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GSK has reached a licensing agreement with mRNA vaccine developer CureVac worth up to €1.4bn to develop its vaccines for flu, Covid-19 and avian flu.
The UK drugmaker has an existing collaboration with the German vaccine maker but it will pay €400mn to CureVac to take full control of developing vaccines under the agreement. There could also be an additional €1.05bn in milestone payments linked to sales and development of the jabs, as well as royalties.
The deal hands GSK the ability to develop potential flu and Covid-19 combination vaccines, which could be updated for new seasonal variants, and compete with existing mRNA vaccines such as those produced by Moderna, Pfizer and BioNTech.
It also provides Nasdaq-listed CureVac with a cash injection, as the troubled biotech has struggled to commercialise its products. CureVac also said on Wednesday it would cut almost a third of its workforce to reduce staffing costs by €25mn.
Tony Wood, chief scientific officer at GSK, said: “We are excited about our flu/Covid-19 programmes and the opportunity to develop best in class mRNA vaccines to change the standard of care.”
CureVac was an early developer of Covid-19 vaccines at the beginning of the pandemic, with the German government buying 23 per cent of the company to fast track its mRNA treatments.
But the vaccine maker struggled to develop a jab and fell behind Moderna, BioNTech and Pfizer in bringing a vaccine to market.
It entered into a €150mn agreement with GSK in 2021 to develop jabs that could be adapted to new variants of Covid-19, but the agreement has yet to deliver a clinically approved vaccine. CureVac shares have collapsed since the initial deal was signed.
Under the new agreement, GSK will now take over full development of the vaccines, including an avian flu vaccine, as cases of the condition mount across the world and have led to several human infections.
As it shifts away from Covid and flu vaccines, CureVac said it would also cut 30 per cent of its staff. It will instead focus on development of early-stage oncology vaccines, an area in which it also lags behind German rival BioNTech.
“The new GSK agreement not only provides substantial financing but also allows us to streamline our operations and focus on technology innovation, research, and development,” said chief executive Alexander Zehnder. “The approximately 30 per cent workforce reduction is a difficult decision on a personal level, I am convinced that this is a necessary step to ensure the long-term success of CureVac.”
The move will lead to one-off severance and restructuring costs of €15mn.