Citius Pharmaceuticals To Receive 65 Million Shares Of TenX Keane For Merger Of Citius Oncology

August 06, 2024 at 10:45 AM EDT

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By Meg Flippin, Benzinga

Citius Pharmaceuticals Inc. (NASDAQ: CTXR), a late-stage biopharmaceutical company, is progressing with its focus on unlocking value for investors by announcing that shareholders of TenX Keane Acquisition (NASDAQ: TENK), a publicly traded special purpose acquisition company, have voted to approve the previously announced business combination between TenX Keane and Citius Pharma’s oncology subsidiary. The newly combined public company will continue to trade on the Nasdaq stock exchange and is to be renamed Citius Oncology, Inc.

In October, Citius announced it was spinning out its wholly-owned oncology unit to form Citius Oncology, a standalone publicly traded entity. Under the terms of the deal, Citius Pharma is getting 65.6 million shares of common stock of Citius Oncology, which would represent approximately 90% of the newly public company.

As part of the transaction, Citius Pharma will contribute $10 million in cash to Citius Oncology. An additional 12.75 million existing options will be assumed by Citius Oncology. At closing, any cash remaining in TenX’s trust account along with the cash provided by Citius Pharma will be contributed to Citius Oncology for working capital and general corporate purposes of Citius Oncology following the transaction.

Unlocking Significant Value

Citius previously stated that the SPAC deal is expected to unlock significant value for Citius shareholders by separating the oncology business, potentially leading to increased access to capital markets and further development of new applications and additional intellectual property. It also underscores Citius’ strategy to purchase assets, develop them and bring them to market and then unlock shareholder value.

First Out Of The Gate: LYMPHIR

Citius Oncology will serve as a platform to develop and commercialize novel targeted oncology therapies. The first to go to market will be LYMPHIR, a recombinant fusion protein designed to treat T-cell lymphomas.

Citius said the deal is expected to provide Citius Oncology with improved access to the public equity markets and thereby facilitate the commercialization of LYMPHIR and position the company to explore additional value-creating opportunities more fully.

The drug agent LYMPHIR combines the interleukin-2 (IL-2) receptor binding domain with diphtheria toxin fragments. The agent specifically binds to IL-2 receptors on the cell surface, causing diphtheria toxin fragments that have entered cells to inhibit protein synthesis. In 2011 and 2013, the FDA granted orphan drug designation to LYMPHIR for the treatment of peripheral T-cell lymphoma (PTCL) and Cutaneous T-cell lymphoma (CTCL).

In 2021, Citius acquired an exclusive license with rights to develop and commercialize LYMPHIR in all markets except for Japan and certain other parts of Asia. In March this year, the FDA accepted Citius’s Biologics License Application (BLA) for LYMPHIR with a decision expected on August 13, 2024, the FDA's assigned Prescription Drug User Fee Act (PDUFA) action date. If approved, Citius is preparing for LYMPHIR commercialization later this year.

“The reason we are doing this is acquire a Nasdaq listing by having the SPAC acquire the assets and at the same time it enables us to do something to prevent dilution for shareholders,” said Leonard Mazur, CEO of Citius in a recent interview with Benzinga.

The CEO counts himself as one of the shareholders. He has invested $22.5 million of his own money in the business. “During the first year on the market we will be profitable. All that benefits Citius shareholders,” he said.

Featured photo by National Cancer Institute on Unsplash.

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