Cidara Therapeutics - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 delivered a cleaner P&L (no IPR&D or collaboration revenue) and an EPS beat versus Street: diluted EPS was $(1.65) versus consensus $(1.815), aided by interest income and reversal of indirect tax liabilities; revenue was $0, in line with consensus.
• Clinical momentum is the primary catalyst: Phase 2b NAVIGATE met primary and all secondary endpoints with dose-dependent protection of 76.1%, 61.3%, and 57.7%, with strong safety; End-of-Phase 2 FDA meeting is scheduled, breakthrough therapy designation has been requested, and BARDA funding proposal submitted.
• Balance sheet significantly strengthened to fund Phase 3: cash, cash equivalents, and restricted cash were $516.9M at June 30, 2025 following a $402.5M upsized offering; CFO guided runway through completion of Phase 3.
• Management guided initiation of Phase 3 no later than spring 2026 (Southern Hemisphere), with operational readiness to start as early as this fall pending FDA alignment — a potential near-term stock catalyst on FDA minutes and trial start clarity.
• Stock narrative likely pivots around regulatory milestones (FDA minutes, BTD decision), Phase 3 start timing, and BARDA outcome; positive efficacy versus historical vaccine effectiveness may support sentiment despite zero revenue.

What Went Well and What Went Wrong

What Went Well

• Phase 2b NAVIGATE efficacy: single-dose CD388 conferred 76.1% (450mg), 61.3% (300mg), and 57.7% (150mg) protection over 24 weeks; clear dose response and favorable safety profile, a key de-risking event for Phase 3.
• Regulatory and funding positioning: End-of-Phase 2 meeting scheduled; breakthrough therapy designation requested; BARDA proposal submitted — collectively improving the probability of expedited development and non-dilutive support.
• Capital strength: closed a $402.5M upsized offering; cash at quarter-end was $516.9M, with CFO stating funding is adequate through completion of the planned Phase 3 program.

Management quote:

• “The highly compelling results of our Phase 2b NAVIGATE trial… put us in a position of strength to execute on our Phase 3 plan…” — Jeffrey Stein, Ph.D., CEO.

What Went Wrong

• No revenue: collaboration revenue fell to $0 versus $0.3M in Q2 2024, reflecting prior termination of the Janssen collaboration, leaving the P&L fully dependent on financing and interest income.
• Elevated R&D/OpEx: R&D rose to $24.8M (from $6.7M YoY) with G&A at $6.5M (from $4.7M YoY) as CD388 development ramped; while expected, it increases burn absent near-term revenue.
• One-time tailwinds: EPS improvement included a $3.9M reversal of indirect tax liabilities — helpful but non-recurring and not indicative of ongoing operating leverage.

Transcript

Speaker 6

Good afternoon and welcome to the Cidara Therapeutics second quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To join the question queue, you may press star followed by one on your telephone keypad. To withdraw your question, please press star, then two. Please note that the event is being recorded. I would now like to turn the conference over to Brian Ritchie with LifeSci Advisors. Please go ahead.

Speaker 1

Thank you, operator, and good afternoon, everyone. With me today on the phone from Cidara Therapeutics is Dr. Jeff Stein, President and Chief Executive Officer. Following Dr. Stein's prepared remarks, we will be joined by Mr. Frank Karbe, Chief Financial Officer, Dr. Nicole Davarpanah, Chief Medical Officer, Dr. Les Tari, Chief Scientific Officer, and Mr. Jim Beitel, Chief Business Officer, to participate in a Q&A session. Earlier this afternoon, Cidara released financial results and a business update for the second quarter ended June 30, 2025. A copy of the press release and the company's corporate presentation are available on its company website. Please note that certain information discussed on the call today is covered under the Safe Harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Cidara management will be making forward-looking statements.

Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with a company's business. These forward-looking statements are qualified by the cautionary statements contained in Cidara's press release issued today and the company's SEC filings, including in the annual report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, August 7, 2025. Cidara undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that, I'd like to turn the call over to Dr. Jeff Stein. Jeff?

Speaker 3

Thank you, Brian, and thank you all for joining us for our second quarter 2025 earnings call. We made substantial progress in the second quarter, most notably with the announcement of positive top-line results from our Phase 2B Navigate clinical trial, our subsequent $400 million financing, and advancing our discussions with the FDA and BARDA regarding the further development of CD388. In an effort to keep today's prepared remarks as succinct as possible, and given our current status as a non-revenue-generating company, we will not have a dedicated section to review our quarterly financial results on this call and will not repeat in detail information that which has been previously discussed. Rather, I will point you to the press release and 10-Q we filed earlier today.

With that, I will begin by reminding everyone that Cidara Therapeutics' proprietary Cloudbreak platform enables the development of novel drug FC conjugates, or DFCs, a fundamentally new class of drug that combines the strengths of small molecules with those of monoclonal antibodies. Our lead asset, CD388, is a once-per-flu season antiviral drug with universal activity against all flu strains and is designed to have universal activity in all people, regardless of immune status. Its unique properties substantially enhance its antiviral activity, making it a potentially transformational universal preventative of influenza that overcomes the limitations of existing vaccines and antivirals. In late June, we announced the top-line results from our Navigate Phase 2B study, which evaluated the efficacy and safety of a single administration of CD388 for the prevention of seasonal influenza in healthy adult subjects.

The study was initiated the last week of September of last year, and enrollment was completed with over 5,000 subjects in the first week of December 2024, before the peak of the flu season. Subjects were randomized across three CD388 dose groups and one placebo group. The primary analysis included all available data as of April 30, 2025. The Navigate study was designed initially to determine dose selection for the Phase 3 study and was not powered for statistical significance. Prior to study start, we had expected, based on historical flu season averages, that 2% of participants in the placebo arm would develop influenza illness. However, as the 2024-2025 flu season unfolded, we updated this forecast and predicted that the placebo attack rate could be sufficiently high for the Navigate study to be piloted for statistical significance.

Based on this updated forecast, we discussed and reached agreement with the FDA on modifications to the study's statistical analysis plan to evaluate the potential statistical significance of CD388 efficacy versus placebo. The observed placebo attack rate in the Navigate study was 2.8%, which enabled the detection of a statistically significant difference from placebo at each dose group. Single doses of 450 mg, 300 mg, and 150 mg of CD388 confer 76%, 61%, and 58% protection, respectively, with p-values of less than 0.0001, 0.0024, and 0.005 at each dose, respectively. This is remarkable given the relatively small size of the study compared to vaccine studies. Importantly, the prevention efficacy data for each of the CD388 dose groups exceeded the historical average vaccine effectiveness of approximately 40% for a seasonal vaccine.

The safety and tolerability data were consistent with prior studies of CD388 and similar in all arms of the study, with no safety signals observed. While we observed a clear dose-response relationship for efficacy, there were no meaningful changes in safety across the dose groups and placebo. These and additional details of the full Navigate top-line results, including a replay of the data call, are available on our website under the Investors tab. We plan to present additional details from the Navigate trial at upcoming scientific conferences later this year. We believe that these results are groundbreaking for the field of influenza and support our confidence in the potential of CD388 to offer robust once-per-season protection against influenza A and B. Based on these robust data, we submitted our end-of-phase-two meeting request to the FDA to review the data and discuss the details of a Phase 3 study.

This meeting has been scheduled for later this month. Once we have received the meeting minutes from the FDA, we plan to disclose key details of our planned Phase 3 study, including study design, dose selection, and timelines. We have guided previously to initiate this study in the Southern Hemisphere in the spring of 2026. Pending feedback from the FDA, we are confident that we can meet that goal, but we are also operationally prepared to start the study this fall should this become an option based on the outcome of our end-of-phase-two meeting. If we are able to start Phase 3 this fall, we believe that the study will enroll over the course of two flu seasons: the 2025-2026 Northern Hemisphere and the subsequent 2026 Southern Hemisphere flu season. Following the initial flu season, we plan to conduct an interim analysis for potential trial resizing.

In Phase 3, we plan to focus our efforts initially on large populations with the highest unmet need, which includes high-risk comorbid and immunocompromised patients because they are disproportionately affected by influenza, as evidenced by substantially higher rates of hospitalizations and deaths, and are underserved by currently available vaccines and antiviral drugs. Our plan to address these high unmet need populations is the basis for CD388's current fast track and priority review designations. In addition, based on the strength of the Phase 2B results, we have submitted to the FDA an application for breakthrough therapy designation and expect to hear the outcome of this application later this year. I would also add that we have submitted a proposal to BARDA, which, if funded, could provide meaningful funding to support manufacturing and additional clinical development studies of CD388.

We expect to learn the outcome of this submission also by the end of this year. As we prepare to advance CD388 into Phase 3, we do so from a position of significant financial strength, having recently closed an upsized public offering for gross proceeds of $402.5 million, which provides funding through the completion of our planned Phase 3 study. This funding also enables us to conduct additional supportive clinical and non-clinical studies, as well as additional market research to further characterize the cost-effectiveness and commercial opportunities for CD388, both in the U.S. and ex-U.S. This includes work to highlight the burden of illness that influenza represents in our initial target population and the cost offsets that could potentially be achieved with CD388. We plan to present the results of these activities in the coming months following the conclusion of our discussions with the FDA regarding our Phase 3 plans.

In closing, the data we have generated to date further validate our Cloudbreak platform and the potential of CD388 to offer universal protection against both seasonal and pandemic influenza strains. While vaccines play a vital role in flu prevention, they do not offer sufficient protection, particularly for immunocompromised individuals, underscoring the need for a durable, broadly acting antiviral like CD388. We look forward to discussing our planned Phase 3 study design and trial start timeframe with the FDA shortly. With that, I will turn it back to the operator to take your questions.

Speaker 6

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question is from Seamus Fernandez with Guggenheim. Please go ahead.

Speaker 2

Great. Thanks so much for the question. Just wanted to see if you can help us understand potential differences from the Type C meeting that you had with the FDA and the planned Phase 3 design that you shared with us during your analyst day. If there are any potential changes or meaningful changes that you're proposing, or if you're simply looking for your sort of pre-Phase 3 discussion to just clarify those particular points from the Type C meeting. Just as a follow-up question on BARDA, I was hoping to get a better understanding of exactly what you would hope to achieve with the grant. I don't know if that's something that you can discuss at this point, but I think we have some idea. It would be interesting to just hear how that exercise is advancing and what the prospects might be for BARDA.

The last question that I have is, would that evolve to potentially become something that could incorporate orders? It's unclear if the administration is currently concerned about bird flu or other influenza spreading, just interested to know what it takes to kind of move forward to actually get to orders, should the BARDA grant be issued. Thanks so much.

Speaker 3

Sure, Shayna's. I'll provide some initial responses, and then I'll welcome Nicole Davarpanah to supplement. Regarding our upcoming meeting with the FDA, and regarding your question of the difference from the Type C meeting, we don't have an expectation of substantial differences. We largely reached alignment with the FDA in our Type C meeting in our discussions regarding the Phase 3 plan. The difference is that meeting took place in May before the Navigate Phase 2B results were available. Now that we have the results, this is the first opportunity to discuss those results within the context of the Phase 3 plan. Obviously, based on the strength of the Phase 3 data and the strong safety that we observe, we don't anticipate substantial differences from that discussion. Regarding BARDA, the plan, as you are aware, when you submit these, there is a base period and option period.

We have expectations that the base period will, if funded, fund manufacturing, in particular, the onshoring of manufacturing to the U.S. Then there are various options for the option period, which if exercised, could result in substantial funding to support additional clinical studies. Finally, regarding any orders from BARDA, that would come in the form of an emergency use authorization in the event of a bird flu outbreak. We believe that based on the strength of the Phase 2B results, that would be an option. Should there be an outbreak, I would not anticipate a stocking order for CD388 in the absence of an emergency use authorization, however. I'll invite Nicole to provide any additional color on those questions. Nicole?

Speaker 0

Thank you, Jeff. I think you captured it quite, quite nicely. Hello, Shayna's. Going back to the first point, we had, as Jeff mentioned, a significant amount of alignment with the FDA on our trial population, the study design, and endpoints. That was before the benefit of having this nice Phase 2 data. We will have this meeting currently to align with them further in case there's any changes, which we do not anticipate to the study design. Once we have received the meeting minutes, we will share openly any changes that have potentially been made.

Speaker 3

Great. Thanks so much.

Speaker 6

Our next question is from Eric Schmidt with Cantor Fitzgerald. Please go ahead.

Thank you for taking my question. Congrats on a, just a wonderful second quarter. Maybe just to continue Shayna's line of discussion around the upcoming FDA meeting. I assume first it's in August because I think you need to schedule those within 60 days, so you can correct me if my timelines are off. How would you plan to update investors on the outcome from that meeting? What actual points of discussion or questioning do you plan to put forth to the FDA? Do you also plan to submit for a commissioner voucher? It would seem that CD388 might be a good fit for a national priority. Thank you.

Speaker 3

Sure, Eric. All good questions. As discussed in the response to Shayna's question regarding the FDA meeting, this is the first opportunity to discuss with them the Phase 3 plan in the context of the Phase 2B data. That meeting has been scheduled, and we expect that it will occur by the end of this month. In response to your question about communication of the outcome of that meeting, we will await the receipt of the FDA minutes, and then communicate those results and the results of those minutes in detail. With respect to your other question, I think about the CMPV voucher, we have submitted a statement of interest. It was a 350-word statement of interest, and we have yet to receive a response. I agree that CD388 would appear to be a very good fit. Was there another question, Eric, that I missed?

I think you got it, unless you're willing, Jeff, to talk a little bit more about what you want to hear from the agency in your pre-Phase 3 meeting before having a go-decision on this season.

Yeah. I'll respond, and I'll invite Nicole to provide any other color. Really, it's to corroborate the agreement we reached in our Type C meeting. We haven't disclosed the details of that because, obviously, that can change based on the end-of-phase-two meeting. We will discuss those results when they become available in the form of the meeting minutes from the FDA. We don't anticipate substantial changes because the results of the Navigate study were pretty much in alignment with the expectations that we discussed with the FDA in the Type C meeting. Nicole, any other color you would like to add to that?

Speaker 0

Thank you, Jeff. No, nothing further to add.

Thank you very much, both.

Speaker 6

The next question is from Brian Ritchie with RBC Capital Markets. Please go ahead.

Hi, everyone. Thanks for taking our questions. This is Nevin Ahn for Brian. I just wanted to follow up on a little bit more on the Phase 3 design that you proposed. You're planning to enroll a more immunocompromised, high-risk population. Could there be a greater chance that the trial could reach the needed number of events earlier than the Navigate trial had reached those events? Can you explain some of the reasoning behind enrolling the trial over two to three influenza seasons instead of just the one season as with the Navigate trial? Could you also remind us of the evidence that you've generated to date that suggests CD388 can be re-dosed? Do you imagine that regulators would want to see re-dosing potential, potentially, in the pivotal trial?

Speaker 3

Sure. Good questions. Can you repeat the first question, please?

Of course. Just given that the population that you're planning to enroll is more immunocompromised and high-risk, do you think that there's a greater chance that the trial could reach the needed number of events sooner than the Navigate trial had?

Yeah, great question. Actually, we believe the opposite, that the attack rate in the placebo arm of this study will be lower than that in the Phase 2B. The main reason for that is even though, and I think what your question is alluding to is that this is a more vulnerable patient population, at the same time, they are a more protected patient population. They go because of the inadequacy of vaccines in protecting these patients, they are highly protected. Also, a big difference is that we believe that at least 50%, if not more, of these subjects will be vaccinated. Even though the vaccine effectiveness will be modest at best, it does offer some protection.

In regard to your other question on re-dosing, yes, we do anticipate conducting a re-dosing study that is planned, and it's basically a continuation of re-dosing that we had conducted in our first Phase 1 study where we are looking for anti-drug antibodies. We didn't see any substantial evidence of that. We also looked for those in the Phase 2B study. We have this great resource in the subjects we enrolled in the Navigate Phase 2B study that have received a dose, three different doses of CD388. We're going to take advantage of that resource and take a subset of those subjects for a re-dosing study that we anticipate starting shortly.

Thank you so much. What do you think the timelines for that would be? Would that be kind of prior to the initiation of the pivotal trial or just?

Yeah, good question. We'll communicate that after we receive the meeting minutes from our upcoming end-of-Phase 2 meeting because we'll be discussing that with the FDA.

Okay, great. Thank you so much.

Sure.

Speaker 6

The next question is from Joseph Stringer with Needham & Company. Please go ahead.

Speaker 4

Good afternoon. This is Eddie Oprichowy. Thanks for taking our questions. Just two from us. First, just to follow up on the previous question, I'm wondering what assumptions are built into that cash runway, and does this include that re-dosing trial as well as the potential for a second Phase 3 trial? A follow-up, just looking at the landscape. Fantasy guided for mid-teens percent decline in their flu business this year, probably due to the U.S. pricing pressures. I'm curious what their read-through might be possible for your business and maybe some commercial outlook for CD388.

Speaker 3

Sure. For the first question on cash runway, let me turn that one over to Frank Karbe, our CFO. Frank?

Speaker 5

Yeah, sure. Hey, Eddie. With the $500+ million in cash on hand now, we believe we are adequately funded through the end of our Phase 3 program, including the additional studies that we have cited here on this call, and also including different potential scenarios how the Phase 3 could play out.

Speaker 3

With respect to the second question, if you could repeat that, I know it was a commercial question regarding a Sanofi product, and I will turn that over to Jim Beitel, our Chief Business Officer. If you could repeat that question first.

Speaker 4

Yeah, absolutely. Just on Cidara Therapeutics' earnings call, they guided for a mid-teens % decline this year in their food business. I'm just seeing if there's any read-through to your business or commercial outlook for CD388.

Speaker 3

Yeah, Jim?

Yeah, thanks for the question. Certainly, I appreciate the question. There has been a lot of downward pressure on vaccine businesses, I think not just others as well. A lot of that has to do with things unrelated to CD388. I think it underscores the importance of our commercial strategy and development strategy, really focusing in on these subjects with the greatest risk. There, the burden of illness is highest, and the value proposition that we've demonstrated in the Navigate study and intend to demonstrate in the Phase 3, I think really brings something unique to the marketplace. Certainly, there is downward pressure on vaccines, but a very different commercial model there relative to the one that we're considering for CD388.

Speaker 4

Okay, thanks so much.

Speaker 6

The next question is for Roy Buchanan with Citizens Bank. Please go ahead.

Hey, great. Thanks for taking the question. Just a couple of quick ones. I get you mentioned the scientific presentations later this year. Have you been accepted at any conferences, and could you tell us what those are? Any key data that we should be looking out for? For example, are you going to have the CD388 data from the Phase 2B there?

Speaker 3

Yeah, good questions. We have submitted to the ISIRV and ID Week. Les, do you want to provide a little color on whether those have been accepted yet? I don't believe they have, but we have high expectations that they will be accepted. Les?

Sure, Jeff, and hi, Roy. Yeah, we have two abstracts. We are submitting two abstracts to ISIRV, one to summarize the Phase 2B data, and another that has been accepted for an oral presentation, and that's going to be on our activity against a contemporary H5N1 strain, a non-clinical efficacy model where we demonstrated robust efficacy. In the fall, we will also be presenting. We've submitted an abstract to where we're going to be describing the PK/PD relationships for activity in the Phase 2B trial with CD388.

Okay, great. Apologies for the non-CD388 question. I'll keep it quick, but I'm just curious, what's next in your view in terms of targets and potential timing when we might see some developments there? Thanks.

Sure. No specific plans at the moment. Certainly, our oncology program is a great asset, and we have an opportunity to advance that, but we have not determined a specific timeframe when we will be advancing that into the clinic.

Okay. Perfect. Thank you.

Speaker 6

Once again, if you have a question, please press star then one. The next question is from Sarah Nick with H.C. Wainwright. Please go ahead.

Speaker 0

Hi, and thanks for taking the question. Just kind of following up on the previous one, wanted to get a sense of the resolution of the kind of data you'll be presenting at these conferences. You mentioned some PK/PD data. Will you be presenting anything with regards to individual subgroup data at these meetings, maybe with regards to age or region, preventative efficacy, outcomes, or anything along those lines? Thank you.

Speaker 3

Yeah, we will be sharing the details of that when they're accepted. Certainly, what you mentioned is encompassed in some of the abstracts that have been submitted. Les, any other color you'd like to share on that?

Hi, Sarah. No, Jeff, you covered it well. Once the abstracts are published, we'll be able to provide more clarity on what will be presented.

Speaker 0

All right. Great. Thank you.

Speaker 6

This concludes the question and answer session. I'd like to turn the conference back over to Dr. Jeff Stein for any closing remarks.

Speaker 3

Thank you all for joining us today. We greatly appreciate your interest in Cidara and hope you enjoy your evening. Thank you.

Speaker 6

The conference is now concluded. Thank you for attending today's presentation. You may disconnect.