Citius Pharma (CTXR)

FN Rating

10/10
10/10

FN Summary: Lead product (Mino-Lok) has QIDP, Fast Track & Priority Review designation with no competition and patent protection until 2036. Phase 2 results had a 100% response rate – Phase 3 now in progress. All-star management has 1) invested side-by-side with the investors, and 2) a long history of biotech product successes.

Table of Contents

This company hits all the right spots!

Experienced Management

Invested Management (significant!)

Good Phase 2 (very good in this case)

Pipeline has little, or no, competition

Plenty of Cash (as of May 2021)

Next Catalyst

65% Interim Meeting on Mino-Lok P3 Trial - June 29, 2021

The DMC meeting is on the 29th and they will (most likely) report the results in early July.

Countdown Timer 👇
days until June 29
P3 65% interim readout any day!

Interactive Chart

Cash on Hand

.

Est Monthly Cash Burn

$$$$

103.7M

3M

Notes

Excellent cushion!

just an estimate

Est Cash End of May 2021

97M

This is enough cash until 2023

Pipeline & Timeline

Products & Sales Potential

Indication

Salvage CVCs

Px Str Hemorrhoid Cream

Prevent Inf. w/ Brst Implants

Adv Resp. Distress Syndrome

US Market

.

$400M

.

ROW Market

$2B

.

Multi-Billion $

Citius Pharma Market Cap: ~ $296M as of April 30, 2021

Management

Yes, they really are this good.

Yes, we get it. (Yawn) This is the most boring part of the page. But, it is also the most important. Read this: Importance of Management

Leonard Mazur - Chairman of the Board

  • Leonard spent his first 10 years working for Cooper Laboratories, starting in sales and rising into positions of strategic planning, then acquisitions and eventually head of one of the Cooper divisions. Cooper built its brand as an expert in developing medical specialty silos – acquiring companies and building business units around their medical specialties.
  • He put together the first strategic plan and got the first unit operational, which was in the ophthalmology space. In a matter of roughly seven years, the unit went from acquiring a tiny prescription eye-drop company to about $800M in revenue as one of the largest eye care companies in the world, called Cooper Vision.
  • Mazur was involved in many of Cooper’s approximately 150 acquisitions and assisted in the creation of Cooper Dermatology, which had Aveeno as one of its flagship products.
  • During Mazur’s tenure, Cooper also launched Cooper Dental, which started by acquiring an upstart toothbrush company doing less than $1.0 million in annual sales that it grew into Oral-B, the best selling toothbrush in the world that was bought by Gillette in 1984 for $118.5M.
  • From Cooper, he took the job as Director of Marketing at the BASF company Knoll Pharmaceuticals where he launched the painkiller Vicodin, amongst other strong sellers. Following Knoll, Mazur moved on to ICN Pharmaceuticals, now called Valeant Pharmaceuticals. As VP of Sales and Marketing at ICN, Mazur launched Ribavirin, a staple in treating hepatitis C and other maladies.
  • He became EVP at the microcap startup Medicis Pharmaceutical, where he successfully created and launched Dynacin, a drug with minocycline in it that became one of the best-known branded generics of all time. In 2012, Valeant acquired Medicis for $2.6B.
  • He created dermatology company Genesis Pharmaceutical in 1995 and selling it to French specialty pharma Pierre Fabre in 2003 and then founding Triax Pharmaceuticals (sold to PreCision Dermatology in 2012, which was acquired by Valeant in 2014 for $475 million) and Akrimax Pharmaceuticals (~$100M in sales before pieces started being acquired).

The takeaway from this list is that Mr. Mazur has extensive experience in launching & creating strong brands and is familiar in the M&A space.

  • Co-founder, director and CEO of Leonard Meron Biosciences, Inc. prior to its merger with Citius in March 2016
  • President of Roche Laboratories, Inc. (“Roche”), a major research-based pharmaceutical company, from December 1998 to August 2001
  • President of Roche, Mr. Holubiak helped transform Roche Labs into a leading antibiotic and biotechnology company
  • Founder of Emron, Inc., a health economics and managed care consulting company, and helped to create the Academy of Managed Care Pharmacy (AMCP)
  • Director of Bioscrip, Inc., a national home infusion company, from 2002 through 2016, and served as its Chairman of the Board from 2012 through 2016
  • Since July 2010, Mr. Holubiak has served as a member of the Board of Directors of Assembly Biosciences, Inc. and its predecessor, Ventrus Biosciences, Inc.

• Recent Therapeutic Area Head and Vice President of the Clinical Research and Development Global Lymphoma/CLL Program at Celgene
• Former Chief, Lymphoma/Myeloma service at Roswell Park Comprehensive Cancer Center in Buffalo
• Published more than 180 peer-reviewed journal articles

Despite their impressive background, most notable is they have invested $26.5M of their own money into Citius. As of Sept 2019 Mazur & Holubiak held over 12.2M shares and have not sold any.

It is rare in clinical biotechs for management to have such a high percentage of ownership and it speaks to their confidence in eventual drug approval.

Clinical Trials

Understanding the Phase 2 trial is crucial to anticipate the success of the current Phase 3 trial. In summary, the Phase 2 trial was a huge success.

Phase 2

In Phase 2 Mino-Lok had a 100% response rate with no SAEs! This means that all the infected CVCs treated with Mino-Lok were salvaged. See data below.

Phase 3

With these impressive results, the company worked with the FDA to design the Phase 3 trial. Below is a link to the Phase 3 Trial, which is currently in progress.

The P3 trial is a superiority trial. Superiority for this trial is defined as the time to catheter failure be at least 38 days for Mino-Lok versus 21 days for the standard of care antibiotic locks. 144 patients will be enrolled into the trial.

Company PDFs

(FN posts only the most recent documentation)

Sharholder Letter - Feb 2021

Read all of this 👇

Corp Presentation - Spr 2021

CTXR Fact Sheet - Summary

Analyst Price Targets

Dawson James Price Target $8 - May 21, 2021

Ownership

Insider Ownership (not precise)

Recent Insider Transactions

Leonard Mazur & Myron Holubiak invested almost $27M of their own money into the company. They, nor any other insiders, have sold any ownership.

Institutional Holdings

Notable Institutional & Insider Holdings

Short Interest

Daily Short Volume Chart

FAQ

Q. What will be the price of Mino-Lok?
A. The price given by the company will range b/w $200-400/day.  It is a 7-day treatment; therefore, the total cost will range b/w $1,400 – $2,800.  Video Source [Timestamp 13:24]

Q. When does the company plan on commercially launching Mino-Lok
A. Pending a successful P3, the company will do a rolling FDA application submission and plan on launching the drug in 2022.

FN Nuggets

Stretching your brain...

Watch this video to learn why the Russell Reconstitution can increase CTXR share price.

CTXR Videos

We don't include TA videos - sorry, not sorry

June 10, 2021

May 13, 2021 - Benzinga Global Small Cap Conference

Play Video

8:38 – draw your attention to the physical and psychological symptom burden presented by CLBSI. Well over 1/2-2/3rds of patients report they have significant physical & psychological symptoms associated with catheter removal and reinsertion. Study done with MD Anderson – new information people are not yet aware.

10:30 – Mino-Lok patients (in the P2 study) were actually sicker (more patients in ICU and on mechanical ventilators) than the control arm

12:02 – We are well over 80% of the patients right now. (in other words, at least 80% of the 144 patients have been enrolled)

April 22, 2021 - Benzinga Interview with Myron Holubiak

April 8, 2021 - Benzinga Power Hour

We are all-in entrepreneurs.

I have signed over my house…can’t tell you how many times I’ve done this in the past.

Hospitals hate the infection; they don’t get reimbursed if someone gets an infection in the hospital.

CVC infections are much worse outside the US.

In the last capital raise, we were oversubscribed 2:1.

FDA gave us fast-track status, so we will be submitting a rolling NDA.

Because we have QIDP, we have a 6 month review time vs. 1 year (for most other drugs).

We are not looking to raise money soon.

At one point, I mortgaged everything I owned at 25% interest for my ventures.

Insiders own about 14% at this point.

Our shareholders and management are joined at the hip.

March 25, 2021 - Benzinga Conference - Leonard Mazur

Play Video
Screen recorded from the Benzinga Conf so the resolution isn't great - sorry.

13:24: Price point to be b/w $200-$400/day

March 9, 2021 - HC Wainwright GLS Conference

At the 3:00 mark Myron states they hope to have an interim readout the beginning of May.

Feb 16, 2021

Feb 12, 2021

July 9, 2020

Nov 27, 2019

Nov 2, 2017

Sept 20, 2016

Bearish Video

We weren't kidding about including bearish information

7:20 – ‘One problem with the study is that one group was looked at retrospectively and one group was looked at prospectively.’

FN Reply – This is strange verbiage.  By prospectively, I think he means the patient group that received the Mino-Lok treatment.  By retrospectively, I think he means that for the ‘control’ Citius looked at published results with similar clinical characteristics as the Mino-Lok patient group.  While it wasn’t a side-by-side comparison, it provided enough data to proceed with the Phase 3 trial.  It is important to note that the Phase 2 group has 100% salvage of CVCs with no SAEs.  100% response rate is almost unheard of in clinical trials and should make investors take note.

8:35 – ‘We like to replace the catheter.’

FN Reply – Dr. Dean acts like its no big deal to replace catheters (and maybe this is the case at his location), but at $10K per patient, most hospitals would disagree. After all, isn’t it better to give a $1,800 catheter treatment (last price estimate provided) by a floor nurse, than to bring in a team to remove and replace an infected catheter?  Yes – It is.

11:00 – ‘number of Phase 3 patents is not that large.’

FN Reply – Phase 3 clinical trials are designed in cooperation with the FDA and the trial patient numbers are chosen to show statistically proven clinical benefit with a p-value less than 0.05.  In summary, the clinical trial population (72 in each arm) is just fine.

11:17 – ‘Here is an article that describes some of the guidelines for infection disease’.

FN Reply – The fact that he is referencing this document is bizarre.  This is not the Phase 2 published results study.  It is another study that talks about 21 other trials involving antibiotic lock therapy.  The antibiotic lock therapies referenced in the article are any home-brew concoction the hospital choses to use.  Since there is no FDA approved lock therapy, hospitals are allowed to do this.  To be clear, this referenced study (which he is negative on) is NOT the Mini-Lok therapy Phase 2 trial.  Dr. Dean goes on to say that antibiotic lock therapies really don’t work that well.  No kidding!  Maybe that’s why Citius is bringing Mino-Lok through clinical development.

Risks

Frankly, there aren't many. The biggest risk is that P3 uncovers variables that were not uncovered in P2, which gives confounding data resulting in a delayed readout.

While Mino-Lok does not have any direct competition, Defencath™ - by CorMedix, is designed to prevent catheter infections from occurring in the first place. Therefore, if Defencath™ is successful, it will reduce the overall need for treatments. But keep in mind that Defencath™ is only for hemodialysis patients at this time. The company does have plans to expand to the oncology market, but that will take several years.

Disclaimer: FrugalNorwegian owns this stock.

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