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(Reuters) -British drugmaker GSK on Wednesday bought partner CureVac out of their alliance on influenza and COVID-19 vaccine development, boosting its messenger RNA credentials and extending the German biotech company's financial lifeline.
GSK, one of the world's largest vaccine manufacturers, will take control of CureVac's leading experimental vaccines to fight infections, including seasonal flu and bird flu.
It will pay CureVac 400 million euros ($430 million) upfront and up to 1.05 billion euros contingent on achievements.
CureVac shares surged on the news, trading 24% higher to reach a three-week high at 0739 GMT.
CureVac said it would cut about 30% of its jobs as it focuses on mRNA-based cancer therapies and other earlier-stage projects. It added GSK's cash payment extends funding, which would have run out at the end of next year, into 2028.
Under the partnership that began in 2020 during the COVID-19 pandemic, the companies have worked together to develop mRNA vaccines for infectious diseases.
Wednesday's agreement reflects GSK CEO Emma Walmsley's focus on vaccines and infectious diseases as a strategy to counter patent expiries and declining revenue from current bestselling medicines by the end of this decade.
CureVac said in April it would cut 150 of more than 1,000 jobs at the company to try to move beyond its failure to develop an mRNA-based COVID vaccine during the pandemic. The 30% job reduction announced on Wednesday includes the previously announced cuts.
GSK will advance the development of a vaccine for flu and another for COVID-19 that are in phase II trials, as well as one for avian flu that is in phase I, or early stage, trials.
The licensing agreement does not affect the size of GSK's 7% stake in CureVac, a GSK spokesperson said.
($1 = 0.9314 euros)
(Reporting by Maggie Fick in London, Patricia Weiss and Ludwig Burger in Frankfurt and by Yadarisa Shabong in Bengaluru; editing by Janane Venkatraman, Jason Neely and Barbara Lewis)
