cdtx-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-36912

CIDARA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware

46-1537286

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

6310 Nancy Ridge Drive,

Suite 101

San Diego,

92121

(858)

752-6170

(Address of Principal Executive Offices, including Zip Code)

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $0.0001 Per Share

CDTX

The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2021, the registrant had 48,289,795 shares of Common Stock ($0.0001 par value) outstanding.

CIDARA THERAPEUTICS, INC.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION		3
	Item 1. Financial Statements	3
	Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity for the three months ended March 31, 2021 and 2020 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3. Quantitative and Qualitative Disclosures about Market Risk	30
	Item 4. Controls and Procedures	30
PART II. OTHER INFORMATION		30
	Item 1. Legal Proceedings	32
	Item 1A. Risk Factors	32
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	68
	Item 3. Defaults Upon Senior Securities	68
	Item 4. Mine Safety Disclosures	68
	Item 5. Other Information	68
	Item 6. Exhibits	69
SIGNATURES		70

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CIDARA THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets


	March 31, 2021		December 31, 2020
(In thousands, except share and per share data)	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	42,863	$	35,912
Restricted cash	5,926		7,037
Accounts receivable	11		11,175
Prepaid expenses and other current assets	2,501		3,067
Total current assets	51,301		57,191
Property and equipment, net	285		342
Operating lease right-of-use asset	663		868
Other assets	1,961		2,023
Total assets	$	54,210	$	60,424

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,215	$	4,568
Accrued liabilities	9,047		7,959
Accrued compensation and benefits	5,661		4,210
Current deferred revenue	15,411		13,865
Current portion of term loan	5,916		7,023
Current portion of lease liability	716		939
Total current liabilities	39,966		38,564
Long-term deferred revenue	12,352		11,145

Total liabilities	52,318		49,709
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at March 31, 2021 and December 31, 2020:
Series X Convertible Preferred stock, $0.0001 par value; 5,000,000 shares authorized at March 31, 2021 and December 31, 2020; 1,096,519 and 1,044,278 shares issued and outstanding, respectively, at March 31, 2021 and December 31, 2020	—		—
Common stock, $0.0001 par value; 200,000,000 shares authorized at March 31, 2021 and December 31, 2020; 48,288,670 and 44,876,408 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	5		4
Additional paid-in capital	354,879		345,411
Accumulated deficit	(352,992)		(334,700)
Total stockholders' equity	1,892		10,715
Total liabilities and stockholders' equity	$	54,210	$	60,424

See accompanying notes.

CIDARA THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)


	Three Months Ended March 31,
(In thousands, except share and per share data)	2021		2020
Revenues:
Collaboration revenue	$	2,408	$	2,530
Total revenues	2,408		2,530
Operating expenses:
Research and development	15,849		12,996
General and administrative	4,781		4,095
Total operating expenses	20,630		17,091
Loss from operations	(18,222)		(14,561)
Other income (expense):
Interest income (expense), net	(70)		22
Total other income (expense), net	(70)		22
Net loss and comprehensive loss	(18,292)		(14,539)
Recognition of beneficial conversion feature	—		(2,762)
Net loss attributable to common shareholders	$	(18,292)	$	(17,301)
Basic and diluted net loss per common share	$	(0.39)	$	(0.46)


Shares used to compute basic and diluted net loss per common share	46,967,213		37,856,338

See accompanying notes.

CIDARA THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Three Months Ended March 31,
(In thousands)	2021		2020
Operating activities:
Net loss	$	(18,292)	$	(14,539)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	57		71
Stock-based compensation	879		1,246
Non-cash interest expense	3		1
Amortization of debt issuance costs	1		—
Operating lease right-of-use assets and liabilities, net	(17)		(12)
Changes in assets and liabilities:
Accounts receivable	11,164		(307)
Prepaid expenses, other current assets, and other assets	461		(1,021)
Accounts payable and accrued liabilities	(253)		379
Accrued compensation and benefits	1,451		(1,422)
Deferred revenue	2,753		476
Net cash used in operating activities	(1,793)		(15,128)

Investing activities:
Purchases of property and equipment	(12)		(36)
Net cash used in investing activities	(12)		(36)

Financing activities:
Proceeds from issuance of common and Series X Preferred stock pursuant to rights offering, net of issuance costs	—		29,186
Proceeds from public offering of common stock, net of issuance costs	8,755		19
Proceeds from exercise of stock options	1		5
Principal repayments of Term Loan	(1,111)		—
Net cash provided by financing activities	7,645		29,210
Net increase in cash, cash equivalents, and restricted cash	5,840		14,046
Cash, cash equivalents, and restricted cash at beginning of period	42,949		60,268
Cash, cash equivalents, and restricted cash at end of period	$	48,789	$	74,314

Supplemental disclosure of cash flows:
Interest paid	$	75	$	139

See accompanying notes.

CIDARA THERAPEUTICS, INC.

Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity

(unaudited)


	Three Months Ended March 31, 2021
	Series X Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Stockholders' Equity
(In thousands, except share data)	Shares	Amount		Shares	Amount
Balance, December 31, 2020	1,044,278	$	—	44,876,408	$	4	$	345,411	$	(334,700)	$	10,715


Public offering of common stock, net of issuance costs	—	—		3,327,706	1		8,588		—		8,589
Issuance of common stock for exercise of options	—	—		486	—		1		—		1
Issuance of common stock for restricted share units vested	—	—		84,070	—		—		—		—
Stock-based compensation	—	—		—	—		879		—		879
Net loss	—	—		—	—		—		(18,292)		(18,292)
Balance, March 31, 2021	1,044,278	—		48,288,670	5		354,879		(352,992)		1,892


	Three Months Ended March 31, 2020
	Series X Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Stockholders' Equity
(In thousands, except share data)	Shares	Amount		Shares	Amount
Balance, December 31, 2019	565,231	$	—	33,838,466	$	3	$	297,659	$	(259,827)	$	37,835
Rights offering, net of offering costs	531,288	—		6,639,307	1		29,185		—		29,186
Recognition of beneficial conversion feature	—	—		—	—		2,762		(2,762)		—
Public offering of common stock, net of issuance costs	—	—		7,600	—		19		—		19
Issuance of common stock for exercise of options	—	—		1,834	—		5		—		5
Issuance of common stock for restricted share units vested	—	—		72,304	—		—		—		—
Stock-based compensation	—	—		—	—		1,246		—		1,246
Net loss	—	—		—	—		—		(14,539)		(14,539)
Balance, March 31, 2020	1,096,519	—		40,559,511	$	4	$	330,876	$	(277,128)	$	53,752

See accompanying notes.

CIDARA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. THE COMPANY AND BASIS OF PRESENTATION

Description of Business

Cidara Therapeutics, Inc., or the Company, was originally incorporated in Delaware in December 2012 as K2 Therapeutics, Inc., and its name was changed to Cidara Therapeutics, Inc. in July 2014. The Company is a biotechnology company focused on the discovery, development and commercialization of long-acting therapeutics designed to transform the standard of care for patients facing serious fungal or viral infections. The Company’s lead product candidate is rezafungin acetate, an intravenous formulation of a novel echinocandin. Rezafungin is being developed as a once-weekly, high-exposure therapy for the first-line treatment and prevention of serious, invasive fungal infections. In addition, the Company is using its Cloudbreak® antiviral platform to develop Antiviral Conjugates, or AVCs, for the prevention and treatment of influenza and other viral infections, including RSV, HIV and the SARS-CoV-2 strains causing COVID-19.

The Company formed wholly-owned subsidiaries, Cidara Therapeutics UK Limited, in England, and Cidara Therapeutics (Ireland) Limited, in Ireland, in March 2016 and October 2018, respectively, for the purpose of developing its product candidates in Europe.

Basis of Presentation

The Company has a limited operating history and the sales and income potential of the Company’s business and market are unproven. The Company has experienced net losses and negative cash flows from operating activities since its inception. At March 31, 2021, the Company had an accumulated deficit of $353.0 million. The Company expects to continue to incur net losses into the foreseeable future. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company’s cost structure.

At March 31, 2021, the Company had cash, cash equivalents and restricted cash of $48.8 million. Based on the Company’s current business plan, management believes that existing cash and cash equivalents will not be sufficient to fund the Company’s obligations for twelve months from the issuance of these financial statements. The Company’s ability to execute its operating plan depends on its ability to obtain additional funding through equity offerings, debt financings or potential licensing and collaboration arrangements. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. However, the Company’s current working capital, anticipated operating expenses and net losses and the uncertainties surrounding its ability to raise additional capital as needed, as discussed below, raise substantial doubt about its ability to continue as a going concern for a period of one year following the date that these financial statements are issued. The consolidated financial statements do not include any adjustments for the recovery and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company plans to continue to fund its losses from operations through cash and cash equivalents on hand, as well as through future equity offerings, debt financings, other third party funding, and potential licensing or collaboration arrangements. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to the Company. Even if the Company raises additional capital, it may also be required to modify, delay or abandon some of its plans which could have a material adverse effect on the Company’s business, operating results and financial condition and the Company’s ability to achieve its intended business objectives. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

In addition to the foregoing, the Company is monitoring closely the impact of the COVID-19 pandemic on its business and has taken steps designed to protect the health and safety of its employees while continuing its operations. Given the level of uncertainty regarding the duration and impact of the COVID-19 pandemic on capital markets and the U.S. economy, the Company is currently unable to assess the impact of the COVID-19 pandemic on its future access to capital. The Company is continuing to monitor the spread of COVID-19 and its potential impact on the Company's operations. The full extent to which the COVID-19 pandemic will impact the Company's business, results of operations, financial condition, clinical trials, and preclinical research will depend on future developments that are highly uncertain, including actions taken to contain or treat COVID-19 and their effectiveness, as well as the economic impact on national and international markets.

Unaudited Interim Financial Data

The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with U.S. generally accepted accounting principles, or GAAP, as found in the Accounting Standards Codification, or ASC, of the Financial Accounting Standards Board, or FASB. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended March 31, 2021 and 2020.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. The Company evaluates its estimates and assumptions on an ongoing basis. The most significant estimates in the Company’s consolidated financial statements relate to estimating the fair value of the Company’s stock options, estimated collaboration expenses and incurred expenses related to the Mundipharma Collaboration Agreement (as defined below), and certain accruals, including those related to nonclinical and clinical activities. Although the estimates are based on the Company’s knowledge of current events, comparable companies, and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Segment Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, the Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as one operating segment.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term investments purchased with a maturity of three months or less when acquired to be cash equivalents.

Restricted cash represents cash that the Company is required to maintain on hand in order to maintain compliance with an operating covenant in the Third Amendment to the Company's Loan Agreement with Pacific Western Bank. See Note 4 for additional information.

Accounts Receivable

Accounts receivable are recorded at their net invoice value and are not interest bearing. The Company reserves specific receivables when collectibility is no longer probable. These reserves are re-evaluated on a regular basis and are adjusted, as needed. Once a receivable is deemed to be uncollectible, such balance is recorded as an allowance for credit losses. No such allowance existed at March 31, 2021 or December 31, 2021.

SEC Form 10-Q filed by Cidara Therapeutics, Inc.