Citius Oncology Inc. (NASDAQ:CTOR) dropped 13.8% in premarket trading Tuesday after the company unveiled plans to raise roughly $18 million through a combination of registered direct and private placement offerings.
The cancer-focused biotech said it reached an agreement with a single institutional healthcare investor to sell shares and warrants at a price of $1.09 per share — an at-the-market valuation under Nasdaq rules. The financing includes 1,284,404 shares sold via a registered direct offering and an additional 15,229,358 shares, or pre-funded warrants, issued in a parallel private placement.
Both transactions include warrants that will become exercisable only after shareholders give their approval, and they will remain valid for five years from that date. H.C. Wainwright & Co. is acting as the exclusive placement agent, with the deals expected to close around December 10, 2025.
Citius Oncology said the new capital will bolster its balance sheet and help support the commercialization of LYMPHIR™, its immunotherapy designed for treating cutaneous T-cell lymphoma (CTCL). The proceeds will also go toward working capital and general corporate purposes.
The sharp share decline reflects the typical market response to equity raises, which can dilute existing shareholders even when the funds are intended to advance strategic initiatives.
Citius Oncology operates as a subsidiary of Citius Pharmaceuticals, Inc. (NASDAQ:CTXR) and is dedicated to developing and bringing oncology-focused therapies to market.