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Featured Content from MarketBeat Merck Writes a $9.2 Billion Check for a Flu Drug That Could Change EverythingWritten by Jeffrey Neal Johnson. Published 11/18/2025. 
Key Points - Merck's major acquisition of Cidara Therapeutics demonstrates a clear and proactive strategy to build its next-generation long-term revenue drivers.
- The acquisition secures a high-potential, late-stage antiviral drug that has already earned key designations from the FDA for its innovative approach.
- This strategic move reinforces Merck’s strong financial fundamentals and its unwavering commitment to creating sustainable, long-term value for its shareholders.
In one of the most decisive strategic moves in the biotech sector this year, pharmaceutical titan Merck & Co. (NYSE: MRK) has committed $9.2 billion in cash to acquire Cidara Therapeutics (NASDAQ: CDTX). The announcement immediately sent Cidara’s stock price soaring more than 100%, a clear win for its investors. Gold has surged past $4,200 an ounce — up sharply over the past year — but Sean Brodrick of Weiss Ratings believes this move could still be in its early stages. After three decades tracking precious metals, he says past gold surges have often been overshadowed by a different type of opportunity that historically delivered far stronger returns than simply holding physical gold.
Sean now believes that pattern may be setting up again, and the strategy behind it doesn't require buying gold coins or bars. For a limited time this weekend, investors can access his full research — including the approach he says could benefit most if this gold cycle continues — for just $19 as part of a special offer. Click here to see how you could benefit before the offer expires For Merck, however, the market’s muted reaction reflects confidence in a carefully planned strategic move. This acquisition is more than a headline; it demonstrates Merck’s intent to build the next generation of revenue drivers from a position of financial and operational strength. A Strategic Imperative: Securing the Next Decade For any pharmaceutical leader, managing the lifecycle of blockbuster drugs is the ultimate strategic test. Merck is proactively addressing the scheduled 2028 patent expiration of Keytruda, a cancer therapy that reshaped oncology and currently contributes a large share of the company’s revenue. Rather than waiting for that cliff, Merck is executing a science-led business development strategy to diversify its portfolio for the next decade. The Cidara acquisition exemplifies this approach and is enabled by Merck’s solid balance sheet. With trailing-twelve-month net income of over $17 billion and a debt-to-equity ratio (D/E) of 0.69, Merck can absorb a $9.2 billion deal without straining operations or shareholder commitments. It follows last month’s closing of Verona Pharma and its promising COPD drug, OHTUVAYRE. These moves show management’s discipline in using Merck’s balance sheet to acquire external innovation and mitigate future risks. By expanding into respiratory antivirals, Merck gains exposure to the large, recurring global influenza market—an intelligent diversification away from the intensely competitive oncology space. CD388: What Makes a Flu Drug Worth Billions? At the heart of the multibillion-dollar acquisition is Cidara's crown jewel: an investigational drug called CD388. This asset is not merely an incremental improvement; it could reshape influenza prevention, which helps explain the premium price. Its value rests on several attributes that reduce risk and enhance commercial potential. - Advanced and de-risked: CD388 is already in Phase 3 clinical trials, the final and most costly stage before seeking regulatory approval. That advanced position removes much of the early scientific and clinical uncertainty—an important factor for an acquirer like Merck.
- Potential new standard of care: As a long-acting antiviral, CD388 is designed to provide season-long protection against both influenza A and B from a single dose. That one-and-done approach could be a meaningful advantage over annual vaccines, which must be reformulated each year to match circulating strains. Its strain-agnostic design aims to be effective regardless of which variants dominate in a given season.
- Regulatory confidence: The drug has received both Breakthrough Therapy and Fast Track designations from the U.S. Food and Drug Administration (FDA). Those designations are reserved for therapies targeting serious conditions that may offer substantial improvement over available options, and they can accelerate the path to market.
Merck’s management projects a commercial opportunity that could exceed $5 billion annually for CD388—blockbuster potential that helps justify the acquisition price and its anticipated contribution to Merck's top line. What This Deal Means for Investors For investors, Merck’s acquisition of Cidara strengthens the long-term bullish case for the stock. The deal provides a tangible growth pathway that helps insulate the company from future patent cliffs, addressing a major valuation risk for pharmaceutical firms. It shows management is executing a well-capitalized plan to secure future revenue streams. This strategic foresight rests on attractive financial fundamentals. Merck’s stock trades at a forward price-to-earnings ratio (P/E) of about 10.4, a valuation that appears reasonable relative to its growth prospects and the broader market. The company’s commitment to shareholder returns is clear, with a dividend yield of 3.48% that has been increased for 14 consecutive years. That dividend is supported by a payout ratio of just 42.8% of earnings, leaving ample capital for reinvestment and strategic deals like this one. With a consensus analyst price target of around $104.50, the stock offers roughly 12% near-term upside. The stock has already gained more than 10% in the last month, and this acquisition provides a fundamental catalyst to support further positive momentum. The Cidara deal is more than a pipeline addition; it signals proactive leadership and long-term value creation, reinforcing Merck’s role as a blue-chip innovator preparing for the future.
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