Cidara Therapeutics: Merck's Rise and Future Plans

Cidara Therapeutics Inc. (NASDAQ:CDTX) is leading the way among the most sought-after SMID-cap stocks of 2025, having recorded a 717% increase in shareholder price since the beginning of the year. Following the acquisition announcement by Merck & Co. Inc. (NYSE:MRK), Guggenheim analyst Seamus Fernandez downgraded his rating on Cidara Therapeutics from Buy to Hold. In his initial assessment, he set a target price for the stock at $167, but following the downgrade, he raised his target price to the offer price of $221.5.

On November 14, Merck announced that it would make a cash acquisition of Cidara Therapeutics Inc. (NASDAQ:CDTX) for $221.5 per share. This transaction is valued at a total of $9.2 billion and the offer price represents a premium of 109% over the closing price on November 13. According to the terms of the agreement, Merck's subsidiary will acquire all outstanding shares of Cidara through a tender offer, with the completion of this agreement expected in the first quarter of 2026 after obtaining necessary approvals.

With this acquisition, Merck plans to expand its infectious disease portfolio with Cidara’s leading drug candidate, Fc conjugates (DFC) CD388. CD388 is a late-stage, long-acting antiviral agent designed to prevent influenza in individuals at high risk of complications, and is currently in Phase 3 (ANCHOR Study) stage. CD388 has also earned Breakthrough Therapy and Fast Track designations following positive Phase 2b results.

This addition is expected to help Merck offset revenue declines due to the impending patent expiration of its major drug Keytruda. Merck CEO Rob Davis emphasized that CD388 is a “significant growth driver” for the next decade.

On the day the announcement was made, Cidara Therapeutics Inc. (NASDAQ:CDTX) shares saw an increase of over 105%, closing near the offer price. Thus, the stock has shown a 717% increase since the beginning of the year.

Aside from Guggenheim, analysts such as H.C. Wainwright, JPMorgan, and RBC Capital also downgraded the stock to 'Hold'. Morgan Stanley analyst Maxwell Skor expressed hope that the acquisition would proceed as planned, downgrading the stock to Equal Weight and setting the target price at the offer price of $221.5.

Cidara Therapeutics Inc. (NASDAQ:CDTX) is a clinical-stage biotechnology company developing anti-infectives for the treatment and prevention of fungal, bacterial, and viral pathogens. While we acknowledge the investment potential of CDTX, we believe that some artificial intelligence (AI) stocks offer greater upside potential with less downside risk.