Image Source: Cidara Therapeutics
Cidara Therapeutics (CDTX) has pivoted by selling its Rezayo business and concentrating on its unique Cloudbreak platform which produces MDCs (Multi-Drug Conjugates) that combine small molecules or peptides with human antibody fragments (FC) to enhance therapeutic efficacy.The platform has produced several promising drug candidates, such as CD388, a promising anti-influenza MDC which is the most advanced in terms of regulatory process as it has already undergone two clinical trials producing promising results.The company reacquired the global rights from former partner Janssen this year. Recently, the company announced that it has begun to dose patients in its Phase 2b NAVIGATE trial for Influenza Prevention evaluating CD388 for the pre-exposure prophylaxis of seasonal influenza. Cidara’s goal is to develop CD388 as a novel influenza prevention option that could provide long-lasting protection against multiple strains of the virus with a single dose. The company believes that CD388’s unique mechanism of action could address current limitations in influenza prevention, particularly for individuals who may not respond well to traditional vaccines.While with biotech companies, there are no guarantees for drugs that have yet to clear the regulatory process, but CD388 and an Oncology MDC (CBO421) which has just received IND clearance and should start a clinical trial late this year or early next year, are sufficiently promising and targeting very large markets to make the shares attractive for long-term investors.We can add the IP in the form of the Cloudbreak platform and the cash that should be enough to last the company through the NAVIGATE trial. The company also received a $250M investment from heavyweight biotech investors earlier in the year.With its innovative CD388 program, strong financial position, and renewed focus on influenza prevention, Cidara Therapeutics is well-positioned to make significant strides in the fight against influenza. As the company progresses through clinical development, investors and the medical community alike will be watching closely to see if CD388 can deliver on its promise of universal, long-lasting influenza prevention.Financial platforms greatly underrepresent the company’s value as the fully diluted share count is much higher than they report.
Rezayo
Cidara had a revenue-producing anti-fungal drug rezafungin (brand name Rezayo), a once-weekly anti-fungal injection used to treat candidemia or invasive candidiasis.It sold its Rezayo business to Mundipharma in April 2024, producing $128M in cost savings consisting of approximately $67M in clinical development and CMC costs over the next three years and an additional approximately $61M in forecasted obligations through the patent life of rezafungin.
Cloudbreak platform
Cidara’s Cloudbreak Platform
is a proprietary technology that enables the development of novel drug-Fc conjugates (DFCs). DFCs are designed to inhibit specific disease targets while simultaneously engaging the immune system.It is used to develop drug-Fc conjugates (DFCs) that couple targeted small molecules and peptides to a human antibody fragment (Fc). Cloudbreak DFCs consist of two main components:
Targeting Moiety (TM): This can be a small molecule or peptide that binds to surface targets on a pathogen or host cell to directly inhibit viral proliferation.
Effector Moiety (EM): This is a proprietary composition containing the fragment crystallizable (FC) region of human IgG1 antibodies. This region is chosen to extend the DFC’s half-life and engage the human immune system.
These “single molecule cocktails” are engineered to combine the best attributes of small molecules and antibodies and overcome the limitations of each. They can be designed to inhibit specific disease targets and simultaneously engage the immune system. Key features that make the Cloudbreak platform unique:
Multivalent Binding: This has the potential to increase potency compared to other therapies.
Drug Cocktail in a Single Molecule: DFCs can engage different targets simultaneously, acting like a “drug cocktail” in a single molecule. This may improve treatment response and disease prevention.
Advantages over Vaccines: DFCs offer potential advantages over vaccines because they can provide antiviral protection regardless of the patient’s immune status.
Smaller Size for Better Tissue Penetration: DFCs are smaller than antibody-drug conjugates (ADCs) and monoclonal antibodies, which allows for better tissue penetration. They are also designed to target multiple sites.
Focus on Potency: Unlike small molecules, DFC optimization can primarily focus on potency.
Long Duration of Action: DFCs have the potential to provide months of protection from disease with a single dose.
Rapid Onset: DFCs are designed to rapidly distribute to the site of infection for disease treatment.
Alternatives are small molecules or other antibody-based therapeutics (monoclonal or bispecific antibodies, or antibody-drug conjugates). DFCs have major advantages as DFCs consist of the Fc part of antibodies plus multiple targeting moieties, which can be small molecules or peptides, combining the advantages of both:
Improved pharmacokinetics (long duration of action versus small molecules).
Potential for multi-targeting with a single DFC (higher efficacy and lower risk of resistance).
Potential less toxicity compared to small molecules due to being limited to the extra-cellular compartment.
DFCs smaller size produces better tissue (tumor!) penetration and potential to access cryptic binding targets (compared to larger antibody-based therapeutics).
Cost advantage compared to other antibody-based therapeutics
Potential expansion of the platform to numerous indications beyond the current targets of oncology and infectious diseases.
The Cloudbreak Platform is modular and adjustable to the needs of the indication. Both the Fc component and targeting moieties are modifiable. It’s possible to engineer multiple targeting moieties in the same DFC creating the possibility of multi-targeting with a single DFC (resulting in higher potency and a lower chance of emergence of resistance, important in infectious diseases and even more in oncology).
Pipeline
CD388 has already started its P2b NAVIGATE trial while the other candidates are pre-clinical so we’ll mostly focus on CD388 below.
The company is focusing on CD388 as well after reacquiring the global rights to CD388 from Janssen.
Cidara has reduced its workforce to concentrate on developing CD388 in September, impacting approximately 30% of its workforce.
CD388CD388 provides universal prevention against influenza A and B with a single dose. CD388 has the potential to become an alternative to the flu shot as they work instantly. CD388 obtained FDA Fast Track designation in June 2023 CD388 functions by linking a potent small molecule inhibitor of influenza neuraminidase to a human antibody fragment (Fc), allowing it to engage the immune system while directly inhibiting the virus.CD388 doesn’t work by the Fc-mediator effector functions, that is, contrary to vaccines, it works as a long-acting antiviral and its activity is not dependent on an intact immune system and retains activity against NAI-resistant strains.
CD388 has several potential advantages:
Broad-Spectrum, Universal Coverage: Preclinical studies as well as the P2a study have shown CD388 to be effective against a wide range of influenza A and B viruses, including pandemic strains, seasonal strains, and drug-resistant strains.
Superior Resistance Profile: CD388’s unique targeting mechanism and multivalent target engagement may make it less susceptible to viral resistance, so it offers better protection for people with compromised immune systems, a significant advantage over flu vaccines.
Seasonal and Pandemic Readiness: CD388 could be a valuable tool for responding quickly to influenza outbreaks, both seasonal and pandemic. Its rapid onset of protection and ability to cover strains often missed by vaccines make it a promising alternative. Additionally, CD388 is not subject to the time-consuming and complex process of vaccine manufacturing.
Long Duration of Action: A single dose of CD388 may offer protection for an entire influenza season, a significant improvement over current antiviral medications that require daily dosing.
More potent than antivirals:retains activity:
A little overview:
CD388 has already completed P1 and P2a trials (see the P2 interim data
from March 2023) and has now started
its P2b NAVIGATE trial in September.
The main CD388 Phase 2a results
The trial reported a total of 63 side effects among participants who received CD388, compared to 25 side effects in the placebo group. Notably, the high-dose group (150 mg) had more reported side effects than the placebo group, with 41 participants experiencing these effects.
However, most side effects were mild, with only a few classified as moderate. There were no serious adverse events or discontinuations due to the treatment. One participant in the high-dose group experienced injection site pain, while others reported upper respiratory tract infections and headaches.
Participants underwent various health assessments, including blood tests and EKGs, which showed no significant changes attributable to CD388, reinforcing its safety profile.
The high-dose group exhibited a significantly lower viral load compared to the placebo group. The mean Area Under the Viral Load-time Curve (VL-AUC) was 10.7 for CD388 versus 16.1 for placebo, indicating reduced viral replication in the upper respiratory tract.
The incidence of PCR-confirmed influenza infections was notably lower in the high-dose group (21.4%) compared to the placebo group (50%). This suggests that CD388 may effectively reduce the likelihood of developing influenza after exposure.
Overall, the Phase 2a trial results suggest that CD388 is generally safe and well-tolerated while showing potential efficacy in reducing both viral load and infection rates among participants exposed to influenza.
Phase 2b NAVIGATE trial
The NAVIGATE trial has started
with 5K patients (1K in the UK at a single site and 4K in the US at 57 sites) in September 2024.
It pits various single doses of CD388 versus a placebo group
Market Opportunity
Oncology
The Cloudbreak platform for Oncology aims to design DFCs to inhibit specific disease targets while engaging the immune system, enhancing therapeutic efficacy and safety in cancer treatment.A major focus of Cidara’s oncology efforts is on inhibiting CD73, an enzyme that is overexpressed in many tumors and contributes to immune evasion by producing adenosine, which suppresses anti-tumor immunity. It has been recognized as a promising cancer target for some time.By targeting CD73, Cidara aims to transform the immunosuppressive TME (tumor microenvironment) into one that allows immune cells to combat tumors effectively. The main focus, for now, is on CBO421, which operates with a dual mechanism of action:
Competitive Inhibition: CBO421 acts as a potent AMP-competitive inhibitor of CD73, effectively blocking its enzymatic activity. This inhibition is critical for preventing the conversion of AMP to adenosine, which suppresses immune cell activation.
Receptor Internalization: In addition to direct inhibition, CBO421 triggers the internalization of CD73 receptors on cancer cells. This process further reduces the availability of CD73 on the cell surface, diminishing its ability to produce adenosine and enhancing the anti-tumor immune response.
CBO421 combines the potent enzymatic inhibition of small molecule inhibitors with the receptor internalization induced by anti-CD37 monoclonal antibodies, potentially offering superior activity versus small molecule and/or mAb treatments).CBO421 has received IND (Investigational New Drug) clearance from the FDA in July 2024, setting it up to start a P1 clinical trial starting late 2024 or early 2025.CBO212 was actually the first oncology DFC candidate selected from the Cloudbreak platform specifically designed to target CD73.
Financials
![](https://charts.ycharts.com/generate_fund_chart?mode=image_contents&calcs=id%3Arevenues_ttm%2Cinclude%3Atrue%2C%2Cid%3Arevenues_growth%2Cinclude%3Atrue&chartId=&chartType=&correlations=&customGrowthAmount=&dataInLegend=value&dateSelection=range&displayDateRange=&endDate=&format=real&legendOnChart=true&lineAnnotations=&nameInLegend=name_and_ticker¬e=&partner=seeking_alpha_635"eLegend=true&recessions=false&scaleType=linear&securities=id%3ACDTX%2Cinclude%3Atrue%2Ctype%3Asecurity%2C%2C&securityGroup=&securitylistName=&securitylistSecurityId=&source=false&splitType=metric&startDate=&title=&units=false&useCustomColors=false&useEstimates=false&zoom=3&hideValueFlags=false&redesign=true&chartAnnotations=&axisExtremes=&sortColumn=&sortDirection=)
As the Company reported in April 2024, it sold its Rezayo business to Mundipharma, sold its Rezayo business consisting of approximately $67M in clinical development and CMC costs over the next three years and an additional approximately $61M in forecasted obligations through the patent life of Rezayo.The company didreacquiring with premier institutions (RA Capital Management, Bain Capital Life Sciences and the like) in April 2024, issuing 240K convertible preferred stock at $1000 per share with a conversion price of $14.2 per share.reacquiring from Janssen included an $85M upfront payment, up to $150M in development/regulatory milestones, and up to $455M in commercial milestones. It doesn’t include royalties, but of course, Cidera foregoes the milestone payments from Janssen. OpEx has gone down to just $11.4M in Q2:
![](https://charts.ycharts.com/generate_fund_chart?mode=image_contents&calcs=id%3Atotal_operating_expense%2Cinclude%3Atrue%2C%2C&chartId=&chartType=&correlations=&customGrowthAmount=&dataInLegend=value&dateSelection=range&displayDateRange=&endDate=&format=real&legendOnChart=true&lineAnnotations=&nameInLegend=name_and_ticker¬e=&partner=seeking_alpha_635"eLegend=true&recessions=false&scaleType=linear&securities=id%3ACDTX%2Cinclude%3Atrue%2Ctype%3Asecurity%2C%2C&securityGroup=&securitylistName=&securitylistSecurityId=&source=false&splitType=metric&startDate=&title=&units=false&useCustomColors=false&useEstimates=false&zoom=3&hideValueFlags=false&redesign=true&chartAnnotations=&axisExtremes=&sortColumn=&sortDirection=)
However, OpEx is expected to grow substantially with the start of the P2b CD388 trial (which has just started) and could rise further if its cancer compounds reach the clinical stage.On the other hand, management decided to focus on the clinical work on CD388 and has reduced its workforce by mid-September.The company had $164.37M in cash at the end of Q2, which seems plenty to last them at least until the end of the P2b CD388 trial, if not longer.
Valuation
At 23.2M fully diluted shares the company has a market cap of $255.2M (at $11 per share).
Conclusion
The company has a unique asset in its Cloudbreak platform producing designer DFCs with dual activity.
Its most advanced candidate, CD388 has the potential to become a universal influenza prophylactic as it’s well tolerated and combines important advantages, covering all strains and being effective irrespective of the state of a person’s immune system. The FDA assigned it fast-track designation and it has just started its P2b clinical trial with 5K patients.
The company has several promising additional DFCs in Oncology, the most advanced is CBO421 for solid tumor treatment which was IND-cleared this year and will enter its first clinical trial late this year or early next year.
The company has plenty of cash to see it through the NAVIGATE trial with results expected in H2 2025.
While clinical-stage biotech companies always contain risks, the candidates are promising, serve multi-billion-sized markets, and the company has significant IP in its Cloudbreak platform.
A market cap of around $250M is about the same as some pristine biotech investors recently put into the company, we think the shares are attractively priced for biotech investors with a significant time horizon.
Looking for similar stocks? Other companies in the influenza space include CSL Seqirus (part of CSL Limited, CMXHF), Eradivir (private), Genentech (Roche Group, RHHBY), and Johnson & Johnson (JNJ).More By This Author:A Game Changer For GameSquare
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