On June 17, shares of CureVac (NASDAQ:CVAC) 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?
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 (NASDAQ:MRNA) 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.