Cidara Therapeutics Inc. (NASDAQ: CDTX) shares saw a massive gain on Tuesday after the firm announced that it has entered into a strategic partnership with Mundipharma. The goal of this partnership is to develop and commercialize Cidara’s rezafungin for the treatment and prevention of invasive fungal infections.
What stands out with this deal is the sheer amount of money that Cidara can make. Although all the money won’t come at once, it will be smooth sailing ahead for Cidara, assuming positive results for its ongoing trials.
Under the terms of the agreement, in exchange for granting Mundipharma exclusive commercialization rights to rezafungin outside the United States and Japan, Cidara will receive a $30 million upfront payment and Mundipharma will make a $9 million equity investment in Cidara. Cidara also will receive an additional $42 million in near-term funding to support the global Phase 3 Restore and Respect trials for the treatment and prevention of fungal infections.
Additionally, Cidara is eligible to receive development, regulatory and commercial milestone payments, representing a total potential transaction value of $568 million plus double-digit royalties. Cidara will continue to lead the ongoing global Phase 3 development programs for rezafungin with the support of Mundipharma. The companies may pursue additional indications or formulations of rezafungin.
After Tuesday’s move, Cidara has a market cap of over $62 million. Keep in mind that this transaction is valued at roughly $568 million, about nine times what Cidara is worth, even after jumping over 50% on the news.
Jeffrey Stein, Ph.D., president and CEO of Cidara, commented:
This is a transformational collaboration for Cidara, and we look forward to working closely with our colleagues at Mundipharma, a highly successful, profitable company with a commercial presence spanning 120 markets worldwide and annual sales exceeding €2 billion. Mundipharma is particularly well positioned globally with established hospital and hematology/oncology business units to fully leverage the commercial potential of rezafungin. Through this partnership, both companies fully commit to advancing rezafungin and helping to save the lives of patients who are highly vulnerable to these deadly infections.
Shares of Cidara Therapeutics traded up about 56% on Tuesday to $2.62, in a 52-week range of $1.22 to $4.95. The consensus price target is $6.40.