NASDAQ: CTOR

Citius Oncology and the Merger

On August 23, 2021, Citius Pharma formed Citius Acquisition Corp. (“SpinCo”)
as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR, SpinCo began operations in April 2022, when Citius Pharma
transferred the assets related to LYMPHIR to SpinCo, including the related license agreement with Eisai Co., Ltd. (“Eisai”)
and the related asset purchase agreement with Dr. Reddy’s Laboratories SA, a subsidiary of Dr. Reddy’s Laboratories, Ltd.
(collectively, “Dr. Reddy’s”).

On October 23, 2023, Citius Pharma and SpinCo
entered into an agreement and plan of merger and reorganization (the “Merger Agreement”) with TenX Keane Acquisition, a Cayman
Islands exempted company (“TenX”), and TenX Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of TenX
(“Merger Sub”). On August 12, 2024, pursuant to the terms and conditions of the Merger Agreement, Merger Sub merged with and
into SpinCo, with SpinCo surviving as a wholly owned subsidiary of TenX, which was subsequently renamed Citius
Oncology Sub. Prior to the closing of the Merger (the “Closing”), TenX migrated to and domesticated as a Delaware corporation
in accordance with Section 388 of the General Corporation Law of the State of Delaware and the Cayman Islands Companies Act (As Revised)
(the “Domestication”). As part of the Domestication, TenX changed its name to “Citius Oncology, Inc.” (Nasdaq:
CTOR). Immediately after the closing of the Merger, Citius Pharma owned approximately 92% of the outstanding shares of common stock of
the Company. As of December 17, 2025, Citius Pharma owned approximately 77.9% of Citius Oncology (excluding pre-funded warrants to purchase
up to 15,229,358 shares of Citius Oncology common stock in a transaction that closed on December 11, 2025).

Since SpinCo’s inception, Citius Pharma
has funded and continues to fund Citius Oncology, and Citius Pharma and Citius Oncology are party to an amended and restated shared services
agreement (the “A&R Shared Services Agreement”), which governs certain management and scientific services that Citius
Pharma provides Citius Oncology.

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LYMPHIRTM (denileukin diftitox-cdxl)

Overview

In September 2021, Citius Pharma announced that
it had entered into an asset purchase agreement with Dr. Reddy’s to acquire its exclusive license of E7777 (denileukin diftitox).
E7777, an engineered IL-2-diphtheria toxin fusion protein, is an improved formulation of oncology agent, ONTAK®, which was previously
approved by the FDA for the treatment of patients with persistent or recurrent CTCL. Dr. Reddy’s had previously exclusively licensed
E777 in select markets from Eisai and as part of the transaction, Eisai entered into a license agreement whereby Eisai assigned all of
its rights to E7777 to Citius Pharma. Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the product.
Denileukin diftitox is referred to in this report as E7777, I/ONTAK or LYMPHIR, depending on the period of time and context that is being
discussed. In April 2022 LYMPHIR was assigned to Citius Oncology.

LYMPHIR is a recombinant DNA-derived fusion protein
designed to direct the cytocidal action of diphtheria toxin (DT) to cells which express the IL-2 receptor. After uptake into the cell,
the DT fragment is cleaved and the free DT fragments inhibit protein synthesis, resulting in cell death. Consequently, LYMPHIR’s
differentiated mechanism of action supports two therapeutic effects: (i) killing tumors by binding to IL-2 receptors to deliver diphtheria
toxin directly to the tumor cells, and (ii) depleting immunosuppressive regulatory T lymphocytes (Tregs) to enhance antitumor activity.

Phase 3 Trial (E7777-G000-302) Design

LYMPHIR is an improved formulation of oncology
agent, ONTAK®, which was previously approved by the FDA for the treatment of patients with persistent or recurrent CTCL. ONTAK was
marketed in the U.S. previously. The manufacturing formulation improvements were substantial enough that the FDA required a new clinical
study to be performed (Study E7777-G000-302). The safety profile of LYMPHIR from study E7777-G000-302 is comparable to Study 93-04-11/L4389-11,
which served as the basis for the full approval of ONTAK. Study E7777-G000-302, a global, multicenter, open-label single-arm pivotal clinical
trial for the treatment of patients with persistent or recurrent CTCL, commenced (first subject consented) in May 2013 and completed (data
cutoff for primary analysis) in December 2021. The study was sponsored by Eisai and was conducted at 17 sites in the United States and
three sites in Australia. Inclusion criteria for the study were to evaluate patients in advanced stage CTCL (Mycosis Fungoides or Sézary
Syndrome), who received at least one prior CTCL therapy. The objectives were met for Study E7777-G000-302, in both the lead-in phase and
the main phase. Overall, the primary and secondary endpoints of Study E7777-G000-302 demonstrate the tolerability and clinical benefit
of 9 µg/kg/day LYMPHIR for the treatment of adult patients with relapsed or refractory Stage I-III CTCL. No new safety signals were
identified compared to ONTAK.

The pivotal trial of E7777 was divided into two
phases, a lead-in phase with 21 subjects that evaluated dose finding, pharmacokinetics and immunogenicity, and assessed the Objective
Response Rate (the “ORR”). An ORR is defined as a greater than 50% reduction in tumor burden. Patients received a daily intravenous
infusion of denileukin diftitox from Day 1 through Day 5 of each 21-day cycle. In the lead-in phase, the main objectives were to determine
the maximum tolerated dose (MTD) of LYMPHIR and to select the dose of LYMPHIR to be used in the main phase (subjects were treated at doses
ranging from 6 to 15 µg/kg/day). The MTD was 12 µg/kg/day and, based on data of the lead-in phase, 9 µg/kg/day was selected
for the main phase of the study. The objectives of the main phase were to evaluate the efficacy and safety of LYMPHIR (at the dose determined
in the lead-in phase of 9 µg/kg/day).

The primary efficacy endpoint was tumor response
rate, i.e. ORR per the Independent Review Committee (IRC) assessment based on International Society for Cutaneous Lymphomas/ European
Organization for Research and Treatment of Cancer Global Response Score (GRS; Olsen, et al., 2011).

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The secondary efficacy endpoints
were:

●
Duration of response (DOR) based on GRS;

●
Time to response based on GRS;

●
ORR assessed by investigator using GRS;

●
Objective response assessed by IRC using Prince (Prince, et al., 2010);

●
Skin response (according to modified Severity Weighted Assessment Tool [mSWAT]);

●
Duration of skin response; and

●
Time to skin response.

Overall, there were 25 responders out of 69 subjects
in the Primary Efficacy Analysis Set (i.e., subjects with CTCL disease Stages I to III (9 µg/kg/day)) as assessed by the IRC, with
an ORR of 36.2% (95% CI: 25.0%, 48.7%), with 8.7% (6/69) achieving a Complete Response (CR) and 27.5% (19/69) achieving a Partial Response.

Among responders, the median follow-up for duration
of response was 6.5 months (range: 3.5+, 23.5+ months). Median time to response was 1.4 months (range: 0.7 to 5.6 months).

ORR (95% CI) by investigator was 42.3% (30.6%,
54.6%) (30 of 71 subjects), with 8.5% (6 subjects) achieving a CR. ORR (95% CI) by IRC assessment using the Prince (2010) criteria was
36.2% (25.0%, 48.7%) (25 of 69 subjects). Further, an ORR of 38.1% in the intent to treat population and 44.4% in the efficacy evaluable
populations were observed. The 2-sided, exact 95% CI of ORR was calculated using the Clopper-Pearson method. Per protocol, LYMPHIR demonstrated
clinical benefit if the lower bound of the 2-sided 95% exact CI of the ORR exceeded 25%.

Skin responses were the same as GRS objective
responses, for both IRC and investigator assessments. Responses were deep, reflected by the substantial decrease in skin tumor burden,
including 8 subjects with 100% clearance of skin lesions per IRC.

In the second and main phase of the pivotal trial,
70 patients were administered the 9 µg/kg/day rate for 5 consecutive days in 21-day cycles. The inclusion criteria were identical
to the lead-in phase.

Phase 3 Trial Efficacy & Safety Results

The efficacy population of the main phase included
69 patients with relapsed or refractory stage I to III CTCL. Of the 69 patients, the median age was 64 years (range: 28 to 87 years),
65% were male, 73% were White, 19% Black or African American, 1% Asian, and 14% Hispanic or Latino. The CTCL disease stage was IA in 7%,
IB in 23%, IIA in 13%, IIB in 35%, IIIA in 12%, and IIIB in 10%. The median number of prior therapies was 4 (range: 1 to 18), including
both skin-directed and systemic therapies. Prior therapies included photodynamic therapy (56%), total skin electron beam therapy (42%),
systemic retinoids (49%), methotrexate/pralatrexate (49%), histone deacetylase inhibitor (35%), brentuximab vedotin (26%) and mogamulizumab
(12%).

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Efficacy was established based on ORR, according
to ISCL/EORTC Global Response Score (GRS) per Independent Review Committee (Olsen 2011). Efficacy results are shown in the table below.

LYMPHIR

Efficacy Results of E7777-G000-302
9 µg/kg/day

(N=69)

ORR (GRS)%a
36%

(95% CIb)
(25,49)

Complete Response
9%

Partial Response
27%

Duration of Response

Median (range), months
6.5 (3.0+, 23.5+)

Duration ≥ 6 months, n (%)
52%

Median Time to Response, months
1.4

(95% CIb)
(0.7,5.6)

(a)
ORR, Objective Response Rate per Olsen, et all (2011) Global Response Score (GRS), by Independent Review Committee (IRC)

(b)
CI = confidence interval

Both the endpoints and objectives of Study E7777-G000-302
were met, while the statistical confidence interval (95% CI) resulted in a marginal shortfall (25% actual achievement vs. >25% from
the statistical plan). Throughout the initial BLA review period, the FDA accepted the Study E7777-G000-302 data which demonstrated both
tolerability and clinical benefit.

Overall, LYMPHIR was well-tolerated with the use
of pre-medications, close patient monitoring, and prompt initiation of supportive measures and drug management. There was no evidence
of cumulative toxicity and most patients experienced low grade 1 or 2 treatment emergent adverse events.

Serious adverse reactions occurred in 38% of patients
who received LYMPHIR. Serious adverse reactions in > 2% of patients included capillary leak syndrome (10%), infusion-related reaction
(9%), sepsis (7%), skin infection (2.9%), pyrexia (2.9%), and rash (2.9%). There were no Grade 5 adverse events in the Study E7777-G000-302,
Stage I-III Safety Set (which is the safety set FDA required for inclusion in the package insert/label).

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Adverse Reactions (≥ 10%) in Patients with
Relapsed or Refractory Stage I-III CTCL Who Received LYMPHIR in E7777-G000-302

LYMPHIR

N=69

Adverse Reaction

All Grades

(%)

Grade 3 or 4

(%)

Gastrointestinal disorders

Nausea
43
1.4

Diarrhea
19
0

Vomiting
13
0

Constipation
12
0

General disorders and administration site conditions

Fatiguea
38
0

Edemab
33
1.4

Chills
27
1.4

Feverc
16
1.4

Musculoskeletal and connective tissue disorders

Musculoskeletal paind
27
2.9

Arthralgiae
12
0

Nervous system disorders

Headachef
25
0

Dizziness
13
0

Mental status changesg
13
0

Injury, poisoning and procedural complications

Infusion-related reaction
25
6

Skin and subcutaneous tissue disorders

Rashh
23
6

Pruritisi
19
6

Vascular disorders

Capillary leak syndrome
20
6

Metabolism and nutrition disorders

Decreased appetite
13
1.4

Eye disorders

Vision changesj
13
0

Investigations

Weight increased
13
0

Infections and infestations

Skin infection
13
1.4

Renal and urinary disorders

Renal insufficiencyl
12
2.9

Psychiatric disorders

Insomnia
10
0

(a)
Includes fatigue, asthenia, and lethargy.

(b)
Includes edema, edema peripheral generalized edema, face edema, swelling face, peripheral swelling.

(c)
Includes fever, pyrexia, tumor associated fever.

(d)
Includes musculoskeletal pain, back pain, neck pain, pain in extremity, myalgia, bone pain, flank pain.

(e)
Includes arthralgia, joint swelling, joint range of motion decreased, musculoskeletal stiffness.

(f)
Includes headache, migraine.

(g)
Includes mental status changes, amnesia, confusional state, delirium, altered state of consciousness, hallucinations (including auditory), memory impairment, disturbance in attention, somnolence, cognitive disorder.

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(h)
Includes rash, dermatitis, drug eruption, erythema, palmar erythema, toxic skin eruption, rash maculo-papular, rash papular, rash pustular, rash pruritic, dermatitis exfoliative generalized, acute generalized exanthematous pustulosis.

(i)
Includes pruritis, itching.

(j)
Includes vision blurred, photopsia, visual impairment.

(k)
Includes skin infection, skin bacterial infection, staphylococcal skin infection, cellulitis, impetigo.

(l)
Includes renal failure, nephropathy, acute kidney injury, blood creatinine increased, renal impairment.

Grade refers to the severity of the adverse reaction.
The Common Terminology Criteria for Adverse Events displays Grades 1 through 5 with unique clinical descriptions of severity for each
adverse reaction based on this general guideline:

●
Grade 1 - Mild; asymptomatic or mild symptoms; clinical or diagnostic observations only; intervention not indicated.

●
Grade 2 - Moderate; minimal, local or noninvasive intervention indicated; limiting age-appropriate instrumental activities of daily living.

●
Grade 3 - Severe or medically significant but not immediately life-threatening; hospitalization or prolongation of hospitalization indicated; disabling; limiting self-care activities of daily living.

●
Grade 4 - Life-threatening consequences; urgent intervention indicated.

●
Grade 5 - Death related to the adverse reaction.

Investigator Initiated Trials

We believe there is an opportunity in the field
of immuno-oncology and have undertaken two investigator-initiated trials to evaluate the potential safety and efficacy of LYMPHIR as an
immuno-oncology combination therapy.

A Phase 1 trial was initiated in June 2021 at
the University of Minnesota, Masonic Cancer Center. This study is a single-arm open-label trial which has an estimated enrollment of 20
participants who will be administered denileukin diftitox prior to Chimeric Antigen Receptor (“CAR-T”) therapies. The Phase
1 study consists of two components: dose finding to establish a maximum tolerated dose (“MTD”) of denileukin diftitox in combination
with CART-T therapies and an extension component to provide an estimate of efficacy at that MTD. (Title: Phase I/II Trial Using E7777
to Enhance Regulatory T-Cell Depletion Prior to CAR-T Therapy for Relapsed/Refractory B-Cell Lymphoma (DLBCL). NCT04855253). Preliminary
results are anticipated in the first quarter of 2026.

A second Phase 1 Study was initiated in September
2022 at the University of Pittsburg Medical Center, Hillman Cancer Center. This study is an open label, Phase 1/1b study to investigate
the safety and efficacy of a combined regimen of pembrolizumab with T-regulatory cell depletion and denileukin diftitox in patients diagnosed
with recurrent or metastatic solid tumors in the second line setting. (Title: The efficacy of T-regulatory cell depletion with E7777 combined
with immune checkpoint inhibitor, pembrolizumab, in recurrent or metastatic solid tumors: Phase I/II Study. NCT05200559).

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The study consists of two parts. Part I is a dose
escalation study of four cohorts (3,6,9,12 mcg of LYMPHIR) and is expected to enroll 18-30 patients. Part II is a dose expansion study
of approximately 40 patients to evaluate the safety and tolerability of the recommended combination dose of LYMPHIR and pembrolizumab
(to include ovarian cancer and MSI-H cancer cohorts). The study will also investigate the alteration of the immune microenvironment within
tumors and peripheral blood. Secondary endpoints include the objective response (complete response plus partial response), progression-free
survival, and overall survival.

In November 2024, the Company announced promising
preliminary results of the Phase I Clinical Trial of Pembrolizumab (KEYTRUDA®) and LYMPHIR™ in cancer patients with recurrent
solid tumors conducted at the University of Pittsburg Hillman Cancer Center.

Preliminary Results

The results of this chemotherapy-free regimen
combining two immuno-modulator agents, pembrolizumab (anti-PD-1) and LYMPHIR (transient Treg depletion) demonstrated:

●
An overall response rate (ORR) of 27% (4/15) and a clinical benefit rate of 33% (5/15) among evaluable patients; and,

●
Median progression-free survival (PFS) for patients achieving clinical benefit of 57 weeks, with a range of 30 to 96 weeks.

Notably, two of the four patients who achieved partial remission had received prior checkpoint inhibitors (i.e. anti-PD-1 therapy). This highlights the therapeutic potential of LYMPHIR plus immune checkpoint inhibitors to be effective in patients who fail prior anti-PD-1/L1 therapy.

The trial enrolled 21 patients with recurrent
or metastatic solid tumors. Among the evaluable participants, four patients achieved a partial response, and one patient demonstrated
durable stable disease lasting over six months. The combination regimen was generally well tolerated, with most adverse events related
to the patients’ underlying disease. Importantly, no significant immune-related adverse events were observed, and only one case
of dose-limiting toxicity (capillary leak syndrome) was reported at the highest dose level (12 mcg/kg).

Table 1: Efficacy Data

Value

Patients Enrolled
21

Patients Evaluable for Response
15

Partial Responses (PR)
4 (27%)

Stable Disease (≥ 6 months)
1

Clinical Benefit Rate (CBR)
33% (PR + SD ≥ 6 months)

Median Progression-Free Survival (PFS)
57 weeks (range: 30-96 weeks)

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Table 2: Safety Data

Value

Dose-Limiting Toxicities (DLTs)

1 (Capillary Leak Syndrome at 12 mcg/kg)

Immune-Related Adverse Events (irAEs)

None documented (≥ Grade 3)

Adverse Events (Grade ≥ 3)

Most related to underlying disease

Regulatory Development

In the 1990s, denileukin diftitox was developed
at Boston University and the National Cancer Institute (“NCI”) in collaboration with Seragen, Inc.

In 1999, ONTAK® (denileukin diftitox)
was granted accelerated approval by the FDA for the treatment of persistent or recurrent CTCL. Ligand Pharmaceuticals, Inc. (“Ligand”)
acquired the marketing rights in that same year.

In 2006, Eisai acquired the commercial rights
to ONTAK from Ligand.

In 2008, the FDA granted full approval to ONTAK
for CTCL.

In 2011, a new formulation of denileukin diftitox
was developed under the code name E7777 in response to a post-marketing condition established by the FDA upon approval. As the FDA considered
this a new product, an Investigational New Drug Application (“IND”) was filed. As a part of ensuing discussions, the FDA agreed
to a development plan that included a single arm, open label study to confirm the safety and efficacy of E7777 and a chemistry, manufacturing
and controls (“CMC”) development plan that demonstrates the new process results in a comparable drug product.

In 2011, the FDA Office of Orphan Products Development
granted E7777 orphan drug designation status for the treatment of Peripheral T-Cell Lymphoma (“PTCL”).

In 2013, the FDA Office of Orphan Products Development
granted E7777 orphan drug designation status for the treatment of CTCL.

In 2013, the first patient was enrolled into the
lead-in phase of the pivotal study for the E7777 U.S. CTCL clinical trial.

In 2014, commercial sales of ONTAK were discontinued
when the product was voluntarily withdrawn from the market due to manufacturing issues at the contract manufacturer.

In 2015, the last patient enrolled exited the
lead-in phase of the E7777 U.S. CTCL clinical trial.

In March 2016, Dr. Reddy’s exclusively licensed
the global rights to E7777 from Eisai, other than the rights in countries retained by Eisai, which consists of Japan, China, Korea, Taiwan,
Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia,
Laos, Afghanistan, Bangladesh, Bhutan, Nepal, Mongolia and Papua New Guinea. The license included an option on the right to develop and
market the product in India prior to FDA approval.

In June 2016, the first patient was enrolled in
the main phase of the Phase 3 U.S. CTCL clinical trial for E7777.

In March 2020, Eisai filed a New Drug Application
(“NDA”) for E7777 in Japan for both CTCL and PTCL, and in March 2021 received approvals in both indications.

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In September 2021, Citius
Pharma acquired the marketing rights to E7777 in selected markets. Citius Pharma subsequently renamed E7777 as LYMPHIR.

In December 2021, patient
enrollment for the Phase 3 Pivotal study of LYMPHIR was completed.

In April 2022, Citius
Pharma reported that topline results from the Phase 3 trial were consistent with the prior formulation. Moreover, no new safety signals
were identified.

In December 2022, a Biologics License Application
(“BLA”) for LYMPHIR was accepted for filing with the FDA and a PDUFA goal date was set for July 28, 2023.

In July 2023, the FDA issued a complete response
letter (“CRL”) requiring the Company to incorporate enhanced product testing and additional controls agreed to with the FDA
during the market application review. There were no concerns relating to the safety and efficacy clinical data package submitted with
the BLA, or the proposed prescribing information.

In September 2023, Citius Pharma announced that
the FDA agreed with the plans to address the requirements outlined in the CRL, which guidance provided the Company with a path for completing
the necessary activities to support the resubmission of the BLA for LYMPHIR.

In February 2024, based on the feedback from the
FDA, Citius Pharma completed the CRL remediation activities and filed the resubmission.

In March 2024, Citius Pharma announced the acceptance
of the BLA by the FDA. The FDA assigned a PDUFA goal date of August 13, 2024 and approved LYMPHIR on August 8, 2024.

In August 2024, Citius Pharma announced that the
FDA had approved LYMPHIR. Citius Oncology launched LYMPHIR in December 2025.

Market Opportunity

CTCL’s are a heterogeneous subset of extranodal
non-Hodgkin lymphomas (“NHL”) of mature, skin-homing T-cells that are mainly localized to the skin. The most common types
of CTCL are mycosis fungoides (“MF”) and primary cutaneous CD30+ anaplastic large cell lymphoma (pcALCL), jointly representing
an estimated 80 to 85% of all CTCL. Sézary Syndrome (“SS”), a very rare subtype (~2 to 5% of CTCL) characterized by
diffuse inflammatory, often exfoliative, erythroderma and by leukemic and nodal involvement, displays a significant degree of clinical
and biological overlap with MF and has long been considered a clinical variant of MF, although recent evidence suggests that it may be
a separate entity. The rest is represented by extremely rare, generally more aggressive subtypes.

In light of the overlap between MF and SS, and
considering that many of the systemic therapy options for the two neoplasms are the same, some consider the treatment approach to MF and
SS as if they were a single disease entity (MF/SS). However, some of the drugs currently in use, or in development, for MF/SS appear to
be more effective in clearing different anatomical compartments (skin versus blood, for example) and therefore have differential efficacy
in MF and SS.

Based on Surveillance Epidemiology and End Results
(SEER) data from 2001 to 2007, the estimated incidence rate of MF/SS in the U.S. is 0.5/100,000 or about 2,500 to 3,000 new cases per
year representing about 25% of all T-cell lymphomas. In total, the Company estimates that there are approximately 30,000 to 40,000 patients
living with CTCL in the U.S.

Based on internal estimates, the Company believes
the addressable U.S. market for LYMPHIR exceeds $400 million and may further expand with the introduction of a new therapeutic.

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Competition

There are currently several approved targeted
therapeutics for patients with persistent or recurrent CTCL. However, there are limitations to these targeted therapies, which are often
discontinued due to toxicity, adverse events, or a limited duration of response due to resistance over time. Consequently, the Company
believes there continues to be an unmet medical need for patients with CTCL and an opportunity for LYMPHIR to be included among the treatment
armamentarium for advanced-stage CTCL.

The following products are approved for the systemic
treatment of advanced CTCL:

●
Mogamulizumab, sold under the brand name Poteligeo, is a humanized, afucosylated monoclonal antibody targeting CC chemokine receptor 4. The FDA approved it for treatment of relapsed or refractory mycosis fungoides and Sézary disease.

●
Brentuximab vedotin, sold under the brand name Adcetris, is an antibody-drug conjugate medication used to treat relapsed or refractory Hodgkin lymphoma and systemic anaplastic large cell lymphoma, a type of T-cell non-Hodgkin lymphoma. It selectively targets tumor cells expressing the CD30 antigen, a defining marker of Hodgkin lymphoma and ALC.

●
Romidepsin sold under the brand name Istodax, is a histone deacetylase (“HDAC”) inhibitor indicated for the treatment of CTCL in adult patients who have received at least one prior systemic therapy.

●
Vorinostat sold under the brand name Zolinza, is a HDAC inhibitor indicated for the treatment of cutaneous manifestations in patients with CTCL who have progressive, persistent or recurrent disease on or following two systemic therapies.

Sales and Marketing

The Company does not currently have our own commercial
infrastructure and has finalized its initial sales and marketing capability by contracting with a large third-party commercial sales and
marketing organization with an existing commercial infrastructure and product launch experience to assist in our commercial efforts. Through
this third-party organization, the Company has developed a dedicated field force combined with various marketing programs which will be
tailored to both physicians and patients to facilitate the successful launch of LYMPHIR and grow our market share. We plan to focus our
commercial efforts on a concentrated group of prescribing hematologists, oncologists and dermatologist-oncologists, along with key opinion
leaders and advocacy groups who play an important role in the CTCL treatment regimen.

To support the launch and commercialization of
LYMPHIR, we have entered into distribution agreements with Cardinal Health, Cencora and McKesson Corporation. In addition, we have contracted
with EVERSANA an innovative AI platform, to support the launch and commercialization of LYMPHIR whereby EVERSANA provides an integrated
suite of pre- and post-launch services, including medical information, pharmacovigilance, revenue cycle management, program management,
data and analytics, and channel management. In addition, in October 2025, we announced that we are actively engaging with regional distribution
partners to make LYMPHIR available to eligible patients through country-specific Named Patient Programs (NPPs) in Europe, South America
and the Middle East. As part of its NPP strategy, we have entered into an exclusive distribution agreement with Integris Pharma S.A.,
headquartered in Athens, Greece. The partnership covers Greece, Cyprus, Malta, Bulgaria, Romania, Croatia, Serbia, Albania, Bosnia Herzegovina,
Kosovo, Montenegro and North Macedonia.

In September 2024, the Company announced the inclusion
of LYMPHIR in the National Comprehensive Cancer Network (“NCCN”) guidelines and compendia. LYMPHIR was included bases on an
NCCN Category 2A recommendation which indicates a uniform NCCN consensus that LYMPHIR is appropriate as an option for patients with CTCL.
The Company believes that LYMPHIR’s addition to the NCCN guidelines will assist LYMPHIR in obtaining coverage and reimbursement
from the Centers for Medicare and Medicaid Services (“CMS”).

In February 2025, Citius Pharma announced that
LYMPHIR had been assigned a unique, permanent Healthcare Common Procedure Coding System (HCPCS) J-code (J9161) by CMS.

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Supply and Manufacturing

The Company does not currently have, nor do we
intend to establish, our own manufacturing facilities. We have secured supply agreements for LYMPHIR with third-party cGMP facilities
who are in compliance with current good manufacturing practices as generally accepted by the FDA. The Company is confident that all drug
substance and drug product materials meet or will meet specifications as agreed with the FDA.

The Company also believes our contract manufacturers
have sufficient capacity to support demand for LYMPHIR and any future clinical phase and approved products as our business grows.

In addition to our supply agreements with third-party
manufacturers, the Company has contracted with other proven suppliers for, testing, labeling, packaging, and distribution of LYMPHIR.

In general, our suppliers purchase raw materials
and supplies on the open market. Substantially all such materials are obtainable from a number of sources so that the loss of any one
source of supply would not have a material adverse effect on us.

Our product development and manufacturing for
LYMPHIR is subject to regulation under various federal and state laws, including the Food, Drug and Cosmetic Act, Occupational Safety
and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, the Controlled
Substances Act and other present and potential future federal, state or local regulations.

If we fail to raise additional capital, and as
a result are unable to abide by our contractual obligations with these third-party manufacturers and suppliers, including making timely
payment, the necessary third-party support to successfully commercialize LYMPHIR could be delayed or terminated.

LYMPHIR License Agreement

On September 3, 2021, Citius Pharma acquired the
exclusive license of E7777 (denileukin diftitox), an oncology immunotherapy for the treatment of CTCL, from Dr. Reddy’s, who had
exclusively licensed it previously from Eisai. The exclusive license, which was amended as part of the transaction, is with Eisai and
includes rights to develop and commercialize LYMPHIR in all markets except for Japan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia,
Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia, Laos, Afghanistan, Bangladesh,
Bhutan, Nepal, Mongolia, and Papua New Guinea. Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the
product. In April 2022, Citius Pharma assigned the license agreement to SpinCo, at which time SpinCo began operations. Upon the completion
of the Merger, the Company acquired SpinCo as our wholly owned subsidiary. Citius Pharma remains a guarantor on all of Citius Oncology’s
payment obligations thereunder.

Obligations to
Eisai under the License Agreement

Under the license agreement, Eisai is to receive
a $5.9 million development milestone payment upon initial approval by the FDA of LYMPHIR for the CTCL indication and an aggregate of up
to $22 million related to the achievement of net product sales thresholds. Pursuant to the terms of the license agreement, through 2022,
Citius Pharma reimbursed Eisai for approximately $2.65 million of Eisai’s costs to complete the ongoing Phase 3 pivotal clinical
trial for LYMPHIR for the CTCL indication and for all reasonable costs associated with the preparation of a BLA for LYMPHIR. The Company
has accrued the $2.9 million unpaid balance of the development milestone payment as of September 30, 2025.

Pursuant to the terms of the license agreement,
Eisai was responsible for completing the current CTCL clinical trial, and chemistry, manufacturing and controls development activities
through the production of the BLA, which Citius Pharma filed with the FDA in September 2022. Citius Pharma is responsible for the costs
of correcting any major deficiencies in the BLA, as well as the costs of any further studies and development costs associated with potential
additional indications.

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On March 28, 2025, Citius Oncology and Eisai entered
into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the milestone payment and certain
unpaid invoices. We agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter on the 15th of
each of the next four months to pay Eisai $2.35 million and make a final payment of $2,197,892 to Eisai on or before December 15, 2025,
in each case with interest on each obligation from its original due date through the date of actual payment under the letter agreement
at the rate of 2% per annum. During the year ended September 30, 2025, we recorded $218,032 in interest expense under the agreement. The
parties released each other from any and all claims, losses, damages, costs and expenses that arise from or related to our failure to
pay the milestone payment or the other incurred costs under the license agreement except for any claims arising out of a breach of the
letter agreement. All other terms of the license agreement remain in full force and effect. During the year ended September 30, 2025 we
paid $3 million of the development milestone and the balance of $2.9 million is included in license fee payable at September 30, 2025.
On July 21, 2025, Citius Oncology made a payment to Eisai of $1,616,522 for other invoices and accumulated interest associated with
the letter agreement.

The term of the license agreement will continue
until (i) March 30, 2026, if there has not been a commercial sale of a licensed product in the territory, or (ii) if there has been a
first commercial sale of a licensed product in the territory by March 30, 2026, the 10-year anniversary of the first commercial sale on
a country-by-country basis. The initial commercial orders for LYMPHIR were placed and filled in December 2025. The term of the license
may be extended for additional 10-year periods for all countries in the territory by notifying Eisai and paying an extension fee equal
to $10 million. Either party may terminate the license agreement upon written notice if the other party is in material breach of the agreement,
subject to cure within the designated time periods. Either party also may terminate the license agreement immediately upon written notice
if the other party files for bankruptcy or takes related actions or is unable to pay its debts as they become due. Additionally, either
party will have the right to terminate the agreement if the other party directly or indirectly challenges the patentability, enforceability,
or validity of any licensed patent.

The Company is responsible for preparing, filing,
prosecuting, and maintaining all patent applications and patents included in the licensed patents that we intend to pursue within the
territory.

Obligations to
Dr. Reddy’s under the Asset Purchase Agreement

Citius Pharma and Dr. Reddy’s entered into
an asset purchase agreement whereby Dr. Reddy’s transferred to Citius Pharma the then-existing patents, know-how, regulatory documentation
and other assets related to LYMPHIR and Citius Pharma agreed to assume certain liabilities associated with Dr. Reddy’s development
of LYMPHIR. The agreement was assigned to the Company in April 2022.

Under the terms of the asset purchase agreement
with Dr. Reddy’s, the Company will be obligated to pay up to an aggregate of $40 million related to CTCL approvals in the U.S. and
other markets, up to $70 million in development milestones for additional indications, and up to $300 million for commercial sales milestones.
The Company will also be obligated to pay on a fiscal quarter basis tiered royalties equal to low double-digit percentages of net product
sales (within a range of 10% to 15%). The royalties will end on the earlier of (i) the 15-year anniversary of the first commercial sale
of the latest indication that received regulatory approval in the applicable country and (ii) the date on which a biosimilar product results
in the reduction of net sales in the applicable product by 50% in two consecutive quarters, as compared to the four quarters prior to
the first commercial sale of the biosimilar product. The Company will also pay to Dr. Reddy’s an amount equal to a low-thirties
percentage of any sublicense upfront consideration or milestone payments (or the like) received by the Company and the greater of (i)
a low-thirties percentage of any sublicensee sales-based royalties or (ii) a mid-single digit percentage of such licensee’s net
sales.

Also under the agreement with Dr. Reddy’s,
the Company is required to (i) use commercially reasonable efforts to make commercially available products in the CTCL indication, peripheral
T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator initiated immuno-oncology trials, (iii) use
commercially reasonable efforts to achieve each of the approval milestones, and (iv) complete each specified immuno-oncology investigator
trial on or before the four-year anniversary of the effective date of the definitive agreement. Additionally, the Company is required
to commercially launch a product in a territory within six months of receiving regulatory approval for such product in each such jurisdiction.
The Company is responsible for these and any and all further developmental activities relating to LYMPHIR.

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Dr. Reddy’s agreed to not compete against
the Company in the development of products containing compounds in LYMPHIR in the territory covered by the license for a designated period
of time. There are no termination provisions included in the asset purchase agreement other than those related to the term of the royalties.
To assist in the transfer of the LYMPHIR assets, the Company and Dr. Reddy’s entered into a transition services agreement at the
closing of the transaction, which was in effect until March 2022.

At the time of the FDA
approval for LYMPHIR, a $27.5 million milestone became payable to Dr. Reddy’s, of which a balance of $19.75 million included in
license fee payable, remained due as of September 30, 2025. After discussions, Dr. Reddy’s agreed to a partial deferral without
penalty of this milestone payment. During the years ended September 30, 2025 and 2024, we paid $2,750,000 and $5,000,000, respectively,
against the outstanding milestone fee.

LYMPHIR Patents

As part of the definitive agreement with Dr. Reddy’s,
Citius Pharma acquired and later transferred to the Company method of use patents in which E7777 is administered in combination with the
programmed cell death protein 1 (“PD-1”) pathway inhibitor drug class. PD-1 plays a vital role in inhibiting immune responses
and promoting self-tolerance through modulating the activity of T-cells, activating apoptosis of antigen-specific T cells and inhibiting
apoptosis of regulatory T cells.

The following patents
were acquired:

●
U.S. Provisional Application No. 63/070,645, which was filed on August 26, 2020, and subsequently published as US 2022/0062390 A1 on March 3, 2022, entitled Methods of Treating Cancer. Expiration date of August 23, 2041.

●
International Patent Application Number: PCT/IB2021/0576733, which was filed with the World Intellectual Property Organization on August 23, 2021 for Europe, and subsequently published as WO 2022/043863 A1 on March 3, 2022, entitled, Combination for Use in Methods of Treating Cancer. Expiration date of August 23, 2041.

Regulation

U.S. Government Regulation

The research, development, testing, manufacture,
labeling, promotion, advertising, distribution, and marketing, among other things, of LYMPHIR and other potential future product candidates,
is extensively regulated by governmental authorities in the U.S. and other countries.

In the U.S., the FDA regulates drugs under the
Federal Food, Drug, and Cosmetic Act (the “FDCA”) and the agency’s implementing regulations. If the Company fails to
comply with the applicable U.S. requirements at any time during the product development process, including clinical testing, as well as
at any time before and after the approval process, we may become subject to administrative or judicial sanctions, or other actions, such
as the FDA’s delay in review of or refusal to approve a pending NDA or BLA, withdrawal of an approval, imposition of a clinical
hold or study termination, issuance of Warning Letters or Untitled Letters, mandated modifications to promotional materials or issuance
of corrective information, requests for product recalls, consent decrees, corporate integrity agreements, deferred prosecution agreements,
product seizures or detentions, refusal to allow product import or export, total or partial suspension of or restriction of or imposition
of other requirements relating to production or distribution, injunctions, fines, debarment from government contracts and refusal of future
orders under existing contracts, exclusion from participation in federal and state healthcare programs, FDA debarment, restitution, disgorgement
or civil or criminal penalties, including fines and imprisonment. Any enforcement action could have a material adverse effect on the Company
and our operations.

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FDA Marketing Approval

Before any one of the Company’s drug product
candidates may be marketed in the U.S., it must be approved by the FDA. Obtaining FDA marketing approval for new products requires substantial
time, effort and financial resources. In order for the FDA to determine that a product is safe and effective for the proposed indication,
the product must first undergo testing in animals (nonclinical studies). The data generated from nonclinical studies is used to support
the filing of an IND under which human studies are conducted. Human testing is generally conducted under an IND in three phases following
Good Clinical Practices (“GCP”) regulations:

●
Phase 1 studies evaluate the safety and tolerability of the drug, generally in normal, healthy volunteers;

●
Phase 2 studies evaluate safety and efficacy, as well as appropriate doses; these studies are typically conducted in patient volunteers who suffer from the particular disease condition that the drug is designed to treat; and

●
Phase 3 studies evaluate safety and efficacy of the product at specific doses in one or more larger pivotal trials.

In addition to human testing, the manufacturing
process of the potential product must be developed in accordance with cGMP regulations. Prior to the approval of a new product, the FDA
will inspect the facilities at which the proposed drug product is manufactured to ensure cGMP compliance.

The cumulative safety and efficacy data generated
from the clinical trials described above, chemistry, manufacturing and control (“CMC”) information, nonclinical study data
and proposed labeling are used as the basis to support approval of a marketing application (NDA or BLA) to the FDA. The preparation of
an NDA or BLA requires the expenditure of substantial funds and the commitment of substantial resources. Additionally, at the time of
an NDA or BLA submission a user fee is required (unless the product has ODD) to be paid. The FDA conducts a preliminary administrative
review upon receipt of the NDA or BLA submission, the FDA either accepts the NDA or BLA submission or does not. If the application is
not accepted for review by FDA, the sponsor of the application must resolve the deficiencies and re-submit the application, re-starting
the review clock.

After evaluating the NDA or BLA and all related
information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and
clinical trial sites, the FDA may issue an approval letter, or, in some cases, a CRL. A CRL generally contains a statement of specific
conditions that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical studies,
or other information, in order for FDA approval. Even with submission of this additional information, the FDA may decide that the NDA
or BLA does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction,
the FDA may issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information
for specific indications.

Data obtained from the development program are
not always conclusive and may be susceptible to varying interpretations. These instances may delay, limit or prevent regulatory approval.
The FDA may not grant approval on a timely basis, or at all. We may encounter difficulties or unanticipated costs in our efforts to secure
necessary governmental approvals, which could delay or preclude us from marketing our products. The FDA may limit the indications for
use or place other conditions on any approvals that could restrict the commercial application of the product.

FDA Post-Approval Considerations

Drugs manufactured or distributed pursuant to
FDA approvals are subject to continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping,
manufacturing, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences
with the product and drug shortages. During the approval process, the FDA and the sponsor may agree that specific studies or clinical
trials should be conducted as post-marketing commitments, but they are not required. The FDA may also impose post-marketing requirements
as a condition of approval of an NDA or BLA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials
and surveillance, to further assess and monitor the product’s safety and effectiveness after commercialization. Once an approval
is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems
occur after the product becomes available in the market.

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After approval, most changes to the approved product,
such as manufacturing changes and adding new indications or other labeling claims, are subject to FDA review and approval. There are also
annual user fee requirements for any marketed product and new application fees for supplemental applications with clinical data. Additionally,
the FDA strictly regulates the labeling, advertising and promotion of products under an approved NDA or BLA. The FDA and other agencies
actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly
marketed or promoted off-label uses may be subject to significant liability, including criminal and civil penalties under the FDCA and
False Claims Act, exclusion from participation in federal healthcare programs, debarment from government contracts, refusal of future
orders under existing contracts and mandatory compliance programs under corporate integrity agreements or deferred prosecution agreements.

Other Regulations of the Healthcare Industry

In addition to FDA regulations governing the marketing
of pharmaceutical products, there are various state and federal laws that may restrict business practices in the biopharmaceutical industry.
These include the following:

●
The federal Anti-Kickback laws and implementing regulations, which prohibit persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

●
Other Medicare laws, regulations, rules, manual provisions and policies that prescribe the requirements for coverage and payment for services performed by our customers, including the amount of such payment;

●
The federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;

●
The Foreign Corrupt Practices Act (“FCPA”), which prohibits certain payments made to foreign government officials;

●
State and foreign law equivalents of the foregoing and state laws regarding pharmaceutical company marketing compliance, reporting and disclosure obligations;

●
The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the “Affordable Care Act” or “ACA”), which among other things: changes access to healthcare products and services; creates new fees for the pharmaceutical and medical device industries; changes rebates and prices for health care products and services; and requires additional reporting and disclosure;

●
The Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations (collectively, “HIPAA”), which creates federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program and which also imposes certain obligations on entities with respect to the privacy, security and transmission of individually identifiable health information; and

●
The federal Physician Payment Sunshine Act, which requires certain pharmaceutical and biological manufacturers to engage in extensive tracking of payments or transfers of value to physicians and teaching hospitals and public reporting of the payment data.

If our operations are found to be in violation
of any of these laws, regulations, rules or policies or any other law or governmental regulation, or if interpretations of the foregoing
change, we may be subject to civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs and the curtailment
or restructuring of our operations.

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To the extent that any of our products are sold
in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing
requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting
of payments or transfers of value to healthcare professionals. This is currently not applicable as our only approved product is not currently
sold in a foreign country nor have we applied for any foreign approvals. The Company has signed international distribution agreements
covering Greece, Cyprus other Balkan countries as well as Turkey, Bahrain, Qatar, Oman, Kuwait, Saudi Arabia, and the UAE through named
patient programs which allows access to LYMPHIR where permitted by local law without constituting commercial approval outside the United
States.

Coverage and Reimbursement

The commercial success of our product candidates
and our ability to commercialize any approved product candidates successfully will depend in part on the extent to which governmental
authorities, private health insurers and other third-party payers provide coverage for and establish adequate reimbursement levels for
our therapeutic product candidates. In the United States, the European Union and other potentially significant markets for our product
candidates, government authorities and third-party payers are increasingly imposing additional requirements and restrictions on coverage,
attempting to limit reimbursement levels or regulate the price of drugs and other medical products and services, particularly for new
and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be. For example,
in the United States, federal and state governments reimburse covered prescription drugs at varying rates generally below average wholesale
price. Federal programs also impose price controls through mandatory ceiling prices on purchases by federal agencies and federally funded
hospitals and clinics and mandatory rebates on retail pharmacy prescriptions paid by Medicaid and Tricare. These restrictions and limitations
influence the purchase of healthcare services and products. Legislative proposals to reform healthcare or reduce costs under government
programs may result in lower reimbursement for our products and product candidates or exclusion of our products and product candidates
from coverage. Moreover, the Medicare and Medicaid programs increasingly are used as models for how private payers and other governmental
payers develop their coverage and reimbursement policies.

In addition, the increased emphasis on managed
healthcare in the United States and on country and regional pricing and reimbursement controls in the European Union will put additional
pressure on product pricing, reimbursement and utilization, which may adversely affect our future product sales and results of operations.
These pressures can arise from rules and practices of managed care groups, competition within therapeutic classes, availability of generic
equivalents, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, coverage and
reimbursement policies and pricing in general. The cost containment measures that healthcare payers and providers are instituting and
any healthcare reform implemented in the future could significantly reduce our revenues from the sale of any approved products. We cannot
provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for our approved products
in whole or in part.

Healthcare Reform

The United States and many foreign jurisdictions
have enacted or proposed legislative and regulatory changes affecting the healthcare system. The United States government, state legislatures
and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid
healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded
prescription drugs.

In recent years, Congress has considered reductions
in Medicare reimbursement levels for drugs administered by physicians. Further, CMS, the agency that administers the Medicare and Medicaid
programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some drugs. Cost reduction initiatives
and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved
products. While Medicare regulations apply only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage
policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from federal
legislation or regulation may result in a similar reduction in payments from private payers.

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The ACA substantially changed the way healthcare
is financed by both governmental and private insurers, and significantly impacts the pharmaceutical industry. The ACA was intended to
broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and
abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and
medical device manufacturers, and impose additional health policy reforms. Since its passage, there have been significant ongoing efforts
to modify or eliminate the ACA.

The first Trump administration pushed for modifications
to the ACA. In addition, the Tax Cuts and Jobs Act (the “TCJA”), enacted on December 22, 2017, repealed the shared responsibility
payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended
(the “IRC”), as amended, commonly referred to as the individual mandate. While the Biden administration rolled back many of
the executive orders issued by President Trump in his first term, ongoing repeal and reform efforts impacting the ACA and the healthcare
sector more broadly are being sought and are likely under the current Trump administration.

Other legislative changes have been proposed and
adopted since passage of the ACA. These have, among other things, reduced Medicare payments to several types of providers, including hospitals,
imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments
to providers.

Further legislative and regulatory changes under
the ACA remain possible. The Inflation Reduction Act of 2022, enacted on August 16, 2022, includes several provisions to lower prescription
drug costs for Medicare patients and reduce drug spending by the federal government. It is unknown what form any future changes or any
law would take under the current Trump administration, and how or whether it may affect our business in the future. We expect that changes
or additions to the ACA, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices
(which becomes effective in January 2026 for 10 prescription drugs) and changes stemming from other healthcare reform measures, especially
with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare
industry. In addition, the Affordable Care Act has also been subject to challenges in the courts, which remain ongoing.

Payment methodologies may be subject to changes
in healthcare legislation and regulatory initiatives as well. In addition, at the state level, legislatures have passed and implemented
regulations, and may pass additional legislation, designed to control pharmaceutical product pricing, including price or patient reimbursement
constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases,
designed to encourage importation from other countries and bulk purchasing.

We expect that additional federal, state and foreign
healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will
pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products,
once approved, or additional pricing pressures.

Foreign Regulation

The Company and any of our collaborative partners
may be subject to widely varying foreign regulations, which may be different from those of the FDA, governing clinical trials, manufacture,
product registration and approval and pharmaceutical sales. Whether or not FDA approval has been obtained, the Company or our collaborative
partners must obtain a separate approval for a product by the comparable regulatory authorities of foreign countries prior to the commencement
of product marketing in such countries. In certain countries, regulatory authorities also establish pricing and reimbursement criteria.
The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. In addition,
under current U.S. law, there are restrictions on the export of products not approved by the FDA, depending on the country involved and
the status of the product in that country.

Employees

The Company has no employees. Through our consulting
and collaboration arrangements, including the A&R Shared Services Agreement with Citius Pharma, we have access to more than 30 professionals
(including our executive officers), who possess significant expertise in business development, legal, accounting, regulatory affairs,
clinical operations, and manufacturing. The Company also relies upon a network of consultants to support our clinical studies and manufacturing
efforts.

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