The Covid-19 vaccine developer Curevac has turned from a beacon of hope into a straggler. Nonetheless, the main investor Dietmar Hopp holds the company steadfast. Used to be drives him?
«The word failure does not fit. We talk about research and development, about trial and blunder, about scientific approaches, about opportunities and risks: No, Dietmar Hopp doesn’t want to hear about failure after the recent setback at the German biopharmaceutical company Curevac in its vaccine development.
Hopp has a 40% stake in Curevac through its investment company Dievini and a further 4% through a direct stake . He clarifies: “We intend to remain the main shareholder in every descend.”
Investor from the very beginning
Without the 81-year-old Hopp, who unites himself as co-founder and former CEO of the software company and DAX heavyweight SAP Made a name for itself and made a billion dollar fortune, Curevac might no longer exist. At the end of 2004, he invested around € 20 million in the start-up founded in 2000 through Dievini. At that time it had great difficulty in finding investors; at times it only survived thanks to a loan from the local district savings bank. Dievini was the first major investor, others, including the Bill & Melinda Gates Foundation, were to follow.
And then there was Corona.
In 2020 the Tübingen-based company, previously only known to insiders, was suddenly seen as one of the greatest hopes in the fight against the pandemic. It was one of the pioneers in mRNA technology, which seemed made for the rapid development of a Covid-19 vaccine. Investors were also enthusiastic about it: the company’s share price, which went on the Contemporary York technology exchange Nasdaq at $ 16 per share in August 2020, briefly peaked at over $ 130 in December of the same year – although investments in this industry are necessarily comparatively risky .
This is also shown by the Descend Curevac. In the race for a vaccine, the Tübingen-based company initially fell behind their own plans and behind their most important competitors Biontech / Pfizer and Moderna, who also worked with mRNA and whose vaccines received initial approvals as early as the turn of 2020/2021. In June 2021, Curevac announced that its vaccine candidate of the first period, CVnCoV, had “only” achieved an effectiveness of 48% against Covid-19 disease of any severity and in all age groups in the pivotal study, significantly less than the aforementioned Competitors.
However, Curevac and Hopp emphasize that the data are not comparable. Because of the delay in the Curevac study, its vaccine candidate already encountered over a dozen Corona variants, while those of the competitors only dealt with the original Wuhan strain during their studies. Compared to all existing strains, their effectiveness is also lower.
Nevertheless, investors reacted with a huff: The stock market price broke after the first report the study result. It is now bobbing at just under $ 40. However, this is still well above the issue value in August 2020 and gives the company a market value of around $ 7.3 billion.
Disillusionment with Curevac
Share price in $
Key factor timing
Something else was added: As a result of a detail from the European Medicines Agency (EMA) Curevac concluded in mid-October that EMA approval of the vaccine for the first period could not be expected until the second quarter of 2022 at the earliest. This would mean that he would be too late for the current peak demand caused by the pandemic. In addition, Curevac and its partner, the British pharmaceutical company GlaxoSmithKline (GSK) expect the candidates for their second period vaccine program to have advanced into clinical development by then.
Therefore, Curevac decided to withdraw the vaccine candidate of the first period from the ongoing approval process, to destroy pre-produced vaccines and to concentrate on the vaccine program focus on the second period.
Why did Curevac lag behind in terms of time ? In his written answers to questions from the NZZ, Hopp emphasizes two factors. Firstly, Curevac did not initially have an industrial partner like Biontech had with Pfizer; the general cooperation with GSK began in July 2020 and was only expanded to Covid-19 in February 2021. Second, in March 2020, the Tübingen-based company “did not have nearly the financial resources that Biontech, Moderna, AstraZeneca and Johnson & Johnson had available to go full throttle”. Pfizer and Moderna had access to significant government funding in the US.
Swiftly like in football
But Hopp stays calm. The setback is relative, as it was not due to the technologies or the abilities of Curevac, but to the timing and the pandemic course, he explains. In the meantime, however, the availability of the already approved vaccines, which all address the original Corona strain, is so good that it makes sense for Curevac to concentrate on the second generation of vaccines.
According to the company, this second period has the potential to cause various Covid-19 Targeting variants in a single vaccination, treating different diseases with a combined vaccine and enabling improved forms of administration. Anyone who brings such a vaccine onto the market can still be at the forefront in the next Corona segment.
The sports-loving investor who also plays a prominent and polarizing role as a patron of the football club TSG 1899 Hoffenheim, his club from his days as an amateur footballer , uses the metaphor: “The future of mRNA has only just begun, we are, as an analogy to football, around the third minute of the game.”
According to Hopp, mRNA has a platform potential that goes far beyond Corona. The development of mRNA-based therapies and products against cancer is an integral part of the corporate strategy. But it is more complex than that of anti-infectives and will probably take a few more years.
A platform does not guarantee the success of every single product, but it always generates new products that could make it onto the market, explains Hopp. This would also result in total losses in the nature of the matter. Not even 20% of all drug candidates that were tested on humans, whether from established pharmaceutical companies or innovative biotech companies, would make it to the market. In addition to entrepreneurial and, of course, financial success, the drive is to protect and heal people with new technologies and products.
Krupp heritage on board
Friedrich von Bohlen and Halbach gave Hopp a taste for it. Von Bohlen, who comes from the Krupp family, studied biochemistry at the University of Zurich and did his doctorate in neurobiology at the ETH, is himself a biotech founder and one of the founders of Dievini. Today he is one of four managing directors of this investment company that invests money from Hopp and his family in biotech and, in addition to the stake in Curevac, holds eight other investments. Von Bohlen also represents Dievini on the board of Curevac.
The first investment in Curevac was made shortly after Dievini was founded. Von Bohlen had met the Curevac founders shortly before and, according to Hopp, was “absolutely convinced that mRNA would have the greatest therapeutic potential of all possible active ingredients – in oncology, but also in infectious diseases and in many other diseases”.
The main shareholders of Curevac
Shares in share capital, in%
In the meantime, Dievini has invested more than € 150 million in Curevac, and Hopp has participated in the IPO with a further € 105 million . Hopp defends the entry of the German state, which is controversial among economists and holds 16% of Curevac’s capital through the KfW development bank. It took place before the IPO. For the IPO, it was a strong signal that the state was ready to invest in companies whose products, technologies and jobs in Germany and Europe would be systemically relevant. However, it does not necessarily have to be a direct investment; there could also be state incentive systems for equity investments.
The US is miles ahead
From Hopp’s point of view, such incentives would be important because In Europe there is neither the necessary volume of capital nor a broad range of skills in actively managing equity in innovative high technologies such as biotechnology. “In this regard, the US is still miles ahead of us,” explains the investor. He sees this as the main reason why startups like Curevac in Europe often struggle to find investors in the initial phase and, after initial successes, often go to the USA to look for capital.
To incentives Hopp is convinced that there are many possibilities of a tax nature to create for equity investments. In addition, “future funds” could make these topics interesting for small investors, “so that interest and understanding for the opportunities and necessity of these future topics increase”.
You can contact the Berlin business correspondent René Höltschi on Twitter follow.