Shares of Cidara Therapeutics, which have already rocketed more than 173% this year, surged to a seven-year high Wednesday on plans to expand testing for its non-vaccine flu prevention drug.
Following a meeting with the Food and Drug Administration, Cidara accelerated plans to start Phase 3 testing within six months. The company's goal is to time out its testing with the flu season in the Northern Hemisphere. The agency also encouraged Cidara to include older adults with and without conditions that put them at risk of developing severe influenza.
Cidara says a single final-phase study of its drug, CD388, could be enough for approval.
"We now see more than 5 (million people) on this drug in the out-years," RBC Capital Markets analyst Brian Abrahams said in a report. "With accelerated timelines for CD388 likely, we believe that the drug could bring in $3.78B in WW sales in the out-years and see additional upside potential for shares from here."
Cidara stock surged 20.5%, closing at 88.58. Shares hit their highest point since October 2018 and have now gained extended their year-to-date gain to roughly 230%. The biotech stock has a perfect IBD Digital Relative Strength Rating of 99, reflecting its top performance over the past 12 months. Cidara stock has more than tripled this year.
'Better Than Expected' Updates
Following the meeting with the FDA, Cidara is now planning to enroll people age 13 and older with high-risk comorbidities and those with compromised immune systems. The company will also include people age 65 and older.
That expands the potential market for CD388 from roughly 50 million to well north of 100 million in the U.S. Based on this, Needham analyst Joseph Stringer raised his forecast to $2.2 billion in peak U.S. sales, up from $1.5 billion. He also hiked his price target on Cidara stock to 100 from 74.
"The updates were better than investors had anticipated," he said in a client note.
Adding healthy older adults increases the likelihood the Phase 3 study will succeed, RBC's Abrahams said.
He also raised his price target on Cidara Therapeutics stock to 137 from 115, and reiterated his outperform rating. Abrahams now expects the drug to launch in 2028 and forecasts a U.S. sales peak of $2.4 billion. Globally, CD388 could generate $3.7 billion in sales, he said.
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