Citius Pharmaceuticals (CTXR) risk factors, FY2024 10-K

Risks Related to Our Business and our Industry

1. 01We require substantial additional funding in the near future to support our operations, complete the commercialization of LYMPHIR, and continue the development of our other product candidates, which capital may not be available on acceptable terms, or at all
2. 02We have a history of net losses and expect to incur losses for the foreseeable future. We may never generate revenues or, if we are able to generate revenues, achieve profitability
3. 03Our and Citius Oncology’s ongoing explorations of alternative strategic paths may not result in entering into or completing transactions, when necessary, and the process of reviewing alternative strategic paths or their conclusion could adversely affect our stock price
4. 04Our independent registered public accounting firm’s report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern
5. 05Citius Oncology could be delayed in the launch of LYMPHIR
6. 06We need to secure additional financing in the future to complete the development of our other current product candidates and support our operations
7. 07We are primarily a late-stage development company with an unproven business strategy and may never achieve commercialization of our therapeutic product candidates or profitability
8. 08We have a limited operating history upon which to evaluate our ability to successfully commercialize our product candidates
9. 09We may choose not to continue developing any of our product candidates at any time during development, which would reduce or eliminate our potential return on investment for those product candidates
10. 10We face significant risks in our product candidate development efforts
11. 11We, through Citius Oncology, may be required to make milestone payments to the licensor and former licensee of the LYMPHIR intellectual property in connection with its development and commercialization of LYMPHIR, which could adversely affect the profitability of LYMPHIR
12. 12A material breach or default under any of our license agreements, including failure to make timely payments when due, gives the licensor party to such agreement the right to terminate the license agreement, which termination would materially harm our business
13. 13We rely exclusively on third parties to formulate and manufacture our product candidates. Our failure to abide by our contractual obligations with these third parties, including timely payment, could result in a delay or the loss of necessary third-party support
14. 14While our business strategy generally is to focus on the development of late-stage product candidates to lessen the development risk, there is still significant risk to successfully developing a product candidate
15. 15The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable results in later studies or trials
16. 16We may be required to demonstrate through large, long-term outcome trials that our product candidates are safe and effective for use in a broad population prior to obtaining regulatory approval. This would increase the duration and cost of any such trial
17. 17We do not own Citius Oncology or NoveCite, Inc. outright and will share any benefits from the commercialization of LYMPHIR and the development of the NoveCite product candidate with the other stockholder
18. 18Any FDA programs related to the development and approval of treatments for COVID-19 and its symptoms may not be available to us or actually lead to a faster development or regulatory review or approval process for NoveCite, our proposed treatment for ARDS, nor will it assure FDA approval of such a treatment
19. 19NoveCite has assumed that the biological capabilities of iPSCs and adult-donor derived cells are likely to be comparable. If it is discovered that this assumption is incorrect, the NoveCite product candidate research and development activities could be harmed
20. 20Even if we receive regulatory approval to commercialize a product candidate, that product may not gain market acceptance among physicians, patients, healthcare payers or the medical community and may not generate significant revenue
21. 21Even if approved for marketing by applicable regulatory bodies, we will not be able to create a market for any of our product candidates if we fail to establish marketing, sales, and distribution capabilities, either on our own or through arrangements with third parties
22. 22The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses
23. 23The markets in which we operate are highly competitive and we might be unable to compete successfully against new entrants or established companies
24. 24Physicians and patients might not accept and use any of our product candidates for which regulatory approval is obtained
25. 25Our ability to generate product revenues will be diminished if any of our product candidates that may be approved sell for inadequate prices or patients are unable to obtain adequate levels of reimbursement
26. 26We are actively engaged with CMS in order to obtain the necessary coverage to facilitate reimbursement for LYMPHIR. However, we can offer no assurance as to any reimbursement coverage
27. 27Healthcare reform measures could hinder or prevent our product candidates’ commercial success
28. 28We are and will be dependent on third-party contract research organizations to conduct all of our clinical trials
29. 29Any termination, or breach by, or conflict with our strategic partners could harm our business
30. 30We rely on the significant experience and specialized expertise of our executive management and other key personnel and the loss of any of our executive management or key personnel or our inability to successfully hire their successors could harm our business
31. 31If we are unable to retain or hire additional qualified personnel, our ability to grow our business might be harmed
32. 32We expect to need to increase the size of our organization to further develop our product candidates, and we may experience difficulties in managing growth
33. 33improve our operational, financial and management controls, reporting systems and procedures
34. 34We are subject to information technology and cyber-security threats which could have an adverse effect on our business and results of operations
35. 35We plan to grow and develop our business through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us
36. 36Conflicts of interest may arise from our relationship with Citius Oncology and NoveCite

Risks Related to Our Regulatory and Legal Environment

1. 37We might not obtain the necessary U.S. or foreign regulatory approvals to commercialize any current product candidates
2. 38Following any regulatory approval of any product candidate, we will be subject to ongoing regulatory obligations and restrictions, which may result in significant expense and limit our ability to commercialize our other product candidates
3. 39We could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful

Risks Related to Our Intellectual Property

1. 40Our business depends on protecting our intellectual property
2. 41We rely on trade secret protections through confidentiality agreements with our employees and other parties, and the breach of these agreements could adversely affect our business and prospects
3. 42If we infringe the rights of third parties we might have to forego developing and/or selling any approved products, pay damages, or defend against litigation
4. 43The U.S. government could have “march-in rights” to certain of our intellectual property
5. 44If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition and our business, financial condition and results of operations may be adversely affected

Risks Related to the Recently Completed Merger of Citius Oncology

1. 45We may be unable to achieve some or all of the benefits that we expect to achieve from the Merger
2. 46A planned distribution by Citius Pharma to its stockholders of shares of Citius Oncology could result in significant tax liability to Citius Pharma and our stockholders

Risks Related to Our Securities

1. 47Citius Pharma common stock is currently listed on The Nasdaq Capital Market. In order to maintain this listing, we must satisfy minimum financial and other requirements
2. 48While Citius Pharma intends to engage in efforts to regain compliance, and thus maintain our listing, there can be no assurance that we will be successful or, if successful, continue to meet all applicable Nasdaq Capital Market requirements in the future
3. 49The market price of the Company’s common stock is highly volatile, and you may lose some or all of your investment
4. 50You may experience dilution of your ownership interests because of the future issuance of additional shares of our common stock or securities convertible into common stock
5. 51Our Certificate of Incorporation allows for our Board of Directors to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of the common stock
6. 52We have not paid cash dividends in the past and we do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the capital appreciation, if any, of our common stock
7. 53Provisions in our Amended and Restated Articles of Incorporation, as amended, and under Nevada law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management