COVID-19 is a poignant lesson in healthcare access and biotech solution down-streaming; and will be remembered as one for a long time to come. As a global equalizer, the pandemic with global impact led to a stark global scramble over vaccine candidates with several high-income countries racing to get supply commitments from companies with relatively advanced candidates. There has been unconfirmed but widespread speculation around the US inviting German mRNA venture CureVac to move to US and exclusively commit vaccine supply in return for substantial funding support. There have also been several news reports on CureVac planning a NASDAQ listing and thereby potentially becoming controlled by American investors. Simultaneously, triggered by the pandemic led cash crunch and consequent economic impact, there have also been extensive efforts made by EU member states to prevent hostile take-over of companies. Germany has also tightened FDA rules and has extended the current 10% threshold for non-EU/EFTA investors and requires approval of additional healthcare sectors (including developing or manufacturing protective equipment, certain medicinal products, medical devices and in vitro diagnostic medical products).
In this context, notable development measures are taken by national Governments and relevant global bodies in COVID-19 vaccine development landscape. The Federal Republic of Germany announced an investment of EUR 300 million in CureVac AG, a company focussed on development of messenger RNA based therapies. CureVac is one of the more advanced COVID-19 vaccine developers globally and like US based Moderna Therapeutics is advancing an mRNa candidate. This announcement on the 15th of June came two days before CureVac announced obtaining approvals for Phase I clinical trial initiation in Germany and Belgium. Unlike advance purchase commitment funding, the support from German Government has been infused in the form of equity capital thereby providing a non-controlling yet strategic ownership interest in the company. The press release specifically disclaims that the investment is not an act of nationalization and the company retains all entrepreneurial freedom. However, the structure of the transaction is of great significance as it could help the German Government potentially avert other countries from gaining a controlling interest in the COVID-19 vaccine developer.
CureVac is a privately company with 80% of its shared held by SAP co-founder Dievini Hopp Biotech since 2005. The Investment will be made through Kreditanstalt für Wiederaufbau (KfW), state-owned bank for a 23% stake in the Company. The investment is a part of the Corona Economic Stimulus and Future Technologies Package, initiated on 03 June, 2020 with EUR 130 billion Euros to cushion the country from impact of COVID-19 and includes an allocation of EUR 1 billion for domestic production of medical devices and pharmaceuticals that will enable the country to secure more independence for these products. The Government of Germany under the investment policy claimed no influence on the corporate policy decisions of the company, CureVac also retains total independence over its operations and strategies.
CureVac’s COVID-19 vaccine though behind its competitors has showed promising results in its preclinical studies. The candidate displayed high virus neutralising titres at low dose and protected animals from virus infection in established challenge models.
CureVac has also received financial support from the Coalition for Epidemic Preparedness Innovations (CEPI), the Bill & Melinda Gates Foundation (BMGF) as well as from the Defence Advanced Research Projects Agency (DARPA), an agency of the U.S. Department of Defence for its Coronavirus vaccine development. In 2015, BMGF had made an equity investment of EUR 46 million in CureVac to support the overall effort in portfolio of prophylactic vaccines for infectious disease and cGMP scale-up capacity in the venture for this frontier technology.
This investment by the German Government is one of several measures that reflect the complex balance between competition and co-operation amongst nations in the context of COVID-19 vaccines and therapeutics. Sanofi’s expansion in France and multiple measures by the US and UK Governments to secure committed supply have been driven by national priorities and the pursuit of supply security. At the same time, CEPI’s COVID-19 Vaccine Global Access Facility (COVAX) has been trying to address the objective of equitable access for countries globally. We stay optimistic that the spirit of collaboration will not be overshadowed by national interest and the global prowess can be pooled in this effort to counter COVID-19.