Maxim starts Citius Pharma at buy; PT $4

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Maxim Group launched coverage of Citius Pharmaceuticals (NASDAQ:CTXR) with a “buy” rating and $4 price target. The stock closed at $1.62 on Nov. 29.

Citius is a late-stage company with two “de-risked” Phase 3 assets: Mino-Lok in catheter-related bloodstream infection and I/ONTAK in cutaneous T-cell lymphoma. 

Analyst Michael Okunewitch writes that Mino-Lok’s Phase 3 readout is expected in the first half of 2022 and an NDA to follow. “The drug itself has demonstrated 100% clearance of infection-causing biofilms in a Phase 2b study and has the potential to salvage catheters, avoiding a $10,000 remove and replace procedure.” 

He said I/ONTAK is a reformulation of a previously approved IL-2 targeting drug, removing the manufacturing issues that caused the original to be pulled from the market, thereby de-risking development. A Phase 3 readout also is expected in the first half of 2022, with a BLA to follow by the end of 2022, he added. 

Mr. Okunewitch said that with about $70-million in cash, Citius is funded through pivotal readouts in the first half of 2022, which “represent potentially transformative catalysts, in our view.” 

Both assets address areas of high unmet need and have commercial synergies due to a shared target customer, oncology, Mr. Okunewitch said. “With prior data supporting I/ONTAK and Mino-Lok, we consider the risk/reward profile favorable.”