LUV Stock – CureVac’s pain may not yet have peaked
LONDON (Reuters Breakingviews) – CureVac’s, vaccine agony may have further to run. The German biotechnology company’s Frankfurt-listed shares halved on Thursday after the group revealed that its Covid-19 jab may be only 47% effective. That’s a major blow, but the bigger concern for investors is if CureVac’s so-called “messenger RNA” technology behind its cancer and rabies vaccines has flaws.
MRNA vaccines inject genetic code that instructs a recipient’s cells to construct a part of the virus, enabling an immune response. They have been a roaring success in the products developed by BioNTech and Pfizer and by Moderna to fight Covid-19 – the latter’s share price has jumped 10-fold since before the pandemic last year. But the technology behind them is very new.
The underwhelming Covid-19 vaccine results, below the 50% efficacy sought by America’s Food and Drug Administration and the World Health Organization’s 70%, aren’t just a headache for CureVac. Unlike its U.S. peers, the Tuebingen-based company’s vaccine doesn’t require sub-zero storage temperatures, which would have allowed a wider use in developed countries. But the company’s investors, which include the German government, will be the ones most on edge.
The optimistic scenario for CureVac Chief Executive Franz-Werner Haas is that something other than his core mRNA technology is the culprit. CureVac’s decision not to use a chemical called uridine to boost the mRNA’s duration in the body may explain its less effective vaccine. If so, and if CureVac’s cancer vaccine trials are more positive, then Jefferies analysts reckon the company’s shares could rebound from $49 to $80.
Less positively, Haas has suggested that CureVac’s vaccine may have underperformed because its tests have been on more infectious recent Covid-19 variants. If his technology is just as robust as BioNTech and Moderna’s but vaccines are less effective against virus mutations, that would be dire news for the pandemic fight but relatively good news for CureVac.
The real doomsday scenario for Haas is if CureVac’s mRNA has flaws. Jefferies reckons fair value following the vaccine revelations is around $45 per share, but mRNA technology accounts for $40 a share. If the cancer vaccine fails, the analyst reckons it could be worth as little as $14 a share. Until those results come in, investors will be on tenterhooks.
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– German biotechnology company CureVac said on June 16 that its Covid-19 vaccine was only 47% effective in a late-stage trial.
– Prior to the emergence of highly effective vaccines from Pfizer and Moderna, the U.S. Food and Drug Administration had targeted at least 50% efficacy. The World Health Organization had said it was looking for at least 70% efficacy.
– The efficacy of the shot known as CVnCoV emerged from an interim analysis based on 134 Covid-19 cases in the study with about 40,000 volunteers in Europe and Latin America.
– The company said at least 13 virus variants accounted for the infections among the study population.
– CureVac’s Frankfurt-listed shares were down 45.9% at 42.96 euros by 1335 GMT on June 17.
– For previous columns by the author, Reuters customers can click on [DONNELLAN/]
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