GSK plc (LSE/NYSE: GSK) has reached a new licensing agreement with biopharmaceutical company CureVac N.V. (Nasdaq: CVAC), taking full control over the development, manufacturing, and global commercialization of mRNA vaccines for influenza and COVID-19, including combination vaccines.
Announced Today, the deal entails an upfront payment of €400 million to CureVac, with potential future payments totaling €1.05 billion, based on development, regulatory, and sales milestones, alongside tiered royalties.
This restructuring of the companies' existing collaboration, initiated in 2020, enables GSK to leverage its expertise and resources to advance these promising vaccine candidates, which are currently in phase II and phase I clinical development for seasonal and avian influenza, respectively. The candidates utilize CureVac's second-generation mRNA technology, which has shown potential to lead in the vaccine space.
CureVac will retain exclusive rights to other undisclosed infectious disease targets previously part of the collaboration and can independently develop and partner its mRNA vaccines in any other infectious disease or indication. The company's ongoing patent litigation against Pfizer/BioNTech remains unaffected by this agreement.
GSK's Chief Scientific Officer, Tony Wood, emphasized the company's commitment to developing best-in-class mRNA vaccines, while Alexander Zehnder, CEO of CureVac, acknowledged the collaboration's role in advancing their candidates and highlighted the financial strength and strategic focus the new agreement brings to CureVac.
This news is based on a press release statement.
In other recent news, GSK has reported a 100% response rate in a rectal cancer study with Jemperli, a potential new treatment option that could lead to complete tumor regression without the need for invasive procedures. The safety profile of Jemperli was consistent with previous knowledge, with no reported adverse events of grade 3 or higher in this trial.
However, recent developments have seen GSK facing a lawsuit from Valisure, an independent laboratory, over allegations related to the concealment of cancer risks associated with its heartburn medication Zantac. The lawsuit seeks billions in damages, including civil fines for each violation of the federal False Claims Act.
Goldman Sachs has initiated coverage on GSK and issued a Neutral rating, highlighting the company's transition from a conglomerate to a company focused on specialty medicines and vaccines. The firm noted that to improve the stock's rating, GSK will need to demonstrate pipeline optionality with near-term clinical developments.
Lastly, the CDC's recent decision to limit the use of RSV vaccines to a narrower age group could potentially impact the projected market for GSK's Arexvy RSV vaccine, according to analysts at JPMorgan.
These are among the recent developments concerning GSK.
InvestingPro Insights
Amidst the strategic expansion of GSK's vaccine portfolio through the new licensing agreement with CureVac, it's worth noting the financial health and market sentiment surrounding GSK plc. With a robust market capitalization of $77.92 billion and a favorable P/E ratio of 13.68, GSK stands as a significant player in the pharmaceutical industry. The adjusted P/E ratio for the last twelve months as of Q1 2024 is even more attractive at 9.18, indicating the company's earnings relative to its share price are appealing to investors seeking value.
Adding to the financial stability, GSK showcases a strong gross profit margin of 72.67% over the same period, reflecting efficient management and a competitive edge in its operations. InvestingPro Tips highlight that GSK has maintained dividend payments for 24 consecutive years, with a dividend yield of 3.86%, which is particularly of interest for income-focused investors. Additionally, the company's stock is currently seen as oversold according to the Relative Strength Index (RSI), suggesting potential for price appreciation. With analysts predicting profitability for the current year and evidence of solid cash flows that can cover interest payments, GSK appears to be in a strong position to continue its growth trajectory.
For those interested in deeper analysis and more InvestingPro Tips, including the company’s low price volatility and its status as a prominent player in the Pharmaceuticals industry, visit https://www.investing.com/pro/GSK. There are additional tips available on InvestingPro, and by using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.