Citius Pharmaceuticals, a developer of drugs for bloodstream infections, lymphoma, and hemorrhoids, is one step closer to spinning off its oncology business as a separate Nasdaq-listed company. On Monday, August 5, shares of Citius Pharma rose nearly 3% on the news, despite a broader market selloff.
Details
Citius Pharma, with a market capitalization of approximately $168.5 million, is merging its oncology business with the SPAC TenX Keane Acquisition, a Nasdaq-registered shell created to take a company public without an IPO. The SPAC shareholders approved the deal on Friday, August 2, paving the way for the merger, Citius Pharma announced on Monday.
The combined entity will be renamed Citius Oncology and continue to trade on the Nasdaq. It will acquire Citius Pharma’s oncology assets, including its lymphoma drug LYMPHIR, currently under review by the FDA. If it is approved, sales could begin as early as this year, Citius Pharma previously reported.
Additionally, the transaction will allow Citius Oncology to “explore additional targeted oncology opportunities,” according to the press release. “We look forward to closing this transaction in the coming weeks and unlocking and growing the value of our oncology asset,” stated Citius Pharmaceuticals CEO Leonard Mazur. Citius Pharma will hold a stake of about 90% in the new company.
Market reaction
On Monday, Citius Pharma rose 2.86% on the Nasdaq to $0.90 per share. Since the beginning of the year, the stock has added 23%.
According to MarketWatch, two analysts cover the company, both recommending a buy. The average target price is $4.67 per share, indicating nearly 400% upside.
About Citius Pharmaceuticals
Citius Pharma develops critical care products. In addition to LYMPHIR for lymphoma, its portfolio includes Mino-Lok, an antibiotic to treat catheter-related bloodstream infections, which has completed phase III clinical trials. Mazur claims that there are currently no approved or investigational alternatives on the market. The next step is to prepare an application for approval by the FDA.
Citius Pharma told investors in July that it sees “strong momentum” with “multiple catalysts for potentially transformative assets in the second half of 2024.” The company’s third drug, aimed at alleviating hemorrhoid symptoms, is still in the earlier stages of development.
