GSK to Buy CureVac’s Covid-19, Flu Vaccine Rights for Up to $1.56 Billion – Yahoo Finance

- Vivian Wan/Bloomberg News

GSK struck a deal to buy the rights to CureVacs Covid-19 and flu vaccines for up to 1.45 billion euros ($1.56 billion), in a bid to regain ground lost to newcomers to the vaccine market during the pandemic.

The deal bolsters the U.K. pharmaceutical companys vaccine portfolio at a time when bird-flu concerns are boosting demand. Vaccines accounted for roughly a third of GSKs sales last year.

GSKs deal with CureVac follows in the footsteps of a vaccine licensing agreement between Sanofi and Novavax in May valued at up to $1.4 billion.

Both GSK and Sanofi were among the biggest makers of vaccines before the pandemic, but fell behind rivals and new entrants that launched shots based on messenger RNA, or mRNA, technology as Covid-19 turbocharged demand. The mRNA-based vaccines that were widely used to combat Covid-19 use messenger ribonucleic acid instead of an actual bacteria or virus in the production process.

For GSK, the deal with CureVac is all about securing control of those vaccines the company considers most promising and relevant for the development of mRNA vaccines, a spokesperson said. Alongside the deal, GSK will continue to explore the potential of its own mRNA technology, the spokesperson said.

Under the licensing agreement, GSK will assume full control of developing, manufacturing and commercializing globally the candidate vaccines it and CureVac developed through a collaboration. These include shots for seasonal flu and Covid-19 that are currently in mid-stage trials and for avian flu in early-stage clinical development, the companies said.

CureVac will receive EUR400 million upfront and up to EUR1.05 billion in additional paymentssubject to reaching development, regulatory and sales milestoneas well as royalties, the companies said. It will also retain exclusive rights to the additional undisclosed infectious disease targets from the prior collaboration that havent yet been validated in clinical trials.

The deal restructures an existing collaboration between the two companies that began in 2020, at the height of the pandemic, when CureVac sought partners to develop its Covid-19 vaccine candidate. At the time, GSK took a stake of around 10% in CureVac. As of March, GSKs stake in CureVac amounted to 7.4%, according to FactSet.

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The agreement comes as governments around the world are stepping up efforts to prevent the potential spread of the avian flu virus to people. In the U.S., there have been outbreaks of the virus in dairy-cow farms in 12 states, with three dairy workers infected, according to the Centers for Disease Control and Prevention.

Vaccine maker Moderna on Tuesday received $176 million from a U.S. government program to accelerate development of avian flu vaccines for humans. Australias CSL last month got an order for more than 40 million doses of bird flu vaccines from the European Union.

Germany-based biotechnology company CureVac said the licensing agreement with GSK is part of a strategic overhaul that will see it reduce its workforce by around 30% in a bid to streamline its operations. The company in May said it had more than 1,100 employees.

The news sent CureVac shares sharply higher in U.S. premarket trading. GSKs stock edged slightly higher in European morning trading.

The payments from GSK and CureVacs expected savings in personnel costs from its own restructuring mean the company will have cash to run its operations until 2028, CureVac said.

CureVac said the restructuring will allow it to focus resources on mRNA projects in oncology and other areas. The company aims to create a leaner organization refocused on technology innovation, research and development, it said.

Helena Smolak contributed to this article

Write to Anthony O. Goriainoff atanthony.orunagoriainoff@dowjones.com

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GSK to Buy CureVac's Covid-19, Flu Vaccine Rights for Up to $1.56 Billion - Yahoo Finance