Citius Pharmaceuticals (CTXR) to Spinoff Late-Stage Oncology Asset, I/ONTAK, into a New Standalone Publicly Traded Company

May 25, 2022 8:48 AM EDT

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Citius Pharmaceuticals, Inc. ("Citius" or the "Company") (Nasdaq: CTXR), a late-stage biopharmaceutical company developing and commercializing first-in-class critical care products, today announced that it intends to split the Company's assets into two separate publicly-traded entities. Citius plans to form a new company (NewCo) focused on developing and commercializing I/ONTAK, for which a Phase 3 trial was completed in December 2021 and a biologics license application (BLA) is being planned for submission in the second half of 2022. The Company's other pipeline assets, including Mino-LokĀ®, would remain at Citius. Citius would continue to trade on the Nasdaq exchange under its current ticker CTXR. The strategic action is intended to optimize organizational resources and investment capital to support the successful execution of each development program.

"As Citius prepares for the commercialization of its two late-stage product candidates, I/ONTAK and Mino-Lok, we believe that the market has not adequately valued the potential of our recent I/ONTAK licensing agreement. It is our view that a spinoff and IPO would create two focused standalone public companies that are better positioned to pursue their strategic priorities, invest in growth opportunities and attract new investors. Upon completion of the transactions, NewCo would be a pure-play oncology-focused biopharmaceutical company. Citius would retain i0074s Mino-Lok antibiotic lock solution at the core of its diversified pipeline. The planned transactions underscore our commitment to provide patients with superior therapeutics and reinforce our alignment with the needs of shareholders to deliver long term growth. Our intention is that the spinoff will be non-dilutive and tax-fee to Citius shareholders," stated Leonard Mazur, Chairman and CEO of Citius.

Citius intends the spinoff to be accomplished through an initial public offering (IPO) and pro rata distribution of stock in the NewCo to Citius shareholders. The spinoff and distribution of stock is expected to occur in a manner intended to qualify as a tax-free transaction for U.S. shareholders.

The transactions are expected to be completed in the second half of calendar year 2022, subject to the satisfaction of customary conditions, including final approval from the Citius Board of Directors, regulatory approvals and SEC filings.

There can be no assurance regarding the ultimate timing of the proposed transaction or that the transaction will be completed at all.

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