Citius Pharmaceuticals Inc. (NASDAQ: CTXR), a late-stage biopharmaceutical company, has announced that the shareholders of TenX Keane Acquisition (NASDAQ: TENK) have approved the merger between TenX Keane and Citius Pharma’s oncology subsidiary. The newly combined entity will be named Citius Oncology, Inc. and will continue to trade on the Nasdaq stock exchange.
In October, Citius announced its plan to spin out its wholly-owned oncology unit to form Citius Oncology, a standalone publicly traded entity. Under the terms of the deal, Citius Pharma will receive 65.6 million shares of common stock of Citius Oncology, representing approximately 90% of the newly public company.
Citius Pharma will contribute $10 million in cash to Citius Oncology as part of the transaction. Additionally, 12.75 million existing options will be assumed by Citius Oncology. The remaining cash in TenX’s trust account, along with the cash provided by Citius Pharma, will be used as working capital and for general corporate purposes following the transaction.
This strategic move is aimed at unlocking significant value for Citius shareholders by separating the oncology business. This separation is expected to increase access to capital markets and facilitate the further development of new applications and intellectual property. The merger underscores Citius’ strategy of acquiring, developing, and bringing assets to market to unlock shareholder value.
Citius Oncology will focus on developing and commercializing novel targeted oncology therapies, with its first product, LYMPHIR, set to go to market. LYMPHIR is a recombinant fusion protein designed to treat T-cell lymphomas. The drug combines the interleukin-2 (IL-2) receptor binding domain with diphtheria toxin fragments to inhibit protein synthesis in cancer cells.
LYMPHIR has received orphan drug designation from the FDA for the treatment of peripheral T-cell lymphoma (PTCL) and Cutaneous T-cell lymphoma (CTCL). In 2021, Citius acquired an exclusive license to develop and commercialize LYMPHIR in all markets except Japan and certain other parts of Asia. The FDA has accepted Citius’s Biologics License Application (BLA) for LYMPHIR, with a decision expected by August 13, 2024. If approved, Citius plans to commercialize LYMPHIR later this year.
According to Leonard Mazur, CEO of Citius, the merger allows the company to secure a Nasdaq listing while preventing dilution for shareholders. Mazur, who has invested $22.5 million of his own money in the business, stated that the company is expected to be profitable within the first year, benefiting Citius shareholders.
The formation of Citius Oncology and the commercialization of LYMPHIR represent significant steps forward in the development of targeted cancer therapies. These advancements could potentially improve treatment options for patients with T-cell lymphomas and create substantial value for investors.
