Biontech buys CUREVAC in a stock deal of $1.25B, which will also end mRNA patent dispute

Biontech, a biotech company known for its successful development of the Messenger RNA Covid-19 vaccine, is acquiring MRNA Company Curevac in a $1.25 billion stock deal that brings companies of its respective technologies together to develop new cancer treatments.

The acquisition agreement announced Thursday would put Curevac's mRNA pipeline and manufacturing infrastructure under the protection of larger Biontech, the umbrella of Biontech, whose pipeline growth is fueled by revenue from the commercialized Covid-19 vaccine Comirnaty. Biontech and Curevac announced the acquisition Thursday as a combination of complementary technology and capabilities. But Biontech and Curevac aren't always in such a kind way. In fact, they have been fighting in court for the past three years.

Headquartered in Germany, Biontech and Mainz, Germany, in Tübingen, Germany, both rose during the COVID-19 pandemic due to their respective mRNA technology platforms. Despite insufficient expectations in clinical testing for Curevac's novel coronavirus vaccine candidate, Biontech's MRNA vaccine partnered with Pfizer to continue to be the first authorization of the FDA, followed by the first FDA-approved COVID-19 COVID-19 vaccine approved by the FDA, Comirnaty.

Curevac was founded eight years before Biontech and argued that its invention was key to Comirnaty's design and development. In 2022, Curevac sued Biontech in Europe, claiming that Comirnaty infringed on critical mRNA patents. Recent rulings have taken the CUREVAC approach. In March and May, the European Patent Office issued a ruling to maintain the validity of the two Curevac patents. Additional patent hearings are expected throughout the summer.

For Leerink Partners analyst Daina Graybosch, Biontech’s acquisition of Curevac is essentially a hedge against legal and financial uncertainty. The patent lawsuit puts Biontech to date at about $32 billion in global Comirnatiy sales to pay reviewed royalties, Graybosch said in a research note. She said the payment of about $1.25 billion in acquisition of Curevac is essentially an outdoor settlement, adding that Biontech has more potential upside potential to leverage Curevac’s emerging MRNA oncology platform and expertise to complement its own work in cancer drug R&D.

CUREVAC's COVID-19 vaccine was developed with GSK, and the alliance covers extensive infectious diseases. Last year, GSK took over the development of avian influenza vaccine candidates emerging from the partnership. Curevac has also completed its reorganization, allowing the company to focus on the development of mRNA cancer vaccines currently under preclinical and early clinical development.

Before the advent of Covid-19, cancer was the focus of Biontech. There are still several mRNA cancer immunotherapy in the company's pipeline. But at the recent annual meeting of the American Society of Clinical Oncology, Chief Commercial Officer Annemarie Hanekamp told Medcity News that the bispecific antibody, code BNT327, is at the heart of the company's oncology strategy. The antibody is designed to bind to two cancer proteins PD-L1 and VEGF-A.

BNT327 is currently undergoing critical testing in lung and breast cancer, but Biontech considers bispecific antibodies as drug combination backbones, which may be paired with other assets in the Biontech pipeline, such as mRNA immunotherapeutics and antibody drug conjugates. The strategy has been greatly improved from Bristol Myers Squibb, which last week agreed to pay $1.5 billion upfront to start working with Biontech on BNT327.

Biontech's U.S. Deposit Shares (ADS) trade in Nasdaq Stock (ADS) opened at $105.64 per share on Thursday. Under the terms of the all-share acquisition, each CureVAC share will be exchanged for approximately $5.45 from Biontech Ads. The price is 32.6% premium over Curevac's closing price, while the average stock price of Biotech in the three months before the transaction was nearly 55%. The deal comes with a collar agreement that sets the ceiling and depends on changes in Biontech's share price. Upon completion of the transaction, the ownership shares of Curevac shareholders in Biontech will be between 4% and 6%.

In addition to customary regulatory approvals, the acquisition requires at least 80% of CUREVAC shares to accept the terms of the transaction. A shareholder meeting is planned, but no arrangements have been made. In some unspecified cases, it may unilaterally reduce the minimum threshold to 75%.

The acquisition announcement noted that shareholders, which account for 36.76% of Curevac's shares, had agreed to bid for their shares and voted for the deal at an upcoming meeting. Similarly, Biontech said the German government “confirms that there is usually a positive view of the deal.”

Biontech and Curevac expect the acquisition to end later this year. Afterwards, Curevac will operate as a wholly owned subsidiary at the manufacturing site in Tübingen and integrate it into Biontech.

“This deal is another foundation of Biontech’s oncology strategy and an investment in the future of cancer medicine,” Ugur Sahin, CEO and co-founder of Biontech, said in a prepared statement. “We intend to bring together complementary capabilities and leverage technology to advance innovative and transformative cancer treatments and to establish new standards of care for all types of cancer in the coming years.”

Photo: Arne Dedert/Picture Alliance, by Getty Images