CureVac N.V. Unaudited Interim Condensed Consolidated Financial Statements As of

2024-03-31--12-312024Q10001809122false0.12

Unaudited Interim Condensed Consolidated Financial

As of March 31, 2024 and December 31, 2023

and for the three months ended

March 31, 2024 and 2023

Interim Condensed Consolidated Statements of Operations and

Other Comprehensive Income (Loss)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Interim Condensed Consolidated Statements of Financial Position

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Interim Condensed Consolidated Statements of Changes in Shareholders' Equity

for the three months ended March 31, 2024 and 2023

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Interim Condensed Consolidated Statements of Cash Flows

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

1. Corporate Information

CureVac N.V. (CureVac or CV or the Company) is the parent company of CureVac Group (Group) and, along with its subsidiaries, is a global biopharmaceutical company developing a new class of transformative medicines based on the messenger ribonucleic acid (mRNA) that has the potential to improve the lives of people.

The Company is incorporated in the Netherlands and is registered in the commercial register at the Netherlands Chamber of Commerce under 77798031. The Company's registered headquarters is Friedrich-Miescher-Strasse 15, 72076 T bingen, Germany. During fiscal 2023 until now, Dievini Hopp BioTech holding GmbH & Co. KG (dievini), which is an investment company dedicated to the support of companies in health and life sciences, is the largest shareholder of CureVac. Together with its related parties, dievini has held shares and voting rights in CureVac between appr. 37 - 43 % during that period. dievini is thus considered to be the de facto parent of the Group. Dietmar Hopp, Daniel Hopp and Oliver Hopp are the ultimate controlling persons (of the main shareholders) of dievini, and, therefore, control the voting and investment decisions of dievini.

2. Basis of preparation

The interim condensed consolidated financial statements for the three months ended March 31, 2024, have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Group's annual consolidated financial statements as of December 31, 2023. The interim condensed consolidated financial statements were authorized by the Management Board for presentation to the Supervisory Board on May 21, 2024. The Group's interim condensed consolidated financial statements are presented in Euros ("EUR"). Unless otherwise stated, amounts are rounded to thousands of Euros, except per share amounts. Due to rounding, differences may arise when individual amounts or percentages are added together.

New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2023. The new and amended standards and interpretations applied for the first time as of January 1, 2024, as disclosed in the notes to the consolidated financial statements as of December 31, 2023, had no impact on the interim condensed consolidated financial statements of the Group as of and for the three months ended March 31, 2024. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

3. Notes to the Consolidated Statements of Operations

3.1 Revenue from contracts with customers

The Group recognized the following revenues:

During the three months ended March 31, 2024, the Company recognized revenues over-time (i) EUR 7,692k (March 31, 2023: EUR 4,148k) related to delivery of research and development services combined with an IP license (recognized from the upfront payments and achievement of certain milestones as further illustrated in the table below) and (ii) EUR 2,741k (March 31, 2023: EUR 2,849k) from those research and development services considered distinct within the agreements and recognized revenues at point-in-time (iii) EUR 1,940k (March 31, 2023: EUR 132k) related to delivery of products.

Of the total revenues recognized, in the three months ended March 31, 2024, EUR 8,895k in revenue was recognized under the collaboration agreements with GSK, entered into in July 2020, for the research, development, manufacturing and commercialization of mRNA-based vaccines and monoclonal antibodies targeting infectious disease pathogens ("GSK I") and in April 2021 for research, development and manufacturing of next-generation mRNA vaccines targeting the original SARS-CoV-2 strain as well as emerging variants, including multivalent and monovalent approaches, such as the CureVac's second-generation COVID-19 vaccine candidate, CV2CoV ("GSK II"). The upfront payment, attributable to research and development services combined with an IP license, and each development milestones reached, are recognized straight-line from the effective date of the collaboration agreement through to the agreed estimated submission date for authority approval, which represents the period of time during which CureVac is responsible for development as, subsequent to this period, GSK will be responsible for further development and commercialization. In the three months ended March 31, 2023, revenue consisted of EUR 6,473k primarily recognized from the upfront payments under both collaboration agreements with GSK.

The Group has received upfront and milestone payments which were initially deferred and are subsequently recognized as revenue as the Group renders services over the performance period. Below is a summary of such payments and the related revenues recognized:

The cost of sales consists of the following:

For the three months ended March 31, 2024, cost of sales increased in comparison to corresponding period in 2023. This increase was primarily attributable to the increase of the CMO provision (refer to Note 12 for further information) and higher personnel expenses related to the voluntary leaver program initiated in March 2024.

3.3 Selling and distribution expenses

Selling and distribution expenses consist of the following:

3.4 Research and development expenses

R&D expenses consists of the following:

During the three months ended March 31, 2024, research and development expenses increased in comparison to the same period of 2023 due to increased expenses related to the IP litigations.

The decrease in personnel expense quarter over quarter is primarily due to the reimbursement from GSK on the development costs incurred by CureVac related to CV2CoV, or GSK II. Since the first EUR 100,000k on development costs of GSK II was achieved in August 2023, CureVac recognized GSK's reimbursement on GSK II as an offset against research and development expenses.

As of March 31, 2024, the Group had no development expenditures which met the requirements for capitalization and thus none have been capitalized.

3.5 General and administrative expenses

General and administrative expenses consist of the following:

Personnel expenses decreased due to (i) share-based payment expense was lower compared to prior year period (refer to Note 5 for further details) and (ii) lower workforce in the Board of Management as well as in the corporate service functions.

Others include mainly expenses for D&O insurance and allocations.

3.6 Other operating income

Other operating income consist of the following:

4. Issued Capital and Reserves

According to the Company's articles of association, the Company's authorized shares are divided into 386,250,000 common shares and 386,250,000 preferred shares, each having a nominal value of EUR 0.12.

As of March 31, 2024, no preferred shares had been issued and all issued common shares issued and outstanding were fully paid.

The number of shares issued and outstanding developed as follows:

At-the-market offering

On September 17, 2021, CureVac filed a prospectus for an "at-the-market" (ATM) offering program to raise additional cash of up to USD 600 million. The program was activated in June 2022. Through December 31, 2022, CureVac has issued 6,908,493 shares and raised gross proceeds of USD 69,139k. In the first quarter of 2023, 1,748,218 shares were issued under the ATM program, raising USD 18,023k million in gross proceeds. Offering costs for legal, accounting, printing and registration fees were recognized as reduction to capital reserve against the proceeds from the offering.

Follow-on public offering 2023

In February 2023, the Group completed a follow-on public offering whereby it sold 27,027,028 common shares at a price of USD 9.25 per share. The aggregate proceeds, net of underwriting discounts, received by the Group from these transactions were EUR 219,832k. Additional offering costs for legal, accounting, printing and registration fees of EUR 14,580k were recognized as reduction to capital reserve against the proceeds from the offering.

5. Share-based payments

During the three months ended March 31, 2024 and 2023, the Group recognized share-based payment expenses of EUR 487k and EUR 1,578k, respectively, as follows:

Expense recognized for the equity-settled programs was as follows:

On March 1, 2022, CureVac granted 130,000 options to the Executive Board. All grants were made under the terms of the new long-term incentive plan (LTIP) put in place by CureVac N.V. Options will be settled in shares of CureVac N.V. As of March 31, 2024, none of the options were exercised. As the former CEO left the Group, by the end of the three months ended March 31, 2023, all of his remaining unvested awards were subject to accelerated vesting. As of December 31, 2023, none of these options had been exercised.

The expenses recognized for employee services received under the LTIP Stock Options during the three months ended March 31, 2024, is in the amount of EUR 90k (2023: EUR 975k) and is included in general and administrative expenses and selling and distribution expenses.

In 2021, as part of the LTIP program, the Group awarded RSUs (restricted stock units) to senior executives as well as Supervisory Board members. On June 24, 2021, the Group awarded 10,956 RSUs to Supervisory Board members and on December 23, 2021, the Group awarded 63,095 RSUs to the Executive Board and various key employees. Up to March 31, 2024, 66,686 RSUs were settled. The related RSU expense is recorded in the functional cost category to which the award recipient's costs are classified.

On June 22, 2022, the Group awarded 36,902 RSUs to Supervisory Board members and 188,986 RSUs to the Executive Board and various key employees. On November 30, 2022, the Group awarded further 7,633 RSU awards to key employees who joined the Group during fiscal 2022. The related RSU expense is recorded in the functional cost category to which the award recipient's costs are classified. Up to March 31, 2024, 159,931 RSUs were settled.

Effective July 1, 2022, CureVac N.V. acquired all shares of Frame Pharmaceuticals B.V., Amsterdam, Netherlands (formerly Frame Pharmaceuticals), now CureVac Netherlands B.V. On July 1, 2022, CureVac awarded 89,655 RSUs to the former Frame employees. The related RSU expense is recorded in the functional cost category to which the award recipients' costs are classified. Up to March 31, 2024, 29,881 RSUs were settled.

On March 31, 2023, the Group awarded 92,701 RSUs to the Supervisory Board members and 646,914 RSUs to the Executive Board and various key employees. The related RSU expense is recorded in the functional cost category to which the award recipient's costs are classified. Up to March 31, 2024, 295,390 RSUs were settled.

The expenses recognized for employee services received under the LTIP RSUs during the three months ended March 31, 2024, is in an amount of EUR 336k (2023: EUR 542k) and is included in research and development expenses, general and administrative expenses, selling and distribution expenses and cost of sales. The RSU expense related to Supervisory Board members recognized during the three months ended March 31, 2024, in an amount of EUR 57k (2023: EUR 55k) is included in other operating expenses.

Under the New VSOP plan, no options were exercised within the three months ended March 31, 2024.

On the third anniversary after IPO i.e., on August 14, 2023, a fourth 10% portion of the (vested) virtual shares became exercisable because certain minimum trading volumes of the CureVac N.V. shares and liquidity levels were again reached. The beneficiaries declared the exercise of their then exercisable 786,746 virtual shares by March 22, 2024, and CureVac received 786,746 shares from the old shareholders on that day. On March 26, 2024, CureVac transferred 786,746 shares to the exercising beneficiaries.

6.1 Intangible assets

During the three months ended March 31, 2024, the Group acquired intangible assets of EUR 4,078k (three months ended March 31, 2023: EUR 134k). Acquired intangibles mainly related to licenses, software and prepayments made to acquire those.

6.2 Property, plant and equipment

During the three months ended March 31, 2024, the increase in property, plant and equipment was attributable to the purchase of technical equipment and machines and other equipment of EUR 1,284k (March 31, 2023: EUR 3,206k) as well as additional amounts recognized as construction in progress of EUR 2,981k (March 31, 2023: EUR 12,631k) primarily related to the Company-owned GMP IV facility EUR 2,524k.

7. Assets held for sale

In 2022, Management decided to dispose of certain equipment which had been procured for CMO activities (CMO Equipment) but that was no longer planned to be used by the Company. An external service-provider was appointed on June 14, 2022 to organize the sale of the CMO Equipment. The CMO-Equipment identified for sale had a gross book value of EUR 9,130k, as of December 31, 2023, and was written down by EUR 6,711k (with the corresponding expense recognized in cost of sales) to EUR 2,419k, the fair value less anticipated costs to sell. Criteria for the determination of the fair value were defined based on certain sales scenarios considering different sales campaigns. The Company is actively working on selling the remaining equipment and as of March 31, 2024, assets held for sale with a net book value of EUR 523k were sold through an external service provider.

The inventories include only raw materials and supplies amounting to EUR 26,207k (December 31, 2023: EUR 24,801k), which are recoverable under the Company's agreements with its collaboration partners. During the three months ended March 31, 2024, the increase in inventory of EUR 1,406k is primarily due to purchase of raw material.

9. Prepaid expenses and other assets (current)

Prepaid expenses and other current assets as of March 31, 2024 amounted to EUR 22,820k (December 31, 2023: 23,763k) and include prepayments for future service agreements and material in the amount of EUR 2,137k (December 31, 2023: EUR 1,075k), deferred charges of EUR 5,558k (December 31, 2023: EUR 5,463k) and receivables of EUR 8,312k (December 31, 2023: EUR 4,344k). As of March 31, 2024, we had tax receivables, mainly VAT refund claims, of EUR 6,813k in other current assets (December 31, 2023: EUR 12,881k).

10. Financial assets and financial liabilities

Fair values of cash and cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Cash and cash equivalents compromise cash at banks and term deposits.

Cash and cash equivalents compromise cash at banks and term deposits. There were no transfers between Level 1 and Level 2 fair value measurements and no transfers into or out of Level 3 fair value measurements during the three months ended March 31, 2024 and 2023.

11. Trade and other payables

Trade and other payables are all due within one year amounting to EUR 18,457k (December 31, 2023: EUR 48,033k). During the three months ended March 31, 2024, the decrease of EUR 29,576k in trade and other payables was primarily due payments to raw material suppliers for invoices received before December 31, 2023.

12. Other liabilities and provisions

During the three months ended March 31, 2024, the increase of EUR 8,960k in other liabilities and provisions was primarily due to higher provisions partially offset by lower accruals for outstanding invoices.

In May 2024, the Company received the second ruling of its three CMO arbitrations. In 2022, Celonic Deutschland GmbH & Co. KG initiated arbitration proceedings according to the procedural rules of the German Arbitration Institute against the Company, following the termination of the agreement by CureVac after the withdrawal of the EMA dossier of CVnCoV, the Company's first generation SARS COV-2 vaccine candidate. The Company defended against Celonic's claims in written submission and the oral hearings. In the final award, the arbitration tribunal awarded 65% of Celonic's claims. The provision related to the Celonic arbitration therefore increased by EUR 17,000k.

The increase of tax expenses for the three months ended March 31, 2024, was primarily attributable to the deferred tax expense of CureVac Corporate Services GmbH.

Current tax assets of EUR 5,826k (December 31, 2023: 5,201k) consists of withholding tax receivables.

14. Disclosure of financial instruments and management of financial risks