Citius Pharmaceuticals Announces $3 Million Registered Direct Offering Priced At-The-Market under Nasdaq Rules

Rhea-AI Summary

Citius Pharmaceuticals (Nasdaq: CTXR) announced a registered direct offering priced at-the-market under Nasdaq rules. The company has entered into definitive agreements to sell 743,496 shares of its common stock along with warrants to purchase an equal number of shares. The purchase price is $4.035 per share and accompanying warrant.

The warrants have an exercise price of $3.91 per share, are exercisable immediately upon issuance, and will expire five years from the initial exercise date. The offering is expected to close around January 8, 2025, subject to customary closing conditions. H.C. Wainwright & Co. is acting as the exclusive placement agent for this offering.

The aggregate gross proceeds are anticipated to be approximately $3 million, before deducting placement agent fees and other expenses. Citius plans to use the net proceeds for general corporate purposes, including pre-clinical and clinical development, working capital, and capital expenditures.

The securities are being offered under a shelf registration statement filed with the SEC on February 23, 2024 and declared effective on March 1, 2024. The offering will be made by a prospectus and prospectus supplement available on the SEC's website.

Positive

• Expected gross proceeds of approximately $3 million.
• Funds intended for general corporate purposes, including pre-clinical and clinical development.

Negative

• Potential shareholder dilution from the issuance of new shares and warrants.

Insights

Financial Analyst

This $3 million registered direct offering marks a critical capital raise for Citius Pharmaceuticals, though at a concerning price point that reflects current market challenges. The offering price of $4.035 per share with accompanying warrants suggests significant dilution for existing shareholders. The warrant exercise price of $3.91 and immediate exercisability creates additional dilution risk over the next five years. For a company with a market cap of approximately $31.5 million, this 9.5% capital injection is substantial but comes at a cost. The timing and structure of this offering, including at-the-market pricing and warrant coverage, indicates pressing capital needs and financing alternatives. While the additional working capital provides near-term operational runway, the dilutive impact and warrant overhang may pressure stock performance. The involvement of H.C. Wainwright as placement agent suggests traditional institutional channels remain challenging for the company.

Biotech Research Analyst

The capital raise, while modest, provides essential funding for Citius's clinical development pipeline. The emphasis on using proceeds for pre-clinical and clinical development suggests ongoing progress in their first-in-class critical care products portfolio. However, the relatively small size of the raise - $3 million before expenses - may only provide runway for development programs. The company's ability to secure funding, albeit through a dilutive offering, demonstrates some market confidence in their development programs, though the terms reflect current biotech market headwinds. For retail investors, it's important to understand that early-stage biopharma companies often require multiple funding rounds to reach key development milestones. The warrant component, while dilutive, could provide additional capital if the share price exceeds $3.91, potentially funding future development phases without additional offerings.

CRANFORD, N.J., Jan. 8, 2025 /PRNewswire/ -- Citius Pharmaceuticals Inc. (Nasdaq: CTXR) ("Citius Pharma" or the "Company"), a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products, today announced that it has entered into definitive agreements for the purchase of an aggregate of 743,496 shares of its common stock and accompanying warrants to purchase up to an aggregate of 743,496 shares of its common stock, at a purchase price of $4.035 per share and accompanying warrant in a registered direct offering priced at-the-market under Nasdaq rules. The warrants will have an exercise price of $3.91 per share, will be exercisable immediately upon issuance, and will expire five years from the initial exercise date.  The closing of the offering is expected to occur on or about January 8, 2025, subject to the satisfaction of customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The aggregate gross proceeds to the Company from the offering are expected to be approximately $3 million, before deducting the placement agent fees and other offering expenses payable by the Company. The Company currently intends to use the net proceeds from the offering for general corporate purposes, including pre-clinical and clinical development of our product candidates and working capital and capital expenditures.

The securities described above are being offered pursuant to a "shelf" registration statement (File No. 333-277319) filed with the Securities and Exchange Commission ("SEC") on February 23, 2024 and declared effective on March 1, 2024. The offering is being made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. The prospectus supplement and the accompanying prospectus relating to the securities being offered will be filed with the SEC and be available at the SEC's website at www.sec.gov. Electronic copies of the prospectus supplement and the accompanying prospectus relating to the securities being offered may also be obtained, when available, by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3^rd Floor, New York, NY 10022, by telephone at (212) 856-5711 or e-mail at placements@hcwco.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Citius Pharmaceuticals, Inc. 

Citius Pharma is a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products. In August 2024, the FDA approved LYMPHIR, a targeted immunotherapy for an initial indication in the treatment of cutaneous T-cell lymphoma. Citius Pharma's late-stage pipeline also includes Mino-Lok®, an antibiotic lock solution to salvage catheters in patients with catheter-related bloodstream infections, and CITI-002 (Halo-Lido), a topical formulation for the relief of hemorrhoids. A Pivotal Phase 3 Trial for Mino-Lok and a Phase 2b trial for Halo-Lido were completed in 2023. Mino-Lok met primary and secondary endpoints of its Phase 3 Trial. Citius Pharma is actively engaged with the FDA to outline next steps for both programs. Citius Pharma owns 92% of Citius Oncology, Inc. ("Citius Oncology"). For more information, please visit www.citiuspharma.com.

Forward Looking Statements  

This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are made based on our expectations and beliefs concerning future events impacting Citius Pharma. You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "plan," "should," and "may" and other words and terms of similar meaning or use of future dates. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price, and includes all statements related to the completion of the offering, the satisfaction of customary closing conditions related to the offering and the intended use of net proceeds from the offering.  Factors that could cause actual results to differ materially from those currently anticipated, and, unless noted otherwise, that apply to Citius Pharma and Citius Oncology, are: related to the closing of the offering; our ability to raise additional money to fund our operations for at least the next 12 months as a going concern; Citius Pharma's ability to continue to meet Nasdaq's continued listing standards; our ability to commercialize LYMPHIR and any of our other product candidates that may be approved by the FDA; risks relating to the results of research and development activities, including those from our existing and any new pipeline assets; risks related to research using our assets but conducted by third parties; our need for substantial additional funds; the estimated markets for our product candidates and the acceptance thereof by any market; the ability of our product candidates to impact the quality of life of our target patient populations; our dependence on third-party suppliers; our ability to procure cGMP commercial-scale supply; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; uncertainties relating to preclinical and clinical testing; the early stage of products under development; market and other conditions; risks related to our growth strategy; patent and intellectual property matters; our ability to identify, acquire, close and integrate product candidates and companies successfully and on a timely basis; government regulation; competition; as well as other risks described in our SEC filings. These risks have been and may be further impacted by any future public health risks. Accordingly, these forward-looking statements do not constitute guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements. Risks regarding our business are described in detail in our SEC filings which are available on the SEC's website at www.sec.gov, including in Citius Pharma's Annual Report on Form 10-K for the year ended September 30, 2024, filed with the SEC on December 27, 2024, as updated by our subsequent filings with the SEC. These forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.

Investor Contact: 
Ilanit Allen
ir@citiuspharma.com
908-967-6677 x113

Media Contact:
STiR-communications
Greg Salsburg
Greg@STiR-communications.com

 

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SOURCE Citius Pharmaceuticals, Inc.

FAQ

What does the CTXR registered direct offering entail?

The CTXR registered direct offering includes the sale of 743,496 shares of common stock and warrants to purchase an equal number of shares at a price of $4.035 per share and accompanying warrant.

How will the proceeds from the CTXR offering be used?

Citius plans to use the net proceeds for general corporate purposes, including pre-clinical and clinical development, working capital, and capital expenditures.

What is the exercise price of the CTXR warrants?

The exercise price of the CTXR warrants is $3.91 per share.

When will the CTXR offering close?

The CTXR offering is expected to close on or about January 8, 2025, subject to customary closing conditions.

Who is the placement agent for the CTXR offering?

H.C. Wainwright & Co. is acting as the exclusive placement agent for the CTXR offering.

What are the terms of the CTXR warrants?

The CTXR warrants are exercisable immediately upon issuance and will expire five years from the initial exercise date.

What is the total expected gross proceeds from the CTXR offering?

The total expected gross proceeds from the CTXR offering are approximately $3 million.

Under which registration statement are the CTXR securities being offered?

The CTXR securities are being offered under a shelf registration statement filed with the SEC on February 23, 2024, and declared effective on March 1, 2024.