IPO with distribution of shares to Citius shareholders planned for 2H 2022
Citius would retain Mino-Lok and other pipeline assets and continue to trade on Nasdaq (ticker: CTXR)
Citius Pharmaceuticals, Inc. ("Citius" or the "Company") (Nasdaq: CTXR), a late-stage biopharmaceutical company developing and commercializing first-in-class critical care products, today announced that it intends to split the Company's assets into two separate publicly-traded entities. Citius plans to form a new company (NewCo) focused on developing and commercializing I/ONTAK, for which a Phase 3 trial was completed in December 2021 and a biologics license application (BLA) is being planned for submission in the second half of 2022. The Company's other pipeline assets, including Mino-Lok®, would remain at Citius. Citius would continue to trade on the Nasdaq exchange under its current ticker CTXR. The strategic action is intended to optimize organizational resources and investment capital to support the successful execution of each development program.
"As Citius prepares for the commercialization of its two late-stage product candidates, I/ONTAK and Mino-Lok, we believe that the market has not adequately valued the potential of our recent I/ONTAK licensing agreement. It is our view that a spinoff and IPO would create two focused standalone public companies that are better positioned to pursue their strategic priorities, invest in growth opportunities and attract new investors. Upon completion of the transactions, NewCo would be a pure-play oncology-focused biopharmaceutical company. Citius would retain i0074s Mino-Lok antibiotic lock solution at the core of its diversified pipeline. The planned transactions underscore our commitment to provide patients with superior therapeutics and reinforce our alignment with the needs of shareholders to deliver long term growth. Our intention is that the spinoff will be non-dilutive and tax-fee to Citius shareholders," stated Leonard Mazur, Chairman and CEO of Citius.
Citius intends the spinoff to be accomplished through an initial public offering (IPO) and pro rata distribution of stock in the NewCo to Citius shareholders. The spinoff and distribution of stock is expected to occur in a manner intended to qualify as a tax-free transaction for U.S. shareholders.
The transactions are expected to be completed in the second half of calendar year 2022, subject to the satisfaction of customary conditions, including final approval from the Citius Board of Directors, regulatory approvals and SEC filings.
There can be no assurance regarding the ultimate timing of the proposed transaction or that the transaction will be completed at all.
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
About I/ONTAK
I/ONTAK is a recombinant fusion protein that combines the interleukin-2 (IL-2) receptor binding domain with diphtheria toxin fragments. The agent specifically binds to IL-2 receptors on the cell surface, causing diphtheria toxin fragments that have entered cells to inhibit protein synthesis. I/ONTAK, a purified version of denileukin diftitox, is a reformulation of previously FDA-approved oncology treatment ONTAK. ONTAK was marketed in the U.S. from 1999 to 2014, when it was voluntarily withdrawn from the market. Manufacturing improvements resulted in a new formulation, which maintains the same amino acid sequence but features improved purity and bioactivity. The new formulation received regulatory approval in Japan for the treatment of CTCL and PTCL. In 2011 and 2013, the FDA granted orphan drug designation (ODD) to I/ONTAK for the treatment of PTCL and CTCL, respectively, making it potentially eligible for seven years of market exclusivity post-approval for each indication.
About Citius Pharmaceuticals, Inc.
Citius is a late-stage biopharmaceutical 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 therapies. The Company has two late-stage product candidates, Mino-Lok®, an antibiotic lock solution for the treatment of patients with catheter-related bloodstream infections (CRBSIs), which is currently enrolling patients in a Phase 3 Pivotal superiority trial, and I/ONTAK (E7777), a novel IL-2R immunotherapy for an initial indication in cutaneous T-cell lymphoma (CTCL), which has completed enrollment in its Pivotal Phase 3 trial. Mino-Lok® was granted Fast Track designation by the U.S. Food and Drug Administration (FDA). I/ONTAK has received orphan drug designation by the FDA for the treatment of CTCL and peripheral T-cell lymphoma (PTCL). Through its subsidiary, NoveCite, Inc., Citius is developing a novel proprietary mesenchymal stem cell treatment derived from induced pluripotent stem cells (iPSCs) for acute respiratory conditions, with a near-term focus on acute respiratory distress syndrome (ARDS) associated with COVID-19.
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