- Limited business impact of COVID-19 crisis during
Q1
- Unprecedented partnering deal signed for Phase 2 Lyme
vaccine candidate
- 2020 full-year financial guidance updated with improved
EBITDA
- SARS-CoV-2 vaccine development program for COVID-19
initiated
Solid financial results in Q1 2020, with
limited COVID-19 impact
- Product sales revenue of €32.7 million in Q1 2020, similar to
Q1 2019 (€32.8 million)
- Total revenues of €35.2 million in Q1 2020, similar to Q1 2019
(€34.9 million)
- Gross margin on product sales revenues of 69.4% in Q1 2020
driven by geographical mix and strong operational performance in
manufacturing
- EBITDA1 of €2.4 million in Q1 2020, lower than Q1 2019 (€8.2
million) due to increased R&D investments
- Positive operating cash flow of €3.0 million in Q1 2020
- Strong cash position of €80.8 million at the end of March 2020
- Supported by an $85 million debt financing arrangement with
leading U.S. funds in February 2020 (the Company has drawn $45
million from this facility to date)
2020 full-year financial guidance
updated reflecting continuing COVID-19 impact and Lyme
collaboration, with improved EBITDA
- Total revenues now estimated to be between €95 million and €135
million in 2020
- Revised guidance includes €10 million to €30 million revenues
recognized from the Lyme disease vaccine collaboration to be
reported in “Other Revenues”2
- Non-Lyme “Other Revenues” guidance maintained at ~ €10
million
- Product sales revenue guidance revised to €75 million to €95
million noting the continuing impact of the COVID-19 pandemic
- R&D investments of up to €80 million including:
- A potential three month delay in the initiation of the
chikungunya Phase 3 trial driven by the COVID-19 pandemic
situation, as previously announced
- Lyme-related costs noting the new Lyme collaboration
- Initial investment in the Company´s SARS-CoV-2 vaccine
candidate (VLA2001)
- Valneva now expects improved negative EBITDA of €10 million to
€30 million in 2020 (compared to previous guidance of up to €50
million negative EBITDA)
- Cost containment measures are being implemented across the
Company and government support mechanisms are being used where
possible
Significant milestones reported for
R&D programs since the beginning of the year
- Signing of an unprecedented collaboration with Pfizer for Phase
2 Lyme disease vaccine candidate VLA153
- $130 million upfront and $35 million development
milestones
- Up to a further $143 million in early commercialization
milestone payments
- Tiered royalties on sales starting at 19%
- No change to timelines of current VLA15 Phase 2 trials despite
COVID-19 pandemic. First Phase 2 results expected in July 2020
- Positive End of Phase 2 meeting granted by the FDA for
chikungunya vaccine candidate VLA15534
- Chikungunya Phase 3 to be initiated as soon as the COVID-19
situation permits (currently planned for Q4 2020)
- Initiation of VLA2001 – a SARS-CoV-2 vaccine development
program for COVID-195
- Collaboration with Dynavax leveraging Valneva´s technical and
platform capabilities to develop an inactivated, adjuvanted whole
virus vaccine candidate
- Existing BSL3 laboratories recommissioned to undertake
pre-clinical activities
- Resources from other early stage programs reallocated to
support the project; grant funding also sought for clinical
development and manufacturing
- Valneva and Dynavax to align with regulatory authorities on the
optimal strategy for an expedited clinical development program,
with the goal to initiate clinical trials before the end of 2020
(subject to successful preclinical work and receipt of appropriate
funding)
- Production of clinical trial material expected in Valneva’s FDA
approved plant in Livingston, Scotland
David Lawrence, Valneva’s Chief
Financial Officer, commented, “Considering the current
pandemic situation, we are very pleased with our first-quarter
financial results. We have also delivered an unprecedented
collaborative deal with Pfizer to advance our Lyme disease program
in response to a major unmet medical need. Given the global
COVID-19 crisis and its significant impact on our travelers vaccine
business, we are pleased with our ability to balance employee
welfare with business continuity, and would like to thank our
employees for their ongoing commitment and flexibility.”
Financial Information (Q1 2020
unaudited results, consolidated under IFRS)
€ in million |
3 months ending March 31 |
|
2020 |
2019 |
Product sales |
32.7 |
32.8 |
Total revenues |
35.2 |
34.9 |
Net profit/loss |
(1.2) |
4.9 |
EBITDA |
2.4 |
8.2 |
Cash |
80.8 |
68.1 |
Saint Herblain (France), May 7,
2020 – Valneva SE (“Valneva” or “the Company”), a
specialty vaccine company focused on prevention against diseases
with major unmet needs, reported today its first quarter financial
results ending March 31, 2020. The condensed consolidated interim
financial results are available on the Company’s website
www.valneva.com.
Valneva will provide a live webcast of its
first-quarter 2020 financial results conference call beginning at
3:00 p.m. CEST today. This webcast will also be available on the
Company’s website. Please refer to this link:
https://edge.media-server.com/mmc/p/5i6xunqx
Commercial Vaccines
JAPANESE ENCEPHALITIS VACCINE
(IXIARO®/JESPECT®)
In the first quarter of 2020, revenues from
IXIARO®/JESPECT® product sales reached €22.9 million,
representing year-on-year growth of 2% (0% at CER). The increase
was largely driven by demand in North America, both in the public
and private markets. During the first quarter of 2020, the U.S.
government Department of Defense (DoD) issued a Request For
Proposal (RFP) for the supply of Japanese encephalitis vaccines to
the U.S. military. As sole supplier of the only U.S. Food and Drug
Administration (FDA) approved Japanese encephalitis vaccine,
Valneva has responded to this RFP and expects to enter into a new
contract with the DoD in the second quarter of this year. This
expected contract will drive IXIARO® sales in the second half of
2020 and beyond. In addition, the FDA granted a 36 month shelf-life
extension for – IXIARO® in March6, an important achievement
supporting supply management flexibility.
CHOLERA / ETEC7-DIARRHEA VACCINE
(DUKORAL®)
In the first quarter of 2020, revenues from
DUKORAL® sales increased to €9.7 million compared to €9.6 million
in the first quarter of 2019.
TRAVEL VACCINES MARKETThe
Company expects the travel market for IXIARO®/JESPECT® and DUKORAL®
to be significantly impacted, notably in the second and third
quarters of 2020, with a gradual market recovery anticipated in the
fourth quarter. Although it may take some years for travel-related
businesses to return to previous levels, the Company believes that
the current crisis may have a positive effect on the vaccine market
in the mid-to-long term due to an increase in vaccination
awareness.
Clinical Stage Vaccine
Candidates
LYME DISEASE VACCINE CANDIDATE –
VLA15 Strategic alliance with Pfizer;
First Phase 2 results expected mid 2020
Valneva´s Lyme disease vaccine candidate, VLA15,
is the only clinical development stage program in the world and
addresses the most common tick-transmitted infection in the
Northern hemisphere. The Company recently announced that it has
signed a major partnering deal with Pfizer for the late stage
development and future commercialization of VLA158.
Valneva and Pfizer will work closely together
throughout the development of VLA15. Valneva is eligible to receive
a total of $308 million in cash payments consisting of a $130
million upfront payment, $35 million in development milestones and
$143 million in early commercialization milestones. Under the
terms of the agreement, Valneva will fund 30% of all development
costs through completion of the development program, and in return
Pfizer will pay Valneva tiered royalties starting at 19%. Pfizer
will lead late-stage development and have sole control over
commercialization.
Valneva has completed patient enrolment and most
follow-up visits for the two ongoing Phase 2 studies in more than
800 people. Valneva expects to report first Phase 2 results from
study VLA15-201 (0-1-2 month vaccination schedule) in July 2020
followed, in the third quarter, by first results from study
VLA15-202 (0-2-6 month vaccination schedule). The results of these
studies, comprising immunogenicity and safety data, will support
the dose and vaccination schedule to be advanced into Phase 3.
According to the U.S. Centers for Disease
Control and Prevention (CDC), approximately 300,000 Americans4 are
infected with Lyme disease annually with at least an additional
further 200,000 cases in Europe9.
VLA15 is a multivalent, protein subunit vaccine
that targets the outer surface protein A (OspA) of Borrelia and is
intended to protect against the majority of human pathogenic
Borrelia species. VLA15 is designed to confer protection by raising
antibodies that prevent Borrelia from migrating from ticks to
humans after a bite. The program was granted Fast Track designation
by the FDA in July 201710.
Peak revenue potential for a Lyme disease
vaccine in the U.S. and EU is estimated at more than $1
billion11.
CHIKUNGUNYA VACCINE CANDIDATE –
VLA1553Phase 3 initiation preparation
proceeding
Valneva´s single shot chikungunya vaccine
candidate, VLA1553, is unique and addresses a highly prevalent
mosquito transmitted infection in the tropical and subtropical
regions. The Company plans to take this vaccine to market with the
prospect of leveraging major manufacturing and commercial synergies
primarily focusing on the traveler vaccine market. Valneva and the
Butantan Institute in Brazil recently announced the signing of a
binding term sheet for a collaboration for the development,
manufacturing and marketing of Valneva’s single-shot chikungunya
vaccine VLA1553 in Low and Middle Income Countries (LMIC)12. The
collaboration will be effective upon the signing of definitive
agreements and will fall within the framework of the $23.4 million
funding Valneva received from the Coalition for Epidemic
Preparedness Innovations (CEPI) in July 201913.
During the first quarter of 2020 Valneva held an
End-of-Phase 2 meeting with the U.S. FDA14. Valneva is currently
advancing all activities, including its Contract Research
Organization (CRO), to allow Phase 3 initiation as soon as the
COVID-19 situation permits. As previously announced, the Company’s
assumption is that it may start Phase 3 clinical studies in the
fourth quarter of this year, which is three months later than
originally planned.
Chikungunya is considered a major public health
threat with no preventive vaccines or effective treatments
available. Chikungunya is a mosquito-borne viral disease caused by
the chikungunya virus (CHIKV), a Togaviridae virus, transmitted by
Aedes mosquitoes. As of 2017, there have been more than one million
reported cases in the Americas15 and the economic impact is
considered significant (e.g. Colombia outbreak 2014: $73.6
million)16. The medical burden is expected to grow as the
distribution of the CHIKV primary mosquito vectors continues to
spread further geographically.
VLA1553 is a monovalent, single dose,
live-attenuated vaccine candidate for protection against
chikungunya. It was granted Fast Track designation by the FDA in
December 201817.
The global market potential for chikungunya
vaccines is estimated at up to $500 million and the traveler market
at around $250 million 18.
The sponsor of the first chikungunya vaccine
approved in the U.S. will be eligible to receive a Priority Review
Voucher (PRV).
SARS-CoV-2 VACCINE CANDIDATE – VLA2001
Inactivated vaccine program recently
initiated
Valneva recently initiated a research program
aiming to develop a vaccine against SARS COV-2, the COVID-19
pathogen19. The Company is taking advantage of its well-established
IXIARO® technology platform to develop an inactivated, whole virus,
adjuvanted vaccine candidate, in collaboration with Dynavax.
Dynavax is providing its adjuvant CpG 1018, which is also
incorporated in U.S. FDA-approved HEPLISAV-B vaccine.
Valneva is conducting pre-clinical development
work in its Biosafety Level 3 laboratories and has reallocated
resources from other early stage research and development (R&D)
programs, without affecting the clinical development of its vaccine
candidates for Lyme disease and chikungunya. Valneva and Dynavax
will work with regulatory authorities to agree on the optimal
strategy to execute an expedited clinical development program, with
the goal to initiate clinical studies before the end of 2020,
subject to successful pre-clinical work and receipt of appropriate
funding.
Valneva has core manufacturing competences in
its GMP manufacturing facility in Livingston, UK for such a
virus-based vaccine candidate and expects to produce clinical trial
material at that facility.
Valneva is seeking non-dilutive funding, in
particular grant funding, to support clinical development and
manufacturing investments. If the program is successful and obtains
appropriate funding, Valneva estimates that its initial
manufacturing capacity could exceed 30 million doses per year.
First Quarter 2020 Financial
Review (Unaudited, consolidated under IFRS)
RevenuesValneva’s total
revenues in the first quarter of 2020 were €35.2 million compared
to €34.9 million in the first quarter of 2019.
Product sales revenues in the first quarter of
2020 amounted to €32.7 million compared to €32.8 million
in the same period of 2019. On a CER basis, product sales declined
by 2% compared to the first quarter of 2019. Revenues from
collaborations, licensing and services amounted to
€2.5 million in the first quarter of 2020 compared to
€2.1 million in the first quarter of 2019.
Operating result and EBITDA
Costs of goods and services sold (COGS) were €12.1 million in the
first quarter of 2020. Gross margin on product sales amounted to
69.4% compared to 66.1% in the first quarter of 2019. COGS of €6.7
million related to IXIARO®/JESPECT® sales, yielding a product gross
margin of 70.8%. €3.2 million of COGS related to DUKORAL®
sales, yielding a product gross margin of 66.8%. Of the remaining
COGS in the first quarter of 2020, €0.1 million related to the
Third Party Product distribution business and €2.1 million were
related to cost of services. In the first quarter of 2019, overall
COGS were €12.2 million, of which €11.1 million related to cost of
goods and €1.1 million related to cost of services.
R&D expenses in the first quarter of 2020
amounted to €13.3 million compared to €6.3 million in the
first quarter of 2019. This was driven by planned increased
investments into Valneva’s clinical stage vaccine candidates.
Marketing and distribution expenses in the first quarter of 2020
amounted to €6.0 million, compared to €5.6 million in the first
quarter of 2019. In the first quarter of 2020, general and
administrative expenses increased to €5.2 million from €4.5 million
in the first quarter of 2019 mainly driven by increased costs to
support corporate project activities as well as costs related to a
new employee share option program. Amortization and impairment
charges of fixed assets/intangibles in the first quarter of 2020
remained unchanged compared to the same period of 2019 and amounted
to €0.7 million.
Other income, net of other expenses in the first
quarter of 2020 increased to €2.2 million from €0.8 million in
the first quarter of 2019. This increase was driven by increased
R&D tax credit and income from the CEPI funding related to
Valneva’s chikungunya R&D program.
Valneva realized an operating profit of
€0.1 million in the first quarter of 2020 compared to
€6.2 million in the first quarter of 2019. EBITDA in the first
quarter of 2020 was €2.4 million compared to an EBITDA of
€8.2 million in the first quarter of 2019.
Net result In the first quarter
of 2020, Valneva generated a net loss of €1.2 million compared to a
net profit of €4.9 million in the first quarter of 2019.
Finance costs and currency effects in the first
quarter of 2020 resulted in a net finance expense of €2.2 million,
compared to a net finance income of €0.5 million in the first
quarter of 2019. The decline was the result of increased interest
charges as well as foreign currency losses both largely related to
the newly entered USD denominated debt facility.
Cash flow and liquidity Net
cash generated by operating activities in the first quarter of 2020
amounted to €3.0 million compared to €5.3 million in the first
quarter of 2019.
Cash outflows from investing activities in the
first quarter of 2020 amounted to €0.6 million, compared to
€0.8 million in the first quarter of 2019.
Cash inflows from financing activities amounted
to €14.5 million in the first quarter of 2020 and consisted mainly
of €35.5 million net proceeds from the financing arrangement
with U.S. healthcare funds, Deerfield and Orbimed, and €20.0
million repayments of borrowings to the European Investment Bank
(EIB). Cash outflows from financing activities amounted to €13.5
million in the first quarter of 2019, which included the repayment
of the Biopharma (Pharmakon) loan.
Liquid funds on March 31, 2020 stood at €80.8
million compared to €64.4 million on December 31, 2019. The main
change was driven by proceeds from the new debt line net off
re-paying the loan to the EIB in March 2020.
About Valneva SEValneva is a
specialty vaccine company focused on prevention against diseases
with major unmet needs. Valneva’s portfolio includes two commercial
vaccines for travelers: IXIARO®/JESPECT® indicated for the
prevention of Japanese encephalitis and DUKORAL® indicated for the
prevention of cholera and, in some countries, prevention of
diarrhea caused by ETEC. The Company has various vaccines in
development including unique vaccines against Lyme disease and
chikungunya. Valneva has operations in Austria, Sweden, the United
Kingdom, France, Canada and the US with over 500 employees.
For more information, visit www.valneva.com and follow the
Company on LinkedIn.
Valneva Investor and Media ContactsLaetitia
Bachelot-FontaineDirector of Investor Relations & Corporate
CommunicationsM +33 (0)6 4516 7099investors@valneva.com |
Teresa
PinzolitsCorporate Communications SpecialistT +43 (0)1 20620
1116communications@valneva.com |
Forward-Looking Statements
This press release contains certain
forward-looking statements relating to the business of Valneva,
including with respect to the progress, timing and completion of
research, development and clinical trials for product candidates,
the ability to manufacture, market, commercialize and achieve
market acceptance for product candidates, the ability to protect
intellectual property and operate the business without infringing
on the intellectual property rights of others, estimates for future
performance and estimates regarding anticipated operating losses,
future revenues, capital requirements and needs for additional
financing. In addition, even if the actual results or development
of Valneva are consistent with the forward-looking statements
contained in this press release, those results or developments of
Valneva may not be indicative of future performance. In some cases,
you can identify forward-looking statements by words such as
"could," "should," "may," "expects," "anticipates," "believes,"
"intends," "estimates," "aims," "targets," or similar words. These
forward-looking statements are based largely on the current
expectations of Valneva as of the date of this press release and
are subject to a number of known and unknown risks and
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievement expressed or implied by
these forward-looking statements. In particular, the expectations
of Valneva could be affected by, among other things, uncertainties
involved in the development and manufacture of vaccines, unexpected
clinical trial results, unexpected regulatory actions or delays,
competition in general, currency fluctuations, the impact of the
global and European credit crisis, and the ability to obtain or
maintain patent or other proprietary intellectual property
protection. In light of these risks and uncertainties, there can be
no assurance that the forward-looking statements made during this
presentation will in fact be realized. Valneva is providing the
information in these materials as of this press release, and
disclaim any intention or obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise.
1 Q1 2020 EBITDA was calculated by excluding
€2.3 million of depreciation and amortization from the €0.1 million
operating profit as recorded in the consolidated income statement
under IFRS.2 The Pfizer deal revenue recognition under IFRS is
complex and is being evaluated by the Company’s accountants and
auditors.
3 Valneva and Pfizer Announce Collaboration to Co-Develop and
Commercialize Lyme Disease Vaccine, VLA154 Valneva Reports Positive
End-of-Phase 2 Chikungunya Meeting with the U.S. FDA; Sets Stage
for Phase 3 Study 5 Valneva and Dynavax Announce Collaboration
to Advance Vaccine Development for COVID-196 Valneva Announces FDA
Approval of IXIARO® Shelf Life Extension to 36 Months; New US
Military RFP Issued7 Indications differ by country -Please refer to
Product / Prescribing Information (PI) / Medication Guide approved
in your respective countries for complete information, incl.
dosing, safety and age groups in which this vaccine is licensed,
ETEC = Enterotoxigenic Escherichia coli (E. Coli) bacterium.8
Valneva and Pfizer Announce Collaboration to Co-Develop and
Commercialize Lyme Disease Vaccine, VLA15
9 As estimated from available national data.
Case reporting is highly inconsistent in Europe and many LB
infections still go undiagnosed.10 Valneva Receives FDA Fast Track
Designation for its Lyme Disease Vaccine Candidate VLA1511 Lyme
Disease. L.E.K. interviews, research and
analysis[12] Valneva to Partner with Instituto
Butantan on Single-Shot Chikungunya Vaccine for Low- and Middle-
Income Countries13 CEPI awards up to $23.4 million to Valneva for
late-stage development of a single-dose Chikungunya vaccine14
Valneva Reports Positive End-of-Phase 2 Chikungunya Meeting with
the U.S. FDA; Sets Stage for Phase 3 Study
15 PAHO/WHO data: Number of reported cases of
Chikungunya Fever in the Americas – EW 51 (December 22, 2017)16
Cardona-Ospina et al., Trans R Soc Trip Med Hyg 201517 Valneva
Awarded FDA Fast Track Designation for Chikungunya Vaccine
Candidate18 Chikungunya. L.E.K. interviews, research and analysis
for traveler vaccine market19 Valneva and Dynavax Announce
Collaboration to Advance Vaccine Development for COVID-19
- 2020_05_07_VLA_Q1_Results_PR_EN_Final
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