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GSK signs €1.4bn mRNA vaccine deal with troubled biotech CureVac
Double-digit boost for City Law firm Osborne Clarke as it beats revenue target
Lemah Islam
July 03, 2024
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Pharmaceutical: GSK signs €1.4bn mRNA vaccine deal with troubled biotech CureVac
Pharmaceutical: GSK signs €1.4bn mRNA vaccine deal with troubled biotech CureVac
New agreement hands UK drugmaker control of developing jabs and provides cash injection for German group
GSK has reached a licensing agreement with mRNA vaccine developer CureVac worth up to €1.4bn to develop its vaccine 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 the sale and development of the flu jabs and royalties.
The deal allows GSK to develop potential flu and COVID-19 combinations for future variants. It also provides Nasdaq-listed CureVac with a cash injection, as the troubled biotech has struggled to commercialise its products. CureVac also said it would cut almost a third of its workforce to reduce staffing costs by €25mn.
The move leads to one-off severance and restructuring costs of €15mn.
Definition Section
Words | Definitions |
|---|---|
severance | The official ending of an agreement |
restructuring | It is an action taken by a company to significantly modify the financial and operations aspects of the company, usually when the business is facing financial pressures. It is a type of corporate action taken that involves significantly modifying the debt, operations, or structure of a company as a way of limiting financial harm and improving the business. |
cash injection | the word injection implies that a company or organisation receiving funding may be in financial distress. |
licensing agreement | licensing agreement refers to a legal, written contract between two parties wherein the property owner permits another party to use their brand, patent, or trademark. The agreement is set between the licensor and licensee, and contains details on the type of licensing agreement, the terms of usage, and how the licensor is to be compensated. |
Analysis
CureVac was an early developer of COVID-19 vaccines at the beginning of the pandemic, with the German government buying 23% of the company to fast-track its mRNA treatments. However, the vaccine maker struggled to develop a jab and fell behind Moderna, BionNTech and Pfizer in bringing the vaccine to market.
In 2021, it entered into a €150mn agreement with GSK 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 the full development of the vaccines.
Hope you enjoyed it! Lemah Islam
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