-Wrap Overview On January 2, 2019, we entered into a patent and technology license agreement with the Board of Regents of the University of Texas System on behalf of MDACC, whereby we in-licensed exclusive worldwide rights to the patented technology for any and all uses relating to breast implants, specifically the Mino-Wrap technology. This includes rights to U.S.
The available results of NC-iMSC therapy in the study show improvement in critical parameters, such as improved oxygenation, less systemic shock, and reduced lung injury, compared to the control group. The study was conducted in a widely accepted large animal model.
In December 2020, the Company announced interim data from a proof-of-concept (“POC”) large animal study of its proprietary NC-iMSC therapy. The available results of NC-iMSC therapy in the study show improvement in critical parameters, such as improved oxygenation, less systemic shock, and reduced lung injury, compared to the control group.
The efficacy of Mino-Lok therapy was 100% in salvaging CVCs, demonstrating equal effectiveness to removing the infected CVC and replacing it with a new catheter.
The patients were matched for cancer type, infecting organism, and level of neutropenia. All patients were cancer patients and treated at MDACC. The efficacy of Mino-Lok therapy was 100% in salvaging CVCs, demonstrating equal effectiveness to removing the infected CVC and replacing it with a new catheter.
In July 2019, we announced that we intend to pursue the FDA’s Investigational New Drug (“IND”) regulatory pathway for the development of Mino-Wrap. On August 4, 2020, we announced that we had submitted a briefing package to the FDA for a pre-IND consultation on Mino-Wrap.
In July 2019, we announced that we intend to pursue the FDA’s Investigational New Drug (“IND”) regulatory pathway for the development of Mino-Wrap.
Reddy’s Laboratories (“DRL”) acquired the global rights to E7777 from Eisai, other than far east countries, with Eisai retaining the rights in those countries. In June 2016, the first patient was enrolled in the Phase 3 pivotal study for E7777 CTCL in the U.S.
In 2015, the last patient enrolled exited the lead-in phase of the E7777 U.S. CTCL clinical trial. In March 2016, Dr. Reddy’s Laboratories (“DRL”) acquired the global rights to E7777 from Eisai, other than far east countries, with Eisai retaining the rights in those countries.
NoveCite also must pay on a fiscal quarter basis a royalty equal to low double-digit percentages of net sales, commencing upon the first commercial sale of a licensed product.
NoveCite is obligated to pay Licensor up to an aggregate of $51,000,000 in milestone payments upon the achievement of various regulatory and developmental milestones. NoveCite also must pay on a fiscal quarter basis a royalty equal to low double-digit percentages of net sales, commencing upon the first commercial sale of a licensed product.
The term of the license agreement will end on the later of the expiration of all licensed patents, or the fifteenth anniversary of the agreement. MDACC may terminate the license agreement at any time after four years in any country if we have not commercialized or are not actively attempting to commercialize a product in such country.
MDACC may terminate the license agreement at any time after four years in any country if we have not commercialized or are not actively attempting to commercialize a product in such country. The license agreement will terminate in the event we breach any of our payment or reporting obligations or MDACC breaches any of its obligations under the agreement.
In September 2020, the Company announced that the three registration batches for all components of Mino Lok were manufactured and that clinical sites were resupplied with registration product. In November 2020, the Company announced that the three components of Mino-Lok, minocycline, disodium edetate (“EDTA”), and ethanol, were superior to EDTA and ethanol in their ability to eradicate resistant staphylococcal biofilms.
In November 2020, the Company announced that the three components of Mino-Lok, minocycline, disodium edetate (“EDTA”), and ethanol, were superior to EDTA and ethanol in their ability to eradicate resistant staphylococcal biofilms. The 65% interim analysis was completed in June 2021.
The active arm, which is the Mino-Lok treated group of patients, was then compared to 60 patients in a matched cohort that experienced removal and replacement of their CVCs within the same contemporaneous timeframe. The patients were matched for cancer type, infecting organism, and level of neutropenia. All patients were cancer patients and treated at MDACC.
None of the patients experienced any serious adverse event related to the lock therapy. 5 The active arm, which is the Mino-Lok treated group of patients, was then compared to 60 patients in a matched cohort that experienced removal and replacement of their CVCs within the same contemporaneous timeframe.
The QIDP designation provides New Drug Applications an additional five years of market exclusivity, which together with the potential three years of exclusivity for the new strength and formulation of Mino-Lok, would result in a combined total of eight years of market exclusivity regardless of patent protection. 14 Mino-Wrap Intellectual Property In January 2019, we entered into a patent and technology license agreement with MDACC to develop and commercialize Mino-Wrap on an exclusive worldwide basis, with no rights to sub-license.
The QIDP designation provides New Drug Applications an additional five years of market exclusivity, which together with the potential three years of exclusivity for the new strength and formulation of Mino-Lok, would result in a combined total of eight years of market exclusivity regardless of patent protection.
The scientists and technologists at MDACC have developed a biodegradable covering for a medical implant comprising a highly plasticized gelatin and at least one drug to reduce infection. Citius holds the exclusive worldwide license, which provides access to this patented technology for development and commercialization of Mino-Wrap.
The scientists and technologists at MDACC have developed a biodegradable covering for a medical implant comprising a highly plasticized gelatin and at least one drug to reduce infection.
If we elect to conduct product development and manufacturing, we will be subject to regulation under various federal and state laws, including the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, the Controlled Substances Act and other present and potential future federal, state or local regulations.
Substantially all such materials are obtainable from a number of sources so that the loss of any one source of supply would not have a material adverse effect on us. 22 If we elect to conduct product development and manufacturing, we will be subject to regulation under various federal and state laws, including the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, the Controlled Substances Act and other present and potential future federal, state or local regulations.
Satisfactory resolution of these issues is required for FDA approval of the DefenCath NDA. 17 B-Lock™ (Great Lakes Pharmaceuticals, Inc.) B-Lock is a triple combination of trimethoprim, EDTA and ethanol from Great Lakes Pharmaceuticals, Inc. (“GLP”). On July 24, 2012, GLP announced the initiation of a clinical study of B-Lock.
B-Lock™ (Great Lakes Pharmaceuticals, Inc.) B-Lock is a triple combination of trimethoprim, EDTA and ethanol from Great Lakes Pharmaceuticals, Inc. (“GLP”). On July 24, 2012, GLP announced the initiation of a clinical study of B-Lock. We are unaware as to the progress or results of these studies.
We anticipate filing an IND in December 2021 and beginning a Phase 2b clinical study by March 2022. 10 Market Opportunity The current market for OTC and topical prescription (“Rx”) products for the symptomatic treatment of hemorrhoids is highly fragmented, and includes approximately 20 million units of OTC and over 4 million prescriptions.
Market Opportunity The current market for OTC and topical prescription (“Rx”) products for the symptomatic treatment of hemorrhoids is highly fragmented and includes approximately 20 million units of OTC and over 4 million prescriptions.
We may terminate the license agreement upon 180 days’ notice. The license agreement may also be terminated upon our and MDACC’s mutual consent. In December 2017, the USPTO issued U.S.
MDACC will have the right to terminate the agreement if we bring or participate in an action to challenge MDACC’s ownership of any of the licensed patent rights. We may terminate the license agreement upon 180 days’ notice. The license agreement may also be terminated upon our and MDACC’s mutual consent. In December 2017, the USPTO issued U.S.
The catheter is then “locked”, meaning that the solution remains in the catheter without flowing into the vein. The lock is maintained for a dwell-time of two hours while the catheter is not in use. If the catheter has multiple lumens, all lumens may be locked with the Mino-Lok solution either simultaneously or sequentially.
The administration of Mino-Lok consists of filling the lumen of the catheter with 0.8 ml to 2.0 ml of Mino-Lok solution. The catheter is then “locked”, meaning that the solution remains in the catheter without flowing into the vein. The lock is maintained for a dwell-time of two hours while the catheter is not in use.
Additionally, NoveCite shall (i) on or before the five-year anniversary of the date of the license agreement, file an IND for a licensed product in the field of acute pneumonitis treatment and (ii) receive regulatory approval for a licensed product in the field of acute pneumonitis treatment in the United States or in a major market country on or before the ten-year anniversary of the date of the license agreement.
Additionally, NoveCite shall (i) on or before the five-year anniversary of the date of the license agreement, file an IND for a licensed product in the field of acute pneumonitis treatment and (ii) receive regulatory approval for a licensed product in the field of acute pneumonitis treatment in the United States or in a major market country on or before the ten-year anniversary of the date of the license agreement. 18 Pursuant to the terms of the license agreement, NoveCite has been granted a right of first negotiation to exclusively license the rights to any new products developed or acquired by Licensor which cannot include MSC’s, that may be used within the field of acute pneumonitis treatment.
Of those, the Company further estimates that there are 10,000 patients with relapsed or refractory CTCL that require systemic therapy. The Company also estimates that the addressable U.S. market is approximately $300,000,000 for patients with advanced stage relapsed or refractory CTCL.
The Company estimates that there are 30,000 – 40,000 patients living with CTCL in the U.S. with approximately 16,000 – 20,000 having mycosis fungoides. Of those, the Company further estimates that there are 10,000 patients with relapsed or refractory CTCL that require systemic therapy.
In addition, the TE is removed, leading to a delay of lifesaving chemo-radiation therapy, and a more complex reconstruction in the future. 8 Currently, preventive measures are used to decrease the rate of TE infections with include a systemic perioperative antimicrobial agent with the perioperative immersion of the implant or irrigation of the surgical pocket with an antimicrobial solution prior to insertion of the device.
Currently, preventive measures are used to decrease the rate of TE infections, which include a systemic perioperative antimicrobial agent with the perioperative immersion of the implant or irrigation of the surgical pocket with an antimicrobial solution prior to insertion of the device. This is also administered with immediate postoperative oral antimicrobials.
He previously served as a Director of Citius since October 2015 and was the founder and Chief Executive Officer and President of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius, from March 2013 until March 2016. 20 Leonard Mazur , Executive Chairman and Secretary – Mr. Mazur, 76, has been a member of the Board since September 2014. Mr.
Executive Officers of Citius Leonard Mazur , Chief Executive Officer, Chairman and Secretary – Mr. Mazur, 77, was appointed Chief Executive Officer effective May 1, 2022, and has been a member of the Board since September 2014. Mr. Mazur previously served as Chief Executive Officer, President, and Chief Operating Officer from September 2014 until March 2016.
In March 2020, Eisai filed an NDA for E7777 in Japan for both CTCL and PTCL and in March 2021 received approvals in both CTCL and PTCL.
In June 2016, the first patient was enrolled in the Phase 3 pivotal study for E7777 CTCL in the U.S. In March 2020, Eisai filed an NDA for E7777 in Japan for both CTCL and PTCL and in March 2021 received approvals in both CTCL and PTCL.
Market Opportunity CTCL’s are a heterogeneous subset of extranodal non-Hodgkin lymphomas (“NHL”) of mature, skin-homing T-cells that are mainly localized to the skin. The most common types of CTCL are mycosis fungoides (“MF”) and primary cutaneous CD30+ anaplastic large cell lymphoma (pcALCL), jointly representing an estimated 80–85% of all CTCL.
The most common types of CTCL are mycosis fungoides (“MF”) and primary cutaneous CD30+ anaplastic large cell lymphoma (pcALCL), jointly representing an estimated 80–85% of all CTCL.
A second Phase 1 Study is planned to be initiated by March 2022 at the University of Pittsburg Medical Center, Hillman Cancer Center. This study will be investigating the safety and efficacy of a combined regimen of pembrolizumab with T-regulatory cell depletion and E7777 in patients diagnosed with recurrent or metastatic solid tumors in the second line setting.
This study will be investigating the safety and efficacy of a combined regimen of pembrolizumab with T-regulatory cell depletion and E7777 in patients diagnosed with recurrent or metastatic solid tumors in the second line setting. 3 Regulatory Development In the 1990’s, denileukin diftitox was developed at Boston University and the National Cancer Institute (“NCI”) in collaboration with Seragen, Inc.
The ability to be labeled without restrictions with respect to catheter type would allow Mino-Lok unrestricted access to the full U.S. and world markets for an effective antibiotic lock therapy for central line associated blood stream infections (“CLABSIs”). 5 In September 2020, we announced that another DMC meeting was held to review the data being generated and analyzed in the Mino-Lok Phase 3 trial based on progress to date, and to make recommendations to us as to any action that may be necessary regarding the study.
In September 2020, we announced that another DMC meeting was held to review the data being generated and analyzed in the Mino-Lok Phase 3 trial based on progress to date, and to make recommendations to us as to any action that may be necessary regarding the study.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Any or all of these events could increase our operating expenses and the length of time to complete the trial and have a material adverse effect on our financial results.
Any or all of these events could increase our operating expenses and the length of time to complete a trial and have a material adverse effect on our financial results.
In the event that NoveCite issues additional equity securities in the future this would likely reduce our percentage ownership, unless we were to increase our investment, which would further reduce the portion of any benefit that might be derived from the NoveCite drug candidate’s successful development.
In the event that NoveCite issues additional equity securities in the future this would likely reduce our percentage ownership, which would further reduce the portion of any benefit that might be derived from the NoveCite drug candidate’s successful development, unless we were to increase our investment.
In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our product candidates after receipt of FDA approval, if any; ● Our third-party manufacturers might be unable to formulate and manufacture our product candidates in the volume and of the quality required to meet our clinical and commercial needs, if any; ● Our contract manufacturers might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our product candidates for commercialization; ● Currently, our contract manufacturer for our clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions and adds the risk of political and environmental uncertainties that might affect those countries; ● Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.
In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our product candidates after receipt of FDA approval, if any; ● Our third-party manufacturers might be unable to formulate and manufacture our product candidates in the volume and of the quality required to meet our clinical and commercial needs, if any; ● Our contract manufacturers might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our product candidates for commercialization; ● Currently, the contract manufacturer for our clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions, and adds the risk of political and environmental uncertainties that might affect those countries; ● Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.
If we or any of our current or future collaborators fail to renew or terminate any of our collaboration agreements or if either party fails to satisfy its obligations under any of our collaboration or license agreements or complete them in a timely manner, we could have difficulty completing the development of any of our product candidates and potentially lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition as well as volatility in any future revenue.
If we or any of our current or future collaborators fail to renew or terminate any of our collaboration or license agreements or if either party fails to satisfy its obligations under any of our collaboration or license agreements or complete them in a timely manner, we could have difficulty completing the development of any of our product candidates and potentially lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition as well as volatility in any future revenue.
Our President and Chief Executive Officer, Myron Holubiak, our Executive Chairman, Leonard Mazur, and our Chief Medical Officer and Executive Vice President, Myron Czuczman, in particular have significant experience in the running of pharmaceutical companies and/or drug development itself.
Our Chief Executive Officer, Leonard Mazur, our Vice Chairman, Myron Holubiak, and our Chief Medical Officer and Executive Vice President, Myron Czuczman, in particular have significant experience in the running of pharmaceutical companies and/or drug development itself.
The loss of the services of any of Mr. Holubiak, Mr. Mazur, Dr. Czuczman or Dr. Angel, as well as any other member of our executive management or any key employees, including those at NoveCite, could harm our ability to attract capital and develop and commercialize our product candidates.
The loss of the services of any of Mr. Mazur, Mr. Holubiak, Dr. Czuczman or Dr. Angel, as well as any other member of our executive management or any key employees, including those at NoveCite, could harm our ability to attract capital and develop and commercialize our product candidates.
Depending on decisions by the United States Congress, the U.S. federal courts, the USPTO or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’ abilities to obtain new patents or to enforce existing patents we and our licensors or partners may obtain in the future.
Depending on decisions by the United States Congress, the U.S. federal courts, the USPTO or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’ abilities to obtain new patents or to enforce existing patents that we and our licensors or partners may obtain in the future.
Our ability to successfully commercialize any of our product candidates will depend, among other things, on our ability to: ● successfully complete pre-clinical and clinical trials for our product candidates; ● receive marketing approvals from the FDA and similar foreign regulatory authorities for our product candidates; ● establish commercial manufacturing arrangements with third-party manufacturers for our product candidates; ● produce, through a validated process, sufficiently large quantities of our drug compound(s) to permit successful commercialization of our product candidates; ● build and maintain strong sales, distribution and marketing capabilities sufficient to launch commercial sales of any approved products or establish collaborations with third parties for such commercialization; ● secure acceptance of any approved products from physicians, health care payers, patients and the medical community; and ● manage our spending as costs and expenses increase due to clinical trials, regulatory applications and development and commercialization activities.
Our ability to successfully commercialize any of our product candidates will depend, among other things, on our ability to: ● successfully complete pre-clinical and clinical trials for our product candidates; ● receive marketing approvals from the FDA and similar foreign regulatory authorities for our product candidates; ● establish commercial manufacturing arrangements with third-party manufacturers for our product candidates; ● produce, through a validated process, sufficiently large quantities of our drug compound(s) to permit successful commercialization of our product candidates; 26 ● build and maintain strong sales, distribution, and marketing capabilities sufficient to launch commercial sales of any approved products or establish collaborations with third parties for such commercialization; ● secure acceptance of any approved products from physicians, health care payers, patients, and the medical community; and ● manage our spending as costs and expenses increase due to clinical trials, regulatory applications and development and commercialization activities.
We do not have control over third-party manufacturers’ compliance with these regulations and standards; ● If any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we might not own, or might have to share, the intellectual property rights to the innovation with our licensors; ● Operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including a bankruptcy of the manufacturer or supplier or a natural disaster or a pandemic such as COVID-19; and ● We might compete with other companies for access to these manufacturers’ facilities and might be subject to manufacturing delays if the manufacturers give other clients higher priority than us.
We do not have control over third-party manufacturers’ compliance with these regulations and standards; 36 ● If any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we might not own, or might have to share, the intellectual property rights to the innovation with our licensors; ● Operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including a bankruptcy of the manufacturer or supplier or a natural disaster or a pandemic such as COVID-19; and ● We might compete with other companies for access to these manufacturers’ facilities and might be subject to manufacturing delays if the manufacturers give other clients higher priority than us.
The FDA may withdraw fast track designation from Mino-Lok or any other product candidate to be so designated if it believes that the designation is no longer supported by data from our clinical development program. 27 We do not own NoveCite, Inc. outright and will share any benefits from the development of its NoveCite product candidate with the other stockholder.
The FDA may withdraw fast track designation from Mino-Lok or any other product candidate to be so designated if it believes that the designation is no longer supported by data from our clinical development program. We do not own NoveCite, Inc. outright and will share any benefits from the development of its NoveCite product candidate with the other stockholder.
Delays in obtaining regulatory approvals might: ● delay commercialization of, and our ability to derive product revenues from, our product candidates; ● impose costly procedures on us; and ● diminish any competitive advantages that we might otherwise enjoy. 36 Even if we comply with all FDA requests, the FDA might ultimately reject one or more of our NDAs or BLAs.
Delays in obtaining regulatory approvals might: ● delay commercialization of, and our ability to derive product revenues from, our product candidates; ● impose costly procedures on us; and ● diminish any competitive advantages that we might otherwise enjoy. Even if we comply with all FDA requests, the FDA might ultimately reject one or more of our NDAs or BLAs.
Even if a claim is not successful, defending such a claim would be time consuming and expensive, may damage that product’s and our reputations in the marketplace, and would likely divert management’s attention, any of which could have a material adverse effect on our Company. Risks Related to Our Intellectual Property Our business depends on protecting our intellectual property.
Even if a claim is not successful, defending such a claim would be time consuming and expensive, may damage that product’s and our reputations in the marketplace, and would likely divert management’s attention, any of which could have a material adverse effect on our Company. 41 Risks Related to Our Intellectual Property Our business depends on protecting our intellectual property.
Delays or unexpected costs in obtaining, or the failure to obtain, the regulatory approval necessary to bring the NoveCite product candidate to market could impair NoveCite’s and our ability to generate sufficient product revenues to maintain our respective businesses. NoveCite has assumed that the biological capabilities of iPSCs and adult-donor derived cells are likely to be comparable.
Delays or unexpected costs in obtaining, or the failure to obtain, the regulatory approval necessary to bring the NoveCite product candidate to market could impair NoveCite’s and our ability to generate sufficient product revenues to maintain our respective businesses. 32 NoveCite has assumed that the biological capabilities of iPSCs and adult-donor derived cells are likely to be comparable.
However, due to the specific requirements for obtaining these extensions, there is no assurance that our patents will be granted extensions even if we encounter significant delays in patent office proceedings or marketing and regulatory approval. 38 Additionally, patent law is subject to change and varies among the U.S. and foreign countries.
However, due to the specific requirements for obtaining these extensions, there is no assurance that our patents will be granted extensions even if we encounter significant delays in patent office proceedings or marketing and regulatory approval. Additionally, patent law is subject to change and varies among the U.S. and foreign countries.
From our market analysis and discussions with a limited number of physicians, we know that patients sometimes obtain two separate cream products and co-administer them as prescribed, giving them a combination treatment which could be very similar to what we intend to study and seek approval for.
From our market analysis and discussions with a limited number of physicians, we know that patients sometimes obtain two separate cream products and co-administer them as prescribed, giving them a combination treatment that could be very similar to what we intend to study and seek approval for.
Should the licensor under any of our license agreements exercise such a termination right, we would lose our right to the intellectual property under the respective license agreement, which loss may materially harm our business. 33 Any termination, or breach by, or conflict with our strategic partners could harm our business .
Should the licensor under any of our license agreements exercise such a termination right, we would lose our right to the intellectual property under the respective license agreement, which loss may materially harm our business. Any termination, or breach by, or conflict with our strategic partners could harm our business .
If we are not able to maintain regulatory compliance, we might not be permitted to market any future approved products and our business could suffer. 37 We could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful.
If we are not able to maintain regulatory compliance, we might not be permitted to market any future approved products and our business could suffer. We could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful.
Any such modifications or changes could delay or prevent NoveCite’s ability to develop, manufacture, obtain regulatory approval or commercialize its NoveCite product candidate, which would adversely affect NoveCite’s and our business, financial condition and results of operations.
Any such modifications or changes could delay or prevent NoveCite’s ability to develop, manufacture, obtain regulatory approval for or commercialize its NoveCite product candidate, which would adversely affect NoveCite’s and our business, financial condition and results of operations.
We are and will be dependent on third-party research organizations to conduct all of our clinical trials with respect to our product candidates, including any candidates that we may develop in the future.
We are and will be dependent on third-party contract research organizations to conduct all of our clinical trials. We are and will be dependent on third-party research organizations to conduct all of our clinical trials with respect to our product candidates, including any candidates that we may develop in the future.
We have twice failed to meet the listing standards between October 2019 and January 2020 and between April 2020 and July 2020 because the closing bid price for our common stock has fallen below $1.00 per share for 30 consecutive business days, as a result of which we did not comply with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market under Rule 5550(a)(2) of the Nasdaq Listing Rules.
We have twice failed to meet the listing standards, between October 2019 and January 2020 and between April 2020 and July 2020, because the closing bid price for our common stock had fallen below $1.00 per share for 30 consecutive business days, as a result of which we did not comply with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market under Rule 5550(a)(2) of the Nasdaq Listing Rules.
However, the Company’s continued operations beyond March 2023, including its development plans for Mino-Lok, Mino-Wrap, Halo-Lido, Novecite and I/ONTAK, will depend on its ability to obtain regulatory approval to market Mino-Lok and generate substantial revenue from the sale of Mino-Lok and on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing of its product candidates.
However, the Company’s continued operations beyond December 2023, including its development plans for I/ONTAK, Mino-Lok, Halo-Lido, Mino-Wrap and NoveCite, will depend on its ability to obtain regulatory approval to market I/ONTAK and/or Mino-Lok and generate substantial revenue from the sale of I/ONTAK and/or Mino-Lok and on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing of its product candidates.
If our common stock were delisted and determined to be a “penny stock,” a broker-dealer may find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock on the secondary market. 40 You may experience dilution of your ownership interests because of the future issuance of additional shares of our common stock or securities convertible into common stock.
If our common stock were delisted and determined to be a “penny stock,” a broker-dealer may find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock on the secondary market. 44 You may experience dilution of your ownership interests because of the future issuance of additional shares of our common stock or securities convertible into common stock.
Our success will depend upon our ability to develop such capabilities on our own or to enter into collaboration agreements on favorable terms and to select an appropriate commercialization strategy for each product candidate that we choose to pursue and that receive approval, whether on our own or in collaboration.
Our success will depend upon our ability to develop such capabilities on our own or to enter into collaboration agreements on favorable terms and to select an appropriate commercialization strategy for each product candidate that we choose to pursue and that receives approval, whether on our own or in collaboration.
As of November 30, 2021, we owned 75% of the outstanding common stock of NoveCite. As a result, we will only be entitled to a portion of any benefits that flow from the development by NoveCite of its NoveCite product candidate or any other product candidates that it might develop.
As of November 30, 2022, we owned 75% of the outstanding common stock of NoveCite. As a result, we will only be entitled to a portion of any benefits that flow from the development by NoveCite of its NoveCite product candidate or any other product candidates that it might develop.
In addition, because NoveCite’s iPSC-derived cell product candidate is in the pre-clinical stage, NoveCite is currently assessing safety in humans and have not yet been able to assess the long-term effects of treatment.
In addition, because NoveCite’s iPSC-derived cell product candidate is in the pre-clinical stage, NoveCite is currently assessing safety in humans and has not yet been able to assess the long-term effects of treatment.
Neither we nor NoveCite has key man life insurance policies. 34 If we are unable to retain or hire additional qualified personnel, our ability to grow our business might be harmed.
Neither we nor NoveCite has key man life insurance policies. 37 If we are unable to retain or hire additional qualified personnel, our ability to grow our business might be harmed.
We expect to need to increase the size of our organization to further develop our product candidates, and we may experience difficulties in managing growth. We will need to manage our anticipated growth and increased operational activity, including as a result of the in-licensing of I/ONTAK in September 2021.
We expect to need to increase the size of our organization to further develop our product candidates, and we may experience difficulties in managing growth. We will need to manage our anticipated growth and increased operational activity, including as a result of the in-licensing of I/ONTAK in September 2021 and the continuing development of I/ONTAK and our other product candidates.
We believe that the degree of market acceptance and our ability to generate revenues from any approved product candidate or acquired approved product will depend on a number of factors, including: ● prevalence and severity of any side effects; ● results of any post-approval studies of the product; ● potential or perceived advantages or disadvantages over alternative treatments; ● availability of coverage and reimbursement from government and other third-party payers; 29 ● the willingness of patients to pay out of pocket in the absence of government or third-party coverage; ● the relative convenience and ease of administration and dosing schedule; ● product labeling or product insert requirements of the FDA or other regulatory authorities; ● strength of sales, marketing and distribution support; ● price of any future products, if approved, both in absolute terms and relative to alternative treatments; ● the effectiveness of our or any future collaborators’ sales and marketing strategies; ● the effect of current and future healthcare laws on any approved products; ● patient access programs that require patients to provide certain information prior to receiving new and refill prescriptions; and ● requirements for prescribing physicians to complete certain educational programs for prescribing drugs.
We believe that the degree of market acceptance and our ability to generate revenues from any approved product candidate or acquired approved product will depend on a number of factors, including: ● prevalence and severity of any side effects; ● results of any post-approval studies of the product; ● potential or perceived advantages or disadvantages over alternative treatments; ● availability of coverage and reimbursement from government and other third-party payers; ● the willingness of patients to pay out of pocket in the absence of government or third-party coverage; ● the relative convenience and ease of administration and dosing schedule; ● product labeling or product insert requirements of the FDA or other regulatory authorities; ● strength of sales, marketing and distribution support; ● price of any future products, if approved, both in absolute terms and relative to alternative treatments; ● the effectiveness of our or any future collaborators’ sales and marketing strategies; ● the effect of current and future healthcare laws on any approved products; ● patient access programs that require patients to provide certain information prior to receiving new and refill prescriptions; and ● requirements for prescribing physicians to complete certain educational programs for prescribing drugs. 33 If approved, any product candidate may fail to achieve market acceptance or generate significant revenue to achieve or sustain profitability.
For example, the FDA: ● could determine that we cannot rely on Section 505(b)(2) for Mino-Lok or Halo-Lido or any future product candidate whose composition includes components previously approved by the FDA; ● could determine that the information provided by us was inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness of any of our product candidates for any indication; ● may not find the data from clinical trials sufficient to support the submission of an NDA or BLA or to obtain marketing approval in the United States, including any findings that the clinical and other benefits of our product candidates outweigh their safety risks; ● may disagree with our trial design or our interpretation of data from preclinical studies or clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our trials; ● may determine that we have identified the wrong reference listed drug or drugs or that approval of a Section 505(b)(2) application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs; ● may identify deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for the manufacture of our product candidates; ● may approve our product candidates for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical trials; ● may change its approval policies or adopt new regulations that could adversely impact our product candidate development programs; or ● may not approve the labeling claims that we believe are necessary or desirable for the successful commercialization of our product candidates, or may require labeling claims that impair the potential market acceptance of our product candidates.
For example, the FDA: ● may not find the data from clinical trials, including from our Phase 3 trial for I/ONTAK, sufficient to support the submission of an NDA or BLA or to obtain marketing approval in the United States, including any findings that the clinical and other benefits of our product candidates outweigh their safety risks; ● could determine that the information provided by us was inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness of any of our product candidates for any indication; ● may disagree with our trial design or our interpretation of data from preclinical studies or clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our trials; ● could determine that we cannot rely on Section 505(b)(2) for Mino-Lok or Halo-Lido or any future product candidate whose composition includes components previously approved by the FDA; ● may determine that we have identified the wrong reference listed drug or drugs or that approval of a Section 505(b)(2) application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs; ● may identify deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for the manufacture of our product candidates; ● may approve our product candidates for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical trials; ● may change its approval policies or adopt new regulations that could adversely impact our product candidate development programs; or ● may not approve the labeling claims that we believe are necessary or desirable for the successful commercialization of our product candidates, or may require labeling claims that impair the potential market acceptance of our product candidates. 28 These same risks are generally applicable to the regulatory process in foreign countries.
If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for any of our product candidates.
If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for any of our product candidates. 35 We rely exclusively on third parties to formulate and manufacture our product candidates.
However, the Company can provide no assurances on the approval, commercialization or future sales of Mino-Lok or that financing or strategic relationships will be available on acceptable terms, or at all.
However, the Company can provide no assurances on the approval, commercialization, or future sales of I/ONTAK and/or Mino-Lok or that financing or strategic relationships will be available on acceptable terms, or at all.
This same risk would apply to any other license into which we enter if the licensor receives government funding for the product candidate that is the subject of the license. 39 Risks Related to Our Securities If we fail to meet the continued listing requirements of Nasdaq it could result in a delisting of our common stock and certain warrants.
This same risk would apply to any other license into which we enter if the licensor receives government funding for the product candidate that is the subject of the license. 43 Risks Related to Our Securities If we fail to meet the continued listing requirements of Nasdaq it could result in a delisting of our common stock.
The continued spread of COVID-19 also could adversely impact our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, which could further negatively impact the Mino-Lok trial.
The continued spread of COVID-19 also could adversely impact our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, which could further negatively impact the Mino-Lok and Halo-Lido trials.
In addition, if the FDA elects to delay face-to-face meetings for an extended period of time due to COVID-19, it could have a material adverse effect on our Mino-Lok trial and our other product candidates.
In addition, if the FDA elects to delay face-to-face meetings for an extended period of time due to COVID-19, it could have a material adverse effect on our Mino-Lok and Halo-Lido trials and our other product candidates.
Manufacturers of pharmaceutical products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP regulations, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation. Similar regulatory programs exist in foreign jurisdictions.
Similar risks apply in foreign jurisdictions. 40 Manufacturers of pharmaceutical products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP regulations, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation.
We are a clinical stage company and our success is dependent upon our ability to obtain regulatory approval for and commercialize our product candidates and we, as a company, have not demonstrated an ability to perform the functions necessary for the approval or successful commercialization of any product candidates.
As a result, our success is dependent upon our ability to obtain regulatory approval for and commercialize our product candidates and we, as a company, have not demonstrated an ability to perform the functions necessary for the approval or successful commercialization of any product candidates.
We rely exclusively on third parties to formulate and manufacture our product candidates. We do not have and do not intend to establish our own manufacturing facilities. Consequently, we lack the physical plant to formulate and manufacture our product candidates, which are currently being manufactured entirely by commercial third-party manufacturers.
We do not have and do not intend to establish our own manufacturing facilities. Consequently, we lack the physical plant to formulate and manufacture our product candidates, which are currently being manufactured entirely by commercial third-party manufacturers.
Further, regulatory agencies must approve these manufacturing facilities before they can be used to manufacture our future approved products, if any, and these facilities are subject to ongoing regulatory inspections. In addition, regulatory agencies subject a pharmaceutical product, its manufacturer and the manufacturer’s facilities to continual review and inspections.
Similar regulatory programs exist in foreign jurisdictions. Further, regulatory agencies must approve these manufacturing facilities before they can be used to manufacture our future approved products, if any, and these facilities are subject to ongoing regulatory inspections. In addition, regulatory agencies subject a pharmaceutical product, its manufacturer and the manufacturer’s facilities to continual review and inspections.
We will need FDA approval to commercialize our product candidates in the U.S. In order to obtain FDA approval of any product candidate, we must submit to the FDA an NDA or a BLA demonstrating that the product candidate is safe for humans and effective for its intended use. This demonstration requires significant research, pre-clinical studies, and clinical trials.
In order to obtain FDA approval of any product candidate, we must submit to the FDA an NDA or a BLA demonstrating that the product candidate is safe for humans and effective for its intended use. This demonstration requires significant research, pre-clinical studies, and clinical trials.
We expect to incur substantial losses for the foreseeable future as a result of anticipated increases in our research and development costs, including costs associated with conducting preclinical testing and clinical trials, and regulatory compliance activities. We incurred net losses of $23,054,434 and $17,548,085 for the years ended September 30, 2021 and 2020, respectively.
We expect to incur substantial losses for the foreseeable future as a result of anticipated increases in our research and development costs, including costs associated with conducting preclinical testing and clinical trials, and regulatory compliance activities. We incurred net losses of $33,640,646 and $23,054,434 for the years ended September 30, 2022 and 2021, respectively.
Potential and completed acquisitions and strategic investments involve numerous risks, including potential problems or issues associated with the following: ● assimilating the acquired technologies, products or business operations, as we are currently engaged in for I/ONTAK; ● maintaining uniform standards, procedures, controls and policies; ● unanticipated costs associated with the acquisition or investment; ● diversion of our management’s attention from our preexisting business; ● maintaining or obtaining the necessary regulatory approvals or complying with regulatory standards; and ● adverse effects on existing business operations.
Potential and completed acquisitions and strategic investments involve numerous risks, including potential problems or issues associated with the following: ● assimilating the acquired technologies, products, or business operations; ● maintaining uniform standards, procedures, controls, and policies; ● unanticipated costs associated with the acquisition or investment; ● diversion of our management’s attention from our preexisting business; ● maintaining or obtaining the necessary regulatory approvals or complying with regulatory standards; and ● adverse effects on existing business operations.
The amount and timing of our future funding requirements will depend on many factors, including, but not limited to: ● the rate of progress and cost of our trials and other product development programs for our current product candidates; ● the costs and timing of obtaining licenses for additional product candidates or acquiring other complementary technologies; ● the timing of any regulatory approvals of any of our product candidates; ● the costs of establishing or contracting for sales, marketing and distribution capabilities for our product candidates; and ● the status, terms and timing of any collaborative, licensing, co-promotion or other arrangements. 22 We will need to access the capital markets in the future for additional capital for research and development and for operations.
The amount and timing of our future funding requirements will depend on many factors, including, but not limited to: ● the rate of progress and cost of our trials and other product development and commercialization programs for our current product candidates; ● the costs and timing of obtaining licenses for additional product candidates or acquiring other complementary technologies; ● the timing of any regulatory approvals of any of our product candidates; ● the costs of establishing or contracting for sales, marketing, and distribution capabilities for our product candidates; and ● the status, terms and timing of any collaborative, licensing, co-promotion, or other arrangements.
Ability to continue as a going concern. At September 30, 2021, we estimated that we have sufficient capital to continue our operations through March 2023.
Ability to continue as a going concern. At September 30, 2022, we estimated that we have sufficient capital to continue our operations through December 2023.
This is evidenced by our in-licensing of NoveCite in October 2020 and I/ONTAK in September 2021. We might consider opportunities to acquire or invest in other technologies, products and businesses that might enhance our capabilities or complement our current product candidates.
Our business strategy is based on the acquisition of additional product candidates. This is evidenced by our in-licensing of NoveCite in October 2020 and I/ONTAK in September 2021. We might consider opportunities to acquire or invest in other technologies, products and businesses that might enhance our capabilities or complement our current product candidates.
Patent and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate. Our business and prospects will be harmed if these protections prove insufficient.
Patent and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate.
If we experience unanticipated delays or problems, our development costs could substantially increase and our business, financial condition and results of operations will be adversely affected. 23 We have a limited operating history upon which to evaluate our ability to successfully commercialize our product candidates.
If we experience unanticipated delays or problems, our development costs could substantially increase and our business, financial condition and results of operations will be adversely affected. We have a limited operating history upon which to evaluate our ability to successfully commercialize our product candidates. We have two late-stage stage product candidates while our other product candidates are clinical stage.
If that happens, the market price of our securities could decline, and stockholders may lose all or part of their investment. Risks Related to Our Business and our Industry We have a history of net losses and expect to incur losses for the foreseeable future. We may never generate revenues or, if we are able to generate revenues, achieve profitability.
If that happens, the market price of our securities could decline, and stockholders may lose all or part of their investment. 24 Risks Related to Our Business and our Industry We have a history of net losses and expect to incur losses for the foreseeable future.
Potentially costly post-marketing clinical studies may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest to the regulatory authority. Similar risks apply in foreign jurisdictions.
Potentially costly post-marketing clinical studies may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest to the regulatory authority.
As of the date of this report, we do not anticipate seeking additional capital until sometime in 2023. Traditionally, pharmaceutical companies have funded their research and development expenditures through raising capital in the equity markets.
We will need to access the capital markets in the future for additional capital for research and development and for operations. As of the date of this report, we do not anticipate seeking additional capital until sometime in 2023. Traditionally, pharmaceutical companies have funded their research and development expenditures through raising capital in the equity markets.
We were formed in 2007 and since our inception have incurred a net loss in each of our previous operating years. Our ability to become profitable depends upon our ability to obtain marketing approval for and generate revenues from sales of our product candidates.
We may never generate revenues or, if we are able to generate revenues, achieve profitability. We were formed in 2007 and since our inception have incurred a net loss in each of our previous operating years. Our ability to become profitable depends upon our ability to obtain marketing approval for and generate revenues from sales of our product candidates.
This same risk applies to planned clinical trials for our other product candidates. The exact duration of the delay and any other impact will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the severity of COVID-19, or the effectiveness of actions to contain and treat for COVID-19.
The exact duration of the delay and any other impact will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the severity of COVID-19, or the effectiveness of actions to contain and treat for COVID-19.
For example, there are currently no FDA approved products with a label designation that supports the use of a product to treat and reduce the severity of ARDS in patients with COVID-19, which makes it difficult to determine the clinical endpoints and data required to support an application or regulatory approval, and the time and cost required to obtain regulatory approval in the United States for our product candidate. 28 Regulatory requirements in the United States governing cell therapy products have changed frequently and the FDA or other regulatory bodies may change the requirements, or identify different regulatory pathways, for approval of the NoveCite product candidate.
For example, there are currently no FDA approved products with a label designation that supports the use of a product to treat and reduce the severity of ARDS in patients with COVID-19, which makes it difficult to determine the clinical endpoints and data required to support an application or regulatory approval, and the time and cost required to obtain regulatory approval in the United States for our product candidate.
These same risks are generally applicable to the regulatory process in foreign countries. Any failure to obtain regulatory approval of our product candidates would significantly limit our ability to generate revenues, and any failure to obtain such approval for all of the indications and labeling claims we deem desirable could reduce our potential revenues.
Any failure to obtain regulatory approval of our product candidates would significantly limit our ability to generate revenues, and any failure to obtain such approval for all of the indications and labeling claims we deem desirable could reduce our potential revenues.
Our reputation in the industry and in the investment community would likely be significantly damaged. Further, it might not be possible for us to raise funds in the public or private markets, and our stock price would likely decrease significantly.
Our reputation in the industry and in the investment community would likely be significantly damaged. Further, it might not be possible for us to raise funds in the public or private markets, and our stock price would likely decrease significantly. We might not decide to proceed with the proposed spinoff of our I/ONTAK asset.
We cannot assure you that our business strategy will be successful. 25 The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable results in later studies or trials.
All of the risks inherent in drug development of initial stage product candidates also apply to late-stage candidates. We cannot assure you that our business strategy will be successful. The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable results in later studies or trials.
If we are unable to file for approval of Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or if we are required to generate additional data related to safety and efficacy in order to obtain approval of Mino-Lok or Halo-Lido under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization timelines.
However, there can be no assurance regarding the ultimate timing of the proposed transaction or that the transaction will be completed at all. 29 If we are unable to file for approval of Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or if we are required to generate additional data related to safety and efficacy in order to obtain approval of Mino-Lok or Halo-Lido under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization timelines.
Physicians and patients might not accept and use any of our product candidates for which regulatory approval is obtained. Even if the FDA approves one of our product candidates, physicians and patients might not accept and use it.
Even if the FDA approves one of our product candidates, physicians and patients might not accept and use it.
Product candidates may be found ineffective or may cause harmful side effects during clinical trials, may take longer to progress through clinical trials than had been anticipated, may not be able to achieve the pre-defined clinical endpoints due to statistical anomalies even though clinical benefit may have been achieved, may fail to receive necessary regulatory approvals, may prove impracticable to manufacture in commercial quantities at reasonable cost and with acceptable quality, or may fail to achieve market acceptance. 24 We cannot predict whether or when we will obtain regulatory approval to commercialize our product candidates that are under development and we cannot, therefore, predict the timing of any future revenues from these product candidates, if any.
Product candidates may be found ineffective or may cause harmful side effects during clinical trials, may take longer to progress through clinical trials than had been anticipated, may not be able to achieve the pre-defined clinical endpoints due to statistical anomalies even though clinical benefit may have been achieved, may fail to receive necessary regulatory approvals, may prove impracticable to manufacture in commercial quantities at reasonable cost and with acceptable quality, or may fail to achieve market acceptance.
If approved, any product candidate may fail to achieve market acceptance or generate significant revenue to achieve or sustain profitability. In addition, our efforts to educate the medical community and third-party payers on the benefits of any product candidate may require significant resources and may never be successful.
In addition, our efforts to educate the medical community and third-party payers on the benefits of any product candidate may require significant resources and may never be successful.
Risks Related to Our Regulatory and Legal Environment We might not obtain the necessary U.S. or foreign regulatory approvals to commercialize any product candidates. We cannot assure you that we will receive the approvals necessary to commercialize for sale any product candidates we are currently developing or that we may acquire or seek to develop in the future.
We cannot assure you that we will receive the approvals necessary to commercialize for sale any product candidates we are currently developing or that we may acquire or seek to develop in the future. We will need FDA approval to commercialize our product candidates in the U.S.
As a result, our business, financial condition, and results of operations might be materially harmed. 32 Our reliance on a limited number of third-party manufacturers exposes us to the following risks: ● We might be unable to identify manufacturers for commercial supply on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve any replacement contractor.
Our reliance on a limited number of third-party manufacturers exposes us to the following risks: ● We might be unable to identify manufacturers for commercial supply on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve any replacement contractor. This approval would generally require compliance inspections.
Our net cash used in operating activities was $24,250,414 and $16,930,658 for the years ended September 30, 2021 and 2020, respectively. 21 Our ability to generate revenues and achieve profitability will depend on numerous factors, including success in: ● developing and testing product candidates; ● receiving regulatory approvals for our product candidates; ● commercializing our product candidates that receive regulatory approval; ● manufacturing commercial quantities of our product candidates at acceptable cost levels; ● obtaining medical insurance coverage for any approved product candidate; and ● establishing a favorable competitive position for any approved product candidates.
Our ability to generate revenues and achieve profitability will depend on numerous factors, including success in: ● developing and testing product candidates; ● receiving regulatory approvals for our product candidates; ● commercializing our product candidates that receive regulatory approval; ● manufacturing commercial quantities of our product candidates at acceptable cost levels; ● obtaining medical insurance coverage for any approved product candidate; and ● establishing a favorable competitive position for any approved product candidates.
Compared to us, many of our potential competitors have substantially greater as well as access to strategic partners and capital resources. 30 As a result of these factors, our competitors may obtain regulatory approval of their products more rapidly than we can or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates.
As a result of these factors, our competitors may obtain regulatory approval of their products more rapidly than we can or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates.
As an example, on July 1, 2016, we announced that we were discontinuing the development of Suprenza, which was our first commercial product candidate, for strategic reasons and not due to safety or regulatory concerns, in order to focus our management and cash resources on the Phase 3 development of Mino-Lok and the Phase 2b development of Halo-Lido.
If we terminate a program in which we have invested significant resources, we will not receive any return on our investment and we will have missed the opportunity to allocate those resources to potentially more productive uses. 27 As an example, on July 1, 2016, we announced that we were discontinuing the development of Suprenza, which was our first commercial product candidate, for strategic reasons and not due to safety or regulatory concerns, in order to focus our management and cash resources on the Phase 3 development of Mino-Lok and the Phase 2b development of Halo-Lido.
We rely on trade secret protections through confidentiality agreements with our employees and other parties, and the breach of these agreements could adversely affect our business and prospects. We rely on trade secrets, which we seek to protect, in part, through confidentiality and non-disclosure agreements with our employees, collaborators, suppliers, and other parties.
We rely on trade secrets, which we seek to protect, in part, through confidentiality and non-disclosure agreements with our employees, collaborators, suppliers, and other parties.
Our competitors may also develop products that are more effective, more useful and less costly than ours and may also be more successful in manufacturing and marketing their products. In addition, our competitors may be more effective than us in commercializing their products and as a result, our business and prospects might be materially harmed.
Our competitors may also develop products that are more effective, more useful and less costly than ours and may also be more successful in manufacturing and marketing their products.
We plan to grow and develop our business through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us. Our business strategy is based on the acquisition of additional product candidates.
Our future financial performance and our ability to compete effectively will depend, in part, on our ability to effectively manage any future growth. 38 We plan to grow and develop our business through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us.
Two of our directors, Myron Holubiak and Leonard Mazur, also serve as directors of NoveCite. In addition, Myron Holubiak serves as Chief Executive Officer and Jaime Bartushak serves as Chief Financial Officer of both Citius and NoveCite. These overlapping positions could interfere with the duties owed by such individuals to Citius.
Two of our directors, Myron Holubiak and Leonard Mazur, also serve as directors of NoveCite. In addition, Myron Holubiak serves as Chief Executive Officer and Jaime Bartushak serves as Chief Financial Officer of both Citius and NoveCite.
Our Halo-Lido product candidate for the treatment of hemorrhoids is a combination product consisting of two drugs, halobetasol propionate, a corticosteroid, and lidocaine, that have each been separately approved by the FDA for other indications and which are commercially available and marketed by other companies.
Two of our product candidates, Mino-Lok and Halo-Lido, are combination products consisting of components that have each been separately approved by the FDA for other indications and which are commercially available and marketed by other companies.
In late April 2020, we made a pre-IND submission to the FDA for this treatment and requested the FDA’s feedback to support the most expeditious pathway for clinical development of the therapy.
In late April 2020, we made a pre-IND submission to the FDA for this treatment and requested the FDA’s feedback to support the most expeditious pathway for clinical development of the therapy. The CTAP program is relatively new and the FDA has broad discretion in administering the CTAP program and therefore we cannot assure you what the FDA might decide.
Our common stock and certain outstanding warrants are currently listed for trading on The Nasdaq Capital Market, and the continued listing of our common stock on The Nasdaq Capital Market is subject to our compliance with a number of listing standards.
Our common stock is currently listed for trading on The Nasdaq Capital Market, and the continued listing of our common stock on The Nasdaq Capital Market is subject to our compliance with a number of listing standards. These listing standards include the requirement for avoiding sustained losses, maintaining a minimum level of stockholders’ equity, and maintaining a minimum stock price.
We cannot predict whether federal or state legislation will be passed that may impact reimbursement policies nor what the impact of any such legislation would be on the healthcare industry in general or on our business specifically. 31 Health administration authorities in countries other than the U.S. may not provide reimbursement for our products at rates sufficient for us to achieve profitability, or at all.
We cannot predict whether federal or state legislation will be passed that may impact reimbursement policies nor what the impact of any such legislation would be on the healthcare industry in general or on our business specifically.
If the Company is unable to raise sufficient capital, find strategic partners or generate substantial revenue from the sale of Mino-Lok, there would be a material adverse effect on its business. Further, the Company expects in the future to incur additional expenses as it continues to develop its product candidates, including seeking regulatory approval, and protecting its intellectual property.
If the Company is unable to raise sufficient capital, find strategic partners or generate substantial revenue from the sale of I/ONTAK and/or Mino-Lok, there would be a material adverse effect on its business.
Because our NoveCite product candidate is based on novel technologies, it is difficult to predict the regulatory approval process and the time, the cost and our ability to successfully initiate, conduct and complete clinical development, and obtain the necessary regulatory and reimbursement approvals, required for commercialization of our NoveCite product candidate.
As a result, we may encounter problems at a later date under the CTAP program, or with the therapy itself, and we may not experience a faster development process, review or approval compared to conventional FDA procedures. 31 Because our NoveCite product candidate is based on novel technologies, it is difficult to predict the regulatory approval process and the time, the cost and our ability to successfully initiate, conduct and complete clinical development, and obtain the necessary regulatory and reimbursement approvals, required for commercialization of our NoveCite product candidate.
We need to secure additional financing in the future to complete the development of our current product candidates and support our operations. We anticipate that we will incur operating losses for the foreseeable future as we continue developing our product candidates.
We anticipate that we will incur operating losses for the foreseeable future as we continue developing our product candidates.
As of September 30, 2021, there were 145,979,429 shares of common stock outstanding, 40,208,347 shares underlying warrants with a weighted average exercise price of $1.695 per share and 5,755,171 shares underlying options with a weighted average exercise price of $2.13 per share.
As of September 30, 2022, there were 146,211,130 shares of common stock outstanding, 38,325,489 shares underlying warrants with a weighted average exercise price of $1.57 per share and 9,400,171 shares underlying options with a weighted average exercise price of $2.07 per share.
The COVID-19 pandemic has adversely impacted hospitals and medical facilities where we are currently conducting our Mino-Lok phase 3 trial. The full extent to which COVID-19 may impact this trial is not known at this time, but it has slowed the estimated completion date for the trial, which we now expect to be in 2022.
The full extent to which COVID-19 may impact this trial is not known at this time, but it has slowed the estimated completion date for the trial, which we now expect to be in 2023. This same risk applies to our recently begun Phase 2b trial for Halo-Lido and our planned clinical trials for our other product candidates.
Commercial insurance plans reimburse for CRBSIs in a similar manner. With Mino-Lok being priced as a branded FDA-approved pharmaceutical product, this could result in the participating hospital retaining a lower share of CMS or commercial reimbursement which may impact the acceptance and use of Mino-Lok by these institutions.
With Mino-Lok being priced as a branded FDA-approved pharmaceutical product, this could result in the participating hospital retaining a lower share of CMS or commercial reimbursement which may impact the acceptance and use of Mino-Lok by these institutions. 30 Our Halo-Lido product candidate for the treatment of hemorrhoids is a combination product consisting of two drugs, halobetasol propionate, a corticosteroid, and lidocaine, that have each been separately approved by the FDA for other indications and which are commercially available and marketed by other companies.
If the FDA changes its interpretation of Section 505(b)(2), or if the FDA’s interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit. 26 Two of our product candidates, Mino-Lok and Halo-Lido, are combination products consisting of components that have each been separately approved by the FDA for other indications and which are commercially available and marketed by other companies.
If the FDA changes its interpretation of Section 505(b)(2), or if the FDA’s interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit.
Like the U.S., these countries have considered health care reform proposals and could materially alter their government-sponsored health care programs by reducing reimbursement rates. Any reduction in reimbursement rates under Medicare or foreign health care programs could negatively affect the pricing of our product candidates.
Health administration authorities in countries other than the U.S. may not provide reimbursement for our products at rates sufficient for us to achieve profitability, or at all. Like the U.S., these countries have considered health care reform proposals and could materially alter their government-sponsored health care programs by reducing reimbursement rates.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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In the future, we might from time to time become involved in litigation relating to claims arising from our ordinary course of business. Item 4. Mine Safety Disclosures Not applicable. 41 PART II
In the future, we might from time to time become involved in litigation relating to claims arising from our ordinary course of business. Item 4. Mine Safety Disclosures Not applicable. 45 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Issuer Purchases of Equity Securities We did not make any purchases of our common stock during the three months ended September 30, 2021, which is the fourth quarter of our fiscal year. Item 6. [Reserved]
Issuer Purchases of Equity Securities We did not make any purchases of our common stock during the three months ended September 30, 2022, which is the fourth quarter of our fiscal year. Item 6. [Reserved]
The declaration and payment of future dividends on the common stock will be at sole discretion of our Board of Directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant by the Board. Recent Sales of Unregistered Securities None.
The declaration and payment of future dividends on the common stock will be at sole discretion of our Board of Directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant by the Board.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The information regarding our equity compensation plans required by this Item is found in Item 12 of this report. Market Information Our common stock and certain warrants to purchase common stock trade on The Nasdaq Capital Market under the symbol “CTXR” and “CTXRW,” respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The information regarding our equity compensation plans required by this Item is found in Item 12 of this report.
Holders of Common Stock As November 30, 2021, we had approximately 96 stockholders of record of our common stock. Dividends We have never paid dividends on our common stock. We intend to follow a policy of retaining earnings, if any, to finance the growth of our business and do not anticipate paying any cash dividends in the foreseeable future.
We intend to follow a policy of retaining earnings, if any, to finance the growth of our business and do not anticipate paying any cash dividends in the foreseeable future.
Added
Market Information Our common stock trades on The Nasdaq Capital Market under the symbol “CTXR.” Holders of Common Stock As December 15, 2022, we had approximately 95 stockholders of record of our common stock. Dividends We have never paid dividends on our common stock.
Added
Recent Sales of Unregistered Securities On September 13, 2022, we issued 81,5000 shares of our common stock to a consultant for media relations, public relations, and investor relations services pursuant to the agreed upon compensation terms in the consulting agreement with the entity. The issuance of the shares was exempt from registration under Section 4(a)(2) of the Securities Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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In-process research and development of $40,000,000 represents the value of our September 2021 acquisition of an exclusive license for E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma and is expected to be amortized on a straight-line basis over a period of twelve years commencing upon revenue generation.
In-process research and development of $40,000,000 represents the value of our September 2021 acquisition of an exclusive license for E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma and is expected to be amortized on a straight-line basis over a period of twelve years commencing upon revenue generation.
Based on this assessment, management does not believe that it is more likely than not that the carrying value of the reporting unit exceeds its fair value. Accordingly, no further testing was performed as management believes that there are no impairment issues with respect to goodwill as of September 30, 2021.
Based on this assessment, management does not believe that it is more likely than not that the carrying value of the reporting unit exceeds its fair value. Accordingly, no further testing was performed as management believes that there are no impairment issues with respect to goodwill as of September 30, 2022.
We may need to raise additional capital in the future to support our operations beyond March 2023. There is no assurance, however, that we will be successful in raising the needed capital or that the proceeds will be received in an amount or in a timely manner to support our operations.
We may need to raise additional capital in the future to support our operations beyond December 2023. There is no assurance, however, that we will be successful in raising the needed capital or that the proceeds will be received in an amount or in a timely manner to support our operations.
If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value for the period identified. No impairments have occurred since the acquisitions of our intangible assets through September 30, 2021.
If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value for the period identified. No impairments have occurred since the acquisitions of our intangible assets through September 30, 2022.
Under the simplified model, a goodwill impairment is calculated as the difference between the carrying amount of the reporting unit and its fair value. The Company performed a qualitative assessment for its 2021 analysis of goodwill.
Under the simplified model, a goodwill impairment is calculated as the difference between the carrying amount of the reporting unit and its fair value. The Company performed a qualitative assessment for its 2022 analysis of goodwill.
The Company recorded a gain of $166,557 for the principal and accrued interest on the Paycheck Protection Program loan that was forgiven on July 28, 2021. 45 Other income for the year ended September 30, 2021 consists of accrued interest of $59,917 on notes payable – related parties that was forgiven in June 2021.
The Company recorded a gain of $166,557 during the year ended September 30, 2021 for the principal and accrued interest on the Paycheck Protection Program loan that was forgiven on July 28, 2021. 50 Other income for the year ended September 30, 2021 consists of accrued interest of $59,917 on notes payable – related parties that was forgiven in June 2021.
Through September 30, 2021, we have devoted substantially all of our efforts to product development, raising capital, building infrastructure through strategic alliances and coordinating activities relating to our proprietary products. We have not yet realized any revenues from its operations. Patent and Technology License Agreements Mino-Lok® - LMB has a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc.
Through September 30, 2022, we have devoted substantially all our efforts to product development, raising capital, building infrastructure through strategic alliances and coordinating activities relating to our proprietary products. We have not yet realized any revenues from our operations. Patent and Technology License Agreements Mino-Lok® - LMB has a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc.
During the year ended September 30, 2021, we received $31,130,134 in proceeds from the exercise of common stock warrants and $82,634 in proceeds from the exercise of common stock options. Based on our cash and cash equivalents at September 30, 2021, we expect that we will have sufficient funds to continue our operations through March 2023.
During the year ended September 30, 2021, we received $31,130,134 in proceeds from the exercise of common stock warrants and $82,634 in proceeds from the exercise of common stock options. 51 Based on our cash and cash equivalents at September 30, 2022, we expect that we will have sufficient funds to continue our operations through December 2023.
Net proceeds from the offering were $8,700,201. On January 27, 2021, the Company closed a private placement for 15,455,960 common shares and warrants to purchase 7,727,980 common shares, at a purchase price of $1.294 per share of common stock and accompanying warrant, for gross proceeds of $20,000,012. Net proceeds from the offering were $18,450,410.
Financing Activities On January 27, 2021, the Company closed a private placement for 15,455,960 common shares and warrants to purchase 7,727,980 common shares, at a purchase price of $1.294 per share of common stock and accompanying warrant, for gross proceeds of $20,000,012. Net proceeds from the offering were $18,450,410.
In fiscal year 2012, we granted options to our new employees and additional options to other employees, our directors and consultants.
In fiscal year 2022, we granted options to our new employees and additional options to other employees, our directors, and consultants.
General and administrative expenses consist primarily of compensation costs, consulting fees incurred for financing activities and corporate development services, and investor relations expenses. Stock-based Compensation Expense For the year ended September 30, 2021, stock-based compensation expense was $1,454,979 as compared to $803,261 for the year ended September 30, 2020. Stock-based compensation expense includes options granted to directors, employees and consultants.
General and administrative expenses consist primarily of compensation costs, consulting fees incurred for financing activities and corporate development services, and investor relations expenses. Stock-based Compensation Expense For the year ended September 30, 2022, stock-based compensation expense was $3,905,954 as compared to $1,454,979 for the year ended September 30, 2021. Stock-based compensation expense includes options granted to directors, employees, and consultants.
We believe the judgments and estimates required by the following accounting policies to be critical in the preparation of our financial statements. 47 Research and Development Research and development costs, including upfront fees and milestones paid to collaborators who are performing research and development activities under contractual agreement with us, are expensed as incurred.
Actual results may differ from these estimates. We believe the judgments and estimates required by the following accounting policies to be critical in the preparation of our financial statements. Research and Development Research and development costs, including upfront fees and milestones paid to collaborators who are performing research and development activities under contractual agreement with us, are expensed as incurred.
Under the license agreement, we paid a nonrefundable upfront payment of $125,000. We are obligated to pay an annual maintenance fee of $30,000, commencing in January 2020 that increases annually by $15,000 per year up to a maximum of $90,000. Annual maintenance fees cease on the first sale of product.
We are obligated to pay an annual maintenance fee of $30,000, commencing in January 2020 that increases annually by $15,000 per year up to a maximum of $90,000. Annual maintenance fees cease on the first sale of product.
We expect that research and development expenses will continue to increase in fiscal 2022 as we continue to focus on our Phase 3 trial for Mino-Lok, progress the Halo-Lido product candidate, and accelerate our research and development efforts related to ARDS, Mino-Wrap and E7777.
We expect that research and development expenses will continue to increase in fiscal 2023 as we continue to focus on the commercialization of E7777, our Phase 3 trial for Mino-Lok, our Phase 2b trial for Halo-Lido, and accelerate our research and development efforts related to Mino-Wrap and ARDS.
We expect that we will have sufficient funds to continue our operations through March 2023. At September 30, 2021, Citius had cash and cash equivalents of $70,072,946 available to fund its operations. The Company’s only source of cash flow since inception has been from financing activities.
We expect that we will have sufficient funds to continue our operations through December 2023. At September 30, 2022, Citius had cash and cash equivalents of $41,711,690 available to fund its operations. The Company’s only source of cash flow since inception has been from financing activities.
Citius’ net cash used in operations during the years ended September 30, 2021 and 2020 was $24,250,414 and $16,930,658, respectively. As a result of our common stock offerings and common stock warrant exercises in fiscal year 2021, the Company had working capital of approximately $68,800,000 at September 30, 2021.
Citius’ net cash used in operations during the years ended September 30, 2022 and 2021 was $28,361,256 and $24,250,414, respectively. As a result of our common stock offerings and common stock warrant exercises in fiscal year 2021, the Company had working capital of approximately $40,000,000 at September 30, 2022.
Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all original terms and conditions. 43 As part of the Novellus and Brooklyn merger transaction, the 25% non-dilutive position as per the subscription agreement between Novellus and NoveCite was removed.
Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all original terms and conditions. In October 2021, Brooklyn changed its name to Eterna Therapeutics Inc. As part of the Novellus and Brooklyn merger transaction, the 25% non-dilutive position as per the subscription agreement between Novellus and NoveCite was removed.
For the year ended September 30, 2021, stock-based compensation includes $83,555 in expense for the NoveCite stock option plan that was adopted in November 2020. Stock-based compensation expense increased by $651,718 in comparison to the prior year due to new grants made by Citius and the expense for the NoveCite stock plan.
For the years ended September 30, 2022 and 2021, stock-based compensation expense includes $133,332 and $83,555, respectively, for the NoveCite stock option plan that was adopted in November 2020. Stock-based compensation expense increased by $2,450,975 in comparison to the prior year due to new grants made by Citius and the increase in expense for the NoveCite stock plan.
Reddy's exclusive license of E7777 from Eisai and other related assets owned by Dr. Reddy's. Citius's exclusive license rights include rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia. Additionally, Citius has an option on the right to develop and market the product in India.
Citius’s exclusive license rights include rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia. Additionally, Citius has an option on the right to develop and market the product in India. Eisai retains exclusive development and marketing rights for the agent in Japan and Asia. Dr.
The Company reviews intangible assets annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life of any intangible asset.
Goodwill will not be amortized and will be tested at least annually for impairment. 52 The Company reviews intangible assets annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life of any intangible asset.
During the year ended September 30, 2021, research and development costs for our proposed novel cellular therapy for acute respiratory distress syndrome (ARDS) were $6,946,365 as compared to $846,232 for the year ended September 30, 2020. The increase of $6,100,133 was primarily due to the $5,000,000 license fee paid to Novellus.
During the year ended September 30, 2022, research and development costs for our proposed novel cellular therapy for acute respiratory distress syndrome (ARDS) were $1,777,288 as compared to $6,946,365 for the year ended September 30, 2021. The decrease of $5,169,077 was primarily related to the $5,000,000 license fee paid to Novellus in the year ended September 30, 2021.
(“LMB”) by issuing shares of our common stock. We acquired identifiable intangible assets of $19,400,000 related to in-process research and development and recorded goodwill of $9,346,796 for the excess of the purchase consideration over the net assets acquired. On September 11, 2020, we formed NoveCite, Inc.
We acquired identifiable intangible assets of $19,400,000 related to in-process research and development and recorded goodwill of $9,346,796 for the excess of the purchase consideration over the net assets acquired. On September 11, 2020, we formed NoveCite, Inc. (“NoveCite”), a Delaware corporation, of which we own 75% of the issued and outstanding capital stock.
On August 23, 2021, we formed Citius Acquisition Corp., a wholly owned subsidiary. 42 In-process research and development of $19,400,000 represents the value of LMB’s leading drug candidate (Mino-Lok), which is an antibiotic solution used to treat catheter-related bloodstream infections and is expected to be amortized on a straight-line basis over a period of eight years commencing upon revenue generation.
In-process research and development of $19,400,000 represents the value of LMB’s leading drug candidate (Mino-Lok), which is an antibiotic solution used to treat catheter-related bloodstream infections and is expected to be amortized on a straight-line basis over a period of eight years commencing upon revenue generation. Goodwill of $9,346,796 represents the value of LMB’s industry relationships and its assembled workforce.
LIQUIDITY AND CAPITAL RESOURCES Liquidity and Working Capital Citius has incurred operating losses since inception and incurred net losses of $23,054,434 and $17,548,085 for the years ended September 30, 2021 and 2020, respectively. At September 30, 2021, Citius had an accumulated deficit of $96,047,821.
LIQUIDITY AND CAPITAL RESOURCES Liquidity and Working Capital Citius has incurred operating losses since inception and incurred net losses of $33,640,646 and $23,054,434 for the years ended September 30, 2022 and 2021, respectively. At September 30, 2022, Citius had an accumulated deficit of $129,688,467.
We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not required.
We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.
Research and development costs for our Mino-Wrap product candidate increased by $51,990 to $165,507 for the year ended September 30, 2021 as compared to $113,517 during the year ended September 30, 2020.
Research and development costs for our Mino-Wrap product candidate increased by $70,909 to $236,416 for the year ended September 30, 2022, as compared to $165,507 during the year ended September 30, 2021, due to increased formulation work.
Results of Operations for Year Ended September 30, 2021 compared to Year Ended September 30, 2020 Year Ended September 30, 2021 Year Ended September 30, 2020 Revenues $ - $ - Operating expenses: Research and development 12,240,503 8,812,810 General and administrative 9,836,412 8,094,614 Stock-based compensation – general and administrative 1,454,979 803,261 Total operating expenses 23,531,894 17,710,685 Operating loss (23,531,894 ) (17,710,685 ) Interest income 261,825 68,066 Gain on forgiveness of note payable - Paycheck Protection Program and accrued interest 166,557 - Other income 59,917 110,207 Interest expense (10,839 ) (15,673 ) Net loss $ (23,054,434 ) $ (17,548,085 ) 44 Revenues We did not generate any revenues for the years ended September 30, 2021 and 2020.
Results of Operations for Year Ended September 30, 2022 compared to Year Ended September 30, 2021 Year Ended September 30, 2022 Year Ended September 30, 2021 Revenues $ — $ — Operating expenses: Research and development 17,655,482 12,240,503 General and administrative 11,754,609 9,836,412 Stock-based compensation – general and administrative 3,905,954 1,454,979 Total operating expenses 33,316,045 23,531,894 Operating loss (33,316,045 ) (23,531,894 ) Interest income 251,399 261,825 Gain on forgiveness of note payable - Paycheck Protection Program and accrued interest — 166,557 Other income — 59,917 Interest expense — (10,839 ) Loss before income taxes (33,064,646 ) (23,054,434 ) Income tax expense 576,000 — Net loss $ (33,640,646 ) $ (23,054,434 ) Revenues We did not generate any revenues for the years ended September 30, 2022 and 2021.
General and Administrative Expenses For the year ended September 30, 2021, general and administrative expenses were $9,836,412 as compared to $8,094,614 for the year ended September 30, 2020 an increase of $1,741,798. The primary reason for the increase was additional compensation costs for new employees and performance bonuses.
General and Administrative Expenses For the year ended September 30, 2022, general and administrative expenses were $11,754,609 as compared to $9,836,412 for the year ended September 30, 2021, an increase of $1,918,197. The primary reason for the increase was additional compensation costs for new employees, as well as increased investor relations expense.
Research and Development Expenses For the year ended September 30, 2021, research and development expenses were $12,240,503 as compared to $8,812,810 for the year ended September 30, 2020, an increase of $3,427,693.
Research and Development Expenses For the year ended September 30, 2022, research and development expenses were $17,655,482 as compared to $12,240,503 for the year ended September 30, 2021, an increase of $5,414,979.
Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the filing date of this report.
Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors.
I/ONTAK/E7777 - In September 2021 the Company announced that it had entered into a definitive agreement with Dr. Reddy's to acquire its exclusive license of E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. Under the terms of this agreement, Citius acquired Dr.
Reddy’s to acquire its exclusive license of E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. Under the terms of this agreement, Citius acquired Dr. Reddy’s exclusive license of E7777 from Eisai and other related assets owned by Dr. Reddy’s.
Interest expense for the year ended September 30, 2021 was $10,839 as compared to $15,673 for the year ended September 30, 2020. Interest expense for both years is primarily for the notes payable to related parties that were acquired in the acquisition of LMB.
There was no interest expense for the year ended September 30, 2022 as compared to $10,839 for the year ended September 30, 2021. Interest expense was for the notes payable to related parties that were acquired in the acquisition of LMB and the COVID-19 related Small Business Administration (“SBA”) Paycheck Protection Program loan received on April 15, 2020.
The increase was due to our investment of most of the 2021 equity offerings and common stock warrant exercises proceeds in money market accounts.
We have invested the remaining balance of the 2021 equity offerings and common stock warrant exercises proceeds in money market accounts.
We intend to develop a liquefying gel-based wrap containing minocycline and rifampin for the reduction of infections associated with breast implants following breast reconstructive surgeries. We are required to use commercially reasonable efforts to commercialize Mino-Wrap under several regulatory scenarios and achieve milestones associated with these regulatory options leading to an approval from the FDA.
We are required to use commercially reasonable efforts to commercialize Mino-Wrap under several regulatory scenarios and achieve milestones associated with these regulatory options leading to an approval from the FDA. 47 Under the license agreement, we paid a nonrefundable upfront payment of $125,000.
Goodwill represents the value of LMB’s industry relationships and its assembled workforce. Goodwill will not be amortized and will be tested at least annually for impairment.
Goodwill represents the value of LMB’s industry relationships and its assembled workforce.
In addition, NoveCite will pay to Licensor an amount equal to a mid-twenties percentage of any sublicensee fees it receives. Under the terms of the license agreement, in the event that Licensor receives any revenue involving the original cell line included in the licensed technology, then Licensor shall remit to NoveCite 50% of such revenue.
Under the terms of the license agreement, in the event that Licensor receives any revenue involving the original cell line included in the licensed technology, then Licensor shall remit to NoveCite 50% of such revenue. 48 I/ONTAK/E7777 - In September 2021 the Company announced that it had entered into a definitive agreement with Dr.
We also incurred $739,208 in research and development expenses for our proposed product candidate related to the E7777 license.
We also incurred $8,693,775 in research and development expenses for our E7777 product candidate during the year ended September 30, 2022 as compared to $739,208 during the year ended September 30, 2021.
Our primary uses of operating cash were for in-licensing of intellectual property, product development and commercialization activities, employee compensation, consulting fees, legal and accounting fees, insurance and investor relations expenses. Financing Activities In December 2019, 1,060,615 of the September 2019 Offering Pre-Funded Unit Warrants were exercised at $0.0001 per share for net proceeds of $106.
During the year ended September 30, 2021, the Company received net proceeds of $120,643,020, from the issuance of equity. Our primary uses of operating cash were for in-licensing of intellectual property, product development and commercialization activities, employee compensation, consulting fees, legal and accounting fees, insurance, and investor relations expenses.
Historical Background We are a specialty pharmaceutical company dedicated to the development and commercialization of critical care products targeting unmet needs with a focus on anti-infectives, cancer care and unique prescription products. On September 12, 2014, we acquired Citius Pharmaceuticals, LLC as a wholly-owned subsidiary. On March 30, 2016, we acquired all of the outstanding stock of Leonard-Meron Biosciences, Inc.
On September 12, 2014, we acquired Citius Pharmaceuticals, LLC as a wholly-owned subsidiary. On March 30, 2016, we acquired all of the outstanding stock of Leonard-Meron Biosciences, Inc. (“LMB”) by issuing shares of our common stock.
Goodwill of $9,346,796 represents the value of LMB’s industry relationships and its assembled workforce. Goodwill will not be amortized but will be tested at least annually for impairment.
Goodwill will not be amortized but will be tested at least annually for impairment.
At September 30, 2021, unrecognized total compensation cost related to unvested options for Citius common stock of $3,012,685 is expected to be recognized over a weighted average period of 2.34 years and unrecognized total compensation cost related to unvested options for NoveCite common stock of $316,444 is expected to be recognized over a weighted average period of 2.42 years Other Income (Expense) During the year ended September 30, 2021, the Company earned $261,825 of interest income compared to $68,066 of interest income during the year ended September 30, 2020.
At September 30, 2022, unrecognized total compensation cost related to unvested options for Citius common stock of $5,317,681 is expected to be recognized over a weighted average period of 1.9 years and unrecognized total compensation cost related to unvested options for NoveCite common stock of $183,111 is expected to be recognized over a weighted average period of 1.5 years.
Net Loss For the year ended September 30, 2021, we incurred a net loss of $23,054,434 compared to a net loss of $17,548,085 for the year ended September 30, 2020.
There was no provision for income taxes for the year ended September 30, 2021 due to the Company’s operating losses and the valuation reserve on deferred tax assets. Net Loss For the year ended September 30, 2022, we incurred a net loss of $33,640,646 compared to a net loss of $23,054,434 for the year ended September 30, 2021.
The $5,506,349 increase in the net loss was primarily due to the $3,427,693 increase in research and development expenses and the $1,741,798 increase in general and administrative expenses, which increases were primarily associated with NoveCite.
The $10,586,212 increase in the net loss was primarily due to the $5,414,979 increase in research and development expenses, the $1,918,197 increase in general and administrative expenses, and the $2,450,975 increase in stock-based compensation expense.
Research and development costs for our Halo-Lido product candidate decreased by $783,870 to $862,173 for the year ended September 30, 2021 as compared to $1,646,043 for the year ended September 30, 2020 due to a reduction in costs associated with manufacturing development as well as our patient reported outcome tool for the year ended September 30, 2021.
Research and development costs for Mino-Lok® increased by $723,405 to $4,250,655 for the year ended September 30, 2022 as compared to $3,527,250 for the year ended September 30, 2021 driven primarily by an increase in the costs associated with the addition of the global CRO, Biorasi, and the opening of international sites, primarily in India, for the Phase 3 Mino-Lok trial. 49 Research and development costs for our Halo-Lido product candidate increased by $1,835,175 to $2,697,348 for the year ended September 30, 2022 as compared to $862,173 for the year ended September 30, 2021 due to an increase in costs associated with the initiation of the Phase 2 study for the year ended September 30, 2022.
Removed
(“NoveCite”), a Delaware corporation, of which we own 75% of the issued and outstanding capital stock.
Added
We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the filing date of this report. 46 Historical Background We are a late-stage biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products with a focus on oncology, anti-infectives in adjunct cancer care, unique prescription products and stem cell therapies.
Removed
Eisai retains exclusive development and marketing rights for the agent in Japan and Asia. Dr.
Added
On August 23, 2021, we formed Citius Acquisition Corp., a wholly owned subsidiary, which began operations in April 2022.
Removed
Research and development costs for Mino-Lok® decreased by $2,679,768 to $3,527,250 for the year ended September 30, 2021 as compared to $6,207,018 for the year ended September 30, 2020 driven primarily by a decrease in the cost of registration batches produced in the year ended September 30, 2021.
Added
We intend to develop a liquefying gel-based wrap containing minocycline and rifampin for the reduction of infections associated with breast implants following breast reconstructive surgeries.
Removed
In November 2019, we received a $110,207 refund from the FDA for 2016 product and establishment fees because the fees paid by the Company exceeded the costs of the FDA’s review of the associated applications. The Company recorded the $110,207 as other income during the year ended September 30, 2020.
Added
In addition, NoveCite will pay to Licensor an amount equal to a mid-twenties percentage of any sublicensee fees it receives.
Removed
We also accrued interest expense on the COVID-19 related Small Business Administration (“SBA”) Paycheck Protection Program loan received on April 15, 2020. At September 30, 2021, there were no outstanding notes payable.
Added
The increase of $7,954,567 was primarily due to costs associated with the completion of the Phase 3 trial, as well as the preparation and submission of the Biologics License Application to the FDA, which we filed in September 2022.
Removed
During the years ended September 30, 2021 and 2020, the Company received net proceeds of $120,643,020 and $22,733,850, respectively, from the issuance of equity. We also received $164,583 from the COVID-related SBA paycheck protection program loan received on April 15, 2020.
Added
Other Income (Expense) During the year ended September 30, 2022, the Company earned $251,399 of interest income compared to $261,825 of interest income during the year ended September 30, 2021. The decrease was due to lower balances of investable funds offset by an increase in interest rates.
Removed
In January 2020, investors who participated in the September 2019 Offering exercised 1,315,715 warrants at $0.77 per share resulting in net proceeds of $1,013,101 to the Company.
Added
The notes payable to related parties were paid in full in June 2021 and therefore were not outstanding at September 30, 2021 or 2022. Income Taxes The Company recorded deferred income tax expense of $576,000 for the year ended September 30, 2022 related to the amortization for taxable purposes of its in-process research and development asset.
Removed
On February 14, 2020, the Company entered into a warrant exercise agreement for 3,712,218 shares of common stock having an exercise price of $0.77 and 2,586,455 shares of common stock at a reduced exercise price of $1.02.
Added
Additionally, in November 2022, the Company was selected to participate in New Jersey’s Technology Business Tax Certificate Transfer (NOL) Program and will receive $3.6 million in non-dilutive capital through the New Jersey Economic Development Authority; the Company expects to receive these funds by late 2022 or early 2023.
Removed
The offering closed on February 19, 2020 and net proceeds were $5,013,930 after placement agent fees and offering expenses. 46 On May 18, 2020, the Company closed a registered direct offering for the sale of 7,058,824 shares of common stock at $1.0625 per share for gross proceeds of $7,500,001.
Removed
The Company also issued 3,529,412 unregistered immediately exercisable warrants to the investors with an exercise price of $1.00 per share and a term of five and one-half years. Net proceeds from the offering were $6,877,100. On June 26, 2020, 1,129,412 of the May 2020 Registered Direct Offering Investor Warrants were exercised at $1.00 per share for net proceeds of $1,129,412.
Removed
On August 10, 2020, the Company closed an underwritten public offering of 9,159,524 shares of common stock at $1.05 per share for gross proceeds of $9,617,500.
Removed
The Company paid the underwriter a fee of 7% of the gross proceeds totaling $673,225 and issued the underwriter 641,166 immediately exercisable warrants with an exercise price of $1.3125 per share and a term of five years. The Company also reimbursed the placement agent for $135,000 in expenses and incurred $109,074 in other expenses.