Tesla (TSLA 1.56%) is sizzling-hot right now. It will soon become the latest addition to the S&P 500. The company reported record revenue and earnings in the third quarter of 2020. Its CEO, Elon Musk, just edged out Bill Gates to become the second-richest person in the world, thanks to his Tesla stock skyrocketing.
It seems that nearly anyone or anything connected with Tesla achieves success. That could be fantastic news for one biotech that's closing in on the leaders in the race to develop a coronavirus vaccine. CureVac (CVAC 5.08%) is something of an under-the-radar COVID-19 vaccine maker for U.S. investors, but it's the only one to have a bona fide Tesla tie-in.
You might think it's a big stretch for an electric vehicle company like Tesla to have anything to do with a biotech developing a coronavirus vaccine. Once you understand a few key things about CureVac and Tesla, the connection between the two companies will make sense.
Like Moderna and Pfizer's partner BioNTech, CureVac develops vaccines and therapies based on messenger RNA (mRNA). This mRNA approach holds significant potential in immunizing against infections by multiple types of viruses as well as treating other diseases, including cancer.
In 2019 (well before the COVID-19 pandemic struck), CureVac won $34 million in funding from the Coalition for Epidemic Preparedness Innovations (CEPI) to build a prototype mRNA "printer." The idea was to create a device that could produce mRNA doses for use in regions with viral outbreaks and in hospitals for making personalized medicines.
An mRNA printer would be a revolutionary leap forward in fighting viral disease, especially in remote areas. As you might expect, though, there are plenty of technological hurdles to developing the device.
That's where Tesla enters the picture. Three years ago, Tesla acquired Grohmann Engineering, a German company that specializes in automated manufacturing. After CureVac received CEPI funding to build a prototype mRNA printer, Tesla Grohmann Automation was the logical partner to turn to for help.
So far, CureVac hasn't said very much on how the effort to develop an mRNA printer is going. We'll have to wait and see if Tesla's magic will show up once again by helping the biotech achieve a breakthrough.
CureVac's bigger story
However, CureVac won't need Tesla's Midas touch to succeed with its bigger story. It's one of only three companies with COVID-19 vaccine candidates currently in phase 2 testing. The other two are Chinese drugmakers. This puts CureVac's vaccine candidate CVnCoV behind only five others in late-stage testing that could be commercialized in major Western markets.
CureVac plans to advance CVnCOV into a pivotal phase 2b/3 clinical study by the end of 2020. If all goes well, the biotech seems likely to become one of the biggest COVID vaccine winners.
The company recently lined up an agreement with the European Commission to supply up to 225 million doses of CVnCOV (assuming it secures regulatory approval). The deal includes an option for the EC to buy an additional 180 million doses. Although no financial details were revealed, CureVac likely stands to make several billion dollars in 2021 if CVnCOV is proven to be safe and effective in late-stage testing.
CVnCOV can be stored at standard refrigerator temperatures for up to three months and for up to 24 hours at room temperature. This could give it an advantage over vaccines such as Pfizer's and BioNTech's BNT162b2, which must be stored at ultracold temperatures.
One to watch
Success for CVnCOV could bode well for the rest of CureVac's mRNA pipeline. The company is evaluating a rabies vaccine and two cancer immunotherapy candidates in phase 1 clinical studies. CureVac also has several other preclinical programs.
It's still too early to know for sure if CVnCOV will achieve similar efficacy to the results announced by Pfizer and Moderna. However, CureVac is without question a biotech stock for investors to keep on their radars.