Citius Pharmaceuticals (NASDAQ: CTXR) CEO Interview Update


Citius Pharmaceuticals
CEO: Myron Holubiak




WSA: Good day from Wall Street, this is Juan Costello, Senior analyst at the Wall Street Analyzer.  Joining us today is Myron Holubiak, the CEO for Citius Pharmaceuticals.  The company trades on NASDAQ ticker Symbol CTXR.  Thanks for joining us today there Myron.

Myron Holubiak:  Thanks, Juan. Glad to be here.

WSA: So, starting off, please give us an overview of the company for some of our listeners that didn’t catch our previous interview.

Myron Holubiak:  Sure. We merged as a private company with Citius roughly two years ago.  Citius is dedicated to developing products that use the 505(b)(2) pathway.  What that means is that we’re using agents that have been in man before.  But what we look for are very specialized, very unique applications.  And what I mean by that is that we may use substances that were used for particular kinds of indications, but when they are combined you can use them for something completely different.

In our case we’re looking for things that have unique applications, and we’ve been successful in developing two promising drug products thus far.  You have alluded to Mino-Lok, Mino-Lok being one of them, and the other one being Hydro-Lido, which is a combination of hydrocortisone and lidocaine to be used in symptomatic relief of hemorrhoids.  So, that’s the company, we’ve progressed Mino-Lok through the regulatory pathway to phase 3, the pivotal trial for approval.

We’ve done all the amendments to the approved protocol.  It is now in the field.  We have five active turned on sites.  By turned on I mean trained and ready to go with clinical trial product at their sites.  And we are awaiting our very first patient.  We expect that to happen soon and that really will be the beginning of our Phase 3 trial and that will be the registration trial for the product.  The second product Hydro-Lido completed a phase 2a trial not too long ago, which was a dose finding trial.

We were able to settle in on a dose.  We did have our meeting with the FDA, and now we’re preparing our Phase 2b protocol and that one will be showing that the combination is superior to its components in the vehicle, which would be a placebo.  We expect that to be initiated later this year.  So that’s the status of the company, and that’s what we do and who we are.

WSA: Right, yeah.  Bring us up to speed on some of the recent Mino-Lok developments since we last spoke which was March of last year.

Myron Holubiak:  Sure.  I’d be happy to do that.  Let me also mention though that the company has had several raises since that time.  We just had a $6.8 million raise which was pulling down a shelf.  We have filed a $50 million shelf.  We are NASDAQ listed, subsequent to that we had a raise.  We put up a shelf and pulled down 6.8 recently.  What’s good about that is we have several substantial sophisticated institutional investors in the company now.

We do have coverage by the Dawson James Analyst, Robert Wasserman.  Proud to say that he put a Buy Rating on with a $10 target, so we’re excited about that.  We’ve had several very high trading days particularly while we were at JP Morgan.  We had a day that went I believe was over 170,000 shares.  We’re working through all the shares and warrants from earlier raises and we are somewhere in the mid-$4 range right now and we expect that to be fairly solid for a while.

In terms of what’s happening with Mino-Lok, we did go through several amendments on the protocol.  Some of our IRBs, the institutions out there that are doing the trial had let us know that the control was not according to their standards of care.  So we amended the controls and that was approved and we’re in the field now with an amended protocol, which allows us to compare Mino-Lok to any antibiotic lock that’s used by an institution.  We expect that to be a good study.  We expect to have an interim analysis sometime later this year and within an 18-month period from today we expect to complete that trial.  As you may know, I’ll re-enforce if I mentioned it in our first meeting, we did receive qualified infectious disease products from the FDA, which provides us fast track, priority review as well as expands our intellectual property protection for an additional five years.  So that was a big finding. FDA also suggested that we apply for fast track in addition to QIDP, which we did and we received fast track designation which allows us to have a rolling NDA, so every time we complete a section of the NDA we can submit it for review as opposed to waiting for the entire NDA to be completed.  We’re very excited, everything is going extremely well with Mino-Lok.  For those who may not remember, Mino-Lok is a solution of Minocycline, disodium EDTA and alcohol.  So, when combined and inserted, instilled into an indwelling infected catheter will salvage that catheter and avoid having to remove that infected catheter and replace it with a new catheter in two surgical procedures.

That’s a major advance, and even the agency meaning the FDA has recognized that this is an important development.  So that’s where we are at, we’re feeling pretty good.

WSA: Great.  What some of the key goals and milestones that you’re looking at here over the course of this next six to 12 months?

Myron Holubiak:  Yeah, sure, of course the first ones the one I alluded to and that’s to get the first patient in.  We have 26 sites that have agreed to participate in the trial.  We expect to go to 50 so I think the milestone of when we achieve full site recruitment will be important.  I believe that as we get the patients enrolled and treated this is a therapy that lasts roughly perhaps for five to seven days for the comparative product it will be somewhere into the 10 to 14 day period.

So as we complete patients we’ll be able to at least report on the status of how we’re progressing with recruitment and treatment.  Somewhere around the 50% point we’ll have an interim analysis that’s been discussed with the agency.  We expect that to happen later this year.  So I think that will happen somewhere in — let’s say last quarter of this year.  At that point in time there’s a possibility that we achieve significance and that might enable us to stop the study.

We never expect that, we expect to have to go through the entire trial, which would be 18 months.  But the milestones there really are the ones I mentioned, which is first patient in, different milestones in terms of how well we do with recruiting sites as well as patients and then the interim analysis that will be coming.  On our other product Hydro-Lido we will be initiating our phase 2b trial this year. So, whenever that initiates and I expect that to be around mid-year, that would be another piece of news.  Those are the major milestones that I think would cause people to take a look at the company and see its value grow.

WSA: Great.  So, what are some of the key trends that you’re seeing here right now in the sector, and what make Citius uniquely positioned to capitalize.

Myron Holubiak:  I think there is a major trend that we’re observing that I think provides us with some tailwind for the adoption of our development and adoption of our products and that really is the move away from invasive procedures to less invasive procedures.  As I mentioned earlier, the way to treat a patient with catheter related blood stream infections.  So these  are mainly cancer patients that have bacteremia from their central line.

It could be hemodialysis patients that develop a bacteremia because of their catheter.  And it could be people on parenteral nutrition who get infected because of their catheter.  Today is a pretty gruesome process of removing that catheter.  There was a paper presented last October at ID Week that showed when you remove a catheter well over 50% of the people find that to very discomforting, so we would avoid that.

In addition to that our results have been stellar to date we’re in the high 90% efficacy rate in terms of clearing out catheters in our Phase 2 trials, and we’ve had no adverse events.  So the idea of not having to go through that as many of these catheters are tunneled so you don’t have to go through that surgical procedure of removing a central line that’s very discomforting, and then several days later, because these patients need central lines is to reinsert a new catheter at different place and run the hazards of reinsertion which includes things like perforation of veins, hematomas, pneumothorax, hemothorax, things like that.  So we avoid that completely.  And in today’s day and age the move away from these kinds of invasive procedures that may have some safety risks to one that has highly reduced safety risk and in our case even has better clinical outcome.  Thus far in one our Phase 2 trial our clinical outcome in terms of sustained microbiological effect has been better than if you remove and replace with a brand new catheter.  So those are the trends out there that I think support us.

In addition to that in the rest of the world central lines are starting to be used more.  So there’s a little over 5% growth in central catheters being used in rest of the world.  And so that’s the rate that says they’ll start seeing the same types of infections as we do here.  Our product again will provide those benefits for those countries as well.

WSA: Certainly.  So, in terms of investors and the financial community as you were presenting at the biotech showcase and other recent conference presentations, what are some of the key drivers that you want investors to better know about you guys?

Myron Holubiak: I think besides having a fairly experienced management team, my background is running a fairly large pharmaceutical company Roche Laboratories.  We know what we’re doing in terms of antibiotics and this whole field of therapy.  My partner Leonard Mazur is also experienced, he has a hugely successful track record in developing companies from start, and creating enormous amount of value.  The rest of the team we have a half a dozen other executives here, they’re all experienced. So, we have a very good experienced management team that knows what they are doing in terms of how to take risks and how to invest in the development of new innovation.  So I think that’s one of the big things.  The second thing is I think we’re incredibly undervalued.  You have a Phase 3 unique property that is on the verge of its Phase 3 trial and ultimate approval and usually you find companies with that kind of an asset well over the roughly $40 million market capital that we have.

So I think there’s a real opportunity for a major jump as long as the trial supports our beliefs and claims, which again I believe with, thus that’s why we’re in this business but the trial will tell.  If that trial is positive we would expect the huge increase in value.

WSA: Right.  Perhaps you can talk a little bit more about your background and experience Myron and who the key management team is there.

Myron Holubiak:  Yeah, sure.  As I touched on my background really it’s academically, it’s in biophysics and molecular biology out of the University of Pittsburgh.  I really switched over to the business side when I joined Hoffmann La Roche Laboratories.  I held just about every commercial position there in terms of sales, marketing, advertising a variety of things.  Ultimately I led the effort to create an antibiotic company at Roche Labs.

As you may know we were primarily a CNS company and those products have played out quite a bit, their patents were expiring so we then shifted the company into more of an institutional anti-biotic presence.  Rocephin, which I think became one of the most successful antibiotics of all time, was under my charge.  I then went and did my own thing for a while at EMRON that’s with an M.  That company was dedicated to health economics and we did major economic studies for companies such as J&J — there’s a variety of companies, trying to prove the value of their product.  They included EPO as well as an aldose reductase inhibitor.  Then Roche called me back after I sold my company EMRON to Dun and Bradstreet but Roche called me back asked me to be President of Roche Labs US, which I did.  At that point in time we began to shift primarily from primary care over to specialty care.  And as you know today Roche is probably 80% specialty care, as opposed to primary care.

Specialty care fit right nicely with Roche largely because they had a diagnostics group.  They had a major effort in the recombinant DNA area, as well as all the new techniques that are being used to create biotechnology today.  Part of Genentech today Roche in the United States is called Genentech.  My background really fits with those areas.

I got together with my partner who I’ve known for many, many years, who is a very successful entrepreneur.  Has developed many companies and sold them successfully creating a lot of value for his shareholders.  And the two of us picked an area that was dear to our hearts.  And by that I mean that we both have experience in this field of cancer as well as anti-infectives in cancer, and thought that there could be a lot of progress made so we had an opportunity to work with MD Anderson Cancer Center.

We were involved with them in the development of Mino-Lok.  Ultimately we licensed the product worldwide.  We went through Phase 2 trials, and now are starting Phase 3 trial.  So the partnership with MD Anderson has also been very important.  We have a very strong management team that’s very well experienced and is working with some of the top institutions in America.

WSA: Right, so once again joining us today is Myron Holubiak, CEO for Citius Pharmaceuticals which trades on NASDAQ, ticker symbol CTXR, currently trading at 4.34 a share.  Market Cap is about 36 million.  Before we conclude here to recap some of your key points, why do you believe an investor should consider the company as a good investment opportunity today?

Myron Holubiak:  Well, it’s some of the things that we just shared about that is you got a strong management team that knows what it’s doing.  We have a partnership with some of the top institutions in the United States but in particular MD Anderson that believes in what we’re doing.  We have an undervalued company for a company such as ours with a phase 3 asset with this kind of potential.  So we expect there to be a huge jump in value as we progress this product.  You add all these things together and you have milestones.

You have three or four good milestones over the next year each of which should prove the value of the assets that we’re developing and help with the company’s value.

WSA: Well, we certainly look forward to continuing to track the company’s growth and report on your upcoming progress and we’d like to thank you for taking the time to join us today Myron, and update our investor audience at Citius it was great having you on.

Myron Holubiak:  Thanks Juan, thanks very much.

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