Germany-based biotech CureVac (CVAC -1.35%) announced on Friday it has been pledged a large chunk of grant money to help develop its coronavirus vaccine candidate. The company said the German government's Federal Ministry of Education and Research notified it that up to 252 million euros ($298 million) will be provided.

CureVac applied for the grant in July, as part of a government initiative to speed along vaccine candidates. Later that month, the company was announced as one of a group of successful applicants.

A researcher studying a sample in a petri dish.

Image source: Getty Images.

The company said it will use the funds not only for the development of the vaccine candidate, but also for its production. It added that the payments will be made in installments according to certain milestones, which it did not specify. CureVac expects to receive as much as 103 million euros ($122 million) by the end of this year, and up to 149 million euros ($176 million) in 2021.

"Given the significant costs related to the development of a safe and effective vaccine as well as to the extension of the manufacturing capacity, we believe that this grant can substantially support our efforts to produce and develop a safe and effective vaccine in high volume as quickly as possible," CEO Franz-Werner Haas was quoted as saying.

Similar to the vaccine candidate from high-profile Moderna (MRNA -0.38%), CureVac's version uses messenger RNA (mRNA) to effectively instruct the body how to produce the antibodies needed to keep COVID-19 at bay. It produced successful results in pre-clinical testing, and recently entered a phase 1 clinical trial.

CureVac shares zoomed more than 11% higher on Friday, in sharp contrast to the declines recorded by the wider stock market.