Citius Oncology Announces Pricing of $9.0 Million Registered Direct Offering and Concurrent Private Placement

Rhea-AI Summary

Citius Oncology (NASDAQ:CTOR) has announced a $9.0 million registered direct offering and concurrent private placement. The company will issue 5,142,858 shares of common stock at a combined effective price of $1.75 per share to a single institutional investor.

The deal includes unregistered warrants to purchase an additional 5,142,858 shares at an exercise price of $1.84 per share. These warrants will be exercisable after six months and expire 5.5 years from issuance. The offering is expected to close around September 10, 2025, with Maxim Group LLC serving as the sole placement agent.

Positive

• Secured $9.0 million in gross proceeds to strengthen balance sheet
• Single institutional investor participation indicates confidence in the company

Negative

• Potential dilution for existing shareholders
• Offering price of $1.75 represents a discount to market price
• Additional future dilution possible from warrant exercises

Insights

Financial Analyst

Citius Oncology raises $9M through share offering at $1.75 per share with warrants, significantly diluting existing shareholders.

Citius Oncology's $9 million capital raise through a registered direct offering reveals important financial dynamics investors should understand. The company is selling 5,142,858 shares at $1.75 per share to a single institutional investor, along with an equal number of warrants exercisable at $1.84 after six months.

This financing structure has several implications. First, the 5% premium on the warrant exercise price ($1.84 vs $1.75) suggests minimal expected near-term appreciation. More concerning is the potential significant dilution for existing shareholders, as these new shares plus potential warrant exercises could substantially increase the outstanding share count.

The deal's structure - using a direct offering to a single institutional investor rather than a broader public offering - typically indicates difficulty attracting diverse investor interest. This, combined with the modest $9 million raise and the inclusion of warrants (which are often used as additional incentive when straight equity is insufficient), suggests potential fundraising challenges.

The timing is also notable - coming just days after the S-3 registration became effective on September 4, 2025, indicating urgency to secure funding. For a biopharmaceutical company in late-stage development, this relatively small capital infusion may only provide limited runway, potentially necessitating additional dilutive financings in the future if significant revenue doesn't materialize soon.

CRANFORD, N.J., Sept. 9, 2025 /PRNewswire/ -- Citius Oncology, Inc. ("Citius Oncology") (Nasdaq: CTOR), the oncology-focused subsidiary of Citius Pharmaceuticals, Inc. ("Citius Pharma") (Nasdaq: CTXR), a late-stage biopharmaceutical company developing and commercializing first-in-class critical care products, today announced that it has entered into a securities purchase agreement with a single institutional investor to purchase 5,142,858 shares of common stock in a registered direct offering. In a concurrent private placement, the Company also agreed to issue unregistered warrants to purchase up to an aggregate of 5,142,858 shares of common stock. The combined effective offering price for each share of common stock and accompanying warrant is $1.75. The warrants will have an exercise price of $1.84 per share, will be exercisable six months from the date of issuance, and will expire on the five and one-half year anniversary from the date of issuance.

The gross proceeds to the Company from the registered direct offering and concurrent private placement are estimated to be approximately $9.0 million before deducting placement agent fees and other estimated offering expenses payable by the Company. The offering is expected to close on or about September 10, 2025, subject to the satisfaction of customary closing conditions.

Maxim Group LLC is acting as sole placement agent in connection with the offering.

The shares of common stock described above are being offered pursuant to a registration statement on Form S-3 (File No. 333-289979), which was filed with the U.S. Securities and Exchange Commission ("SEC") on September 2, 2025, and was declared effective by the SEC on September 4, 2025. The offering of shares of common stock will be made only by means of a prospectus supplement, forming a part of the effective registration statement. A prospectus supplement relating to the shares of common stock will be filed with the SEC. Electronic copies of the prospectus relating to this offering, when available, may also be obtained from Maxim Group LLC, 300 Park Avenue, 16th Floor, New York, New York 10022, Attention: Syndicate Department, by telephone at (212) 895-3745 or by email at syndicate@maximgrp.com. The warrants to be issued in the concurrent private placement and the shares issuable upon exercise of such warrants were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated thereunder and have not been registered under the Act or applicable state securities laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Citius Oncology, Inc.

Citius Oncology, Inc. (Nasdaq: CTOR) is a platform to develop and commercialize novel targeted oncology therapies. In August 2024, its primary asset, LYMPHIR, was approved by the FDA for the treatment of adults with relapsed or refractory CTCL who had had at least one prior systemic therapy. Management estimates the initial market for LYMPHIR currently exceeds $400 million, is growing, and is underserved by existing therapies. Robust intellectual property protections that span orphan drug designation, complex technology, trade secrets and pending patents for immuno-oncology use as a combination therapy with checkpoint inhibitors would further support Citius Oncology's competitive positioning. For more information, please visit www.citiusonc.com.

About Citius Pharmaceuticals, Inc.

Citius Pharmaceuticals, Inc. (Nasdaq: CTXR) is a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products. In August 2024, the FDA approved LYMPHIR, a targeted immunotherapy for an initial indication in the treatment of cutaneous T-cell lymphoma. Citius Pharma's late-stage pipeline also includes Mino-Lok®, an antibiotic lock solution to salvage catheters in patients with catheter-related bloodstream infections, and CITI-002 (Halo-Lido), a topical formulation for the relief of hemorrhoids. A Pivotal Phase 3 Trial for Mino-Lok and a Phase 2b trial for Halo-Lido were completed in 2023. Mino-Lok met primary and secondary endpoints of its Phase 3 Trial. Citius is actively engaged with the FDA to outline next steps for both programs. Citius Pharmaceuticals owns 84% of Citius Oncology. For more information, please visit www.citiuspharma.com.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are made based on our expectations and beliefs concerning future events impacting Citius Pharma or Citius Oncology. You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "plan," "should," and "may" and other words and terms of similar meaning or use of future dates. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price, and includes all statements related to the completion of the offering, the satisfaction of customary closing conditions related to the offering, and the intended use of net proceeds from the offering.  Factors that could cause actual results to differ materially from those currently anticipated, and, unless noted otherwise, that apply to Citius Pharma and Citius Oncology, are: risks related to the closing of the offering; our ability to commercialize LYMPHIR and any of our other product candidates that may be approved by the FDA; our need for substantial additional funds; Citius Pharma's  ability to maintain compliance with Nasdaq's continued listing requirements; the estimated markets for our product candidates and the acceptance thereof by any market; our ability to successfully implement and maintain distribution agreements with current or other future distribution partners; potential disruptions or performance issues involving third-party logistics providers; the ability of our product candidates to impact the quality of life of our target patient populations; risks relating to the results of research and development activities, including those from our existing and any new pipeline assets; our dependence on third-party suppliers; our ability to procure cGMP commercial-scale supply; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; uncertainties relating to preclinical and clinical testing; the early stage of products under development; market and other conditions; risks related to our growth strategy; patent and intellectual property matters; our ability to identify, acquire, close and integrate product candidates and companies successfully and on a timely basis; government regulation; competition; as well as other risks described in our SEC filings. These risks have been and may be further impacted by any future public health risks. Accordingly, these forward-looking statements do not constitute guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements. Risks regarding our business are described in detail in our Securities and Exchange Commission ("SEC") filings which are available on the SEC's website at www.sec.gov, including in Citius Oncology's Annual Report on Form 10-K for the year ended September 30, 2024, filed with the SEC on December 27, 2024, as amended on January 27, 2025, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, as filed with the SEC on May 14, 2025, and as updated by our subsequent filings with the SEC. These forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.

Investor Contact:
Ilanit Allen
ir@citiuspharma.com
908-967-6677 x113

Media Contact:
STiR-communications
Greg Salsburg
Greg@STiR-communications.com

 

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SOURCE Citius Oncology, Inc.

FAQ

What is the size and price of Citius Oncology's (CTOR) September 2025 offering?

Citius Oncology is offering 5,142,858 shares at a combined effective price of $1.75 per share, raising approximately $9.0 million in gross proceeds.

What are the terms of CTOR's warrants in the September 2025 private placement?

The warrants allow purchase of up to 5,142,858 shares at $1.84 per share, exercisable after 6 months and expiring 5.5 years from issuance.

When will Citius Oncology's (CTOR) September 2025 offering close?

The offering is expected to close on or about September 10, 2025, subject to customary closing conditions.

Who is the placement agent for CTOR's September 2025 offering?

Maxim Group LLC is acting as the sole placement agent for the offering.

How will the September 2025 offering affect CTOR shareholders?

The offering will result in immediate dilution for existing shareholders, with potential additional dilution if warrants are exercised in the future.