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

2024-06-30--12-312024Q20001809122false0.12

Unaudited Interim Condensed Consolidated Financial

As of June 30, 2024 and December 31, 2023

and for the three and six months ended

June 30, 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 six months ended June 30, 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. 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 of appr. 37 % 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 as of and for the three and six months ended June 30, 2024 and 2023, 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 August 13, 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 and six months ended June 30, 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 contract with customers

The Group recognized the following revenues:

During the six months ended June 30, 2024, the Company recognized revenues over-time (i) EUR 16,545k (June 30, 2023: EUR 8,545k) 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 4,289k (June 30, 2023: EUR 5,259k) from those research and development services considered distinct within the agreements and recognized revenues at point-in-time (iii) EUR 5,975k (June 30, 2023: EUR 903k) related to delivery of products.

Of the total revenues recognized, in the six months ended June 30, 2024, EUR 17,622k 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 six months ended June 30, 2023, revenue consisted of EUR 12,756k primarily recognized from the upfront payments under both collaboration agreements with GSK. In the second quarter of 2024, the Company reached a development milestone of EUR 5,000k under the GSK I collaboration. Therefore, revenue for the six months ending June 30, 2024, also includes recognition of EUR 1,711k of the milestone amount (June 30, 2023: EUR 0k). The remaining EUR 3,289k of the milestone amount is deferred as contract liability and will be recognized into revenue through the above-mentioned time. In July 2024, the Group entered into a new licensing agreement with GSK, which provides for GSK to assume full control of developing and manufacturing vaccine candidates for seasonal influenza, COVID-19 and avian influenza. The new licensing agreement replaces the 2020 GSK Agreement and the GSK COVID Agreement, including all financial considerations relating to such agreements. Under the terms of the new agreement, GSK will have worldwide rights to commercialize the candidate vaccines (refer to Note 17 for further information).

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 six months ended June 30, 2024, cost of sales increased in comparison to the corresponding period in 2023. This increase was primarily attributable to the increase of a CMO (contract manufacturing organization) provision (refer to Note 12 for further information), write-down of raw materials (refer to Note 8 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 six months ended June 30, 2024, research and development expenses increased in comparison to the same period of 2023 due to increased expenses related to the IP litigations and write-off of licenses (refer to Note 6.1 for further information).

The decrease in personnel expense 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.

In April 2024, CureVac and The University of Texas M.D. Anderson Cancer Center (MD Anderson) entered a strategic collaboration to develop novel cancer vaccines. The joint arrangement between CureVac and MD Anderson , with joint control in place over the decisions on relevant activities that significantly affect the investee's returns, is accounted for as joint operation. CureVac recognizes its expenses based on the shares defined in the contractual arrangement in research and development expenses.

As of June 30, 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:

During the six months ended June 30, 2024, general and administrative expenses decreased in comparison to the same period of 2023 due to decreased personnel expenses related to lower share-based payment expenses (refer to Note 5 for further details).

Others include mainly expenses for D&O insurance.

3.6 Other operating income

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 June 30, 2024, no preferred shares had been issued and all issued common shares issued and outstanding were fully paid.

The number of common shares issued and outstanding developed as follows:

For the three months ended June 30, 2024, due to the use of tax loss carryforwards for which no deferred tax asset has been capitalized in prior periods, EUR 898k have been credited in equity (refer to Note 13 for further information).

5. Share-based payments

The Group recognized share-based payment expenses as follows:

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

On June 1, 2024, the Group granted 25,000 options to the Chief Business Officer, CBO. The grant was made under the terms of the long-term incentive plan (LTIP) put in place by CureVac N.V. Options will be settled in shares of CureVac N.V.

For the grant to the CBO, a Monte Carlo simulation has been used to measure the fair value at the grant date. The inputs used in the measurement of the fair value at grant date were as follows:

On March 31, 2024, the Group awarded 199,910 RSUs to the Supervisory Board members and 1,374,824 RSUs to the Executive Board and various key employees. The fair value is based on the CureVac stock price as of March 31, 2024, which amounts to USD 3.03 (EUR 2.80).

Under the New VSOP plan, no options were exercised within the three and six months ended June 30, 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 six months ended June 30, 2024, the Group acquired intangible assets of EUR 4,088k (six months ended June 30, 2023: EUR 2,567k). Acquired intangibles mainly related to licenses, software and prepayments made to acquire those.

As the Company decided to stop an early-stage R&D-program due to strategic reasons, related license agreements with a collaboration partner were terminated and already capitalized licenses with a remaining book value of EUR 3,248k were impaired, as no future use is anticipated. The expense recognized related to the impairment is included in research and development expenses.

6.2 Property, plant and equipment

During the six months ended June 30, 2024, the increase in property, plant and equipment was attributable to the purchase of technical equipment and machines and other equipment of EUR 2,210k (June 30, 2023: EUR 5,940k) as well as additional amounts recognized as construction in progress of EUR 3,572k (June 30, 2023: EUR 22,421k) primarily related to the Company-owned GMP IV facility EUR 2,740k.

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 June 30, 2024, assets held for sale with a net book value of EUR 597k were sold through an external service provider.

The inventories include only raw materials and supplies amounting to EUR 457k (December 31, 2023: EUR 24,801k), which are recoverable under the Company's agreements with its collaboration partner. During the six months ended June 30, 2024, the decrease in inventory of EUR 24,344k is primarily due to write-down of raw material which would have been recoverable under the previous GSK collaboration (refer to Note 17 for further information). The expense recognized related to the write-down is included in cost of sales.

9. Prepaid expenses and other assets (current)

Prepaid expenses and other current assets as of June 30, 2024 amounted to EUR 12,554k (December 31, 2023: 23,763k) and include prepayments for future service agreements and material in the amount of EUR 935k (December 31, 2023: EUR 1,075k), deferred charges of EUR 3,286k (December 31, 2023: EUR 5,463k) and other receivables of EUR 4,059k (December 31, 2023: EUR 4,344k). As of June 30, 2024, we had tax receivables, mainly VAT refund claims, of EUR 4,273k 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 six months ended June 30, 2024 and 2023.

11. Trade and other payables

Trade and other payables are all due within one year amounting to EUR 7,513k (December 31, 2023: EUR 48,033k). During the six months ended June 30, 2024, the decrease of EUR 40,520k in trade and other payables was primarily attributable to payments to raw material suppliers for invoices received before December 31, 2023.

12. Other liabilities and provisions

During the six months ended June 30, 2024, the decrease of EUR 39,954k in other liabilities and provisions was primarily due to lower provisions related to CMO arbitrations and due to 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 (Celonic) 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. As the award was higher than the provision, expense of EUR 17,098k was recognized in cost of sales. As of June 30, 2024, the awarded amount was paid to Celonic.

In July 2024, the Company received the last ruling of its three CMO arbitrations. In 2022, Wacker Biotech B.V. (Wacker) 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 Wacker's claims in written submission and the oral hearings. In the final award, the arbitration tribunal awarded 30% of Wacker's claims. The provision related to the Wacker arbitration therefore decreased by EUR 2,091k.

The increase of tax expenses for the six months ended June 30, 2024 to EUR 1,967k was primarily attributable to the deferred tax expense of CureVac N.V. and CureVac Corporate Services GmbH. For the three months ended June 30, 2024, due to the use of tax loss carryforwards for which no deferred tax asset has been capitalized in prior periods, EUR 898k have been credited in equity.

Income taxes for the six months ended June 30, 2024, were calculated based on the best estimate of the weighted average annual income tax rates expected for the full financial years (estimated annual effective income tax rates) on ordinary income before tax adjusted by the tax effect of any discrete items. For the six months ended June 30, 2024, the effective income tax rate for CureVac N.V. was approximately 6.1% applicable on taxable income. The effective tax rate considers the usage of loss carryforwards from former years and management's assessment of the requirements in IAS 12, which lowers the effective tax rate of the Group.

14. Disclosure of financial instruments and management of financial risks

As the Group requires significant liquid funds available for the financing of its research and development activities, during the six months ended June 30, 2024, it has maintained funds as cash and cash equivalents and not in less liquid financial instruments. The Group has distributed the cash amongst several banks and amongst the legal entities in the Group in order to avoid cluster risks.

Refer to note 15 to the consolidated financial statements as of December 31, 2023, for additional information on the Group's risk management activities. As of June 30, 2024, the Group held cash and cash equivalents of USD 30,197k and CHF 152k, which are exposed to foreign currency exchange risk. The Group intends to settle expenses arising in US dollars using these US dollar funds.