CTXR US Equity☆

Item 1A. Risk Factors 27

Item 1B. Unresolved Staff Comments 55

Item 1C. Cybersecurity 55

Item 2. Properties 55

Item 3. Legal Proceedings 55

Item 4. Mine Safety Disclosures 55

Item 6. [Reserved] 56

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 64

Item 8. Financial Statements and Supplementary Data F-1 to F-20

Item 9A. Controls and Procedures 65

Item 9B. Other Information 65

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 65

PART III 66

Item 10. Directors, Executive Officers and Corporate Governance 66

Item 11. Executive Compensation 66

Item 14. Principal Accountant Fees and Services 66

Item 15. Exhibits and Financial Statement Schedules 67

Signatures 71

i

NOTES

In

this annual report on Form 10-K, and unless the context otherwise requires, the “Company,” “we,” “us”

and “our” refer to Citius Pharmaceuticals, Inc. and its wholly-owned subsidiaries Citius Pharmaceuticals, LLC, Leonard-Meron

Biosciences, Inc. and Citius Oncology, Inc. (formerly Citius Acquisition Corp.), and its majority-owned subsidiary, NoveCite, Inc.,

taken as a whole.

Mino-Lok®

and LYMPHIRTM (denileukin diftitox) are our registered trademarks. All other trade names, trademarks and service marks

appearing in this prospectus are the property of their respective owners. We have assumed that the reader understands that all such terms

are source-indicating. Accordingly, such terms, when first mentioned in this report, appear with the trade name, trademark or service

mark notice and then throughout the remainder of this report without trade name, trademark or service mark notices for convenience only

and should not be construed as being used in a descriptive or generic sense.

FORWARD-LOOKING

STATEMENTS

This

Annual Report on Form 10-K contains “forward-looking statements.” Forward-looking statements include, but are not limited

to, statements that express our intentions, beliefs, expectations, plans, strategies, predictions, or any other statements relating to

our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections

about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve

risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ

materially from what is expressed or forecasted in the forward-looking statements due to numerous factors discussed from time to time

in this report, including the risks described under Item 1A - “Risk Factors,” and Item 7 - “Management’s Discussion

and Analysis of Financial Condition and Results of Operations” in this report and in other documents which we file with the Securities

and Exchange Commission (“SEC”). In addition, such statements could be affected by risks and uncertainties related to:

● the cost, timing, and results of our pre-clinical and clinical trials;

Any

forward-looking statements speak only as of the date on which they are made, and, except as may be required under applicable securities

laws, we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the filing

date of this report.

ii

SUMMARY

OF RISK FACTORS

An

investment in our securities involves a high degree of risk. You should carefully consider the risks summarized in Item 1A, “Risk

Factors” included in this report. These risks include, but are not limited to, the following:

● We face significant risks in our product candidate development efforts.

iii

● Our business depends on protecting our intellectual property.

iv

PART

I

Item

1. Business

Overview

Citius

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.

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”).

On

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 LYMPHIRTM, 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.,

Ltd. (“Eisai”) and the related asset purchase agreement with Dr. Reddy’s Laboratories SA, a subsidiary of Dr. Reddy’s

Laboratories, Ltd. (collectively, “Dr. Reddy’s”). 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.

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 five proprietary products: LYMPHIR,

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.

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.

1

Recent

Developments

As

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”.

In

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

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

Company. 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.

The

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. There

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

LYMPHIRTM (denileukin

diftitox-cdxl)

Overview

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

Dr. 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. Reddy’s. Renamed

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.

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.

2

Phase

3 Trial (E7777-G000-302) Design

In

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

CTCL was initiated. 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.

The

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”). 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.

Based

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

the ORR.

Phase

3 Trial Efficacy & Safety Results

The

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

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 (12%).

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.

LYMPHIR

ORR (GRS)%a 36%

Complete Response 9%

Partial Response 27%

Duration of Response

Median (range), months 6.5 (3.0 +, 23.5 +)

Duration ≥ 6 months, n (%) 52%

Median Time to Response, months 1.4

b) CI = confidence interval

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%).

3

Adverse

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

LYMPHIR

in E7777-G000-302

LYMPHIR N = 69

Adverse Reaction All Grades (%) Grade 3 or 4 (%)

Gastrointestinal disorders

Constipation 12 0

General disorders and administration site conditions

Musculoskeletal and connective tissue disorders

Musculoskeletal paind 27 2.9

Arthralgiae 12 0

Nervous system disorders

Mental status changesg 13 0

Injury, poisoning and procedural complications

Infusion-related reaction 25 6

Skin and subcutaneous tissue disorders

Vascular disorders

Capillary leak syndrome 20 6

Metabolism and nutrition disorders

Decreased appetite 13 1.4

Eye disorders

Vision changesj 13 0

Investigations

Weight increased 13 0

Infections and infestations

Skin infection 13 1.4

Renal and urinary disorders

Renal insufficiencyl 12 2.9

Psychiatric disorders

(a) Includes fatigue, asthenia, and lethargy.

(c) Includes fever, pyrexia, tumor associated fever.

(f) Includes headache, migraine.

(i) Includes pruritis, itching.

(j) Includes vision blurred, photopsia, visual impairment.

4

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 for potential 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. 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.

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

(DLBCL). NCT04855253)

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. (Title:

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).

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.

Regulatory

Development

In

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

with Seragen, Inc.

In

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

Ligand Pharmaceuticals, Inc. (“Ligand”) 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 for CTCL.

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.

5

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.

In

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.

In

June 2016, the first patient was enrolled in the main phase of the Phase 3 U.S. CTCL clinical trial for E7777.

In

March 2020, Eisai filed an 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 E7777 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 requiring us to incorporate enhanced product testing and additional controls agreed

to with the FDA during the market application review. There were no concerns relating to the safety and efficacy clinical data package

submitted with the BLA, or the proposed prescribing information.

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.

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. 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.

6

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.

Proposed

Spinoff

In

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.

As

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.

Mino-Lok®

Overview

Mino-Lok

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

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

infections (“CRBSIs”). Mino-Lok breaks down biofilm barriers formed by bacterial colonies, eradicates the bacteria, and provides

anti-clotting properties to maintain patency in CVCs.

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

solution either simultaneously or sequentially. If patients are receiving continuous infusion therapy, the catheters alternate between

being locked with the Mino-Lok solution and delivering therapy. The Mino-Lok therapy is two hours per day for at least five days, usually

with two additional locks in the subsequent two weeks. After locking the catheter for two hours, the Mino-Lok solution is aspirated,

and the catheter is flushed with normal saline. At that time, either the infusion will be continued, or will be locked with the standard-of-care

lock solution until further use of the catheter is required. In a clinical study conducted by MD Anderson Cancer Center (“MDACC”),

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

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

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

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.

7

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. 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.

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 (8%). As footnoted, six patients had more than one complication in the control arm

group.

Mino-Lok® Arm Control Arm

Parameter N (%) N (%)%

Cancer type

ICU Admission 4 (13 ) 4 (7 )

Mech.Ventilator 3 (10 ) 0 (0 )

Bacteremia

- Relapse 0 (0 ) 3 (5 )

Complications 0 (0 ) 8 (13 )

SAEs related R&R 0 (0 ) 6 (10 )

Overall Complication Rate 0 (0 )% 11 ** (18 )%

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

** 6 Patients had > 1 complication

Source:

Dr. Issam Raad, Antimicrobial Agents and Chemotherapy, June 2016, Vol. 60 No. 6, Page 3429

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.

8

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 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.

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 criteria.

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 the U.S. market. 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 evaluated. 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 product.

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 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.

9

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. Topline results are anticipated in the first half

of 2024.

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

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. Patent No. 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.” 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. 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.

10

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 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.

The

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

different vascular access site. However, in cancer and hemodialysis patients with long-term surgically implantable silicone catheters,

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

of other accessible vascular sites and the need to maintain infusion therapy. Furthermore, critically ill patients with short-term catheters

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

of mechanical complications, such as pneumothorax, misplacement, or arterial puncture. Studies have also revealed that CRBSI patients

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

by Staphylococcus aureus or Candida species. Furthermore, catheter retention in patients with CRBSIs is associated with

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

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 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.

Short-Term CVC Long-Term CVC Total

No. of Catheters 3 million 4 million 7 million

Avg. Duration (Days) 12 100 N/A

Catheter Days 36 million 400 million 436 million

Flushes/Catheter 5 7 6.7

Sources:

Ann Intern Med 2000; 132:391-402, Clev Clin J Med 2011; 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.

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

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

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

line.

11

Halo-Lido

Overview

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

(“DESI”) program and are commonly referred to as DESI drugs. However, none of these single-agent or combination prescription

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

hemorrhoid patients use over the counter (“OTC”) products as their first line therapy. OTC products contain any one of several

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

relief.

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.

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

classification of internal hemorrhoids:

Grade I Hemorrhoids not prolapsed but bleeding.

Grade II Hemorrhoids prolapse and reduce spontaneously with or without bleeding.

Grade III Prolapsed hemorrhoids that require reduction manually.

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.

12

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