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Wednesday, GSK plc (NYSE:GSK) and CureVac N.V. (NASDAQ:CVAC) announced they have restructured their existing collaboration into a new licensing agreement, allowing the companies to prioritize investment and focus on its respective mRNA development activities.
Since 2020, GSK and CureVac have worked together to develop mRNA vaccines for infectious diseases.
Through this collaboration, GSK and CureVac have vaccine candidates for seasonal influenza and COVID-19 in Phase 2 and avian influenza in Phase 1 clinical development.
All candidates are based on CureVac's proprietary second-generation mRNA backbone.
Also Read: CureVac, GSK Partner Release Data On Influenza Vaccine Study.
GSK will assume full control of developing and manufacturing these candidate vaccines.
GSK will have worldwide rights to commercialize the candidate vaccines.
CureVac will receive an upfront payment of around $430.4 million (400 million euros) and up to $1.13 billion (1.05 billion euros) in development, regulatory, and sales milestones and tiered royalties in the high single to low teens range.
The new agreement replaces all previous financial considerations from the prior collaboration agreement between GSK and CureVac.
CureVac retains exclusive rights to the additional undisclosed and preclinically validated infectious disease targets from the prior collaboration and the freedom to independently develop and partner mRNA vaccines for any other infectious disease or indication.
The new agreement does not affect CureVac's ongoing patent litigation against Pfizer Inc (NYSE:PFE) and BioNTech SE (NASDAQ:BNTX).
CureVac also announced a significant strategic restructuring to focus its resources on mRNA projects in oncology.
The restructuring includes a workforce reduction of approximately 30%.
The restructuring initiative follows the recent new licensing agreement with GSK, valued at up to 1.45 billion euros plus royalties.
The company expects to report data from the Phase 1 study of its cancer vaccine candidate CVGBM in glioblastoma in the second half of 2024.
CureVac expects two clinical candidates for shared-antigen cancer vaccines in solid tumors and hematological cancers by the end of 2025 and plans to initiate two additional Phase 1 studies by the end of 2026.
As a result of the restructuring, CureVac expects operational expenses to decrease by more than 30% from 2025 onward, including a decrease in personnel costs of approximately 25 million euros.
The company estimates it will incur one-time restructuring charges of approximately 15 million euros in the fourth quarter of 2024.
The cost savings, with an upfront payment of 400 million euros and up to 1.05 billion euros in milestones plus tiered royalties from the GSK agreement, will extend CureVac's cash runway into 2028.
Price Action: CVAC shares are up 23.4% at $4.12, and GSK shares are down 0.34% at $38.08 during the premarket session at last check Wednesday.
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