Cidara Therapeutics Inc (NASDAQ: CDTX) is rocketing in the market today, trading on gains well over 50% early on after announcing partnership news. Here’s what’s going on:
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CDTX Stock Rockets On Commercialization Partnership Announcement
Cidara Therapeutics made a huge announcement this morning. The company said that it has entered into a commercialization partnership with Mundipharma.
Under the terms of the agreement, CDTX will grant Mundipharma exclusive commercialization rights to Rezafungin outside of the United States and Japan. In exchange, Mundipharma will make an upfront payment of $30 million on top of a $9 million equity investment in the comapny.
Moreover, the value of this agreement goes far further. Should all milestones be met, the agreement could be worth $568 million for CDTX and its investors. The company will also get its hands on $42 million in near-term funding for the support of phase 3 trials of the drug.
In a statement, Jeffrey Stein, CEO at CDTX, had the following to offer:
This is a transformational collaboration for Cidara, and we look forward to working closely with our colleagues at Mundipharma, a highly successful, profitable company with a commercial presence spanning 120 markets worldwide and annual sales exceeding EUR2 billion.
Why This Is So Exciting
There are several reasons that the news released by Cidara Therapeutics is exciting investors. First and foremost, the agreement will lead to $39 million in immediate funding as well as $42 million in near-term funding that will support Phase 3 development of the drug.
This is great news as the $42 million to support Phase 3 studies will likely pay for the majority, if not all, of the costs associated with Phase 3 development. This takes a huge cost burden off of the table.
Moreover, the agreement serves to validate the impressive work that the company is doing with Rezafungin. After all, if Mundipharma didn’t see a massive opportunity here, the company would not be spending tens of millions of dollars to be part of it.
All in all, CDTX is onto something here and their work is paying off in a big way as a result of the announcement today.
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