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Item 1. Business

2021-12-15 compared with 2020-12-16 · 1002 added, 826 removed, 106 unchanged (95% of the section changed)

Pharmaceuticals, Inc., headquartered in Cranford, New Jersey, is a specialty pharmaceutical company dedicated to the development

and commercialization of critical care products targeting important medical needs with a focus on anti-infective products in adjunct

cancer care, unique prescription products and, recently, mesenchymal stem cell therapy.

Our goal generally is to achieve leading

market positions by providing therapeutic products that address unmet medical needs yet have a lower development risk than usually

is associated with new chemical entities.

New formulations of previously approved drugs with substantial existing safety and efficacy

data are a core focus.

We seek to reduce development and clinical risks associated with drug development, yet still focus on innovative

applications.

Our strategy centers on products that have intellectual property and regulatory exclusivity protection, while providing

competitive advantages over other existing therapeutic approaches.

Pharmaceuticals, Inc.

(the “Company,” “Citius” or “we”), headquartered in Cranford, New Jersey, is

a specialty pharmaceutical company dedicated to the development and commercialization of first in class critical care products with a

focus on anti-infective products in adjunct cancer care, unique prescription products and mesenchymal stem cell therapy.

Our goal generally

is to achieve leading market positions by providing therapeutic products that address unmet medical needs yet have a lower development

risk than usually is associated with new chemical entities.

New formulations of previously approved drugs with substantial existing safety

and efficacy data are a core focus.

We seek to reduce development and clinical risks associated with drug development, yet still focus

on innovative applications.

Our strategy centers on products that have intellectual property and regulatory exclusivity protection, while

providing competitive advantages over other existing therapeutic approaches.

Company was founded as Citius Pharmaceuticals, LLC, a Massachusetts limited liability company, on January 23, 2007.

12, 2014, Citius Pharmaceuticals, LLC entered into a Share Exchange and Reorganization Agreement, with Citius Pharmaceuticals,

(formerly Trail One, Inc.), a publicly traded company incorporated under the laws of the State of Nevada.

Citius Pharmaceuticals,

LLC became a wholly-owned subsidiary of Citius Pharmaceuticals, Inc.

(“Citius”).

On March 30, 2016, Citius acquired

Leonard-Meron Biosciences, Inc.

(“LMB”) as a wholly-owned subsidiary.

LMB was a pharmaceutical company focused on

the development and commercialization of critical care products with a concentration on anti-infectives.

On September 12,

we formed NoveCite, Inc.

(“NoveCite”), a Delaware corporation, of which we own 75% of the issued and outstanding capital

NoveCite is focused on the development and commercialization of its proprietary mesenchymal stem cells for the treatment

of acute respiratory disease syndrome (“ARDS”).

its inception, the Company has devoted substantially all of its efforts to business planning, acquiring our proprietary

technology, research and development, recruiting management and technical staff, and raising capital.

We are developing four

proprietary products:

Mino-Lok, an antibiotic lock solution used to treat patients with catheter-related bloodstream

infections by salvaging the infected catheter;

Mino-Wrap, a liquifying gel-based wrap for reduction of tissue expander

infections following breast reconstructive surgeries;

Halo-Lido, a corticosteroid-lidocaine topical formulation that is

intended to provide anti-inflammatory and anesthetic relief to persons suffering from hemorrhoids;

and NoveCite, in-licensed

in October 2020, a mesenchymal stem cell therapy for the treatment of ARDS.

We believe these unique markets for our products

are large, growing, and underserved by the current prescription products or procedures.

is subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, risks related

to the development by Citius or its competitors of research and development stage products, market acceptance of its products

that receive regulatory approval, competition from larger companies, dependence on key personnel, dependence on key suppliers

and strategic partners, the Company’s ability to obtain additional financing and the Company’s compliance with governmental

and other regulations.

Mino-Lok ®

is a patented solution containing minocycline, disodium ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which

act synergistically to treat and salvage infected central venous catheters (“CVCs”) in patients with catheter related

bloodstream infections (“CRBSIs”).

Mino-Lok breaks down biofilm barriers formed by bacterial colonies, eradicates

the bacteria, and provides anti-clotting properties to maintain patency in CVCs.

2014, Citius Pharmaceuticals, LLC entered into a Share Exchange and Reorganization Agreement, with Citius (formerly Trail One, Inc.),

a publicly traded company incorporated under the laws of the State of Nevada.

Citius Pharmaceuticals, LLC became a wholly-owned subsidiary

On March 30, 2016, Citius acquired Leonard-Meron Biosciences, Inc.

(“LMB”) as a wholly-owned subsidiary.

a pharmaceutical company focused on the development and commercialization of critical care products with a concentration on anti-infectives.

On September 11, 2020, we formed NoveCite, Inc.

(“NoveCite”), a Delaware corporation, of which we own 75% of the issued and

outstanding capital stock.

NoveCite is focused on the development and commercialization of its proprietary mesenchymal stem cells for

the treatment of acute respiratory disease syndrome (“ARDS”).

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

wholly-owned subsidiary in conjunction with the acquisition of I/ONTAK, but no activity has occurred to date.

its inception, the Company has devoted substantially all of its efforts to business planning, acquiring our proprietary technology, research

and development, recruiting management and technical staff, and raising capital.

We are developing five proprietary products:

an antibiotic lock solution used to treat patients with catheter-related bloodstream infections by salvaging the infected catheter;

a liquifying gel-based wrap for reduction of tissue expander infections following breast reconstructive surgeries;

Halo-Lido, a corticosteroid-lidocaine

topical formulation that is intended to provide anti-inflammatory and anesthetic relief to persons suffering from hemorrhoids;

a mesenchymal stem cell therapy for the treatment of ARDS;

and I/ONTAK, in-licensed in September 2021, a engineered IL-2 diphtheria toxin

fusion protein, for the treatment of patients with persistent or recurrent cutaneous T-cell lymphoma (“CTCL”).

these unique markets for our products are large, growing, and underserved by the current prescription products or procedures.

is subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, risks related to the

development by Citius or its competitors of research and development stage products, market acceptance of its products that receive regulatory

approval, competition from larger companies, dependence on key personnel, dependence on key suppliers and strategic partners, the Company’s

ability to obtain additional financing and the Company’s compliance with governmental and other regulations.

September 2021, the Company announced that it had entered into a definitive agreement with Dr.

Reddy's Laboratories SA, a subsidiary

Reddy's Laboratories, Ltd.

(collectively, "Dr.

Reddy's"), to acquire its exclusive license of E7777 (denileukin diftitox),

a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma.

E7777, an engineered IL-2-diphtheria

toxin fusion protein, is an improved formulation of oncology agent, ONTAK®, which was previously approved by the U.S.

Food and Drug

Administration (“FDA”) for the treatment of patients with persistent or recurrent CTCL.

We have renamed E7777 as I/ONTAK

although we refer to it as E7777 at times in this report.

global, multicenter, open label single arm pivotal clinical trial for the treatment of patients with persistent or recurrent CTCL was

initiated in 2013.

Inclusion criteria for the study were to evaluate patients in advanced stage CTCL (Mycosis Fungoides or Sézary

Syndrome), who received at least one prior CTCL therapy.

pivotal trial was divided into two phases, a lead-in phase with 21 subjects that evaluated dose finding, pharmacokinetics and immunogenicity,

as well as assessing the Objective Response Rate (the “ORR”).

An ORR is defined as a greater than 50% reduction in tumor

results of the lead-in study were:

mcg/kg/dose for 5 consecutive days in 21-day cycles which was selected for the main phase

of the study based on safety, tolerability, and efficacy data.

new safety signals were identified compared to Ontak.

ORR of 38.1% in the intent to treat population and 44.4% in the efficacy evaluable populations.

second phase to the pivotal trial was a 70-patient study administered at the 9 mcg/kg/dose rate for 5 consecutive days in 21-day cycles,

The inclusion criteria was identical to the lead-in study and the primary objective was to evaluate the ORR.

Initiated Trials

Phase 1 trial has been initiated at the University of Minnesota, Masonic Cancer Center.

This study is a single-arm non-randomized trial

which has an estimated enrollment of 30 participants who will be administered E7777 prior to tisagenlecleucel Chimeric Antigen Receptor,

(“CAR-T”) therapy.

The Phase 1 study consists of two components:

dose finding to establish a maximum tolerated dose (“MTD”)

of E7777 in combination with CART-T Therapy, and a small extension component to provide an estimate of efficacy at that MTD.

second Phase 1 Study is planned to be initiated by March 2022 at the University of Pittsburg Medical Center, Hillman Cancer Center.

study will be investigating the safety and efficacy of a combined regimen of pembrolizumab with T-regulatory cell depletion and E7777

in patients diagnosed with recurrent or metastatic solid tumors in the second line setting.

the 1990’s, denileukin diftitox was developed at Boston University and the National Cancer Institute (“NCI”) in collaboration

with Seragen, Inc.

In 1999, Ontak® (denileukin diftitox) was granted accelerated approval by the FDA for the treatment of persistent

or recurrent CTCL with Ligand Pharmaceuticals, Inc.

(“Ligand”) acquiring the marketing rights in that same year.

Eisai Co., Ltd.

(“Eisai”) acquired the commercial rights to Ontak from Ligand.

2008, the FDA granted full approval to Ontak for CTCL.

2011, there was a commercial supply disruption due to manufacturing issues and a new formulation of denileukin diftitox was developed

under the code name E7777.

The FDA considered this a new product with a new IND being filed.

In ensuing discussions, the FDA agreed to

a development plan that included a single arm, open label study to conclude safety and efficacy of E7777 and a CMC development plan that

demonstrates the new process results in a comparable drug product.

2011, the FDA Office of Orphan Products Development granted E7777 orphan drug designation status for the treatment of Peripheral T-Cell

Lymphoma (“PTCL”).

In 2013, the FDA Office of Orphan Products Development granted E7777 orphan drug designation status for

the treatment of CTCL.

2013, the first patient was enrolled into the lead-in phase of the pivotal study for the E7777 U.S.

CTCL clinical trial.

2014, commercial sales of Ontak were discontinued when the product was voluntarily withdrawn from the market due to manufacturing issues

at the contract manufacturer.

2015, the last patient enrolled exited the lead-in phase of the E7777 U.S.

CTCL clinical trial.

March 2016, Dr.

Reddy’s Laboratories (“DRL”) acquired the global rights to E7777 from Eisai, other than far east countries,

with Eisai retaining the rights in those countries.

June 2016, the first patient was enrolled in the Phase 3 pivotal study for E7777 CTCL in the U.S.

March 2020, Eisai filed an NDA for E7777 in Japan for both CTCL and PTCL and in March 2021 received approvals in both CTCL and PTCL.

last patient in the Phase 3 Pivotal study of E7777 has been enrolled and a biologics license application (“BLA”) for E7777's

first indication in CTCL is expected to be filed with the FDA by the end of 2022.

are a heterogeneous subset of extranodal non-Hodgkin lymphomas (“NHL”) of mature, skin-homing T-cells that are mainly localized

The most common types of CTCL are mycosis fungoides (“MF”) and primary cutaneous CD30+ anaplastic large cell

lymphoma (pcALCL), jointly representing an estimated 80–85% of all CTCL.

Sézary Syndrome (“SS”), a very rare

subtype (~2–5% of CTCL) characterized by diffuse inflammatory, often exfoliative, erythroderma and by leukemic and nodal involvement,

displays a significant degree of clinical and biological overlap with MF and has long been considered a clinical variant of MF, although

recent evidence suggests that it may be a separate entity.

The rest is represented by extremely rare, generally more aggressive subtypes.

In light of the overlap between MF and SS, and considering that many of the systemic therapy options for the two neoplasms are the same,

some consider the treatment approach to MF and SS as if they were a single disease entity (MF/SS).

However, some of the drugs currently

in use, or in development, for MF/SS appear to be more effective in clearing different anatomical compartments (skin versus blood, for

example) and therefore have differential efficacy in MF and SS.

on Surveillance Epidemiology and End Results (SEER) data from 2001–2007, the estimated incidence rate of MF/SS in the U.S.

is 0.5/100,000

or about 2,500–3,000 new cases per year representing about 25% of all T-cell lymphomas.

Company estimates that there are 30,000 – 40,000 patients living with CTCL in the U.S.

with approximately 16,000 – 20,000

having mycosis fungoides.

Of those, the Company further estimates that there are 10,000 patients with relapsed or refractory CTCL that

require systemic therapy.

Company also estimates that the addressable U.S.

market is approximately $300,000,000 for patients with advanced stage relapsed or refractory

is a patented solution containing minocycline, disodium ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which act

synergistically to treat and salvage infected central venous catheters (“CVCs”) in patients with catheter related bloodstream

infections (“CRBSIs”).

Mino-Lok breaks down biofilm barriers formed by bacterial colonies, eradicates the bacteria, and provides

anti-clotting properties to maintain patency in CVCs.

administration of Mino-Lok consists of filling the lumen of the catheter with 0.8 ml to 2.0 ml of Mino-Lok solution.

is then “locked”, meaning that the solution remains in the catheter without flowing into the vein.

The lock is maintained

for a dwell-time of two hours while the catheter is not in use.

If the catheter has multiple lumens, all lumens may be locked

with the Mino-Lok solution either simultaneously or sequentially.

If patients are receiving continuous infusion therapy, the catheters

alternate between being locked with the Mino-Lok solution and delivering therapy.

The Mino-Lok therapy is two hours per day for

at least five days, usually with two additional locks in the subsequent two weeks.

After locking the catheter for two hours, the

Mino-Lok solution is aspirated, and the catheter is flushed with normal saline.

At that time, either the infusion will be continued,

or will be locked with the standard-of-care lock solution until further use of the catheter is required.

In a clinical study conducted

by MD Anderson Cancer Center (“MDACC”), there were no serum levels of either minocycline or edetate detected in the

sera of several patients who underwent daily catheter lock solution with minocycline and edetate (“M-EDTA”) at the

concentration level proposed in Mino-Lok treatment.

Thus, it has been demonstrated that the amount of either minocycline or edetate

that leaks into the serum is very low or none at all.

The catheter is

then “locked”, meaning that the solution remains in the catheter without flowing into the vein.

The lock is maintained for

a dwell-time of two hours while the catheter is not in use.

If the catheter has multiple lumens, all lumens may be locked with the Mino-Lok

solution either simultaneously or sequentially.

If patients are receiving continuous infusion therapy, the catheters alternate between

being locked with the Mino-Lok solution and delivering therapy.

The Mino-Lok therapy is two hours per day for at least five days, usually

with two additional locks in the subsequent two weeks.

After locking the catheter for two hours, the Mino-Lok solution is aspirated,

and the catheter is flushed with normal saline.

At that time, either the infusion will be continued, or will be locked with the standard-of-care

lock solution until further use of the catheter is required.

In a clinical study conducted by MD Anderson Cancer Center (“MDACC”),

there were no serum levels of either minocycline or edetate detected in the sera of several patients who underwent daily catheter lock

solution with minocycline and edetate (“M-EDTA”) at the concentration level proposed in Mino-Lok treatment.

been demonstrated that the amount of either minocycline or edetate that leaks into the serum is very low or none at all.

April 2013 to July 2014, 30 patients with CVC-related bloodstream infection were enrolled at MDACC in a prospective Phase 2b study.

Patients received Mino-Lok therapy for two hours once daily for a minimum of five days within the first week, followed by two

additional locks within the next two weeks.

received Mino-Lok therapy for two hours once daily for a minimum of five days within the first week, followed by two additional locks

within the next two weeks.

Patients were followed for one month post-lock therapy.

Demographic information, clinical

characteristics, laboratory data, therapy, as well as adverse events and outcome were collected for each patient.

Median age at

diagnosis was 56 years (range:

Demographic information, clinical characteristics,

laboratory data, therapy, as well as adverse events and outcome were collected for each patient.

Median age at diagnosis was 56 years

21-73 years).

In all patients, prior to the use of lock therapy, systemic treatment with a culture-directed,

first-line intravenous antibiotic was started.

In all patients, prior to the use of lock therapy, systemic treatment with a culture-directed, first-line intravenous

antibiotic was started.

Microbiological eradication was achieved at the end of therapy in all cases.

of the patients experienced any serious adverse event related to the lock therapy.

active arm, which is the Mino-Lok treated group of patients, was then compared to 60 patients in a matched cohort that experienced

removal and replacement of their CVCs within the same contemporaneous timeframe.

The patients were matched for cancer type, infecting

organism, and level of neutropenia.

None of the patients experienced

any serious adverse event related to the lock therapy.

active arm, which is the Mino-Lok treated group of patients, was then compared to 60 patients in a matched cohort that experienced removal

and replacement of their CVCs within the same contemporaneous timeframe.

The patients were matched for cancer type, infecting organism,

and level of neutropenia.

All patients were cancer patients and treated at MDACC.

The efficacy of Mino-Lok therapy was

100% in salvaging CVCs, demonstrating equal effectiveness to removing the infected CVC and replacing it with a new catheter.

main purpose of the study was to show that Mino-Lok therapy was at least as effective as the removal and replacement of CVCs when

CRBSIs are present, and that the safety was better, that is, the complications of removing an infected catheter and replacing

with a new one could be avoided.

In addition to having a 100% efficacy rate with all CVCs being salvaged, Mino-Lok therapy had

no significant adverse events (“SAEs”), compared to an 18% SAE rate in the matched cohort where patients had the infected

CVCs removed and replaced with a fresh catheter.

There were no overall complication rates in the Mino-Lok arm group compared to

11 patients with events (18%) in the control group.

These events included bacterial relapse (5%) at four weeks post-intervention,

and a number of complications associated with mechanical manipulation in the removal or replacement procedure for the catheter

(10%) or development of deep-seated infections such as septic thrombophlebitis and osteomyelitis (8%).

As footnoted, six patients

had more than one complication in the control arm group.

Mino-Lok®

The efficacy of Mino-Lok therapy was 100% in salvaging

CVCs, demonstrating equal effectiveness to removing the infected CVC and replacing it with a new catheter.

main purpose of the study was to show that Mino-Lok therapy was at least as effective as the removal and replacement of CVCs when CRBSIs

are present, and that the safety was better, that is, the complications of removing an infected catheter and replacing with a new one

could be avoided.

In addition to having a 100% efficacy rate with all CVCs being salvaged, Mino-Lok therapy had no significant adverse

events (“SAEs”), compared to an 18% SAE rate in the matched cohort where patients had the infected CVCs removed and replaced

with a fresh catheter.

There were no overall complication rates in the Mino-Lok arm group compared to 11 patients with events (18%) in

the control group.

These events included bacterial relapse (5%) at four weeks post-intervention, and a number of complications associated

with mechanical manipulation in the removal or replacement procedure for the catheter (10%) or development of deep-seated infections

such as septic thrombophlebitis and osteomyelitis (8%).

As footnoted, six patients had more than one complication in the control arm

Mino-Lok® Arm

- Hematologic

7 unchanged sentences

Overall Complication Rate

Polymicrobial patient had a Gram+ and a Gram- organism cultured

1 Polymicrobial patient

had a Gram+ and a Gram- organism cultured

6 Patients had > 1 complication

2 unchanged sentences

From initiation through the first quarter of 2017,

2017, the Company received input from several sites related to the control arm as being less than standard-of-care for some of

the respective institutions.

The Company worked closely with the U.S.

Food and Drug Administration (“FDA”) with respect

to the design of the Phase 3 trial and received feedback on August 17, 2017.

The FDA stated that they recognized that there is

an unmet medical need in salvaging infected catheters and agreed that an open label, superiority design would address the Company’s

concerns and would be acceptable to meet the requirements of a new drug application.

The Company amended the Phase 3 study design

to remove the saline and heparin placebo control arm and to use an active control arm that conforms with today’s current

standard-of-care.

the Company received input from several sites related to the control arm as being less than standard-of-care for some of the respective

institutions.

The Company worked closely with the FDA with respect to the design of the Phase 3 trial and received feedback on August

The FDA stated that they recognized that there is an unmet medical need in salvaging infected catheters and agreed that an

open label, superiority design would address the Company’s concerns and would be acceptable to meet the requirements of a new drug

The Company amended the Phase 3 study design to remove the saline and heparin placebo control arm and to use an active control

arm that conforms with today’s current standard-of-care.

Patient enrollment commenced in February 2018.

Mino-Lok Phase 3 Trial was originally planned to enroll 700 patients in 50 participating institutions, all located in the U.S.

There will be interim analyses at both the 50% and 75% points of the trial as measured by the number of patients treated.

November 15, 2020, there are 29 active sites currently enrolling patients including such academic centers as MDACC, Henry Ford

Health Center, Georgetown University Medical Center, and others.

were interim analyses at both the 50% and 75% points of the trial as measured by the number of patients treated.

As of November 30, 2021,

there are 21 active sites currently enrolling patients including such academic centers as MDACC, Henry Ford Health Center, Georgetown

University Medical Center, and others.

There are two additional medical centers in startup mode.

are no other remaining sites in feasibility.

September 2019, the Company announced that the FDA agreed to a new primary efficacy endpoint of “time to catheter failure”

There are no other remaining sites in

September 2019, the Company announced that the FDA agreed to a new primary efficacy endpoint of “time to catheter failure”

in comparing Mino-Lok to the antibiotic lock control arm.

This change in the trial design reduced the required patient sample

size of the trial from 700 subjects to approximately 144 available subjects to achieve the pre-specified 92 catheter failure events

needed to conclude the trial.

Additionally, the Company submitted a response to the FDA that it will implement this change in

the primary endpoint and expected it to result in less than 150 subjects needed in its Phase 3 trial.

The new primary endpoints

require that the time to catheter failure be at least 38 days for Mino-Lok versus 21 days for the standard of care antibiotic

This change in the trial design reduced the required patient sample size of

the trial from 700 subjects to approximately 144 available subjects to achieve the pre-specified 92 catheter failure events needed to

conclude the trial.

Additionally, the Company submitted a response to the FDA that it would implement this change in the primary endpoint

and expected it to result in less than 150 subjects needed in its Phase 3 trial.

The new primary endpoints require that the time to catheter

failure be at least 38 days for Mino-Lok versus 21 days for the standard of care antibiotic locks.

October 2019, the FDA agreed that the patient sample size of approximately 144 patients was acceptable.

October 2019, the Company announced that the Phase 3 trial had reached the 40% completion triggering an interim futility analysis

by the data monitoring committee (the “DMC”).

The DMC is an independent panel of experts that review progress regarding

the safety and efficacy of drugs in clinical trials, and to determine if the trial may be futile in achieving its endpoints or

if the trial should be modified in any way.

October 2019, the Company announced that the Phase 3 trial had reached the 40% completion triggering an interim futility analysis by

the data monitoring committee (the “DMC”).

The DMC is an independent panel of experts that review progress regarding the

safety and efficacy of drugs in clinical trials, and to determine if the trial may be futile in achieving its endpoints or if the trial

should be modified in any way.

December 2019, the DMC convened and recommended that the trial continue with no changes because the analysis showed a positive outcome,

as it met the prespecified interim futility analysis criteria.

May 2020, we announced that we are providing free access to Mino-Lok for healthcare providers under an Expanded Access protocol

to ease the burden associated with the COVID-19 pandemic.

Through the Expanded Access protocol, an infected central venous catheter

can now be treated with Mino-Lok, potentially avoiding the need for the removal and replacement procedure.

June 2020, we announced that we had received positive feedback from the FDA on our proposed catheter compatibility studies for

The studies, if and when successfully completed, should allow Mino-Lok to be labeled for use with all commercially available

CVCs and peripherally inserted central catheters (PICCs) on the U.S.

It is further assumed that these studies will meet

European and world standards.

The ability to be labeled without restrictions with respect to catheter type would allow Mino-Lok

unrestricted access to the full U.S.

and world markets for an effective antibiotic lock therapy for central line associated blood

stream infections (“CLABSIs”).

September 2020, we announced that another DMC meeting was held to review the data being generated and analyzed in the Mino-Lok

Phase 3 trial based on progress to date, and to make recommendations to us as to any action that may be necessary regarding the

After reviewing these data, the DMC members stated that they did not find any safety signals;

and they also recommended

continuing the trial without any modifications.

The DMC further conducted an ad hoc meeting and agreed with the Company

that a 75% interim analysis be conducted as planned in which superior efficacy is evaluated.

The 75% interim analysis is expected

to be completed by March 2021.

September 2020 the Company announced that the three registration batches for all components of Mino Lok were manufactured and

that clinical sites were resupplied with registration product.

November 2020, the Company announced that the three components of Mino-Lok, minocycline, disodium edetate (“EDTA”),

and ethanol, were superior to EDTA and ethanol in their ability to eradicate resistant staphylococcal biofilms.

May 2020, we announced that we are providing free access to Mino-Lok for healthcare providers under an Expanded Access protocol to ease

the burden associated with the COVID-19 pandemic.

Through the Expanded Access protocol, an infected central venous catheter can now be

treated with Mino-Lok, potentially avoiding the need for the removal and replacement procedure.

June 2020, we announced that we had received positive feedback from the FDA on our proposed catheter compatibility studies for Mino-Lok.

The studies, if and when successfully completed, should allow Mino-Lok to be labeled for use with all commercially available CVCs and

peripherally inserted central catheters (PICCs) on the U.S.

We further assume that these studies will meet European and world

The ability to be labeled without restrictions with respect to catheter type would allow Mino-Lok unrestricted access to the

and world markets for an effective antibiotic lock therapy for central line associated blood stream infections (“CLABSIs”).

September 2020, we announced that another DMC meeting was held to review the data being generated and analyzed in the Mino-Lok Phase

3 trial based on progress to date, and to make recommendations to us as to any action that may be necessary regarding the study.

reviewing these data, the DMC members stated that they did not find any safety signals;

and they also recommended continuing the trial

without any modifications.

The DMC further conducted an ad hoc meeting and agreed with the Company that a 75% interim analysis

be conducted as planned in which superior efficacy is evaluated.

September 2020, the Company announced that the three registration batches for all components of Mino Lok were manufactured and that clinical

sites were resupplied with registration product.

November 2020, the Company announced that the three components of Mino-Lok, minocycline, disodium edetate (“EDTA”), and ethanol,

were superior to EDTA and ethanol in their ability to eradicate resistant staphylococcal biofilms.

75% interim analysis was completed in June 2021.

In July 2021, the Company announced that following an unblinded data review of safety

and efficacy, the independent DMC for the trial recommended proceeding with the trial as planned.

The DMC did not identify any safety

concerns and no modifications were recommended to the protocol-defined sample size or power to achieve the primary endpoint.

Track Designation

October 2017, the Company received official notice from FDA that the investigational program for Mino-Lok was granted “Fast

Fast Track is a designation that expedites FDA review to facilitate development of drugs which treat a serious

or life-threatening condition and fill an unmet medical need.

A drug that receives Fast Track designation is eligible for the

More frequent meetings with FDA to discuss the

drug’s development plan and ensure collection of appropriate data needed to support drug approval;

More frequent written correspondence from FDA

about the design of the clinical trials;

Priority review to shorten the FDA review process

for a new drug from ten months to six months;

Rolling review, which means Citius can submit

completed sections of its New Drug Application (“NDA”) for review by FDA, rather than waiting until every section

of the application is completed before the entire application can be reviewed.

October 2017, the Company received official notice from FDA that the investigational program for Mino-Lok was granted “Fast Track”

Fast Track is a designation that expedites FDA review to facilitate development of drugs which treat a serious or life-threatening

condition and fill an unmet medical need.

A drug that receives Fast Track designation is eligible for the following:

More frequent meetings

with FDA to discuss the drug’s development plan and ensure collection of appropriate data needed to support drug approval;

More frequent written correspondence

from FDA about the design of the clinical trials;

Priority review to shorten

the FDA review process for a new drug from ten months to six months;

Rolling review, which means

Citius can submit completed sections of its New Drug Application (“NDA”) for review by FDA, rather than waiting until

every section of the application is completed before the entire application can be submitted for review.

International Study

October 2017, data from an international study on Mino-Lok was presented at the Infectious Disease Conference, (“ID Week”),

in San Diego, California.

The 44-patient study was conducted in Brazil, Lebanon, and Japan and showed Mino-Lok therapy was an

effective intervention to salvage long-term, infected CVCs in CRBSIs in patients who had cancer with limited vascular access.

This study showed 95% effectiveness for Mino-Lok therapy in achieving microbiological eradication of the CVCs as compared to 83%

for the control.

The single failure in the Mino-Lok arm was due to a patient with Burkholderia cepacia that was resistant

to all antibiotics tested.

The 44-patient study was conducted in Brazil, Lebanon, and Japan and showed Mino-Lok therapy was an effective

intervention to salvage long-term, infected CVCs in CRBSIs in patients who had cancer with limited vascular access.

This study showed

95% effectiveness for Mino-Lok therapy in achieving microbiological eradication of the CVCs as compared to 83% for the control.

failure in the Mino-Lok arm was due to a patient with Burkholderia cepacia that was resistant to all antibiotics tested.

Patent Application for Mino-Lok

October 2018, the U.S.

Patent and Trademark Office (“USPTO”) issued U.S.

10,086,114, entitled “Antimicrobial

Solutions with Enhanced Stability.”

This invention overcomes limitations in mixing antimicrobial solutions in which components

have precipitated because of physical and/or chemical factors, thus limiting the stability of the post-mix solutions.

The scientists

and technologists at MDACC have been able to improve the stability of the post-mixed solutions through adjustments of the post-mixed

pH of the solution.

This may allow for longer storage time of the ready-to-use solution.

Citius holds the exclusive worldwide

license which provides access to this patented technology for development and commercialization of Mino-Lok.

October 9, 2019, the European Patent Office (“EPO”) granted European Patent No.

3370794, entitled “Antimicrobial

Solutions with Enhanced Stability.”

The grant of this European patent strengthens the intellectual property protection for

Mino-Lok through November of 2036.

This invention overcomes limitations in mixing antimicrobial solutions, in which components

have precipitated because of physical and/or chemical factors, thus limiting the stability of the post-mix solutions.

The scientists

and technologists at MDACC have been able to improve the stability of the post-mixed solutions through adjustments of the post-mixed

pH of the solution.

Patent and Trademark Office (“USPTO”) issued U.S.

10,086,114, entitled “Antimicrobial

Solutions with Enhanced Stability.” On October 9, 2019, the European Patent Office (“EPO”) granted European Patent

3370794, entitled “Antimicrobial Solutions with Enhanced Stability.” The grant of this European patent strengthens the

intellectual property protection for Mino-Lok through November of 2036.

This invention overcomes limitations in mixing antimicrobial

solutions in which components have precipitated because of physical and/or chemical factors, thus limiting the stability of the post-mix

The scientists and technologists at MDACC have been able to improve the stability of the post-mixed solutions through adjustments

of the post-mixed pH of the solution.

This may allow for longer storage time of the ready-to-use solution.

spite of best clinical practice, catheters contribute to approximately 70% of blood stream infections that occur in the intensive

care unit or are associated with hemodialysis or cancer patients (approximately 470,000 per year).

Bacteria enter the catheter

either from the skin or intraluminally through the catheter hub.

Once in the catheter, bacteria tend to form a protective biofilm

on the interior surface of the catheter that is resistant to most antimicrobial solutions.

The most frequently used maintenance

flush, heparin, actually stimulates biofilm formation.

Heparin is widely used as a prophylactic lock solution, in spite of the

evidence that it contributes to the promotion of biofilm formation.

Citius holds the exclusive

worldwide license which provides access to this patented technology for development and commercialization of Mino-Lok.

spite of best clinical practice, catheters contribute to approximately 70% of blood stream infections that occur in the intensive care

unit or are associated with hemodialysis or cancer patients (approximately 470,000 per year).

Bacteria enter the catheter either from

the skin or intraluminally through the catheter hub.

Once in the catheter, bacteria tend to form a protective biofilm on the interior

surface of the catheter that is resistant to most antimicrobial solutions.

The most frequently used maintenance flush, heparin, actually

stimulates biofilm formation.

Heparin is widely used as a prophylactic lock solution, in spite of the evidence that it contributes to

the promotion of biofilm formation.

The formation of bacterial biofilm usually precedes CRBSIs.

standard of care in the management of CRBSI patients consists of removing the infected CVC and replacing it with a new catheter

at a different vascular access site.

However, in cancer and hemodialysis patients with long-term surgically implantable silicone

catheters, removal of the CVC and reinsertion of a new one at a different site might be difficult, or even impossible, because

of the unavailability of other accessible vascular sites and the need to maintain infusion therapy.

Furthermore, critically ill

patients with short-term catheters often have underlying coagulopathy, which makes reinsertion of a new CVC at a different site,

in the setting of CRBSIs, risky in terms of mechanical complications, such as pneumothorax, misplacement, or arterial puncture.

Studies have also revealed that CRBSI patients may be associated with serious complications, including septic thrombosis, endocarditis

and disseminated infection, particularly if caused by Staphylococcus aureus or Candida species.

Furthermore, catheter

retention in patients with CRBSIs is associated with a higher risk of relapse and poor response to antimicrobial therapy.

to Maki et al., published in the Mayo Clinic Proceedings in 2006, there are approximately 250,000 CRBSIs annually in the

standard of care in the management of CRBSI patients consists of removing the infected CVC and replacing it with a new catheter at a

different vascular access site.

However, in cancer and hemodialysis patients with long-term surgically implantable silicone catheters,

removal of the CVC and reinsertion of a new one at a different site might be difficult, or even impossible, because of the unavailability

of other accessible vascular sites and the need to maintain infusion therapy.

Furthermore, critically ill patients with short-term catheters

often have underlying coagulopathy, which makes reinsertion of a new CVC at a different site, in the setting of CRBSIs, risky in terms

of mechanical complications, such as pneumothorax, misplacement, or arterial puncture.

Studies have also revealed that CRBSI patients

may be associated with serious complications, including septic thrombosis, endocarditis and disseminated infection, particularly if caused

by Staphylococcus aureus or Candida species.

Furthermore, catheter retention in patients with CRBSIs is associated with

a higher risk of relapse and poor response to antimicrobial therapy.

to Maki et al., published in the Mayo Clinic Proceedings in 2006, there are approximately 250,000 CRBSIs annually in the U.S.

Subsequent to this study, our estimates have ranged upwards to over 450,000 CLABSIs annually (see analysis in the table below).

CRBSIs are associated with a 12% to 35% mortality rate and an attributable cost of $35,000 to $56,000 per episode.

are associated with a 12% to 35% mortality rate and an attributable cost of $35,000 to $56,000 per episode.

estimate that the potential market for Mino-Lok in the U.S.

to be approximately $500 million to $1 billion as shown in the table

below based on a target price of up to $300 per dose of each salvage flush treatment.

to be approximately $500 million to $1 billion as shown in the table below

based on a target price of up to $300 per dose of each salvage flush treatment.

Duration (Days)

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78(1):10-17, JAVA 2007;

12(1):17-27, J Inf Nurs 2004;27(4):245-250, Joint

Commission website Monograph, CLABSI and Internal Estimates.

various plausible pricing scenarios, we believe that Mino-Lok would be cost-saving to the healthcare system given that the removal

of an infected CVC and replacement of a new catheter in a different venous access site is estimated by us to cost between $8,000

Furthermore, there are potential additional medical benefits, a reduction in patient discomfort and avoidance of

serious adverse events with the Mino-Lok approach since the catheter remains in place and is not subject to manipulation.

there will be an economic argument to enhance the adoption of Mino-Lok by infection control committees at acute care institutions.

January of 2017, we commissioned a primary market research study with MEDACore, a subsidiary of Leerink, a healthcare focused

network with more than 35,000 healthcare professionals, including key opinion leaders, experienced practitioners and other healthcare

professionals throughout North America, Europe, Asia and other locations around the world.

This network includes approximately

55 clinical specialties, 21 basic sciences and 20 business specialties.

As part of this market research project, we commissioned

a third party survey of 31 physicians to qualify the need for catheter salvage in patients with infected, indwelling central venous

lines, especially when the catheter is a tunneled or an implanted port.

There were 19 infectious disease experts and 12 intensivists

surveyed who all agreed that salvage would be preferable to catheter exchange to avoid catheter misplacements, blood clots, or

vessel punctures that can potentially occur during reinsertion.

Most were also concerned that viable venous access may not be

available in patients who were vitally dependent on a central line.

January 2, 2019, we entered into a patent and technology license agreement with the Board of Regents of the University of Texas

System on behalf of MDACC, whereby we in-licensed exclusive worldwide rights to the patented technology for any and all uses relating

to breast implants, specifically the Mino-Wrap technology.

12(1):17-27, J Inf Nurs 2004;27(4):245-250, Joint Commission

website Monograph, CLABSI and Internal Estimates.

various plausible pricing scenarios, we believe that Mino-Lok would be cost-saving to the healthcare system given that the removal of

an infected CVC and replacement of a new catheter in a different venous access site is estimated by us to cost between $8,000 and $10,000.

Furthermore, there are potential additional medical benefits, a reduction in patient discomfort and avoidance of serious adverse events

with the Mino-Lok approach since the catheter remains in place and is not subject to manipulation.

We believe there will be an economic

argument to enhance the adoption of Mino-Lok by infection control committees at acute care institutions.

January of 2017, we commissioned a primary market research study with MEDACore, a subsidiary of Leerink, a healthcare focused network

with more than 35,000 healthcare professionals, including key opinion leaders, experienced practitioners and other healthcare professionals

throughout North America, Europe, Asia and other locations around the world.

This network includes approximately 55 clinical specialties,

21 basic sciences and 20 business specialties.

As part of this market research project, we commissioned a third-party survey of 31 physicians

to qualify the need for catheter salvage in patients with infected, indwelling central venous lines, especially when the catheter is

a tunneled or an implanted port.

There were 19 infectious disease experts and 12 intensivists surveyed who all agreed that salvage would

be preferable to catheter exchange to avoid catheter misplacements, blood clots, or vessel punctures that can potentially occur during

Most were also concerned that viable venous access may not be available in patients who were vitally dependent on a central

January 2, 2019, we entered into a patent and technology license agreement with the Board of Regents of the University of Texas System

on behalf of MDACC, whereby we in-licensed exclusive worldwide rights to the patented technology for any and all uses relating to breast

implants, specifically the Mino-Wrap technology.

This includes rights to U.S.

9,849,217, which was issued

on December 16, 2017.

We intend to develop Mino-Wrap as a liquefying, gel-based wrap containing minocycline and rifampin for the

reduction of infections associated with breast implants following breast reconstructive surgeries.

We are required to use commercially

reasonable efforts to commercialize Mino-Wrap under several regulatory scenarios and achieve milestones associated with these

regulatory options leading to an approval from the FDA.

Mino-Wrap will require pre-clinical development prior to any regulatory

In July 2019, we announced that we intend to pursue the FDA’s Investigational New Drug (“IND”) regulatory

pathway for the development of Mino-Wrap.

On August 4, 2020, we announced that we had submitted a briefing package to the FDA

for a pre-IND consultation on Mino-Wrap.

In December 2020, we reported the FDA response to the briefing package and commented

that the FDA was in general agreement with our planned pre-clinical program and gave further guidance on our clinical plans.

cancer is the most frequent cancer in women worldwide representing 25% of all cancer diagnoses with the exception of non-melanoma

In the United States, the overall rate of mastectomies, combining single and double mastectomies, has increased 36%

from 2005 to 2013.

Additionally, the incidence of post-mastectomy breast reconstruction, following breast cancer treatment, has

been increasing on an annual basis.

2017, the American Society of Plastic Surgeons reported that over 105,000 women in the United States underwent a post-mastectomy

breast reconstructive procedure.

Approximately 30% of these breast reconstruction occurs simultaneously with mastectomy, with

most reconstructions occurring weeks later.

current standard of care in post-mastectomy breast reconstruction is the use of a Tissue Expander (“TE”), which is

a temporary implant that is placed below the pectoralis muscle within the mastectomy space.

Once a sufficiently large soft tissue

envelope has been created, the TE is then replaced by a permanent breast implant.

Approximately 80% of the time, a TE is used

in breast reconstructions.

9,849,217, which was issued on December 16,

We intend to develop Mino-Wrap as a liquefying, gel-based wrap containing minocycline and rifampin for the reduction of infections

associated with breast implants following breast reconstructive surgeries.

We are required to use commercially reasonable efforts to

commercialize Mino-Wrap under several regulatory scenarios and achieve milestones associated with these regulatory options leading to

an approval from the FDA.

Mino-Wrap will require pre-clinical development prior to any regulatory pathway.

In July 2019, we announced

that we intend to pursue the FDA’s Investigational New Drug (“IND”) regulatory pathway for the development of Mino-Wrap.

On August 4, 2020, we announced that we had submitted a briefing package to the FDA for a pre-IND consultation on Mino-Wrap.

December 2020, the Company announced the receipt of a written response and guidance from the FDA Division of Anti-Infective Products

to the Company's Pre-IND consultation request for its Mino-Wrap briefing package.

The briefing package contained information regarding

pre-clinical data and a clinical development plan, along with questions for the FDA regarding safety and efficacy data that would be

required to advance Mino-Wrap into clinical trials.

The FDA granted a Written Response Only meeting regarding guidance and direction

on our Mino-Wrap development plan.

The FDA indicated that bio absorption simulation studies may provide information to support the development

of Mino-Wrap and made suggestions on what should be provided relative to non-clinical support.

The FDA provided guidance on the

design of the drug elution studies and agreed that a large animal pharmacology study would be appropriate.

They also agreed that

a 28-day toxicology study appears appropriate and that microbiology support through existing data is acceptable.

We are pursuing these

studies and anticipate filing an IND for Mino-Wrap in 2022.

cancer is the most frequent cancer in women worldwide representing 25% of all cancer diagnoses with the exception of non-melanoma skin

In the United States, the overall rate of mastectomies, combining single and double mastectomies, has increased 36% from 2005

Additionally, the incidence of post-mastectomy breast reconstruction, following breast cancer treatment, has been increasing

on an annual basis.

2017, the American Society of Plastic Surgeons reported that over 105,000 women in the United States underwent a post-mastectomy breast

reconstructive procedure.

Approximately 30% of these breast reconstructions occur simultaneously with mastectomy, with most reconstructions

occurring weeks later.

current standard of care in post-mastectomy breast reconstruction is the use of a Tissue Expander (“TE”), which is a temporary

implant that is placed below the pectoralis muscle within the mastectomy space.

Once a sufficiently large soft tissue envelope has been

created, the TE is then replaced by a permanent breast implant.

Approximately 80% of the time, a TE is used in breast reconstructions.

rate of infection following a mastectomy with a TE is 2.4 to 24% with an estimated mean of 12-14%.

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leading to a delay of lifesaving chemo-radiation therapy, and a more complex reconstruction in the future.

preventive measures are used to decrease the rate of TE infections with include a systemic perioperative antimicrobial agent with

the perioperative immersion of the implant or irrigation of the surgical pocket with an antimicrobial solution prior to insertion

of the device.

preventive measures are used to decrease the rate of TE infections with include a systemic perioperative antimicrobial agent with the

perioperative immersion of the implant or irrigation of the surgical pocket with an antimicrobial solution prior to insertion of the

This is also administered with immediate postoperative oral antimicrobials.

3 unchanged sentences

To our knowledge, there are currently no FDA-approved prescription drug products for the treatment of hemorrhoids.

Some physicians

are known to prescribe topical steroids for the treatment of hemorrhoids.

Some physicians are

known to prescribe topical steroids for the treatment of hemorrhoids.

In addition, there are various topical combination prescription

products containing halobetasol propionate along with lidocaine or pramoxine, each a topical anesthetic, that are prescribed by

physicians for the treatment of hemorrhoids.

These products contain drugs that were in use prior to the start of the Drug Efficacy

Study Implementation (“DESI”) program and are commonly referred to as DESI drugs.

However, none of these single-agent

or combination prescription products have been clinically evaluated for safety and efficacy and approved by the FDA for the treatment

of hemorrhoids.

Further, many hemorrhoid patients use over the counter (“OTC”) products as their first line therapy.

OTC products contain any one of several active ingredients including glycerin, phenylephrine, pramoxine, white petrolatum, shark

liver oil and/or witch hazel, for symptomatic relief.

products containing halobetasol propionate along with lidocaine or pramoxine, each a topical anesthetic, that are prescribed by physicians

for the treatment of hemorrhoids.

These products contain drugs that were in use prior to the start of the Drug Efficacy Study Implementation

(“DESI”) program and are commonly referred to as DESI drugs.

However, none of these single-agent or combination prescription

products have been clinically evaluated for safety and efficacy and approved by the FDA for the treatment of hemorrhoids.

Further, many

hemorrhoid patients use over the counter (“OTC”) products as their first line therapy.

OTC products contain any one of several

active ingredients including glycerin, phenylephrine, pramoxine, white petrolatum, shark liver oil and/or witch hazel, for symptomatic

of Hemorrhoids Drugs

are a common gastrointestinal disorder, characterized by anal itching, pain, swelling, tenderness, bleeding and difficulty defecating.

In the U.S., hemorrhoids affect nearly 5% of the population, with approximately 10 million persons annually admitting to having

symptoms of hemorrhoidal disease.

Of these persons, approximately one third visit a physician for evaluation and treatment of

their hemorrhoids.

The data also indicate that for both sexes a peak of prevalence occurs from age 45 to 65 years with a subsequent

decrease after age 65 years.

Caucasian populations are affected significantly more frequently than African Americans, and increased

prevalence rates are associated with higher socioeconomic status in men but not women.

Development of hemorrhoids before age 20

In addition, between 50% and 90% of the general U.S., Canadian and European population will experience hemorrhoidal

disease at least once in life.

Although hemorrhoids and other anorectal diseases are not life-threatening, individual patients

can suffer from agonizing symptoms which can limit social activities and have a negative impact on the quality of life.

In the U.S., hemorrhoids affect nearly 5% of the population, with approximately 10 million persons annually admitting to having symptoms

of hemorrhoidal disease.

Of these persons, approximately one third visit a physician for evaluation and treatment of their hemorrhoids.

The data also indicate that for both sexes a peak of prevalence occurs from age 45 to 65 years with a subsequent decrease after age 65

Caucasian populations are affected significantly more frequently than African Americans, and increased prevalence rates are associated

with higher socioeconomic status in men but not women.

Development of hemorrhoids before age 20 is unusual.

In addition, between 50%

and 90% of the general U.S., Canadian and European population will experience hemorrhoidal disease at least once in life.

Although hemorrhoids

and other anorectal diseases are not life-threatening, individual patients can suffer from agonizing symptoms which can limit social

activities and have a negative impact on the quality of life.

are defined as internal or external according to their position relative to the dentate line.

Classification is important for

selecting the optimal treatment for an individual patient.

Accordingly, physicians use the following grading system referred to

as the Goligher’s classification of internal hemorrhoids:

Classification is important for selecting

the optimal treatment for an individual patient.

Accordingly, physicians use the following grading system referred to as the Goligher’s

classification of internal hemorrhoids:

Hemorrhoids not prolapsed

but bleeding.

Hemorrhoids prolapse and reduce spontaneously

with or without bleeding.

Prolapsed hemorrhoids that require reduction

Prolapsed and cannot be reduced including both

internal and external hemorrhoids that are confluent from skin tag to inner anal canal.

Hemorrhoids prolapse and

reduce spontaneously with or without bleeding.

Prolapsed hemorrhoids that

require reduction manually.

Prolapsed and cannot be

reduced including both internal and external hemorrhoids that are confluent from skin tag to inner anal canal.

Activities to Date

the fall of 2015, we completed dosing patients in a double-blind dose ranging placebo controlled Phase 2a study where six different

formulations containing hydrocortisone and lidocaine in various strengths were tested against the vehicle control.

The objectives

of this study were to:

(1) demonstrate the safety and efficacy of the formulations when applied twice daily for two weeks in subjects

with Grade I or II hemorrhoids, and (2) assess the potential contribution of lidocaine hydrochloride and hydrocortisone acetate,

alone or in combination for the treatment of symptoms of Goligher’s Classification Grade I or II hemorrhoids.

improvement was observed based on a global score of disease severity (“GSDS”) and based on some of the individual

signs and symptoms of hemorrhoids, specifically itching and overall pain and discomfort.

Within the first few days of treatment,

the combination products (containing both hydrocortisone and lidocaine) were directionally favorable versus the placebo and their

respective individual active treatment groups (e.g., hydrocortisone or lidocaine alone) in achieving ‘almost symptom free’

or ‘symptom free’

the fall of 2015, we completed dosing patients in a double-blind dose ranging placebo-controlled Phase 2a study where six different formulations

containing hydrocortisone and lidocaine in various strengths were tested against the vehicle control.

The objectives of this study were

(1) demonstrate the safety and efficacy of the formulations when applied twice daily for two weeks in subjects with Grade I or II

hemorrhoids, and (2) assess the potential contribution of lidocaine hydrochloride and hydrocortisone acetate, alone or in combination

for the treatment of symptoms of Goligher’s Classification Grade I or II hemorrhoids.

improvement was observed based on a global score of disease severity (“GSDS”) and based on some of the individual signs and

symptoms of hemorrhoids, specifically itching and overall pain and discomfort.

Within the first few days of treatment, the combination

products (containing both hydrocortisone and lidocaine) were directionally favorable versus the placebo and their respective individual

active treatment groups (e.g., hydrocortisone or lidocaine alone) in achieving ‘almost symptom free’ or ‘symptom free’

status according to the GSDS scale.

These differences suggest the possibility of a benefit for the

combination product formulation.

These differences suggest the possibility of a benefit for the combination product formulation.

results from adverse event reporting support the safety profile of all test articles evaluated in this study and demonstrate similar

1 unchanged sentence

The safety findings were unremarkable.

There was a low occurrence of adverse events

and a similar rate of treatment related adverse events across all treatment groups.

The majority of adverse events were mild and

only one was severe.

None of the adverse events were an SAE and the majority of adverse events were recovered/resolved at the

end of the study.

There were only two subjects who were discontinued from the study due to adverse events.

addition to the safety and dose-ranging information, information was obtained relating to the use of the GSDS as an assessment

tool for measuring the effectiveness of the test articles.

Individual signs and symptoms were also assessed but can vary from

patient to patient.

Therefore, the goal of the GSDS was to provide an assessment tool that could be used for all patients regardless

of which signs and symptoms they are experiencing.

The GSDS proved to be a more effective tool for assessing the severity of the

disease and the effectiveness of the drug when compared to the assessment of the individual signs and symptoms.

Citius believes

that we can continue to develop this assessment tool as well as other patient reported outcome endpoints for use in the next trials

and in the pivotal trial.

There was a low occurrence of adverse events and a

similar rate of treatment related adverse events across all treatment groups.

The majority of adverse events were mild and only one was

None of the adverse events were an SAE and the majority of adverse events were recovered/resolved at the end of the study.

were only two subjects who were discontinued from the study due to adverse events.

addition to the safety and dose-ranging information, information was obtained relating to the use of the GSDS as an assessment tool for

measuring the effectiveness of the test articles.

Individual signs and symptoms were also assessed but can vary from patient to patient.

Therefore, the goal of the GSDS was to provide an assessment tool that could be used for all patients regardless of which signs and symptoms

they are experiencing.

The GSDS proved to be a more effective tool for assessing the severity of the disease and the effectiveness of

the drug when compared to the assessment of the individual signs and symptoms.

Citius believes that we can continue to develop this assessment

tool as well as other patient reported outcome endpoints for use in the next trials and in the pivotal trial.

was also obtained about the formulation of the drug and the vehicle.

As a result of this study, we believe that the performance

of the active arms of the study relative to the vehicle could be improved by re-formulating our topical preparation.

we initiated work on vehicle formulation and evaluation of higher potency steroids.

As a result of this study, we believe that the performance of the

active arms of the study relative to the vehicle could be improved by re-formulating our topical preparation.

Therefore, we initiated

work on vehicle formulation and evaluation of higher potency steroids.

June and July 2016, we engaged the Dominion Group, a leading provider of healthcare and pharmaceutical marketing research services.

The primary market research was conducted to understand the symptoms that are most bothersome to patients better in order to develop

meaningful endpoints for the clinical trials.

We also learned about the factors that drive patients to seek medical attention

for hemorrhoids in an effort to understand the disease impact on quality of life.

The results of this survey are able to help

us develop patient reported outcome evaluation tools.

These tools can be used in clinical trials to evaluate the patients’

conditions and to assess the performance of the test articles.

March 2018, we announced that we had selected a higher potency corticosteroid in our steroid/anesthetic topical formulation program

for the treatment of hemorrhoids.

The original topical preparation, which we referred to as Hydro-Lido or CITI-001, which was

used in the Phase 2a study, was a combination of hydrocortisone acetate and lidocaine hydrochloride.

The new formulation, CITI-002,

which we refer to as Halo-Lido, combine slidocaine with the higher potency corticosteroid halobetasol propionate for symptomatic

relief of the pain and discomfort of hemorrhoids.

held a Type C meeting with the FDA in December 2017 to discuss the results of the Phase 2a study and to obtain the FDA’s

view on development plans to support the potential formulation change for the planned Phase 2b study.

We also requested the FDA’s

feedback on our Phase 2b study design, including target patient population, inclusion/exclusion criteria, and efficacy endpoints.

The pre-clinical and clinical development programs for CITI-002 are planned to be similar to those conducted for the development

of CITI-001 to support the design for a planned Phase 3 clinical trial.

We anticipate beginning a Phase 2b clinical study in the

first quarter of 2021.

current market for OTC and topical prescription (“Rx”) products for the symptomatic treatment of hemorrhoids is highly

fragmented, and includes approximately 20 million units of OTC and over 4 million prescriptions.

None of the Rx products have

received FDA approval and are only available due to the DESI program, which started decades ago after enactment of the 1962 Kefauver-Harris

Drug Amendments.

These DESI products have no FDA reviewed evidence of efficacy or safety, and may be subject to withdrawal if

an approved product were to be introduced.

Several topical combination prescription products for the treatment of hemorrhoids

are available containing hydrocortisone in strengths ranging from 0.5% to 3.0%, combined with lidocaine in strengths ranging from

1.0% to 3.0%.

The various topical formulations include creams, ointments, gels, lotions, enemas, pads, and suppositories.

most commonly prescribed topical combination gel is sold as a branded generic product and contains 2.5% hydrocortisone and 3.0%

primary market research was conducted to understand the symptoms that are most bothersome to patients better in order to develop meaningful

endpoints for the clinical trials.

We also learned about the factors that drive patients to seek medical attention for hemorrhoids in

an effort to understand the disease impact on quality of life.

The results of this survey are able to help us develop patient reported

outcome evaluation tools.

These tools can be used in clinical trials to evaluate the patients’ conditions and to assess the performance

of the test articles.

March 2018, we announced that we had selected a higher potency corticosteroid in our steroid/anesthetic topical formulation program for

the treatment of hemorrhoids.

The original topical preparation, which we referred to as Hydro-Lido or CITI-001, which was used in the

Phase 2a study, was a combination of hydrocortisone acetate and lidocaine hydrochloride.

The new formulation, CITI-002, which we refer

to as Halo-Lido, combine lidocaine with the higher potency corticosteroid halobetasol propionate for symptomatic relief of the pain and

discomfort of hemorrhoids.

held a Type C meeting with the FDA in December 2017 to discuss the results of the Phase 2a study and to obtain the FDA’s view on

development plans to support the potential formulation change for the planned Phase 2b study.

We also requested the FDA’s feedback

on our Phase 2b study design, including target patient population, inclusion/exclusion criteria, and efficacy endpoints.

The pre-clinical

and clinical development programs for CITI-002 are planned to be similar to those conducted for the development of CITI-001 to support

the design for a planned Phase 3 clinical trial.

We anticipate filing an IND in December 2021 and beginning a Phase 2b clinical study

by March 2022.

current market for OTC and topical prescription (“Rx”) products for the symptomatic treatment of hemorrhoids is highly fragmented,

and includes approximately 20 million units of OTC and over 4 million prescriptions.

None of the Rx products have received FDA approval

and are only available due to the DESI program, which started decades ago after enactment of the 1962 Kefauver-Harris Drug Amendments.

These DESI products have no FDA reviewed evidence of efficacy or safety, and may be subject to withdrawal if an approved product were

to be introduced.

Several topical combination prescription products for the treatment of hemorrhoids are available containing hydrocortisone

in strengths ranging from 0.5% to 3.0%, combined with lidocaine in strengths ranging from 1.0% to 3.0%.

The various topical formulations

include creams, ointments, gels, lotions, enemas, pads, and suppositories.

The most commonly prescribed topical combination gel is sold

as a branded generic product and contains 2.5% hydrocortisone and 3.0% lidocaine.

believe there are currently no FDA-approved prescription drug products for the treatment of hemorrhoids.

Although there are numerous

Rx and OTC products commonly used to treat hemorrhoids, none possess proven safety and efficacy data generated from rigorously

conducted clinical trials.

We believe that a novel topical formulation of halobetasol propionate and lidocaine designed to provide

anti-inflammatory and anesthetic relief and which has an FDA-approved label specifically claiming the treatment of hemorrhoids

will become an important treatment option for physicians who want to provide their patients with a therapy that has demonstrated

safety and efficacy in treating this uncomfortable and often recurring disease.

We believe that our Halo-Lido product represents

an attractive, low-risk product opportunity with meaningful upside potential.

Rx and OTC products commonly used to treat hemorrhoids, none possess proven safety and efficacy data generated from rigorously conducted

clinical trials.

We believe that a novel topical formulation of halobetasol propionate and lidocaine designed to provide anti-inflammatory

and anesthetic relief and which has an FDA-approved label specifically claiming the treatment of hemorrhoids will become an important

treatment option for physicians who want to provide their patients with a therapy that has demonstrated safety and efficacy in treating

this uncomfortable and often recurring disease.

We believe that our Halo-Lido product represents an attractive, low-risk product opportunity

with meaningful upside potential.

believe that we will be the first company to conduct rigorous clinical trials and receive FDA approval of a topical corticosteroid-lidocaine

2 unchanged sentences

for our dosage strength and formulation.

In addition, we will also be the only product on the market specifically proven to be

safe and effective for the treatment of hemorrhoids.

Generally, if a company conducts clinical trials and receives FDA approval

of a product for which there are similar, but non FDA-approved, prescription products on the market, the manufacturers of the

unapproved but marketed products are required to withdraw them from the market.

However, the FDA has significant latitude in determining

how to enforce its regulatory powers in these circumstances.

We have not had any communication with the FDA regarding this matter

and cannot predict what action, if any, the FDA will take with respect to the unapproved products.

believe that should Halo-Lido receive FDA approval and demonstrate, proven safety and efficacy data, and if Halo-Lido obtains

three years of market exclusivity based on our dosage strength and formulation, we are likely to have a meaningful advantage in

our pursuit of achieving a significant position in the market for topical combination prescription products for the treatment

of hemorrhoids.

October 2020, we, through our recently formed subsidiary, NoveCite, signed an exclusive agreement with Novellus Therapeutics Limited

(“Novellus”) to license iPSC-derived mesenchymal stem cells (iMSCs).

Under this worldwide exclusive license, we will

be focused on developing cellular therapies.

Specifically, we will seek to develop and commercialize the NoveCite mesenchymal

stem cells (“NC- i MSCs”) to treat acute respiratory conditions with a near term focus on ARDS associated with

In addition, we will also be the only product on the market specifically proven to be safe and

effective for the treatment of hemorrhoids.

Generally, if a company conducts clinical trials and receives FDA approval of a product for

which there are similar, but non FDA-approved, prescription products on the market, the manufacturers of the unapproved but marketed

products are required to withdraw them from the market.

However, the FDA has significant latitude in determining how to enforce its regulatory

powers in these circumstances.

We have not had any communication with the FDA regarding this matter and cannot predict what action, if

any, the FDA will take with respect to the unapproved products.

believe that should Halo-Lido demonstrate, proven safety and efficacy data and receive FDA approval, and if Halo-Lido obtains three years

of market exclusivity based on our dosage strength and formulation, we are likely to have a meaningful advantage in our pursuit of achieving

a significant position in the market for topical combination prescription products for the treatment of hemorrhoids.

October 2020, we, through our subsidiary, NoveCite, signed an exclusive agreement with Novellus Therapeutics Limited (“Novellus”)

to license iPSC-derived mesenchymal stem cells (iMSCs).

Under this worldwide exclusive license, we are focused on developing cellular

Specifically, we are seeking to develop and commercialize the NoveCite mesenchymal stem cells (“NC- i MSCs”)

to treat acute respiratory conditions with a near term focus on ARDS.

are the next generation mesenchymal stem cell therapy.

They are believed to be differentiated and superior to donor-derived MSCs.

Human donor-derived MSCs are sourced from human bone marrow, adipose tissue, placenta, umbilical tissue, etc.

and have significant

challenges (e.g., variable donor and tissue sources, limited supply, low potency, inefficient and expensive manufacturing).

overcome these challenges because they:

more potent and secrete exponentially higher levels of immunomodulatory proteins;

practically unlimited supply for high doses and repeat doses;

from a single donor and clonal so they are economically produced at scale with consistent

quality and potency, as well as being footprint free (compared to viral reprogramming

a significantly higher expansion capability.

cell therapy companies using donor-derived MSC therapies in treating ARDS have demonstrated that MSCs reduce inflammation, enhance

clearance of pathogens and stimulate tissue repair in the lungs.

Almost all these positive results are from early clinical trials

or under the emergency authorization program.

We believe them to be differentiated and superior to donor-derived MSCs.

donor-derived MSCs are sourced from human bone marrow, adipose tissue, placenta, umbilical tissue, etc.

and have significant challenges

(e.g., variable donor and tissue sources, limited supply, low potency, inefficient and expensive manufacturing).

NC-iMSCs overcome these

challenges because they:

Are more potent and secrete

exponentially higher levels of immunomodulatory proteins;

Have practically unlimited

supply for high doses and repeat doses;

Are from a single donor

and clonal so they are economically produced at scale with consistent quality and potency, as well as being footprint free (compared

to viral reprogramming methods);

Have a significantly higher

expansion capability.

cell therapy companies using donor-derived MSC therapies in treating ARDS have demonstrated that MSCs reduce inflammation, enhance clearance

of pathogens and stimulate tissue repair in the lungs.

Almost all these positive results are from early clinical trials or under the

FDA’s emergency authorization program.

December 2020, the Company announced interim data from a proof-of-concept ("POC") large animal study of its proprietary NC-iMSC

The available results of NC-iMSC therapy in the study show improvement in critical parameters, such as improved oxygenation,

less systemic shock, and reduced lung injury, compared to the control group.

The study was conducted in a widely accepted large animal

the third quarter 2021, the Company completed the characterization and expansion of its NC-iMSC accession cell bank (ACB) at Waisman

Biomanufacturing at the University of Wisconsin-Madison to create a cGMP master cell bank (MCB).

July 2021, Novellus was acquired by Brooklyn ImmunoTherapeutics, Inc.

(“Brooklyn”).

Pursuant to this transaction, the NoveCite

license was assumed by Brooklyn with all of the original terms and conditions in the exclusive license agreement.

there are 3 million cases of ARDS every year, out of which approximately 200,000 cases are in the United States.

pandemic has added significantly to the number of ARDS cases.

Once the COVID patients advance to ARDS, they are put on mechanical

The COVID-19 pandemic

has added significantly to the number of ARDS cases.

Once the COVID-19 patients advance to ARDS, they are put on mechanical ventilators.

Death rate among patients on ventilators can be as high as 50% depending on associated co-morbidities.

no approved treatments for ARDS, and the current standard of care only attempts to provide symptomatic relief.

There are no approved treatments

for ARDS, and the current standard of care only attempts to provide symptomatic relief.

and Marketing

1 unchanged sentence

In our product acquisition

criteria, we concentrate on markets that are highly influenced by key opinion leaders, commonly referred to as KOLs, and in which

products are prescribed by a relatively small number of physicians, yet provide opportunities for growth and market share.

strategy allows for a manageable commercialization effort for our Company in terms of resources and capital.

We also seek to provide

cost-effective therapies that would be endorsed by payers, patients, and providers.

We believe that we will be able to commercialize

products within the scope of these criteria ourselves, and that we can create marketing synergies by having a common narrow audience

for our marketing efforts (“several products in the bag for the same customer”).

our product candidates that fall out of the narrow scope criteria, we have identified pharmaceutical companies with large sales

forces, experienced sales and marketing management teams, direct-to-consumer capabilities, significantly larger resources than

ours, and non-competing product portfolios that we believe would make excellent sales and marketing partners.

We intend to license

our mass audience, non-specialty product candidates to such companies for sales and marketing.

rely on a combination of patent, trade secret, copyright, and trademark laws, as well as confidentiality, licensing and other

agreements, to establish and protect our proprietary rights.

Our policy is to actively seek to obtain, where appropriate, the

broadest intellectual property protection possible for our current product candidates and any future product candidates both in

However, patent protection may not provide us with complete protection against competitors who seek to circumvent

To help protect our proprietary know-how that is not patentable, and for inventions for which patents may be difficult

to enforce, we currently rely and will in the future rely on trade secret protection and confidentiality agreements to protect

our interests.

criteria, we concentrate on markets that are highly influenced by key opinion leaders, commonly referred to as KOLs, and in which products

are prescribed by a relatively small number of physicians, yet provide opportunities for growth and market share.

This strategy allows

for a manageable commercialization effort for our Company in terms of resources and capital.

We also seek to provide cost-effective therapies

that would be endorsed by payers, patients, and providers.

We believe that we will be able to commercialize products within the scope

of these criteria ourselves, and that we can create marketing synergies by having a common narrow audience for our marketing efforts

(“several products in the bag for the same customer”).

our product candidates that fall out of the narrow scope criteria, we have identified pharmaceutical companies with large sales forces,

experienced sales and marketing management teams, direct-to-consumer capabilities, significantly larger resources than ours, and non-competing

product portfolios that we believe would make excellent sales and marketing partners.

We intend to license our mass audience, non-specialty

product candidates to such companies for sales and marketing.

rely on a combination of patent, trade secret, copyright, and trademark laws, as well as confidentiality, licensing and other agreements,

to establish and protect our proprietary rights.

Our policy is to actively seek to obtain, where appropriate, the broadest intellectual

property protection possible for our current product candidates and any future product candidates both in the U.S.

patent protection may not provide us with complete protection against competitors who seek to circumvent our patents.

To help protect

our proprietary know-how that is not patentable, and for inventions for which patents may be difficult to enforce, we currently rely

and will in the future rely on trade secret protection and confidentiality agreements to protect our interests.

Intellectual Property

September 3, 2021, we, through our subsidiary, Citius Acquisition Corp., acquired the exclusive license of E7777 (denileukin diftitox),

a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma.

E7777, an engineered IL-2-diphtheria

toxin fusion protein, is an improved formulation of oncology agent, ONTAK ® ,

which was previously FDA-approved for the treatment of patients with persistent or recurrent CTCL, from Dr.

the agent as I/ONTAK.

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

and commercialize I/ONTAK in all markets except for Japan and certain parts of Asia.

Additionally, we have an option on the right to

develop and market the product in India.

the license agreement, Eisai is to receive a $6 million development milestone payment upon initial approval by the FDA of I/ONTAK for

the CTCL indication (which increases to $7 million in the event we have exercised our option to add India to the licensed territory prior

to FDA approval) and an aggregate of up to $22 million related to the achievement of net product sales thresholds.

We also are required

to reimburse Eisai for up to $2.65 million of its costs to complete the ongoing Phase 3 pivotal clinical trial for I/ONTAK for the CTCL

indication and reimburse Eisai for all reasonable costs associated with the preparation of a BLA for I/ONTAK.

to the terms of the license agreement, Eisai is responsible for completing the current CTCL clinical trial, and chemistry, manufacturing

and controls development activities through the production of the BLA that we will file with the FDA while we are responsible for the

costs of correcting any major deficiencies in the BLA as well as the costs of any necessary companion diagnostic or pediatric study.

We are responsible for development costs associated with potential additional indications.

term of the license agreement will continue until (i) if there has not been a commercial sale of a licensed product in the territory,

until the 10-year anniversary of the original license effective date, March 30, 2016, or (ii) if there has been a first commercial sale

of a licensed product in the territory within the 10-year anniversary of the original license effective date, the 10-year anniversary

of the first commercial sale on 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.

are responsible for preparing, filing, prosecuting and maintaining all patent applications and patents included in the licensed patents

that we intend to pursue within the territory.

the terms of the agreement with Dr.

Reddy’s, we are obligated to pay up to an aggregate of $40 million related to CTCL approvals

and other markets, up to $70 million in development milestones for additional indications, and up to $300 million for commercial

sales milestones.

We also must pay on a fiscal quarter basis tiered royalties equal to low double-digit percentages of net product sales.

The royalties will end on the earlier of (i) the 15-year anniversary of the first commercial sale of the latest indication that received

regulatory approval in the applicable country and (ii) the date on which a biosimilar product results in the reduction of net sales in

the applicable product by 50% in two consecutive quarters, as compared to the four quarters prior to the first commercial sale of the

biosimilar product.

We will also pay to Dr.

Reddy’s an amount equal to a low-thirties percentage of any sublicense upfront consideration

or milestone payments (or the like) received by us and the greater of (i) a low-thirties percentage of any sublicensee sales-based royalties

or (ii) a mid-single digit percentage of such licensee’s net sales.

under the agreement with Dr.

Reddy’s, we are required to (i) use commercially reasonable efforts to make commercially available

products in the CTCL indication, peripheral T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator

initiated immuno-oncology trials, (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) to complete

each specified immuno-oncology investigator trial on or before the four-year anniversary of the effective date of the definitive agreement.

Additionally, we are required to commercially launch a product in a territory within six months of receiving regulatory approval for

such product in each such jurisdiction.

Intellectual Property

May 2014, our subsidiary LMB entered into a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc.

(“NAT”), who licensed the intellectual property from MDACC, to develop and commercialize Mino-Lok on an exclusive,

worldwide (except for South America), sub-licensable basis.

who licensed the intellectual property from MDACC, to develop and commercialize Mino-Lok on an exclusive, worldwide (except for South

America), sub-licensable basis.

LMB incurred a one-time license fee in May 2014.

On March 20, 2017,

LMB entered into an amendment to the license agreement that expanded the licensed territory to include South America, providing

LMB with worldwide rights.

We are obligated to pay annual maintenance fees that increase annually until reaching a designated

amount, which we must pay until the first sale of product.

We also must pay up to an aggregate of approximately $1.1 million in

milestone payments, depending on the achievement of various regulatory and commercial milestones.

Under the terms of the license

agreement, we also must pay a royalty equal to mid-single digit percentages to low-double digit percentages of net sales, depending

on the level of sales in that year, and subject to downward adjustment to lower- to mid-single digit percentages in the event

there is no valid patent for the product in the country of sale at the time of sale.

After the first sale of product, we will

owe an annual minimum royalty payment that will increase annually until reaching a designated amount, which we must pay for the

duration of the term.

We will be responsible for all patent expenses for the term of the agreement although MDACC is responsible

for filing, prosecution and maintenance of all patents.

earlier terminated by NAT based on the failure to achieve certain development or commercial milestones, the license agreement

remains in effect until the date that all patents licensed under the agreement have expired and all patent applications within

the licensed patent rights have been cancelled, withdrawn or expressly abandoned.

The license agreement will terminate in the

event we breach any of our payment or reporting obligations or NAT breaches any of its obligations under the agreement.

have the right to terminate the agreement if we bring or participate in an action to challenge NAT’s ownership of any of

the licensed patent rights.

We may terminate the license agreement upon 180 days’

The license agreement may also

be terminated upon our and NAT’s mutual consent.

On March 20, 2017, LMB entered into an amendment to

the license agreement that expanded the licensed territory to include South America, providing LMB with worldwide rights.

We are obligated

to pay annual maintenance fees that increase annually until reaching a designated amount, which we must pay until the first sale of product.

We also must pay up to an aggregate of approximately $1.1 million in milestone payments, depending on the achievement of various regulatory

and commercial milestones.

Under the terms of the license agreement, we also must pay a royalty equal to mid-single digit percentages

to low-double digit percentages of net sales, depending on the level of sales in that year, and subject to downward adjustment to lower-

to mid-single digit percentages in the event there is no valid patent for the product in the country of sale at the time of sale.

the first sale of product, we will owe an annual minimum royalty payment that will increase annually until reaching a designated amount,

which we must pay for the duration of the term.

We will be responsible for all patent expenses for the term of the agreement although

MDACC is responsible for filing, prosecution and maintenance of all patents.

earlier terminated by NAT based on the failure to achieve certain development or commercial milestones, the license agreement remains

in effect until the date that all patents licensed under the agreement have expired and all patent applications within the licensed patent

rights have been cancelled, withdrawn or expressly abandoned.

The license agreement will terminate in the event we breach any of our

payment or reporting obligations or NAT breaches any of its obligations under the agreement.

NAT will have the right to terminate the

agreement if we bring or participate in an action to challenge NAT’s ownership of any of the licensed patent rights.

We may terminate

the license agreement upon 180 days’ notice.

The license agreement may also be terminated upon our and NAT’s mutual consent.

is covered in relation to the composition by issued U.S.

7,601,731, entitled “Antimicrobial Flush Solutions,”

which was issued on October 13, 2009.

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The patents provide intellectual property protection until June 7, 2024.

There are corresponding

patents granted in Europe and Canada (European Patent No.

There are corresponding patents

granted in Europe and Canada (European Patent No.

EP 1644024, and Canadian Patent No.

1 unchanged sentence

October 2018, the U.S.

Patent and Trademark Office (“USPTO”) issued U.S.

10,086,114 (the “114 patent”),

entitled “Antimicrobial Solutions with Enhanced Stability.”

On October 9, 2019, the European Patent Office (“EPO”)

Patent and Trademark Office (“USPTO”) issued U.S.

10,086,114 (the “114 patent”),

entitled “Antimicrobial Solutions with Enhanced Stability.” On October 9, 2019, the European Patent Office (“EPO”)

granted European Patent No.

3370794, which corresponds to the ‘114 patent.

The grant of these patents strengthens the intellectual

property protection for Mino-Lok through November 2036.

While the original patents for Mino-Lok (discussed above) cover the basic

composition, this invention overcomes limitations in mixing antimicrobial solutions in which components have precipitated because

of physical and/or chemical factors, thus limiting the stability of the post-mix solutions.

The scientists and technologists at

MDACC have been able to improve the stability of the post-mixed solutions through adjustments of the post-mixed pH of the solution.

This may allow for longer storage time of the ready-to-use solution.

As such, the patents claiming the enhanced stability may

effectively extend patent protection for Mino-Lok beyond the 2024 expiration of the original patents since it is expected that

the compositions providing enhanced stability would be preferred over any non-stabilized versions that a competitor may introduce

after June 7, 2024.

Citius holds the exclusive worldwide license which provides access to this patented technology for development

and commercialization of Mino-Lok.

has received a Qualified Infectious Disease Product (“QIDP”) designation.

While the original patents for Mino-Lok (discussed above) cover the basic composition,

this invention overcomes limitations in mixing antimicrobial solutions in which components have precipitated because of physical and/or

chemical factors, thus limiting the stability of the post-mix solutions.

The scientists and technologists at MDACC have been able to

improve the stability of the post-mixed solutions through adjustments of the post-mixed pH of the solution.

This may allow for longer

storage time of the ready-to-use solution.

As such, the patents claiming the enhanced stability may effectively extend patent protection

for Mino-Lok beyond the 2024 expiration of the original patents since it is expected that the compositions providing enhanced stability

would be preferred over any non-stabilized versions that a competitor may introduce after June 7, 2024.

Citius holds the exclusive worldwide

license which provides access to this patented technology for development and commercialization of Mino-Lok.

has received a Qualified Infectious Disease Product (“QIDP”) designation.

The QIDP designation provides New Drug Applications

an additional five years of market exclusivity, which together with the potential three years of exclusivity for the new strength

and formulation of Mino-Lok, would result in a combined total of eight years of market exclusivity regardless of patent protection.

Intellectual Property

January 2019, we entered into a patent and technology license agreement with MDACC to develop and commercialize Mino-Wrap on an

exclusive worldwide basis, with no rights to sub-license.

an additional five years of market exclusivity, which together with the potential three years of exclusivity for the new strength and

formulation of Mino-Lok, would result in a combined total of eight years of market exclusivity regardless of patent protection.

Mino-Wrap Intellectual Property

In January 2019, we entered into a patent and

technology license agreement with MDACC to develop and commercialize Mino-Wrap on an exclusive worldwide basis, with no rights to sub-license.

We paid a one-time upfront licensing fee upon execution of the agreement.

Under the agreement, we are required to use commercially reasonable efforts to commercialize Mino-Wrap under several regulatory

scenarios and achieve milestones that are associated with these regulatory options leading to an approval from the FDA.

obligated to pay annual maintenance fees that increase annually until reaching a designated amount, which we must pay until the

first sale of product.

We also must pay up to an aggregate of $2.1 million in milestone payments, depending on the achievement

of various regulatory and commercial milestones.

Under the terms of the license agreement, we also must pay a royalty equal to

mid- to upper-single digit percentages of net sales, depending on the level of sales in that year, and subject to downward adjustment

to lower- to mid-single digit percentages in the event there is no valid patent for the product in the United States at the time

Under the agreement, we are required to use commercially reasonable

efforts to commercialize Mino-Wrap under several regulatory scenarios and achieve milestones that are associated with these regulatory

options leading to an approval from the FDA.

We are obligated to pay annual maintenance fees that increase annually until reaching a designated

amount, which we must pay until the first sale of product.

We also must pay up to an aggregate of $2.1 million in milestone payments,

depending on the achievement of various regulatory and commercial milestones.

Under the terms of the license agreement, we also must pay

a royalty equal to mid- to upper-single digit percentages of net sales, depending on the level of sales in that year, and subject to downward

adjustment to lower- to mid-single digit percentages in the event there is no valid patent for the product in the United States at the

time of sale.

After the first sale of product, we will owe an annual minimum royalty payment that will increase annually for the duration

We will be responsible for all patent expenses incurred by MDACC for the term of the agreement although MDACC is

responsible for filing, prosecution and maintenance of all patents.

term of the license agreement will end on the later of the expiration of all licensed patents, or the fifteenth anniversary of

the agreement.

MDACC may terminate the license agreement at any time after four years in any country if we have not commercialized

or are not actively attempting to commercialize a product in such country.

The license agreement will terminate in the event we

breach any of our payment or reporting obligations or MDACC breaches any of its obligations under the agreement.

MDACC will have

the right to terminate the agreement if we bring or participate in an action to challenge MDACC’s ownership of any of the

licensed patent rights.

We may terminate the license agreement upon 180 days’

The license agreement may also be

terminated upon our and MDACC’s mutual consent.

December 2017, the USPTO issued U.S.

9,849,217, entitled “Antimicrobial Wraps for Medical Implants.”

invention overcomes limitations in breast reconstruction utilizing tissue expanders and implants following mastectomies by providing,

in certain aspects, biodegradable antimicrobial film that may be wrapped around a medical implant such as a breast implant prior

to the insertion into a subject such as a human patient.

The scientists and technologists at MDACC have developed a biodegradable

covering for a medical implant comprising a highly plasticized gelatin and at least one drug to reduce infection.

the exclusive worldwide license, which provides access to this patented technology for development and commercialization of Mino-Wrap.

Intellectual Property

are developing Halo-Lido to have a unique combination of excipients as well as unique concentrations of the active ingredients.

The goal is to have a product that is optimized for stability and activity.

Once the formulation development is completed and

data is obtained, we intend to apply for a patent on this new topical formulation.

seek to achieve approval for Halo-Lido by utilizing the FDA’s 505(b)(2) pathway.

This pathway allows an applicant to file

an NDA that contains full reports of investigations of safety and effectiveness, but where at least some of the information required

for approval comes from prior studies not conducted by or for the applicant and for which the applicant has not obtained a right

of reference to such prior third-party studies.

This pathway would provide three years of market exclusivity.

Intellectual Property

October 2020, we, through our subsidiary NoveCite, Inc., entered into a license agreement with Novellus Therapeutics Limited (“Licensor”),

whereby NoveCite acquired an exclusive, worldwide license, with the right to sublicense, to develop and commercialize a stem cell

therapy based on the Licensor’s patented technology for the treatment of acute pneumonitis of any etiology in which inflammation

is a major agent in humans.

The patented technology consists of mesenchymal stem cells (“MSCs”) derived from an induced

pluripotent stem cell line that is made by Licensor using the mRNA cell reprogramming methods in the patents covering the licensed

execution of the license agreement, NoveCite paid an upfront payment of $5,000,000 and issued to Licensor shares of Novecite’s

common stock representing 25% of Novecite’s currently outstanding equity.

We own the other 75% of NoveCite’s currently

outstanding equity.

Pursuant to the terms of the stock subscription agreement between Novellus and NoveCite, if NoveCite issues

additional equity, subject to certain exceptions, prior to its initial public offering or a change of control (as defined in the

license agreement), NoveCite must maintain Novellus’s ownership at 25% by issuing to Novellus additional shares.

is obligated to pay Licensor up to an aggregate of $51,000,000 in milestone payments upon the achievement of various regulatory

and developmental milestones.

NoveCite also must pay on a fiscal quarter basis a royalty equal to low double-digit percentages

of net sales, commencing upon the first commercial sale of a licensed product.

This royalty is subject to downward adjustment

on a product-by-product and country-by-country basis to an upper-single digit percentage of net sales in any country in the event

of the expiration of the last valid patent claim or if no valid patent claim exists in that country.

The royalty will end on the

earlier of (i) date on which a biosimilar product is first marketed, sold, or distributed by Licensor or any third party in the

applicable country or (ii) the 10 year anniversary of the date of expiration of the last-to-expire valid patent claim in that

In the case of a country where no licensed patent ever exists, the royalty will end on the later of (i) the date of expiry

of such licensed product’s regulatory exclusivity and (ii) the 10 year anniversary of the date of the first commercial sale

of the licensed product in the applicable country.

In addition, NoveCite will pay to Licensor an amount equal to a mid-twenties

percentage of any sublicensee fees it receives.

the term of the license agreement, NoveCite is required to use commercially reasonable efforts to make commercially available

at least one product in at least two markets:

the United States and either the United Kingdom, France, Germany, China or Japan.

Additionally, NoveCite shall (i) on or before the five year anniversary of the date of the license agreement, file an IND for

a licensed product in the field of acute pneumonitis treatment and (ii) receive regulatory approval for a licensed product in

the field of acute pneumonitis treatment in the United States or in a major market country on or before the ten year anniversary

of the date of the license agreement.

to the terms of the license agreement, NoveCite has been granted a right of first negotiation to exclusively license the rights

to any new products developed or acquired by Licensor which cannot include MSC’s, that may be used within the field of acute

pneumonitis treatment.

After receiving notice from the Licensor of the new product opportunity, NoveCite has 30 days to notify

Licensor of its desire to negotiate a license agreement for the new product.

If such notice is given by NoveCite, the parties

shall then have a period of 150 days from the date of Licensor’s notice to NoveCite to negotiate, exclusively and in good

faith, the terms and conditions for the new product license agreement.

term of the license agreement will continue on a country-by-country and licensed product-by-licensed product basis until the expiration

of the last-to-expire royalty term for any and all licensed products unless earlier terminated in accordance with its terms.

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

subject to cure within the designated time periods.

Either party also may terminate the license agreement if the other party files

for bankruptcy or takes related actions or is unable to pay its debts as they become due, subject to cure within the designated

Additionally, Licensor will have the right to terminate the agreement if NoveCite directly or indirectly challenges

the patentability, enforceability or validity of any licensed patent.

NoveCite may terminate the license agreement at any time

without cause upon 90 days prior written notice.

will be responsible for preparing, filing, prosecuting and maintaining all patent applications and patents included in the licensed

patents in the territory.

Provided however, that if Licensor decides that it is not interested in maintaining a particular licensed

patent or in preparing, filing, or prosecuting a licensed patent, it will promptly advise NoveCite in writing and NoveCite will

have the right, but not the obligation, to assume such responsibilities in the territory at NoveCite’s sole cost and expense.

the term of the license agreement, Licensor is prohibited from commercializing or exploiting (directly or indirectly) any product

that includes mesenchymal stem cells for any purpose in acute pneumonitis treatment (subject to certain sponsored research exceptions),

or exploiting (directly or indirectly) or enabling a third party to exploit, for any purpose in acute pneumonitis treatment or

otherwise, the original licensed cell banks line or any GMP-grade cell banks of a cell line derived therefrom and that can be

used as starting material for the manufacture of products derived from the licensed technology.

During the term of the license

agreement, each party is prohibited from soliciting any employee of the other party, subject to certain exceptions.

operate in a highly competitive and regulated industry which is subject to rapid and frequent changes.

We face significant competition

from organizations that are pursuing drugs that would compete with the drug candidates that we are developing and the same or

similar products that target the same conditions we intend to treat.

Due to our limited resources, we may not be able to compete

successfully against these organizations, which include many large, well-financed and experienced pharmaceutical and biotechnology

companies, as well as academic and research institutions and government agencies.

the only alternative to Mino-Lok in the treatment of infected CVCs in CRBSI/CLABSI patients of which we are aware, is the standard

of care of removing the culprit CVC and replacing a new CVC at a different vascular site.

Citius is not aware of any INDs for

a salvage antibiotic lock solution and does not expect any to be forthcoming due to the difficulty of meeting the necessary criteria

to be effective and practical.

this time, there are no pharmacologic agents approved in the U.S.

for the prevention or treatment of CRBSIs or CLABSIs in central

venous catheters.

Citius is aware that there are several agents in development for prevention but none for salvage.

The most prominent

of these appear to be Defencath from CorMedix Inc.

We will be responsible for all patent expenses incurred by MDACC for the term of the agreement although MDACC is responsible

for filing, prosecution and maintenance of all patents.

The term of the license agreement will end on

the later of the expiration of all licensed patents, or the fifteenth anniversary of the agreement.

MDACC may terminate the license agreement

at any time after four years in any country if we have not commercialized or are not actively attempting to commercialize a product in

such country.

The license agreement will terminate in the event we breach any of our payment or reporting obligations or MDACC breaches

any of its obligations under the agreement.

MDACC will have the right to terminate the agreement if we bring or participate in an action

to challenge MDACC’s ownership of any of the licensed patent rights.

We may terminate the license agreement upon 180 days’

The license agreement may also be terminated upon our and MDACC’s mutual consent.

In December 2017, the USPTO issued U.S.

9,849,217, entitled “Antimicrobial Wraps for Medical Implants.” This invention overcomes limitations in breast reconstruction

utilizing tissue expanders and implants following mastectomies by providing, in certain aspects, biodegradable antimicrobial film that

may be wrapped around a medical implant such as a breast implant prior to the insertion into a subject such as a human patient.

The scientists

and technologists at MDACC have developed a biodegradable covering for a medical implant comprising a highly plasticized gelatin and at

least one drug to reduce infection.

Citius holds the exclusive worldwide license, which provides access to this patented technology for

development and commercialization of Mino-Wrap.

Halo-Lido Intellectual Property

We are developing Halo-Lido to have a unique combination

of excipients as well as unique concentrations of the active ingredients.

The goal is to have a product that is optimized for stability

and activity.

Once the formulation development is completed and data is obtained, we intend to apply for a patent on this new topical

We seek to achieve approval for Halo-Lido by utilizing

the FDA’s 505(b)(2) pathway.

This pathway allows an applicant to file an NDA that contains full reports of investigations of safety

and effectiveness, but where at least some of the information required for approval comes from prior studies not conducted by or for the

applicant and for which the applicant has not obtained a right of reference to such prior third-party studies.

This pathway would provide

three years of market exclusivity.

NoveCite Intellectual Property

In October 2020, we, through our subsidiary NoveCite,

Inc., entered into a license agreement with Novellus Therapeutics Limited (“Licensor”), whereby NoveCite acquired an exclusive,

worldwide license, with the right to sublicense, to develop and commercialize a stem cell therapy based on the Licensor’s patented

technology for the treatment of acute pneumonitis of any etiology in which inflammation is a major agent in humans.

The patented technology

consists of mesenchymal stem cells (“MSCs”) derived from an induced pluripotent stem cell line that is made by Licensor using

the mRNA cell reprogramming methods in the patents covering the licensed technology.

Upon execution of the license agreement, NoveCite

paid an upfront payment of $5,000,000 and issued to Licensor shares of Novecite’s common stock representing 25% of Novecite’s

currently outstanding equity.

We own the other 75% of NoveCite’s currently outstanding equity.

NoveCite is obligated to pay Licensor up to an

aggregate of $51,000,000 in milestone payments upon the achievement of various regulatory and developmental milestones.

NoveCite also

must pay on a fiscal quarter basis a royalty equal to low double-digit percentages of net sales, commencing upon the first commercial

sale of a licensed product.

This royalty is subject to downward adjustment on a product-by-product and country-by-country basis to an

upper-single digit percentage of net sales in any country in the event of the expiration of the last valid patent claim or if no valid

patent claim exists in that country.

The royalty will end on the earlier of (i) the date on which a biosimilar product is first marketed,

sold, or distributed by Licensor or any third party in the applicable country or (ii) the 10-year anniversary of the date of expiration

of the last-to-expire valid patent claim in that country.

In the case of a country where no licensed patent ever exists, the royalty will

end on the later of (i) the date of expiry of such licensed product’s regulatory exclusivity and (ii) the 10-year anniversary of

the date of the first commercial sale of the licensed product in the applicable country.

In addition, NoveCite will pay to Licensor an

amount equal to a mid-twenties percentage of any sublicensee fees it receives.

During the term of the license agreement, NoveCite

is required to use commercially reasonable efforts to make commercially available at least one product in at least two markets:

States and either the United Kingdom, France, Germany, China or Japan.

Additionally, NoveCite shall (i) on or before the five-year anniversary

of the date of the license agreement, file an IND for a licensed product in the field of acute pneumonitis treatment and (ii) receive

regulatory approval for a licensed product in the field of acute pneumonitis treatment in the United States or in a major market country

on or before the ten-year anniversary of the date of the license agreement.

Pursuant to the terms of the license agreement,

NoveCite has been granted a right of first negotiation to exclusively license the rights to any new products developed or acquired by

Licensor which cannot include MSC’s, that may be used within the field of acute pneumonitis treatment.

After receiving notice from

the Licensor of the new product opportunity, NoveCite has 30 days to notify Licensor of its desire to negotiate a license agreement for

the new product.

If such notice is given by NoveCite, the parties shall then have a period of 150 days from the date of Licensor’s

notice to NoveCite to negotiate, exclusively and in good faith, the terms and conditions for the new product license agreement.

The term of the license agreement will continue

on a country-by-country and licensed product-by-licensed product basis until the expiration of the last-to-expire royalty term for any

and all licensed products unless earlier terminated in accordance with its terms.

Either party may terminate the license agreement upon

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

Either party also may terminate the license agreement if the other party files for bankruptcy or takes related actions or is unable to

pay its debts as they become due, subject to cure within the designated time period.

Additionally, Licensor will have the right to terminate

the agreement if NoveCite directly or indirectly challenges the patentability, enforceability or validity of any licensed patent.

may terminate the license agreement at any time without cause upon 90 days prior written notice.

Licensor will be responsible for preparing, filing,

prosecuting and maintaining all patent applications and patents included in the licensed patents in the territory.

Provided however, that

if Licensor decides that it is not interested in maintaining a particular licensed patent or in preparing, filing, or prosecuting a licensed

patent, it will promptly advise NoveCite in writing and NoveCite will have the right, but not the obligation, to assume such responsibilities

in the territory at NoveCite’s sole cost and expense.

During the term of the license agreement, Licensor

is prohibited from commercializing or exploiting (directly or indirectly) any product that includes mesenchymal stem cells for any purpose

in acute pneumonitis treatment (subject to certain sponsored research exceptions), or exploiting (directly or indirectly) or enabling

a third party to exploit, for any purpose in acute pneumonitis treatment or otherwise, the original licensed cell banks line or any GMP-grade

cell banks of a cell line derived therefrom and that can be used as starting material for the manufacture of products derived from the

licensed technology.

During the term of the license agreement, each party is prohibited from soliciting any employee of the other party,

subject to certain exceptions.

In July 2021, Novellus was acquired by Brooklyn.

Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all of its original terms and conditions.

We operate in a highly competitive and regulated

industry which is subject to rapid and frequent changes.

We face significant competition from organizations that are pursuing drugs that

would compete with the drug candidates that we are developing and the same or similar products that target the same conditions we intend

Due to our limited resources, we may not be able to compete successfully against these organizations, which include many large,

well-financed and experienced pharmaceutical and biotechnology companies, as well as academic and research institutions and government

Mino-Lok Competition

Currently, the only alternative to Mino-Lok in

the treatment of infected CVCs in CRBSI/CLABSI patients of which we are aware, is the standard of care of removing the culprit CVC and

replacing a new CVC at a different vascular site.

Citius is not aware of any INDs for a salvage antibiotic lock solution and does not

expect any to be forthcoming due to the difficulty of meeting the necessary criteria to be effective and practical.

At this time, there are no pharmacologic agents

approved in the U.S.

for the prevention or treatment of CRBSIs or CLABSIs in central venous catheters.

Citius is aware that there are

several agents in development for prevention but none for salvage.

The most prominent of these appear to be Defencath from CorMedix Inc.

and B-Lock from Great Lakes Pharmaceuticals, Inc.

(“GLP”).

Neither of these lock solutions have been shown to be effective

in salvaging catheters in bacteremic patients as Mino-Lok is intended to do, and Citius does not expect that either would be pursued for

this indication.

(CorMedix Inc.)

is a formulation of Taurolidine 1.35%, Citrate 3.5%, and Heparin 1000 units/mL.

Neutrolin is an anti-microbial catheter lock solution

being developed by CorMedix to prevent CRBSIs and to prevent clotting.

In January 2015, the FDA granted Fast Track and QIDP designations

for Defencath.

In December 2015, CorMedix initiated its Phase 3 clinical trial in hemodialysis patients in the United States.

On June 20, 2018, CorMedix announced that it had completed its review and source-verification of the data required for the interim

analysis of the Phase 3 LOCK-IT-100 study for Neutrolin.

The data was then locked and transferred to the independent biostatistician

for un-blinding and analysis, who then provided the results to the Data and Safety Monitoring Board (“DSMB”) for its

July 25, 2018 CorMedix announced that the DSMB had completed its review of the interim analysis of the data from the currently

ongoing Phase 3 LOCK-IT-100 study for Neutrolin.

Because the pre-specified level of statistical significance was reached and efficacy

had been demonstrated, the DSMB recommended the study be terminated early.

No safety concerns were reported by the DSMB based

on the interim analysis.

has submitted its NDA for Defencath to the FDA, which accepted the NDA in August 2020.

Defencath is a formulation of Taurolidine 1.35%,

Citrate 3.5%, and Heparin 1000 units/mL.

Neutrolin is an anti-microbial catheter lock solution being developed by CorMedix to prevent

CRBSIs and to prevent clotting.

In January 2015, the FDA granted Fast Track and QIDP designations for Defencath.

In December 2015, CorMedix

initiated its Phase 3 clinical trial in hemodialysis patients in the United States.

On June 20, 2018, CorMedix announced that it had completed

its review and source-verification of the data required for the interim analysis of the Phase 3 LOCK-IT-100 study for Neutrolin.

was then locked and transferred to the independent biostatistician for un-blinding and analysis, who then provided the results to the

Data and Safety Monitoring Board (“DSMB”) for its review.

On July 25, 2018, CorMedix announced that the

DSMB had completed its review of the interim analysis of the data from the currently ongoing Phase 3 LOCK-IT-100 study for Neutrolin.

Because the pre-specified level of statistical significance was reached and efficacy had been demonstrated, the DSMB recommended the study

be terminated early.

No safety concerns were reported by the DSMB based on the interim analysis.

CorMedix submitted its NDA for Defencath to the

FDA, which accepted the NDA in August 2020.

The FDA set a target review date of February 28, 2021.

B-Lock™

In March 2021, CorMedix reported that

the FDA, in its Complete Response Letter (“CRL”), informed CorMedix that the FDA could not approve the NDA for DefenCath in

its present form.

The FDA noted concerns at the third-party manufacturing facility after a review of records requested by the FDA and

provided by the contract manufacturer (“CMO”).

Additionally, the FDA is requiring a manual extraction study to demonstrate

that the labeled volume can be consistently withdrawn from the vials despite an existing in-process control to demonstrate fill volume

within specifications.

In April 2021, CorMedix and the CMO met with the FDA to discuss proposed resolutions for the deficiencies identified

in the CRL and the Post-Application Action Letter received by the CMO from the FDA for the NDA for DefenCath.

There was an agreed upon

protocol for the manual extraction study identified in the CRL, which has been successfully completed.

Addressing the FDA’s concerns

regarding the qualification of the filling operation necessitated adjustments in the process and generation of additional data on operating

parameters for the manufacture of DefenCath.

CorMedix and the CMO determined that additional process qualification is needed with subsequent

validation to address these issues.

The FDA stated that the review timeline would be determined when the NDA resubmission is received

and that it expected all corrections to facility deficiencies to be complete at the time of resubmission so that all corrective actions

may be verified during an onsite evaluation of the manufacturing facility in the next review cycle, if the FDA determines it will do an

onsite evaluation.

Satisfactory resolution of these issues is required for FDA approval of the DefenCath NDA.

(Great Lakes Pharmaceuticals, Inc.)

is a triple combination of trimethoprim, EDTA and ethanol from Great Lakes Pharmaceuticals, Inc.

(“GLP”).

24, 2012, GLP announced the initiation of a clinical study of B-Lock.

B-Lock is a triple combination of trimethoprim,

EDTA and ethanol from Great Lakes Pharmaceuticals, Inc.

On July 24, 2012, GLP announced the initiation of a clinical

study of B-Lock.

We are unaware as to the progress or results of these studies.

In addition, we are not aware of any IND being filed in the U.S.

for B-Lock, nor are we aware of any clinical studies to support

salvage of infected catheters in bacteremic patients.

of these lock solutions have been shown to be effective in salvaging catheters in bacteremic patients as Mino-Lok is intended

to do, and Citius does not expect that either would be pursued for this indication.

has been no further public information available on GLP.

GLP’s web site and phone number are no longer active and the Company

believes that they have ceased operations.

primary competition for Mino-Wrap would be the existing standard of care treatment, which includes a systemic perioperative antimicrobial

agent with the perioperative immersion of the implant or irrigation of the surgical pocket with an antimicrobial solution prior

to insertion of the tissue expander device.

This is also administered with immediate postoperative oral antimicrobials.

primary competition in the hemorrhoid market is non-prescription OTC products.

If approved by the FDA, Halo-Lido will be the only

prescription product for the treatment of hemorrhoids.

are multiple participants in the cell therapy field both in the United States and abroad.

We believe that the following companies

most directly compete with NoveCite in our licensed field of acute pneumonitis treatment.

Therapeutics Limited develops and commercializes a proprietary mesenchymal stem cell technology under the Cymerus brand for human

therapeutic use in Australia.

The company’s lead therapeutic product candidate is CYP-001, which has completed a Phase 1

clinical trial for the treatment of graft versus host disease.

Cynata also develops products for the treatment of asthma, heart

attack, diabetic wounds, coronary artery disease, acute respiratory distress syndrome, brain cancer, melanoma, sepsis, osteoarthritis,

and critical limb ischemia, which are in a preclinical model.

is a biotechnology company that focuses on the research and development activities in the field of regenerative medicine.

Its clinical development programs are focused on treating neurological conditions, cardiovascular diseases, inflammatory and immune

disorders, and pulmonary and other conditions.

The company’s lead platform product includes MultiStem cell therapy, an allogeneic

stem cell product, which is in a Phase 3 clinical study for the treatment of patients suffering from neurological damage from

an ischemic stroke, as well as in a Phase 2 clinical study for the treatment of patients with acute myocardial infarction, and

has completed a Phase 1 clinical study for the treatment of patients suffering from leukemia or various other blood-borne cancers.

The company has license and collaboration agreements with Healios K.K.

to develop and commercialize MultiStem cell therapy for

ischemic stroke, acute respiratory distress syndrome, and ophthalmological indications, as well as for the treatment of liver,

kidney, pancreas, and intestinal tissue diseases;

and the University of Minnesota to develop MultiStem cell therapy platform.

Therapeutics Inc.

operates as a bio-therapeutics company in Israel.

It focuses on the research, development, clinical trial, and

manufacture of placental expanded (PLX) based cell therapeutic products and related technologies for the treatment of various

ischemic, inflammatory, and hematologic conditions, as well as autoimmune disorders.

A Phase2 study of PLX cells as a treatment

for severe COVID-19 cases complicated by acute respiratory distress syndrome has been initiated in the U.S.

Limited is a biopharmaceutical company that develops and commercializes allogeneic cellular medicines.

The company offers products

in the areas of cardiovascular, spine orthopedic disorder, oncology, hematology, and immune-mediated and inflammatory diseases.

Its proprietary regenerative medicine technology platform is based on specialized cells known as mesenchymal lineage adult stem

In April 2020, Mesoblast initiated a Phase 3 trial using mesenchymal stromal cells for the treatment of moderate to severe

COVID-19 acute respiratory distress syndrome.

and Manufacturing

do not currently have and we do not intend to set up our own manufacturing facilities.

We expect to use approved contract manufacturers

for manufacturing our product candidates in all stages of development after we file for FDA approval.

Each of our domestic and

foreign contract manufacturing establishments, including any contract manufacturers we may decide to use, must be listed in the

NDA and must be registered with the FDA.

In addition, we are not aware of any IND being filed in

for B-Lock, nor are we aware of any clinical studies to support salvage of infected catheters in bacteremic patients.

There has been no further public information available

GLP’s web site and phone number are no longer active and the Company believes that they have ceased operations.

Mino-Wrap Competition

The primary competition for Mino-Wrap would be

the existing standard of care treatment, which includes a systemic perioperative antimicrobial agent with the perioperative immersion

of the implant or irrigation of the surgical pocket with an antimicrobial solution prior to insertion of the tissue expander device.

is also administered with immediate postoperative oral antimicrobials.

Halo-Lido Competition

The primary competition in the hemorrhoid market

is non-prescription OTC products.

If approved by the FDA, Halo-Lido will be the only prescription product for the treatment of hemorrhoids.

NoveCite Competition

There are multiple participants in the cell therapy

field both in the United States and abroad.

We believe that the following companies most directly compete with NoveCite in our licensed

field of acute pneumonitis treatment.

Cynata Therapeutics Limited develops and commercializes

a proprietary mesenchymal stem cell technology under the Cymerus brand for human therapeutic use in Australia.

The company’s lead

therapeutic product candidate is CYP-001, which has completed a Phase 1 clinical trial for the treatment of graft versus host disease.

Cynata also develops products for the treatment of asthma, heart attack, diabetic wounds, coronary artery disease, acute respiratory distress

syndrome, brain cancer, melanoma, sepsis, osteoarthritis, and critical limb ischemia, which are in a preclinical model.

Athersys, Inc.

is a biotechnology company that

focuses on the research and development activities in the field of regenerative medicine.

Its clinical development programs are focused

on treating neurological conditions, cardiovascular diseases, inflammatory and immune disorders, and pulmonary and other conditions.

company’s lead platform product includes MultiStem cell therapy, an allogeneic stem cell product, which has an ongoing Phase 2/3

clinical trial for the treatment of ARDS and has an ongoing clinical trial on Japan for the treatment of RDS.

The MultiStem therapy also

is in a Phase 3 clinical study for the treatment of patients suffering from neurological damage from an ischemic stroke, as well as in

a Phase 2 clinical study for the treatment of patients with acute myocardial infarction, and has completed a Phase 1 clinical study for

the treatment of patients suffering from leukemia or various other blood-borne cancers.

The company has license and collaboration agreements

with Healios K.K.

to develop and commercialize MultiStem cell therapy for ischemic stroke, acute respiratory distress syndrome, and ophthalmological

indications, as well as for the treatment of liver, kidney, pancreas, and intestinal tissue diseases;

and the University of Minnesota

to develop MultiStem cell therapy platform.

Pluristem Therapeutics Inc.

operates as a bio-therapeutics

company in Israel.

It focuses on the research, development, clinical trial, and manufacture of placental expanded (PLX) based cell therapeutic

products and related technologies for the treatment of various ischemic, inflammatory, and hematologic conditions, as well as autoimmune

A Phase 2 study of PLX cells as a treatment for severe COVID-19 cases complicated by acute respiratory distress syndrome has

been initiated in the U.S.

as well as in Europe and Israel.

Mesoblast Limited is a biopharmaceutical company

that develops and commercializes allogeneic cellular medicines.

The company offers products in the areas of cardiovascular, spine orthopedic

disorder, oncology, hematology, and immune-mediated and inflammatory diseases.

Its proprietary regenerative medicine technology platform

is based on specialized cells known as mesenchymal lineage adult stem cells.

In April 2020, Mesoblast initiated a Phase 3 trial using

mesenchymal stromal cells for the treatment of moderate to severe COVID-19 acute respiratory distress syndrome.

The trial was halted in

December 2020 after the Data Safety Monitoring Board (DSMB) performed a third interim analysis on the trial’s first 180 patients,

noting that the trial was not likely to meet the 30-day mortality reduction endpoint at the planned 300 patient enrolment.

The trial was

powered to achieve a primary endpoint of 43% reduction in mortality at 30 days for treatment with remestemcelL on top of maximal care.

The DSMB recommended that the trial complete with the enrolled 222 patients, and that all be followed-up as planned.

At follow-up through

day 60, remestemcel-L showed a positive but non-significant trend in overall mortality reduction across the entire population of treated

patients (n=217).

In the pre-specified population of patients under age 65 (n=123), remestemcel-L reduced mortality through day 60 by

46%, but not in patients 65 or older (n=94).

In an exploratory analysis through day 60, remestemcelL reduced mortality by 75% and increased

days alive off mechanical ventilation in patients under age 65 when combined with dexamethasone, in comparison with controls on dexamethasone.

I/ONTAK Competition

The following products are approved for the systemic

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.

There are limitations in these targeted therapies,

which often are discontinued due to toxicity and adverse events as well as a limited duration of response due to resistance over time.

Supply and Manufacturing

We do not currently have and we do not intend

to set up our own manufacturing facilities.

We expect to use approved contract manufacturers for manufacturing our product candidates

in all stages of development after we file for FDA approval.

Each of our domestic and foreign contract manufacturing establishments, including

any contract manufacturers we may decide to use, must be listed in the NDA or the BLA, as applicable, and must be registered with the

Also, the FDA imposes substantial annual fees on manufacturers of branded products.

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.

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

including the 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.

have contracted with proven suppliers and manufacturers for active pharmaceutical ingredient, development and packaging.

confident that all materials meet or will meet specifications discussed at the chemistry, manufacturing and controls meeting with

States Government Regulation

research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing, among other things,

of our product candidates are extensively regulated by governmental authorities in the United States and other countries.

of our current product candidates are considered drugs rather than medical devices.

Consequently, we intend to submit an NDA to

the FDA for each of Mino-Lok, Halo-Lido, Mino-Wrap and NoveCite.

the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act and the agency’s implementing

If we fail to comply with the applicable United States requirements at any time during the product development process,

including clinical testing, as well as at any time before and after the approval process, we may become subject to administrative

or judicial sanctions.

These sanctions could include the FDA’s refusal to approve pending applications, license suspension

or revocation, withdrawal of an approval, warning letters, adverse publicity, product recalls, product seizures, total or partial

suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution.

Any agency enforcement

action could have a material adverse effect on our company and its operations.

any of our drug product candidates may be marketed in the United States, it must be approved by the FDA.

The steps required before

a drug may be approved for marketing in the United States generally include:

preclinical laboratory and animal tests, and

formulation studies;

the submission to the FDA of an IND application

for human clinical testing that must become effective before human clinical trials may begin;

adequate and well-controlled human clinical

trials to establish the safety and efficacy of the product candidate for each indication for which approval is sought;

the submission to the FDA of an NDA and the

FDA’s acceptance of the NDA for filing;

satisfactory completion of an FDA inspection

of the manufacturing facilities at which the product is to be produced to assess compliance with the FDA’s current Good

Manufacturing Practices (“cGMP”);

FDA review and approval of the NDA.

and any of our collaborative partners may be subject to widely varying foreign regulations, which may be different from those

of the FDA, governing clinical trials, manufacture, product registration and approval and pharmaceutical sales.

Whether or not

FDA approval has been obtained, we or our collaboration partners must obtain a separate approval for a product by the comparable

regulatory authorities of foreign countries prior to the commencement of product marketing in such countries.

In certain countries,

regulatory authorities also establish pricing and reimbursement criteria.

The approval process varies from country to country,

and the time may be longer or shorter than that required for FDA approval.

In addition, under current United States law, there

are restrictions on the export of products not approved by the FDA, depending on the country involved and the status of the product

in that country.

International

sales of medical devices manufactured in the U.S.

that are not approved by the FDA for use in the U.S., or are banned or deviate

from lawful performance standards, are subject to FDA export requirements.

Exported devices are subject to the regulatory requirements

of each country to which the device is exported.

Some countries do not have medical device regulations, but in most foreign countries,

medical devices are regulated.

Frequently, regulatory approval may first be obtained in a foreign country prior to application

to take advantage of differing regulatory requirements.

Most countries outside of the U.S.

require that product approvals

be recertified on a regular basis, generally every five years.

The recertification process requires that we evaluate any device

changes and any new regulations or standards relevant to the device and conduct appropriate testing to document continued compliance.

Where recertification applications are required, they must be approved in order to continue selling those products in those countries.

the European Union, in order for a product to be marketed and sold, it is required to comply with the Medical Devices Directive

and obtain CE Mark certification.

The CE Mark certification encompasses an extensive review of the applicant’s quality management

system which is inspected by a notified body’s auditor as part of a stage 1 and 2 International Organization for Standardization

(“ISO”) 13485:2016 audit, in accordance with worldwide recognized ISO standards and applicable European Medical Devices

Directives for quality management systems for medical device manufacturers.

Once the quality management system and design dossier

has been successfully audited by a notified body and reviewed and approved by a competent authority, a CE certificate for the

medical device will be issued.

Applicants are also required to comply with other foreign regulations such as the requirement to

obtain Ministry of Health, Labor and Welfare approval before a new product can be launched in Japan.

The time required to obtain

these foreign approvals to market our products may vary from U.S.

approvals, and requirements for these approvals may differ from

those required by the FDA.

device laws and regulations are in effect in many of the countries in which we may do business outside the United States.

laws and regulations range from comprehensive device approval requirements for our medical device product to requests for product

data or certifications.

The number and scope of these requirements are increasing.

We may not be able to obtain regulatory approvals

in such countries and may be required to incur significant costs in obtaining or maintaining its foreign regulatory approvals.

In addition, the export of certain of our products which have not yet been cleared for domestic commercial distribution may be

subject to FDA export restrictions.

Any failure to obtain product approvals in a timely fashion or to comply with state or foreign

medical device laws and regulations may have a serious adverse effect on our business, financial condition or results of operations.

of September 30, 2020, we had ten employees and various consultants providing support.

Through our consulting and collaboration

arrangements, and including our Scientific Advisory Board, we have access to more than 30 additional professionals, who possess

significant expertise in business development, legal, accounting, regulatory affairs, clinical operations and manufacturing.

also rely upon a network of consultants to support our clinical studies and manufacturing efforts.

Officers of Citius

Holubiak, President, Chief Executive Officer and Director –

Holubiak, 73, was appointed President, Chief Executive

Officer and Director in March 2016.

He previously served as a Director of Citius since October 2015 and was the founder and Chief

Executive Officer and President of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius, from March 2013 until March

Mazur , Executive Chairman and Secretary –

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 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.

We have contracted with proven suppliers and manufacturers

for active pharmaceutical ingredient, development and packaging.

We are confident that all materials meet or will meet specifications

discussed at the chemistry, manufacturing and controls meeting with the FDA.

United States Government Regulation

The research, development, testing, manufacture,

labeling, promotion, advertising, distribution and marketing, among other things, of our product candidates are extensively regulated

by governmental authorities in the United States and other countries.

All of our current product candidates are considered drugs.

Consequently,

we intend to submit an NDA to the FDA for each of Mino-Lok, Halo-Lido, Mino-Wrap and a BLA to the FDA for each of I/ONTAK and NoveCite.

In the United States, the FDA regulates drugs

under the Federal Food, Drug, and Cosmetic Act and the agency’s implementing regulations.

If we fail to comply with the applicable

United States requirements at any time during the product development process, including clinical testing, as well as at any time before

and after the approval process, we may become subject to administrative or judicial sanctions.

These sanctions could include the FDA’s

refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, warning letters, adverse publicity,

product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal

Any agency enforcement action could have a material adverse effect on our company and its operations.

Before any of our drug product candidates may

be marketed in the United States, it must be approved by the FDA.

The steps required before a drug may be approved for marketing in the

United States generally include:

preclinical laboratory and animal tests, and formulation studies;

the submission to the FDA of an IND application for human clinical testing that must become effective before human clinical trials may begin;

adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate for each indication for which approval is sought;

the submission to the FDA of an NDA or a BLA and the FDA’s acceptance of the NDA or BLA for filing;

satisfactory completion of an FDA inspection of the manufacturing facilities at which the product is to be produced to assess compliance with the FDA’s current Good Manufacturing Practices (“cGMP”);

FDA review and approval of the NDA or BLA.

Foreign Regulation

We and any of our collaborative partners may be

subject to widely varying foreign regulations, which may be different from those of the FDA, governing clinical trials, manufacture, product

registration and approval and pharmaceutical sales.

Whether or not FDA approval has been obtained, we or our collaboration partners must

obtain a separate approval for a product by the comparable regulatory authorities of foreign countries prior to the commencement of product

marketing in such countries.

In certain countries, regulatory authorities also establish pricing and reimbursement criteria.

process varies from country to country, and the time may be longer or shorter than that required for FDA approval.

In addition, under

current United States law, there are restrictions on the export of products not approved by the FDA, depending on the country involved

and the status of the product in that country.

As of September 30, 2021, we had fifteen employees

and various consultants providing support.

Through our consulting and collaboration arrangements, and including our Scientific Advisory

Board, we have access to more than 30 additional professionals, who possess significant expertise in business development, legal, accounting,

regulatory affairs, clinical operations and manufacturing.

We also rely upon a network of consultants to support our clinical studies

and manufacturing efforts.

Executive Officers of Citius

Myron Holubiak, President, Chief

Executive Officer and Director – Mr.

Holubiak, 74, was appointed President, Chief Executive Officer and Director in March 2016.

He previously served as a Director of Citius since October 2015 and was the founder and Chief Executive Officer and President of Leonard-Meron

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

Leonard Mazur , Executive Chairman

and Secretary – Mr.

Mazur, 76, has been a member of the Board since September 2014.

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

Bartushak , Chief Financial Officer and Principal Financial Officer –

Bartushak, 53, was appointed as Chief Financial

Officer in November 2017.

Previously, he was one of the founders and Chief Financial Officer of Leonard-Meron Biosciences, Inc.,

an acquired subsidiary of Citius.

Czuczman , Chief Medical Officer and Executive Vice President –

Czuczman, 61 was appointed as Chief Medical Officer

and Executive Vice President in July 2020.

Czuczman previously served as Vice President, Global Clinical Research and Development,

Therapeutic Head of Lymphoma/CLL at Celgene Corporation.

make available, free of charge through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports

on Form 8-K and all amendments to those reports as soon as is reasonably practicable after such material is electronically filed

with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange

The SEC maintains an Internet site that contains these reports at www.sec.gov.

website address is http://www.citiuspharma.com .

The information contained in, or that can be accessed through, our website

is not part of this report.

Mazur previously served as Chief Executive

Officer, President, and Chief Operating Officer from September 2014 until March 2016.

Jaime Bartushak , Chief Financial

Officer and Principal Financial Officer – Mr.

Bartushak, 54, was appointed as Chief Financial Officer in November 2017.

he was one of the founders and Chief Financial Officer of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius.

Myron Czuczman , Chief Medical Officer

and Executive Vice President – Dr.

Czuczman, 62 was appointed as Chief Medical Officer and Executive Vice President in July 2020.

Czuczman previously served as Vice President, Global Clinical Research and Development, Therapeutic Head of Lymphoma/CLL at Celgene

Other Information

We make available, free of charge through our

website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports

as soon as is reasonably practicable after such material is electronically filed with or furnished to the SEC pursuant to Section 13(a)

or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The SEC maintains an Internet site that

contains these reports at www.sec.gov.

Our website address is http://www.citiuspharma.com .

The information contained in, or that can be accessed through, our website is not part of this report.

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