CureVac scraps its first-generation COVID-19 vaccine candidate, shares tumble

October 12, 2021, 12:34 PM UTC

Shares in CureVac plummeted by as much as 15% Tuesday on the news that the German biotech was abandoning its first-generation COVID-19 vaccine candidate, and instead focusing on a second-generation jab that it’s developing alongside GlaxoSmithKline.

CureVac applied for approval of its mRNA-based CVnCoV vaccine at the European Medicines Agency (EMA) back in February. However, in the middle of the year it announced disappointing results from clinical trials: just 48% efficacy at preventing disease, compared with over 90% for vaccines from rivals such as Pfizer/BioNTech, Moderna, and Sputnik V. And in September, the EMA said it wouldn’t be making a decision on CVnCoV until at least the end of the year.

CureVac said Tuesday that it estimated EMA approval would only come in Q2 of 2022 at the earliest—by which point it expects to be conducting late-stage clinical trials of its coproduction with GSK. Given the timing, it’s withdrawing its application with the agency.

“The global fight against COVID-19 continues, and we remain committed to making a difference with a safe and efficacious vaccine,” said CureVac CEO Franz-Werner Haas. “This goal has not changed, but the requirements to effectively address the virus and emerging variants have changed. In the ongoing transition from acute pandemic to endemic, our decision to withdraw CVnCoV from the regulatory approval process and focus our efforts on second-generation mRNA vaccine candidates reflects expected changes in public health needs that our second generation can potentially address.”

While CureVac’s own share price tumbled on the news, GSK’s popped by 2%.

CureVac’s call spells the end for its advance purchase agreement with the European Commission, which had an order in for up to 405 million doses. It also cancels a partnership between CureVac and Bayer, the pharmaceuticals and life sciences giant that in January agreed to help with CVnCoV logistics and regulatory affairs. CureVac had already scrapped contract manufacturing deals with Switzerland’s Celonic Group and Germany’s Wacker.

“This announcement makes [the deal] obsolete—this kind of support which we originally offered is not needed anymore,” said a Bayer spokesperson, while confirming that Bayer would play no role in the development or rollout of the CureVac/GSK vaccine.

The German government invested €300 million ($347 million) in CureVac in June last year, shortly after then-President Donald Trump reportedly tried to buy exclusive rights to the firm’s vaccine for the U.S.

This week’s abandonment of the vaccine may suggest a lack of a payoff for that investment, but on the other hand the German government also gave €375 million in funding to BioNTech last year, and that was without question a smart move: According to recent estimates, Pfizer’s partner may boost German GDP by up to 0.5 percentage points this year, all on its own.

More health care and Big Pharma coverage from Fortune:

Subscribe to Fortune Daily to get essential business stories delivered straight to your inbox each morning.

Read More

COVID VaccinesReturn to WorkMental Health