What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-12-22 compared with 2021-12-15 · 145 added, 122 removed, 941 unchanged (22% of the section changed)

49 unchanged sentences

At September 30, 2022, we estimated that we have

sufficient capital to continue our operations through March 2023.

sufficient capital to continue our operations through December 2023.

You should not rely on our consolidated balance sheet as an indication

3 unchanged sentences

to date and has principally raised capital through the issuance of debt and equity instruments to finance its operations.

Company’s continued operations beyond March 2023, including its development plans for Mino-Lok, Mino-Wrap, Halo-Lido, Novecite and

I/ONTAK, will depend on its ability to obtain regulatory approval to market Mino-Lok and generate substantial revenue from the sale of

Mino-Lok and on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic

relationships, or out-licensing of its product candidates.

However, the Company can provide no assurances on the approval, commercialization

or future sales of Mino-Lok or that financing or strategic relationships will be available on acceptable terms, or at all.

If the Company

is unable to raise sufficient capital, find strategic partners or generate substantial revenue from the sale of Mino-Lok, there would

be a material adverse effect on its business.

Further, the Company expects in the future to incur additional expenses as it continues

to develop its product candidates, including seeking regulatory approval, and protecting its intellectual property.

Company’s continued operations beyond December 2023, including its development plans for I/ONTAK, Mino-Lok, Halo-Lido, Mino-Wrap

and NoveCite, will depend on its ability to obtain regulatory approval to market I/ONTAK and/or Mino-Lok and generate substantial revenue

from the sale of I/ONTAK and/or Mino-Lok and on its ability to raise additional capital through various potential sources, such as equity

and/or debt financings, strategic relationships, or out-licensing of its product candidates.

However, the Company can provide no assurances

on the approval, commercialization, or future sales of I/ONTAK and/or Mino-Lok or that financing or strategic relationships will be available

on acceptable terms, or at all.

If the Company is unable to raise sufficient capital, find strategic partners or generate substantial

revenue from the sale of I/ONTAK and/or Mino-Lok, there would be a material adverse effect on its business.

Further, the Company expects

in the future to incur additional expenses as it continues to develop its product candidates, including seeking regulatory approval, and

protecting its intellectual property.

We need to secure additional financing in

4 unchanged sentences

will depend on many factors, including, but not limited to:

the rate of progress and cost of our trials and other product development programs for our current product candidates;

the rate of progress and cost of our trials and other product development and commercialization programs for our current product candidates;

the costs and timing of obtaining licenses for additional product candidates or acquiring other complementary technologies;

30 unchanged sentences

will depend upon our ability to develop such capabilities on our own or to enter into collaboration agreements on favorable terms and

to select an appropriate commercialization strategy for each product candidate that we choose to pursue and that receive approval, whether

to select an appropriate commercialization strategy for each product candidate that we choose to pursue and that receives approval, whether

on our own or in collaboration.

18 unchanged sentences

which to evaluate our ability to successfully commercialize our product candidates.

We are a clinical stage company and our success

is dependent upon our ability to obtain regulatory approval for and commercialize our product candidates and we, as a company, have not

demonstrated an ability to perform the functions necessary for the approval or successful commercialization of any product candidates.

While various members of our executive management and key employees have significant prior experience in pharmaceutical development, as

a company we have to date not successfully completed any late-stage clinical trials nor undertaken any commercialization activities.

operations have been limited primarily to business planning, acquiring our proprietary technology, research and development, recruiting

management and technical staff, and raising capital.

These operations provide a limited basis for you to assess our ability to successfully

commercialize our product candidates and the advisability of investing in our securities.

We have two late-stage stage product candidates

while our other product candidates are clinical stage.

As a result, our success is dependent upon our ability to obtain regulatory approval

for and commercialize our product candidates and we, as a company, have not demonstrated an ability to perform the functions necessary

for the approval or successful commercialization of any product candidates.

While various members of our executive management and key

employees have significant prior experience in pharmaceutical development, as a company we have to date successfully completed only one

late-stage clinical trial and are just beginning to undertake commercialization activities, in each case for I/ONTAK.

Despite our progress

with I/ONTAK, our operations have been limited primarily to business planning, acquiring our proprietary technology, research and development,

recruiting management and technical staff, and raising capital.

These operations provide a limited basis for you to assess our ability

to successfully commercialize our product candidates and the advisability of investing in our securities.

The COVID-19 pandemic may materially and

4 unchanged sentences

trial is not known at this time, but it has slowed the estimated completion date for the trial, which we now expect to be in 2023.

same risk applies to planned clinical trials for our other product candidates.

The exact duration of the delay and any other impact will

depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak,

the severity of COVID-19, or the effectiveness of actions to contain and treat for COVID-19.

The continued spread of COVID-19 also could

adversely impact our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may

have heightened exposure to COVID-19, which could further negatively impact the Mino-Lok trial.

In addition, if the FDA elects to delay

face-to-face meetings for an extended period of time due to COVID-19, it could have a material adverse effect on our Mino-Lok trial and

our other product candidates.

Any or all of these events could increase our operating expenses and the length of time to complete the

trial and have a material adverse effect on our financial results.

same risk applies to our recently begun Phase 2b trial for Halo-Lido and our planned clinical trials for our other product candidates.

The exact duration of the delay and any other impact will depend on future developments, which are highly uncertain and cannot be predicted

with confidence, such as the duration of the outbreak, the severity of COVID-19, or the effectiveness of actions to contain and treat

for COVID-19.

The continued spread of COVID-19 also could adversely impact our ability to recruit and retain patients and principal investigators

and site staff who, as healthcare providers, may have heightened exposure to COVID-19, which could further negatively impact the Mino-Lok

and Halo-Lido trials.

In addition, if the FDA elects to delay face-to-face meetings for an extended period of time due to COVID-19, it

could have a material adverse effect on our Mino-Lok and Halo-Lido trials and our other product candidates.

Any or all of these events

could increase our operating expenses and the length of time to complete a trial and have a material adverse effect on our financial results.

We may choose not to continue developing

34 unchanged sentences

For example, the FDA:

could determine that we cannot rely on Section 505(b)(2) for Mino-Lok or Halo-Lido or any future product candidate whose composition includes components previously approved by the FDA;

may not find the data from clinical trials, including

from our Phase 3 trial for I/ONTAK, sufficient to support the submission of an NDA or BLA or to obtain marketing approval in the United

States, including any findings that the clinical and other benefits of our product candidates outweigh their safety risks;

could determine that the information provided by us was inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness of any of our product candidates for any indication;

may not find the data from clinical trials sufficient to support the submission of an NDA or BLA or to obtain marketing approval in the United States, including any findings that the clinical and other benefits of our product candidates outweigh their safety risks;

may disagree with our trial design or our interpretation of data from preclinical studies or clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our trials;

may disagree with our trial design or our interpretation

of data from preclinical studies or clinical trials, or may change the requirements for approval even after it has reviewed and commented

on the design for our trials;

could determine that we cannot rely on Section 505(b)(2) for Mino-Lok or Halo-Lido or any future product candidate whose composition includes components previously approved by the FDA;

may determine that we have identified the wrong reference listed drug or drugs or that approval of a Section 505(b)(2) application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs;

52 unchanged sentences

might not be possible for us to raise funds in the public or private markets, and our stock price would likely decrease significantly.

We might not decide to proceed with the

proposed spinoff of our I/ONTAK asset.

In May 2022, we

announced that we intend to split the Company’s assets into two separate publicly traded entities.

We plan to form a new company

focused on developing and commercializing I/ONTAK.

Our other pipeline assets, including Mino-Lok, would remain at Citius.

continue to trade on the Nasdaq exchange under its current ticker CTXR.

The strategic action is intended to optimize organizational resources

and investment capital to support the successful execution of each development program.

The transactions are expected to be completed

in calendar year 2023, subject to the satisfaction of customary conditions, including final approval from the Citius Board of Directors,

market conditions, regulatory approvals, and SEC filings.

However, there can be no assurance regarding the ultimate timing of the proposed

transaction or that the transaction will be completed at all.

If we are unable to file for approval of

66 unchanged sentences

and discussions with a limited number of physicians, we know that patients sometimes obtain two separate cream products and co-administer

them as prescribed, giving them a combination treatment which could be very similar to what we intend to study and seek approval for.

As a branded, FDA-approved product with safety and efficacy data, we intend to price our product substantially higher than the generically

them as prescribed, giving them a combination treatment that could be very similar to what we intend to study and seek approval for.

a branded, FDA-approved product with safety and efficacy data, we intend to price our product substantially higher than the generically

available individual creams.

34 unchanged sentences

In the event that NoveCite issues additional

equity securities in the future this would likely reduce our percentage ownership, unless we were to increase our investment, which would

further reduce the portion of any benefit that might be derived from the NoveCite drug candidate’s successful development.

equity securities in the future this would likely reduce our percentage ownership, which would further reduce the portion of any benefit

that might be derived from the NoveCite drug candidate’s successful development, unless we were to increase our investment.

Any FDA programs related to the development

8 unchanged sentences

The CTAP program

has only recently begun and the FDA has broad discretion in administering the CTAP program and therefore we cannot assure you what the

FDA might decide.

Even though we believe that the response from the FDA was favorable, we did not specifically request guidance on the

CTAP program we may encounter problems at a later date under the CTAP program, or with the therapy itself, and we may not experience a

is relatively new and the FDA has broad discretion in administering the CTAP program and therefore we cannot assure you what the FDA might

Even though we believe that the response from the FDA was favorable, we did not specifically request guidance on the CTAP program.

As a result, we may encounter problems at a later date under the CTAP program, or with the therapy itself, and we may not experience a

faster development process, review or approval compared to conventional FDA procedures.

11 unchanged sentences

In addition, because NoveCite’s iPSC-derived cell product candidate is in the pre-clinical stage,

NoveCite is currently assessing safety in humans and have not yet been able to assess the long-term effects of treatment.

NoveCite is currently assessing safety in humans and has not yet been able to assess the long-term effects of treatment.

Animal models

8 unchanged sentences

and regulatory requirements for approval of the NoveCite product candidate, NoveCite may be required to modify or change its pre-clinical

and clinical development plans or its manufacturing activities and plans, or be required to meet stricter regulatory requirements for

Any such modifications or changes could delay or prevent NoveCite’s ability to develop, manufacture, obtain regulatory

approval or commercialize its NoveCite product candidate, which would adversely affect NoveCite’s and our business, financial condition

and clinical development plans or its manufacturing activities and plans or be required to meet stricter regulatory requirements for approval.

Any such modifications or changes could delay or prevent NoveCite’s ability to develop, manufacture, obtain regulatory approval

for or commercialize its NoveCite product candidate, which would adversely affect NoveCite’s and our business, financial condition

and results of operations.

74 unchanged sentences

Even if approved for marketing by applicable

regulatory bodies, we will not be able to create a market for any of our product candidates if we fail to establish marketing, sales and

distribution capabilities, either on our own or through arrangements with third parties.

regulatory bodies, we will not be able to create a market for any of our product candidates if we fail to establish marketing, sales,

and distribution capabilities, either on our own or through arrangements with third parties.

Our strategy with our product candidates is to

148 unchanged sentences

Our contract manufacturers might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our product candidates for commercialization;

Currently, our contract manufacturer for our clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions and adds the risk of political and environmental uncertainties that might affect those countries;

Currently, the contract manufacturer for our clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions, and adds the risk of political and environmental uncertainties that might affect those countries;

Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.

28 unchanged sentences

If we or any of our current or future collaborators

fail to renew or terminate any of our collaboration agreements or if either party fails to satisfy its obligations under any of our collaboration

or license agreements or complete them in a timely manner, we could have difficulty completing the development of any of our product candidates

and potentially lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition

as well as volatility in any future revenue.

In addition, our agreements with our collaborators may have provisions that give rise to

disputes regarding the rights and obligations of the parties.

These and other possible disagreements could lead to termination of the

agreement or delays in collaborative research, development, supply or commercialization of our product candidates, or could require or

result in litigation or arbitration.

fail to renew or terminate any of our collaboration or license agreements or if either party fails to satisfy its obligations under any

of our collaboration or license agreements or complete them in a timely manner, we could have difficulty completing the development of

any of our product candidates and potentially lose significant sources of revenue, which could result in an adverse impact on our operations

and financial condition as well as volatility in any future revenue.

In addition, our agreements with our collaborators may have provisions

that give rise to disputes regarding the rights and obligations of the parties.

These and other possible disagreements could lead to termination

of the agreement or delays in collaborative research, development, supply, or commercialization of our product candidates, or could require

or result in litigation or arbitration.

Any such conflicts with our collaborators could reduce our ability to obtain future collaboration

1 unchanged sentence

Finally, any of our collaborations may prove to be unsuccessful.

We plan to grow and develop our business

through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions

or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us.

Our business strategy is based on the acquisition

of additional product candidates.

This is evidenced by our in-licensing of NoveCite in October 2020 and I/ONTAK in September 2021.

might consider opportunities to acquire or invest in other technologies, products and businesses that might enhance our capabilities or

complement our current product candidates.

Potential and completed acquisitions and strategic investments involve numerous risks, including

potential problems or issues associated with the following:

assimilating the acquired technologies, products or business operations, as we are currently engaged in for I/ONTAK;

maintaining uniform standards, procedures, controls and policies;

unanticipated costs associated with the acquisition or investment;

diversion of our management’s attention from our preexisting business;

maintaining or obtaining the necessary regulatory approvals or complying with regulatory standards;

adverse effects on existing business operations.

We have no current commitments with respect to

any acquisition or investment in other technologies or businesses.

We do not know if we will identify other suitable acquisitions, whether

we will be able to successfully complete any acquisitions, or whether we will be able to successfully integrate any acquired product,

technology or business into our business operations or retain key personnel, suppliers or collaborators.

Our ability to successfully develop our business

through acquisitions including the recent in-licensing of I/ONTAK, will depend on our ability to identify, negotiate, complete and integrate

suitable target businesses or technologies and obtain any necessary financing.

These efforts could be expensive and time consuming and

might disrupt our ongoing operations.

If we are unable to efficiently integrate any acquired business, technology or product into our

business operations, our business and financial condition might be adversely affected.

We rely on the significant experience and

4 unchanged sentences

expertise in our business.

Our President and Chief Executive Officer, Myron Holubiak, our Executive Chairman, Leonard Mazur, and our Chief

Medical Officer and Executive Vice President, Myron Czuczman, in particular have significant experience in the running of pharmaceutical

companies and/or drug development itself.

In addition, Matt Angel, a director of NoveCite, is serving as a technical consultant to that

company and was instrumental in the discovery and development to date of NoveCite.

This depth of experience is of significant benefit

to us, especially given the small size of our management team and our company, including our subsidiaries.

The loss of the services of

Holubiak, Mr.

Our Chief Executive Officer, Leonard Mazur, our Vice Chairman, Myron Holubiak, and our Chief Medical Officer

and Executive Vice President, Myron Czuczman, in particular have significant experience in the running of pharmaceutical companies and/or

drug development itself.

In addition, Matt Angel, a director of NoveCite, is serving as a technical consultant to that company and was

instrumental in the discovery and development to date of NoveCite.

This depth of experience is of significant benefit to us, especially

given the small size of our management team and our company, including our subsidiaries.

The loss of the services of any of Mr.

Holubiak, Dr.

Czuczman or Dr.

Angel, as well as any other member of our executive management or any key employees,

including those at NoveCite, could harm our ability to attract capital and develop and commercialize our product candidates.

nor NoveCite has key man life insurance policies.

Angel, as well as any other member of our executive management or any key employees, including those

at NoveCite, could harm our ability to attract capital and develop and commercialize our product candidates.

Neither we nor NoveCite has

key man life insurance policies.

If we are unable to retain or hire additional

20 unchanged sentences

We will need to manage our anticipated growth

and increased operational activity, including as a result of the in-licensing of I/ONTAK in September 2021.

Our personnel, systems and

facilities currently in place may not be adequate to support this future growth.

Our need to effectively execute our growth strategy will

require that we:

and increased operational activity, including as a result of the in-licensing of I/ONTAK in September 2021 and the continuing development

of I/ONTAK and our other product candidates.

Our personnel, systems, and facilities currently in place may not be adequate to support

this future growth.

Our need to effectively execute our growth strategy will require that we:

manage our research and development activities and our regulatory trials effectively;

16 unchanged sentences

performance and our ability to compete effectively will depend, in part, on our ability to effectively manage any future growth.

We plan to grow and develop our business

through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions

or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us.

Our business strategy is based on the acquisition

of additional product candidates.

This is evidenced by our in-licensing of NoveCite in October 2020 and I/ONTAK in September 2021.

might consider opportunities to acquire or invest in other technologies, products and businesses that might enhance our capabilities or

complement our current product candidates.

Potential and completed acquisitions and strategic investments involve numerous risks, including

potential problems or issues associated with the following:

assimilating the acquired technologies, products, or business operations;

maintaining uniform standards, procedures, controls, and policies;

unanticipated costs associated with the acquisition or investment;

diversion of our management’s attention from our preexisting business;

maintaining or obtaining the necessary regulatory approvals or complying with regulatory standards;

adverse effects on existing business operations.

We have no current commitments with respect to

any acquisition or investment in other technologies or businesses.

We do not know if we will identify other suitable acquisitions, whether

we will be able to successfully complete any acquisitions, or whether we will be able to successfully integrate any acquired product,

technology or business into our business operations or retain key personnel, suppliers, or collaborators.

Our ability to successfully develop our business

through acquisitions including the recent in-licensing of I/ONTAK, will depend on our ability to identify, negotiate, complete, and integrate

suitable target businesses or technologies and obtain any necessary financing.

These efforts could be expensive and time consuming and

might disrupt our ongoing operations.

If we are unable to efficiently integrate any acquired business, technology or product into our

business operations, our business and financial condition might be adversely affected.

Conflicts of interest may arise from our

16 unchanged sentences

Risks Related to Our Regulatory and Legal Environment

We might not obtain the necessary

or foreign regulatory approvals to commercialize any product candidates.

We might not obtain the necessary U.S.

foreign regulatory approvals to commercialize any product candidates.

We cannot assure you that we will receive the

152 unchanged sentences

or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may

weaken our and our licensors’ abilities to obtain new patents or to enforce existing patents we and our licensors or partners may

obtain in the future.

weaken our and our licensors’ abilities to obtain new patents or to enforce existing patents that we and our licensors or partners

may obtain in the future.

Patent and other intellectual property protection

49 unchanged sentences

If we fail to meet the continued listing

requirements of Nasdaq it could result in a delisting of our common stock and certain warrants.

Our common stock and certain outstanding warrants

are currently listed for trading on The Nasdaq Capital Market, and the continued listing of our common stock on The Nasdaq Capital Market

is subject to our compliance with a number of listing standards.

These listing standards include the requirement for avoiding sustained

losses, maintaining a minimum level of stockholders’ equity and maintaining a minimum stock price.

The failure to meet any listing

standard would subject us to potential loss of listing.

requirements of Nasdaq it could result in a delisting of our common stock.

Our common stock is currently listed for trading

on The Nasdaq Capital Market, and the continued listing of our common stock on The Nasdaq Capital Market is subject to our compliance

with a number of listing standards.

These listing standards include the requirement for avoiding sustained losses, maintaining a minimum

level of stockholders’ equity, and maintaining a minimum stock price.

The failure to meet any listing standard would subject us

to potential loss of listing.

If our common stock were no longer listed on The

10 unchanged sentences

We have twice failed to meet the listing standards,

between October 2019 and January 2020 and between April 2020 and July 2020 because the closing bid price for our common stock has fallen

between October 2019 and January 2020 and between April 2020 and July 2020, because the closing bid price for our common stock had fallen

below $1.00 per share for 30 consecutive business days, as a result of which we did not comply with the $1.00 minimum bid price requirement

50 unchanged sentences

Not applicable.

We lease our offices at 11 Commerce Drive, Cranford,

New Jersey 07016.

We lease our offices at 11 Commerce Drive, First Floor, Cranford, New

Jersey 07016.

The lease runs until October 31, 2025.

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 1A. Risk Factors