Citius Pharmaceuticals, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations for the three and six months ended March 31, 2025 and 2024 should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Report and in conjunction with the audited financial statements of Citius Pharmaceuticals, Inc. included in our Annual Report on Form 10-K for the year ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on December 27, 2024, as amended on January 27, 2025. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements” on page iii of this Report.

Current wording

The following discussion and analysis of our financial condition and results of operations for the three and nine months ended June 30, 2025 and 2024 should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Report and in conjunction with the audited financial statements of Citius Pharmaceuticals, Inc. included in our Annual Report on Form 10-K for the year ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on December 27, 2024, as amended on January 27, 2025. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements” on page iii of this Report.

Previous wording

At the time of the FDA approval for LYMPHIR, a $27.5 million milestone payment became payable to Dr. Reddy’s under the terms of the asset purchase agreement for which a balance of $22.5 million remains due as of March 31, 2025. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.

Current wording

At the time of the FDA approval for LYMPHIR, a $27.5 million milestone payment became payable to Dr. Reddy’s under the terms of the asset purchase agreement for which a balance of $22.5 million remains due as of June 30, 2025. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment. On July 10, 2025, Citius Pharma made a payment of $1,000,000 to Dr. Reddy’s against the outstanding milestone approval fee. On July 28, 2025, Citius Oncology made a payment of $1,250,000 to Dr. Reddy’s against the outstanding milestone approval fees.

Previous wording

On March 28, 2025, Citius Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the milestone payment and certain unpaid invoices. Citius Oncology has agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter on the 15 th of each of the next four months to pay Eisai $2,350,000 and make a final payment of $2,197,892 to Eisai on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment under the letter agreement at the rate of 2% per annum. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or related to the failure of Citius Oncology to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect.

Current wording

On March 28, 2025, Citius Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the milestone payment and certain unpaid invoices. Citius Oncology has agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter on the 15 th of each of the next four months to pay Eisai $2,350,000 and make a final payment of $2,197,892 to Eisai on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment under the letter agreement at the rate of 2% per annum. During the nine months ended June 30, 2025 Citius Oncology recorded $160,755 in interest expense under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or related to the failure of Citius Oncology to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect. On July 15, 2025 Citius Pharma made a payment of $1,091,167.12 to Eisai for the outstanding milestone approval fee and accumulated interest associated with the letter agreement. On July 21, 2025, Citius Oncology made a payment to Eisai of $1,616,521.96 for other certain invoices and accumulated interest associated with the letter agreement.

Previous wording

For the three months ended March 31, 2025, research and development expenses were $3,766,525 as compared to $3,605,898 during the three months ended March 31, 2024, an increase of $160,627.

Current wording

For the three months ended June 30, 2025, research and development expenses were $1,621,325 as compared to $2,763,865 during the three months ended June 30, 2024, a decrease of $1,142,540.

Previous wording

Research and development costs for Mino-Lok decreased by $1,515,717 to $122,570 for the three months ended March 31, 2025 as compared to $1,638,287 for the three months ended March 31, 2024, due primarily to decreased costs since the completion of the Phase 3 trial. 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. The FDA provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future New Drug Application (NDA) submission for Mino-Lok.

Current wording

Research and development costs for Mino-Lok decreased by $982,327 to $161,731 for the three months ended June 30, 2025 as compared to $1,144,058 for the three months ended June 30, 2024, due primarily to decreased costs since the completion of the Phase 3 trial and subsequent shut down cost. 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. The FDA provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future New Drug Application (NDA) submission for Mino-Lok.

Previous wording

Research and development costs for Halo-Lido decreased by $201,970 to $0 for the three months ended March 31, 2025, as compared to $201,970 for the three months ended March 31, 2024 due to lower costs since the completion of the Phase 2 study in April 2023. Citius subsequently met with the FDA for an end of Phase 2 meeting to discuss next steps in the clinical development program.

Current wording

Research and development costs for Halo-Lido decreased by $25,602 to $3,994 for the three months ended June 30, 2025, as compared to $29,596 for the three months ended June 30, 2024 due to lower costs since the completion of the Phase 2 study in April 2023. Citius subsequently met with the FDA for an end of Phase 2 meeting to discuss next steps in the clinical development program.

Previous wording

For the six months ended March 31, 2025, general and administrative expenses were $10,179,874 as compared to $7,946,639 during the six months ended March 31, 2024. General and administrative expenses increased by $2,233,235 in comparison with the prior period. The primary reason for the increase were higher costs for pre-launch commercial activities associated with LYMPHIR. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.

Current wording

For the three months ended June 30, 2025, general and administrative expenses were $4,447,008 as compared to $4,808,551 during the three months ended June 30, 2024. General and administrative expenses decreased by $361,543 in comparison with the prior period. Overall general and administrative expenses were consistent with the prior period. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.

Previous wording

For the three months ended March 31, 2025 stock-based compensation expense was $2,702,031 as compared to $3,078,392 for the three months ended March 31, 2024. Stock-based compensation expense includes $2,088,572 for the Citius Oncology plan for the three months ended March 31, 2025 and $1,957,000 for the Citius Oncology plan and $13,858 for the NoveCite Stock plan for the three months ended March 31, 2024. Stock-based compensation expense for the most recently completed quarter decreased by $376,361 in comparison to the prior period primarily due to lower costs for the Citius Pharma stock plans.

Current wording

For the three months ended June 30, 2025 stock-based compensation expense was $2,719,674 as compared to $3,061,763 for the three months ended June 30, 2024. Stock-based compensation expense includes $2,125,237 for the Citius Oncology plan for the three months ended June 30, 2025 and $1,957,000 for the Citius Oncology plan and $13,858 for the NoveCite Stock plan for the three months ended June 30, 2024. Stock-based compensation expense for the most recently completed quarter decreased by $342,089 in comparison to the prior period primarily due to lower costs for the Citius Pharma stock plans.

Previous wording

Interest income for the six months ended March 31, 2025 was $36,021 as compared to interest income of $435,843 for the prior period. The decrease is due to lower average investable balances of the remaining proceeds of our equity offerings in money market accounts. Other income for the six months ended March 31, 2024 included a gain of $2,387,842 recognized in connection with the sale of certain New Jersey income tax net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

Current wording

Interest income for the three months ended June 30, 2025 was $20,637 as compared to interest income of $204,843 for the prior period. The decrease is due to lower average investable balances of the remaining proceeds of our equity offerings in money market accounts.

Previous wording

For the three months ended March 31, 2025, we incurred a net loss of $11,511,505, compared to a net loss for the three months ended March 31, 2024 of $8,544,154. The $2,967,351 increase in the net loss was primarily due to the increases of $160,627 in research and development and $506,211 in general and administrative expenses and the decrease in other income of $2,556,634.

Current wording

For the three months ended June 30, 2025, we incurred a net loss of $9,203,872, compared to a net loss for the three months ended June 30, 2024 of $10,573,336. The $1,369,464 decrease in the net loss was primarily due to the decreases of $1,142,540 in research and development and $361,543 in general and administrative expenses offset by the decrease in other income (expense) of $356,468.

Previous wording

Six months ended March 31, 2025 compared with the six months ended March 31, 2024

Current wording

Nine months ended June 30, 2025 compared with the nine months ended June 30, 2024

Previous wording

We did not generate any revenues for the six months ended March 31, 2025 or 2024.

Current wording

We did not generate any revenues for the nine months ended June 30, 2025 or 2024.

Previous wording

For the six months ended March 31, 2025, research and development expenses were $5,893,563 as compared to $6,227,808 during the six months ended March 31, 2024, a decrease of $334,245.

Current wording

For the nine months ended June 30, 2025, research and development expenses were $7,514,888 as compared to $8,991,673 during the nine months ended June 30, 2024, a decrease of $1,476,785.

Previous wording

Research and development costs for Mino-Lok decreased by $2,022,325 to $507,586 for the six months ended March 31, 2025 as compared to $2,529,911 for the three months ended March 31, 2024, due primarily to decreased costs since the completion of the Phase 3 trial. 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. The FDA provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future an NDA submission for Mino-Lok.

Current wording

Research and development costs for Mino-Lok decreased by $3,044,652 to $669,317 for the nine months ended June 30, 2025 as compared to $3,673,969 for the nine months ended June 30, 2024, due primarily to decreased costs since the completion of the Phase 3 trial and subsequent shutdown costs. 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. The FDA provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future an NDA submission for Mino-Lok.

Previous wording

Research and development costs for Halo-Lido decreased by $437,846 to $10,696 for the six months ended March 31, 2025 as compared to $448,542 the six months ended March 31, 2024 due to lower costs since the completion of the Phase 2 study in April 2023. Citius subsequently met with the FDA for an end of Phase 2 meeting to discuss the next steps in the clinical development program.

Current wording

Research and development costs for Halo-Lido decreased by $463,448 to $14,690 for the nine months ended June 30, 2025 as compared to $478,138 the nine months ended June 30, 2024 due to lower costs since the completion of the Phase 2 study in April 2023. Citius subsequently met with the FDA for an end of Phase 2 meeting to discuss the next steps in the clinical development program.

Previous wording

Research and development costs for LYMPHIR were $3,641,479 during the three months ended March 31, 2025, as compared to $1,760,916 for the three months ended March 31, 2024. The $1,880,563 increase in expenses was primarily due to costs associated with the expense of a drug substance batch needed for the pre license inspection of the manufacturer.

Current wording

Research and development costs for LYMPHIR were $6,824,619 during the nine months ended June 30, 2025 as compared to $4,817,350 for the nine months ended June 30, 2024. The $2,007,269 increase in expenses was primarily due to costs associated with the expense of a drug substance batch needed for the pre-license inspection of the manufacturer.

Previous wording

For the three months ended March 31, 2025, general and administrative expenses were $4,792,122 as compared to $4,285,911 during the three months ended March 31, 2024. General and administrative expenses increased by $506,211 in comparison with the prior period. The primary reason for the increase were higher costs for pre-launch commercial activities associated with LYMPHIR. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.

Current wording

For the nine months ended June 30, 2025, general and administrative expenses were $14,626,882 as compared to $12,755,190 during the nine months ended June 30, 2024. General and administrative expenses increased by $1,871,692 in comparison with the prior period. The primary reason for the increase were higher costs for pre-launch commercial activities associated with LYMPHIR. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.

Previous wording

For the six months ended March 31, 2025 stock-based compensation expense was $5,226,855 as compared to $6,136,577 for the six months ended March 31, 2024. Stock-based compensation expense includes $3,897,050 for the Citius Oncology plan for the six months ended March 31, 2025 and $3,874,000 for the Citius Oncology plan and $33,716 for the NoveCite Stock plan for the six months ended March 31, 2024. Stock-based compensation expense for the six months ended March 31, 2025 decreased by $909,722 in comparison to the prior period primarily due to lower costs for the Citius Pharma stock plans.

Current wording

For the nine months ended June 30, 2025 stock-based compensation expense was $7,946,529 as compared to $9,198,340 for the nine months ended June 30, 2024. Stock-based compensation expense includes $6,022,287 for the Citius Oncology plan for the nine months ended June 30, 2025 and $5,831,000 for the Citius Oncology plan and $47,574 for the NoveCite Stock plan for the nine months ended June 30, 2024. Stock-based compensation expense for the nine months ended June 30, 2025 decreased by $1,251,811 in comparison to the prior period primarily due to lower costs for the Citius Pharma stock plans.

Previous wording

Interest income for the three months ended March 31, 2025 was $13,413 as compared to interest income of $182,205 for the prior period. The decrease is due to lower average investable balances of the remaining proceeds of our equity offerings in money market accounts. Other income for the three months ended March 31, 2024 included a gain of $2,387,842 recognized in connection with the sale of certain New Jersey income tax net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

Current wording

Interest income for the nine months ended June 30, 2025 was $56,658 as compared to interest income of $640,686 for the prior period. The decrease is due to lower average investable balances of the remaining proceeds of our equity offerings in money market accounts. Other income for the nine months ended June 30, 2024 included a gain of $2,387,842 recognized in connection with the sale of certain New Jersey income tax net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

Previous wording

The Company recorded deferred income tax expense of $528,480 and $288,000 for the six months ended March 31, 2025 and 2024, respectively. Deferred income tax expense is related to the amortization for taxable purposes of our in-process research and development asset.

Current wording

The Company recorded deferred income tax expense of $792,720 and $432,000 for the nine months ended June 30, 2025 and 2024, respectively. Deferred income tax expense is related to the amortization for taxable purposes of our in-process research and development asset.

Previous wording

For the six months ended March 31, 2025, we incurred a net loss of $21,792,751, compared to a net loss for the six months ended March 31, 2024 of $17,775,339. The $4,017,412 increase in the net loss was primarily due to the increase of $2,233,235 in general and administrative expenses, the decrease in other income of 2,787,664 partially offset by lower research and development expense of $334,245 and lower stock-based compensation expense of $909,722.

Current wording

For the nine months ended June 30, 2025, we incurred a net loss of $30,996,623, compared to a net loss for the nine months ended June 30, 2024 of $28,348,675. The $2,647,948 increase in the net loss was primarily due to the increase of $1,871,692 in general and administrative expenses, the decrease in other income (expense) of $3,144,132 partially offset by lower research and development expense of $1,476,785 and lower stock-based compensation expense of $1,251,811.

Previous wording

Citius Pharma has incurred operating losses since inception and incurred a net loss of $21,792,751 for the six months ended March 31, 2025. At March 31, 2025, Citius Pharma had an accumulated deficit of $222,054,969. Citius Pharma’s net cash used in operations during the six months ended March 31, 2025 was $9,265,328.

Current wording

Citius Pharma has incurred operating losses since inception and incurred a net loss of $30,996,623 for the nine months ended June 30, 2025. At June 30, 2025, Citius Pharma had an accumulated deficit of $230,844,841. Citius Pharma’s net cash used in operations during the nine months ended June 30, 2025 was $14,671,948.

Previous wording

The Company had a negative working capital of approximately $31.5 million at March 31, 2025. At March 31, 2025, Citius Pharma had cash and cash equivalents of $26,410 available to fund its operations. The Company’s only source of cash flow since inception has been from financing activities. During the six months ended March 31, 2025, the Company received net proceeds of $6,039,858 from the issuance of equity. Our primary uses of operating cash have been for in-licensing of intellectual property, product development and commercialization activities, employee compensation, consulting fees, legal and accounting fees, insurance, and investor relations expenses.

Current wording

The Company had a negative working capital of approximately $27.2 million at June 30, 2025. At June 30, 2025, Citius Pharma had cash and cash equivalents of $6,089,126 available to fund its operations. The Company’s only source of cash flow since inception has been from financing activities. During the nine months ended June 30, 2025, the Company received net proceeds of $16,509,194 from the issuance of equity and $1,000,000 from the issuance of a note payable. Our primary uses of operating cash have been for in-licensing of intellectual property, product development and commercialization activities, employee compensation, consulting fees, legal and accounting fees, insurance, and investor relations expenses.

Previous wording

Until Citius Oncology raises adequate capital through equity financings from outside investors and/or generates revenue from the future sales of LYMPHIR, Citius Pharma plans to continue to fund Citius Oncology. Citius Oncology has also retained Jefferies LLC as its exclusive financial advisor in evaluating strategic alternatives aimed at maximizing shareholder value. There is no assurance, however, that Citius Oncology will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to it or that it will find strategic partners or generate substantial revenue from the sale of LYMPHIR.

Current wording

Until Citius Oncology raises adequate capital through equity financings from outside investors and/or generates revenue from the future sales of LYMPHIR, Citius Pharma plans to continue to fund Citius Oncology. Citius Oncology has retained Jefferies LLC as its exclusive financial advisor in evaluating strategic alternatives aimed at maximizing shareholder value. There is no assurance, however, that Citius Oncology will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to it or that it will find strategic partners or generate substantial revenue from the sale of LYMPHIR.

Previous wording

After giving effect to the April 2, 2025 financing, we expect that we will have sufficient funds to continue our operations through May 2025. We will need to raise additional capital in the future to support our operations beyond May 2025. There is no assurance, however, that we will be successful in raising the needed capital or that the proceeds will be received in an amount or in a timely manner to support our operations.

Current wording

After giving effect to the July 17, 2025 financing by Citius Oncology, we expect that we will have sufficient funds to continue our operations through September 2025. We will need to raise additional capital in the future to support our operations beyond September 2025. There is no assurance, however, that we will be successful in raising the needed capital or that the proceeds will be received in an amount or in a timely manner to support our operations.