Healthcare major GSK (NYSE:GSK) (GB:GSK) is sharpening its focus on vaccines by acquiring the complete rights for certain vaccine candidates from its partner CureVac (NASDAQ:CVAC). The deal announcement has pushed CVAC shares nearly 22% higher in the premarket session today.
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GSK and CureVac’s Previous Collaboration
GSK and CureVac teamed up in 2020 to develop mRNA vaccines for infectious diseases. The two companies have developed vaccine candidates for COVID-19 and influenza under this collaboration.
The New Deal
Now, GSK is acquiring the complete rights to these vaccine candidates. This move is another step in vaccine platform technology investments for GSK. In turn, CureVac receives a much-needed cash lifeline in the form of €400 million in an upfront payment. The German biotech also stands to receive nearly €1.05 billion in various milestone payments.
CureVac Goes for Restructuring
Moreover, the deal allows CureVac to prioritize opportunities in oncology and other selected diseases. The company is undertaking a strategic restructuring and plans to lower its headcount by nearly 30%. The move enables CureVac to extend its cash runway until 2028. Notably, it aims to deliver two or more clinical candidates by the end of next year.
What Is the Stock Price Prediction for CVAC?
While GSK shares are largely unchanged following the deal announcement, CureVac shares have shot up by nearly 22%. Overall, the Street has a Moderate Buy consensus rating on CureVac. At the same time, the average CVAC price target of $10.25 implies a mouth-watering 206.9% potential upside in the stock.
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