Merck to Acquire Cidara in $9.2 Billion Deal for Flu Drug
The acquisition gives Merck access to a late-stage universal flu prevention candidate, a major strategic move to diversify beyond its blockbuster drug Keytruda.
Merck & Co. has agreed to acquire Cidara Therapeutics in a landmark $9.2 billion deal, making a substantial bet on a novel, late-stage antiviral agent designed to offer universal protection against influenza. The move is a major step in the pharmaceutical giant's strategy to build out its drug pipeline and reduce its reliance on the cancer therapy Keytruda, which faces patent expiration in 2028.
The all-cash deal, announced by Merck on Friday, values Cidara at $221.50 per share. The news sent shares of San Diego-based Cidara skyrocketing over 105% to nearly $218 in morning trading, reflecting the significant premium Merck is paying for the company's lead asset.
At the center of the acquisition is CD388, a potentially first-in-class drug candidate for preventing both seasonal and pandemic influenza. Unlike conventional vaccines that require annual updates, CD388 is a long-acting antiviral that could provide protection with a single dose. The drug is currently in Phase 3 clinical trials and has received both Fast Track and Breakthrough Therapy designations from the U.S. Food and Drug Administration, signaling its potential to address a significant unmet medical need.
"This acquisition is a clear strategic play to secure a potential blockbuster asset and fortify our respiratory virus portfolio," a Merck spokesperson stated. "CD388's unique mechanism and late-stage development profile make it a compelling addition as we plan for our next phase of growth."
For Merck, a company with a market capitalization of over $230 billion, the transaction represents a critical investment in its future. The company's top-selling drug, Keytruda, is expected to generate over $25 billion in revenue this year but will lose its market exclusivity in 2028, creating a looming revenue gap that has been a key concern for investors. This high-stakes purchase is one of the most aggressive moves Merck has made to diversify its portfolio ahead of that patent cliff.
Investors reacted favorably to the strategic logic, though with a degree of caution. Merck's shares (NYSE: MRK) saw a modest rise of about 0.9% to $93.74 in Friday trading. The muted response suggests that while Wall Street understands the need for the deal, its ultimate success is contingent on positive Phase 3 trial results and a successful commercial launch for CD388.
Analysts see the deal as a necessary, if expensive, step for Merck. The acquisition follows a broader industry trend where large pharmaceutical companies are using their substantial cash reserves to acquire smaller biotech firms with promising late-stage assets, thereby outsourcing a portion of their R&D risk and replenishing their pipelines.
The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, including the tender of a majority of Cidara's outstanding shares and regulatory approval. Upon completion, Merck will gain full rights to CD388 and Cidara's portfolio of immunotherapies, positioning it as a formidable player in the global fight against influenza.