Full Press Release Details
CORPORATE PARTICIPANTS
Sebastian, LifeSci Advisors
Jeff Stein, President and Chief Executive Officer
Jamie Levine, Chief Financial Officer
Paul Daruwala, Chief
CONFERENCE CALL PARTICIPANTS
Joseph Stringer, Needham & Company
Nathan Weinstein, Aegis Capital
Robert Driscoll, Wedbush
Good morning, ladies and gentlemen, and welcome to the Cidara Therapeutics Business Update Call.
At this time, all participants are in a listen-only mode. A brief
question-and-answer session will follow the formal presentation. If anyone should require Operator assistance during the conference, please press star, zero on your
telephone keypad. As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Tracey Sebastian with LifeSci
Advisors. Thank you, Ms. Sebastian. You may begin.
Thank you, Operator, and thank you all for joining us today.
With me on today s call are Jeff Stein, President and Chief Executive Officer; Jamie Levine, Chief Financial Officer; and Paul Daruwala, Chief
Operating Officer of Cidara Therapeutics.
This morning, Cidara issued a news release announcing that it has entered into a collaboration agreement
with Janssen Pharmaceuticals, Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson, to develop and commercialize Cidara s Cloudbreak antiviral conjugates, or AVCs, for the prevention and treatment of seasonal and
pandemic influenza. The collaboration agreement was facilitated by Johnson & Johnson Innovation. Please note, the effectiveness of this agreement is subject to the expiration or earlier termination of all applicable waiting periods under
the Hart-Scott-Rodino Antitrust Improvements Act.
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Before I turn the call over to Jeff, I would like to note that all of the information discussed on the
call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that during this call Management will be making forward-looking statements. Actual results could differ materially from those
stated or implied by forward-looking statements due to risks and uncertainties associated with the Company s business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in Cidara s SEC
filings, including its Annual Report on Form 10-K.
I would also like to point out that the content of this
conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, April 5, 2021. Cidara undertakes no obligation to revise or update any forward-looking statements to reflect events or
circumstances after the date of this conference call.
I will now turn the call over to Jeff Stein, President and CEO of Cidara.
Good morning everyone, and thank you for joining
We are very excited to announce today that we have entered into an exclusive worldwide license and collaboration agreement with Janssen
Pharmaceuticals, a part of Johnson & Johnson, to develop and commercialize Cidara s Cloudbreak Antiviral Conjugates, or AVCs, for the prevention and treatment of seasonal and pandemic influenza.
Our Cloudbreak antiviral platform represents a potentially transformational approach to prevent and treat viral infections, from which we are creating a
new generation of immunotherapeutic antiviral conjugates for influenza, RSV, HIV, SARS-CoV2 and other viruses. AVCs are a novel class of drugs that couple potent antivirals to a human antibody fragment, or Fc. These long-acting AVCs directly inhibit
viral replication while simultaneously engaging the immune system, and may offer significant advantages over vaccines and monoclonal antibodies. Our Influenza AVCs, such as CD388, are designed for rapid onset and have the potential to deliver potent
universal flu protection for an entire flu season with a single dose.
Under the terms of the agreement with Janssen, Cidara will be responsible for
the development and key aspects of manufacturing of our lead influenza AVC, CD388, into the clinic and through the first Phase 2 clinical trial, and Janssen will be responsible for and will fund late-stage development, manufacturing, registration,
and worldwide commercialization. Janssen will reimburse Cidara for the costs incurred in conducting research and development of CD388 under an agreed research plan and budget. Cidara will receive an upfront payment of $27 million and will be
eligible to receive up to an additional $753 million, which consists of budgeted R&D funding, as well as development, regulatory and commercial milestones. In addition, Cidara will receive tiered royalties on worldwide sales in the mid-to high-single digits, and will have the option to co-detail CD388 in the United States.
This collaboration represents a tremendous achievement for Cidara and validates the significant potential of our Cloudbreak AVC platform, as well as the
incredible innovation and efforts of the Cidara team. Leveraging Janssen s infrastructure and commercial capabilities will be invaluable to the expeditious development of CD388 for influenza on a global scale.
Currently, we believe there is a significant unmet need in the influenza landscape and large market opportunity. We all know influenza as a contagious
infection that can cause severe illness, and sometimes it results in death, which is why the CDC recommends that all people over six months of age receive the flu vaccine each year. A 2018 CDC study estimated that about 8% of the U.S. population, or
more than 25 million Americans, get sick from the flu in a typical year, even with current vaccination efforts, resulting in a total economic burden of over $11 billion per year.
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Current treatment options are often ineffective and viral resistance to existing drugs has been
observed. Moreover, current flu vaccines, while critical and still our best defense to date, have two well-known limitations: they don t cover all strains of flu, and they don t cover all people who receive the vaccine. To the first point,
vaccines typically cover only three to four of the dozens of flu strains that could become prevalent during a given flu season. The vaccine strains are selected six months before the flu season and, due to antigenic drift, can become less
susceptible to the vaccine over time. To my second point, of the 49% of Americans who historically obtain an annual influenza vaccine, about 60% do not adequately respond and remain at risk of getting the flu. In fact, vaccine effectiveness for the
2018-2019 flu season was estimated to be only 29%, with effectiveness rates as low as 12% in people over 65.
Importantly, we designed our influenza
AVC, CD388, to address the shortcomings in both the prevention and treatment settings. AVCs are not vaccines, monoclonal antibodies, or traditional therapeutics, but rather they are potent long-acting drugs. As such, they are designed to offer
First, in the prevention setting, our preclinical data support the potential for CD388 to provide universal protection from all
flu strains tested, both A and B, including both seasonal and pandemic strains. In addition, because AVCs are long-acting drugs that do not require an immune response as a vaccine does, they have demonstrated efficacy in severely immunocompromised
mouse infection models, which are intended to represent high-risk populations such as the elderly or immune-compromised. As a result, CD388 has the potential to fulfill our vision that a single dose, given subcutaneously or intramuscularly, could
provide universal protection against all strains for all people for an entire flu season.
An additional advantage of AVCs is the time required to
achieve protection. Vaccines can have a delay of up to 14 days until they are fully protective, while AVCs are expected to take effect nearly immediately. AVCs also have potential advantages over monoclonal antibodies, which typically have high
production costs and limited spectrum that can prohibit their utility for disease prevention in broad populations. Flu AVCs are highly active against A and B, whereas monoclonal antibodies currently in development are only active against A.
Flu AVCs also have advantages in the treatment setting. Importantly, the efficacy window of today s flu treatment options is only about 48 hours,
not nearly long enough for most people to benefit from existing therapeutic options. Our preclinical studies demonstrate that flu AVCs may extend that treatment window by up to 24 hours longer, giving AVCs the potential to drastically improve
patient responses. Additional preclinical studies demonstrate that flu AVCs have a lower resistance potential compared to approved influenza treatments, as well as near-immediate protective effects.
As a result of these data, we believe AVCs have the potential for fast-acting universal treatment of Influenza A and B, including all major clinically
characterized drug-resistant seasonal and pandemic strains. Collectively, flu AVCs such as CD388 have the potential to protect all high-risk groups from all known influenza strains from both a prevention and treatment standpoint, while remaining a
cost-effective and scalable option.
In terms of upcoming milestones, we have a very active year planned for the CD388 program. We are currently
completing IND-enabling studies for CD388 and expect to file an IND by the end of this year, and to subsequently initiate a Phase 1 study in early 2022. Concurrently, we are scaling manufacturing with a
leading contract manufacturer and will direct aspects of CD388 manufacturing.
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In summary, we believe the Janssen collaboration we are announcing today validates our vision of the
game-changing potential of flu AVCs.
I d like to turn now to address the opportunities we see in our broader Cloudbreak antiviral platform
programs which are not presently partnered. I mentioned earlier that the foundational concept of our Cloudbreak platform is to generate long-acting, antiviral drugs, by linking potent antivirals to a human antibody fragment. With this modular
approach we can swap out the influenza antiviral targeting moiety for a different small molecule or peptide antiviral directed against a different pathogen and thereby generate AVCs to target other viral diseases with our immunotherapeutic approach.
Our current efforts are focused on RSV, HIV and SARS-CoV-2.
I ll begin with respiratory syncytial virus, or RSV. RSV is the second largest cause of death in children under one year of age worldwide, second
only to malaria. There is a significant unmet need for both seasonal and long-term prevention and treatment of RSV for the very young, the elderly and those with weaker immune systems, and currently there is no vaccine for RSV. We believe that there
is an unmet need for a therapy can provide broad-spectrum viral coverage with a long duration of action and can also protect high-risk individuals. The encouraging preclinical efficacy of influenza AVCs suggests that the Cloudbreak AVC platform has
the potential to address this deficiency in the current landscape for RSV.
Given Janssen s significant research and commercial presence in the
field of respiratory viral infections, including RSV, Cidara has granted Janssen an exclusive right of first negotiation, for a limited period of time, to negotiate for and enter into a separate collaboration for the research and development of AVCs
Moving on to our HIV program, like RSV there is no vaccine for HIV, and long-term prevention and maintenance remain priorities. HIV
has a critical unmet need for long-acting, effective drugs and we see the market shifting in that direction. Our RSV, HIV, and SARS-CoV-2 programs will benefit from the
learnings from our flu AVC program to accelerate their advancement. We look forward to sharing additional preclinical data on these programs in the near future.
Finally, we are also actively considering other viral diseases to target with our Cloudbreak approach based on technical, clinical and commercial
Notwithstanding the focus and excitement today regarding our flu AVCs and our collaboration with Janssen, there is more to Cidara than
the Cloudbreak antiviral platform. Our most advanced infectious disease program focuses on the attractive systemic antifungal market and we continue to advance our novel long-acting echinocandin, rezafungin, through two Phase 3 clinical trials. The
first is the ReSTORE trial, which addresses the treatment of candidemia and invasive candidiasis, and the second is our ReSPECT prophylaxis trial focused on the prevention of invasive fungal disease in patients undergoing allogeneic blood and marrow
transplant. Rezafungin, if approved, could transform the standard of care for the treatment and prevention of invasive fungal infections and has the potential to be the first new antifungal in over a decade indicated for both first-line Candida
treatment and first-line antifungal prophylaxis. These two Phase 3 trials could position Cidara and rezafungin squarely within both the infectious disease and hematology settings.
The rezafungin program is validated by our partnership with Mundipharma, through which Cidara retains rights for the U.S. and Japan, whereas Mundipharma
will commercialize rezafungin in all other regions. As a reminder, we expect topline results from the Phase 3 ReSTORE treatment trial by the end of 2021.
As I begin to wrap up my prepared comments, I d like to address the positive financial impact of this collaboration on Cidara s future
operations. We expect that our strengthened balance sheet, both from the upfront payment and ongoing R&D funding from the Janssen collaboration, as well as the ongoing support
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from Mundipharma for our rezafungin Phase 3 clinical trials, provides us with the cash resources necessary to fund our activities past the expected IND filing for CD388 and topline data for the
ReSTORE Phase 3 trial. Importantly, both our rezafungin and Cloudbreak platforms are now validated by key strategic partnerships with Mundipharma and Janssen, respectively. On a combined basis, these two collaborations have the potential to provide