CureVac has signed up Bayer as a partner for its experimental Covid-19 vaccine, keeping a project that is starting late-stage clinical trials in German hands.
The move underscores Germany's push for a home-grown vaccine after local rival BioNTech partnered with US drugmaker Pfizer on its Covid-19 inoculation, which is already being rolled out.
"Bayer will contribute its expertise and established infrastructure in areas such as clinical operations, regulatory affairs, pharmacovigilance, medical information, supply chain performance as well as support in selected countries," the companies said.
A spokeswoman for Bayer said the drugmaker would for now play a supporting role in production and would decide during the first quarter whether to manufacture the vaccine for CureVac.
CureVac's shares had surged 14% by 1251 GMT, as traders said the deal gave added assurance on the viability of the biotech firm's technology.
Financial terms were not disclosed.
CureVac last month started a late-stage clinical trial of its Covid-19 vaccine candidate, banking on the same technology that has allowed rivals BioNTech and Moderna to lead the development race.
Nasdaq-listed CureVac, which is backed by investors Dietmar Hopp, the Gates Foundation and GlaxoSmithKline as well as the German government, has said it aims to produce up to 300 million doses of the vaccine in 2021 and up to 600 million in 2022.
Ahead of regulatory approval, the European Union has secured up to 405 million doses of the immunisation, among a slew of supply deals it has agreed with vaccine developers.
Under the deal with Bayer, CureVac will be in charge of obtaining regulatory approval for its vaccine in the EU, while Bayer has options to take that role in other, unspecified markets outside of Europe.
Bayer's pharma unit, which is trying to build a new cell and gene therapy business, has expertise in cancer, haemophilia, multiple sclerosis, cardiovascular diseases and women's health, but not in vaccines.
The group's stock has been battered by billions of euros in writedowns at its agriculture division, litigation woes and a bleaker profit outlook, in large part related to its $63 billion takeover of seed maker Monsanto.
In March last year CureVac was at the centre of a row over alleged attempts by US President Donald Trump to gain access to the vaccine. The company denied at the time having received any US offers for it or its assets.
CureVac has said it would launch in the United States only after the pandemic has been controlled, as the government there had already secured sufficient vaccine quantities from rivals.