Good morning, everyone. Thank you for joining the 24th Annual Needham Healthcare Conference. My name is Joey Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next presenting company, Cidara Therapeutics. Joining us today from Cidara is President and CEO Jeff Stein and CFO Frank Karbe. For those of you joining on the webcast, if you would like to ask a question, please do so at any time. You can submit a question using the chat box at the bottom of your screen. With that, we'll get started. Jeff and Frank, thank you so much for joining us today. Thanks, Joey. Pleasure to be here. Jeff, can you start us off with a brief overview of Cidara's Cloudbreak technology and maybe the history behind your lead asset, CD388 for flu? Sure, absolutely. Cidara actually was founded back in early 2014, and the founding basis is this Cloudbreak immunotherapy platform. It was a much different format back then. In parallel to that, we acquired an antifungal drug, which we advanced through approval in 2023. Let me just illustrate that better with this graphic here, just to give some more background. Our discovery platform, the Cloudbreak immunotherapy platform, evolved until 2018, where we invented this DFC or drug-Fc conjugate format. CD388 was the first molecule out of that platform. As you can see, it is a completely novel type of approach, not a monoclonal antibody, certainly not a vaccine. However, it does use a combination of attributes of the small molecule and a monoclonal antibody. Basically, it is a conjugate of, in the case of CD388, a very potent inhibitor of neuraminidase. It is basically an approved drug combined with something that is in all of our bodies, which is human antibodies. In this case, with CD388, it is the Fc fragment of a human antibody that confers the long half-life. Instead of using kind of the variable domains on monoclonal antibodies, the kind of the Y-shaped domains that we think about when we picture an antibody, we take those off and we substitute for the variable domains, the small molecule inhibitor, in this case, zanamivir. You can see we actually have two copies on each, which form a dimer that is stably conjugated to the Fc. We have multiple copies of those dimers. That was invented in 2018. Fast forward, we partnered that at a preclinical stage with Johnson & Johnson and advanced that under that partnership through two phase I studies and a phase II-A study. At that point in time, J&J was prepared to deliver to us a notice to proceed, and they were to have taken it into phase II- B and then eventually into phase III. At that point in time, in mid-2023, is when they made the strategic decision to exit the infectious disease landscape. They started a series of divestiture processes, starting with their most advanced programs, going to their earlier stage programs. CD388 was kind of in the middle of that process. They had initiated a divestiture process, and we got together with an all-star group of investors, put together a $240 million financing that enabled us to compete with the big pharmas in that process. Ultimately, we succeeded and were able to reacquire all rights to CD388. That was the end of April of 2024, and we were able to get a 5,000-subject study up and running end of September, completely enrolled those 5,000 subjects by the first week of December. That happened to coincide with a historically severe flu season, which puts us where we are now, approaching the end of the flu season. In a nutshell, that really is the story from then till now. Great. We'll dive into the program here in the next couple set of questions, but wanted to step back and take a look at some of the more recent macro things that are going on. Just get your take on the recent developments and layoffs within HHS and FDA, given that you have a flu program in development. What specifically, what impact do you think the recent developments at those agencies will have on your flu program? What are you hearing from the administration and/or key government stakeholders on any potential changes there? Yeah. Obviously, any turmoil in the FDA, NIH, CDC is going to impact any sponsors that rely upon them. We have not seen that yet. In fact, we are seeing a very rapid response of the FDA to our outreach. We are in discussions with them on revising our statistical analysis plan based on the severe flu season and the prospect of introducing a pre-specified p-value. We expect to be able to announce that at a May 22nd R&D day. Stepping back, it is concerning whenever you rely on the CDC to get real-time information on the flu season. We rely on the FDA in order to advance our program. From a broad perspective, yeah, that is concerning. We suspect that that could be more impactful to any sponsors that are developing vaccines as opposed to a long-acting antiviral like CD388. Great. In terms of unmet need in flu, obviously vaccines and new treatments available, but how effective are the current vaccines? Where's the unmet need? Where do you plan to position CD388? Yeah, important question. Vaccines are one of the reasons why we exist is because vaccines are not up to speed on addressing the threat, particularly in high-risk and immunecompromised individuals. In healthy normal individuals, the vaccine effectiveness is highly variable, on average about 40% effective, which does not help with the uptake of vaccines. If on average it's only 40% effective, then it doesn't inspire confidence to even go out and get the vaccine. That vaccine effectiveness is substantially lower in the high-risk comorbid and in the immunecompromised. That is our priority for developing CD388 in phase III, is to go after the highest unmet need populations. Got it. In terms of the immunocompromised patients, where you mentioned the vaccine doesn't just by mechanistically, it doesn't work as well. That certainly makes sense, but maybe help explain why CD388 would have utility in patients with high-risk comorbidities, where presumably a typical vaccine maybe works, but why go for those types of population? Yeah, vaccines actually work, are far less effective in the high risk. It's not because if you're a high-risk patient, you have issues, you have renal impairment, cardiovascular issues, maybe cancer. And while not strictly immunocompromised, meaning your immune system is not completely ablated, such as in a blood and marrow transplant patient, there is a far lower response rate to vaccines in that population. Layer on top of that, and most importantly, is the consequence of getting influenza results in a high rate of hospitalization. That's the bigger issue. Let me just illustrate that here. You look at the influenza disease burden in the U.S. in this past year, you can see the flu illness rate, medical visits, and the hospitalization rate. That is amplified in the high-risk comorbid population to the extent that we will likely be capturing hospitalization as one of the secondary outcomes when we include this population in our phase III program. Okay, great. Very helpful. Talk about the touch on the design, Jeff, of CD388. Had the inhibitor, what was the name of your chosen as a neuraminidase inhibitor? As a follow-up, what's the activity of 388 versus flu A, flu B, and how is that different from current vaccines? Yeah, so clearly CD388 is not a vaccine, long-acting antiviral. We selected zanamivir because it is the most potent of the neuraminidase inhibitors. It's actually the first neuraminidase inhibitor. It's exquisitely potent because it binds to a transition state of the enzyme and virtually impossible for the virus to develop resistance. There's a very low level of resistance against zanamivir. Now the liability of zanamivir is that it has very poor drug properties. Great enzyme inhibitor, poor drug. What we aim to do with the CD388 is turn a great enzyme inhibitor into a great drug. We did that by making dimers of zanamivir. We have more than one copy. Those two copies are then conjugated stably to the Fc fragment of a human antibody. As you can see here, we have multiple copies of those dimers. We see an amplification of potency just by the fact that the sheer numbers of zanamivir dimers on a molar basis is amplified on each of those CD388 molecules. We designed the length of those linkers specifically to bridge multiple copies on the surface of an infected cell. Neuraminidase mediates viral exit from an infected cell. It is arrayed across the surface of the cell in tetramers. Each of those dimers can span multiple monomers on each tetramer. A lot of structure- activity relationship work went into the design of this. It seems to be playing out, certainly in vitro, in vivo, and with the clinical data we have today. You mentioned the clinical data to date. Can you walk us through the results of the phase II-A human challenge study and in particular the placebo-adjusted efficacy or the relative effectiveness against flu infection? Yeah, for placebo-adjusted efficacy, we see about a 50% response rate. The way these challenge studies are designed is you get healthy volunteers. They are administered either placebo or drug. Five days later, they are challenged with an intranasal administration of an attenuated strain of, in this case, H3N2 influenza. What you look for first is what is the percent of placebo subjects that display PCR-confirmed influenza. You can see here, roughly 50% of the placebo subjects displayed qRT-PCR influenza. 21% of the CD388 subjects had that. That's about a 57% response rate. Similar kind of relative response rate with the other secondary outcomes. What's important here is to determine, you know, how does this compare from historical rates? A question we frequently get is, you know, how does this translate into phase II- B or phase III? The first answer to that is it's not intended to translate. This is somewhat of an artificial comparison because if people in the real world, they don't get influenza injected up into their nose and not this particular strain. It is important to look at historical data to see how, in particular, other neuraminidase inhibitors perform. If we look at Tamiflu, which is a well-known orally available neuraminidase inhibitor, we see that in a very similar challenge study, it had about a 24% placebo-adjusted response rate. However, neuraminidase inhibitors aren't really good at preventing viral entry because neuraminidase mediates viral exit. You fully expect to see PCR positivity in a phase II-A study. What's important is how that translates into phase II-B or phase III. That's where neuraminidase inhibitors really do well. They're preventing viral exit. They prevent proliferation of the influenza virus. In the case of the phase III study with Tamiflu, it went from a 24% relative response rate in phase II- A to almost 80%. The question with CD388, we have a 57% relative response rate in the challenge study. What does that translate to in our phase II- B with endpoints similar to what the Tamiflu phase III had? We do not know that yet. We are still blinded to the study. We will be blinded at our R&D day as well. Based on a database lock at the end of this month, which is the end of the flu season, we expect to have top-line data to report mid to end of June. Okay, great. That leads into my next question on the phase II- B. You have some of the trial design up there. Maybe just walk us through what you can disclose on the stats plan for the phase II- B. What are the assumptions on effect size and powering, etc.? Yeah, at the beginning of the flu season, we did not, obviously, we weren't aware of how severe the flu season would be. We had a relatively modest assumption of a 2% breakthrough infection rate in the placebo arm of the study. That 2% was determined based on looking at historical data over the last 20 years and then skew that to the more conservative end because it's generally between 2% and 3%. We assume the 2%. Clearly, even though it's a large study, 5,000 subjects, those subjects are distributed amongst four arms of the study. There're a placebo arm and three dosing arms, 150, 300, and 450 mg. We didn't have an expectation of being able to show a statistically meaningful difference, but we did have an expectation of being able to determine a difference between the three dosing arms. That was the initial objective of the study, select a dose that we would then take into phase III. However, we noted a very severe flu season. Now we expect, even though we don't know what the placebo event rate is because we're still blinded, we suspect that it's going to be higher than 2%, which gives us an opportunity to potentially detect a statistically meaningful difference at a p-value of 0.05, comparing each of the three dosing arms or some combination of those dosing arms versus placebo. We haven't finalized that yet. We're still in discussions with the FDA. As mentioned, we're very pleased with the response rate that we're getting from the FDA to our proposals. We expect to have that finalized by our May 22nd R&D day and describe it at that point. Great. That's very helpful color. As we look towards the top-line readout, a simple question, maybe a little bit harder to answer, but what's the bar for success in terms of placebo-adjusted efficacy? I suppose in some ways you could look at flu vaccines on average about 40% effective, potentially as a comp, but just want to get your thoughts on what the best way to think about the actual number is whenever it does come out. Yeah, and as mentioned before, CD388 being a neuraminidase inhibitor is inhibiting viral exit. It targets neuraminidase, which is separate from the target that vaccines and monoclonal antibodies target, which is hemoglobin. We fully expect to see that whatever efficacy CD388 displays, it will be additive to that of vaccine. In our phase II- B study, this is a healthy, normal 18 - 65 year population, unvaccinated. However, in phase III, vaccination will be allowed. We expect that CD388's activity will be additive. If on average the vaccine effectiveness is 40%, if CD388 is 40% effective, then that should be 80% efficacy, which would be a game changer. We fully expect it to be greater than 40% based on the data I just showed you in the going from phase II- A to phase II- B. Our bar for success doesn't have to be 80%. We think it's going to be lower because of the expectation of the additive activity on top of vaccines. Got it. In terms of dose response, should we be looking for anything there? Are you expecting to see different efficacy there? Yeah, let me illustrate what we expect to see by sharing with you the PK curve here. This is from our phase I study showing two of the three doses we're testing in our phase II- B. In our first in-human study, we tested the 150 and the 450 mg doses. We determined a minimum efficacious concentration based on a mouse lethal challenge model and asked the question, you know, how long is the exposure above that? You can see over the course of a flu season, which is generally 24-30 weeks, we expect that all three doses will be above that exposure line for the majority of the flu seasons. Any infections that occur towards the end of the flu season, so April 30th happens to coincide with week 30. If you go out to week 30 here, we might expect that any infections that occur at the end of the flu season, we should start to see a difference in the outcome rate. That is part of the design of the study. We want to have some information on which to base dose selection, but we do not expect to get that information until we get to the end of the flu season, which is where we are right now. Got it. Jeff, I want to go back to a point you made about the phase II- B and vaccine efficacy. Just to be clear, the phase II- B is in unvaccinated subjects. That's right. Yeah, yeah. We wanted to make sure it was not, you mentioned additive effect, but sorry, I'll let you expand upon that. Exactly. We won't see that in the phase II- B, but we do expect to see that in phase III. Got it. Great. Speaking of phase III, you obviously got the big top-line readout for the phase II- B coming up. What are the next steps in terms of development? What would a potential phase III program look like? When could a program start? Our base case for the phase III is to start in the spring of 2026 in the Southern Hemisphere. That is based on the fact that we will have top-line results in mid-June. We have to schedule end of phase II meeting with the FDA, finalize the design of the study. That said, if there is an opportunity to start in the fall of this year, we will certainly take advantage of that opportunity. That depends on three things: the results of the study, the timing and outcome of the end of phase II meeting with the FDA, and the availability of capital. Going into phase III, we will be going into a different population. This will be in the high-risk comorbid population that we discussed previously, but also the immune-compromised population. You can see these are big populations. This is potential multibillion dollar market opportunity here. When you combine those, you're looking at potentially 50 million subjects in the U.S. To that point, Jeff, when we think about a potential label for 388 here, what are the regulatory considerations for the high-risk subjects here and then the immunocompromised patients? Just in terms of trial design and things like that. Yeah, yeah. Our trial design that we're currently contemplating will have both of these in separate parts of the study. Potentially a part A, part B, one of those parts would have the high-risk comorbid. The other will be immune compromised. What's the upside and potential strategy in other populations outside of high-risk and IC patients such as elderly, etc.? Yeah, certainly the elderly over 65 or even over 70 population have a much lower response rate to vaccines. We think that there is an opportunity there. We fully expect to explore the subsequent populations. What I'm showing here are the initial two populations that we aim to explore. This is the highest unmet need. Also, more robust pricing and reimbursement in this population. Great. Just in terms of the market here, Jeff, how do you think a flu prophylaxis is or will be perceived in the market? Just given you have vaccine, some treatment options, would there be significant educational component to show physicians and patients that this is different or potentially better than a vaccine or more appropriate? Certainly, there will be. That is what we aim to do. This is a completely different type of drug. Physicians, patients are accustomed to vaccines or antivirals. Let me just bring this up here. Here are the two populations we are evaluating right now. You can see that this is an important population to start with. To get to the heart of your question, when we look at these populations compared to vaccines, which most people are more familiar with, with vaccines, the $6 billion-$8 billion market in the U.S., you can see pricing and reimbursement is on the low end of the scale. What CD388's initial positioning will be is in a similar multi billion-dollar market opportunity in that high risk. Substantial population, 40 million or greater, but with more robust pricing. There are some good analogs for that, the most recent of which would be Beyfortus, the RSV antiviral, which is approved in infants and children under 24 months of age. One or two doses per season. In our case, CD388 is being developed as a single dose per season. What would be the potential call points for this therapy? Could it be given at, say, a local CVS, or would it require an expert to administer? Yeah, we expect the call points will be physicians and potentially specialists, in particular for the immunocompromised and in certain of the high-risk patient populations. Okay, great. Last question from us. Maybe you touched on this before, but current cash position and expectations on cash runway. Yeah. Frank, you want to address that one? Sure. As of the end of last year, we had cash of about $200 million. That is sufficient to allow us to complete the ongoing phase II study and advance all preparatory activities in advance of initiating a phase III study. Great. Thank you so much, Jeff and Frank, for the discussion. Very informative. Great, Joey. Thank you. Great questions. Thanks, everyone, for joining us on the webcast. Everyone, have a good day and a good rest of the conference. Great. Thank you. Thank you.