BioNTech Acquires CureVac in $1.25B All-Stock Deal, Bolstering Oncology Pipeline

BioNTech, the German biotech company known for its successful COVID-19 vaccine, has announced the acquisition of fellow mRNA pioneer CureVac in an all-stock transaction valued at $1.25 billion. The deal, expected to close later this year, marks a significant consolidation in the mRNA therapeutics space and underscores BioNTech's growing focus on oncology.

Acquisition Details and Strategic Rationale

Under the terms of the agreement, each CureVac share will be exchanged for approximately $5.46 worth of BioNTech American Depository Shares (ADSs), representing a 55% premium over CureVac's three-month volume-weighted average share price. Upon completion of the transaction, CureVac shareholders will own between 4% and 6% of BioNTech.

The acquisition is positioned as a strategic move to enhance BioNTech's oncology portfolio and manufacturing capabilities. BioNTech CEO Ugur Sahin, M.D., stated, "This transaction is another building block in BioNTech's oncology strategy and an investment in the future of cancer medicine. We intend to bring together complementary capabilities and leverage technologies with the goal of advancing the development of innovative and transformative cancer treatments."

Key assets highlighted in the deal include CureVac's early-stage cancer immunotherapy programs, most notably a Phase I mRNA-based glioblastoma therapy. Additionally, BioNTech emphasized the value of CureVac's "state-of-the-art" research and manufacturing facility in Tübingen, Germany.

Legal Resolution and Industry Implications

The acquisition also serves to resolve ongoing patent litigation between the two companies. CureVac had previously sued BioNTech in July 2022, claiming patent infringement related to mRNA technology used in COVID-19 vaccines. The European Patent Office had upheld two of CureVac's patents, with a trial scheduled for July 1 in a Dusseldorf regional court.

Industry analysts have speculated that avoiding potential royalty payments was a significant factor in BioNTech's decision to acquire CureVac. Umer Raffat, an analyst at Evercore ISI, suggested that a single-digit percentage royalty awarded to CureVac could have cost BioNTech up to $3 billion.

Oncology Focus and Pipeline Expansion

Both BioNTech and CureVac have been pivoting towards oncology research in recent years. BioNTech's oncology strategy includes various approaches, from cell therapies to mRNA vaccines and bispecific antibodies. The company recently showcased promising clinical data for its PD-L1xVEGF bispecific antibody, BNT327, in triple-negative breast cancer and small cell lung cancer.

CureVac's oncology pipeline, while earlier in development, includes a brain cancer vaccine that has shown early clinical promise and a lung cancer immunotherapy recently cleared for human testing. The integration of these programs into BioNTech's portfolio is expected to accelerate the development of innovative cancer treatments.

Alexander Zehnder, M.D., CEO of CureVac, commented on the synergies between the two companies: "For more than two decades, both companies have operated with related ambitions, often tackling challenges from different angles. This transaction aims at combining complementary scientific capabilities, proprietary technologies, and manufacturing expertise in the mRNA field under one roof."

As the pharmaceutical industry continues to evolve, this acquisition represents a significant development in the mRNA therapeutics landscape, potentially setting the stage for accelerated progress in cancer treatment and solidifying BioNTech's position as a leader in the field.