Please ensure Javascript is enabled for purposes of website accessibility

Why Is Everyone Talking About CureVac Stock?

By Zhiyuan Sun - Jun 21, 2021 at 5:13AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This coronavirus vaccine developer just hit a massive stumbling block.

On June 17, shares of CureVac (CVAC 0.67%) plunged by over 50% during the trading session after the company announced its mRNA coronavirus vaccine candidate CVnCoV had achieved just 47% overall efficacy in preventing COVID-19 during the second interim analysis of a pivotal phase 3 study. That is just below the 52% overall efficacy requirement for success in the final analysis.

Investors were clearly disappointed by the results. Suspicions about the vaccine candidate's potential had already been spreading after it passed the first interim analysis without disclosure of efficacy rates. Some are thinking of doubling down, while others see the stock as a (rapidly) falling knife. Just what are the odds that CureVac stock can recoup its losses?  

A patient holds up his hand in refusal of a syringe held by another person.

Image source: Getty Images.

Can the company make a comeback? 

Unfortunately, its chances look pretty grim at this point. Shortly after the disastrous news, company executives began offering post-hoc speculation about why the vaccine candidate did not meet its endpoints. 

The first point of view is that CureVac conducted the phase 3 study in locations where highly infectious, highly resistant coronavirus variants are running rampant. About 57% of 40,000 participants were exposed to variants and not the original coronavirus. Hence, it would make sense that the vaccine candidate was less effective. But the current coronavirus vaccines on the market are pretty robust against variants -- offering 100% protection against severe COVID-19 disease. That's their whole purpose.

The second and most plausible argument for the trial failure is its dosage. CureVac's vaccine candidate contains only 12 micrograms of mRNA per dose. Meanwhile, Pfizer/BioNTech's and Moderna's (MRNA -0.37%) vaccines contain 30 micrograms and 100 micrograms of mRNA per dose, respectively.  

There is a problem with simply escalating the dosage and trying again. In phase 1, the rate of severe systemic adverse events increased rapidly from participants who received 2 micrograms of CVnCoV to those who received 12 micrograms. Anything above that amount is very likely to be above CVnCoV's therapeutic window.

The wild card

Despite all odds, however, the company still has a small probability of success with CVnCoV. This is because the second interim analysis stops for futility at 41.4% efficacy as per trial protocol. Since results did not fall below this benchmark, the trial will proceed to final analysis due in about two or three weeks.

Clinical trial results can have a huge degree of variance over time. As for the 47% efficacy figure, we don't know if it increased or decreased with the number of cases. For the sake of argument, if CVnCoV only had, say, 30% overall efficacy in the first interim analysis, that would be really good. Conversely, if the vaccine candidate fell from a high point in the first interim analysis, all is probably over for CureVac. 

The interim analyses also do not differentiate between mild/moderate and severe/critical illness. If the disparity in protection is significant, say 10% for the former and 84% for the latter, then that could be grounds for clemency from regulatory agencies. The European Medical Agency said that it would not use a minimum of 50% overall efficacy endpoint for approval. Instead, it would look at the entire data set (and possibly subgroup analysis) in its decision. 

CureVac is really struggling at this point. Vaccination campaigns are gaining momentum across the EU. The founder of Germany-based BioNTech, Ugur Sahin, promised that every German can receive a full vaccination course by the end of the summer. There won't be a need for a vaccine with (preliminarily) low efficacy for the sake of emergency protection anymore. And even though CureVac is partnering with GlaxoSmithKline to develop a second-generation coronavirus vaccine, that won't come to fruition until next year, likely too late for mass vaccination campaigns entirely.

Overall, the company looks pretty overvalued even after the sell-off. At a $10 billion market cap, CureVac's pipeline (which includes a potential rabies vaccine in phase 1 trials) is in its infancy, and its coronavirus vaccine candidate is questionable. It is definitely not a safe biotech for investors to buy anytime soon. 

Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool recommends GlaxoSmithKline and Moderna Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

CureVac N.V. Stock Quote
CureVac N.V.
CVAC
$13.48 (0.67%) $0.09
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$50.11 (3.77%) $1.82
GSK Stock Quote
GSK
GSK
$36.03 (0.84%) $0.30
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$171.18 (-0.37%) $0.63
BioNTech SE Stock Quote
BioNTech SE
BNTX
$160.35 (1.11%) $1.76

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.