IPO Report: Cidara Therapeutics (CDTX)

Francis Gaskins |

Cidara_Therapeutics_logo.jpg

Cidara Therapeutics (CDTX) is a biotechnology company focused on the discovery, development and commercialization of novel anti-infectives for the treatment of diseases that are inadequately addressed by current standard of care therapies. The company is based in San Diego, CA. 

Six other companies are scheduled for the week of April 13. The full IPO calendar is available at IPO Premium.

Manager, Joint-managers: Jefferies, Leerink Partners
Co-managers: Wedbush PacGrow Life Sciences, Needham, BTIG

CDTX scheduled a $60 million IPO on Nasdaq with a market capitalization of $190 million at a price range midpoint of $15 for Wednesday, April 15, 2015 on Nasdaq.

SEC filings

Cidara Therapeutics Valuation

Glossary

Accumulated deficit (mm)

.

.

-$13

     

Per share dilution

.

.

-$5.86

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Cidara Therapeutics (CDTX)

$191

no rev

-15.9

1.64

1.64

31%

             


Cidara Therapeutics Conclusion

Neutral slightly plus

Novel anti-infectives

No strategic partners

Shareholders may by $25mm or 42% of the IPO

P/E of -16 indicates moderate cash burn rate relative to market cap

Price-to-book of 1.64 is low

Intends to initiate Phase 1 & Phase 1b/2 clinical trials

Cidara Therapeutics Shareholders & Affiliates

Indicated an interest in purchasing  $25.0 million on the IPO, or 42%

Cidara Therapeutics Business

CDTX is a biotechnology company focused on the discovery, development and commercialization of novel anti-infectives for the treatment of diseases that are inadequately addressed by current standard of care therapies.

CD101 is an echinocandin—a proven class of antifungals. CDTX’s initial proprietary product candidates are formulations of CDTX’s novel compound, CD101, for the treatment of serious fungal infections.

Cidara Therapeutics Product Candidates

CDTX’s first product candidate is CD101 intravenous, formerly biafungin, a potential once-weekly intravenous, or IV, therapy being developed for the treatment and prevention of systemic fungal infections.

CDTX intends to file an investigational new drug application, or IND, and initiate a Phase 1 clinical trial for CD101 IV in the second half of 2015.

CDTX’s second product candidate, CD101 topical, formerly topifungin, is a topical formulation of CD101 for the treatment of vulvovaginal candidiasis, or VVC, a prevalent mucosal infection. CD101 topical is the first topical application of the echinocandin class of antifungals.

CDTX intends to file an IND and initiate a Phase 1b/2 clinical trial for CD101 topical in the first half of 2016.

Cidara Therapeutics Technology Platform

In addition, CDTX has developed a proprietary immunotherapy technology platform, CloudbreakTM, which CDTX uses to create compounds designed to direct a patient’s immune cells to attack and eliminate pathogens that cause infectious disease.

CDTX is developing its first Cloudbreak development candidate, C001, for the treatment of invasive aspergillosis, an infection caused by the fungal pathogen, Aspergillus.

CDTX is also evaluating additional opportunities to expand its Cloudbreak immunotherapy platform to other areas of infectious disease.

Cidara Therapeutics Anti-infectives Market

CDTX is focused on the anti-infectives market, which CDTX believes has the following advantages for the development of innovative products:

 a high correlation between efficacy in preclinical animal models and outcomes of clinical trials;

 a regulatory environment that provides developers of anti-infectives opportunities to reduce development costs and time to market;

 an ability to commercialize anti-infective products with a focused sales and marketing organization for inpatient and outpatient settings; and

 attractive commercial opportunities in certain segments of the market, such as the estimated $3.7 billion global prescription systemic antifungal market in which there is high unmet need, high mortality rates and few new agents in development.

Cidara Therapeutics Intellectual Property

The proprietary nature of, and protection for, CD101 IV, CD101 topical, CDTX’s Cloudbreak immunotherapy platform, its processes and its know-how are important to its business.

CDTX seeks patent protection in the United States and internationally for CD101 IV, CD101 topical, CDTX’s Cloudbreak immunotherapy platform and any other technology to which CDTX has rights where available and when appropriate.

CDTX’s policy is to pursue, maintain and defend patent rights, developed internally and potentially licensed from third parties and to protect the technology, inventions and improvements that are commercially important to the development of CDTX’s business.

CDTX also relies on trade secrets that may be important to the development of its business.

CDTX cannot be sure that patents will be granted with respect to any of its pending patent applications or with respect to any patent applications filed by CDTX in the future, nor can CDTX be sure that any of its existing patents or any patents that may be granted to CDTX in the future will be commercially useful in protecting CDTX’s technology.

Cidara Therapeutics Competition

CD101 IV will primarily compete with antifungal classes for the treatment of candidemia, which include polyenes, azoles and echinocandins.

The approved branded therapies for this indication include

Cancidas (caspofungin, marketed by Merck & Co., which has net pricing of approximately $1,400 per week in the United States and approximately $4,000 per week in Europe),

Eraxis (anidulafungin, marketed by Pfizer, Inc., which has net pricing of approximately $1,000 per week in the United States and approximately $3,000 per week in Europe) and

Mycamine (micafungin, marketed by Astellas Pharma US, Inc., which has net pricing of approximately $600 per week in the United States and approximately $4,000 per week in Europe).

In addition, there are other generic products approved for candidemia, marketed by companies such as Baxter Healthcare Corporation, Mylan Inc. and Glenmark Generics Inc., among others.

In addition to approved therapies, CDTX expects that CD101 IV will compete with product candidates that CDTX is aware of in clinical development by third parties, including SCY-078 (being developed by Scynexis, Inc.) and isavuconazole (being developed for the treatment of candidemia jointly by Astellas Pharma and Basilea Pharmaceutica Ltd.).

CD101 topical will primarily compete against azole agents (oral, topical and intravaginal), currently used in the treatment of VVC, as well as over-the-counter topical agents used to treat these conditions.

The approved prescription therapies for VVC are Diflucan (fluconazole) and Terazol (terconazole).

While there are several over-the-counter topical agents such as Monistat (miconazole), Gyne-Lotrimin (clotrimazole) or Gynazole-1 (butoconazole) also used to treat VVC, CDTX does not consider these products to be significant competitors due to their limited efficacy in RVVC and severe acute VVC.

n addition to approved therapies, CDTX expects that CD101 topical will compete with product candidates that CDTX is aware of in clinical development by third parties, including VT-1161 (being developed by Viamet Pharmaceuticals, Inc.), and albaconazole (being developed by Actavis plc).

Cidara Therapeutics 5% Shareholders Pre-IPO

5AM Ventures III, L.P. and its affiliates   22.1%

FMR LLC and its affiliates          14.2%

InterWest Partners X, LP            12.7%

Frazier Healthcare VII, LP and its affiliates  12.2%

Seachaid Pharmaceuticals, Inc. 7.7%

Jeffrey L. Stein, Ph.D.   5.9%

Scott Rocklage, Ph.D.   22.1%

Steven A. Elms             11.6%

Patrick Heron    12.2%

Nina Kjellson     12.7%

Cidara Therapeutics Dividends

No dividends are planned.

Cidara Therapeutics Use of Proceeds

CDTX expects to receive $53 million from its IPO and use it for the following:

$20 million for the clinical development of CD101 IV and CD101 topical, through the completion of Phase 2 clinical trials, and the initiation of the pivotal Phase 3 clinical trial for CD101 topical;

$15 million for the preclinical development, IND-enabling studies and early clinical trials of CDTX’s current Cloudbreak development candidates;

$10 million for research and discovery efforts related to the expansion of CDTX’s Cloudbreak immunotherapy platform to other areas of infectious disease; and

the balance to fund working capital, including general operating expenses.

CDTX may also use a portion of the remaining net proceeds to in-license, acquire, or invest in complementary businesses, technologies, products or assets. However, CDTX has no current commitments or obligations to do so.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Comments

Emerging Growth

Immunovaccine Inc.

Immunovaccine Inc is clinical stage biopharmaceutical company. The Company develops products based on its proprietary vaccine enhancement platform in T cell activating therapies for cancer.

Private Markets

Santo Diablo Mezcal

Santo Diablo Mezcal has been created to capitalize on a boom sector of the beverage market currently full of many small unmemorable products by producing one sexy, household, easily recognizable…

Snapchat

Snapchat is the fastest way to share a moment with friends. The mobile app, allows users to not only share photos with friends but also control how long they can…