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CITIUS ONCOLOGY, INC.

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Business Summary

Citius Oncology, Inc. is a biopharmaceutical company based in Cranford, New Jersey, focused on developing and commercializing innovative targeted oncology therapies . The company's strategy emphasizes advancing therapies with reduced development and clinical risks, leveraging new formulations of previously approved drugs or expanded indications for existing therapies, supported by intellectual property and regulatory exclusivity . Citius Oncology operates in the oncology industry, specifically targeting rare forms of non-Hodgkin lymphoma . The company estimates the addressable U.S. market for its lead product, LYMPHIR, to exceed $400 million .

The company's core business model revolves around the development and commercialization of its lead product, LYMPHIR, in the U.S. through an outsourced commercial infrastructure, while pursuing partnerships for international markets . Revenue generation is anticipated to come from direct sales and royalty income . Citius Oncology was formed in August 2021 by Citius Pharmaceuticals, Inc. ("Citius Pharma") and became a standalone publicly-traded company and majority-owned subsidiary of Citius Pharma in August 2024, following a merger . As of December 17, 2025, Citius Pharma owned approximately 77.9% of Citius Oncology .

Citius Oncology's primary product is LYMPHIR (denileukin diftitox), an engineered IL-2 diphtheria toxin fusion protein, approved by the U.S. Food and Drug Administration (FDA) in August 2024 for the treatment of patients with persistent or recurrent Cutaneous T-Cell Lymphoma (CTCL), a rare form of non-Hodgkin lymphoma . LYMPHIR was launched in December 2025 . The product's mechanism of action involves directing the cytocidal action of diphtheria toxin to cells expressing the IL-2 receptor, leading to tumor cell death and depletion of immunosuppressive regulatory T lymphocytes (Tregs) . The company also has two investigator-initiated trials evaluating LYMPHIR as an immuno-oncology combination therapy: a Phase 1 trial with CAR-T therapies for relapsed/refractory B-Cell Lymphoma (DLBCL) at the University of Minnesota, and a Phase 1/1b study with pembrolizumab for recurrent or metastatic solid tumors at the University of Pittsburg Medical Center . Preliminary results from the pembrolizumab combination trial, announced in November 2024, showed an overall response rate (ORR) of 27% (4/15) and a clinical benefit rate of 33% (5/15) among evaluable patients, with a median progression-free survival (PFS) of 57 weeks .

For the fiscal year ended September 30, 2025, Citius Oncology reported no revenues . The company incurred a net loss of $24,761,369 . Total operating expenses were $23,522,750 , comprising research and development expenses of $6,418,334 , general and administrative expenses of $8,783,997 , and stock-based compensation of $8,320,419 . The operating loss for the period was $23,522,750 . Interest income was $36,373 , and interest expense was $218,032 . Income tax expense was $1,056,960 . As of September 30, 2025, cash and cash equivalents stood at $3,924,908 , with an accumulated deficit of $64,039,956 . Total current assets were $27,542,881 , and total current liabilities were $49,491,579 , resulting in a negative working capital of approximately $21.9 million . The company had total stockholders' equity of $44,866,231 .

Comparing the fiscal year ended September 30, 2025, to the prior year, the net loss increased by $3,612,622 from $21,148,747 in 2024 to $24,761,369 in 2025 . This increase was primarily driven by a $1,493,333 rise in research and development expenses , a $635,068 increase in general and administrative expenses , and an $821,602 increase in stock-based compensation expense . Research and development expenses increased from $4,925,001 in 2024 to $6,418,334 in 2025 , mainly due to costs associated with a drug substance batch for pre-license inspection . General and administrative expenses rose from $8,148,929 in 2024 to $8,783,997 in 2025 , attributed to pre-commercial and commercial launch activities for LYMPHIR, including market research, marketing, distribution, and reimbursement efforts . Stock-based compensation expense increased from $7,498,817 in 2024 to $8,320,419 in 2025 , primarily due to new options granted in December 2024 and restricted stock awards granted in September 2025 .

Significant operational developments during the period include the FDA approval of LYMPHIR in August 2024 and its commercial launch in December 2025 . The company has established a small, targeted oncology sales force for LYMPHIR in the U.S. and entered into distribution agreements with Cardinal Health, Cencora, and McKesson Corporation . EVERSANA, an AI platform, has been contracted to support launch and commercialization services . Internationally, Citius Oncology is engaging with regional distribution partners for Named Patient Programs (NPPs) in Europe, South America, and the Middle East, having signed an exclusive distribution agreement with Integris Pharma S.A. covering Greece, Cyprus, Malta, Bulgaria, Romania, Croatia, Serbia, Albania, Bosnia Herzegovina, Kosovo, Montenegro, and North Macedonia . LYMPHIR was included in the National Comprehensive Cancer Network (NCCN) guidelines with a Category 2A recommendation in September 2024 . In February 2025, CMS assigned LYMPHIR a unique, permanent Healthcare Common Procedure Coding System (HCPCS) J-code (J9161) . The company also initiated two investigator-initiated immuno-oncology trials for LYMPHIR .

Business Outlook

Citius Oncology anticipates generating revenue from the future sales of LYMPHIR, which commenced commercial sales in December 2025 . The company expects to continue to incur losses for the foreseeable future as it focuses on the ongoing commercial launch of LYMPHIR and potential development of future product candidates . Management believes that, after giving effect to Citius Pharma's October equity offering and Citius Oncology's December 2025 equity offering, the company and Citius Pharma collectively will have sufficient funds to continue operations through March 2026 . However, additional capital will be required to support operations beyond March 2026, including the successful commercialization of LYMPHIR .

A key growth area for Citius Oncology is the successful commercialization of LYMPHIR for CTCL, with an estimated addressable U.S. market exceeding $400 million . The company intends to commercialize LYMPHIR independently in the U.S. with a targeted oncology sales force and through distribution agreements with Cardinal Health, Cencora, and McKesson Corporation . The inclusion of LYMPHIR in NCCN guidelines with a Category 2A recommendation and the assignment of a permanent HCPCS J-code (J9161) by CMS are expected to facilitate coverage and reimbursement, which are critical for market acceptance and revenue generation . Internationally, the company is pursuing Named Patient Programs (NPPs) in Europe, South America, and the Middle East, with an exclusive distribution agreement already in place with Integris Pharma S.A. for several countries .

Another significant growth vector involves the exploration of LYMPHIR in new indications, particularly in immuno-oncology combination therapies . The company has initiated two investigator-initiated Phase 1 trials: one combining denileukin diftitox with CAR-T therapies for relapsed/refractory B-Cell Lymphoma (DLBCL) at the University of Minnesota, with preliminary results anticipated in the first quarter of 2026 . The second Phase 1/1b study, conducted at the University of Pittsburg Medical Center, investigates LYMPHIR in combination with pembrolizumab for recurrent or metastatic solid tumors . Preliminary results from this trial, announced in November 2024, demonstrated an overall response rate of 27% (4/15) and a clinical benefit rate of 33% (5/15) among evaluable patients, with a median progression-free survival of 57 weeks (range: 30 to 96 weeks) . These results, particularly in patients who previously failed checkpoint inhibitors, highlight the potential for LYMPHIR to expand its therapeutic utility beyond CTCL .

Operationally, the company expects to incur substantial losses for the foreseeable future due to the ongoing commercial launch of LYMPHIR and increases in research and development costs for potential future product candidates and regulatory compliance activities . The company's manufacturing is entirely outsourced to third-party cGMP facilities, with secured supply agreements for LYMPHIR . Minimum purchase commitments under these agreements total approximately $16.2 million for drug substance, consisting of $8.5 million for calendar year 2025 and $5.3 million for 2026, plus $2.4 million for 2026 pass-throughs and consumable manufacturing components . Additionally, commercial supply agreements with two other vendors for finished drug products have minimum purchase commitments of approximately $4.9 million, with $1.2 million in 2025, $1.9 million in 2026, and $1.8 million in 2027 . The company believes its contract manufacturers have sufficient capacity to support demand . Citius Oncology has no employees and relies on Citius Pharma for management and scientific services through an A&R Shared Services Agreement, with an aggregate quarterly fee of approximately $940,000 .

Regarding capital allocation, Citius Oncology will need to raise additional capital beyond March 2026 to support its operations and commercialization efforts . The company has outstanding commitments totaling $38.4 million due to third-party suppliers and manufacturers, and an aggregate of $22.7 million due under its license agreements as of September 30, 2025 . This includes a balance of $19.75 million due to Dr. Reddy's for a milestone payment triggered by FDA approval of LYMPHIR , and a balance of $2.9 million for a milestone approval fee to Eisai, plus $6,697,892 for other invoices . The company has a non-interest bearing promissory note of $3,800,111 due to Citius Pharma, repayable upon closing capital raises aggregating at least $50 million . To date, $36 million has been raised, leaving an additional $14 million needed to trigger repayment . The company has reserved 43,276,754 shares of common stock for future issuances related to stock plan options, restricted stock awards, and warrants .

The company explicitly flags several structural headwinds and execution risks. A substantial doubt about its ability to continue as a going concern exists, as indicated by its independent registered public accounting firm . Citius Oncology requires substantial additional funding beyond March 2026, and there is no assurance that financing or strategic relationships will be available on acceptable terms or at all . Failure to secure this capital could force delays, limits, reductions, or termination of commercialization efforts and business operations . The company has a history of net losses and expects to incur losses for the foreseeable future, with no guarantee of achieving profitability . The unproven business strategy for LYMPHIR and limited operating history present risks to successful commercialization . The company's projections regarding the market opportunity for LYMPHIR may not be accurate, and the actual market may be smaller than estimated . Furthermore, the ability to generate product revenues will be diminished if LYMPHIR sells for inadequate prices or if patients cannot obtain adequate reimbursement levels .

Risk Factors

Citius Oncology faces material risks including substantial doubt about its ability to continue as a going concern, as noted by its independent registered public accounting firm, stemming from recurring losses and a working capital deficit of approximately $21.9 million as of September 30, 2025 [19, 39]. The company requires substantial additional funding beyond March 2026 to support operations and commercialization of LYMPHIR, with no assurance of availability on acceptable terms . Failure to obtain this capital could lead to delays or termination of commercialization efforts . There is a risk that LYMPHIR may not gain market acceptance among physicians, patients, or payers, and may not generate significant revenue, especially if reimbursement levels are inadequate . The company is highly dependent on third-party manufacturers and suppliers, and failure to meet contractual obligations, including timely payments, could result in delays or loss of support . Material breaches of license agreements, such as failure to make timely payments, could lead to termination of licensing rights, which would materially harm the business . The company has outstanding commitments of $38.4 million to third-party suppliers and manufacturers and $22.7 million under license agreements as of September 30, 2025 . Competition in the pharmaceutical industry is intense, with many competitors possessing greater resources and experience, potentially rendering LYMPHIR or future product candidates less competitive or obsolete . Regulatory risks include ongoing compliance obligations, potential for product liability claims, and the uncertainty of obtaining future regulatory approvals for additional indications . The company's intellectual property protection for LYMPHIR, including patents expiring in August 2041 , may be challenged or circumvented, and trade secrets could be compromised . As a controlled company by Citius Pharma (77.9% ownership as of December 10, 2025 ), conflicts of interest may arise, and Citius Pharma's interests may not align with those of public stockholders . The company also relies on Citius Pharma for many corporate functions under an A&R Shared Services Agreement, and replacing these services would be difficult and costly .

Management Priorities

Management's message to shareholders conveys a focus on the commercialization of LYMPHIR and the exploration of its potential in new immuno-oncology indications, while acknowledging the significant financial challenges and the need for additional capital. The company explicitly states that it expects to incur losses for the foreseeable future and that its continued operations beyond March 2026 depend on its ability to successfully launch LYMPHIR and generate substantial revenue, as well as its ability to raise additional capital through equity/debt financings or strategic relationships . Management emphasizes the importance of the FDA approval of LYMPHIR in August 2024 and its commercial launch in December 2025 as a key milestone . Strategic priorities include successful commercialization of LYMPHIR in the U.S. by leveraging outsourced sales and marketing infrastructure and distribution agreements, and securing favorable pricing and reimbursement . A second strategic priority is to expand LYMPHIR's potential through investigator-initiated trials in immuno-oncology, such as the Phase 1 trial with CAR-T therapies and the Phase 1/1b study with pembrolizumab, with preliminary results from the latter showing promising efficacy . Finally, management is actively evaluating strategic alternatives, including partnerships, joint ventures, mergers, acquisitions, or licensing transactions, to provide the necessary resources for LYMPHIR's commercialization and to maximize shareholder value .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Business Overview
  2. [2] Item 1, Business — Market Opportunity
  3. [3] Item 1, Business — Citius Oncology and the Merger
  4. [4] Item 1, Business — Preliminary Results
  5. [5] Item 7, MD&A — Revenues
  6. [6] Item 7, MD&A — Net Loss
  7. [7] Item 7, MD&A — Total Operating Expenses
  8. [8] Item 7, MD&A — Research and Development Expenses
  9. [9] Item 7, MD&A — General and Administrative Expenses
  10. [10] Item 7, MD&A — Stock-based Compensation Expense
  11. [11] Item 7, MD&A — Operating loss
  12. [12] Item 7, MD&A — Interest income
  13. [13] Item 7, MD&A — Interest expense
  14. [14] Item 7, MD&A — Income tax expense
  15. [15] Item 7, MD&A — Liquidity and Working Capital
  16. [16] Item 7, MD&A — Accumulated deficit
  17. [17] Item 8, Consolidated Balance Sheets — Total Current Assets
  18. [18] Item 8, Consolidated Balance Sheets — Total Current Liabilities
  19. [19] Item 7, MD&A — negative working capital of approximately $21.9 million
  20. [20] Item 8, Consolidated Balance Sheets — Total Stockholders' Equity
  21. [21] Item 7, MD&A — The $3,612,622 increase in the net loss
  22. [22] Item 7, MD&A — net loss of $21,148,747 for the year ended September 30, 2024
  23. [23] Item 7, MD&A — increase of $1,493,333 primarily related to costs associated with the expense of a drug substance batch needed for the pre-license inspection of the manufacturer
  24. [24] Item 7, MD&A — increase of $635,068. The primary reason for the increase was the efforts associated with the pre-commercial and commercial launch activities of LYMPHIR associated with market research, marketing, distribution and drug product reimbursement from health plans and payers.
  25. [25] Item 7, MD&A — The primary reasons for the $821,602 increase in stock-based compensation expense were the new options granted in December 2024 and the restricted stock awards granted in September 2025.
  26. [26] Item 7, MD&A — research and development expenses were $4,925,001 for the year ended September 30, 2024
  27. [27] Item 7, MD&A — general and administrative expenses were $8,148,929 for the year ended September 30, 2024
  28. [28] Item 7, MD&A — stock-based compensation expense was $7,498,817 for the year ended September 30, 2024
  29. [29] Item 1A, Risk Factors — We 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.
  30. [30] Item 7, MD&A — After giving effect to the Citius Pharma equity offerings during the year ended September 30, 2025, our equity offerings during the year ended September 30, 2025, Citius Pharma’s October equity offering, and our December 2025 equity offering, we expect that we and Citius Pharma collectively will have sufficient funds to continue our operations through March 2026. We will need to raise additional capital in the future to support our operations beyond March 2026, including to successfully commercialize of LYMPHIR.
  31. [31] Item 8, Note 8 — Commercial Manufacturing Contracts
  32. [32] Item 8, Note 8 — Minimum purchase commitments under these two agreements amount to approximately $4.9 million consisting of purchase commitment obligations of approximately $1.2 million in 2025, $1.9 million in 2026 and $1.8 million in 2027.
  33. [33] Item 13, Certain Relationships and Related Transactions, and Director Independence — A&R Shared Services Agreement
  34. [34] Item 1A, Risk Factors — As of September 30, 2025, we have outstanding commitments totaling $38.4 million due to third-party suppliers and manufacturers, primarily related to the development and commercialization of LYMPHIR, and an aggregate of $22.7 million due under our license agreements, that, if left unpaid, could result in an interruption in the commercialization of LYMPHIR, breach of contract, loss of licensing rights or other events that would have a material adverse effect on our business and operations.
  35. [35] Item 1, Business — Obligations to Dr. Reddy's under the Asset Purchase Agreement
  36. [36] Item 7, MD&A — As of September 30, 2025, we owe a balance of $2.9 million for the milestone approval fee and $6,697,892 for certain other invoices.
  37. [37] Item 13, Certain Relationships and Related Transactions, and Director Independence — Promissory Note between the Company and Citius Pharma
  38. [38] Item 8, Note 5 — Common Stock Reserved
  39. [39] Item 1A, Risk Factors — Our 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.
  40. [40] Item 1A, Risk Factors — We require substantial additional funding in the near future to support our operations, complete the commercialization of LYMPHIR, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed on acceptable terms, or at all, or execute on alternative strategic paths, could force us to delay, limit, reduce or terminate our commercialization efforts and business operations.
  41. [41] Item 1A, Risk Factors — We have one approved product, LYMPHIR, that we launched in December 2025, and have an unproven business strategy, and a limited operating history upon which to evaluate it, and may never achieve successful commercialization of LYMPHIR or any future product candidates or achieve or maintain profitability.
  42. [42] Item 1A, Risk Factors — Our projections regarding the market opportunity for our LYMPHIR may not be accurate, and the actual market for LYMPHIR may be smaller than we estimate.
  43. [43] Item 1A, Risk Factors — Our ability to generate product revenues will be diminished if LYMPHIR, or any of our future product candidates that may be approved, sells for inadequate prices or patients are unable to obtain adequate levels of reimbursement.
  44. [44] Item 1A, Risk Factors — 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.
  45. [45] Item 1A, Risk Factors — A 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.
  46. [46] Item 1A, Risk Factors — The markets in which we operate are highly competitive and we might be unable to compete successfully against new entrants or established companies.
  47. [47] Item 1A, Risk Factors — Risks Related to Our Regulatory and Legal Environment
  48. [48] Item 1, Business — LYMPHIR Patents
  49. [49] Item 1A, Risk Factors — Our business depends on protecting our intellectual property.
  50. [50] Item 1A, Risk Factors — We are controlled by Citius Pharma, whose interests may differ from those of public stockholders.
  51. [51] Item 1A, Risk Factors — Our ongoing exploration 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.

Analysis on 5/22/2026