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

2024-09-30--12-312024Q30001809122false0.12

Unaudited Interim Condensed Consolidated Financial

As of September 30, 2024 and December 31, 2023

and for the three and nine months ended

September 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 nine months ended September 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 nine months ended September 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 November 8, 2024. Certain prior year amounts have been reclassified for consistency with the current year presentation. 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 nine months ended September 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 three months ended September 30, 2024, the Company recognized revenues from:

During the nine months ended September 30, 2024, the Company recognized revenues from:

On June 29, 2024, CureVac and Glaxosmithkline Biologicals SA (GSK) entered into a new Licensing Agreement to amend and restate their existing collaboration agreements (CLA1 and CLA2, as amended and restated). The agreement was dependent upon approval of the German Antitrust Authorities which was granted on July 11, 2024, and marks the effective date of the agreement. Under the agreement, CureVac granted GSK a worldwide, non-transferable, royalty-free, sublicensable, exclusive license to use the CureVac licensed intellectual property (IP) for the development and manufacture of the GSK products, as well as a worldwide, royalty-bearing, sublicensable exclusive license to use the CureVac licensed IP for the commercialization of the GSK products.

Since 2020 under the CLA1 and CLA2 agreements, GSK and CureVac have developed mRNA vaccine candidates for infectious diseases including seasonal influenza and COVID-19 and avian influenza. All candidates are based on CureVac's proprietary second-generation mRNA backbone.

Under the terms of the License Agreement, GSK will assume full control of developing and manufacturing candidate vaccines for influenza and COVID-19, including combinations. The new Licensing Agreement replaces all previous financial considerations from the prior collaboration agreements between CureVac and GSK. CureVac further retains exclusive rights to the additional undisclosed and preclinically validated infectious disease targets from the prior collaboration together with the freedom to independently develop and partner mRNA vaccines in any other infectious disease or other indication.

CureVac identified one performance obligation in granting of licenses and one in activities related to the transition and wind down of the GSK program. CureVac received a non-refundable upfront payment of EUR 400,000k, which was received in August 2024, and will receive additional development and regulatory milestone payments of up to EUR 550,000k, commercial milestone payments of up to EUR 500,000k and tiered royalties on product sales.

Since CureVac has no major obligations in respect of the licenses and, especially, no obligation to perform further research and development (R&D) services in connection with the granted licenses, the licenses do not provide access to CureVac's IP. Instead, the licenses are accounted for as a right to use CureVac's IP. GSK is able to direct the use of, and obtain substantially all of the benefits from, the license at the time that control of the license is transferred to GSK. Therefore, the upfront payment is fully recognized in the third quarter of 2024 as revenue. Under the previous CLA1 and CLA2 agreements, CureVac recognized revenue over time for the combined performance obligation where CureVac grants its customer a license which is bundled with research and development services relating to the technology.

CureVac and GSK agreed in the License Agreement that all unfulfilled performance obligations from prior CLA1 and CLA2 agreements relating to R&D services combined with an IP license expired, which means that GSK can no longer exercise its contractual rights in respect to R&D services combined with an IP license. All outstanding contract liabilities amounting to EUR 80,382k attributed to expired performance obligations that resulted from non-refundable upfront payments are recognized as revenue upon the Licensing Agreement becoming effective in July 2024.

In the third quarter of 2024, the Company reached a development milestone of EUR 10,000k under the GSK I collaboration. Therefore, revenue for the nine months ending September 30, 2024, also includes recognition of EUR 10,000k of the milestone amount (September 30, 2023: EUR 1,087k).

Of the total revenues recognized in the nine months ended September 30, 2024, EUR 508,323k in revenue was recognized under the 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 nine months ended September 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 due to costs related to the restructuring of the organization of EUR 4,377k (refer to Note 12 for further information).

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 nine months ended September 30, 2024, research and development expenses increased in comparison to the same period of 2023 due to increased expenses related to the IP litigations (refer to Note 12 for further information) and write-off of licenses (refer to Note 6.1 for further information).

The increase in personnel expenses for the three months ended September 30, 2024, is primarily due to costs related to the restructuring of the organization of EUR 4,823k (refer to Note 12 for further information). For the nine months ended September 30, 2024, the increase is offset by the reimbursement from GSK on the development costs incurred by CureVac related to CV2CoV, or GSK II, for the first half of 2024. 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 until June 2024 (refer to Note 3.1. for further information).

The increase in patent and fees to register / protect a legal right for the three months ended September 30, 2024, is primarily due to the provisions recognized related to pending patent litigations of EUR 15,894k (refer to Note 12 for further information).

As of September 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 nine months ended September 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 September 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 and nine months ended September 30, 2024, due to the use of tax loss carryforwards for which no deferred tax asset has been capitalized in prior periods, EUR 9,201k and EUR 10,099k, respectively, 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 nine months ended September 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.

On the fourth anniversary after IPO i.e., on August 14, 2024, a fifth 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 790,185 virtual shares by September 20, 2024, and CureVac received 790,185 shares from the old shareholders on that day. On September 25, 2024, CureVac transferred 790,185 shares to the exercising beneficiaries.

6.1 Intangible assets

During the nine months ended September 30, 2024, the Group acquired intangible assets of EUR 4,094k (nine months ended September 30, 2023: EUR 2,610k). 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 nine months ended September 30, 2024, the decrease in property, plant and equipment was attributable to the impairment of a production line.

CureVac's GMP IV facility was initially planned and constructed for commercial (large scale) production. Following the effectiveness of the new Licensing Agreement with GSK in July 2024, management embarked on a significant strategic restructuring to focus its resources on high-value mRNA projects in oncology and other select areas of substantial unmet medical need.

As a result of the strategic restructuring, one production line within the GMP IV facility will not be developed further and therefore will have no future use. Therefore this production line will not generate cash inflow in the future, resulting in a full impairment of the production line in the amount of EUR 36,641k. The expense recognized related to the impairment is included in other operating expenses. The remaining carrying amount of the GMP IV facility, as of September 30, 2024, presented within construction in progress, amounts to EUR 139,369k.

The decrease is offset by the purchase of technical equipment and machines and other equipment of EUR 3,189k (September 30, 2023: EUR 7,690k) as well as additional amounts recognized as construction in progress of EUR 5,858k (September 30, 2023: EUR 32,918k) primarily related to the Company-owned GMP IV facility with the amount of EUR 5,379k.

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 September 30, 2024, assets held for sale with a net book value of EUR 775k were sold through an external service provider.

The inventories include only raw materials and supplies amounting to EUR 470k (December 31, 2023: EUR 24,801k), which are recoverable under the Company's agreements with its collaboration partner. During the nine months ended September 30, 2024, the decrease in inventory of EUR 24,331k is primarily due to write-down of raw material which would have been recoverable under the previous GSK collaboration (refer to Note 3 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 September 30, 2024 amounted to EUR 15,860k (December 31, 2023: 23,763k) and include prepayments for future service agreements and material in the amount of EUR 234k (December 31, 2023: EUR 1,075k), deferred charges of EUR 6,653k (December 31, 2023: EUR 5,463k) and other receivables of EUR 4,570k (December 31, 2023: EUR 4,344k). As of September 30, 2024, also included are VAT refund claims in the amount of EUR 4,404k (December 31, 2023: EUR 12,881k).