04:47 AM EDT, 07/03/2024 (MT Newswires) -- CureVac ( CVAC ) and GSK (GSK) said Wednesday that they have restructured their existing partnership into a new licensing agreement that will allow each company to prioritize investment and focus on their mRNA development activities.

Under the terms of the new agreement, GSK will assume full control of the development and manufacturing of the companies' vaccine candidates. It will also have the worldwide rights to commercialize them.

Meanwhile, CureVac ( CVAC ) will receive an upfront payment of 400 million euros ($430.4 million) and up to an additional 1.05 billion euros in development, regulatory and sales milestones and tiered royalties in the high single- to low-teens range.

The completion of the new agreement remains subject to certain antitrust and regulatory approvals, as well as customary closing conditions, the companies said.

CureVac ( CVAC ) and GSK have been collaborating on mRNA vaccines for infectious diseases since 2020.

Following the new licensing agreement, CureVac ( CVAC ) said it is implementing a "significant" restructuring to focus on its mRNA projects in oncology and other select areas. This restructuring includes a workforce reduction of about 30%.

The company estimates to incur a one-time restructuring charge of about 15 million euros, including employee severance, benefits and related costs, which it expects to incur in Q4.

As a result of the restructuring, CureVac ( CVAC ) said it expects to reduce operational expenses by more than 30% from 20205 onward, including a decrease in personnel costs of about 25 million euros.

The cost savings, as well as the upfront payment and potential milestones from the GSK agreement, will extend CureVac's ( CVAC ) cash runway into 2028, the company said.

CureVac ( CVAC ) also expects to deliver two or more clinical candidates by the end of next year and plans to initiate at least two new phase 1 studies by the end of 2026.

Shares of CureVac ( CVAC ) rose more than 21% in recent premarket activity Wednesday, while GSK was down 0.3%.

Price: 4.07, Change: +0.73, Percent Change: +21.86