Clinical trial results have yielded a major payout for Cidara Therapeutics, a San Diego company developing an antifungal drug.
Mundipharma paid Cidara $30 million upfront, pledged a $9 million equity investment in the company, and committed $42 million in the near term for clinical testing of Cidara’s drug candidate, called rezafungin. In exchange, Mundipharma received exclusive commercialization rights to rezafungin outside of the U.S. and Japan.
In addition, Cidara is eligible for $568 million in development, regulatory and commercial milestones, plus royalties on drug sales. Much of this is dependent on Cidara’s drug candidate getting approval from the U.S. Food and Drug Administration.
The deal, announced Sept. 3, follows clinical trial results that hit their mark.
In July, Cidara reported that rezafungin met objectives in efficacy, safety and tolerability in the second part of mid-stage clinical trials. It’s now in late-stage, or phase 3, clinical testing to prevent and treat Candida infections – namely Candidemia. The disease — the fourth most common cause of bloodstream infections in U.S. hospitalizations — occurs when a yeast-like fungus enters the bloodstream and spreads through the body.
A separate phase 3 trial will gauge whether rezafungin can prevent can Candida, Aspergillus and Pneumocystis in patients who have a compromised immune system, including from organ transplant.
Cidara has said an estimated 97,000 Americans die from hospital-related invasive fungal infections each year.
Under the deal Cidara will keep leading rezafungin’s phase 3 development programs, albeit with the aforementioned $42 million in support. The companies might pursue rezafungin in additional indications.
“This is a transformational collaboration for Cidara,” said Jeffrey Stein, president and CEO of Cidara.
On Sept. 3, Cidara’s stock closed at $2.35 a share, up nearly 40% on the day.
“Overall, we view the Mundipharma partnership as a significant de-risking event,” said analyst Robert Driscoll with Wedbush Securities.
Driscoll said the cash injection lengthens the company’s runway amid late-stage testing.
He added reimbursement policies under consideration to stoke the development of antibiotics and anti-fungal drugs give added reason to be bullish on Cidara. The proposals are a response to drugmakers abandoning the antibiotic space in the face of economics that often don’t pencil out.