Citius Pharmaceuticals Spinoff Strategy: LYMPHIR Advances Toward Market With Nasdaq Listing Via SPAC Merger

Citius Pharmaceuticals Inc. (NASDAQ: CTXR) is reshaping its corporate structure to accelerate commercialization of its lead oncology asset. The company’s oncology division will merge with TenX Keane Acquisition (NASDAQ: TENK), a special purpose acquisition company, creating Citius Oncology, Inc. as an independently traded Nasdaq entity. Shareholders of TenX Keane have officially approved the business combination, marking a pivotal step in executing what company leadership describes as a value-unlocking strategy.

The Strategic Rationale Behind The Split

The decision to separate oncology operations reflects a broader corporate philosophy centered on asset acquisition, development, and targeted value realization. According to Leonard Mazur, CEO of Citius Pharmaceuticals, this approach enables the company to achieve public market access while maintaining shareholder protections. “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,” Mazur explained. The CEO has personally committed $22.5 million to the venture, aligning his interests with broader shareholder expectations.

Transaction Structure and Shareholder Composition

Under the merger agreement, Citius Pharmaceuticals will retain substantial ownership of Citius Oncology. The parent company will receive 65.6 million shares, representing approximately 90% of the newly public entity’s outstanding common stock. Additionally, Citius Pharmaceuticals is contributing $10 million in cash to support working capital and operational needs. The transaction includes the assumption of 12.75 million existing options by Citius Oncology.

At closing, any remaining capital in TenX’s trust account, combined with the contributed cash from Citius Pharmaceuticals, will be deployed for Citius Oncology’s general corporate and working capital requirements. This capital structure positions the subsidiary for near-term commercialization efforts and potential platform expansion.

LYMPHIR: The Commercial Centerpiece

Citius Oncology’s foundation rests on LYMPHIR, a recombinant fusion protein developed to address T-cell lymphomas. The therapeutic mechanism involves combining the interleukin-2 (IL-2) receptor binding domain with diphtheria toxin fragments. This design allows LYMPHIR to bind selectively to IL-2 receptors on affected cells, delivering diphtheria toxin fragments that inhibit protein synthesis.

The FDA has previously granted orphan drug designation status to LYMPHIR for two indications: peripheral T-cell lymphoma (PTCL) and cutaneous T-cell lymphoma (CTCL), designations awarded in 2011 and 2013 respectively. Citius acquired exclusive commercialization and development rights to LYMPHIR in 2021, with rights extending across all markets except Japan and select Asian territories.

FDA Review and Path to Market

The regulatory timeline provides a near-term catalyst for the newly formed company. The FDA accepted Citius’s Biologics License Application (BLA) for LYMPHIR in March 2024, with an assigned Prescription Drug User Fee Act (PDUFA) action date of August 13, 2024. If approved, Citius intends to initiate LYMPHIR commercialization activities during the latter portion of 2024.

Leadership expects profitability during LYMPHIR’s first commercial year, creating direct financial benefits for shareholders of both Citius Pharmaceuticals and Citius Oncology.

Public Market Access and Platform Potential

The Nasdaq listing provides Citius Oncology with enhanced access to public capital markets, a significant advantage for companies seeking to fund clinical development, expand manufacturing capabilities, and pursue strategic acquisitions. This improved market positioning facilitates LYMPHIR commercialization while simultaneously enabling the platform to evaluate additional value-creation opportunities within the oncology space.

The merger structure demonstrates Citius Pharmaceuticals’ approach to extracting shareholder value by isolating high-potential assets into independently traded entities capable of generating separate valuations and accessing dedicated investor bases.