(908) 967-6677 x105 ascott@citiuspharma.com LETTER TO SHAREHOLDERS May 2020 Dear Fellow Shareholders, Our thoughts go out to all those affected by COVID-19. We especially want to express our gratitude and admiration to a

LETTER TO SHAREHOLDERS

Dear Fellow Shareholders,

Our thoughts go out to all those affected

by COVID-19. We especially want to express our gratitude and admiration to all the front-line healthcare workers who are putting

themselves at risk as they treat and comfort patients.

Citius Pharmaceuticals, Inc. ("Company")

has made significant progress since our last communication to shareholders, and we have significant news to share with you about

recent developments that relate directly to the pandemic affecting us all. We recently acquired an option from Novellus, Inc. to

license a potential therapy to treat Acute Respiratory Distress Syndrome (ARDS), which is a major complication of the COVID-19

coronavirus and has led to the majority of COVID-19 patient deaths.

While the COVID-19 pandemic has affected

the progress of virtually all clinical trials, including our own, the Company continues to make progress, albeit at a slower pace.

The Mino-Lok pivotal Phase 3 trial is now expected to complete enrollment in the first half of 2021 and, prior to full enrollment,

we also expect to conduct an interim analysis for efficacy and safety in the second half of 2020. For Mino-Wrap, we have been consulting

with FDA and anticipate having a pre-IND (PIND) meeting by the end of 2020. For Halo-Lido, we plan to initiate a Phase 2b

trial in the second half of 2020.

Citius Drug Pipeline

Stem-Cell Therapy for ARDS due

to COVID-19 - Exclusive Option to License Novel Therapy from Novellus, Inc.

In the span of just a few months, the

COVID-19 pandemic has had a tremendous impact on the world - including the deaths of hundreds of thousands of people -

and has led to social distancing policies for millions of people and an unprecedented global economic slowdown in terms of speed

and breadth. Considerable and concerted worldwide efforts are now focused on developing a vaccine and other therapies to address

the COVID-19 crisis. In early April, we announced that we signed an exclusive six-month option with Novellus, Inc., a privately

held preclinical stage biotechnology company focused on creating new engineered cellular therapies and diagnostics, to in-license

a stem-cell therapy for ARDS with an initial targeted application in ARDS associated with COVID-19.

ARDS is the most common cause of respiratory

failure and mortality in COVID-19 patients with no currently approved drug therapy available. Mechanical ventilation, which is

essentially oxygen forced into the lungs, is typically used in the worst cases of COVID-19, but ARDS is believed to account for

80% of the deaths in ventilated patients suffering from COVID-19. ARDS is characterized by widespread inflammation in the lungs

and affects approximately 250,000 people each year in the U.S. Unfortunately, the pandemic has caused the prevalence of ARDS to

sharply increase beyond this base case. ARDS has a 30-50% mortality rate and has symptoms of shortness of breath, rapid breathing

and heart rate, chest pain (especially while inhaling), and bluish skin coloration.

Novellus' cellular process relies

on its exclusive non-immunogenic synthetic messenger ribonucleic acid (mRNA) reprogramming process to create a master cell bank

of induced pluripotent stem cells (iPSCs). The iPSCs create mesenchymal stem cells (MSCs) that, due to their multi-potent nature

and their ability to secrete multiple paracrine factors, such as anti-inflammatory cytokines, can potentially treat the major abnormalities

that underlie ARDS. While the immunomodulatory properties of MSCs have been well characterized, clinical results in ARDS are only

now being investigated. The cellular processing technology used by Novellus provides a virtually unlimited supply of MSCs (called

NC-MSCs) that are allogeneic (i.e., "off-the-shelf"). To put it in simpler terms, these NC-MSCs are derived from a

new and improved source, are quick to produce, can scale easily, can be transported and delivered easily, and are especially potent.

Furthermore, MSCs, in general, have a favorable safety profile from their history of use in other indications.

Of course, working with Novellus, we

still need to pursue the traditional regulatory path and conduct clinical trials to confirm that these seemingly superior NC-MSCs

are effective in humans in order to obtain FDA approval for this ARDS therapy, but we certainly are encouraged by the preclinical

data we have seen thus far. Previous research suggests the rationale for using MSCs in ARDS is that they can offer potent anti-inflammatory

properties that can counter the cytokine storm in the lungs and can enhance the clearance of fluid from the lungs. They may also

exhibit antimicrobial properties and restore endothelial and epithelial barrier integrity in the lungs.

In late April, we announced a pre-IND

(Investigational New Drug) submission to the FDA under its new Coronavirus Treatment Acceleration Program (CTAP) for this novel

stem-cell therapy for ARDS in COVID-19 patients. We hope to initiate a clinical trial in patients by the end of 2020. The FDA's

emergency CTAP program was designed to accelerate the development of COVID-19 treatments via faster communications and regulatory

review protocols. Thus, we can benefit from a faster track at the FDA throughout the traditional regulatory process because the

FDA is prioritizing such development activity given the current pandemic.

Mino-Lok (FDA Phase III)

- Interim Data Analysis and Enrollment Update

Mino-Lok is our lead product and

is an antibiotic lock solution for use in treating catheter-related bloodstream infections (CRBSIs). In mid-December 2019, we announced

a positive outcome for the pre-specified interim futility analysis for our ongoing pivotal Phase 3 trial of Mino-Lok vs. standard-of-care

antibiotic locks. This analysis was performed once enrollment in the trial reached 40% in late September 2019. The trial's

Data Monitoring Committee (DMC), an independent panel of experts who monitor the safety and efficacy of the trial's progress,

recommended the trial proceed as planned. In February 2020, we announced the trial had reached 50% enrollment. The next trial milestone

will be an interim analysis of safety and superior efficacy. We expect to collect the relevant data by the end of June and hold

our next DMC meeting in the third quarter. If the trial were to meet the interim superiority threshold, it could be halted earlier

than anticipated. However, we expect that the trial will continue as planned until it is fully enrolled, which we anticipate to

be in the first half of 2021.

Post-Mastectomy Infection Prevention, a $400 Million Market Opportunity

Mino-Wrap is a bio-absorbable, antimicrobial

solid film wrap that is wrapped around a tissue expander and placed in the surgical pocket following a mastectomy to prevent post-surgical

infections by reducing microbial colonization of the device. Once installed, Mino-Wrap slowly liquefies in situ for a specified

period of time, providing extended protection against infection.

The reported rate of tissue expander-related

infections is between 2.5% and 24%, depending on the extent of surgery, duration of postoperative drainage, and many other factors.

Once the tissue expander becomes infected, the patient is hospitalized, and the tissue expander may need to be removed. These serious

infections may lead to a delay in life-saving chemo-radiation therapy, which can be a devastating consequence for the patient,

and can also lead to a delay in permanent breast implantation.

Mino-Wrap is designed to allow the temporary

tissue expander to be inflated without any restrictions and to prevent infection and biofilm formation surrounding the tissue expander

over a longer duration than that from the current treatment regimen. Mino-Wrap could also be used with breast implants during reconstruction

following removal of the tissue expander.

We currently expect to have a PIND meeting

with the FDA before the end of the year and begin a Phase 2 clinical study in 2021. The market opportunity for Mino-Wrap in preventing

infections following breast implant surgeries following mastectomies is estimated to be $400 million.

Halo-Lido - Aiming to

be the first FDA-approved prescription product to treat hemorrhoids in the U.S.

Halo-Lido is being developed for symptomatic

relief of hemorrhoids and combines the high-potency steroid halobetasol with lidocaine. Based on results of previous clinical work

and a Vasoconstriction Assay (VCA), we selected a cream formulation combining the potent steroid Halobetasol Propionate and Lidocaine

HCl to move forward in clinical development. The manufacturing scale-up is complete and the formulation has met chemical, physical,

and stability criteria. This formulation will be used in a Phase 2b study expected to start in the second half of 2020.

Over 10 million patients in the U.S.

admit to symptoms of hemorrhoidal disease and one-third of them seek physician treatment, yet there are no FDA-approved prescription

products available. Over-the-counter hemorrhoid product sales are approximately 20 million units annually. Our formulation, if

approved, would be the first prescription product to treat hemorrhoids approved by the FDA in the U.S.

Other Corporate Activities -

We believe our products in development

and the market opportunities we are pursuing are quite compelling and are always looking for ways to share our story with investors.