What changed in this filing

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Item 1. Business

2025-12-23 compared with 2024-12-27 · 228 added, 252 removed, 588 unchanged (45% of the section changed)

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drugs with substantial existing safety and efficacy data or expanded indications for approved therapies.

The Company’s lead product candidate is

LYMPHIR TM , an engineered IL-2 diphtheria toxin fusion protein, for the treatment of patients with persistent or recurrent CTCL,

a rare form of non-Hodgkin lymphoma.

LYMPHIR was approved by the FDA in August 2024.

The Company believes there is an attractive and growing

market for LYMPHIR, estimated to exceed $400 million, that is underserved by existing treatments.

See below for more detailed information

In the future, the Company intends to commercialize

our products independently in the U.S., and partner to market products outside of the U.S.

The Company is in the process of establishing

a small, targeted oncology sales force, initially for LYMPHIR, focused on key geographies and stakeholders, primarily major cancer centers.

This commercialization strategy is anticipated to result in a combination of direct sales revenue, and royalty income, as well as incremental

operating expenses and greater working capital requirements.

Citius Oncology and the Business Combination

On August 23, 2021, Citius Pharmaceuticals, Inc.

(“Citius Pharma”), formed Citius Acquisition Corp.

(“SpinCo”) as a wholly-owned subsidiary in conjunction with

the acquisition of LYMPHIR, but SpinCo did not begin operations until April 2022, when Citius Pharma transferred the assets related to

LYMPHIR to SpinCo, including the related license agreement with Eisai Co., Ltd.

(“Eisai”) and the related asset purchase agreement

The Company’s lead product is LYMPHIR TM ,

an engineered IL-2 diphtheria toxin fusion protein, for the treatment of patients with persistent or recurrent CTCL, a rare form of non-Hodgkin

LYMPHIR was approved by the U.S.

Food and Drug Administration (the “FDA”) in August 2024 and was launched in December

The Company believes there is an attractive and growing market for LYMPHIR, estimated to exceed $400 million, that is underserved

by existing treatments.

See below for more detailed information on LYMPHIR.

The Company intends to commercialize our products

independently in the U.S., and partner to market products outside of the U.S.

The Company has established a small, targeted oncology sales

force, initially for LYMPHIR, focused on key geographies and stakeholders, primarily major cancer centers.

This commercialization strategy

is anticipated to result in a combination of direct sales revenue, and royalty income, as well as incremental operating expenses and greater

working capital requirements.

Citius Oncology and the Merger

On August 23, 2021, Citius Pharma formed Citius Acquisition Corp.

as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR, SpinCo began operations in April 2022, when Citius Pharma

transferred the assets related to LYMPHIR to SpinCo, including the related license agreement with Eisai Co., Ltd.

and the related asset purchase agreement with Dr.

Reddy’s Laboratories SA, a subsidiary of Dr.

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On August 12, 2024, pursuant to the terms and conditions of the Merger Agreement, Merger Sub merged with and

into SpinCo, with SpinCo surviving as a wholly owned subsidiary of TenX (the “Merger”) which was subsequently renamed Citius

into SpinCo, with SpinCo surviving as a wholly owned subsidiary of TenX, which was subsequently renamed Citius

Oncology Sub.

Prior to closing of the Merger (the “Closing”), TenX migrated to and domesticated as a Delaware corporation

Prior to the closing of the Merger (the “Closing”), TenX migrated to and domesticated as a Delaware corporation

in accordance with Section 388 of the General Corporation Law of the State of Delaware and the Cayman Islands Companies Act (As Revised)

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As part of the Domestication, TenX changed its name to “Citius Oncology, Inc.” (Nasdaq:

Immediately after the closing of the Merger, Citius Pharma owned approximately 92.3% of the outstanding shares of common stock

of the Company.

Since the SpinCo’s inception, Citius Pharma

funded SpinCo and continues to fund Citius Oncology, and Citius Pharma and Citius Oncology are party to an amended and restated shared

services agreement (the “A&R Shared Services Agreement”), which governs certain management and scientific services that

Citius Pharma provides Citius Oncology.

Immediately after the closing of the Merger, Citius Pharma owned approximately 92% of the outstanding shares of common stock of

As of December 17, 2025, Citius Pharma owned approximately 77.9% of Citius Oncology (excluding pre-funded warrants to purchase

up to 15,229,358 shares of Citius Oncology common stock in a transaction that closed on December 11, 2025).

Since SpinCo’s inception, Citius Pharma

has funded and continues to fund Citius Oncology, and Citius Pharma and Citius Oncology are party to an amended and restated shared services

agreement (the “A&R Shared Services Agreement”), which governs certain management and scientific services that Citius

Pharma provides Citius Oncology.

LYMPHIR TM (denileukin diftitox-cdxl)

In September 2021, Citius Pharma announced

that it had entered into an asset purchase agreement with Dr.

Reddy’s to acquire its exclusive license of E7777 (denileukin

E7777, an engineered IL-2-diphtheria toxin fusion protein, is an improved formulation of oncology agent, ONTAK®,

which was previously approved by the FDA for the treatment of patients with persistent or recurrent CTCL.

previously exclusively licensed E777 in select markets from Eisai and as part of the transaction, Eisai entered into a license

agreement whereby Eisai assigned all of its rights to E7777 to Citius Pharma.

Citius Pharma renamed E7777 as I/ONTAK and also

obtained the trade name LYMPHIR for the product.

Denileukin diftitox is referred to in this annual report as E7777, I/ONTAK or

LYMPHIR, depending on the period of time and context that is being discussed.

In September 2021, Citius Pharma announced that

it had entered into an asset purchase agreement with Dr.

Reddy’s to acquire its exclusive license of E7777 (denileukin diftitox).

E7777, an engineered IL-2-diphtheria toxin fusion protein, is an improved formulation of oncology agent, ONTAK®, which was previously

approved by the FDA for the treatment of patients with persistent or recurrent CTCL.

Reddy’s had previously exclusively licensed

E777 in select markets from Eisai and as part of the transaction, Eisai entered into a license agreement whereby Eisai assigned all of

its rights to E7777 to Citius Pharma.

Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the product.

Denileukin diftitox is referred to in this report as E7777, I/ONTAK or LYMPHIR, depending on the period of time and context that is being

In April 2022 LYMPHIR was assigned to Citius Oncology.

LYMPHIR is a recombinant DNA-derived fusion protein

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differentiated mechanism of action supports two therapeutic effects:

(1) killing tumors by binding to IL-2 receptors to deliver diphtheria

toxin directly to the tumor cells, and (2) depleting immunosuppressive regulatory T lymphocytes (Tregs) to enhance antitumor activity.

(i) killing tumors by binding to IL-2 receptors to deliver diphtheria

toxin directly to the tumor cells, and (ii) depleting immunosuppressive regulatory T lymphocytes (Tregs) to enhance antitumor activity.

Phase 3 Trial (E7777-G000-302) Design

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The secondary efficacy endpoints

of response (DOR) based on GRS;

to response based on GRS;

assessed by investigator using GRS;

response assessed by IRC using Prince (Prince, et al., 2010);

response (according to modified Severity Weighted Assessment Tool [mSWAT]);

of skin response;

to skin response.

Duration of response (DOR) based on GRS;

Time to response based on GRS;

ORR assessed by investigator using GRS;

Objective response assessed by IRC using Prince (Prince, et al., 2010);

Skin response (according to modified Severity Weighted Assessment Tool [mSWAT]);

Duration of skin response;

Time to skin response.

Overall, there were 25 responders out of 69 subjects

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36.2% (25.0%, 48.7%) (25 of 69 subjects).

And, an ORR of 38.1% in the intent to treat population and 44.4% in the efficacy evaluable populations

were observed.

Further, an ORR of 38.1% in the intent to treat population and 44.4% in the efficacy evaluable

populations were observed.

The 2-sided, exact 95% CI of ORR was calculated using the Clopper-Pearson method.

Per protocol, LYMPHIR demonstrated clinical

benefit if the lower bound of the 2-sided 95% exact CI of the ORR exceeded 25%.

Per protocol, LYMPHIR demonstrated

clinical benefit if the lower bound of the 2-sided 95% exact CI of the ORR exceeded 25%.

Skin responses were the same as GRS objective

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of cumulative toxicity and most patients experienced low grade 1 or 2 treatment emergent adverse events.

Serious adverse reactions occurred in 38% of

patients who received LYMPHIR.

Serious adverse reactions in > 2% of patients included capillary leak syndrome (10%), infusion-related

reaction (9%), sepsis (7%), skin infection (2.9%), pyrexia (2.9%), and rash (2.9%).

There were no Grade 5 adverse events in the Study

E7777-G000-302, Stage I-III Safety Set (which is the safety set FDA required for inclusion in the package insert/label).

Adverse Reactions (≥ 10%) in Patients

with Relapsed or Refractory Stage I-III CTCL Who Received LYMPHIR in E7777-G000-302

Serious adverse reactions occurred in 38% of patients

who received LYMPHIR.

Serious adverse reactions in > 2% of patients included capillary leak syndrome (10%), infusion-related reaction

(9%), sepsis (7%), skin infection (2.9%), pyrexia (2.9%), and rash (2.9%).

There were no Grade 5 adverse events in the Study E7777-G000-302,

Stage I-III Safety Set (which is the safety set FDA required for inclusion in the package insert/label).

Adverse Reactions (≥ 10%) in Patients with

Relapsed or Refractory Stage I-III CTCL Who Received LYMPHIR in E7777-G000-302

Adverse Reaction

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Grade 2 - Moderate;

minimal, local or noninvasive

intervention indicated;

minimal, local or noninvasive intervention indicated;

limiting age-appropriate instrumental activities of daily living.

● Grade 3 - Severe or medically significant but

not immediately life-threatening;

Grade 3 - Severe or medically significant but not immediately life-threatening;

hospitalization or prolongation of hospitalization indicated;

limiting self care activities

of daily living.

limiting self-care activities of daily living.

Grade 4 - Life-threatening consequences;

intervention indicated.

urgent intervention indicated.

Grade 5 - Death related to the adverse reaction.

Investigator Initiated Trials

The Company believes there is an opportunity in

the field of immuno-oncology and has undertaken two investigator-initiated trials to evaluate the potential safety and efficacy of LYMPHIR

as an immuno-oncology combination therapy.

We believe there is an opportunity in the field

of immuno-oncology and have undertaken two investigator-initiated trials to evaluate the potential safety and efficacy of LYMPHIR as an

immuno-oncology combination therapy.

A Phase 1 trial was initiated in June 2021 at

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to Enhance Regulatory T-Cell Depletion Prior to CAR-T Therapy for Relapsed/Refractory B-Cell Lymphoma (DLBCL).

NCT04855253).

results are anticipated in the first quarter of 2026.

A second Phase 1 Study was initiated in September

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survival, and overall survival.

Trials at both the University of Minnesota, Masonic

Cancer Center and the University of Pittsburgh Medical Center, Hillman Cancer Center are enrolling patients and progressing.

In November 2024, the Company announced promising

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combining two immuno-modulator agents, pembrolizumab (anti-PD-1) and LYMPHIR (transient Treg depletion) demonstrated:

● An overall response rate (ORR) of 27% (4/15)

and a clinical benefit rate of 33% (5/15) among evaluable patients;

● Median progression-free survival (PFS) for patients

achieving clinical benefit of 57 weeks, with a range of 30 to 96 weeks.

● Notably, two of the four patients who achieved

partial remission had received prior checkpoint inhibitors (i.e.

An overall response rate (ORR) of 27% (4/15) and a clinical benefit rate of 33% (5/15) among evaluable patients;

Median progression-free survival (PFS) for patients achieving clinical benefit of 57 weeks, with a range of 30 to 96 weeks.

Notably, two of the four patients who achieved partial remission had received prior checkpoint inhibitors (i.e.

anti-PD-1 therapy).

This highlights the therapeutic potential of LYMPHIR

plus immune checkpoint inhibitors to be effective in patients who fail prior anti-PD-1/L1 therapy.

This highlights the therapeutic potential of LYMPHIR plus immune checkpoint inhibitors to be effective in patients who fail prior anti-PD-1/L1 therapy.

The trial enrolled 21 patients with recurrent

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to the patients’ underlying disease.

Importantly, no significant immune-related adverse events were observed, and only one case of dose-limiting

toxicity (capillary leak syndrome) was reported at the highest dose level (12 mcg/kg).

Importantly, no significant immune-related adverse events were observed, and only one case

of dose-limiting toxicity (capillary leak syndrome) was reported at the highest dose level (12 mcg/kg).

Efficacy Data

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FDA had approved LYMPHIR.

Citius Oncology launched LYMPHIR in December 2025.

Market Opportunity

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the addressable U.S.

market for LYMPHIR exceeds $400,000,000 and may further expand with the introduction of a new therapeutic.

market for LYMPHIR exceeds $400 million and may further expand with the introduction of a new therapeutic.

There are currently several approved targeted

therapeutics for patients with persistent or recurrent CTCL.

However, there are limitations to these targeted therapies, which often are

However, there are limitations to these targeted therapies, which are often

discontinued due to toxicity, adverse events, or a limited duration of response due to resistance over time.

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treatment of advanced CTCL:

● Mogamulizumab, sold under the brand name Poteligeo,

is a humanized, afucosylated monoclonal antibody targeting CC chemokine receptor 4.

The FDA approved it for treatment of relapsed or refractory

mycosis fungoides and Sézary disease.

● 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.

● 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.

● Vorinostat sold under the brand name Zolinza,

is a HDAC inhibitor indicated for the treatment of cutaneous manifestations in patients with CTCL who have progressive, persistent or

recurrent disease on or following two systemic therapies.

Mogamulizumab, sold under the brand name Poteligeo, is a humanized, afucosylated monoclonal antibody targeting CC chemokine receptor 4.

The FDA approved it for treatment of relapsed or refractory mycosis fungoides and Sézary disease.

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.

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.

Vorinostat sold under the brand name Zolinza, is a HDAC inhibitor indicated for the treatment of cutaneous manifestations in patients with CTCL who have progressive, persistent or recurrent disease on or following two systemic therapies.

Sales and Marketing

The Company does not currently have our own commercial

infrastructure and is in the process of developing our sales or marketing capability by contracting with a large third-party commercial

sales and marketing organization with an existing commercial infrastructure and product launch experience to assist in our commercial

The Company intends to utilize a dedicated field force combined with various marketing programs which will be tailored to both

physicians and patients to launch LYMPHIR and grow our market share.

We plan to focus our commercial efforts on a concentrated group of

prescribing hematologists, oncologists and dermatologist-oncologists, along with key opinion leaders and advocacy groups who play an important

role in the CTCL treatment regimen.

infrastructure and has finalized its initial sales and marketing capability by contracting with a large third-party commercial sales and

marketing organization with an existing commercial infrastructure and product launch experience to assist in our commercial efforts.

this third-party organization, the Company has developed a dedicated field force combined with various marketing programs which will be

tailored to both physicians and patients to facilitate the successful launch of LYMPHIR and grow our market share.

We plan to focus our

commercial efforts on a concentrated group of prescribing hematologists, oncologists and dermatologist-oncologists, along with key opinion

leaders and advocacy groups who play an important role in the CTCL treatment regimen.

To support the launch and commercialization of

LYMPHIR, we have entered into distribution agreements with Cardinal Health, Cencora and McKesson Corporation.

In addition, we have contracted

with EVERSANA an innovative AI platform, to support the launch and commercialization of LYMPHIR whereby EVERSANA provides an integrated

suite of pre- and post-launch services, including medical information, pharmacovigilance, revenue cycle management, program management,

data and analytics, and channel management.

In addition, in October 2025, we announced that we are actively engaging with regional distribution

partners to make LYMPHIR available to eligible patients through country-specific Named Patient Programs (NPPs) in Europe, South America

and the Middle East.

As part of its NPP strategy, we have entered into an exclusive distribution agreement with Integris Pharma S.A.,

headquartered in Athens, Greece.

The partnership covers Greece, Cyprus, Malta, Bulgaria, Romania, Croatia, Serbia, Albania, Bosnia Herzegovina,

Kosovo, Montenegro and North Macedonia.

In September 2024, the Company announced the inclusion

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from the Centers for Medicare and Medicaid Services (“CMS”).

In February 2025, Citius Pharma announced that

LYMPHIR had been assigned a unique, permanent Healthcare Common Procedure Coding System (HCPCS) J-code (J9161) by CMS.

Supply and Manufacturing

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intend to establish, our own manufacturing facilities.

We have secured supply agreements with third-party cGMP facilities who are in compliance

with current good manufacturing practices as generally accepted by the FDA.

The Company is confident that all drug substance and drug

product materials meet or will meet specifications as agreed with the FDA.

We have secured supply agreements for LYMPHIR with third-party cGMP facilities

who are in compliance with current good manufacturing practices as generally accepted by the FDA.

The Company is confident that all drug

substance and drug product materials meet or will meet specifications as agreed with the FDA.

The Company also believes our contract manufacturers

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manufacturers, the Company has contracted with other proven suppliers for, testing, labeling, packaging, and distribution of LYMPHIR.

In general, our suppliers purchase raw materials and supplies on the open market.

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.

If we elect to conduct product development and manufacturing, we will be subject to regulation under various federal and state laws, including

the Food, Drug and Cosmetic Act, 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

In general, our suppliers purchase raw materials

and supplies on the open market.

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.

Our product development and manufacturing for

LYMPHIR is subject to regulation under various federal and state laws, including the Food, Drug and Cosmetic Act, 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.

If we fail to raise additional capital, and as

a result are unable to abide by our contractual obligations with these third-party manufacturers and suppliers, including making timely

payment, the necessary third-party support to commercialize LYMPHIR could be delayed or terminated.

payment, the necessary third-party support to successfully commercialize LYMPHIR could be delayed or terminated.

LYMPHIR License Agreement

On September 3, 2021, Citius Pharma acquired the

exclusive license of E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, from Dr.

who had exclusively licensed it previously from Eisai.

The exclusive license, which was amended as part of the transaction, is with Eisai

and includes rights to develop and commercialize LYMPHIR in all markets except for Japan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia,

exclusive license of E7777 (denileukin diftitox), an oncology immunotherapy for the treatment of CTCL, from Dr.

Reddy’s, who had

exclusively licensed it previously from Eisai.

The exclusive license, which was amended as part of the transaction, is with Eisai and

includes rights to develop and commercialize LYMPHIR in all markets except for Japan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia,

Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia, Laos, Afghanistan, Bangladesh,

Bhutan, Nepal, Mongolia, and Papua New Guinea.

The license includes an option on the right to develop and market the product in India.

Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the product.

In April 2022, Citius Pharma assigned

the license agreement to SpinCo, at which time SpinCo began operations.

Upon the completion of the Merger, the Company acquired SpinCo

as our wholly owned subsidiary.

Citius Pharma remains a guarantor on all of Citius Oncology’s payment obligations thereunder.

Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the

In April 2022, Citius Pharma assigned the license agreement to SpinCo, at which time SpinCo began operations.

Upon the completion

of the Merger, the Company acquired SpinCo as our wholly owned subsidiary.

Citius Pharma remains a guarantor on all of Citius Oncology’s

payment obligations thereunder.

Obligations to

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Under the license agreement, Eisai is to receive

a $5.9 million development milestone payment upon initial approval by the FDA of LYMPHIR for the CTCL indication (which increases to $6.9

million in the event the Company exercises the option to add India to the licensed territory) and an aggregate of up to $22 million related

to the achievement of net product sales thresholds.

Pursuant to the terms of the license agreement, through 2022, Citius Pharma reimbursed

Eisai for approximately $2.65 million of Eisai’s costs to complete the ongoing Phase 3 pivotal clinical trial for LYMPHIR for the

CTCL indication and for all reasonable costs associated with the preparation of a BLA for LYMPHIR.

The Company has accrued the $5.9 million

development milestone payment as of September 30, 2024.

a $5.9 million development milestone payment upon initial approval by the FDA of LYMPHIR for the CTCL indication and an aggregate of up

to $22 million related to the achievement of net product sales thresholds.

Pursuant to the terms of the license agreement, through 2022,

Citius Pharma reimbursed Eisai for approximately $2.65 million of Eisai’s costs to complete the ongoing Phase 3 pivotal clinical

trial for LYMPHIR for the CTCL indication and for all reasonable costs associated with the preparation of a BLA for LYMPHIR.

has accrued the $2.9 million unpaid balance of the development milestone payment as of September 30, 2025.

Pursuant to the terms of the license agreement,

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additional indications.

On March 28, 2025, Citius Oncology and Eisai entered

into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the milestone payment and certain

unpaid invoices.

We agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter on the 15 th of

each of the next four months to pay Eisai $2.35 million and make a final payment of $2,197,892 to Eisai on or before December 15, 2025,

in each case with interest on each obligation from its original due date through the date of actual payment under the letter agreement

at the rate of 2% per annum.

During the year ended September 30, 2025, we recorded $218,032 in interest expense under the agreement.

parties released each other from any and all claims, losses, damages, costs and expenses that arise from or related to our failure to

pay the milestone payment or the other incurred costs under the license agreement except for any claims arising out of a breach of the

letter agreement.

All other terms of the license agreement remain in full force and effect.

During the year ended September 30, 2025 we

paid $3 million of the development milestone and the balance of $2.9 million is included in license fee payable at September 30, 2025.

On July 21, 2025, Citius Oncology made a payment to Eisai of $1,616,522 for other invoices and accumulated interest associated with

the letter agreement.

The term of the license agreement will continue

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a country-by-country basis.

The term of the license may be extended for additional 10-year periods for all countries in the territory

by notifying Eisai and paying an extension fee equal to $10 million.

Either party may terminate the license agreement upon written notice

if the other party is in material breach of the agreement, subject to cure within the designated time periods.

Either party also may terminate

the license agreement immediately upon written notice if the other party files for bankruptcy or takes related actions or is unable to

pay its debts as they become due.

Additionally, either party will have the right to terminate the agreement if the other party directly

or indirectly challenges the patentability, enforceability, or validity of any licensed patent.

The initial commercial orders for LYMPHIR were placed and filled in December 2025.

The term of the license

may be extended for additional 10-year periods for all countries in the territory by notifying Eisai and paying an extension fee equal

to $10 million.

Either party may terminate the license agreement upon written notice if the other party is in material breach of the agreement,

subject to cure within the designated time periods.

Either party also may terminate the license agreement immediately upon written notice

if the other party files for bankruptcy or takes related actions or is unable to pay its debts as they become due.

Additionally, either

party will have the right to terminate the agreement if the other party directly or indirectly challenges the patentability, enforceability,

or validity of any licensed patent.

The Company is responsible for preparing, filing,

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closing of the transaction, which was in effect until March 2022.

At the time of the FDA approval for LYMPHIR, a

$27.5 million milestone payment became payable for which a balance of $22.5 million remains due as of September 30, 2024.

At the time of the FDA

approval for LYMPHIR, a $27.5 million milestone became payable to Dr.

Reddy’s, of which a balance of $19.75 million included in

license fee payable, remained due as of September 30, 2025.

After discussions, Dr.

Reddy’s agreed to a partial deferral without

penalty of this milestone payment.

During the years ended September 30, 2025 and 2024, we paid $2,750,000 and $5,000,000, respectively,

against the outstanding milestone fee.

LYMPHIR Patents

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were acquired:

● US Provisional Application No.

63/070,645, which

was filed on August 26, 2020, and subsequently published as US 2022/0062390 A1 on March 3, 2022, entitled Methods of Treating Cancer.

Provisional Application No.

63/070,645, which was filed on August 26, 2020, and subsequently published as US 2022/0062390 A1 on March 3, 2022, entitled Methods of Treating Cancer.

Expiration date of August 23, 2041.

International Patent Application Number:

PCT/IB2021/0576733,

which was filed with the World Intellectual Property Organization on August 23, 2021 for Europe, and subsequently published as WO 2022/043863

A1 on March 3, 2022, entitled, Combination for Use in Methods of Treating Cancer.

PCT/IB2021/0576733, which was filed with the World Intellectual Property Organization on August 23, 2021 for Europe, and subsequently published as WO 2022/043863 A1 on March 3, 2022, entitled, Combination for Use in Methods of Treating Cancer.

Expiration date of August 23, 2041.

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Good Clinical Practices (“GCP”) regulations:

● Phase 1 studies evaluate the safety and tolerability

of the drug, generally in normal, healthy volunteers;

● Phase 2 studies evaluate safety and efficacy,

as well as appropriate doses;

these studies are typically conducted in patient volunteers who suffer from the particular disease condition

that the drug is designed to treat;

● Phase 3 studies evaluate safety and efficacy

of the product at specific doses in one or more larger pivotal trials.

Phase 1 studies evaluate the safety and tolerability of the drug, generally in normal, healthy volunteers;

Phase 2 studies evaluate safety and efficacy, as well as appropriate doses;

these studies are typically conducted in patient volunteers who suffer from the particular disease condition that the drug is designed to treat;

Phase 3 studies evaluate safety and efficacy of the product at specific doses in one or more larger pivotal trials.

In addition to human testing, the manufacturing

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the review clock.

After evaluating the NDA or BLA and all

related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing

facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter

A CRL generally contains a statement of specific conditions that must be met in order to secure final approval

of the NDA or BLA and may require additional clinical or preclinical studies, or other information, in order for FDA approval.

with submission of this additional information, the FDA may decide that the NDA or BLA does not satisfy the regulatory criteria for

If and when those conditions have been met to the FDA’s satisfaction, the FDA may issue an approval letter.

approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

After evaluating the NDA or BLA and all related

information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and

clinical trial sites, the FDA may issue an approval letter, or, in some cases, a CRL.

A CRL generally contains a statement of specific

conditions that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical studies,

or other information, in order for FDA approval.

Even with submission of this additional information, the FDA may decide that the NDA

or BLA does not satisfy the regulatory criteria for approval.

If and when those conditions have been met to the FDA’s satisfaction,

the FDA may issue an approval letter.

An approval letter authorizes commercial marketing of the drug with specific prescribing information

for specific indications.

Data obtained from the development program are

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In addition to FDA regulations governing the marketing

of pharmaceutical products, there are various other state and federal laws that may restrict business practices in the biopharmaceutical

of pharmaceutical products, there are various state and federal laws that may restrict business practices in the biopharmaceutical industry.

These include the following:

● The federal Anti-Kickback laws and implementing

regulations, which prohibit persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or

indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for

which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

● Other Medicare laws, regulations, rules, manual

provisions and policies that prescribe the requirements for coverage and payment for services performed by our customers, including the

amount of such payment;

● The federal False Claims Act, which imposes civil

and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the

● The Foreign Corrupt Practices Act (“FCPA”),

which prohibits certain payments made to foreign government officials;

● State and foreign law equivalents of the foregoing

and state laws regarding pharmaceutical company marketing compliance, reporting and disclosure obligations;

● The Patient Protection and Affordable Care Act

of 2010, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “Affordable Care

Act” or “ACA”), which among other things:

The federal Anti-Kickback laws and implementing regulations, which prohibit persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

Other Medicare laws, regulations, rules, manual provisions and policies that prescribe the requirements for coverage and payment for services performed by our customers, including the amount of such payment;

The federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;

The Foreign Corrupt Practices Act (“FCPA”), which prohibits certain payments made to foreign government officials;

State and foreign law equivalents of the foregoing and state laws regarding pharmaceutical company marketing compliance, reporting and disclosure obligations;

The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “Affordable Care Act” or “ACA”), which among other things:

changes access to healthcare products and services;

creates new fees for the

pharmaceutical and medical device industries;

creates new fees for the pharmaceutical and medical device industries;

changes rebates and prices for health care products and services;

and requires additional

reporting and disclosure;

● The Health Insurance Portability and Accountability

Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations

(collectively, “HIPAA”), which creates federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit

program and which also imposes certain obligations on entities with respect to the privacy, security and transmission of individually

identifiable health information;

● The federal Physician Payment Sunshine Act, which

requires certain pharmaceutical and biological manufacturers to engage in extensive tracking of payments or transfers of value to physicians

and teaching hospitals and public reporting of the payment data.

and requires additional reporting and disclosure;

The Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations (collectively, “HIPAA”), which creates federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program and which also imposes certain obligations on entities with respect to the privacy, security and transmission of individually identifiable health information;

The federal Physician Payment Sunshine Act, which requires certain pharmaceutical and biological manufacturers to engage in extensive tracking of payments or transfers of value to physicians and teaching hospitals and public reporting of the payment data.

If our operations are found to be in violation

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sold in a foreign country nor have we applied for any foreign approvals.

The Company has signed international distribution agreements

covering Greece, Cyprus other Balkan countries as well as Turkey, Bahrain, Qatar, Oman, Kuwait, Saudi Arabia, and the UAE through named

patient programs which allows access to LYMPHIR where permitted by local law without constituting commercial approval outside the United

Coverage and Reimbursement

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in Medicare reimbursement levels for drugs administered by physicians.

Further, the Center for Medicare & Medicaid Services (“CMS”),

the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to implement coverage

restrictions for some drugs.

Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease

utilization of and reimbursement for any approved products.

While Medicare regulations apply only to drug benefits for Medicare beneficiaries,

private payers often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates.

Therefore, any

reduction in reimbursement that results from federal legislation or regulation may result in a similar reduction in payments from private

Further, CMS, the agency that administers the Medicare and Medicaid

programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some drugs.

Cost reduction initiatives

and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved

While Medicare regulations apply only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage

policy and payment limitations in setting their own reimbursement rates.

Therefore, any reduction in reimbursement that results from federal

legislation or regulation may result in a similar reduction in payments from private payers.

The ACA substantially changed the way healthcare

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to modify or eliminate the ACA.

The Trump administration pushed for modifications

The first Trump administration pushed for modifications

In addition, the Tax Cuts and Jobs Act (the “TCJA”), enacted on December 22, 2017, repealed the shared responsibility

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(the “IRC”), as amended, commonly referred to as the individual mandate.

While the Biden administration has rolled back many

of the executive orders issued by former President Trump, ongoing repeal and reform efforts impacting the ACA and the healthcare sector

more broadly are likely under the incoming Trump administration.

While the Biden administration rolled back many of

the executive orders issued by President Trump in his first term, ongoing repeal and reform efforts impacting the ACA and the healthcare

sector more broadly are being sought and are likely under the current Trump administration.

Other legislative changes have been proposed and

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to providers.

Further legislative and regulatory changes

under the ACA remain possible.

The Inflation Reduction Act of 2022, enacted on August 16, 2022, includes several provisions to lower

prescription drug costs for Medicare patients and reduce drug spending by the federal government.

It is unknown what form any future

changes or any law would take under the incoming Trump administration, and how or whether it may affect our business in the future.

We expect that changes or additions to the ACA, the Medicare and Medicaid programs, changes allowing the federal government to

directly negotiate drug prices (which becomes effective in January 2026 for 10 prescription drugs) and changes stemming from other

healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could

have a material adverse effect on the healthcare industry.

In addition, the Affordable Care Act has also been subject to challenges

in the courts, which remain ongoing.

Further legislative and regulatory changes under

the ACA remain possible.

The Inflation Reduction Act of 2022, enacted on August 16, 2022, includes several provisions to lower prescription

drug costs for Medicare patients and reduce drug spending by the federal government.

It is unknown what form any future changes or any

law would take under the current Trump administration, and how or whether it may affect our business in the future.

We expect that changes

or additions to the ACA, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices

(which becomes effective in January 2026 for 10 prescription drugs) and changes stemming from other healthcare reform measures, especially

with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare

In addition, the Affordable Care Act has also been subject to challenges in the courts, which remain ongoing.

Payment methodologies may be subject to changes

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The Company also relies upon a network of consultants to support our clinical studies and manufacturing

Executive Officers of Citius Oncology

Leonard Mazur , Chief Executive Officer

and Director and Chairman of the Board– Mr.

Mazur, 79, was appointed Chief Executive Officer after the Merger.

He was appointed

the Chief Executive Officer of Citius Pharma effective May 1, 2022, and has been a member of its Board since September 2014.

previously served as Chief Executive Officer, President, and Chief Operating Officer from September 2014 until March 2016.

Myron Holubiak, Secretary and Director

Holubiak, 77, was appointed Secretary and Director after the Merger.

He was appointed Executive Vice Chairman of Citius Pharma

effective May 1, 2022, and has been a member of its Board since October 2015.

He previously served as President and Chief Executive Officer

of Citius Pharma from March 2016 through April 2022.

He was also the founder and Chief Executive Officer and President of Leonard-Meron

Biosciences, Inc., an acquired subsidiary of Citius Pharma, from March 2013 until March 2016.

Jaime Bartushak , Chief Financial

Officer and Treasurer – Mr.

Bartushak, 57, was appointed as Chief Financial Officer and Treasurer after the Merger.

He has served

as the Chief Business Officer and Chief Financial Officer of Citius Pharma since November 2017.

Previously, he was one of the founders

and Chief Financial Officer of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius Pharma.

Myron Czuczman , Chief Medical Officer

President – Dr.

Czuczman, 65, was appointed as Chief Medical Officer and President after the Merger.

He has served as the Chief

Medical Officer and Executive Vice President of Citius Pharma since July 2020.

Czuczman previously served as Vice President, Global

Clinical Research and Development, Therapeutic Head of Lymphoma/CLL at Celgene Corporation.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business