Merck's $9.2bn Acquisition of Cidara Therapeutics
- amansp2006
- Jan 14
- 5 min read
Updated: 7 days ago
By Arthus Marande, Namien Koné, Olivia Riera Ripoll, Nehir Yanmaz, (ESCP), Diana Usova, Oliver Cedar, Dylan Stiassny, Obianuju Okafor (University of Bristol)
Photo: Akram Huseyn (Unsplash)
Overview of the deal
Acquirer: Merck
Target: Cidara Therapeutics
Total Transaction Size: $9.2 Billion
Closed date: Expected First Quarter 2026
Target advisor(s): Evercore and Goldman Sachs & Co (financial), Cooley (legal)
Acquirer advisor(s): BofA Securities (financial), Gibson Dunn (legal)
On the 4th of November 2025, it was announced that Merck would acquire Cidara Therapeutics through a subsidiary at an 109% premium. At a cash price of $221.50 per share, Cidara will be acquired at a $9.2bn cost as Merck’s team aims to build on their progress by having control over Cidara’s investigational, long-acting antiviral drug aimed at finding a prevention for influenza.
Through the acquisition, Merck will gain access to Cidara’s primary research product CD388. While it is still in Phase 3 of its advanced testing trials, it will be tested only on healthy seniors, as well as adults and teens with a higher risk of influenza.
Merck is expecting a slow down in revenues in 2025, as they attempt to navigate a market where their key ‘Keytruda’ drug, best selling drug in 2024, comes off patent in 2028. The deal nears closure in a market which has seen a recent surge in the volume of biotech deals as drugmaking firms' revenues weaken through losses in patent revenues as they continue their search for new, innovative products.
“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,” - Robert M. Davis, CEO of Merck
Company Details (Acquirer - Merck & Co.)
Merck & Co., known as MSD outside the US and Canada, is an American pharmaceutical company. Its core revenue streams come from prescription medicines, vaccines, biologics and animal health products.
Founded: 1917, headquartered in Rahway, NJ, United States
CEO: Robert M. Davis
Employees: 74,000
Market Cap: $259.37bn (25/11/25)
Enterprise Value: $272.4bn
LTM Revenue: $64.24bn
LTM EBITDA: $27.66bn
LTM EV/Revenue: 4.24x
LTM EV/EBITDA: 9.85x
Recent Transactions: $10bn acquisition of Verona Pharma (July 2025), $1.3bn acquisition of EyeBio (July 2024)
Company Details (Target Company - Cidara Therapeutics)
Cidara Therapeutics is a biotechnology company specialising in developing targeted immunotherapies for serious infectious diseases and cancers. Using its platform Cloudbreak the company creates drug-Fc conjugates combining direct antiviral activity with targeted immune engagement. Overall, Cidara aims to address unmet needs in infectious diseases through long-lasting innovative therapeutic solutions.
Founded in 2012, headquartered in San Diego, CA, United States
CEO: Jeffrey L. Stein
Number of employees: 38
Market Cap: $3.3bn (as of 13/11/2025)
EV: $3.3bn
LTM Revenue: $0
LTM EBITDA: $(195)mm
LTM EV/Revenue: N/A
LTM EV/EBITDA: N/A
Projections and Assumptions
Short-Term Consequences
The short-term consequences of Merck’s $9.2 billion acquisition of Cidara Therapeutics are primarily financial and market-driven, with immediate effects for both companies. For Cidara, the deal triggered a rapid surge in its share price, more than doubling overnight due to Merck’s $221.50 per share all-cash offer, which values the transaction at approximately $9.2 billion. Because the stock now trades close to the acquisition price, analysts have downgraded Cidara to neutral ratings, noting that any additional upside is capped until the transaction closes. Operationally, Cidara’s near-term activities remain focused on completing the Phase 3 development of CD388, its long-acting antiviral for influenza, while the company progresses through the required regulatory and shareholder approvals ahead of the expected Q1 2026 closing.
For Merck, the immediate impact is financial dilution. The company expects the acquisition to reduce earnings by roughly $0.30 per share in the first 12 months post-close, driven by the costs of financing the deal and advancing CD388 toward commercial readiness, as outlined in Merck’s financial presentation. Despite the sizable outlay, Merck’s credit rating and capital allocation priorities remain unchanged, and the market responded calmly, suggesting investors view the move as strategically aligned with Merck’s long-term pipeline needs. In the short term, the acquisition instantly adds a promising late-stage antiviral candidate to Merck’s portfolio, signaling continued momentum in its “string-of-pearls” M&A strategy as it prepares for future revenue pressures, particularly the patent expiry of Keytruda.
Long-Term Upsides
Over the long term, Merck’s purchase of Cidara could give the company a lasting edge in the fight against seasonal influenza and consolidate its presence in the infectious disease landscape. CD388’s distinctive subcutaneous delivery, designed for once-a-season use, coupled with its potential to strengthen vaccine-induced immunity, might well become the primary treatment for vulnerable groups like the elderly and those with weakened immune systems, particularly in settings where vaccine efficacy alone provides insufficient protection. If the Phase 3 results are anything like the remarkable 76% efficacy seen in the Phase 2b trials, Merck could be looking at a highly stable, multi-billion-dollar yearly revenue source, driven by ongoing seasonal needs rather than isolated treatment episodes, which introduces welcomed predictability into its long-term revenue planning.
Beyond the flu, Merck’s long-term prospects are brightened by Cidara’s Cloudbreak platform. This could pave the way for new treatments targeting respiratory or viral diseases, further strengthening the strategic value of the agreement and opening avenues for pipeline expansion beyond a single product thesis. If Merck successfully leverages its global regulatory infrastructure, its established physician relationships, and its marketing prowess, the CD388 franchise could become a mainstay in healthcare systems throughout the United States and elsewhere, potentially achieving widespread adoption over time. Ultimately, this acquisition does more than just broaden Merck’s portfolio beyond oncology; it also positions the company to leverage a fundamental change in how we approach preventive care for infectious diseases and to shape the future standards of long-term immunological protection.
Risks and Uncertainties
The Merck-Cidara transaction is highly concentrated on a single late-stage asset, CD388, which remains investigational. Although CD388 has Fast Track and Breakthrough Therapy designations and Phase 2b NAVIGATE met all primary and secondary endpoints, the ongoing Phase 3 ANCHOR trial (target enrolment 6,000 patients) still carries the usual clinical risks: recruitment delays, protocol changes, or weaker-than-expected efficacy/safety could undermine the approval timetable or narrow the eventual label. Regulatory risk is material: accelerated designations can shorten timelines but do not guarantee approval, and any negative FDA or ex-US feedback would directly affect the deal’s value creation potential.
Commercial execution is another source of uncertainty. Analysts see a potential addressable market of up to 100 million high-risk individuals in the U.S. alone (including older adults and immunocompromised patients), but uptake will depend on comparative effectiveness versus vaccines and existing antivirals, pricing and reimbursement, and how severe future flu seasons actually are. A milder epidemiological environment, changes in vaccination practices, or new competitor entrants could all limit the realised revenue pool versus current expectations.
The company financial profile also highlights execution risk. It shows annual cash burn of roughly $157m (vs. a peer mean of $31m) and cash burn excluding capital raising of about $487m (vs. $119m for peers), with R&D at 12,295% of sales compared with 1,106% for comparables. This underscores how dependent the deal’s economics are on Merck’s ability to both fund and successfully commercialise CD388; any delay in launch (currently expected as early as 2028) or slower ramp-up would prolong negative cash flows and increase the risk of goodwill or asset write-downs.
Finally, closing is not fully de-risked. The transaction is structured as a tender offer followed by a merger and remains subject to a majority tender condition, expiration of the Hart-Scott-Rodino waiting period, and other customary approvals. Forward-looking statements in the merger materials explicitly flag risks around clinical results, regulatory timing, competing offers, and general market conditions, all of which could affect both deal completion and the realisation of the strategic rationale.
“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” - Robert M. Davis, CEO of Merck