Today, the German mRNA therapy companyCureVacAnnounced the launch of a major strategic restructuring, focusing resources on high-value mRNA projects in oncology and other areas with significant unmet needs. The restructuring includes cutting approximately 30% of the workforce and refocusing on technological innovation, research and development, among others.According to the description in the press release, this restructuring plan was implemented following a new licensing agreement recently reached with GlaxoSmithKline (GSK), which is worth up to 1.45 billion euros plus royalties. Under the new agreement, GSK will be responsible for the development, manufacturing, and global commercialization of the COVID-19 and influenza programs, including combination therapies, while CureVac will focus on leveraging its core strengths.(Source: Company's official website)
In this regard, Dr. Alexander Zehnder, CEO of CureVac, stated in the press release,"Now, we can open a new chapter in the development of CureVac.""The new agreement with GSK not only provides funding for the company but also enables us to streamline operations and focus on technological innovation, research, and development. As a result, we can prioritize oncology projects and leverage proprietary technology to develop novel mRNA therapies."CureVac, once one of the "global mRNA vaccine giants" alongside Moderna and BioNTech, gained prominence for its mRNA research during the early months of the pandemic. However, CureVac's vaccine development progressed more slowly compared to the other two companies and encountered significant setbacks in its attempt to launch a COVID-19 mRNA vaccine. In June 2021, CureVac announced the latest Phase IIb/III clinical trial data for its COVID-19 mRNA vaccine, showing that CVnCoV had an efficacy rate of only 47%, failing to meet the predefined statistical success criteria. Following the announcement, CureVac’s stock price plummeted by half, with after-hours trading on U.S. markets dropping over 50%. In October 2021, CureVac withdrew its application for European approval of its COVID-19 mRNA candidate vaccine, opting instead to focus resources on co-developing a new vaccine with GSK.Subsequently, over the past two years, CureVac has been in litigation with BioNTech. Currently, the company's stock price is approximately $3.12 per share, far below $120 per share at the beginning of 2021, with a total market value of only $700 million. Public data shows that compared to its peak period, CureVac’s stock price has fallen by more than 94%.No Longer Glorious and Short of Funds, CureVac Decides to Cut Costs and Increase Revenue by Layoffs and New Licensing Agreements, Starting a New Chapter. On one hand, it saves operating expenses through layoffs and replenishes cash flow in time through new agreements; on the other hand, CureVac focuses resources on developing high-value mRNA projects, retaining the right to independently develop or co-develop its mRNA vaccines for other infectious diseases or indications.In fact, less than three months ago, CureVac announced that it would lay off 150 employees to cut costs. As of the end of last year, the total number of employees at this German biotech company was close to 1,130.Following this restructuring, CureVac expects operating expenses to decrease by more than 30% starting from 2025, with personnel costs reducing by approximately 25 million euros.In addition to layoffs, CureVac also pointed out that its collaboration with GSK has shifted to a new licensing agreement. The partnership between the two companies began in 2020, focusing on the joint development of treatments and vaccines for infectious diseases. The upfront payment at that time was €120 million (approximately $137 million), and CureVac was entitled to receive milestone payments worth hundreds of millions of dollars. The two companies collaborated on the research, development, and production of up to five mRNA vaccines and monoclonal antibodies targeting pathogens of infectious diseases, with CureVac responsible for the early development phase. Based on this cooperation, the two parties have jointly developed candidate vaccines for seasonal flu, COVID-19, and avian influenza, which are currently in clinical trials.Through the latest licensing agreement,GSK gained full control of these vaccines with an upfront payment of 400 million euros (approximately 432 million US dollars).In addition to an upfront payment of 400 million euros, GSK is also providing up to 1.05 billion euros in development, regulatory, and sales milestone payments, as well as tiered royalties on licensed vaccine sales.It is expected toCureVacThe cash flow will be extended to 2028.Figure | CureVac and GSK Collaboration Project (Source: Company Official Website)Meanwhile, CureVac retains exclusive rights to undisclosed and preclinical infectious disease programs from the previous collaboration.The company is expected to report Phase I study data for its cancer candidate vaccine CVGBM in glioblastoma in the second half of 2024. By the end of 2025, it is expected to have two clinical cancer vaccine candidates targeting shared antigens in solid tumors and hematologic cancers, one of which is in collaboration with researchers at MD Anderson, with plans to initiate two additional Phase I studies by the end of 2026.Reference link:
1.https://www.curevac.com/en/curevac-initiates-strategic-restructuring-to-align-resources-with-focus-on-high-value-mrna-pipeline-opportunities/
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