GSK To Spend Up to $1.56B for Rights to Potential COVID-19, Flu Vaccines

Drug maker GSK (GSK) agreed to pay up to $1.56 billion for the rights to develop, manufacture, and market COVID-19 and influenza vaccines being worked on in collaboration with German biotechnology company CureVac (CVAC).

GSK said CureVac would receive EUR400 million ($432 million) up front, and up to an additional EUR1.05 billion ($1.13 billion) in development, regulatory, and sales milestones.

The companies teamed up during the COVID-19 outbreak in 2020 to create mRNA vaccines for infectious diseases. GSK said its efforts have produced “candidates for seasonal influenza and COVID-19 in phase II and avian influenza in phase I clinical development” based on CureVac’s mRNA technology. The updated deal means GSK will “assume full control of developing and manufacturing these candidate vaccines,” the company said.

CureVac Shares Rise After Deal Announcement

CureVac shares initially rose on the announcement Wednesday, but dropped by 5% near closing in Independence Day holiday-shortened trading. The deal “puts us in a strong financial position and enables us to focus on efforts in building a strong R&D pipeline,” said Chief Executive Officer Alexander Zehnder.

The news came a day after Moderna (MRNA) received a $176 million U.S. government grant to come up with a vaccine to prevent avian flu in humans. 

GSK’s American depositary receipts (ADRs) are up about 3.6% year-to-date. They were slightly higher at $38.40 near early closing on Wednesday.