What happened

Shares of CureVac (CVAC -6.61%) were tumbling 7.4% as of 11 a.m. EDT on Tuesday after falling as much as 13% earlier in the morning. The decline came after the company announced it's withdrawing COVID-19 vaccine candidate CVnCoV from the European Medicines Agency's approval process. CureVac plans to now focus on the development of  second-generation COVID-19 vaccine candidates with its partner GlaxoSmithKline (GSK 0.71%)

So what

In June, CureVac released final data from a phase 2b/3 clinical study that showed CVnCoV had an overall efficacy of 48%. That level is well below the efficacy achieved by other authorized COVID-19 vaccines. However, CureVac initially hoped to win European approval despite the lower efficacy.

A healthcare professional giving a shot to a person.

Image source: Getty Images.

The company chose to throw in the towel on CVnCoV after the European Medicines Agency communicated that it wouldn't fast-track the approval process for the vaccine candidate. As a result, the earliest possible European approval for the experimental vaccine would have been in the second quarter of next year. CureVac expects its second-generation vaccine candidates will be in late-stage clinical studies by then.

The decision to withdraw CVnCoV from the EMA approval process came at a cost, though. The company had an advance purchase agreement with the European Commission to supply 405 million doses of the vaccine if it secured approval.

Now what

Can the vaccine stock recover? Perhaps. CureVac and GlaxoSmithKline are accelerating their efforts to develop a second-generation COVID-19 vaccine. The companies hope to begin clinical development within the next few months with the goal of winning regulatory approval sometime next year.