Citius Pharmaceuticals Announces Closing of $3 Million Registered Direct Offering

Rhea-AI Summary

Citius Pharmaceuticals (Nasdaq: CTXR) has closed a $3 million registered direct offering, selling 12,000,000 shares of common stock with accompanying warrants at $0.25 per share and warrant. The warrants are immediately exercisable at $0.25 per share and expire in five years. H.C. Wainwright & Co. served as the exclusive placement agent. The company plans to use the net proceeds for general corporate purposes, including pre-clinical and clinical development of product candidates, working capital, and capital expenditures.

Positive

• Secured $3 million in immediate funding through registered direct offering
• Warrants provide potential for additional future funding at $0.25 per share

Negative

• Significant dilution with 12 million new shares issued at $0.25 per share
• Low offering price of $0.25 per share indicates weak market position
• Additional potential dilution of 12 million shares through warrants

Insights

Financial Analyst

This $3 million registered direct offering at $0.25 per share represents significant dilution for existing shareholders, with 12 million new shares being issued at a substantial discount to recent trading prices. The accompanying warrants, also priced at $0.25, could lead to further dilution if exercised. While the capital raise provides some runway for operations, the pricing and structure suggest challenging market conditions for the company.

The offering size relative to Citius's $57.8 million market cap is concerning, representing approximately 5.2% dilution at the outset, with potential for up to 10.4% total dilution if all warrants are exercised. The company's need to raise capital at these terms indicates potential cash flow pressures and may signal more dilutive financings ahead if product development milestones aren't reached before current funds are depleted.

CRANFORD, N.J., Nov. 18, 2024 /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 closed its previously announced registered direct offering for the purchase of an aggregate of 12,000,000 shares of its common stock and accompanying warrants to purchase up to an aggregate of 12,000,000 shares of its common stock, at a purchase price of $0.25 per share and accompanying warrant. The warrants have an exercise price of $0.25 per share, are exercisable immediately upon issuance, and expire five years from the initial exercise date. 

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

The aggregate gross proceeds to the Company from the offering were $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 was filed with the SEC on November 18, 2024, and is 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 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 statements related to 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 regain compliance with and 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, 2023, filed with the SEC on December 29, 2023, 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

How much did Citius Pharmaceuticals (CTXR) raise in its November 2024 offering?

Citius Pharmaceuticals raised $3 million in gross proceeds through a registered direct offering.

What was the share price for CTXR's November 2024 registered direct offering?

The offering price was $0.25 per share and accompanying warrant.

How many shares were issued in CTXR's November 2024 offering?

Citius Pharmaceuticals issued 12,000,000 shares of common stock with accompanying warrants.

What are the terms of the warrants in CTXR's November 2024 offering?

The warrants have an exercise price of $0.25 per share, are immediately exercisable, and expire five years from the initial exercise date.