x200B; ​ CureVac N.V. Unaudited Interim Condensed Consolidated Financial Statements As of

2023-03-31--12-312023Q10001809122false0000000000000.1298000

Unaudited Interim Condensed Consolidated Financial

As of March 31, 2023 and December 31, 2022

and for the three months ended

March 31, 2023 and 2022

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, 2023 and 2022

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 Tuebingen, Germany. During 2021 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. 43 46 % 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, 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, 2022. The interim condensed consolidated financial statements were authorized by the Management Board for presentation to the Supervisory Board on May 22, 2023. 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, 2022. The new and amended standards and interpretations applied for the first time as of January 1, 2023, as disclosed in the notes to the consolidated financial statements as of December 31, 2022, had no impact on the interim condensed consolidated financial statements of the Group as of and for the three months ended March 31, 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Impact of COVID-19 and the Russia-Ukraine Conflict

As the Group is currently devoting significant resources to the development of COVID vaccines, such development may impair the ability to timely progress other product candidates in clinical trials or into clinical trials from their current preclinical stage. In addition, enrollment in other programs may be delayed as a result of the COVID-19 pandemic and our focus on developing a COVID vaccine could have a negative impact on our progress on and associated revenue recognition from our non-COVID-19 collaborations. The partial disruption, even temporary, may negatively impact the Company's operations and overall business by delaying the progress of its clinical trials and preclinical studies. The Group's operations, including research and manufacturing, could also be disrupted due to the potential impact of staff absences as a result of self-isolation procedures or extended illness. However, the Group has taken a series of actions aimed at safeguarding its employees and business associates, including implementing a work-from-home policy for employees except for those related to the Group's laboratory and production operations.

The ongoing military conflict between Russia and Ukraine has not and is not expected to have a material direct or indirect effect on the Group's operations or financial condition: however, the Group is currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. As a result of this instability and responding actions taken by the United States, Russia, EU, and other Foreign Governments, this may limit or prevent filing, prosecuting, and maintaining of patent applications in Russia. Government actions may also prevent maintenance of issued patents in Russia. These actions could result in abandonment or lapse of our patents or patent applications in Russia, resulting in partial or complete loss of patent rights in Russia. In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit, without consent or compensation, inventions owned by patentees that have citizenship or nationality in, are registered in, or have predominately primary place of business or profit-making activities in countries that Russia has deemed unfriendly. Consequently, we would not be able to prevent third parties from using our inventions in Russia or from selling or importing products made using our inventions in and into Russia. Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be materially adversely affected.

3. Notes to the consolidated financial statements

3.1 Revenue from contract with customers

The Group recognized the following revenues:

Of these revenues, all of which were recognized over time as part of collaboration agreements, during the three months ended March 31, 2023 EUR 4,148k (March 31, 2022: EUR 18,243k) related to (i) delivery of research services combined with an IP license (recognized from the upfront payments and achievement of certain milestones as further illustrated in the table below), (ii) EUR 132k (March 31, 2022: EUR 103k) related to delivery of products and (iii) EUR 2,849k (March 31, 2022: EUR 6,027k) were recognized from those research and development services considered distinct within the agreements.

Of the total revenues recognized, in the three months ended March 31, 2023, EUR 6,473k 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 ). In the first quarter of 2022, the Company reached a development milestone of EUR 10,000k under the GSK I collaboration. Therefore, revenue for the three months ending March 31, 2023, also includes recognition of EUR 423k of the milestone amount (March 31, 2022: EUR 4,725k). The remaining EUR 3,321k of the milestone amount is deferred as contract liability and will be recognized into revenue through the estimated completion date of Phase 1 clinical trials, 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, 2022, revenue consisted of EUR 23,746k primarily recognized from the upfront payments under both collaboration agreements with GSK.

The Group has received upfront 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:

* Translated at the currency exchange rate prevailing on the transaction date.

Trade receivables are non-interest bearing and are generally settled within 30 to 45 days. The contract liabilities contain upfront payments and milestone payments from Collaboration agreements.

The cost of sales consists of the following:

For the three months ended March 31, 2023, cost of sales decreased in comparison to corresponding period in 2022. This decline was primarily attributable to higher material costs in the prior year, which were driven by write-offs of raw materials originally procured for the manufacturing of products intended to be sold to GSK. However, these raw materials were no longer expected to be sold to them.

3.3 Selling and distribution expenses

Selling and distribution expenses consist of the following:

Personnel expenses mainly include salary and salary-related expenses, during the three months ended March 31, 2023 of EUR 675k (March 31, 2022: EUR 129k) and share-based payment expense of EUR 41k (March 31, 2022: EUR 68k).

3.4 Research and development expenses

R&D expenses consists of the following:

During the three months ended March 31, 2023, research and development expenses increased in comparison to the same period of 2022, as the prior year period was largely impacted by the reversal of provision for onerous contracts in the amount of EUR 6,800k as a result of more participants leaving the clinical trials, prior to completion, than originally estimated and of renegotiations of contracts with CROs. Additionally in 2022, GSK took over the Group's committed capacity at Novartis (see Note 3.6 for additional information) which resulted in a reduction in the estimated contract termination provisions in the amount of EUR 25,059k. The net effect of these two events resulted in an overall gain within the Third-party services category.

As of March 31, 2023, the Group had no development expenditures which met the requirements for capitalization and thus none have been capitalized.

Personnel expenses mainly include salary and salary-related expenses, during the three months ended March 31, 2023 of EUR 10,885k (March 31, 2022: EUR 6,864k) and share-based payment expense of EUR 152k (March 31, 2022: EUR 190k).

3.5 General and administrative expenses

General and administrative expenses consist of the following:

Personnel expenses mainly include salary and salary-related expenses, during the three months ended March 31, 2023, of EUR 7,768k (March 31, 2022: EUR 7,803k) and share-based payment expense of EUR 1,330k (March 31, 2022: EUR 1,978k). During the three months ended March 31, 2023, third-party services expenses increased, compared to the same period of 2022, mainly due to higher consulting services.

3.6 Other operating income

In March 2022, CureVac AG and GlaxoSmithKline Biologicals SA amended and restated the 2020 GSK agreement and the GSK COVID Agreement in connection with GSK entering into a direct agreement with Novartis for use of Novartis as a CMO at the same time as CureVac exits its CMO agreement with Novartis. Additionally, under the restated agreement, CureVac is entitled to further compensation by GSK. The compensations mainly consist of a consideration for set-up activities undertaken by CureVac (EUR 20,500k) and for reimbursement of prepayments (EUR 12,000k), which were recognized in other operating income in the three months ended March 31, 2022. As an additional result of this agreement, certain reserved capacity at Novartis was also taken over from the Group by GSK, which resulted in the reversal of provisions of EUR 25,059k which had been recognized as of December 31, 2021, and the recognition of a corresponding gain in research and development expenses in the three months ended March 31, 2022 (see Note 3.4).

During the three months ended March 31, 2023 and 2022, income from grants with government agencies and similar bodies resulted from the following:

Coalition for Epidemic Preparedness Innovations (CEPI)

In January 2020, CureVac and CEPI entered into a collaboration to develop a vaccine against the new coronavirus SARS-CoV-2. The aim of the cooperation is to safely advance vaccine candidates into clinical testing as quickly as possible. The agreement builds upon the existing partnership between CureVac and CEPI to develop a rapid-response vaccine platform and included additional initial funding of up to USD 8,300k. In May 2020, CEPI increased its grant award to the Group for SARS-CoV-2 vaccine development to up to USD 15,300k.

For the three months ended March 31, 2023, CureVac recognized the reimbursement by CEPI of approved expenses of EUR 2k (March 31, 2022: EUR 6k) as other operating income . As of March 31, 2023, EUR 307k in grant funds received have been deferred and are presented within other liabilities (December 31, 2022: EUR 309k).

Bill & Melinda Gates Foundation (BMGF)

For the three months ended March 31, 2023, CureVac recognized EUR 0k (March 31, 2022: EUR 63k) from the amortization of the grants on a straight-line basis into other operating income. As of March 31, 2023, EUR 1,712k in grant funds received have been deferred and presented within other liabilities (December 31, 2022: EUR 1,712k).

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, 2023, no preferred shares had been issued and all issued common shares issued and outstanding were fully paid.

All payments received from shareholders in excess of the nominal value of the shares issued and net of transaction costs are recognized in capital reserves. Capital reserves also consists of recognition of share-based payments and the equity components of convertible loans. The Company may only make distributions, whether a distribution of profits or of freely distributable reserves, to shareholders to the extent shareholders' equity exceeds the sum of the paid-in and called-up share capital plus any reserves required by Dutch law or by the Company's articles of association.

In September 2021, the Company entered into a sales agreement, the Open Sale Agreement, with Jefferies LLC and SVB Leerink LLC, as sales agents, to establish an at-the-market (ATM) offering program, pursuant to which it may sell, from time to time, ordinary shares for aggregate gross proceeds of up to USD 600.0 million. In the first quarter of 2023, 1,748,218 shares were issued under the ATM program, raising USD 17.5 million in net proceeds; related offering expenses were recorded against the proceeds in equity. Following these issuances, the remaining value authorized for sale under the at-the-market program amounts to $497.5 million.

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.

The number of shares issued and outstanding developed as follows:

5. Share-based payments

During the three months ended March 31, 2023 and 2022, the Group recognized share-based based payments expenses of EUR 1,578k and EUR 2,273k, respectively, as follows:

Three months ended March 31,

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

Three months ended March 31,

On November 16, 2020, CureVac granted 266,155 options to the Chief Scientific Officer (CSO). Furthermore, on December 1, 2020, CureVac granted 266,156 options (in 3 tranches) to the Group's Chief Business Officer (CBO) and Chief Commercial Officer (CCO). All grants were made at no cost under the terms of a 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, 2023, none of the options granted to the CBO/CCO under the LTIP were exercised at that date. The CSO exercised 6,303 options during 2022.

On July 1, 2021, CureVac granted 20,000 options to the Chief Operations Officer (COO). Furthermore, on August 1, 2021, CureVac granted 30,000 options to the Chief Development Officer (CDO). All grants were made at no cost 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, 2023, none of the options granted to the COO were exercised at that date. The CDO has left the Group and, under the terms of his LTIP agreement, his options had expired as of December 31, 2022.

On March 1, 2021, CureVac granted 2,000 options to a key employee and on January 1, 2022, CureVac granted 9,500 options to a key employee. All grants were made at no cost 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, 2023, none of the options were exercised at that date.

On March 1, 2022, CureVac granted 130,000 options to the Executive Board. All grants were made at no cost 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, 2023, none of the options were exercised at that date.

On April 1, 2022, CureVac granted 700 options to a key employee. All grants were made at no cost 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, 2023, none of the options were exercised at that date.

The expenses recognized for employee services received under the LTIP Stock Options during the three months ended March 31, 2023, is in an amount of EUR 975k (2022; EUR 1,824k) 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, 2023, 47,424 RSU's were settled. The related RSU expense is recorded in the functional cost category to which the award recipient's costs are classified.

On January 01, 2022, CureVac awarded 36,000 RSUs to the Chief Executive Officer (CEO). The related RSU expense is included in general and administrative expenses. For the three months period ended March 31, 2023, all RSUs were settled.

On January 31, 2022, CureVac awarded 5,000 options to the Chief Operations Officer (COO) and 30,000 RSUs to the Chief Business Officer (CBO). The related RSU expense is included in general and administrative expenses.

On June 22, 2022, the group awarded 37,868 RSUs to supervisory board members and 193,340 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, 2023, 73,056 RSUs were settled.

Effective July 1, 2022 ( closing date'), CureVac N.V. acquired all shares of Frame Pharmaceuticals B.V., Amsterdam, Netherlands ( Frame Pharmaceuticals'), now CureVac Netherlands BV. 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.

The expenses recognized for employee services received under the LTIP RSUs during the three months ended March 31, 2023, is in an amount of EUR 542k (2022: EUR 216k) and is included in research and development expenses, general and administrative expenses and selling and distribution expenses.

The remaining expense of EUR 57k (2022: EUR 103k) results from grants under the New VSOP and the consideration of the Prior VSOP program leads to an earning of EUR 51k (2022: expense of EUR 92k) in the three-month period ended March 31, 2023.

As the CEO left as of March 31, 2023, all remaining unvested awards are subject to accelerated vesting.

Under the New VSOP plan, 36,516 options were exercised within the first three months of 2023 at a weighted average share price of USD 10.42.

6.1 Intangible assets

During the three months ended March 31, 2023, the Group acquired intangible assets of EUR 134k (three months ended March 31, 2022: EUR 448k). Acquired intangibles mainly related to licenses, software and prepayments made to acquire those.