CDTX - NASDAQ

Good day, and welcome to the Cidara Therapeutics Q3 2025 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brian Ritchie with LifeSci. Please go ahead.

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 third quarter ended September 30, 2025. Both the press release is available on the company's 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. Management will be making forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. These statements are qualified by the cautionary notes in today's press release and the company's SEC filings. This call contains time-sensitive information accurate only as of today, November 6, 2025. Cidara undertakes no obligation to revise or update any forward-looking statements. With that, I'd like to turn the call over to Jeff Stein. Jeff?

Thank you, Brian, and thank you all for joining us. We are pleased to report another very productive quarter at Cidara. Our lead candidate, CD388 has advanced into Phase III development on an accelerated time line in addition to other notable achievements, including the expansion of the patient population for our Phase III trial, receipt of breakthrough therapy designation from the FDA and securing funding from BARDA for this program. As with prior calls, we will focus our remarks on clinical and corporate updates. As a non-revenue-generating company, we will not have a dedicated section to review our quarterly financial results on this call, but instead refer you to today's press release and 10-Q filing. Cidara's proprietary Cloudbreak platform has been developed as a fundamentally new approach to treat and prevent serious diseases through the development of novel drug-Fc conjugates or DFCs, a new class of therapeutic that combines the precision of small molecules with the durability of antibodies. Our lead candidate, CD388 is a highly potent, long-acting antiviral designed to deliver universal once-per-season prevention of seasonal and pandemic influenza by directly inhibiting viral proliferation. Its enhanced antiviral potency and durability make it a potentially transformational non-vaccine preventative of influenza that overcomes the limitations of existing vaccines and antivirals. A key accomplishment during the third quarter was the start of our Phase III ANCHOR trial six months earlier than originally planned. This trial will evaluate the safety and efficacy of CD388 in populations at high risk for complications from influenza. Based on feedback from the FDA in our end of Phase II meeting, we believe that the ANCHOR trial, if successful, may support potential BLA approval of CD388 in the study populations examined in both the Phase IIb NAVIGATE study as well as the Phase III ANCHOR study. The ANCHOR trial was started in late September following a constructive end of Phase II meeting with the FDA at the end of August. Initiation of the study triggered a $45 million milestone payment to J&J, which was booked in Q3, but will be paid in Q4. Originally, we plan to enroll participants aged 12 years of age and older with moderate to severe comorbidities as well as subjects who are immunocompromised. However, based on FDA feedback, we expanded enrollment to include healthy adults over 65, a large and growing group that is poorly protected by current influenza vaccines due to age-related declines in immune function. This change has two important implications. First, it more than doubles the initial number of patients who would potentially be eligible to receive CD388 from 50 million to well over 100 million people in the U.S. Second, it has helped facilitate faster enrollment. The study began in the Northern Hemisphere in late September. The primary endpoint is based on laboratory-confirmed influenza, body temperature of 37.2 degrees centigrade or 99 degrees Fahrenheit or greater and new or worsening of either two respiratory symptoms or one respiratory symptom and one new systemic symptom. We plan to enroll 6,000 participants in 150 sites, nearly 3x the number of sites we used in the Phase IIb NAVIGATE study. All sites are now active and the study is over 50% enrolled, on track to achieve target enrollment in the Northern Hemisphere by December. An interim analysis, most likely in late Q1 2026, will assess the trial size, powering assumptions and event rate to determine if it is necessary to enroll participants in the Southern Hemisphere in the spring of 2026. CD388's progression into Phase III is supported by the strength of the compelling data from our Phase IIb NAVIGATE study, which met its primary endpoint, demonstrating statistically significant prevention of efficacy and a benign safety profile in all three doses tested. Importantly, the NAVIGATE study showed that a single 450-milligram dose of CD388 provided 76.1% protective efficacy that extended through the entire flu season. We shared additional NAVIGATE data at key scientific meetings this fall. The data presented continues to reinforce CD388's differentiated profile as a long-acting broad-spectrum antiviral for influenza prophylaxis. The pharmacokinetic data for the 450-milligram dose demonstrated sustained serum concentrations well above the targeted therapeutic threshold, supporting protection through the full flu season with a single 450-milligram dose in both influenza A and B strains, paired with a clean safety and tolerability profile, including low rates of injection site reactions, which further differentiates CD388 from vaccines. These results validate our dose selection for Phase III. Taken together, these findings strengthen our conviction that CD388 can offer clinically meaningful protection in populations at high risk for flu complications, independent of host immune status, setting it apart from both vaccines and currently approved antivirals. In early October, the FDA granted CD388 breakthrough therapy designation, recognizing preliminary clinical evidence of substantial improvement over existing options. The advantages to Cidara will be enhanced access to the FDA, including more frequent guidance, rolling data review and eligibility for priority review, all of which may accelerate development and regulatory time lines. CD388 also holds fast track status, and this latest recognition affirms the quality and promise of the clinical data we have generated. Also in October, we received an award valued up to $339 million from the Biomedical Advanced Research and Development Authority, or BARDA, to support expanded manufacturing and clinical development of CD388. The multiyear agreement is structured to include a base period and additional option periods. The base period valued at $58 million over the first 24 months will fund the onshoring of manufacturing to the United States, expanding our initial commercial supply chain. It will also support several important development activities, including a clinical trial to demonstrate comparability for a higher concentration formulation and alternative product presentations, nonclinical studies to further characterize CD388's activity against pandemic influenza strains and early work on clinical trial protocols for expanded populations. The option periods could provide up to an additional $281 million in funding to support further clinical and nonclinical studies of CD388 in targeted patient groups and broader population settings. Thanks to our successful financing in June, we remain in a strong financial position. With approximately $476 million in cash at September 30, our Phase III development program is fully funded through completion in all scenarios, including potentially expanding the study to the Southern Hemisphere if needed. Before closing, I want to highlight that we plan to host a virtual R&D Day for the investment community on December 15. We'll provide a detailed update on the CD388 program, including enrollment progress, and we'll share insights from recent market research on the commercial opportunity for CD388. Further details will be announced shortly, and we look forward to your participation in this event. With that, I will turn it back to the operator to take your questions. Operator?

[Operator Instructions] Our first question comes from Anupam Rama with JPMorgan.

This is Priyanka on for Anupam. At the interim analysis, how will the external statistician decide how many additional patients are needed to enroll?

Yes. Great question, Priyanka. Let me turn that question over to Dr. Davarpanah, our Chief Medical Officer. Nicole?

Thank you, Jeff. Priyanka, thanks for the question. So as you know, the purpose of the interim analysis is to look at data at an early time point prespecified at the end of the Northern Hemisphere, approximately end of Q1 of next year to look at the events and to tell us essentially if the powering assumptions, the desired power target for the study was met. So there is a kind of a complex algorithm that has been created for this by our statistician. Importantly, this is a statistician independent to the study, and they will be able to see this data, but will not share any of it with us, and so Cidara and the study team will not be informed. We will only be told if the powering assumptions have been met and whether we need to -- we are able to keep the sample size that we have with 6,000 or we need to add additional participants.

Our next question comes from Maxwell Skor with Morgan Stanley.

Just a follow-up on the first question. Should we not expect at the interim analysis to see any sort of efficacy data across the cohorts? And also, I was wondering at the Investor Day, will you begin to introduce efficacy thresholds across cohorts that we can expect in the Phase III trial? And the last question, is there a chance you could potentially include mild patients on the label if everything is positive in the Phase III trial?

Good questions, Max. Again, I'll turn that over to Nicole.

Thanks, Jeff. Max, thank you for the question. So I think the initial question is, will we know any kind of efficacy data from the interim? And the answer is no. So this is essentially only the blinded status -- unblinded excuse me, statistician will see this information and will not share it with us. But I think one thing that maybe you're alluding to as well is we may end up enrolling the entire trial in the Northern Hemisphere. And at that time, there may be no need to actually even move into the Southern Hemisphere, and we will make a decision at that time if it's appropriate to kind of call that the efficacy analysis. However, we will not be informed by the interim analysis if we decide to do this. I appreciate the question as well about the different kind of subgroups in the trial and what we will be able to show. So we won't be able to show kind of any efficacy estimates for our December Investor Day. We will be able to share a little bit more about the population subgroups that we have enrolled. And I think that will be kind of very enlightening for all of us about the real-world high-risk and 65-plus populations as well as IC populations that you can enroll in a trial like this. And you have to remind me of your third question.

Sorry, just one last one around mild patients who are immunocompromised and comorbid. Is there a potential for them to be included in the label?

That's an excellent question. So in our discussions with the FDA, as you know, they have asked us to expand the trial eligibility to anyone who's 65 plus. So that means 65 is healthy or those with low or mild comorbidities. And as you can imagine, we are going to enroll a lot of those participants with lower mild comorbidities. So I believe that there's an opportunity for that, but it will require further discussion with FDA.

And just to add to Nicole's comments, the high-risk populations are focused on the moderate to severe comorbidities.

Our next question comes from Seamus Fernandez with Guggenheim Securities.

So, two from my side. First, we've heard a lot of updates from some of the flu vaccine manufacturers that flu vaccination rates are down. Wondering if you have a sense of the sort of flu vaccination rates in your study. I think previously, you'd anticipated 65% of the adults potentially having flu vaccination and then having CD388 on top of it. Just wondering how you're thinking about the impact of that and if that 65% is still consistent with your expectations? And then just my second question is on manufacturing and how manufacturing scale-up is progressing and what the needs are from a manufacturing scale up, whether it be with the three-dose or sorry, the three-needle regimen as it stands today? And then what it would take to bring us forward to the sort of vial formulation, which is more consistent with how flu vaccines are delivered today.

Great. Thanks, Seamus. Yes, clearly, you got it right. Our estimate of the flu vaccination rate in the ANCHOR study, which was based on prior clinical studies in the prior years, was 65%, given the fact that we are enrolling subjects with moderate to severe comorbidities, immunocompromised and more recently, over 65, all three populations, which tend to have high vaccination rates. And clearly, that has an impact on our -- the powering of the study. We also noted in the Southern Hemisphere, however, this past flu season, that the vaccination rates have trended much lower than that 65% overall. And we also noted some of the vaccine manufacturers who have made similar observations. Because this is an ongoing study, we won't be sharing the vaccination rate because that can change over the course of the season up until the point where we complete enrollment. But let me turn it over to Nicole to see if she has any additional comments on that.

Thank you very much, Jeff. Yes, I think you stated it very nicely that we had predicted a kind of a historical vaccination rate of around 60%. But really, our goal was to have vaccination be optional, which is in the trial and to really capture the real-world kind of incidence of vaccination. As we know this therapy will work well, particularly in participants who are unvaccinated, but we expect it to work well vaccinated as well. And so we will continue to follow this, and we are pleased with how enrollment is going so far. I also want to add that if we do end up seeing kind of a lower vaccination rate than expected, we -- this may end up actually kind of favoring the results of the trial, as you can imagine, because there may be a higher kind of event rate in the placebo arm based on capturing symptoms. So we are prepared for whatever comes, but it's an interesting time certainly to be doing an anti-influenza study.

And then, Seamus, to answer the second part of your question regarding manufacturing scale-up, I'll turn that question over to Shane Ward, our COO.

Thanks, Jeff. I think we have talked quite a bit about the work we're doing with our partner, WuXi, who has worked with us on manufacturing since the initial stages of clinical development, has supported our clinical trials and will be the site of manufacturing for our BLA submission and planned commercialization. At WuXi, the process characterization and PPQ activities necessary for BLA readiness are progressing well towards our target dates and that provides us more than adequate capacity for launching given our expectations of potential market demand given the population as we now understand it. The bigger question is how do we meet the potentially much greater demand during the life cycle of the product. And we have separate activities underway for further scale up. The first one of those is expanding to a parallel U.S. supply chain. We've talked about our recent receipt of BARDA funding and the primary purpose of that funding is to support standing up a full U.S. commercial supply chain for all nodes of manufacturing. And the tech transfer kickoffs have already begun for those, and we have a time frame that provides that additional capacity to come online shortly after our anticipated approval. And then the third piece is that we are looking at potential larger capacity global manufacturers who could come online a couple of years after that combined U.S. and WuXi supply chain to add the final bit of capacity that we would need for expansion into the largest possible population.

Next question comes from Eric Schmidt with Cantor.

Another CMC question, if I could. What is the scale at WuXi currently that you hope to launch with? And I know you've said that CMC is rate limiting to a BLA filing. What exactly within CMC is the rate-limiting effect? And then if I can squeeze another one in for Les on the data that you were presenting a couple of weeks back. Do we have any sense of resistance to CD388 and for those patients who weren't protected, why they weren't protected?

Great questions, Eric. First part, obviously, we'll turn that over to Shane Ward. Shane?

Right. Thank you. Yes, the capacity at WuXi based on our initial scale that we are validating will provide for around production of 5 million doses per year at the 450-milligram dose level. There's some variability to that, and we may be able to scale up further. WuXi certainly has further capacity, but that is the expectation in terms of the initial supply chain, which then we will add the U.S. supply chain to shortly thereafter. In terms of your question about CMC being rate limiting, that's really all of the qualification requirements as we move forward to BLA readiness. So as was referenced earlier, we are transitioning from the clinical trial formulation or clinical trial configuration, which is three injections using prefilled syringes to a commercial configuration that will be a single vial containing the full dose. So we are transitioning to the vial configuration, scaling up, doing full process characterization and then final qualification. And those steps are really why it's rate limiting and why we are gating in terms of the company's timing for filing the BLA. But we have an aggressive time line for all of those pieces, and WuXi has worked closely with us in developing an integrated plan for each of the nodes to be qualified on an accelerated schedule, which gives us the ability for that 2027 filing time.

And Eric, could you repeat the second part of your question for Les?

Yes, that was just on anything we may have learned about resistance or why the product wasn't fully protected for those patients who did get breakthrough infections.

Yes, go ahead, Les.

Eric, that's a great question. So at IDWeek, we presented our updated Phase IIb data, which included breakdowns of the timing of influenza cases in all the trial arms across the parallel at the European working group and Valencia, we presented comprehensive PK/PD and exposure response modeling analyses. And I think the PK/PD and exposure response modeling analyses get to the heart of your question that there isn't a red line, a concentration threshold where you're going to get 100% protection with a neuraminidase inhibitor. There will be breakthrough infections if there's potentially a high inoculum, it's called an inoculum effect where you could see infections. And so the fact that we saw infections doesn't mean that there was resistance. So we haven't seen evidence nonclinically that this should be a molecule that's susceptible to resistance, but we are conducting the virology next-generation sequencing on the infections that were observed in the placebo and in the treatment arms, and we will report that data in due course once we have the analyses completed.

The next question comes from Brian Abrams with RBC Capital Markets.

Congrats on all the progress. I was wondering if you could talk a little bit more about how the inclusion of healthy individuals over 65 impacts your assumptions for vaccine rates, event rates and powering? And then secondarily, also trying to understand the implications of a potential December enrollment completion. I guess I'm curious what was the median time on study during flu season that your event rate projections had assumed and whether December completion potentiates average accrual of either greater or fewer potential influenza events than you had maybe originally assumed in your powering.

Great, Brian. Nicole, do you want to take those questions?

Absolutely. Brian, thanks for the questions. For your first question, so the addition of 65 plus is really kind of a fascinating addition to the trial because 65-plus is a broad group, as you know. So it's 65 healthy and it's 65 mild to moderate kind of a mild comorbidities, so to speak. In fact, we think in a lot of ways, it helps the study. So this is a much easier population to enroll, as you can imagine, and we would probably expedite enrollment, which it seems to have just done so far for us as well. In terms of kind of background attack rate in this population, this is a population that tends to see more flu events in trials. And I think that's because there isn't as much protection in cocooning. These are our own relatives and people who are going out seeing their grandchildren and out and about and not protecting themselves as much as a traditional kind of high-risk or immunocompromised participant might. And so when we did all the math and put these populations together, we realized that our placebo attack rate didn't really change very much. It was still right around 1.5%. I think we expect this 65-plus population to have a higher background vaccination rate, about 65% or more. So far, we're still monitoring that. But in general, I think it helped us to have this population in the trial and did not affect our sample size or powering assumptions in any negative way. As to your second question, for the December analysis, so what we mean by that is we will enroll everybody by December. Of course, the endpoint of the trial is still a six-month follow-up. That's the 24-weeks influenza rate or event rate. And so all those participants would still be followed for -- to the flu season, if that helps. So it would be similar to our Phase IIb study, where we looked at that at the end of flu season and had results in June.

And I would add to Nicole's remarks that so far, we have not seen any early signs of influenza in North America. That's important. We want to fully enroll this study before we see the first peak or a peak of influenza this year. So far, it is resembling last year when we're enrolling the 5,000 participant Phase IIb NAVIGATE study. where we fully enrolled it about 1.5 weeks, 2 weeks before the first peak of the flu season. So, so far, fingers crossed, we're tracking to a similar time line here.

Our next question comes from Joseph Stringer with Needham & Company.

Just wondering if you could give us a sense for how you're thinking about potential real-world uptake or penetration of CD388 within the individual patient segments. I think at a previous R&D Day, you had some initial survey work that you've done on this. But just given the potential for subsequent developments here for a larger addressable patient population, how should we think about that? Maybe as a representative example, what would be the realistic uptake in, say, a severe immunocompromised patient versus an otherwise healthy 50-year-old with a mild comorbidity?

Yes. These are important questions, Joey, and we'll be addressing those in detail at our R&D Day event on December 15. But let me turn it over to Jim Beitel to address those to the extent we can now. Jim?

Yes. Sure, Jeff. Thanks for the question. Certainly an important one. The scope of the approved label is expected to be quite broad. And so certainly, commercial reach will factor into the adoption and sort of how fast we get to peak sales over time. But I also want to point you to some interesting data in our current corporate deck, I think it's Slide 20, where we described the data from our primary market research showing that prescribers have interest in this product in terms of their perception of the burden of flu and the importance of preventing it in subjects with moderate to severe comorbidities, but also these mild forms of comorbidities. And so there's a very broad market opportunity here with strong physician interest across the scope of the populations included in the Phase III study.

[Operator Instructions] Our next question comes from Sara Nik with H.C. Wainwright.

Again, congrats on all the progress. My question is more actually looking for opportunities beyond even the seasonal flu. As you've highlighted previously, CD388 universal activity against all flu strains, including H5N1. So just wondering beyond the BARDA funding at this point, what specific clinical or preclinical work is planned to formally establish its utility in the pandemic setting? And do you think this could create a separate regulatory pathway or government stockpiling opportunity distinct from the seasonal flu?

Yes. Thanks, Sara. Les, do you want to take that question about any other studies we might be performing to evaluate CD388 in pandemic strains?

Yes. So we're working closely with Richard Webby's lab at St. Jude's Hospital. And thus far, we -- at a meeting earlier this summer, we presented data against the pandemic H5N1 strains in ferrets, where we demonstrated robust efficacy with H5N1 at exposures that are consistent with the exposures at the high dose in human subjects. We're going to continue to work with them on other pandemic strains as well as mutant strains that are resistant to neuraminidase inhibitors -- thus far, all of the strains that we've tested that have resistance against neuraminidase inhibitors, we retain activity against those without a shift. So we're going to do in vitro studies that will follow up on the ferrets efficacy study that we ran with Webby's lab at St. Jude.

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

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