Citius Pharmaceuticals Plummets 24%: What's Behind the Sharp Selloff?

Summary
• Citius Pharmaceuticals (CTXR) tumbles 24% to $0.8006, its lowest since December 2025
• Intraday range of $1.18 to $0.63 highlights extreme volatility
• Earnings report cited as catalyst, yet market sentiment remains bearish
• Turnover surges 103% as short-term traders capitalize on gap-down move

Citius Pharmaceuticals has experienced a dramatic intraday selloff, with shares plunging 24% to $0.8006 as of 6:20 PM ET. The stock opened at $1.18 but collapsed to a 52-week low of $0.63, driven by a combination of earnings-driven optimism and broader market skepticism. The sharp decline has sparked intense debate among traders about the sustainability of the move and potential catalysts beyond the reported Q4 results.

Earnings Optimism Overshadowed by Structural Weakness
Despite reporting better-than-expected fourth-quarter earnings, Citius Pharmaceuticals' shares collapsed due to structural concerns. The company's 2025 fiscal year results revealed a $24.8 million net loss, with R&D expenses rising to $6.4 million and G&A costs at $8.8 million. While the launch of LYMPHIR in December 2025 marked a revenue milestone, the stock's reaction suggests investors are pricing in long-term risks: high leverage (38.05% debt-to-equity), negative cash flow (-$5.49 million operating cash flow), and a lack of profitability visibility. The market appears to be discounting the company's aggressive financing strategy ($36 million raised post-fiscal year) as insufficient to offset recurring losses.

Drug Manufacturers Sector Mixed as Amgen Outperforms
The broader Drug Manufacturers - Specialty & Generic sector showed mixed performance, with Amgen (AMGN) rising 0.75% as a sector leader. Citius' 24% drop diverged sharply from peers like Omeros (OMER, +73%) and Edgewise Therapeutics (EWTX, +25.5%), which surged on clinical trial updates. This divergence highlights Citius' unique challenges: its high debt load, unproven commercialization model for LYMPHIR, and lack of near-term catalysts compared to peers with clearer revenue pathways.

Bearish Setup: Options and ETFs for Short-Term Volatility
• 200-day MA: $1.224 (above current price)
• RSI: 41.98 (neutral to bearish)
• MACD: -0.0566 (bearish divergence)
• Bollinger Bands: Price at 0.9271 (lower band) suggests oversold conditions

The technical picture points to a short-term bearish bias, with key support at $0.9271 and resistance at $1.1698. A breakdown below $0.9271 could trigger further selling into the 52-week low of $0.63. The options chain reveals two high-conviction plays:

• CTXR20260515C1 (Call):
- Strike: $1
- Expiry: May 15, 2026
- IV: 30.00% (moderate)
- Delta: 0.1579 (moderate sensitivity)
- Theta: -0.00016 (slow time decay)
- Gamma: 1.604 (high sensitivity to price swings)
- Turnover: 6,600 (liquid)
- Leverage Ratio: 2.67% (moderate)
- Payoff at 5% downside: $0.00 (strike above current price)
- Why it stands out: High gamma and liquidity make this call ideal for a rebound scenario if the stock stabilizes above $1.

• CTXR20260515P1 (Put):
- Strike: $1
- Expiry: May 15, 2026
- IV: 88.92% (elevated)
- Delta: -0.5366 (high sensitivity)
- Theta: -0.000406 (moderate decay)
- Gamma: 0.8916 (strong sensitivity)
- Turnover: 40 (limited)
- Leverage Ratio: 2.67% (moderate)
- Payoff at 5% downside: $0.05 (strike above projected price)
- Why it stands out: Elevated IV and high delta make this put a strong bearish play if the selloff accelerates below $0.9271.

Trading Insight: Aggressive bears should prioritize the CTXR20260515P1 put for a 5% downside scenario, while cautious bulls may test the CTXR20260515C1 call if the stock stabilizes above $1.1698.

Backtest Citius Stock Performance
The backtest of CTXR's performance after a -23% intraday plunge from 2022 to now shows mixed results. The 3-Day win rate is 45.65%, the 10-Day win rate is 41.39%, and the 30-Day win rate is 46.03%. However, the stock experienced a maximum return of only -0.24% over the 30 days, with a maximum return day at 0. This indicates that while there were some short-term gains, they were not substantial, and the stock largely remained in a recovery phase.

Short-Term Bearish Bias: Key Levels to Watch
Citius Pharmaceuticals' 24% intraday selloff reflects a market pricing in structural risks despite Q4 earnings optimism. The stock's technical profile—oversold RSI, bearish MACD, and breakdown below Bollinger Bands—suggests further downside to the 52-week low of $0.63. Investors should monitor the $0.9271 support level and the $1.1698 resistance. Meanwhile, sector leader Amgen (AMGN) rose 0.75%, highlighting Citius' divergence from peers. Action: Short-term traders should target the CTXR20260515P1 put if the stock breaks below $0.9271, while longs should wait for a confirmed rebound above $1.1698.