Cidara Therapeutics: An Attractive Price For A Niche Opportunity With A High Probability Of Success


Summary

  • Cidara Therapeutics is an anti-infectives company run by the former management of Trius Therapeutics (acquired by Cubist).

  • Its lead program, CD101 topical failed in VVC, but still represents a niche opportunity as IV treatment of systemic Candida infections.

  • Additional upside if CD101 IV demonstrates superiority.

  • Phase-2 data of CD101 IV in patients with systemic candidiasis or candidemia is due 1Q18.

Investment Thesis:

Cidara Therapeutics (NASDAQ:CDTX) is developing a novel echinocandin (CD101) that we believe will compete for first-line treatment of systemic fungal infections in a subset of patients. Current standard of care for patients with invasive candidiasis or candidemia involves daily IV treatment of an echinocandin until they can be safely released with oral azole step-down therapy. Given its once-weekly dosing schedule, it offers the possibility of a quicker path to outpatient treatment over the current once-daily inpatient schedule. Additionally, this approach would be the best available option for patients with azole-resistant infections, contraindications, and those who can't tolerate oral medications. While we see a niche opportunity here as a non-inferior echinocandin option, there would be additional upside if CD101 achieves superiority as it would become the obvious first-line choice for a broader patient population. Additionally, we expect a larger market penetration in the prophylactic setting, where once-weekly CD101 IV could be a more potent outpatient alternative to oral azoles in patients undergoing transplant. While we believe CD101 IV alone more than justifies the current valuation, we expect additional value generation from CD201 and other products from Cloudbreak™.

Background and context

Cidara Therapeutics is an anti-infectives company with both antifungal and antibacterial programs. Its lead asset, CD101, is a novel formulation of a known class of antifungals called echinocandins. Echinocandins target the fungal cell wall...

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