German biotechnology company BioNTech (BNTX) is making a bold move to expand its cancer research efforts with a $1.25 billion all-stock acquisition of CureVac (CVAC). The deal is expected to enhance BioNTech’s mRNA capabilities and deepen its oncology pipeline as the company ramps up its efforts to develop next-generation cancer treatments. Following the announcement, CVAC stock soared over 30%, while BNTX was up by 1%.
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Details of the Deal
Under the agreement, CureVac shareholders will receive around $5.46 in BioNTech stock for each CureVac share they own, a 34% premium over CureVac’s Wednesday closing price. Moreover, the deal includes a collar mechanism, which limits the number of BioNTech shares to be exchanged if the stock price moves beyond specified levels in the five days leading up to the closing. Both companies’ boards have approved the transaction.
The deal also marks an exit for the German government, which acquired a 13.3% stake in CureVac during the pandemic. It will now receive approximately $163 million worth of BioNTech shares as part of the transaction. BioNTech noted that the government supports the deal.
BioNTech’s Long-Term Play with CureVac
BioNTech said the move is designed to enhance its strengths across the entire value chain, from R&D and manufacturing to the commercialization of experimental mRNA-based cancer therapies. As drugmakers increasingly explore mRNA beyond vaccines, the deal reflects a broader push into cancer treatment and other diseases.
For over 20 years, the two companies have pursued similar goals through different approaches. This merger brings together their unique technologies, scientific expertise, and production capabilities in mRNA under one umbrella.
Furthermore, the deal marks the end of a long-standing rivalry between the two firms, which intensified during the global race to create a COVID-19 vaccine. BioNTech, in partnership with Pfizer (PFE), emerged as a frontrunner and rose to prominence as a leading European biotech. Meanwhile, CureVac fell behind after its vaccine candidate failed to deliver strong results in trials and was never commercialized.
Is BioNTech a Good Stock to Buy?
On TipRanks, BNTX stock has a consensus Moderate Buy rating among 19 Wall Street analysts. That rating is based on 14 Buys and five Holds assigned in the last three months. The average BioNTech stock price target of $139.91 implies a 33% upside from current levels.
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