Merck's $9.2B Acquisition of Cidara Therapeutics Marks Major Push into Antiviral Market

Merck & Co. has announced a significant $9.2 billion acquisition of Cidara Therapeutics, a move that underscores the pharmaceutical giant's commitment to expanding its antiviral portfolio. The deal, which values Cidara at $221.50 per share, represents a 109% premium over the company's closing price on Thursday and centers around CD388, a promising long-acting influenza prevention drug.

CD388: A Potential Game-Changer in Flu Prevention

CD388 is being developed as a non-vaccine alternative for influenza prevention. The drug is a member of the drug-Fc conjugate class, combining multiple copies of a potent small molecule neuraminidase inhibitor with a bespoke Fc fragment of a human antibody. In a recent Phase 2b trial, CD388 demonstrated impressive efficacy, with the highest 450-mg dose conferring 76% protection against seasonal influenza in unvaccinated adults compared to placebo.

Merck CEO Robert Davis expressed confidence in CD388's potential, stating, "We continue to execute our science-led business development strategy, augmenting our pipeline with CD388, a potentially first-in-class, long-acting antiviral designed to prevent influenza in individuals at higher risk of complications."

The drug is currently undergoing Phase 3 testing, with interim study results expected next year. The FDA has granted CD388 a designation that should expedite future review processes.

Strategic Implications for Merck

This acquisition is part of Merck's broader strategy to offset potential revenue losses when its top-selling cancer immunotherapy, Keytruda, loses patent protection later this decade. The company has been actively redirecting spending toward newly launched drugs and experimental treatments to spur future growth.

Industry analysts at RBC Capital Markets project a $3.8 billion market opportunity for CD388, highlighting the significant potential return on Merck's investment. The deal also follows Merck's recent $10 billion acquisition of Verona Pharma for a lung disease drug, further demonstrating the company's aggressive pursuit of promising therapies.

Cidara's Journey and BARDA Support

Cidara's path to this acquisition has been marked by both challenges and opportunities. The company previously lost its partnership with Johnson & Johnson's Janssen unit in April 2024 when J&J wound down its infectious disease and vaccine R&D efforts. However, Cidara successfully regained the rights to CD388 and secured potentially up to $339 million in funding from the U.S. Department of Health and Human Services' Biomedical Advanced Research and Development Authority (BARDA).

This BARDA support, which included $58 million in confirmed cash over two years, has been crucial for Cidara in establishing domestic manufacturing capabilities for CD388 and developing its initial commercial supply chain.

Jeffrey Stein, CEO of Cidara, commented on the acquisition, saying, "Merck's global development, regulatory and commercial capabilities provide the expertise and resources needed to bring this important innovation to those individuals who need it most."