SAN DIEGO - Cidara Therapeutics, Inc. (NASDAQ:CDTX), a biotechnology company specializing in drug-Fc conjugate immunotherapies, announced today the sale of its antifungal drug, rezafungin, to Mundipharma. The transaction is expected to save Cidara approximately $128 million in costs, which the company plans to reinvest in its Cloudbreak development programs.
The divestiture includes the transfer of all future royalties and milestones from Mundipharma and Melinta Therapeutics (OTC:MLNTQ), which were previously payable to Cidara, as well as the rezafungin patent portfolio, product data, and regulatory approvals. Mundipharma has also assumed the obligation to conduct and fund the ongoing ReSPECT Phase 3 clinical trial for rezafungin. This strategic move allows Cidara to concentrate on advancing its lead oncology candidate, CBO421, and other pipeline assets.
Jeffrey Stein, Ph.D., President and CEO of Cidara, stated that the cost savings from this deal would enable the company to progress its promising pipeline and potentially create transformational new therapies in oncology and other disease areas.
Cidara estimates cost savings of approximately $67 million in clinical development and CMC costs over the next three years, with an additional $61 million in forecasted obligations through the expected patent life of rezafungin. The company believes these savings will significantly contribute to the advancement of its Cloudbreak platform.
The sale follows the recent approval of rezafungin acetate for the treatment of invasive candidiasis in adults by the United Kingdom Medicines and Healthcare products Regulatory Agency. As part of the agreement, Mundipharma waived Cidara's obligation to reimburse a $11.145 million milestone advance, contingent on Cidara completing transition services and asset transfer in accordance with the definitive agreements.
This announcement is based on a press release statement from Cidara Therapeutics and outlines the company's strategic decision to divest one of its assets to focus on its core development programs. The financial benefits from this transaction are anticipated to bolster Cidara's research and development efforts in the field of immunotherapy.
InvestingPro Insights
In light of the recent strategic divestiture by Cidara Therapeutics, Inc. (NASDAQ:CDTX), the company's financial health and market performance provide additional context for investors. With a market capitalization of approximately $1.11 billion, Cidara is navigating the competitive biotechnology landscape. Notably, the company's cash position is stronger than its debt load, which may provide flexibility in funding ongoing and future projects. However, it's important to consider that analysts have expressed concerns over the company's cash burn rate and anticipate a sales decline in the current year.
InvestingPro data reveals that Cidara's revenue for the last twelve months as of Q4 2023 stood at $63.91 million, with a negative revenue growth of 0.84%. The company's gross profit margin during the same period was -9.62%, highlighting challenges in profitability. Additionally, the stock has experienced significant volatility, with a one-week price total return of -29.04% and a one-month price total return of -34.07%.
InvestingPro Tips for Cidara suggest that while the company holds more cash than debt, it is quickly burning through cash reserves. Moreover, the stock has taken a notable hit over the last week and month, reflecting investor sentiment and market reactions to company developments. With analysts not expecting profitability this year and projecting a net income drop, these factors are crucial for potential investors to consider.
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