Cidara Therapeutics announces $105 million private placement

Published 21/11/2024, 14:38
Cidara Therapeutics announces $105 million private placement
CDTX
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SAN DIEGO - Cidara Therapeutics, Inc. (NASDAQ:CDTX), a biotechnology firm specializing in immunotherapies, has disclosed a securities purchase agreement to raise approximately $105 million through a private placement. The transaction is led by Venrock Healthcare Capital Partners (WA:CPAP), with participation from a mix of new and existing investors, including RA Capital Management and TCGX.

The company will issue over 3.8 million shares of common stock at a price of $14.912 each. Additionally, certain investors are opting for pre-funded warrants to purchase common stock, amounting to around 3.1 million shares, at a purchase price mirroring the common stock less a nominal exercise price.

This capital infusion is slated to close around November 25, 2024, subject to standard closing conditions. Cidara plans to channel the net proceeds into research and development for its product candidates, working capital, and other corporate purposes.

RBC Capital Markets is serving as the sole placement agent for this private placement, while Guggenheim Securities is acting as financial advisor to Cidara.

The securities involved in this private placement have not been registered under the Securities Act of 1933 and are therefore subject to restrictions on resale in the U.S. Cidara has committed to filing a registration statement with the SEC to allow for the resale of the shares and the shares underlying the pre-funded warrants.

Cidara is known for its Cloudbreak® platform, which has produced drug-Fc conjugates (DFCs) for various diseases. Its lead candidate, CD388, is an antiviral aimed at universal prevention of influenza and has entered a Phase 2b trial as of September 2024. The company is also exploring DFCs for oncology, with IND clearance for a candidate targeting CD73 in solid tumors as of July 2024.

The information in this article is based on a press release statement by Cidara Therapeutics, Inc.

In other recent news, Cidara Therapeutics has initiated a Phase 2b NAVIGATE trial for its influenza drug CD388, involving 5,000 healthy, unvaccinated adults. The company has also announced a 30% workforce reduction to concentrate resources on CD388's development, with the restructuring expected to cost around $1.2 million in severance and related benefits. Additionally, Jim Beitel has been appointed as the new Chief Business Officer, following a stock rating upgrade from Neutral to Buy by H.C. Wainwright.

The company also expanded its authorized shares of common stock from 20 million to 50 million, providing greater financial flexibility. Furthermore, Cidara Therapeutics sold its rezafungin program to Mundipharma and re-acquired its Phase 2b-ready influenza program from Johnson & Johnson, followed by a $240 million private investment in public equity financing deal.

These recent developments highlight the company's efforts to advance its clinical and preclinical initiatives. The company continues to explore the potential of its Cloudbreak® platform, which is being used in the development of CD388.

InvestingPro Insights

Cidara Therapeutics' recent $105 million private placement comes at a critical time for the company, as reflected in the latest InvestingPro data. The company's market capitalization stands at $106.55 million, closely aligning with the capital raised. This significant influx of funds is crucial, given that InvestingPro Tips indicate Cidara is "quickly burning through cash."

The company's financial health presents a mixed picture. While Cidara "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations," it's important to note that the company is "not profitable over the last twelve months." This is further underscored by the negative gross profit margin of -48.49% in the last twelve months as of Q3 2024.

Despite these challenges, Cidara has shown strong market performance recently. InvestingPro data reveals impressive price returns of 34.76% over the last month and 42.37% over the last six months. This positive momentum is reflected in the InvestingPro Tip that suggests "strong return over the last three months."

However, investors should exercise caution. An InvestingPro Tip warns that the "RSI suggests the stock is in overbought territory," which could indicate a potential pullback. Additionally, analysts anticipate a sales decline and a drop in net income for the current year.

For a more comprehensive analysis, InvestingPro offers 13 additional tips for Cidara Therapeutics, providing deeper insights into the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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