Update: MSD's $9.2bn deal for flu biotech Cidara confirmed

MSD has announced a takeover deal for Cidara Therapeutics, an infectious disease specialist currently focused on developing a preventive antibody-based therapy for influenza.

The agreement – first reported in the Financial Times – will see MSD pay $9.2 billion to take control of Cidara. Citing people familiar with the matter, the FT suggested two companies have been negotiating with Cidara over a sale, and MSD emerged as the preferred bidder with its offer of $221.50 per share for the 14-year-old, San Diego-based company.

It's another example of competition among pharma groups for biotech companies with promising assets that have passed proof-of-concept clinical testing, coming after Pfizer's acrimonious battle with Novo Nordisk to take control of obesity drug developer Metsera. Pfizer closed the $10 billion deal yesterday.

Cidara, which specialises in developing a form of antibody-drug conjugate called drug-Fc-conjugates (DFCs), is in the process of running the phase 3 ANCHOR trial of CD388 as a potential prophylactic therapy for people at increased risk of complications from influenza, as well as those seeking alternatives to flu vaccines, that would work regardless of what strains of the virus are circulating.

A few weeks ago, the company won a $339 million award from the Biomedical Advanced Research and Development Authority (BARDA) to help advance CD388, shortly after it showed protective efficacy of up to 76% against flu in the phase 2b NAVIGATE trial.

Since then, on the advice of the FDA, it expanded the parameters of the ANCHOR trial to include not only people vulnerable to flu because of comorbidities or compromised immunity, but also generally healthy adults over the age of 65 – a change that Cidara said almost doubles the eligible population for CD388 if it reaches the market.

Predictions of the peak sales potential for CD388 vary, but range from around $2 billion to more than $4 billion in the US alone.

"We continue to execute our science-led business development strategy, augmenting our pipeline with CD388, a potentially first-in-class, long-acting antiviral designed to prevent influenza in individuals at higher risk of complications," said Robert Davis, chairman and chief executive of MSD, known as Merck & Co in the US and Canada. 

"We intend to build on the Cidara team’s remarkable progress and are confident that CD388 has the potential to be another important driver of growth through the next decade, creating real value for shareholders."

Cidara has already brought one product to market – the antifungal Rezzayo (rezafungin) – but licensed commercial rights to the product to partners and divested all its rights to the drug last year.

Shares in Cidara had rocketed more than 90% after the FT broke the takeover rumour, trading at more than $200 at the time of writing, nearly eight times their value at the start of the year.