BioNTech, a biotech company best known for its successful development of a messenger RNA Covid-19 vaccine, is acquiring fellow mRNA company CureVac in a $1.25 billion stock deal that brings together firms applying their respective technologies to the development of new treatments for cancer.
The acquisition agreement announced Thursday will place the mRNA pipeline and manufacturing infrastructure of CureVac under the umbrella of the much larger BioNTech, whose pipeline growth has been fueled by revenue from the commercialized Covid-19 vaccine. The joint BioNTech and CureVac announcement Thursday framed the acquisition as a way to combine complementary technologies and capabilities. But BioNTech and CureVac were not always on such cordial terms. In fact, they’ve been fighting in court for the past three years.
Mainz, Germany-based BioNTech and Tübingen, Germany-based CureVac both rose to prominence during the Covid-19 pandemic due to their respective mRNA technology platforms. While CureVac’s vaccine candidate for the novel coronavirus fell short of expectations in clinical testing, BioNTech’s mRNA vaccine, partnered with Pfizer, went on to become the first FDA-authorized and then the first FDA-approved Covid-19 vaccine, Comirnaty.
CureVac was founded eight years before BioNTech and it contended its inventions were key to the design and development of Comirnaty. In 2022, CureVac sued BioNTech in Europe, claiming Comirnaty infringed key mRNA patents. Recent rulings have gone CureVac’s way. In March and in May, the European Patent Office issued rulings upholding the validity of two CureVac patents. Additional patent hearings were expected over the summer.
To Leerink Partners analyst Daina Graybosch, BioNTech’s acquisition of CureVac is essentially a hedge against legal and financial uncertainty. The patent litigation put BioNTech at risk of paying backdated royalties on about $32 billion of global Comirnaty sales to date, Graybosch said in a research note. Paying about $1.25 billion to acquire CureVac is essentially an out-of-court settlement, she said, adding that BioNTech has the additional potential upside of being able to leverage CureVac’s emerging mRNA-based oncology platform and expertise to complement its own work in cancer drug R&D.
CureVac’s Covid-19 vaccine was developed with GSK under an alliance that covered infectious disease broadly. Last year, GSK took over development of an avian influenza vaccine candidate that emerged from the partnership. CureVac also completed a restructuring that left the company focused on R&D of mRNA cancer vaccines that are currently in preclinical and early clinical development.
Well before Covid-19’s emergence, cancer was the focus of BioNTech. The company still has several mRNA cancer immunotherapies in its pipeline. But during the recent annual meeting of the American Society of Clinical Oncology, Chief Commercial Officer Annemarie Hanekamp told MedCity News that a bispecific antibody, codenamed BNT327, is the centerpiece of the company’s oncology strategy. This antibody is engineered to bind to two cancer targets, the proteins PD-L1 and VEGF-A.
BNT327 is currently in pivotal testing in lung and breast cancers, but BioNTech views the bispecific antibody as a drug combination backbone, potentially paired with other assets from the BioNTech pipeline, such as mRNA immunotherapies and antibody drug conjugates. That strategy has a big boost from Bristol Myers Squibb, which last week agreed to pay $1.5 billion up front to begin a collaboration with BioNTech on BNT327.
BioNTech, whose American depositary shares (ADS) trade on the Nasdaq, opened Thursday at $105.64 per share. According to terms of the all-stock acquisition, each CureVac share will be exchanged for about $5.45 in BioNTech ADS. That price represents a premium of 32.6% to CureVac’s closing stock price on Wednesday and a nearly 55% premium to the biotech’s average stock price in the three months leading up to the deal. The transaction comes with a collar agreement that sets a ceiling and a floor for the exchange depending on changes to BioNTech’s stock price. When the deal closes, CureVac shareholders’ ownership stake in BioNTech will be between 4% and 6%.
In addition to the customary regulatory approvals, the acquisition requires a minimum of 80% of CureVac shares to accept the transaction terms. A shareholder meeting is planned, but has not yet been scheduled. BioNTech said it may unilaterally reduce the minimum threshold to 75% under certain circumstances that weren’t specified.
The acquisition announcement states that shareholders representing 36.76% of CureVac’s shares have agreed to tender their shares and to vote in favor of the transaction at the upcoming meeting. Also, BioNTech said the German government has “confirmed to generally have a positive view on the transaction.”
BioNTech and CureVac expect the acquisition will close later this year. Afterward, CureVac will operate as a wholly owned subsidiary with its manufacturing site in Tübingen integrated into BioNTech.
“This transaction is another building block in BioNTech’s oncology strategy and an investment in the future of cancer medicine,” BioNTech CEO and co-founder Ugur Sahin said in a prepared statement. “We intend to bring together complementary capabilities and leverage technologies with the goal of advancing the development of innovative and transformative cancer treatments and establishing new standards of care for various types of cancer in the coming years.”
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