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Item 1. Business

2024-12-27 compared with 2023-12-29 · 1572 added, 1298 removed, 78 unchanged (97% of the section changed)

Pharmaceuticals, Inc.

(“Citius Pharma”, and together with its subsidiaries, the “Company” or “we”),

headquartered in Cranford, New Jersey, is a late-stage pharmaceutical company dedicated to the development and commercialization of first-in-class

critical care products with a focus on oncology, anti-infectives in adjunct cancer care, unique prescription products and 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.

On September 12,

2014, Citius Pharmaceuticals, LLC entered into a Share Exchange and Reorganization Agreement, with Citius Pharma (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 Pharma.

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

(“LMB”) as a wholly-owned

LMB was 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”).

August 23, 2021, we formed Citius Oncology, Inc.

(formerly Citius Acquisition Corp.) (“Citius Oncology”) as a wholly-owned

subsidiary in conjunction with the acquisition of LYMPHIR TM , but Citius Oncology did not begin operations until April 2022,

when Citius Pharma transferred the assets related to LYMPHIR to Citius Oncology, including the related license agreement with Eisai Co.,

Citius Pharmaceuticals, Inc.

(“Citius Pharma”,

and together with its subsidiaries, the “Company” or “we”), headquartered in Cranford, New Jersey, is a biopharmaceutical

company dedicated to the development and commercialization of first-in-class critical care products.

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.

Since 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 three proprietary products Mino-Lok, an antibiotic lock solution used to treat patients

with catheter-related bloodstream infections by salvaging the infected catheter;

Halo-Lido, a corticosteroid-lidocaine topical formulation

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

and NoveCite, a mesenchymal

stem cell therapy for the treatment of ARDS.

Citius Oncology achieved the approval from the FDA for LYMPHIR, in-licensed by Citius Pharma

in September 2021 (now owned by Citius Oncology), an engineered IL-2 diphtheria toxin fusion protein, for the treatment of patients with

persistent or recurrent cutaneous T-cell lymphoma (“CTCL”).

We believe these unique markets for our products are large, growing,

and underserved by the current prescription products or procedures.

We are subject to a number of risks common to

companies in the pharmaceutical industry including, but not limited to, risks related to the development by us or our 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.

The Company was founded as Citius Pharmaceuticals,

LLC, a Massachusetts limited liability company, on January 23, 2007.

On September 12, 2014, Citius Pharmaceuticals, LLC entered into a

Share Exchange and Reorganization Agreement, with Citius Pharma (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 Pharma.

On March 30, 2016, Citius

Pharma 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 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”).

Citius Oncology and the Merger

On August 23, 2021, we formed Citius Acquisition

(“SpinCo”) as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR.

SpinCo began operations in April

2022, when Citius Pharma transferred the assets related to LYMPHIR to SpinCo, including the related license agreement with Eisai Co.,

(“Eisai”) and the related asset purchase agreement with Dr.

2 unchanged sentences

(collectively, “Dr.

Since its inception, Citius Pharma has funded Citius Oncology, and

Citius Pharma and Citius Oncology are party to a shared services agreement, which governs certain management and scientific services

that Citius Pharma provides Citius Oncology.

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:

in-licensed in September 2021 (now owned by Citius Oncology), an engineered IL-2 diphtheria toxin fusion protein, for the treatment of

patients with persistent or recurrent cutaneous T-cell lymphoma (“CTCL”);

Mino-Lok, an antibiotic lock solution used to treat

patients with catheter-related bloodstream infections by salvaging the infected catheter;

Halo-Lido, a corticosteroid-lidocaine topical

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

Mino-Wrap, a liquifying

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

and NoveCite, 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.

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

development by us or our 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.

previously disclosed, on October 23, 2023, Citius Pharma and Citius Oncology entered into an agreement and plan of merger and reorganization

(the “Merger Agreement”) with TenX Keane Acquisition, a Cayman Islands exempted company (“TenX”), and TenX Merger

Sub Inc., a Delaware corporation and a wholly owned subsidiary of TenX (“Merger Sub”).

The Merger Agreement provides, among

other things, (i) on the terms and subject to the conditions set forth therein, that Merger Sub will merge with and into Citius Oncology,

with Citius Oncology to be renamed and to survive as a wholly owned subsidiary of TenX (the “Merger”), and (ii) that prior

to the effective time of the Merger (the “Effective Time”), TenX will migrate to and domesticate as a Delaware corporation

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

(the “Domestication”).

The newly combined publicly traded company is to be named “Citius Oncology, Inc.” (the

“Combined Company”).

The Domestication, Merger and the other transactions contemplated by the Merger Agreement are referred

to herein as the “Business Combination”.

the Merger, all shares of Citius Oncology would be converted into the right to receive common stock of the Combined Company.

upon closing, Citius Pharma would receive 67.5 million shares of common stock of the Combined Company which, at an implied value of $10.00

per share, would be $675 million in equity of the Combined Company, before fees and expenses.

As part of the transaction, Citius Pharma

will contribute $10 million in cash to the Combined Company.

An additional 12.6 million existing options will be assumed by the Combined

Citius Pharma and the Combined Company will also enter into an amended and restated shared services agreement, which, among

other things, will govern certain management and scientific services that Citius Pharma will continue to provide to the Combined Company

following the Effective Time.

Merger Agreement, Business Combination and the transactions contemplated thereby were unanimously approved by the boards of directors

of each of Citius Pharma, Citius Oncology and TenX.

The transaction is expected to be completed in the first half of 2024, subject to

approval by stockholders of TenX and other customary closing conditions, including final regulatory approvals and SEC filings.

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

LYMPHIR TM (denileukin

diftitox-cdxl)

September 2021, the Company announced that it had entered into an asset purchase agreement with 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.

Reddy’s had previously licensed E777 to Eisai and as part of the transaction, Eisai entered into a license agreement whereby

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

In April 2022, Citius Pharma transferred the assets related to E7777 to Citius

Oncology, including the related license agreement with Eisai and the related asset purchase agreement with Dr.

LYMPHIR, E7777 is an improved formulation of ONTAK®, which was previously approved by the United States Food and Drug Administration

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

At times in this annual report on Form

10-K, LYMPHIR may be referred as E7777.

is recombinant DNA-derived fusion protein designed to direct the cytocidal action of diphtheria toxin (DT) to cells which express the

IL-2 receptor.

After uptake into the cell, the DT fragment is cleaved and the free DT fragments inhibit protein synthesis, resulting

in cell death.

Consequently, LYMPHIR’s differentiated mechanism of action supports two therapeutic effects:

(i) killing tumors

by binding to IL-2 receptors to deliver diphtheria toxin directly to the tumor cells, and (ii) depleting immunosuppressive regulatory

T lymphocytes (Tregs) to enhance antitumor activity.

3 Trial (E7777-G000-302) Design

2013, a global, multicenter, open label single arm pivotal clinical trial for the treatment of patients with persistent or recurrent

CTCL was initiated.

At this time, SpinCo was renamed Citius Oncology, Inc.

On October 23, 2023, Citius Pharma and SpinCo

entered into an agreement and plan of merger and reorganization (the “Merger Agreement”) with TenX Keane Acquisition, a Cayman

Islands exempted company (“TenX”), and TenX Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of TenX

(“Merger Sub”).

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

into SpinCo, with SpinCo surviving as a wholly owned subsidiary of TenX (the “Merger”).

Prior to closing of the Merger (the

“Closing”), TenX migrated to and domesticated as a Delaware corporation in accordance with Section 388 of the General Corporation

Law of the State of Delaware and the Cayman Islands Companies Act (As Revised) (the “Domestication”).

As part of the Domestication,

TenX changed its name to “Citius Oncology, Inc.” (“Citius Oncology”) (Nasdaq:

Immediately after the closing

of the Merger, Citius Pharma owned approximately 92.3% of the outstanding shares of common stock of Citius Oncology.

Since its inception, Citius Pharma has funded

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

which governs certain management and scientific services that Citius Pharma provides Citius Oncology.

LYMPHIR TM (denileukin diftitox-cdxl)

In September 2021, the Company announced that

it had entered into an asset purchase agreement with Dr.

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

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

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

Reddy’s had previously exclusively licensed

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

its rights to E7777 to Citius Pharma.

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

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

In April of 2022 LYMPHIR was assigned to Citius Oncology.

LYMPHIR is recombinant DNA-derived fusion protein

designed to direct the cytocidal action of diphtheria toxin (DT) to cells which express the IL-2 receptor.

After uptake into the cell,

the DT fragment is cleaved and the free DT fragments inhibit protein synthesis, resulting in cell death.

Consequently, LYMPHIR’s

differentiated mechanism of action supports two therapeutic effects:

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

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

Phase 3 Trial (E7777-G000-302) Design

LYMPHIR is an improved formulation of oncology

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

marketed in the US previously.

The manufacturing formulation improvements were substantial enough that the FDA required a new clinical

study to be performed (Study E7777-G000-302).

The safety profile of LYMPHIR from study E7777-G000-302 is comparable to Study 93-04-11/L4389-11,

which served as the basis for the full approval of ONTAK.

Study E7777-G000-302, a global, multicenter, open-label single-arm pivotal clinical

trial for the treatment of patients with persistent or recurrent CTCL, commenced (first subject consented) in May 2013 and completed (data

cutoff for primary analysis) in December 2021.

The study was sponsored by Eisai and was conducted at 17 sites in the United States and

three sites in Australia.

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,

and assessed the Objective Response Rate (the “ORR”).

The objectives were met for Study E7777-G000-302, in both the lead-in phase and

the main phase.

Overall, the primary and secondary endpoints of Study E7777-G000-302 demonstrate the tolerability and clinical benefit

of 9 µg/kg/day LYMPHIR for the treatment of adult patients with relapsed or refractory Stage I-III CTCL.

No new safety signals were

identified compared to ONTAK.

The pivotal trial of E7777 was divided into two

phases, a lead-in phase with 21 subjects that evaluated dose finding, pharmacokinetics and immunogenicity, and assessed the Objective

Response Rate (the “ORR”).

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

Patients received a daily intravenous infusion of denileukin diftitox from Day 1 through Day 5 of each 21-day cycle.

on safety, tolerability, and efficacy data of the lead-in phase, 9 mcg/kg/dose was selected for the main phase of the study.

No new safety

signals were identified compared to ONTAK.

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

populations were observed.

In the second and main phase of the pivotal trial, 70 patients were administered the 9 mcg/kg/dose rate for

5 consecutive days in 21-day cycles.

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

3 Trial Efficacy & Safety Results

efficacy population of the main study includes 69 patients with relapsed or refractory stage I to III CTCL.

Of the 69 patients, the median

age was 64 years (range:

28 to 87 years), 65% were male, 73% were White, 19% Black or African American, 1% Asian, and 14% Hispanic or

The CTCL disease stage was IA in 7%, IB in 23%, IIA in 13%, IIB in 35%, IIIA in 12%, and IIIB in 10%.

The median number of prior

therapies was 4 (range:

1 to 18), including both skin-directed and systemic therapies.

Prior therapies included photodynamic therapy

(56%), total skin electron beam therapy (42%), systemic retinoids (49%), methotrexate/pralatrexate (49%), histone deacetylase inhibitor

(35%), brentuximab vedotin (26%) and mogamulizumab (12%).

was established based on ORR, according to ISCL/EORTC Global Response Score (GRS) per Independent Review Committee (Olsen 2011).

results are shown in the table below.

Results of E7777-G000-302

Patients received a daily intravenous

infusion of denileukin diftitox from Day 1 through Day 5 of each 21-day cycle.

In the lead-in phase, the main objectives were to determine

the maximum tolerated dose (MTD) of LYMPHIR and to select the dose of LYMPHIR to be used in the main phase (subjects were treated at doses

ranging from 6 to 15 µg/kg/day).

The MTD was 12 µg/kg/day and, based on data of the lead-in phase, 9 µg/kg/day was selected

for the main phase of the study.

The objectives of the main phase were to evaluate the efficacy and safety of LYMPHIR (at the dose determined

in the lead-in phase of 9 µg/kg/day).

The primary efficacy endpoint was tumor response

ORR per the Independent Review Committee (IRC) assessment based on International Society for Cutaneous Lymphomas/ European

Organization for Research and Treatment of Cancer Global Response Score (GRS;

Olsen, et al., 2011).

The secondary efficacy endpoints were:

of response (DOR) based on GRS

to response based on GRS

assessed by investigator using GRS

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

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

of skin response

to skin response

Overall, there were 25 responders out of 69 subjects

in the Primary Efficacy Analysis Set (i.e., subjects with CTCL disease Stages I to III (9 µg/kg/day)) as assessed by the IRC, with

an ORR of 36.2% (95% CI:

25.0%, 48.7%), with 8.7% (6/69) achieving a Complete Response (CR) and 27.5% (19/69) achieving a Partial Response.

Among responders, the median follow-up for duration

of response was 6.5 months (range:

3.5+, 23.5+ months).

Median time to response was 1.4 months (range:

0.7 to 5.6 months).

ORR (95% CI) by investigator was 42.3% (30.6%,

54.6%) (30 of 71 subjects), with 8.5% (6 subjects) achieving a CR.

ORR (95% CI) by IRC assessment using the Prince (2010) criteria was

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

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

were observed.

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

Per protocol, LYMPHIR demonstrated clinical

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

Skin responses were the same as GRS objective

responses, for both IRC and investigator assessments.

Responses were deep, reflected by the substantial decrease in skin tumor burden,

including 8 subjects with 100% clearance of skin lesions per IRC.

In the second and main phase of the pivotal trial,

70 patients were administered the 9 µg/kg/day rate for 5 consecutive days in 21-day cycles.

The inclusion criteria were identical

to the lead-in phase.

Phase 3 Trial Efficacy & Safety Results

The efficacy population of the main phase included

69 patients with relapsed or refractory stage I to III CTCL.

Of the 69 patients, the median age was 64 years (range:

28 to 87 years),

65% were male, 73% were White, 19% Black or African American, 1% Asian, and 14% Hispanic or Latino.

The CTCL disease stage was IA in 7%,

IB in 23%, IIA in 13%, IIB in 35%, IIIA in 12%, and IIIB in 10%.

The median number of prior therapies was 4 (range:

1 to 18), including

both skin-directed and systemic therapies.

Prior therapies included photodynamic therapy (56%), total skin electron beam therapy (42%),

systemic retinoids (49%), methotrexate/pralatrexate (49%), histone deacetylase inhibitor (35%), brentuximab vedotin (26%) and mogamulizumab

Efficacy was established based on ORR, according

to ISCL/EORTC Global Response Score (GRS) per Independent Review Committee (Olsen 2011).

Efficacy results are shown in the table below.

Efficacy Results of E7777-G000-302

Complete Response

1 unchanged sentence

Duration of Response

(range), months

Median (range), months

6.5 (3.0 +, 23.5 +)

≥ 6 months, n (%)

Median Time to Response,

Objective Response Rate per Olsen, et all (2011) Global Response Score (GRS), by Independent

Review Committee (IRC)

= confidence interval

LYMPHIR was well-tolerated with the use of pre-medications, close patient monitoring, and prompt initiation of supportive measures and

drug management.

There was no evidence of cumulative toxicity and most patients experienced low grade 1 or 2 treatment emergent adverse

adverse reactions occurred in 38% of patients who received LYMPHIR.

Serious adverse reactions in > 2% of patients included capillary

leak syndrome (10%), infusion-related reaction (9%), sepsis (7%), skin infection (2.9%), pyrexia (2.9%), and rash (2.9%).

Reactions (≥ 10%) in Patients with Relapsed or Refractory Stage I-III CTCL Who Received

in E7777-G000-302

Duration ≥ 6 months, n (%)

Median Time to Response, months

ORR, Objective Response Rate per Olsen, et all (2011) Global Response Score (GRS), by Independent Review Committee (IRC)

CI = confidence interval

Both the endpoints and objectives of Study E7777-G000-302

were met, while the statistical confidence interval (95% CI) resulted in a marginal shortfall (25% actual achievement vs.

the statistical plan).

Throughout the initial BLA review period, the FDA accepted the Study E7777-G000-302 data which demonstrated both

tolerability and clinical benefit.

Overall, LYMPHIR was well-tolerated with the use

of pre-medications, close patient monitoring, and prompt initiation of supportive measures and drug management.

There was no evidence

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

Serious adverse reactions occurred in 38% of patients

who received LYMPHIR.

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

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

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

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

Adverse Reactions (≥ 10%) in Patients with

Relapsed or Refractory Stage I-III CTCL Who Received

LYMPHIR in E7777-G000-302

Adverse Reaction

Gastrointestinal disorders

General disorders and administration

site conditions

Musculoskeletal and connective

tissue disorders

Musculoskeletal

system disorders

status changes g

Injury, poisoning and procedural

complications

General disorders and administration site conditions

Musculoskeletal and connective tissue disorders

Musculoskeletal pain d

Nervous system disorders

Mental status changes g

Injury, poisoning and procedural complications

Infusion-related reaction

Skin and subcutaneous tissue

Skin and subcutaneous tissue disorders

Vascular disorders

Capillary leak syndrome

Metabolism and nutrition

Metabolism and nutrition disorders

Decreased appetite

Eye disorders

Vision changes j

Investigations

3 unchanged sentences

Renal and urinary disorders

insufficiency l

Renal insufficiency l

Psychiatric disorders

fatigue, asthenia, and lethargy.

edema, edema peripheral generalized edema, face edema, swelling face, peripheral swelling.

fever, pyrexia, tumor associated fever.

musculoskeletal pain, back pain, neck pain, pain in extremity, myalgia, bone pain, flank

arthralgia, joint swelling, joint range of motion decreased, musculoskeletal stiffness.

headache, migraine.

mental status changes, amnesia, confusional state, delirium, altered state of consciousness,

hallucinations (including auditory), memory impairment, disturbance in attention, somnolence,

cognitive disorder.

rash, dermatitis, drug eruption, erythema, palmar erythema, toxic skin eruption, rash maculo-papular,

rash opular, rash pustular, rash pruritic, dermatitis exfoliative generalized, acute generalized

exanthematous pustulosis.

pruritis, itching.

vision blurred, photopsia, visual impairment.

skin infection, skin bacterial infection, staphylococcal skin infection, cellulitis, impetigo.

renal failure, nephropathy, acute kidney injury, blood creatinine increased, renal impairment.

Initiated Trials

believe there is an opportunity in the field of immuno-oncology and have undertaken two investigator-initiated trials to evaluate the

potential safety and efficacy of LYMPHIR for potential as an immuno-oncology combination therapy.

Phase 1 trial was initiated in June 2021 at the University of Minnesota, Masonic Cancer Center.

This study is a single-arm open-label

trial which has an estimated enrollment of 20 participants who will be administered denileukin diftitox prior to Chimeric Antigen Receptor,

(“CAR-T”) therapies.

The Phase 1 study consists of two components:

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

of denileukin diftitox in combination with CART-T therapies, and an extension component to provide an estimate of efficacy at that MTD.

Phase I/II Trial Using E7777 to Enhance Regulatory T-Cell Depletion Prior to CAR-T Therapy for Relapsed/Refractory B-Cell Lymphoma

second Phase 1 Study was initiated in September 2022 at the University of Pittsburg Medical Center, Hillman Cancer Center.

is an open-label, Phase 1/1b study to investigate the safety and efficacy of a combined regimen of pembrolizumab with T-regulatory cell

depletion and denileukin diftitox in patients diagnosed with recurrent or metastatic solid tumors in the second line setting.

The efficacy of T-regulatory cell depletion with E7777 combined with immune checkpoint inhibitor, pembrolizumab, in recurrent or metastatic

solid tumors:

Includes fatigue, asthenia, and lethargy.

Includes edema, edema peripheral generalized edema, face edema, swelling face, peripheral swelling.

Includes fever, pyrexia, tumor associated fever.

Includes musculoskeletal pain, back pain, neck pain, pain in extremity, myalgia, bone pain, flank pain.

Includes arthralgia, joint swelling, joint range of motion decreased, musculoskeletal stiffness.

Includes headache, migraine.

Includes mental status changes, amnesia, confusional state, delirium, altered state of consciousness, hallucinations (including auditory), memory impairment, disturbance in attention, somnolence, cognitive disorder.

Includes rash, dermatitis, drug eruption, erythema, palmar erythema, toxic skin eruption, rash maculo-papular, rash papular, rash pustular, rash pruritic, dermatitis exfoliative generalized, acute generalized exanthematous pustulosis.

Includes pruritis, itching.

Includes vision blurred, photopsia, visual impairment.

Includes skin infection, skin bacterial infection, staphylococcal skin infection, cellulitis, impetigo.

Includes renal failure, nephropathy, acute kidney injury, blood creatinine increased, renal impairment.

Grade refers to the severity of the adverse reaction.

The Common Terminology Criteria for Adverse Events displays Grades 1 through 5 with unique clinical descriptions of severity for each

adverse reaction based on this general guideline:

● Grade 1 - Mild;

asymptomatic or mild symptoms;

clinical or diagnostic observations only;

intervention not indicated.

● Grade 2 - Moderate;

minimal, local or noninvasive

intervention indicated;

limiting age-appropriate instrumental activities of daily living.

● Grade 3 - Severe or medically significant but

not immediately life-threatening;

hospitalization or prolongation of hospitalization indicated;

limiting self care activities

of daily living.

● Grade 4 - Life-threatening consequences;

intervention indicated.

● Grade 5 - Death related to the adverse reaction.

Investigator Initiated Trials

We believe there is an opportunity in the field

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

immuno-oncology combination therapy.

A Phase 1 trial was initiated in June 2021 at

the University of Minnesota, Masonic Cancer Center.

This study is a single-arm open-label trial which has an estimated enrollment of 20

participants who will be administered denileukin diftitox prior to Chimeric Antigen Receptor, (“CAR-T”) therapies.

1 study consists of two components:

dose finding to establish a maximum tolerated dose (“MTD”) of denileukin diftitox in combination

with CART-T therapies, and an extension component to provide an estimate of efficacy at that MTD.

Phase I/II Trial Using E7777

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

A second Phase 1 Study was initiated in September

2022 at the University of Pittsburg Medical Center, Hillman Cancer Center.

This study is an open label, Phase 1/1b study to investigate

the safety and efficacy of a combined regimen of pembrolizumab with T-regulatory cell depletion and denileukin diftitox in patients diagnosed

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

The efficacy of T-regulatory cell depletion with E7777 combined

with immune checkpoint inhibitor, pembrolizumab, in recurrent or metastatic solid tumors:

Phase I/II Study.

NCT05200559).

study consists of two parts.

Part I is a dose escalation study of four cohorts (3,6,9,12 mcg of LYMPHIR) and is expected to enroll 18-30

Part II is a dose expansion study of approximately 40 patients to evaluate the safety and tolerability of the recommended combination

dose of LYMPHIR and pembrolizumab (to include ovarian cancer and MSI-H cancer cohorts).

The study will also investigate the alteration

of the immune microenvironment within tumors and peripheral blood.

Secondary endpoints include the objective response (complete response

plus partial response), progression-free survival, and overall survival.

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

with Seragen, Inc.

1999, ONTAK® (denileukin diftitox) was granted accelerated approval by the FDA for the treatment of persistent or recurrent CTCL.

The study consists of two parts.

Part I is a dose

escalation study of four cohorts (3,6,9,12 mcg of LYMPHIR) and is expected to enroll 18-30 patients.

Part II is a dose expansion study

of approximately 40 patients to evaluate the safety and tolerability of the recommended combination dose of LYMPHIR and pembrolizumab

(to include ovarian cancer and MSI-H cancer cohorts).

The study will also investigate the alteration of the immune microenvironment within

tumors and peripheral blood.

Secondary endpoints include the objective response (complete response plus partial response), progression-free

survival, and overall survival.

Trials at both the University of Minnesota, Masonic

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

In November 2024, the Company announced promising

preliminary results of the Phase I Clinical Trial of Pembrolizumab (KEYTRUDA®) and LYMPHIR™ in cancer patients with recurrent

solid tumors conducted at the University of Pittsburg Hillman Cancer Center.

Preliminary Results

The results of this chemotherapy-free regimen

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

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

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

● Median progression-free survival (PFS) for patients

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

● Notably, two of the four patients who achieved

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

anti-PD-1 therapy).

This highlights the therapeutic potential of LYMPHIR

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

The trial enrolled 21 patients with recurrent

or metastatic solid tumors.

Among the evaluable participants, four patients achieved a partial response, and one patient demonstrated

durable stable disease lasting over six months.

The combination regimen was generally well tolerated, with most adverse events related

to the patients’ underlying disease.

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

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

Efficacy Data

Patients Enrolled

Patients Evaluable for Response

Partial Responses (PR)

Stable Disease (≥ 6 months)

Clinical Benefit Rate (CBR)

33% (PR + SD ≥ 6 months)

Median Progression-Free Survival (PFS)

57 weeks (range:

Dose-Limiting Toxicities (DLTs)

1 (Capillary Leak Syndrome at 12 mcg/kg)

Immune-Related Adverse Events (irAEs)

None documented (≥ Grade 3)

Adverse Events (Grade ≥ 3)

Most related to underlying disease

Regulatory Development

In the 1990s, 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.

Ligand Pharmaceuticals, Inc.

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

2006, Eisai acquired the commercial rights to ONTAK from Ligand.

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

2011, a new formulation of denileukin diftitox was developed under the code name E7777 in response to a post-marketing condition established

by the FDA upon approval.

As the FDA considered this a new product, an Investigational New Drug Application (“IND”) was filed.

As a part of ensuing discussions, the FDA agreed to a development plan that included a single arm, open label study to confirm the safety

and efficacy of E7777 and a chemistry, manufacturing, and controls (“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 United States (“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.

acquired the marketing rights in that same year.

In 2006, Eisai acquired the commercial rights

to ONTAK from Ligand.

In 2008, the FDA granted full approval to ONTAK

In 2011, a new formulation of denileukin diftitox

was developed under the code name E7777 in response to a post-marketing condition established by the FDA upon approval.

As the FDA considered

this a new product, an Investigational New Drug Application (“IND”) was filed.

As a part of ensuing discussions, the FDA agreed

to a development plan that included a single arm, open label study to confirm the safety and efficacy of E7777 and a chemistry, manufacturing,

and controls (“CMC”) development plan that demonstrates the new process results in a comparable drug product.

In 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.

In 2013, the first patient was enrolled into the

lead-in phase of the pivotal study for the E7777 United States (“U.S.”) CTCL clinical trial.

In 2014, commercial sales of ONTAK were discontinued

when the product was voluntarily withdrawn from the market due to manufacturing issues at the contract manufacturer.

In 2015, the last patient enrolled exited the

lead-in phase of the E7777 U.S.

CTCL clinical trial.

March 2016, Dr.

Reddy’s 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 main phase of the Phase 3 U.S.

In March 2016, Dr.

Reddy’s exclusively licensed

the global rights to E7777 from Eisai, other than the rights in countries retained by Eisai, which consists of Japan, China, Korea, Taiwan,

Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia,

Laos, Afghanistan, Bangladesh, Bhutan, Nepal, Mongolia and Papua New Guinea.

The license included an option on the right to develop and

market the product in India prior to FDA approval.

In June 2016, the first patient was enrolled in

the main phase of the Phase 3 U.S.

CTCL clinical trial for E7777.

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

September 2021, Citius Pharma acquired the marketing rights to E7777 in selected markets.

Citius Pharma subsequently renamed E7777 as

December 2021, patient enrollment for the Phase 3 Pivotal study of E7777 was completed.

April 2022, we reported that topline results from the Phase 3 trial were consistent with the prior formulation.

Moreover, no new safety

signals were identified.

December 2022, a biologics license application (“BLA”) for LYMPHIR was accepted for filing with the FDA and a PDUFA goal

date was set for July 28, 2023.

July 2023, the FDA issued a complete response letter requiring us to incorporate enhanced product testing and additional controls agreed

In March 2020, Eisai filed a New Drug Application

(“NDA”) for E7777 in Japan for both CTCL and PTCL, and in March 2021 received approvals in both indications.

In September 2021, Citius Pharma acquired the

marketing rights to E7777 in selected markets.

Citius Pharma subsequently renamed E7777 as LYMPHIR.

In December 2021, patient

enrollment for the Phase 3 Pivotal study of LYMPHIR was completed.

In April 2022, we reported

that topline results from the Phase 3 trial were consistent with the prior formulation.

Moreover, no new safety signals were identified.

In December 2022, a biologics

license application (“BLA”) for LYMPHIR was accepted for filing with the FDA and a PDUFA goal date was set for July 28, 2023.

In July 2023, the FDA

issued a complete response letter (“CRL”) requiring us to incorporate enhanced product testing and additional controls agreed

to with the FDA during the market application review.

1 unchanged sentence

submitted with the BLA, or the proposed prescribing information.

September 2023, we announced that the FDA has agreed with the plans to address the requirements outlined in the complete response letter,

which guidance has provided the Company with a path for completing the necessary activities to support the resubmission of the BLA for

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 to 85% of all CTCL.

Sézary Syndrome (“SS”), a very rare subtype

(~2 to 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.

In September 2023, we

announced that the FDA has agreed with the plans to address the requirements outlined in the complete response letter, which guidance

has provided the Company with a path for completing the necessary activities to support the resubmission of the BLA for LYMPHIR.

In February 2024, based on the feedback from the

FDA, Citius Pharma completed the CRL remediation activities and filed the resubmission.

In March 2024, Citius Pharma announced the acceptance

of the BLA by the FDA.

The FDA assigned a PDUFA goal date of August 13, 2024 and approved LYMPHIR on August 8, 2024.

In August 2024, Citius Pharma announced that the

FDA had approved LYMPHIR.

Market Opportunity

CTCL’s are a heterogeneous subset of extranodal

non-Hodgkin lymphomas (“NHL”) of mature, skin-homing T-cells that are mainly localized to the skin.

The most common types

of CTCL are mycosis fungoides (“MF”) and primary cutaneous CD30+ anaplastic large cell lymphoma (pcALCL), jointly representing

an estimated 80 to 85% of all CTCL.

Sézary Syndrome (“SS”), a very rare subtype (~2 to 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.

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 to 2007, the estimated incidence rate of MF/SS in the U.S.

is 0.5/100,000

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

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

on internal estimates, the Company believes the addressable U.S.

market for LYMPHIR exceeds $400,000,000 and may further expand with

the introduction of a new therapeutic.

May 2022, we announced that we intend to split the Company’s assets into two separate publicly traded entities (the “Spinoff”).

Pursuant to that plan we formed a new company focused on developing and commercializing LYMPHIR.

Our other pipeline assets, including

Mino-Lok, remain at Citius Pharma.

Following the Spinoff, Citius Pharma would continue to trade on the Nasdaq Capital Market 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.

discussed above, in October 2023, the Company announced that we entered into the Merger Agreement, dated October 23, 2023, for a proposed

merger whereby TenX would acquire Citius Oncology.

Following closing, the Combined Company would continue as a public company listed

on the Nasdaq Global Market.

The transaction is expected to be completed in the first half of 2024, subject to approval by stockholders

of TenX and other customary closing conditions, including compliance with the Nasdaq initial listing requirements, final regulatory approvals,

and SEC filings.

There can be no assurance regarding the ultimate timing of the proposed transaction or that the transaction will be

completed at all.

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.

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.

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

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.

Based on Surveillance Epidemiology and End Results

(SEER) data from 2001 to 2007, the estimated incidence rate of MF/SS in the U.S.

is 0.5/100,000 or about 2,500 to 3,000 new cases per

year representing about 25% of all T-cell lymphomas.

In total, the Company estimates that there are approximately 30,000 to 40,000 patients

living with CTCL in the U.S.

Based on internal estimates, the Company believes

the addressable U.S.

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

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”).

breaks down biofilm barriers formed by bacterial colonies, eradicates the bacteria, and provides anti-clotting properties to maintain

patency in CVCs.

The administration of Mino-Lok consists of filling

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

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

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

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.

time, either the infusion will be continued, or will be locked with the standard-of-care lock solution until further use of the catheter

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.

Phase 2b Results

From 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.

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:

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.

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

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

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.

None of the patients experienced any serious adverse event related to the

lock therapy.

The 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.

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.

The 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

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

Mino-Lok® Arm

- Hematologic

- Solid tumor

ICU Admission

Mech.Ventilator

Microbiologic

Neutropenia (<500)

Microbiologic Eradication

Complications

Complication Rate

SAEs related R&R

Overall Complication Rate

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

6 Patients had > 1 complication

Issam Raad, Antimicrobial Agents and Chemotherapy, June 2016, Vol.

November 2016, the Company initiated site recruitment for Phase 3 clinical trials.

From initiation through the first quarter of 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 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.

Issam Raad, Antimicrobial Agents

and Chemotherapy, June 2016, Vol.

Phase 3 Trial

In November 2016, the Company initiated site recruitment

for Phase 3 clinical trials.

From initiation through the first quarter of 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 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.

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.

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

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 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.

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 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.

The 75% interim analysis was subsequently changed to a 65% interim analysis

by the Company.

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.

65% 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.

May 2022, the Company selected Biorasi, LLC (“Biorasi”), a global clinical research organization (“CRO”), to

help expand the Company’s Phase 3 Mino-Lok trial by implementing additional sites outside the U.S.

As of December 15, 2023,

there are 12 active sites in the U.S.

currently including such academic centers as Henry Ford Health Center, Georgetown University

Medical Center, and others.

There currently are 16 sites active in India, making a total of 28 participating Mino-Lok institutions globally.

August 2023, the Company announced all 92 events required to complete the trial have been achieved.

Several patients remain in active

treatment, which may result in additional events.

In late December 2023, the Company determined that patient enrollment

for the Mino-Lok trial was complete and that it would begin site shutdown activities.

Topline results are anticipated in the first half

Track Designation

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

Track” status.

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.

The Mino-Lok Phase 3 Trial was originally planned

to enroll 700 patients in 50 participating institutions, all located in the U.S.

There were interim analyses at both the 50% and 75% points

of the trial as measured by the number of patients treated.

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

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.

In October 2019, the FDA agreed that the patient

sample size of approximately 144 patients was acceptable.

In 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.

In 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

In 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.

In 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

We further assume 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”).

In 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.

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

The 75% interim analysis was subsequently changed to a 65% interim analysis by the Company.

In 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

In 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.

The 65% interim analysis was completed in June

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.

In May 2022, the Company selected Biorasi, LLC

(“Biorasi”), a global clinical research organization (“CRO”), to help expand the Company’s Phase 3 Mino-Lok

trial by implementing additional sites outside the U.S.

As of December 15, 2023, there are 12 active sites in the U.S.

currently including

such academic centers as Henry Ford Health Center, Georgetown University Medical Center, and others.

There currently are 16 sites active

in India, making a total of 28 participating Mino-Lok institutions globally.

In August 2023, the Company announced all 92 events

required to complete the trial have been achieved.

Several patients remain in active treatment, which may result in additional events.

In late December 2023, the Company determined

that patient enrollment for the Mino-Lok trial was complete and that it would begin site shutdown activities.

In May 2024, the Company announced positive topline

results of the trial.

The study met its primary endpoint with a statistically significant improvement in the time to failure event in

patients receiving Mino-Lok compared to Control arm patients receiving clinician-directed anti-infective lock solution.

The data demonstrates

that Mino-Lok is well-tolerated.

In November 2024, the Company held a Type C meeting

with the FDA to discuss the results of the Phase 3 study and to obtain the FDA’s view on development plans for Mino-Lok.

provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future New Drug Application

(NDA) submission for Mino-Lok.

Fast Track Designation

In October 2017, the Company received official

notice from the FDA that the investigational program for Mino-Lok was granted “Fast Track” status.

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

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

frequent meetings with the FDA to discuss the drug’s development plan and ensure collection

of appropriate data needed to support drug approval;

frequent written correspondence from the FDA about the design of the clinical trials;

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

review, which means we can submit completed sections of our New Drug Application (“NDA”)

for review by the 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.

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.

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

More frequent written correspondence from the 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 we can submit completed sections of our NDA for review by the FDA, rather than waiting until every section of the application is completed before the entire application can be submitted for review.

Mino-Lok International Study

In 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.

Stability Patent Application for Mino-Lok

In October 2018, the U.S.

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 No.

3370794, 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.

Citius Pharma 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 U.S.

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

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 $400 per dose of each salvage flush treatment.

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.

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

Citius Pharma holds the exclusive worldwide license which provides access

to this patented technology for development and commercialization of Mino-Lok.

Market Opportunity

In 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

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.

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

According 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.

We estimate that the potential market for Mino-Lok

to be approximately $500 million to $1 billion as shown in the table below based on a target price of up to $400 per dose

of each salvage flush treatment.

Duration (Days)

Catheter Days

Infection Rate

Catheters Infected

Flushes/Catheter

Salvage Flushes

Total Salvage Flushes

Ann Intern Med 2000;

1 unchanged sentence

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 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

is a topical formulation of halobetasol propionate, a corticosteroid, and lidocaine that is intended for the treatment of hemorrhoids.

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.

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

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

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.

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

Internal Estimates.

Under 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.

In 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.

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.

Halo-Lido is a topical formulation of halobetasol

propionate, a corticosteroid, and lidocaine that is intended for the treatment of hemorrhoids.

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.

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.

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.

Development of Hemorrhoids Drugs

Hemorrhoids 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 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:

Hemorrhoids not prolapsed

but bleeding.

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

(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 suggested the possibility of a benefit for the combination product formulation.

As a result of this study, we determined 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.

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

safety profiles as compared to the vehicle.

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.

Hemorrhoids 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

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 manually.

Prolapsed and cannot be reduced including both internal and external hemorrhoids that are confluent from skin tag to inner anal canal.

Development Activities to Date

In 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.

Symptom 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.

differences suggested the possibility of a benefit for the combination product formulation.

As a result of this study, we determined 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.

Overall, results from adverse event reporting

support the safety profile of all test articles evaluated in this study and demonstrate similar safety profiles as compared to the vehicle.

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

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.

part of this Phase 2 trial, 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.

developed this assessment tool as well as other patient reported outcome endpoints for use in the recently begun Phase 2b trial and in

subsequent trials.

In 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, along with the

information from the Phase 2b trial, allowed us to develop our patient reported outcome evaluation tool, ePro.

This tool 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.

Phase 2b Trial Overview

Approximately

300 adults with a clinical diagnosis of symptomatic hemorrhoids were enrolled in the Halo-Lido Phase 2b study (NCT05348200), a multi-center,

randomized, dose-ranging, double-blind, parallel group comparison clinical trial, which was initiated in April 2022.

The study assessed

a high dose (CITI-002H) and low dose (CITI-002L) formulation of the combination drug products in comparison to the single active drug

high dose halobetasol, low dose halobetasol and lidocaine.

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.

As part of this Phase 2 trial, 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.

We developed this assessment tool as well as other

patient reported outcome endpoints for use in the recently begun Phase 2b trial and in subsequent trials.

In 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, along with the information from the Phase 2b trial, allowed us to develop our patient

reported outcome evaluation tool, ePro.

This tool can be used in clinical trials to evaluate the patients’ conditions and to assess

the performance of the test articles.

In 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.

We 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.

CITI-002 Phase 2b Trial Overview

Approximately 300 adults with a clinical diagnosis

of symptomatic hemorrhoids were enrolled in the Halo-Lido Phase 2b study (NCT05348200), a multi-center, randomized, dose-ranging, double-blind,

parallel group comparison clinical trial, which was initiated in April 2022.

The study assessed a high dose (CITI-002H) and low dose (CITI-002L)

formulation of the combination drug products in comparison to the single active drug monads:

high dose halobetasol, low dose halobetasol

and lidocaine.

there has been a shift from the use of traditional clinical analysis and outcomes to patients’ perspectives and patients’

3 unchanged sentences

Currently, for hemorrhoidal disease, there are no

validated clinical outcomes assessment (“COA”) tools available in the US.

validated clinical outcomes assessment (“COA”) tools available in the U.S.

The FDA directed Citius Pharma to develop a “fit

3 unchanged sentences

by the Company for this study.

collected using the HQLI was analyzed to derive a meaningful change threshold (“MCT”) to test for the change in hemorrhoidal

symptoms considered relevant to the patient during and following treatment.

Phase 2b Trial Results

June 2023, we announced positive results from the Phase 2b study of Halo-Lido for the treatment of hemorrhoids.

Treatment effect on hemorrhoidal

symptoms was analyzed using the MCT.

At the end of the seven-day treatment period, 42% of the patients in the high dose CITI-002 (CITI-002H)

group reached MCT compared to patients treated with high dose halobetasol alone (29%) or patients treated with lidocaine alone (21%).

Moreover, proportionally more patients in the CITI-002H cohort reported meaningful and statistically significant improvement as compared

to patients treated with lidocaine alone ( CMH test, p = 0.035 ).

additionally assessed clinical treatment efficacy outcomes during seven-day treatment and seven-day follow-up periods using an analysis

of covariance, which analyzed changes from baseline.

Data collected using the HQLI was analyzed to

derive a meaningful change threshold (“MCT”) to test for the change in hemorrhoidal symptoms considered relevant to the patient

during and following treatment.

CITI-002 Phase 2b Trial Results

In June 2023, we announced positive results from

the Phase 2b study of Halo-Lido for the treatment of hemorrhoids.

Treatment effect on hemorrhoidal symptoms was analyzed using the MCT.

At the end of the seven-day treatment period, 42% of the patients in the high dose CITI-002 (CITI-002H) group reached MCT compared to

patients treated with high dose halobetasol alone (29%) or patients treated with lidocaine alone (21%).

Moreover, proportionally more

patients in the CITI-002H cohort reported meaningful and statistically significant improvement as compared to patients treated with lidocaine

alone ( CMH test, p = 0.035 ).

We additionally assessed clinical treatment efficacy

outcomes during seven-day treatment and seven-day follow-up periods using an analysis of covariance, which analyzed changes from baseline.

Substantial improvements were seen across all active treatment groups.

no statistical significance was determined in the changes between the comparison groups, directionally the data signaled that the combination

products provided faster relief compared to individual monads, and the relief persisted after completing treatment.

addition, results from the study indicated that there were no material clinical safety concerns across the five active treatment groups

during the seven-day treatment or follow-up periods.

Although no statistical significance was determined in the changes

between the comparison groups, directionally the data signaled that the combination products provided faster relief compared to individual

monads, and the relief persisted after completing treatment.

In addition, results from the study indicated

that there were no material clinical safety concerns across the five active treatment groups during the seven-day treatment or follow-up

There were no serious adverse events reported.

from the Phase 2b trial confirmed that the HQLI is appropriate to measure patient-reported changes in hemorrhoidal symptoms.

Consequently,

Citius Pharma believes the instrument can be used in future Phase 3 trial development.

Citius Pharma is actively pursuing intellectual

property protections for its groundbreaking work in developing the fit for purpose PRO instrument and has filed patent applications on

its CITI-002 formulations.

on the positive clinical results utilizing the Meaningful Change Threshold analysis, Citius Pharma plans to present this data at the

end of Phase 2 meeting with the FDA.

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.

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

combination product for the treatment of hemorrhoids.

If we receive FDA approval, we will qualify for three years of market exclusivity

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 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.

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,

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 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.

On December 11, 2023, the Company terminated the Mino-Wrap license

agreement with the Board of Regents of the University of Texas System on behalf of MDACC.

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

In the U.S., the overall rate of mastectomies, combining single and double mastectomies, 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 U.S.

underwent a post-mastectomy breast reconstructive

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

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%.

Once the implant becomes infected,

the patient is usually hospitalized requiring approximate two weeks of IV and/or oral antimicrobials.

In addition, the TE is removed,

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, which 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.

on the in vitro preclinical laboratory work, Mino-Wrap appears to have the characteristics necessary for advancement in the protection

of human implants from subsequent infection.

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.

Data from the Phase 2b trial confirmed that the

HQLI is appropriate to measure patient-reported changes in hemorrhoidal symptoms.

Consequently, Citius Pharma believes the instrument

can be used in future Phase 3 trial development.

Citius Pharma is actively pursuing intellectual property protections for its groundbreaking

work in developing the fit for purpose PRO instrument and has filed patent applications on its CITI-002 formulations.

Based on the positive clinical results utilizing

the Meaningful Change Threshold analysis, Citius Pharma had a Phase 2 meeting with the FDA in April 2024 to

discuss the go-forward path for the program .

Market Opportunity

The 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.

We 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.

that our Halo-Lido product represents an attractive, low-risk product opportunity with meaningful upside potential.

Market Exclusivity

We believe that we will be the first company to

conduct rigorous clinical trials and receive FDA approval of a topical corticosteroid-lidocaine combination product for the treatment

of hemorrhoids.

If we receive FDA approval, we will qualify for three years of market exclusivity 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

However, the FDA has significant latitude in determining how to enforce its regulatory powers in these circumstances.

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.

We 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.

In October 2020, we, through our subsidiary, NoveCite,

signed an exclusive agreement with Novellus Therapeutics Limited (“Novellus”) to license iPSC-derived mesenchymal stem cells

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

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.

NC- i MSCs are the next generation mesenchymal

stem cell therapy.

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:

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 of 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.

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).

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.

Several 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.

In December 2020, the Company announced interim

data from a proof-of-concept (“POC”) large animal study of its proprietary NC-iMSC therapy.

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 model.

In the third quarter of 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).

In 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.

October 2022, Brooklyn changed its name to Eterna Therapeutics Inc.

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

The COVID-19 outbreak has added

significantly to the number of ARDS cases.

Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all

of the original terms and conditions in the exclusive license agreement.

In October 2022, Brooklyn changed its name to

Eterna Therapeutics Inc.

Market Opportunity

Globally, there are 3 million cases of ARDS every

year, out of which approximately 200,000 cases are in the U.S.

The COVID-19 outbreak has added significantly to the number of ARDS cases.

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

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

There are no approved treatments for ARDS,

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

and Marketing

are primarily focused on identifying opportunities within the critical care and cancer care market segments.

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.

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.

Death rate among patients on ventilators can be as high

as 50% depending on associated co-morbidities.

There are no approved treatments for ARDS, and the current standard of care only attempts

to provide symptomatic relief.

Sales and Marketing

Oncology does not currently have its own commercial infrastructure and is in the early stages of developing its sales or marketing capability

by contracting with a large third-party commercial sales and marketing organization with an existing commercial infrastructure and product

launch experience to assist in its commercial efforts.

Citius Oncology intends to utilize a dedicated field force combined with various

marketing programs which will be tailored to both physicians and patients to launch LYMPHIR and grow its market share.

We, through Citius

Oncology, plan to focus our commercial efforts on a concentrated group of prescribing hematologists, oncologists and dermatologist-oncologists,

along with key opinion leaders and advocacy groups who play an important role in the CTCL treatment regimen.

Our strategy includes seeking

inclusion in the National Comprehensive Cancer Network (“NCCN”) guidelines and compendia as well as obtaining coverage and

reimbursement from the Centers for Medicare and Medicaid Services.

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.

We are primarily focused on identifying opportunities

within the critical care and cancer care market segments.

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.

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

For 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.

LYMPHIR Sales and Marketing

Citius Oncology does not currently have its own

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

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

commercial efforts.

Citius Oncology intends to utilize a dedicated field force combined with various marketing programs which will be

tailored to both physicians and patients to launch LYMPHIR and grow its market share.

We, through Citius Oncology, plan to focus our commercial

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

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

In September 2024, the Company announced the inclusion

of LYMPHIR in the National Comprehensive Cancer Network (“NCCN”) guidelines and compendia.

LYMPHIR was included bases on an

NCCN Category 2A recommendation which indicates a uniform NCCN consensus that LYMPHIR is appropriate as an option for patients with CTCL.

The Company believes that LYMPHIR’s addition to the NCCN guidelines will assist LYMPHIR in obtaining coverage and reimbursement

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

Intellectual Property

September 3, 2021, we acquired the exclusive license of E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment

of CTCL from Eisai, who acquired it previously from Dr.

We refer to the agent as LYMPHIR.

The exclusive license, which

was amended as part of the transaction, is with Eisai and includes rights to develop and commercialize LYMPHIR in all markets except

for Japan and certain parts of Asia.

We 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.

However, 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.

LYMPHIR Intellectual Property

On September 3, 2021, Citius Pharma acquired the

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

who had exclusively licensed it previously from Eisai.

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

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

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

Bhutan, Nepal, Mongolia, and Papua New Guinea.

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

2022, Citius Pharma assigned the license agreement to Citius Oncology, at which time Citius Oncology began operations.

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

the CTCL indication (which increase to $7 million in the event Citius Oncology exercises the option to add India to the licensed territory)

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

Pursuant to the terms of the license

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

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

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

and controls development activities through the production of the BLA, which we filed with the FDA in September 2022, while we are responsible

for the costs of correcting any major deficiencies in the BLA as well as the costs of any further studies and development costs associated

with potential additional indications.

term of the license agreement will continue until (i) March 30, 2026, if there has not been a commercial sale of a licensed product in

the territory, or (ii) if there has been a first commercial sale of a licensed product in the territory by March 30, 2026, 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.

through our subsidiary, 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, through our subsidiary, are obligated to pay up to an aggregate of $40 million

related to CTCL approvals in the U.S.

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

up to $300 million for commercial sales milestones.

We, through our subsidiary, will also be obligated to 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, through our subsidiary, will also

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

the like) received by Citius Oncology 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, through our subsidiary, 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) 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.

part of the definitive agreement with Dr.

Reddy’s, the Citius Pharma acquired, and later transferred to Citius Oncology, method

of use patents in which E7777 is administered in combination with the programmed cell death protein 1 (“PD-1”) pathway inhibitor

PD-1 plays a vital role in inhibiting immune responses and promoting self-tolerance through modulating the activity of T-cells,

activating apoptosis of antigen-specific T cells and inhibiting apoptosis of regulatory T cells.

following patents were acquired:

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

In April 2022, Citius Pharma assigned

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

Upon the completion of the Merger, SpinCo became a wholly owned

subsidiary of Citius Oncology.

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

Obligations to Eisai under the License Agreement

Under the license agreement, Eisai is to receive

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

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

to the achievement of net product sales thresholds.

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

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

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

The Company has accrued the $5.9 million

development milestone payment as of September 30, 2024.

Pursuant to the terms of the license agreement,

Eisai was responsible for completing the current CTCL clinical trial, and chemistry, manufacturing and controls development activities

through the production of the BLA, which Citius Pharma filed with the FDA in September 2022.

Citius Pharma is responsible for the costs

of correcting any major deficiencies in the BLA, as well as the costs of any further studies and development costs associated with potential

additional indications.

The term of the license agreement will continue

until (i) March 30, 2026, if there has not been a commercial sale of a licensed product in the territory, or (ii) if there has been a

first commercial sale of a licensed product in the territory by March 30, 2026, 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.

The Company, through its subsidiary, is 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.

Obligations to

Reddy’s under the Asset Purchase Agreement

The Company and Dr.

Reddy’s entered into

an asset purchase agreement whereby Dr.

Reddy’s transferred to the Company the then-existing patents, know-how, regulatory documentation

and other assets related to LYMPHIR and the Company agreed to assume certain liabilities associated with Dr.

Reddy’s development

Under the terms of the asset purchase agreement with Dr.

Reddy’s and subsequent to the April 2022 assignment to SpinCo,

Citius Oncology, as guaranteed by Citius Pharma, will be 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.

Citius Oncology will also be obligated to pay on a fiscal quarter basis tiered royalties equal to low double-digit percentages

of net product sales (within a range of 10% to 15%).

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.

Citius Oncology 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 Citius Oncology 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

Also under the agreement with Dr.

the Company, through Citius Oncology, is 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) complete each specified immuno-oncology

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

Additionally, the Company,

through Citius Oncology, is required to commercially launch a product in a territory within six months of receiving regulatory approval

for such product in each such jurisdiction.

The Company, through Citius Oncology, is responsible for these and any and all further developmental

activities relating to LYMPHIR.

Reddy’s agreed to not compete against

the Company in the development of products containing compounds in LYMPHIR in the territory covered by the license for a designated period

There are no termination provisions included in the asset purchase agreement other than those related to the term of the royalties.

To assist in the transfer of the LYMPHIR assets, the Company and Dr.

Reddy’s entered into a transition services agreement at the

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

At the time of the FDA approval for LYMPHIR, a

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

LYMPHIR Patents

As part of the definitive

agreement with Dr.

Reddy’s, Citius Pharma acquired, and later transferred to Citius Oncology, the method of use patents in which

E7777 is administered in combination with the programmed cell death protein 1 (“PD-1”) pathway inhibitor drug class.

plays a vital role in inhibiting immune responses and promoting self-tolerance through modulating the activity of T-cells, activating

apoptosis of antigen-specific T cells and inhibiting apoptosis of regulatory T cells.

The following patents

were acquired:

Provisional Application No.

63/070,645, which was filed on August 26, 2020, and subsequently published as US 2022/0062390 A1 on March

3, 2022, entitled Methods of Treating Cancer.

International

Patent Application Number:

PCT/IB2021/0576733, which was filed with the World Intellectual Property Organization on August 23, 2021,

and subsequently published as WO 2022/043863 A1 on March 3, 2022, entitled, Combination for Use in Methods of Treating Cancer.

Intellectual Property

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

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

America), sub-licensable basis.

63/070,645, which

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

Expiration date of August 23, 2041.

● International Patent Application Number:

PCT/IB2021/0576733,

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

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

Expiration date of August 23, 2041.

Mino-Lok Intellectual Property

In 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.

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.

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.

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

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.

Unless 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’

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.

Mino-Lok is further covered in relation to its method of use by issued U.S.

Mino-Lok 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.

is further covered in relation to its method of use by issued U.S.

9,078,441, which was issued on July 14, 2015.

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

There are corresponding patents

granted in Europe and Canada (European Patent No.

provide intellectual property protection until June 7, 2024.

There are corresponding patents granted in Europe and Canada (European Patent

EP 1644024, and Canadian Patent No.

Patent Application for Mino-Lok

October 2018, the 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.

Stability Patent Application for Mino-Lok

In October 2018, the 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.

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 Pharma 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

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

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

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.

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.

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 U.S.

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 of the term.

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’ notice.

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.” 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.

November 18, 2021, MDACC filed a provisional patent application entitled “Antimicrobial Wraps for Medical Implants” in which

the manufacturing process of the wrap now incorporates a freeze-drying process to prevent degradation of the active drug.

Pharma holds the exclusive worldwide license, which provides access to this patented technology for development and commercialization

of Mino-Wrap.

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 technology.

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

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

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.

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:

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

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

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.

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, whereby NoveCite acquired an exclusive, worldwide license,

with the right to sublicense, to develop and commercialize a stem cell therapy based on Novellus’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 Novellus 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 Novellus 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 Novellus 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 Novellus 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 Novellus 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:

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

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

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.

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.

NoveCite may terminate the license agreement at any time without cause upon 90 days prior written

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.

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.

In October 2021, Brooklyn changed its name to Eterna Therapeutics Inc.

operate in a highly competitive and regulated industry which is subject to change.

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.

are currently several approved targeted therapeutics for patients with persistent or recurrent CTCL.

However, there are limitations to

these targeted therapies, which often are discontinued due to toxicity, adverse events, or a limited duration of response due to resistance

Consequently, we believe there continues to be an unmet medical need for patients with CTCL and an opportunity for LYMPHIR

to be included among the treatment armamentarium for advanced-stage CTCL.

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.

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.

The Company 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

The Company 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.

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 U.S.

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

Novellus which cannot include MSC’s, that may be used within the field of acute pneumonitis treatment.

After receiving notice from

Novellus of the new product opportunity, NoveCite has 30 days to notify Novellus of its desire to negotiate a license agreement for the

If such notice is given by NoveCite, the parties shall then have a period of 150 days from the date of Novellus’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, Novellus 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.

Novellus 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 Novellus 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, Novellus

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.

In October 2021,

Brooklyn changed its name to Eterna Therapeutics Inc.

We operate in a highly competitive and regulated

industry which is subject to change.

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.

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.

LYMPHIR Competition

There are currently several approved targeted

therapeutics for patients with persistent or recurrent CTCL.

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

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

Consequently, we believe

there continues to be an unmet medical need for patients with CTCL and an opportunity for LYMPHIR to be included among the treatment armamentarium

for advanced-stage CTCL.

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.

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.

The Company 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.

The Company 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

and B-Lock from Great Lakes Pharmaceuticals, Inc.

these lock solutions have been shown to be effective in salvaging catheters in bacteremic patients as Mino-Lok is intended to do, and

Citius Pharma 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 U.S.

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 review.

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.

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.

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 (“PAAL”) 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

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.

February 28, 2022, CorMedix resubmitted the NDA for DefenCath to address the CRL issued by the FDA.

In parallel, CorMedix’s third-party

manufacturer submitted responses to the deficiencies identified at the manufacturing facility in the PAAL issued by the FDA concurrently

with the CRL.

On March 28, 2022, CorMedix announced that the resubmission of the NDA for DefenCath had been accepted for filing by the

The FDA considers the resubmission as a complete, Class 2 response with a six-month review cycle.

The CMO has notified us that an

onsite inspection by the FDA was conducted that resulted in FORM FDA 483 observations that are being addressed.

The CMO submitted responses

to the inspectional observations along with a corrective action plan and requested a meeting with the FDA to discuss.

CorMedix also has

been notified by its supplier of heparin, an active pharmaceutical ingredient (“API”) for DefenCath, that an inspection by

the FDA for an unrelated API has resulted in a Warning Letter due to deviations from good manufacturing practices for the unrelated API.

August 8, 2022, CorMedix announced receipt of a second CRL from the FDA regarding our DefenCath NDA.

The FDA stated that the DefenCath

NDA cannot be approved until deficiencies conveyed to the CMO and the heparin API supplier are resolved to the satisfaction of the FDA.

There were no other requirements identified by the FDA for CorMedix prior to resubmission of the NDA.

As part of the NDA review process,

the FDA also notified CorMedix that although the tradename DefenCath was conditionally approved, the FDA now has identified potential

confusion with another pending product name that is also under review.

The ultimate acceptability of the proposed tradename is dependent

upon which application is approved first.

As a precaution, CorMedix has submitted an alternative proprietary name to the FDA which will

undergo review.

also announced that it had finalized an agreement with Alcami Corporation (“Alcami”), a U.S.

based contract manufacturer

with proven capabilities for manufacturing commercial sterile parenteral drug products.

Alcami will function as a manufacturing site

for DefenCath for the U.S.

market, and CorMedix expects to be able to submit a supplement to its NDA application around the end of the

first quarter of 2023 to request approval from FDA for DefenCath manufacturing.

November 15, 2023 CorMedix announced that the FDA has approved DefenCath to reduce the incidence of catheter-related bloodstream infections

(CRBSIs) for the limited population of adult patients with kidney failure receiving chronic hemodialysis through a central venous catheter

(Great Lakes Pharmaceuticals, Inc.)

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.

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 Pharma does not expect that either would be pursued

for this indication.

Defencath TM (CorMedix Inc.)

Defencath is a formulation of Taurolidine 1.35%,

Citrate 3.5%, and Heparin 1000 units/mL.

Neutrolin is an anti-microbial catheter lock solution approved by the FDA in November 2023 to

reduce the incidence of catheter-related bloodstream infections (CRBSIs) for the limited population of adult patients with kidney failure

receiving chronic hemodialysis through a central venous catheter (CVC).

Defencath was shown to reduce the risk of CRBSIs by up to 71%

in a Phase 3 clinical study.

B-Lock™ (Great Lakes Pharmaceuticals,

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.

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.

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 in the hemorrhoid market is non-prescription OTC products.

If approved by the FDA, Halo-Lido would be the only prescription

product for the treatment of hemorrhoids.

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.

are multiple participants in the cell therapy field both in the U.S.

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.

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 has an ongoing Phase 2/3 clinical trial for the treatment of ARDS and has an ongoing clinical trial in Japan for the treatment

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.

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 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.

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.

Halo-Lido Competition

The primary competition in the hemorrhoid market

is non-prescription OTC products.

If approved by the FDA, Halo-Lido would be the only prescription product for the treatment of hemorrhoids.

NoveCite Competition

There are multiple participants in the cell therapy

field both in the U.S.

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 in 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.

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.

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 or the BLA,

as applicable, and must be registered with the FDA.

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.

Supply and Manufacturing

We do not currently have and we do not intend

to set up our own manufacturing facilities.

We rely on and will continue to rely on 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 FDA.

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 Food, Drug and Cosmetic Act, Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act,

the Resource Conservation and Recovery Act, the Controlled Substances Act and other present and potential future federal, state or local

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.

and Manufacturing of LYMPHIR

have either contracted directly or contracted through Citius Oncology, to secure supply agreements with third-party cGMP facilities who

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

We are confident that all drug substance

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

believe our contract manufacturers have sufficient capacity to support demand for our products as our business grows.

In addition to

our supply agreements with third-party manufacturers, we, through Citius Oncology, have contracted with other proven suppliers for, testing,

labeling, packaging, and distribution of LYMPHIR.

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 U.S.

In general, our suppliers purchase raw materials

and supplies on the open market.

Substantially all such materials are obtainable from a number of sources so that the loss of any one

source of supply would not have a material adverse effect on us.

If we elect to conduct product development and

manufacturing, we will be subject to regulation under various federal and state laws, including the Food, Drug and Cosmetic Act, Occupational

Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act,

the Controlled Substances Act and other present and potential future federal, state or local regulations.

We have contracted with proven suppliers and manufacturers

for active pharmaceutical ingredients, 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.

If we fail to raise additional capital, and as

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

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

Supply and Manufacturing of LYMPHIR

We have either contracted directly or contracted

through Citius Oncology, to secure supply agreements with third-party cGMP facilities who are in compliance with current good manufacturing

practices as generally accepted by the FDA.

We are confident that all drug substance and drug product materials meet or will meet specifications

as agreed with the FDA.

We believe our contract manufacturers have sufficient

capacity to support demand for our products as our business grows.

In addition to our supply agreements with third-party manufacturers,

we, through Citius Oncology, have contracted with other proven suppliers for, testing, labeling, packaging, and distribution of LYMPHIR.

Government Regulation

The research, development, testing, manufacture,

labeling, promotion, advertising, distribution, and marketing, among other things, of our product candidates, is extensively regulated

by governmental authorities in the U.S.

and other countries.

All of our current product

candidates are considered drugs.

Consequently, we plan to resubmit the BLA for LYMPHIR early in the first quarter of 2024 and, depending

on the results of our preclinical and clinical trials, 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 NoveCite.

the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act and the agency’s implementing regulations.

we fail to comply with the applicable U.S.

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 one of our drug product candidates may be marketed in the U.S., it must be approved by the FDA.

The steps required before a drug

may be approved for marketing in the U.S.

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.

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 U.S.

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.

of September 30, 2023, we had 22 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.

Officers of Citius Pharma

Mazur , Chief Executive Officer, Chairman and Secretary – Mr.

Mazur, 78, was appointed Chief Executive Officer effective

May 1, 2022, and 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.

Holubiak, Executive Vice Chairman and Director – Mr.

Holubiak, 76, was appointed Executive Vice Chairman effective May

1, 2022, and has been a member of the Board since October 2015.

He previously served as President and Chief Executive Officer from March

2016 through April 2022.

He was also the founder and Chief Executive Officer and President of Leonard-Meron Biosciences, Inc., an acquired

subsidiary of Citius Pharma, from March 2013 until March 2016.

Bartushak , Chief Business Officer, Chief Financial Officer and Principal Financial Officer – Mr.

Bartushak, 56, 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 Pharma.

Czuczman , Chief Medical Officer and Executive Vice President – Dr.

Czuczman, 64, 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 Act”).

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.

In the U.S., the FDA regulates drugs under the

Federal Food, Drug, and Cosmetic Act (the “FDCA”) and the agency’s implementing regulations.

If the Company fails to

comply with the applicable U.S.

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, or other actions, such

as the FDA’s delay in review of or refusal to approve a pending NDA or BLA, withdrawal of an approval, imposition of a clinical

hold or study termination, issuance of Warning Letters or Untitled Letters, mandated modifications to promotional materials or issuance

of corrective information, requests for product recalls, consent decrees, corporate integrity agreements, deferred prosecution agreements,

product seizures or detentions, refusal to allow product import or export, total or partial suspension of or restriction of or imposition

of other requirements relating to production or distribution, injunctions, fines, debarment from government contracts and refusal of future

orders under existing contracts, exclusion from participation in federal and state healthcare programs, FDA debarment, restitution, disgorgement

or civil or criminal penalties, including fines and imprisonment.

Any enforcement action could have a material adverse effect on the Company

and our operations.

FDA Marketing Approval

Before any one of the Company’s drug product

candidates may be marketed in the U.S., it must be approved by the FDA.

Obtaining FDA marketing approval for new products may take many

years and require the expenditure of substantial financial resources.

In order for the FDA to determine that a product is safe and effective

for the proposed indication, the product must first undergo testing in animals (nonclinical studies).

The data generated from nonclinical

studies is used to support the filing of an IND under which human studies are conducted.

Human testing is generally conducted under an

IND in three phases following Good Clinical Practices (“GCP”) regulations:

● Phase 1 studies evaluate the safety and tolerability

of the drug, generally in normal, healthy volunteers;

● Phase 2 studies evaluate safety and efficacy,

as well as appropriate doses;

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

that the drug is designed to treat;

● Phase 3 studies evaluate safety and efficacy

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

In addition to human testing, the manufacturing

process of the potential product must be developed in accordance with cGMP regulations.

Prior to the approval of a new product, the FDA

will inspect the facilities at which the proposed drug product is manufactured to ensure cGMP compliance.

The cumulative safety and efficacy data generated

from the clinical trials described above, chemistry, manufacturing and control (“CMC”) information, nonclinical study data

and proposed labeling are used as the basis to support approval of a marketing application (NDA or BLA) to the FDA.

The preparation of

an NDA or BLA requires the expenditure of substantial funds and the commitment of substantial resources.

Additionally, at the time of

an NDA or BLA submission a user fee is required (unless the product has ODD) to be paid.

The FDA conducts a preliminary administrative

review upon receipt of the NDA or BLA submission, the FDA either accepts the NDA or BLA submission or does not.

If the application is

not accepted for review by FDA, the Sponsor of the application must resolve the deficiencies and re-submit the application, re-starting

the review clock.

After evaluating the NDA or BLA and all related

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

clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter (“CRL”).

A CRL generally

contains a statement of specific conditions that must be met in order to secure final approval of the NDA or BLA and may require additional

clinical or preclinical studies, or other information, in order for FDA approval.

Even with submission of this additional information,

the FDA may decide that the NDA or BLA does not satisfy the regulatory criteria for approval.

If and when those conditions have been met

to the FDA’s satisfaction, the FDA may issue an approval letter.

An approval letter authorizes commercial marketing of the drug

with specific prescribing information for specific indications.

The development and approval of new drugs requires

substantial time, effort and financial resources.

Data obtained from the development program are not always conclusive and may be susceptible

to varying interpretations.

These instances may delay, limit or prevent regulatory approval.

The FDA may not grant approval on a timely

basis, or at all.

We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which

could delay or preclude us from marketing our products.

The FDA may limit the indications for use or place other conditions on any approvals

that could restrict the commercial application of the product.

FDA Post - Approval Considerations

Drugs manufactured or distributed pursuant to

FDA approvals are subject to continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping,

manufacturing, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences

with the product and drug shortages.

During the approval process, the FDA and the sponsor may agree that specific studies or clinical

trials should be conducted as post-marketing commitments, but they are not required.

The FDA may also impose post-marketing requirements

as a condition of approval of an NDA or BLA.

For example, the FDA may require post-marketing testing, including Phase 4 clinical trials

and surveillance, to further assess and monitor the product’s safety and effectiveness after commercialization.

Once an approval

is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems

occur after the product becomes available in the market.

After approval, most changes to the approved product,

such as manufacturing changes and adding new indications or other labeling claims, are subject to FDA review and approval.

There are also

annual user fee requirements for any marketed product and new application fees for supplemental applications with clinical data.

Additionally,

the FDA strictly regulates the labeling, advertising and promotion of products under an approved NDA or BLA.

The FDA and other agencies

actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly

marketed or promoted off-label uses may be subject to significant liability, including criminal and civil penalties under the FDCA and

False Claims Act, exclusion from participation in federal healthcare programs, debarment from government contracts, refusal of future

orders under existing contracts and mandatory compliance programs under corporate integrity agreements or deferred prosecution agreements.

Other Regulations of the Healthcare Industry

In addition to FDA regulations governing the marketing

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

These include the following:

● The federal Anti-Kickback laws and implementing

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

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

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

● Other Medicare laws, regulations, rules, manual

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

amount of such payment;

● The federal False Claims Act, which imposes civil

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

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

which prohibits certain payments made to foreign government officials;

● State and foreign law equivalents of the foregoing

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

● The Patient Protection and Affordable Care Act

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

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

changes access to healthcare products and services;

creates new fees for the

pharmaceutical and medical device industries;

changes rebates and prices for health care products and services;

and requires additional

reporting and disclosure;

● The Health Insurance Portability and Accountability

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

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

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

identifiable health information;

● The federal Physician Payment Sunshine Act, which

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

and teaching hospitals and public reporting of the payment data.

If our operations are found to be in violation

of any of these laws, regulations, rules or policies or any other law or governmental regulation, or if interpretations of the foregoing

change, we may be subject to civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs and the curtailment

or restructuring of our operations.

To the extent that any of our products are sold

in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing

requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting

of payments or transfers of value to healthcare professionals.

This is currently not applicable as our only approved product is not currently

sold in a foreign country.

Coverage and Reimbursement

The commercial success of our product candidates

and our ability to commercialize any approved product candidates successfully will depend in part on the extent to which governmental

authorities, private health insurers and other third-party payers provide coverage for and establish adequate reimbursement levels for

our therapeutic product candidates.

In the United States, the European Union and other potentially significant markets for our product

candidates, government authorities and third-party payers are increasingly imposing additional requirements and restrictions on coverage,

attempting to limit reimbursement levels or regulate the price of drugs and other medical products and services, particularly for new

and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be.

in the United States, federal and state governments reimburse covered prescription drugs at varying rates generally below average wholesale

Federal programs also impose price controls through mandatory ceiling prices on purchases by federal agencies and federally funded

hospitals and clinics and mandatory rebates on retail pharmacy prescriptions paid by Medicaid and Tricare.

These restrictions and limitations

influence the purchase of healthcare services and products.

Legislative proposals to reform healthcare or reduce costs under government

programs may result in lower reimbursement for our products and product candidates or exclusion of our products and product candidates

from coverage.

Moreover, the Medicare and Medicaid programs increasingly are used as models for how private payers and other governmental

payers develop their coverage and reimbursement policies.

In addition, the increased emphasis on managed

healthcare in the United States and on country and regional pricing and reimbursement controls in the European Union will put additional

pressure on product pricing, reimbursement and utilization, which may adversely affect our future product sales and results of operations.

These pressures can arise from rules and practices of managed care groups, competition within therapeutic classes, availability of generic

equivalents, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, coverage and

reimbursement policies and pricing in general.

The cost containment measures that healthcare payers and providers are instituting and

any healthcare reform implemented in the future could significantly reduce our revenues from the sale of any approved products.

provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for our approved products

in whole or in part.

Healthcare Reform

The United States and many foreign jurisdictions

have enacted or proposed legislative and regulatory changes affecting the healthcare system.

The United States government, state legislatures

and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid

healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded

prescription drugs.

In recent years, Congress has considered reductions

in Medicare reimbursement levels for drugs administered by physicians.

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

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

restrictions for some drugs.

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

utilization of and reimbursement for any approved products.

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

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

Therefore, any

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

The ACA substantially changed the way healthcare

is financed by both governmental and private insurers, and significantly impacts the pharmaceutical industry.

The ACA was intended to

broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and

abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and

medical device manufacturers, and impose additional health policy reforms.

Since its passage, there have been significant ongoing efforts

to modify or eliminate the ACA.

The Trump administration pushed for modifications

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

payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended

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

While the Biden administration has rolled back many

of the executive orders issued by former President Trump and has stated that it intends to build on the ACA and to expand coverage thereunder,

ongoing repeal and reform efforts impacting the ACA and the healthcare sector more broadly are likely under the upcoming Trump administration.

Other legislative changes have been proposed and

adopted since passage of the ACA.

These have, among other things, reduced Medicare payments to several types of providers, including hospitals,

imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments

to providers.

Further legislative and regulatory changes under

the ACA remain possible.

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

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

It is unknown what form any future changes or any

law would take under the upcoming Trump Administration and how or whether it may affect our business in the future.

We expect that changes

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

and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation

in individual states, could have a material adverse effect on the healthcare industry.

In addition, the Affordable Care Act has also been

subject to challenges in the courts, which remain ongoing.

Payment methodologies may be subject to changes

in healthcare legislation and regulatory initiatives as well.

In addition, at the state level, legislatures have passed and implemented

regulations, and may pass additional legislation, designed to control pharmaceutical product pricing, including price or patient reimbursement

constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases,

designed to encourage importation from other countries and bulk purchasing.

We expect that additional federal, state and foreign

healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will

pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products,

once approved, or additional pricing pressures.

Foreign Regulation

The Company 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, the Company or our collaborative

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.

under current U.S.

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, 2024, we had 23 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 Pharma

Leonard Mazur , Chief Executive Officer,

Chairman and Secretary – Mr.

Mazur, 79, was appointed Chief Executive Officer effective May 1, 2022, and 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.

Myron Holubiak, Executive Vice Chairman

and Director – Mr.

Holubiak, 77, was appointed Executive Vice Chairman effective May 1, 2022, and has been a member of the Board

since October 2015.

He previously served as President and Chief Executive Officer from March 2016 through April 2022.

He was also the

founder and Chief Executive Officer and President of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius Pharma, from March

2013 until March 2016.

Jaime Bartushak , Chief Business

Officer, Chief Financial Officer and Principal Financial Officer – Mr.

Bartushak, 57, 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 Pharma.

Myron Czuczman , Chief Medical Officer

and Executive Vice President – Dr.

Czuczman, 65, 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

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