Pharma's Flu Drug Could Be Worth Billions, Analyst Says
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Disclosures for RBC Capital Markets, Cidara Therapeutics Ltd., September 24, 2025:

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Our $137 price target is based on a blend of DCF (using 11% discount rate and 0.5% terminal growth rate) and probability-adjusted multiple (25x on 2032E adjusted EPS with an 11% discount) analyses. Our price target supports an Outperform, Speculative Risk rating. Given that CDTX currently does not have any marketed products, which increases development risk, we believe the September 24, 2025 Brian Abrahams, M.D. (212) 858-7066; [email protected] 9Cidara Therapeutics, Inc. Speculative Risk qualifier is appropriate.

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Cidara Therapeutics Inc. (CDTX:NASDAQ) has shared the minutes from its End-of-Phase 2 meeting with the FDA, and the overall feedback was encouraging for the Phase III development, supporting the imminent start of the pivotal trial, for which the company was already operationally prepared, RBC Capital Markets Analyst Brian Abrahams wrote in an updated research note on September 24.

The recommendation to include individuals aged 65 and older could lead to a broader label than the market might expect, and Abrahams now anticipates more than 5 million people using the drug treating seasonal influenza in the coming years. With accelerated timelines likely for CD388, the analyst said the drug could generate US$3.7 billion in worldwide sales in the future, offering additional upside potential for the stock.

Abraham noted he adjusted his price target to US$137 based on model updates. He rated the stock Outperform, Speculative Risk.

Key Points

The End-of-Phase II minutes support the acceleration of the study and the initiation of the Phase III trial in the coming weeks, Abrahams wrote. The company had met with the FDA at the end of August to discuss the NAVIGATE Phase IIb trial data and finalize the design for their pivotal trial. The FDA minutes, disclosed earlier today, were favorable, with three notable takeaways:

• The FDA provided additional clarity to expedite the start of the pivotal trial to later this fall — a scenario the company was operationally ready for, having already screened many participants for the study (this was anticipated given a recent clinicaltrials.gov listing).
• The company still plans to enroll patients across two flu seasons, but by including a broader population and more clinical trial sites, it might be possible to accelerate enrollment further.
• Importantly, the FDA indicated that a single Phase III study would suffice for a Biologics License Application (BLA) package, with the Phase IIb NAVIGATE trial data supporting the filing — removing a concern that some investors might have thought could delay potential approval.

Additionally, CDTX noted that regulators encouraged them to broaden the pivotal trial population to include healthy individuals aged 65 and older, as age itself could be considered a comorbidity. This inclusion could enable the company to secure a broad label if the Phase III trial succeeds, potentially allowing a wider population to be eligible for the drug than the market anticipates.

The pivotal trial design and powering remain largely unchanged, and the inclusion of older healthy individuals should, if anything, strengthen the study's likelihood of success, Abrahams wrote. The Phase III trial was designed to be 90% powered, assuming a 1.5% placebo attack rate (lower than Phase II) and a 10% loss to follow-up, with plans to enroll approximately 6,000 patients.

Including healthy individuals aged 65 and older makes the Phase III trial slightly more similar to the NAVIGATE trial (which also included healthy participants), potentially aiding translatability, though the Phase IIb only enrolled patients aged 18-64 (the pivotal trial includes those aged 12 and older).

Risks to Phase III Trial

If there are any significant risks to the Phase III trial, in our opinion, it would be that participants might experience lower flu infection rates compared to Phase II if the vaccine is well-matched this season, as vaccination is permitted in Phase III, the research note said. However, we believe this concern is mitigated through several strategies: 1) the trial is powered for a lower assumed event rate; 2) there may be a lower vaccination rate than historically observed due to current anti-vaccine sentiment; 3) the criteria for body temperature have been reduced; and 4) interim analysis provides the opportunity to adjust the trial size if event rates are low.

Although the inclusion of a sicker population and a wider age range compared to Phase II could introduce safety uncertainties, we do not view this as a major risk given the absence of adverse events in Phase II and the mechanism involved.

"Given the potential for accelerated timelines for the clinical development of CD388, and likely faster enrollment given the inclusion of the 65yr+ group, we are pulling forward potential approval and commercialization by one year to 2028E and making appropriate changes to expected opex/taxes," the analyst noted. "We now estimate that there could be ~5.3M pts (million patients) in the U.S. on drug in out-years, translating to peak sales of US$2.4 billion (US$3.7 billion WW sales)."