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Monday's Featured Story 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 a formidable $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 shareholders. Some of Wall Street's biggest players have been taking advantage of the same early-morning price behavior for years — a pattern that appears shortly after the opening bell when overnight institutional flows hit the market. Most retail traders never notice it, but Dave Aquino has spent years studying this window and developed a simple routine built to capitalize on it without relying on news or predictions.
He calls it the Good Morning Cash Plan — a single morning setup designed to give traders a structured, rules-based approach before the day even begins. Dave breaks down the full method in a free training session, including how he identifies the setup each morning. Watch the Good Morning Cash Plan training here For Merck, the market’s muted reaction reflects confidence in a carefully executed strategic move. This acquisition is more than a headline; it demonstrates Merck’s plan 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 challenge. Merck is proactively addressing the anticipated 2028 patent expiration of Keytruda, its flagship cancer therapy that has reshaped oncology and currently accounts for a large portion of revenue. Rather than waiting for that cliff, the company is executing a science-led business development strategy to diversify its portfolio for the next decade. This is a deliberate, offensive move, not a reaction. The Cidara acquisition is a clear example of that strategy in action, enabled by Merck’s strong financial position. With trailing‑twelve‑month net income of over $17 billion and a healthy debt-to-equity ratio of 0.69, Merck can absorb a $9.2 billion deal without unduly straining its operations or shareholder commitments. This follows last month’s completed acquisition of Verona Pharma and its promising COPD drug, OHTUVAYRE. These moves illustrate management’s discipline in using Merck’s balance sheet to buy external innovation and reduce future risks. Moving into the respiratory antiviral space taps a stable, recurring revenue opportunity in the large global influenza market — a sensible diversification from the intensely competitive oncology field. CD388: What Makes a Flu Drug Worth Billions? At the heart of the billion-dollar valuation is Cidara's lead asset: an investigational drug known as CD388. This is not just an incremental flu treatment; it could represent a paradigm shift in influenza prevention, which helps justify the premium price. Its potential rests on several attributes that reduce risk and boost commercial upside. - Advanced and de‑risked: CD388 is already in Phase 3 clinical trials, the final and most expensive stage before regulatory submission. That progress means much of the early scientific and clinical risk has been addressed — a key consideration 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‑dose approach would be a major advantage over annual vaccines, which must be reformulated each year to match circulating strains. Its strain‑agnostic design aims to work regardless of which variants dominate a season.
- Regulatory momentum: The drug has received both Breakthrough Therapy and Fast Track designations from the U.S. Food and Drug Administration (FDA). Those designations are for therapies that may offer substantial improvement over available options and can speed the path to market.
Merck management projects a commercial opportunity that could exceed $5 billion annually, a blockbuster outlook that helps explain the acquisition price and its potential contribution to Merck's top line. What This Deal Means for Investors For investors, Merck’s acquisition of Cidara materially strengthens the long‑term bullish case for the stock. The deal creates a tangible growth pathway that helps insulate the company from future patent cliffs — a primary risk for large pharma valuations. It shows management is proactively addressing long‑range challenges with a well‑capitalized plan. That strategic foresight sits on attractive financial fundamentals. Merck’s stock trades at a forward price‑to‑earnings ratio (P/E) of roughly 10.4, a valuation that looks reasonable given its growth prospects and the broader market. The company’s commitment to shareholders is clear: a dividend yield of 3.48% that has been increased for 14 consecutive years. That dividend is supported by a payout ratio of about 42.8% of earnings, leaving ample capital for reinvestment and strategic deals like this one. With a consensus analyst price target near $104.50, the stock offers around 12% near‑term upside. The shares have already gained more than 10% over the past month, and this acquisition provides a fundamental catalyst to sustain positive momentum. The Cidara deal is more than a pipeline add — it signals proactive leadership and long‑term value creation, reinforcing Merck’s status as a blue‑chip innovator positioning itself for the future.
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