All right. Hello, everyone. Welcome back. I'm now joined by Leonard Mazur, the CEO of Citius Pharmaceuticals. It is a pivotal stage company that just recently completed a spin-out of an approved product in cutaneous T-cell lymphoma and oncology. They also recently reported a phase III from their asset in bloodstream infection that's been probably five or six years in the making. So it's a really interesting and exciting time for Citius. And with that, Leonard, why don't you give us a brief two to three-minute overview of what Citius Pharmaceuticals and Citius Oncology is all about?
Certainly. So, with both companies, actually, Citius Oncology, as the name reflects, the title is oncology. It's an oncology-focused company, and it's a company that will be marketing shortly. We anticipate launching Lymphir, the drug that was approved for cutaneous T-cell lymphoma. We anticipate launching that in January of 2025, so we're right around the corner from the launch. We're gearing up for it. So the company basically will go from, as we always like to cite, pre-revenue to being a revenue-producing company, which is a dramatic change for everybody, for all of us, for not only just within the company, but also for shareholders as well. We'll be able to judge the company based on its top-line and bottom-line performance. We're looking forward to that.
So we also have within Citius Pharmaceuticals, we have Mino-Lok, which you hinted at in terms of the amount of time it's taken to bring this- to get this to completion. We're close, we hope so. At this point, we had top-line data on a phase III trial that had extremely positive statistics, a p-value of 0.0006, which is virtually unheard of. We're going to the FDA with that data towards the end of November, and hopefully we'll... Hopefully, those discussions will take us to the next step here. So, that plus, we have Halo-Lido, which is, again, that's also now soon to be in discussions with FDA about a protocol for the trial.
If that gets accepted, we will have something that we can hopefully, once we get some additional data on that, we'll be able to out-license or sell that to big pharma or mid-size pharma, as we've always intended to do. So, the company is, right now, with the two companies that we have, it's actually a combination of a biotech company, which is what the Citius Oncology is, and a small molecule pharmaceutical company, which is where Citius Pharmaceuticals is these days.
All right. Now, to kick things off, just because, that approval is so recent in everyone's mind, could you talk a little bit about the relationship here with Citius Oncology, the rationale behind the spin-out, and how current holders of CTXR have the potential to share in that opportunity still?
Certainly. So, the Citius Pharmaceuticals is the 92% owner of Citius Oncology. All right? We set up Citius Oncology, the subsidiary, where we placed Lymphir, our cancer asset, into that sub, and that sub ultimately was acquired by a SPAC. That SPAC acquired it. We didn't- we knew that the SPAC would not have any cash in it, as a lot of these SPACs these days, when they get de-SPAC'd, there's very little cash in them. Usually, what it is, what we really wanted was the NASDAQ listing so that we could. Would enable us to raise the funding to be able to launch Lymphir into the market.
One of the reasons that we did the spin-out this way is because we wanted to minimize the dilution that would occur with the funding that's gonna be required for the launch of Lymphir. So we have to bring in a staff, we have to have a sales force. There's considerable expenses involved. Even though this is a, as far as the target audience is concerned, a number of oncologists out there that we're gonna market to, that you'll hear about later, is a small number. It's still not.
It's still an expensive proposition, and so we thought that the best way to handle that would be to put it into a sub, have that sub be free trading, and raise the funds for the launch of the drug within the sub and not dilute the parent company. So, that has been set up, established. We're now in the process of raising funds for Citius Oncology. And the way the shareholders, of course, are asking themselves, "How do we benefit from this?" Well, there's two ways that they're gonna benefit. One, ultimately, is that our plan is to distribute the shares in Citius Oncology to the Citius shareholders.
All right, so, that's one way, and the second way is because we are 92% owners of the business, the financial results of Citius Oncology will also be reflected. They'll be consolidated within Citius Pharmaceuticals, so 92% of the results will be consolidated in that fashion. So, we, our forecast, which we have not yet disclosed publicly, at this point for the drug, is... It's a good forecast. We anticipate that, which doesn't usually happen with pharmaceutical drugs, but we anticipate being profitable, by the end of the year, by the end of the year, by the end of 2025. So, with that, that should be reflected then, that'll be reflected in the financial results, reporting results of, of Citius Pharmaceuticals. So-
Can you talk about the market dynamics in CTCL, and, you know, how you guys compete there?
When you say market dynamics, you mean the drug itself? So basically, there are two other primary competitors. Pfizer, through its acquisition of Seagen, has one called Adcetris, and the other one is Kyowa Kirin, which is a Japanese pharma company, has another one called Poteligeo. Those. The market size right now is about somewhere between $300-$400 million. Those two drugs do well in this category. And what we like about it is that the pricing in this category now is about $300,000 for a course of therapy. And this is dramatically different from, as everybody knows, this drug was on the market originally. It was called Ontak at the time.
It was due to manufacturing formulation issues, nothing to do with safety. The drug basically was pulled in order to complete formulation work, and the FDA, when that occurred, said to the company at the time, "You have a new drug here, so now because of that reformulation work that you did, so you'll have to do a phase III trial and a lead-in trial." So with that, that's what occurred. At that time, that drug, Ontak, was in the market by itself, and it was doing $30-$40 million to maybe up to as high as $45 million in revenue, and that was it. There was nobody else in the market.
What we've noticed about what's happened in this market is that whenever a new entry comes in, it's additive to the market. It's unlike most of the markets that I'm very accustomed to, is you're fighting for market share, you're fighting to take market share away from from your competitor. In this case, what's happening is because none of the drugs are curative, first of all, so the objective of the treating oncologist is to keep that patient living longer and to make them as comfortable as possible. What they do is they go from one drug to another drug in that process. When they encounter side effects, when they basically start to see the drug's not working as well anymore, they'll switch and go to another drug. There's no one, two, three order to it.
So what we've noticed is, when these two other drugs came in, they actually added to the overall market size, and we anticipate the same thing here. We've been doing our research in this market for over a year now, and we've done a deep dive, and we have a thorough understanding about this market segment.
So it's not just pricing. The overall market has expanded to support now a much larger market opportunity than that $30 million - $45 million back when Ontak was approved.
In all likelihood, you're right. So, and so basically, that's what's occurred. We think that this market will continue to expand, and there are some good opportunities in here that we'll, you know, you'll hear about shortly with Lymphir.
Mm-hmm.
Lymphir, as you know, has a very unique mechanism of action. One of its MOAs is that it reduces something known as Tregs in the microenvironment of a cancer cell. And that's really critical when it comes to a drug known, a PD-1 inhibitor drug known as Keytruda, which is the number one cancer drug, in fact, the number one selling drug in the world. Its volume is estimated at $32 billion, and Merck is the marketer and owner of that drug. So there's a definite relationship there that is being studied, and if you want, I can go a little bit into that, if you'd like.
Yeah, absolutely. Because despite its-
It is.
... immense sales,
An investigator at the University of Pittsburgh initiated something known as an Investigator IND. And that's for those who in the audience that don't know what that means, what that means is that investigators at research institutions can study unapproved uses of a drug. And what they have to do is they have to submit an application to the FDA, submit a protocol, and the FDA will, after reviewing it, will grant that. And so this investigator, who happened to be a combination of an OBGYN and oncologist, decided that he wanted to look at the combination of our drug with Keytruda.
One of the reasons that he probably did that is because there was an animal trial that had been done in which that combination of Lymphir with a PD-1 inhibitor was studied, and the animal trial showed that the PD-1, the combination was superior to the monotherapy approach. So this physician, an investigator at University of Pittsburgh, decided to combine our drug with Keytruda. The reason being is because Keytruda has, as one of its MOAs, is that it increases Tregs... and if those Tregs get to a larger number, it has an impact on its overall efficacy. So what he's hoping to show is that the efficacy is improved for Keytruda by using this combination.
So the good news here is this, that, he's gonna report on his data very soon, actually, in the next several weeks at a conference on November the 9th. His data has been accepted for a poster, and he'll be presenting the data on a poster based on a number of patients that he's been able to evaluate up to this point in time. So, we're excited about it.
Mm-hmm.
We think that we're hoping that that data is gonna show something that is gonna be positive, and that we can move into a phase two trial with this after we see what the data looks like here. That's one of the Investigator IND trials that's underway. There's another one at the University of Minnesota, where Lymphir is being combined with a CAR T. And so that one's earlier on. I don't have much color on it at this moment, but what I like about both of these is that it puts our drug in the forefront of breakthrough treatments in cancer, and that it really does elevate the overall status of the drug and how people are gonna perceive the drug in the marketplace.
So but the fact that breakthrough researchers are willing to consider this and apply to the FDA for something like this, I think it's a big plus for the company overall in terms of our image out in the marketplace, especially with key oncologists, those that are really in the forefront of breakthroughs. Oncology especially lends itself for combos, as we all know. So there are many, many different combinations out there that are being used to advance treatments in a disease that's the scourge of all mankind.
Yeah. No, absolutely, and a tremendous opportunity if you're able to expand the effectiveness of Keytruda.
Yeah.
So we'll be definitely looking forward to that data up ahead. I think I saw Chad looking to jump in with something as we're shifting gears over here to talk about Mino-Lok.
Sure.
Yeah. I guess to start, if maybe you could just give us an idea of what the price of Mino-Lok could be, and then sort of, you know, in turn, the overall market opportunity potential.
So, our plan. We haven't finalized the pricing on this yet. We're still. Basically, it's something that's gonna be probably a decision made before we launch. But I can position it this way for you, and that is that the pricing comparison here is going to be in a hospital setting.
Mm.
It's going to be the cost of removing and replacing a catheter, two separate surgical procedures. So, based on what we know so far, the cost of that is somewhere around $10,000 plus, could be $12,000, but somewhere in there, and that's data that we'll update as we get closer to launch. So our plan right now is to be cost savings to the hospital system. So we're looking at prices that could be 50% of that, maybe even lower. It just depends on where we think. So, but we definitely wanna be able to make a key point to the hospitals that by using Mino-Lok, it will save- it'll be cost savings to the overall system.
So, you know, $5,000, possibly $4,000. We're still looking at and we're modeling different things here, but a lot of it will depend upon what the dynamics look like within a hospital setting.
Yeah. So how many patients experience a catheter-related bloodstream infection?
There are different market size numbers out there on this, ranging from probably 300,000 - 500,000 , depending here in the United States. The problem is much worse outside the U.S.
Mm-hmm.
Much, much worse. So our hospitals actually have done a pretty good job in terms of, holding down, as best as they can, hospital-acquired infections. So because if somebody comes down with the, t he infection here is, CLABSI or CRBSI, you know, central line-associated bloodstream infections or catheter-related bloodstream infections, they're known as. Okay, so those, infections, especially if they're hospital-acquired, the, and they report it that way, this tends to be underreported-
Mm.
... because the hospital does report it, they don't get reimbursement. So, it's kind of looked at in that fashion. So we think that once this that once we're approved and this gets written up in the the IDSA guidelines, the Infectious Diseases Society of America has written guidelines for the treatment of CLABSI, CRBSI in the hospital setting. So, with that, our understanding is once we're approved, that that this is something that would appear in those guidelines, and I think that would be a big step forward. And I think, you know, based on based on what I've heard direct- I've heard from, believe it or not, patients, direct patients on this, that that suffered through a remove-and-replace procedure. In fact, where, where I usually encounter these patients.
Sometimes I go out on what they, you know, is termed non-deal road shows. Those non-deal road shows, you'd be surprised at the participants in some of those. I've had them stand up after I've finished and go, "I want you to know, I went through this procedure, and it is one of the most awful procedures anybody could go through in terms of the pain and suffering that I went through." So that makes the medical community at large aware of this, and I think that people will do whatever they can to prevent that from occurring.
All right. Now, you did recently complete that phase III, so I'd like to see if you could just walk us through what are the key points and observations? You mentioned you had a tremendously significant p-value.
Right. So, so with that, we will basically, we'll take that. We're preparing to a whole package for the FDA to be able to review that and look at that, data, and we will engage them in discussions about the next steps here. Given the fact that this is overwhelmingly positive-
Mm-hmm.
I think we have a very strong rationale for basically moving to a conclusion with this. But, until I have that, or until we meet with the agency, I gave up predicting the agency now.
Yeah.
I've been, I've had my head handed to me, so in essence, I'm not predicting anything here about that outcome. But I know what we, what we would like, and I know what we're prepared with, which is, we've got... The one good thing about this is we've got extremely solid data behind us.
Yeah.
That's something that you can't take away from us. I think that's the biggest disappointment for us here: the fact that we didn't get a response in the marketplace when that data came out, when it should have. But you know, ultimately, the results will play out here, and you know, the valuations will fall in line.
Mm-hmm. So do you have an expectation on when you will be able to, you know, speak with FDA and get feedback on the precise path to market for Mino-Lok?
So, we're meeting with the FDA, as I indicated, very shortly, within the next coming weeks, towards the end of November. So, after that meeting, we should have a good idea in terms of what the path forward is, and we'll be able to then announce all that to the community, to the shareholders.
Mm-hmm.
Can you maybe talk about, you know, how this is potentially positioned relative to DefenCath? They're totally different target markets.
Yeah.
Could you maybe just clear that up for the audience? I think that would be, that would be helpful.
Okay, so DefenCath is actually a, it's actually indicated in dialysis patients, and...
Mm.
... Ours is a much broader market segment than dialysis. It would be CRBSI, CLABSI, which is a much bigger segment. And so, and it's for prevention. It's for prevention of infections in those, in those types of settings and those catheters. So, we're, we're not a prevention, company at all. We're a, we treat the infection, so our, our, ours is treatment, theirs is prevention. And, I think that, pre, prevention is, it's an interesting market segment. I've never been a fan of prevention, but, I think it's a hard segment to, to penetrate, but I, 'cause I like treatment. Treatment is much better. It's identified, you're there, you know you got it. You gotta, you gotta do something about it, all right? So that's the big difference. There's a huge difference here.
I don't think it'll have any impact whatsoever on our ability to penetrate the market or reduce market size or something like that. I don't anticipate that at all. I know that there's a halo effect so sometimes based off of what's happening with them on us somehow, and so I wish them nothing but the best, and I hope they do succeed.
Mm.
Because, we'll have a positive halo effect on us.
Now, moving on to your third program, Halo-Lido. This is in hemorrhoid. There are no prescription options available, but there are OTCs.
Right.
Can you talk about what the need for an Rx-
Right.
... looks like in this segment?
So basically, what it is is products like Preparation H and so forth, RectiCare, there's a number of them out there, but Prep H is probably the biggest one. They only treat stage one hemorrhoids. They're not effective in two, three, and four, the more severe ones, where there's a significant number of patient visits to physicians around the country. And so, with that, I think, given the fact that, we're going for two and three mostly, that, when something like this becomes available, it's gonna, it, I, I think this, I think Halo-Lido has the largest potential out of anything.
Mm.
Except maybe with Lymphir, once it gets, if it gets combined with Keytruda. That's a whole different ballgame also. So, those two could be neck and neck. We'll see. But nevertheless, I think that this is something that physicians, as you said, you rightly, rightfully identified, that there aren't any prescription drugs out there approved for the treatment of hemorrhoids, that this coming along is gonna be a extreme interest and will, I think, generate a lot of prescriptions, but I think it's one that requires, will require a large sales force. I think it'll be best promoted by direct-to-consumer advertising-
Mm-hmm.
... DTC advertising, and so forth. That's not, that's not our ballgame. No, we like the, we like these small, narrow, specialty markets where it doesn't take a giant sales force to penetrate the market. And, you know, and I'll talk a little bit more about the, about that with, with Lymphir, because Lymphir is, is one that is gonna have a, a very small sales force. We can identify that number for you right now, if you'd like. What... Any more questions on Halo-Lido, though?
I mean, if you have an expectation of how much you're going to need for Lymphir, that would be great information to have.
Certainly. So, you know, as I said, we've been working in this. We've been doing a deep dive into this market segment now for more than the better part of a year, if not almost now going on just about two years. And one of the very first steps that happened here for us, rather fortuitously, is that a year before we even acquired that license from Dr. Reddy's, we hired a chief medical officer. His name happens to be Dr. Myron Czuczman. So I always like to say-
Mm.
... we're the only pharmaceutical company in America that has two Myrons in their upper management team. But so Myron joined us after he had a great career in Buffalo. And basically there, he was the chief of lymphoma. He published 180 papers. All right? Strong rapport. So basically, his background was a fit, right, with what this drug is about. Not only that, but totally by coincidence, Ligand was the original developer of this drug. He was an advisor to Ligand, and when this drug was on the market, he had treated patients with it. So he knew this drug better than anybody did.
Perfect.
At any rate, he spent five years at Celgene. And then when they merged in with Bristol Myers, he wanted to be part of a smaller company. Our very first inroad into this market and our knowledge base all came as a result of bringing Dr. Czuczman on board with us. Then after that, we brought on board the head, a marketing person who spent 25 years at Hoffmann-La Roche, and was the VP Marketing there, and launched all their major antibiotics. And his name is Mike McGuire. He's a great, great spine for us. Knows his category really, really well. Cold. Knows how to launch. He's a real pro. All of us, by the way, in the company, have great experiences in terms of launching drugs, and that's important.
So we decided to hook up with Eversana. Eversana, for those people that don't know, is a major contract provider to the pharmaceutical and biotech industry of different types. Either marketing services, sales reps, warehousing functions, shipping, billing, invoicing. They will perform all those duties for pharma companies, especially companies that are starting out and coming out of the blocks like we are. We spent the better part of a year with them in really examining this market and looking at it very carefully. We identified where every single major treater is of this disease, and also the number of patients that they have. We have all that data. We were able to get all that data through analyzing claims data and other pieces of information. So with that, we've...
At this point, we think that we've already laid out all the sales territories. We've got them all identified. We have all our drug licenses-
Mm-hmm.
... in place for all the states, 'cause you have to get a state-by-state license before you can start shipping drugs into those states. So we have all that in place, and so right now, at this point, it looks like almost around 25 people, part of it will be regular sales reps, then we'll have medical liaison reps, and then we're gonna have two specialty KOL reps that work nothing but KOLs, and as I said, all... We've already brought on board a national sales manager, and I'd like to highlight the fact that the national sales manager that we hired came from Kyowa Kirin, a Japanese company that has Poteligeo, and he launched that drug for them-
Mm.
... back in 2018. So, but again, another level, knowledge level for us now is that market segment from the sales side, sales coverage side, how things are distributed, all of that, that knowledge base we have. We don't- we're not gonna be learning it as we go along. We'll have it in place. And, with Eversana, we'll hire, they're out there now recruiting for the sales people. Those people will be, are, exclusively, Citius Oncology reps. They'll be paid by Eversana, and they'll have a Citius Oncology business card going in. As far as the doctors are concerned, they're Citius people. So, that, that part of it... By the way, a productive doctor here is somebody that sees three patients a year or more, okay?
Just to give you an idea of the levels of productivity here. So, and that, you know, that's probably no more than 800 of those out there at the moment. So we have, it's an attractive market. The pricing on it is correct, so, we'll be pricing it right within the market itself. One of the charges to the marketing and sales group that we had was that we had to be able, with our program, everything that we had going on out there, because there is a lot of patient interaction between the company and the patients.
Mm.
We want to be able to meet or beat the competition in every regard. We do not want to have patients going in, saying to the doctor, "Oh, by the way, Doc, you know, that other company, the previous drug that I was on, they were better than this company was in terms of how they handled my reimbursements," or something like that. We'll have all that in place. All that is being put in place, which I think is very, very critical, that you have to be able to satisfy the demands in the marketplace and meet all the demands of the patient.
Perfect.
That's number one for us, is the patient.
All right. Thank you, Leonard. We're unfortunately a bit over time, but lots of exciting events to come.
Okay.
Look forward to that data, the upcoming launch, and hopefully with the results of the FDA meeting.
Okay. Thank you, thank you. All right, and thank you for giving us the time. I really appreciate you and Michael, you and the entire team. We're honored the fact that that you had this number of analysts on with us. Thank you again.