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📂 Category: Company News,News
📌 Key idea:
Key takeaways
- Merck has agreed to pay $9.2 billion to acquire Cidara Therapeutics, seeking to cash in on an experimental influenza treatment developed by the company.
- The stock’s $221.50 bid represents more than double Cidara’s closing price yesterday.
Shares of Cidara Therapeutics (CDTX) more than doubled on Friday after Merck (MRK) agreed to buy the biopharmaceutical company in an all-cash deal valued at $9.2 billion to expand its access to antiviral therapies.
Merck said it will pay Cidara investors $221.50 per share, a whopping 109% premium to yesterday’s closing price.
This acquisition gives Merck access to Cidara’s best drug candidate, CD388, which uses part of a human antibody to fight influenza A and B. It is currently in a phase 3 trial with teens and adults who are at highest risk of developing flu complications.
Why this news matters to investors
Merck’s acquisition of Cidara is an example of a relatively small company with unique assets being highly valued by a major company willing to spend a large sum to acquire it. Biotechnology stocks can offer investors big rewards when their research and development translates into successful products, but the investments also come with the risk that the innovations will never achieve commercial success.
Robert Davis, Merck’s CEO, said the company is confident that CD388 “has the potential to be another important driver of growth over the next decade, creating real value for shareholders.”
Merck said the deal is expected to close in the first quarter of next year and “be considered an asset acquisition.”
Cidara Therapeutics shares rose 105% to about $218 late Friday, trading at their highest levels in nine years. A year ago, the stock was trading at around $14.
Merck shares rose about 1%, but remain in negative territory for 2025.
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