CureVac Earnings: Cash Burn Continues as Early-Stage Pipeline Makes Progress

CureVac CVAC is continuing to make progress across its early-stage mRNA pipeline candidates. The company reported total 2022 revenue of EUR 67.4 million, which was primarily attributed to milestone payments and revenue from its collaboration agreement with GSK GSK. We maintain CureVac’s fair value estimate of $15.40 per share, no-moat rating, stable moat trend, and Extreme Uncertainty Rating. The stock is trading at an attractive discount to our fair value estimate for long-term investors.

CureVac reported positive extended preliminary data from its ongoing Phase 1 clinical programs in COVID-19 and seasonal flu, which are in collaboration with wide-moat GSK, and these candidates are advancing in development. We assign the second-generation COVID-19 vaccine a 35% probability of approval and forecast it could reach the market as early as 2025. Additionally, CureVac is on track with its first proof-of-principle study of its second-generation mRNA backbone in oncology in the second quarter of 2023.

CureVac reported cash and cash equivalents of EUR 495 million at year-end, which is down from EUR 811 million at the end of 2021. This substantial cash burn is expected for an early-stage company that is heavily investing in its pipeline candidates, and we think it is in a stable position at least for the next couple of years thanks to its ability to raise capital by issuing shares and receiving milestone payments as its pipeline progresses.

We assign CureVac an extreme uncertainty due to its early-stage pipeline and lack of approved products, which contributes to a range of potential outcomes. At this very early stage, a no-moat rating is appropriate. We see significant uncertainty related to regulatory approvals for CureVac’s early-stage portfolio and a range of potential outcomes. We continue to believe there is uncertainty around CureVac’s defenses against other novel mRNA vaccine makers due to Moderna MRNA and BioNTech’s BNTX first-mover status in the mRNA COVID-19 vaccine market.