Lyme and chikungunya passed key milestones in 2019.
Significant value inflection expected in 2020 including Lyme Phase
2 data and partnering in addition to chikungunya entering Phase 3
clinical development
Strong financial results in
20191
- Product sales revenue of €129.5 million (€125.0 million at CER)
in 2019, representing 25% growth (22% at CER2)
- IXIARO® sales revenue growth of 35% (31% at CER) in 2019 mainly
due to high US Military orders and continuing growth in US Private
market
- DUKORAL® sales revenue growth of 4% (3% at CER) in 2019
- Total revenues were €136.9 million excluding the negative
revenue recognition impact of the termination of the
GlaxoSmithKline (GSK) Strategic Alliance Agreement (SAA)3.
- Including the GSK SAA termination effect, total revenues were
€126.2 million
- Gross Margin on Product Sales Revenues of 65.3% in 2019
- EBITDA4 excluding the effect of GSK SAA termination would have
been €18.5 million in 2019
o Including the GSK SAA
termination effect, EBITDA was €7.8 million
- R&D investment of €37.9 million in 2019
- Strong cash position of €64.4 million at the end of December
2019
- Supplemented by recent $85 million debt financing arrangement
with leading US funds
Private traveler market sales expected
to grow by up to 10% in 2020
- Total revenue estimated to be between €135 million and €145
million in 2020
- Valneva expects product sales revenues of between €125 million
and €135 million in 2020
- Product sales from travelers vaccine business expected to
continue to grow
- IXIARO® product sales growth in the Private travelers markets
expected to be 15% (at CER) or more, primarily from US
- US Military business peaked in 2019 and grew by over 50%
compared to 2018
- 2020 Military business may be lower than 2019 but still
significantly above 2018 uptake
- New IXIARO® supply contract with U.S. Department of Defense
(DoD) expected in the first half of 2020
- Other revenues (service revenue, license fees) are expected to
be up to €10 million in 2020
- Gross margin is expected to be similar to 2019 levels at around
65% and net operating margin, prior to R&D investments5, is
expected to be between 30% and 35%
- Valneva expects to invest up to €85 million in R&D
projects, notably Lyme and chikungunya, in 2020
- The Company recently announced a new $85 million financing
arrangement with leading US Healthcare funds Deerfield and OrbiMed
to further advance its leading Lyme and chikungunya programs and
repay existing debt
- Valneva expects negative EBITDA of up to €35 million in 2020
due to the investment into its Lyme and chikungunya programs as
they advance into late stage development
Key R&D Progress reported in
2019
- Valneva completed patient recruitment for the Phase 2 studies
of its Lyme disease vaccine candidate in September 2019 and
initiated a partnering process for late stage co-development and
commercialization
- Valneva reported excellent final Phase 1 results for its
chikungunya vaccine candidate
- Based on these excellent Phase 1 results, and acceptance of the
Accelerated Approval Pathway, the Company has held its End of Phase
2 (EoP2) meeting with the FDA and now awaits confirmation to
proceed into Phase 3.
- Valneva was awarded up to $23.4 million by the Coalition for
Epidemic Preparedness Innovations (CEPI) to support the development
of its chikungunya vaccine for LMIC countries
- Valneva regained full control of its R&D assets through the
termination of the GSK SAA
Major R&D milestones expected in
2020
- Lyme disease vaccine candidate VLA15:
- First Phase 2 data expected mid-2020
- Partnering deal
- Chikungunya vaccine candidate VLA1553:
- Final Phase 3 plans following the EoP2 meeting with the FDA
expected during the first quarter 2020
- Phase 3 initiation mid-year (pending confirmation by the
FDA)
David Lawrence, Valneva’s Chief
Financial Officer, commented, “2019 has been a fantastic
year for Valneva marked by major achievements across our business.
Unlocking shareholder value is fundamental to our strategy, so 2020
and 2021 will be significant years for Valneva as we progress our
two leading clinical assets into late stage development. This
shapes the future of our Company. We recently strengthened our
capital base to fund our key pipeline assets and with an eye to a
potential US IPO in the first half of 2021.”
Financial Information6(2019
unaudited results, consolidated per IFRS)
€ in million |
12 months ending December 31 |
|
2019 |
2018 |
Product sales |
129.5 |
103.5 |
Total revenues |
126.2 |
113.0 |
Net profit/(loss) |
(1.7) |
3.3 |
EBITDA7 |
7.8 |
13.1 |
Cash |
64.4 |
81.7 |
Saint-Herblain (France), February 27,
2020 – Valneva SE (“Valneva” or “the Company”), a
specialty vaccine company focused on prevention against diseases
with major unmet needs, reported today its full year unaudited
consolidated financial results for the year ending December 31,
2019. A brief unaudited report, including the profit and loss
statement and the balance sheet, is available on the Company’s
website, www.valneva.com.A webcast for the financial community and
media will be held today at 3:00 pm. (CET). A replay will be
available on the Company’s website. Please refer to this link:
https://edge.media-server.com/mmc/p/dpm3upxc
Commercial Vaccines
JAPANESE ENCEPHALITIS VACCINE
(IXIARO®/JESPECT®)
In 2019, revenues from IXIARO®/JESPECT® product
sales grew to €94.1 million compared to €69.6 million in 2018.
The 35% increase (31% at CER) was largely driven by demand in North
America, both in the public and private markets.
U.S. private has been the Company’s fastest
growing traveler market (excluding the U.S. Military) in 2019,
followed by Germany and Canada. This has been driven by dedicated
and targeted efforts by our commercial teams and partners.
A Request For Proposal (RFP) for the supply of
Japanese encephalitis vaccine by the U.S DoD is anticipated during
the first quarter of 2020. As sole supplier of the only FDA
approved Japanese encephalitis vaccine, Valneva will respond to
this RFP and expects to enter into a new contract with the DoD in
the second quarter of this year.
This comes in addition to the option (within the
existing contract signed in 20198) that the DoD exercised in
January 2020. This option brought the total contract value to $70
million.
Valneva expects further growth from its traveler
vaccine business. Based on the peak 2019 sales to US Military and
the anticipated new RFP from the DoD, the Company expects 2020
IXIARO® sales to US Military to be lower than in 2019 but still
significantly above 2018.
CHOLERA / ETEC9-DIARRHEA VACCINE
(DUKORAL®)
In 2019, revenues from DUKORAL® sales increased
to €31.5 million compared to €30.4 million in 2018. The 4% increase
(3% at CER) was largely driven by growth in Germany and Canada.
Valneva expects DUKORAL® 2020 revenues to be
similar to 2019 levels noting the likely market entry of a
competitor product in some territories during 2020.
Clinical Stage Vaccine
Candidates
Valneva focuses its R&D efforts on its two
most advanced programs, against Lyme disease and chikungunya. Lyme
disease and chikungunya both represent a significant unmet medical
need for which there are no vaccines available.
LYME DISEASE VACCINE CANDIDATE –
VLA15 First Phase 2 results expected mid 2020;
partnering discussions ongoing
Valneva´s Lyme vaccine candidate VLA15 is the
only one in clinical development today and addresses the most
common tick-transmitted infection in the Northern hemisphere. The
program is currently in Phase 2 and the company completed Phase 2
patient enrolment in more than 800 people in two ongoing studies at
the end of September 2019.
Study VLA15-201 includes 573 subjects across
nine sites in Europe and the U.S., while study VLA15-202 includes
246 subjects across five sites in the U.S.
In both studies, dosage levels of 135µg and
180µg of VLA15 are administered either at Day 1, Month 1 and Month
2 (VLA15-201) or at Day 1, Month 2 and Month 6 (VLA15-202).
Valneva expects to report first Phase 2 results
mid-2020, starting with the shorter vaccination schedule (Day 1,
Month 1 and Month 2). The results of these studies, comprising
immunogenicity and safety data, will support the decision on final
dose and vaccination schedule for Phase 3 development.
The Company has initiated a partnering process
for late stage development and future commercialization.
Discussions are ongoing and the Company expects to announce a
partnering process outcome in 2020.
Lyme disease is a very severe disease. 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
Europe10.
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 U.S. Food and Drug Administration (FDA) in July 201711.
Peak revenue potential for a Lyme disease
vaccine in the US and EU is estimated at more than $1
billion12.
SINGLE-SHOT CHIKUNGUNYA VACCINE
CANDIDATE – VLA1553Progression into late stage
development expected post conclusions from End of Phase 2 meeting
with the FDA
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. Whilst Valneva will focus its efforts on the traveler
vaccine market, it plans to find a partner with the support of CEPI
to meet LMIC13 needs.
In November 2019, Valneva reported excellent
Phase 1 results14. The vaccine candidate showed an excellent
immunogenicity profile in all vaccinated dose groups after a single
vaccination, with a 100% seroconversion15 achieved at Day 14.
Titers were sustained at 100% at Month 12. VLA1553 was generally
safe and well-tolerated with a superior safety profile in low and
medium dose groups compared to the high dose group, and showed an
excellent local tolerability.
Valneva has received confirmation for the
Accelerated Approval Pathway from the FDA. The EoP2 meeting took
place on February 24, 2020. Confirmation of the detailed Phase 3
design and timing are being discussed with the agency and are
expected to be finalized in the first quarter of 2020. This may
lead to a Phase 3 initiation in mid-2020.
In July 2019, Valneva was awarded non-dilutive
financial support of up to $23.4 million by CEPI for the late-stage
clinical development of its single-dose, live-attenuated vaccine
against chikungunya16. The funding underwrites a partnership effort
to accelerate regulatory approval of VLA1553 for use in regions
where outbreaks occur and support World Health Organization (WHO)
prequalification to facilitate broader access in lower and
middle-income countries (LMIC).
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 Americas17 and the economic impact is
considered significant (e.g. Colombia outbreak 2014: $73.6
million)18. 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 201819.
The global market potential for chikungunya
vaccines is estimated at up to $500 million20. The traveler market
is estimated at around $250 million.
The sponsor of the first chikungunya vaccine
approved in the United States will be eligible to receive a
Priority Review Voucher (PRV).
Full Year 2019 Financial Review
(Unaudited, consolidated under IFRS)
RevenuesValneva’s total
revenues in 2019 were €126.2 million (€136.9 million excluding
the GSK SAA termination revenue recognition effect) compared to
€113.0 million in 2018. A net negative effect of €10.7 million was
included in Valneva’s collaboration and licensing revenues to
reflect both the paid as well as the future payment obligations
related to the termination of the SAA.
Product sales revenues in 2019 increased to
€129.5 million from €103.5 million in 2018, representing
year-over-year growth of 25% (22% on a CER basis). Revenues from
collaborations and licensing amounted to negative €3.3 million
(positive €7.4 million excluding the GSK SAA termination
effect) in 2019 compared to €9.6 million in 2018.
Operating result and EBITDA
Costs of goods and services sold (COGS) were €50.0 million in 2019.
Gross margin on product sales amounted to 65.3% compared to 61.7%
in 2018. COGS of €28.3 million related to IXIARO®/JESPECT® sales,
yielding a product gross margin of 70.0%. €14.0 million of COGS
related to DUKORAL® sales, yielding a product gross margin of
55.6%. Of the remaining COGS in 2019, €2.8 million related to the
Third Party Product distribution business and €4.9 million were
related to cost of services. In 2018, overall COGS were €44.4
million, of which €39.7 million related to cost of goods and €4.8
million related to cost of services.
Research and development expenses in 2019
significantly increased to €37.9 million from €25.3 million in
2018. This was driven by planned increased investments into
Valneva’s clinical stage vaccine candidates. Marketing and
distribution expenses in 2019 amounted to €24.1 million, compared
to €20.9 million in 2018 as a result of continued investments in
Valneva’s key markets USA and Canada. In 2019, general and
administrative expenses increased to €18.4 million from €16.9
million in 2018. Amortization and impairment charges of fixed
assets/intangibles in 2019 amounted to €3.0 million compared to
€3.2 million in 2018.
Other income, net of other expenses in 2019
increased to €6.4 million from €4.0 million in 2018. This increase
was driven by increased R&D tax credit and the income from the
CEPI funding, partly offset by expenses related to a potential
settlement of the merger litigation.
Valneva realized an operating loss of
€0.8 million (operating profit of €9.9 million excluding the
GSK SAA termination effect) in 2019 compared to an operating profit
of €6.3 million in 2018. EBITDA in 2019 was €7.8 million
(€18.5 million excluding the GSK SAA termination effect), compared
to an EBITDA of €13.1 million in 2018.
Net result In 2019, Valneva
generated a net loss amounting to €1.7 million (net profit of
€9.0 million excluding the GSK SAA termination effect)
compared to a net profit of €3.3 million in 2018.
Finance costs and currency effects in 2019
resulted in a net finance expense of €1.6 million, compared to a
net finance expense of €4.0 million in 2018. The improved net
finance result compared to prior year was the result of foreign
currency gains incurred during 2019, as well as lower interest
expenses following the re-payment of the Biopharma (Pharmakon) loan
in early January 2019. Results from investments in associates
comprise a €1.6 million profit from Valneva’s 48.9% shareholding in
BliNK Biomedical SAS.
Cash flow and liquidity Net
cash generated by operating activities in the first nine months of
2019 amounted to €5.5 million compared to €16.3 million in
2018. Cash flow from operating activities included a cash payment
of €9.0 million related to the SAA termination.
Cash outflows from investing activities in 2019
amounted to €10.7 million, compared to €2.9 million in 2018,
and resulted primarily from the purchase of equipment.
Cash outflows from financing activities amounted
to €7.7 million in 2019 and consisted of €11.7 million
repayments of borrowings, €2.5 million of fees related to the
private placement of new shares in October 2018, €2.7 million of
payments of lease liabilities, €2.6 million of interest paid and
also included proceeds from a €10.0 million disbursement from the
EIB debt facility as well as €1.4 million from a BPI loan related
to the financing of the R&D tax credit in France. Cash inflows
from financing activities amounted to €30.9 million in 2018 and
included €49.3 million proceeds from the private placement of new
shares.
Liquid funds on December 31, 2019 stood at €64.4
million compared to €81.7 million on December 31, 2018. The main
change was driven by repayment of the legacy Biopharma (Pharmakon)
loan in January 2019.
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 approximately 500
employees. More information is available at www.valneva.com.
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 their in the future. 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 Financial figures reported in this press release are
unaudited. The audit procedures by the Statutory Auditors are
underway. The Company plans to publish its audited annual financial
report on March 31, 2020.
2 CER% represents growth at constant exchange rates
3 Valneva PR: Valneva Announces Mutual Agreement with GSK to End
Strategic Alliance Agreement; Regains Control of R&D
4 2019 EBITDA was calculated by excluding €8.6 million of
depreciation, amortization and impairment from the €0.8 million
operating loss as recorded in the consolidated financial statements
under IFRS
5 Net operating margin is based on the P&L for the
Commercial Products segment including an allocation (56%) of
G&A costs from Corporate Overheads and Amortisation of
Intangibles related to IXIARO®
6 Financial statements are not audited. The audit procedures by
the Statutory Auditors are underway. The Company plans to publish
its audited annual financial report on March 31, 2020.
7 2019 EBITDA was calculated by excluding €8.6 million of
depreciation, amortization and impairment from the €0.8 million
operating loss as recorded in the consolidated financial statements
under IFRS; 2018 EBITDA was calculated by excluding €6.8 million of
depreciation and amortization from the €6.3 million operating
profit as recorded in the consolidated income statement under
IFRS
[8] Valneva press release: Valneva Announces
New $59 Million IXIARO® Supply Contract with US Government
9 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.
10 As estimated from available national data. Case reporting is
highly inconsistent in Europe and many LB infections still go
undiagnosed.
11 Valneva press release: Valneva Receives FDA Fast Track
Designation for its Lyme Disease Vaccine Candidate VLA15
12 Lyme Disease. L.E.K. interviews, research and analysis
13 LMIC: Low and middle-income countries
14 Valneva press release: Valneva Reports Excellent Final Phase
1 Results for its Chikungunya Vaccine Candidate
15 Seroconversion is defined as the proportion of subjects
achieving a CHIKV-specific neutralizing antibody titer of NT50
≥20.
16 Valneva press release: CEPI awards up to $23.4 million to
Valneva for late-stage development of a single-dose Chikungunya
vaccine
17 PAHO/WHO data: Number of reported cases of Chikungunya Fever
in the Americas – EW 51 (December 22, 2017)
18 Cardona-Ospina et al., Trans R Soc Trip Med Hyg 2015
19 Valneva press release: Valneva Awarded FDA Fast Track
Designation for Chikungunya Vaccine Candidate
20 Chikungunya. L.E.K. interviews, research and analysis for
traveler vaccine market
- 2020_02_27_VLA_FY_2019_Results_PR_EN_final