CRANFORD, N.J. - Citius Pharmaceuticals, Inc. (NASDAQ: NASDAQ:CTXR), a late-stage biopharmaceutical company, has announced a significant corporate transaction involving its oncology subsidiary and TenX Keane Acquisition (NASDAQ: TENK). After TenX shareholders' approval, Citius Pharma is set to hold approximately 90% of the new entity, Citius Oncology, Inc., following the merger.
The merger is anticipated to conclude in the coming weeks, subject to customary closing conditions. This strategic move aims to facilitate Citius Oncology's access to public equity markets, bolstering the potential commercialization of its lead product candidate, LYMPHIR, pending approval.
Upon completion, Citius Pharma will possess roughly 65.6 million shares of Citius Oncology's common stock, solidifying its majority control. Citius Pharma will also infuse $10 million in cash into Citius Oncology and transfer 12.75 million existing options. The combined cash from TenX's trust account and Citius Pharma's contribution will serve as working capital and support Citius Oncology's corporate functions post-merger.
Citius Oncology is currently seeking FDA approval for LYMPHIR, designed to treat cutaneous T-cell lymphoma (CTCL). The company's management estimates that the initial market for LYMPHIR exceeds $400 million and notes the market is expanding and currently underserved by available therapies.
The merger agreement details were made public in a Current Report on Form 8-K filed by Citius Pharma with the U.S. Securities and Exchange Commission on October 24, 2023. Maxim Group LLC and Newbridge Securities Corporation served as exclusive financial advisors to Citius Pharma and TenX, respectively.
This announcement is based on a press release statement and contains forward-looking statements subject to risks and uncertainties that could affect Citius's business and stock price. The FDA's approval of LYMPHIR is not guaranteed, and the anticipated benefits of the merger may not fully materialize or may be delayed.
Citius Pharmaceuticals reported that its Phase 3 trial of Mino-Lok, an antibiotic lock solution, has met its primary endpoint and demonstrated overall treatment success. The trial evaluated Mino-Lok's efficacy in salvaging catheters in patients with central line-associated or catheter-related bloodstream infections. Involving 241 patients from the U.S. and India, the study found that catheter failure events occurred significantly later for patients treated with Mino-Lok.
Furthermore, the secondary endpoint revealed a higher overall treatment success rate in the Mino-Lok arm at 57.1% compared to 37.7% in the control arm.
InvestingPro Insights
As Citius Pharmaceuticals, Inc. (NASDAQ: CTXR) gears up for a significant merger with its oncology subsidiary, investors are keeping a close eye on the company's financial health and stock performance. According to InvestingPro data, Citius has a market capitalization of approximately $163.78 million, reflecting its scale in the biopharmaceutical industry. Despite a challenging period with an adjusted P/E ratio for the last twelve months as of Q2 2024 standing at -4.15, the company has shown notable price resilience over the medium term, with a 71.3% return over the last month and a 28.58% return over the last three months.
InvestingPro Tips suggest that Citius's stock has experienced significant volatility, with a notable decline over the past week, yet also displaying strong returns over the last month and three months. This could indicate investor optimism about the company's prospects or a reaction to market dynamics specific to the biopharmaceutical sector. However, analysts remain cautious, as they do not anticipate the company to be profitable this year, and Citius has not been profitable over the last twelve months.
While the company operates with a moderate level of debt and its liquid assets exceed short-term obligations, it suffers from weak gross profit margins. These financial nuances are crucial for potential investors to consider, especially in the context of the upcoming merger and the anticipated FDA decision on LYMPHIR. For those seeking a more granular analysis, InvestingPro offers additional tips on Citius Pharmaceuticals, which can be found at https://www.investing.com/pro/CTXR.
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