Cidara Therapeutics, Inc. (CDTX) Earnings Call Transcript
April 24, 2024
Earnings Call Speaker Segments
Greetings. Welcome to Cidara Therapeutics Business Strategy Update Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Brian Ritchie of LifeSci Advisors. Thank you. You may begin.
Thank you, operator, and thank you all for joining us today. With me on today's call are Jeff Stein, President and Chief Executive Officer; Shane Ward, Chief Operating and Legal Officer; and Preetam Shah, Chief Financial and Chief Business Officer of Cidara Therapeutics. Before I turn the call over to Jeff, I would like to note that all the information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that during this call, management will be making forward-looking statements. Actual results could differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in Cidara's SEC filings, including its annual report on Form 10-K and its current reports on Form 8-K. I would also like to point out that the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, April 24, 2024. Cidara undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. I will now turn the call over to Jeff Stein, President and CEO of Cidara.
Good afternoon, everyone, and thank you for joining our business strategy update call. We are very excited to announce today a series of transformative transactions for Cidara. Let's begin with our definitive agreement with Johnson & Johnson to reacquire the exclusive global development and commercial rights to CD388, which is being developed for the seasonal prevention of all strains of influenza A and B. CD388 is a long-acting antiviral drug developed and invented by Cidara based on our Cloudbreak drug-Fc or DFC platform. As a reminder, in April 2021, Cidara and J&J entered into an exclusive worldwide license and collaboration agreement for the clinical development of CD388. Subsequent to last year's announcement by J&J that they were exiting the infectious disease space and initiating a process to divest multiple partnered programs, including CD388, Cidara entered into discussions with J&J to reacquire the CD388 program. Today, we are very pleased to announce that CD388 has once again become the lead Cloudbreak program at Cidara. We are in the process of finalizing the protocol for the Phase IIb clinical trial, which we intend to initiate during the upcoming Northern Hemisphere influenza season. We believe that CD388 has the potential to capture a meaningful portion of the approximately $9 billion global influenza market, which has been growing at an approximate 11% compound annual growth rate and is expected to reach $23 billion by 2032. In order to support the planned Phase IIb study, we entered into a definitive agreement for the sale of preferred stock in the $240 million private placement led by RA Capital Management with significant participation by Bain Capital Life Sciences as well as Biotech Venture Funds (sic) [ Biotech Value Fund ], BVF, and Canaan Partners. We are absolutely thrilled with a significant investment by this top-tier syndicate of new and existing investors and believe it is indicative of the substantial potential of CD388 as a universal preventative of seasonal and pandemic influenza to patients worldwide. The private placement funded the upfront payment to J&J and is expected to fully fund the planned Phase IIb clinical trial. We believe that CD388 may have significant advantages beyond and in addition to flu vaccines with the potential for universal protection even in the absence of a robust immune system and without the requirement for seasonal influenza strain prediction. This view is supported by preclinical data as well as the results of 3 Phase I clinical studies and 1 Phase IIa clinical study. Importantly, both a significant unmet need in the influenza landscape and a large market opportunity currently exists. The CDC recommends that all people over 6 months of age receive the flu vaccine each year. Yet despite this, during the 2022, 2023 flu season, the CDC reported that 11% of the U.S. population or more than 31 million Americans had symptomatic illness related to flu, resulting in 360,000 hospitalizations and 21,000 [Technical Difficulty] Apologize for the call dropping everybody. But hopefully, you heard most of the narrative or excitement about this series of transactions we announced today. And with that, let me turn it back over to the operator, and we'd be happy to take your questions.
[Operator Instructions] Our first question is from Joseph Stringer with Needham & Company.
First one from us is just big picture positioning for CD388. What's your latest thinking just given the competitive landscape, in particular, flu vaccines? What's your view on how you want to position CD388? And how do you think that would fit into the treatment paradigm? And then secondly, you mentioned you're in the process of finalizing the Phase IIb protocol. Just curious if you can disclose or give us a sense for the basics of what that Phase IIb trial design looks like such as number of patients, endpoints and maybe time lines to enrollment on that?
Sure, Joe. With respect to the first part of your questions, we actually see a greater need for a flu preventative. And just as a reminder, you mentioned treatment. While we believe that CD388 could potentially be used as a treatment, we are developing this as a once a flu season preventative for influenza. And I think that, that unmet need has only dramatically increased based on what we're seeing in the development pipeline with discontinuations of development of monoclonal antibodies and other vaccines. And also, just today, there was a joint briefing session of the FDA, CDC and USDA that highlighted the challenge of the H5N1 bird flu, which now has been reported in dairy cattle herds in 8 different states and has confirmed that in the commercial milk supply, it's testing PCR positive. So dramatic unmet need only increasing. We see that CD388 is the right long-acting preventative certainly at the right time. And with respect to the second part of your question on the Phase IIb clinical trial design, we will be reporting details of that in the coming 1 to 2 weeks. So we're still finalizing the protocol. So we don't want to prematurely discuss details of that design yet.
Great. And then just a quick follow-up from us. How does the reacquisition of the flu program affect the pace at which you can advance your preclinical oncology programs, in particular, CBO421, your CD73 inhibitor? Operationally, resource-wise, are you still on track to enter the clinic in the second half of this year? And when could we see initial clinical data from that program?
So as we've disclosed previously, we are still on track for filing an IND mid this year. This is for CBO421 directed against CD73. Just last week, we disclosed substantial new information at the AACR conference on that and our other preclinical programs, which we think are very exciting. So we have not yet disclosed with precise timing when we expect to start the Phase Ia and Ib clinical study, but we certainly will be keeping you and others updated after the IND filing.
Our next question is from Louise Chen with Cantor Fitzgerald.
Congratulations on all the strategic updates. So I wanted to ask you, first, on CD388. What kind of data have you seen thus far to help establish proof of concept for your drug? And what has your drug been able to do that others haven't? My follow-up question is basically, how have you been able to design something like this where this has kind of been a holy grail that a lot of people have been searching for but have not been able to successfully accomplish?
Sure. With respect to the first part of your question, Louise, we've disclosed the detail of multiple preclinical studies. Those are publicly available on Cidara's website and elsewhere, and the results of 3 Phase I and the Phase IIa study. All of the details of those studies are not yet available, but we expect to close that in -- to announce more details on those results in the coming 1 to 2 weeks. The clinical study reports from several of those studies only recently became finalized. And so you will note in that disclosure, and that will be an 8-K disclosure and a substantive update to our corporate deck, which we will post on our website, that the collective preclinical and clinical data from those 3 Phase Is and the Phase IIa study strongly support the opportunity for CD388 to provide universal protection against all strains of influenza A and B, and importantly, we believe, in virtually all people regardless of immune status with a single dose. So we will be disclosing more details of the Phase IIb study that will test that hypothesis in the coming weeks as well.
And then what about how you've been able to achieve something like this, where others have had a really hard time doing it?
That's a great question and really has been the impetus behind the invention of the DFC or drug-Fc conjugate program. So to date, all efforts against influenza are -- have been focused on vaccines, of which there are multiple types, monoclonal antibodies and then small molecules. Really, what the DFC platform does is to combine the strength of all of those. So CD388 has the long half-life of a vaccine or a monoclonal antibody but the exquisite potency and selectivity of a long-acting drug. And so when you put those attributes together in a single molecule, special things happen. And with CD388, that special thing is the opportunity to create a long-acting drug with potential once a flu season administration that has universal protection against all strains. And importantly, because it's not a vaccine that does not rely upon the immune system for its efficacy, we believe that it should be effective in all people, regardless of immune status.
Our next question is from Ed Arce with H.C. Wainwright.
This is Thomas here asking a couple of questions for Ed. Congratulations on the reacquisition of CD388. Beyond the scientific rationale that you went over earlier for 388, can you discuss what are some of the biggest factors to reacquire 388 from a corporate standpoint? And then also second question, your thoughts on Janssen's decision to divest the rights to 388.
Sure. Yes, let me take the second part of that question first. First, as you may be aware, mid last year, Janssen announced its intent to divest most of its infectious disease programs. This is part of a broader reorganization of the company. CD388 was one of those. That announcement came right before Janssen was to make the decision to provide Cidara with a notice to proceed to acquire formally the opportunity to put CD388 into late-stage clinical development. So once they announced that, we had conversations with Janssen about the reacquisition of the program. This was a competitive process. I can't speak directly to how Cidara prevailed in that process other than to say that Cidara being the inventor and developer of the program to date. We have been responsible for all preclinical and clinical studies with the close collaboration of our colleagues at Janssen. We believe that part of that decision process could have involved the fact that I believe we're the only company that could credibly start the Phase IIb study in this year's flu season.
Great. Got it. And then perhaps can you discuss just quickly how the 388 fit into your overall DFC platform?
How it fits in? Well, yes, that's -- it was -- when it was invented, it was the only member of the DFC platform 2 years ago. Since we entered into the collaboration with Janssen, we have expanded that platform into oncology. And now we have programs against multiple targets in oncology. As mentioned, several of those were disclosed at the AACR conference last week in San Diego. So we see that the opportunities and advantages that CD388 has in influenza can be replicated in oncology and other therapeutic areas. So we see multiple opportunities for the DFC platform across the landscape of infectious disease, oncology and perhaps other areas.
[Operator Instructions] Our next question is from Steve Brozak with WBB.
Congrats. Jeff, you had mentioned one statistic about 11% of Americans getting flu this season. There's another statistic that we track as well, and that's the match that we see with current flu vaccines and efficacy as far as in dealing with the seasonal influenza strains. In some years, over the last 10, it's dropped down to as low as 19%. Just so that -- a reminder, can you give us any details on how 388 would be able to have a stronger profile in dealing with these types of seasonal variants and why, okay? Follow-up after that, please.
Sure. That's a really important question, Steve, and perhaps that's part of what I had covered when the call cut out. But CD388, not being a vaccine, is not reliant on the immune system. Secondly, it is a long-acting drug, and the targeting portion or targeting moiety of CD388 targets a highly conserved region of neuraminidase, which is universally conserved in all strains of influenza, pandemic and seasonal strains, A and B. And it is in variant. And because it's in variant and essential and when you pair that with a long-acting FC and put that together in a single molecule, you have for the first time an opportunity to have a universal preventative against all strains with the potential of being active against all people regardless of immune status. Part of the statistics that you cited is due to the fact that low efficacy is not only the match, but the fact that many people do not respond to vaccines. They are immune compromised. They are on immunosuppressive drugs or have other issues or elderly, over 65, for example. And they simply do not respond to vaccine. So having a long-acting drug for influenza, obviously, has potentials that currently available vaccines, monoclonal antibodies or small molecules simply do not have. And what is your follow-up question?
The follow-up has to do with -- obviously, this is not a vaccine. So it's got a -- from notes and from your press releases and analyzing 388, you've described it as a prophylactic therapeutic, and also it works with the immune system. So along those lines, having the antiviral component and also having the benefit of dealing with immune protection, how -- you're about to go into trialing now to take advantage of the Northern Hemisphere opportunity. How do you present this in the clinical setting to the different clinicians that are going to be looking at this as the advantages for them? And what do you see yourself explaining to this? And I know that obviously, J&J has taken this for the last 3 years. But now that it's back to its home, how do you go out there and say, hey, listen, this is something where this is the next generation? How do you position that? And I'll hop off the queue -- I'll hop back into the queue.
Sure. Absolutely, Steve. The way we position this is that it takes the guesswork out of selecting a vaccine or the strains that form the basis of the vaccine. Wouldn't you rather have something where you have a high degree of confidence that regardless of the seasonal strain that may emerge and even evolve during the course of a flu season and regardless of your immune status, whether you're young or old or on immunosuppressive therapies or otherwise debilitated in your response to a vaccine, wouldn't you rather have the reliability of a long-acting drug that will be administered in a very familiar format? So remember that this is available -- bioavailable as both an intramuscular or a subcutaneous dose. So we actually have the opportunity of having a single intramuscular injection, much like the vaccine, flu vaccine that everybody is familiar with. Or potentially, this could be administered as a subcutaneous injection as well. So lots of dosing flexibility with reliability against all flu strains and reliability in all people. And I think that is something that should resonate, especially in an environment where we see the rapid evolution and emergence of new influenza strains.
Got it. Well, congratulations and also congratulations on super funding this so that you basically take all the guesswork out of how are you going to pay for this. Congrats on all fronts.
Thank you, Steve.
This will conclude our question-and-answer session. I would like to turn the conference back over to Jeff for closing remarks.
Well, thanks again for joining today's call. I think -- you hopefully all appreciate that this is a transformational opportunity for Cidara, CD388 and the rest of our Cloudbreak platform. With multiple near-term catalysts and attractive long-term potential, Cidara is well positioned to become an established leader in the treatment of viral and oncologic disease. We're committed to advancing our diverse pipeline of assets to transform the current standard of care for patients, and we look forward to providing updates on the progress in the coming months. Thank you all for joining our call today. We are extremely pleased to share the details of these important transactions. Finally, I'd like to remind everyone that additional details of the J&J and Mundipharma agreements and the PIPE terms are available in our 8-K filings. We appreciate your continued interest and support of Cidara and hope you enjoy the rest of your day. Thank you so much.
Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.
Read the full transcript via the API
You're viewing the first half of this call. Get the complete Cidara Therapeutics, Inc. transcript - plus 251,000+ transcripts from 12,000+ companies, speaker segments and full-text search - through the EarningsAPI REST API or hosted MCP server.
Get an API key View API docs →For developers and AI pipelines
Programmatic access to Cidara Therapeutics, Inc. earnings transcripts and 251,000+ others is available through the
EarningsAPI REST API and the hosted MCP server.
Quarterly plans from $105 - full transcripts, speaker segments, full-text search,
and the /api/v1/transcripts/recent polling endpoint for ETL pipelines.