Sales and job cuts
CureVac buries Corona hopes with tough restructuring course
03.07.2024, 18:10
Listen to article
This audio version was artificially generated. More info | Send feedback
For a long time, CureVac was a beacon of hope in the struggle for a corona vaccine. But the biotech company was unable to meet expectations. Now the Tübingen-based company is drawing a line under it and selling all rights to the vaccine candidate. The proceeds and further savings will be used to ensure its own survival.
The biotech company CureVac is selling the lion’s share of its research pipeline to the British pharmaceutical group GSK, thereby securing its financial survival for years to come. CEO Alexander Zehnder is also tightening the austerity measures at the Tübingen-based company and wants to cut more jobs than initially planned. GSK is taking over all rights to CureVac’s mRNA vaccine candidates against Covid-19 and flu – the most advanced projects, but also the most expensive in development. CureVac will receive an upfront payment of 400 million euros for this, the company announced. In addition, success-related milestone payments of up to 1.05 billion euros and license payments are possible.
With the deal, CureVac can secure its financing until 2028. Previously, the financial resources would only have lasted until the fourth quarter of next year. The workforce is now to be reduced by around 30 percent – in the spring, CureVac had already announced the elimination of 150 of the approximately 1,100 jobs worldwide, which would have been almost 15 percent.
He is convinced that the staff reduction is a necessary step “to ensure the long-term success of CureVac,” explained Zehnder. “The new GSK agreement not only provides extensive financing, but also enables us to optimize our business operations and concentrate on technology innovation, research and development.” The focus will be on cancer and other diseases.
Vaccination did not work as hoped
CureVac and GSK have been working together since 2020 and had agreed at that time to cooperate on the development of mRNA vaccines against infectious diseases. CureVac was considered one of the great hopes for the development of a Covid-19 vaccine during the pandemic, but suffered a serious setback because its vaccine did not work as hoped and the project was stopped. Since then, the Tübingen-based company has been working with GSK on an improved vaccine.
In the partnership with the pharmaceutical company in 2020, an equity investment of 150 million euros by GSK in CureVac and a one-off payment of 120 million were agreed. According to CureVac, the new deal replaces all financial consideration from the previous cooperation agreement. GSK’s seven percent share in CureVac remains unaffected. According to LSEG data, the largest shareholder is SAP co-founder Dietmar Hopp’s investment company DH Capital with around 31 percent. The federal government invested in CureVac during the pandemic through its development bank KfW and still holds a good 13 percent.
With the sale of the rights to the corona and flu vaccines, including one against bird flu, CureVac still has two candidates that are in the first of three phases of clinical development: a cancer immunotherapy – for which the first study data is expected in the second half of the year – and a project in the field of gene editing. The rest are in preclinical research and development and are therefore still many years away from possible market approval. CureVac hopes to have two or more clinical candidates for cancer vaccines by the end of 2025, and at least two more Phase 1 trials are to start by the end of 2026.
CureVac plans to reduce its operating costs by more than 30 percent starting next year through restructuring. Personnel costs are to be reduced by around 25 million euros, while one-off expenses of around 15 million euros will be incurred in the fourth quarter. At the end of March, the company still had a financial cushion of around 300 million euros, compared to 617.5 million a year earlier.