CureVac cuts jobs, licenses out vaccines to GSK

Dive Brief:

• CureVac, a specialist in messenger RNA-based therapies, disclosed Wednesday plans to lay off 30% of its workforce as part of a “significant strategic restructuring” that will direct the company’s resources toward “high-value” projects.
• The announcement comes less than three months after CureVac said it would trim 150 jobs to help reduce costs. The German biotechnology company had a headcount of almost 1,130 at the end of last year.
• In addition to the layoffs, CureVac said a collaboration with GSK has shifted to a new licensing agreement. The partnership began in 2020 and has led to clinical-stage vaccine candidates for seasonal influenza, COVID-19 and avian influenza. GSK is now paying 400 million euros, or about $432 million, for full control over those vaccines. CureVac, meanwhile, retains exclusive rights to the undisclosed and preclinical infectious disease targets from the prior collaboration.

Dive Insight:

The licensing deal provides an immediate injection of cash at a time when CureVac is trying to make every dollar count.

Like Moderna and BioNTech, CureVac gained prominence in the early months of the coronavirus pandemic because of its work with mRNA. It stumbled, though, trying to bring a COVID-19 shot to the market. Over the past two years, the company has been wrapped up in a legal battle with BioNTech. And its shares now trade at about $3.40, well off the $120 price they went for near the beginning of 2021.

Moving forward, CureVac says it will prioritize oncology and “other select areas of substantial unmet medical need.” Before the end of the year, the company expects to report data from a small study of its experimental cancer vaccine in people with certain kinds of brain tumors. It also plans on having two clinical candidates for solid tumors and blood cancers in early-stage testing by the end of 2026.

“Now, we can embark on a new chapter for CureVac,” Alexander Zehnder, CureVac’s CEO, said in a statement.

That chapter will be financed, in part, by the renegotiated GSK deal. Along with the upfront payment, GSK offered up to 1.05 billion euros in development, regulatory and sales milestones, as well as tiered royalties in the high single-digit to low teens range on sales from the licensed vaccines.

What’s more, CureVac can independently develop or partner the mRNA vaccines it’s holding onto for any other infectious disease or indication.

The new deal “not only provides substantial financing but also allows us to streamline our operations,” Zehnder said.

Relatedly, CureVac estimates its restructuring efforts will curb operational expenses more than 30% from 2025 onward. The company expects to incur a one-time restructuring charge of 15 million euros, which includes employee severance, benefits and related costs. But that charge should be offset, as personnel costs are slated to drop by approximately 25 million euros.