Cidara Therapeutics has entered into a definitive agreement with Johnson & Johnson (J&J) to buy back the rights to its influenza therapy, CD388.
Cidara will pay a one-time cost of $85m, however, J&J will be eligible to receive additional milestone-based payments. Following the deal closure, Cidara will bear all responsibility for the future development, manufacturing, and commercialisation activities of CD388.
Following pipeline reshuffle news, Cidara stock was up by over 47% in premarket trading today, compared to when the market opened on 24 April. The company reported $35.8m in cash reserves as of 31 December 2023.
In 2021, J&J bought the rights to CD388 for $27m in an upfront payment to Cidara, which would be eligible for an estimated aggregate of $753m in budgeted research and development (R&D) funding, milestone-based payments, and royalties on sales.
Two years later, J&J said it would discontinue the CD388 influenza programme as part of its pipeline prioritisation efforts. In September 2023, J&J decided that it would retain the ownership of CD388, triggering a $7m milestone payment to Cidara. However, the company was adamant that it was not planning to add the drug to its portfolio, but rather transfer CD388’s rights and obligations to a third party.
Cidara received $23.3m in R&D, clinical supply and milestone-based payments from J&J in 2023.
Concurrent with the reacquisition of CD388, Cidara closed a private placement of preferred stock. The company plans to use the $240m in gross proceeds to buy back the rights for CD388 and advance its development. The financiers included multiple US-based venture capital firms such as RA Capital Management, Bain Capital Life Sciences, Biotech Value Fund, and Canaan Partners.
“We expect that the capital infusion from this financing, together with existing cash and the expected near-term cost savings associated with our recently announced divestiture of Rezzayo (rezafungin) to Mundipharma, positions us well to execute on the CD388 development program and advance the key assets in our pipeline,” said Jeffrey Stein, PhD, president and CEO of Cidara.
CD388 is a drug-Fc conjugate (DFC) immunotherapy developed using Cidara’s proprietary Cloudbreak platform. Cidara states that CD388 is not a vaccine against influenza A and B, but acts by inhibiting viral proliferation and allowing for immune-mediated viral clearance, which as per the company, provides an advantage over current flu vaccines.
