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Valneva Reports Full Year 2023 Results and Provides Business Updates and OutlookTotal revenues of €153.7 million, including product sales of €144.6 million
Cash position of €126.1 million at year-end 2023 enhanced by €95 million from sale of Priority Review Voucher (PRV)1
Excellent progress across R&D pipeline
Updated FY 2024 guidance Valneva raises its 2024 product sales4 guidance to between €160 million and €180 million due to an improved outlook regarding the IXIARO® supply constraints that were anticipated in February 2024. Mid-term outlook R&D Cash management Financial Information
Saint-Herblain (France), March 20, 2024 – Valneva SE (Nasdaq: VALN; Euronext Paris: VLA) a specialty vaccine company, today reported its consolidated financial results for the year ending December 31, 2023 and provided several key corporate updates. Valneva will provide a live webcast of its full-year 2023 results conference call beginning Peter Bühler, Valneva’s Chief Financial Officer, commented, “In 2023, Valneva successfully executed on key strategic objectives despite a difficult economic environment. Our chikungunya vaccine IXCHIQ® became the world’s first licensed chikungunya vaccine available to address this significant unmet medical need and we also managed to surpass our pre-pandemic product sales. Our objective for 2024 is to continue capitalizing on the travel industry recovery to generate further commercial growth and successfully launch our chikungunya vaccine IXCHIQ®. With the recent successful sale of our PRV, and extension of our loan repayment, we have entered 2024 in a solid financial position to support our near- and mid-term commercial and R&D objectives.” Valneva’s commercial portfolio is composed of three travel vaccines, IXIARO®/JESPECT®, DUKORAL® and IXCHIQ®. The Company also distributes certain third-party products in countries where it operates its own marketing and sales infrastructure. JAPANESE ENCEPHALITIS VACCINE IXIARO®/JESPECT® In 2023, IXIARO®/JESPECT® sales increased 78% to €73.5 million compared to €41.3 million in 2022, primarily benefiting from the continued travel market recovery after the COVID-19 pandemic, and price increases. At the end of September 2023, Valneva also signed a new one-year contract with the U.S. Department of Defense (DoD) worth a minimum of $32 million for the supply of IXIARO®. CHOLERA / ETEC7-DIARRHEA VACCINE DUKORAL® DUKORAL® is an oral vaccine for the prevention of diarrhea caused by Vibrio cholerae and/or heat-labile toxin producing ETEC8, the leading cause of travelers’ diarrhea. DUKORAL® is authorized for use in the European Union and Australia to protect against cholera, and in Canada, Switzerland, New Zealand and Thailand to protect against cholera and ETEC. In 2023, DUKORAL® sales increased 72% to €29.8 million compared to €17.3 million in 2022, of which Canada represented €17.5 million of global sales due to the strong overlap between Canadian travelers to regions of high ETEC prevalence and the vaccine’s approved indication. Similar to IXIARO®, DUKORAL® benefitted from the significant recovery in the private travel markets. CHIKUNGUNYA VACCINE IXCHIQ® IXCHIQ® is a single-dose, live-attenuated vaccine against the chikungunya virus (CHIKV), which in November 2023 was approved in the U.S. by the Food and Drug Administration (FDA) for the prevention of disease caused by CHIKV in individuals 18 years of age and older who are at increased risk of exposure to the mosquito-borne CHIKV. With this approval, IXCHIQ® became the world’s first and only licensed chikungunya vaccine available to address this significant unmet medical need. At the end of February 2024, the U.S. Advisory Committee on Immunization Practices (ACIP), which develops recommendations on how to use vaccines in the U.S., recommended IXCHIQ® for persons aged 18 years and above traveling to a country or territory where a chikungunya outbreak is occurring. Additionally, IXCHIQ® may be considered for persons traveling to a country or territory without an outbreak but with evidence of CHIKV transmission within the last five years, who are aged 65 years and above, and likely to have at least moderate exposure to mosquitos (at least two weeks, cumulatively) or who are traveling for a longer duration (six months or more, cumulatively). ACIP also recommended chikungunya vaccination for laboratory workers with potential for exposure to CHIKV. The ACIP recommendations were recently adopted by the Centers for Disease Control and Prevention9. Valneva’s commercial team is currently launching the vaccine in the U.S. The single-shot vaccine is also under regulatory review in Canada, Brazil and Europe, where it was granted accelerated assessment by the European Medicine Agency’s Committee for Medicinal Products for Human Use (CHMP). Decisions for these submissions are expected in 2024. IXCHIQ®’s final pivotal Phase 3 data were published in The Lancet, the world’s leading peer-reviewed medical journal, in June 202310. The article provides a detailed analysis of the Phase 3 results showing that VLA1553 demonstrated a very high seroresponse rate of 98.9% in participants 28 days after receiving the single administration compared to the 70% threshold (for non-acceptance) agreed with the FDA. Valneva is working on the preparation of two Phase 4 post-marketing effectiveness studies, required as part of the FDA’s approval under the accelerated pathway. The Company expects to launch these studies in 2025. Earlier clinical data, published in the Lancet Infectious Diseases, showed a rapid onset of immune response with a single dose of VLA1553 between 7- and 14-days post-vaccination11. This was later confirmed in a further analysis of the Phase 1 data12, which showed that 100% of vaccinated individuals reached the immune threshold13 established with the FDA at day 14. Additionally, VLA1553 was able to demonstrate a robust immune response which was sustained for 12 and 24 months by 99% and 97% of participants, respectively, and was equally durable in younger and older adults1415. This dedicated antibody persistence trial (VLA1553-303) will continue to evaluate persistence for a period of at least five years. A clinical study in adolescents, VLA1553-321, is ongoing in Brazil, for which Valneva reported initial safety data in August 202316. Funded by the Coalition for Epidemic Preparedness Innovations (CEPI) and conducted in collaboration with Instituto Butantan, the VLA1553-321 adolescent trial is intended to support the label extension to this age group following initial approvals in adults. The trial is also expected to support licensure of the vaccine in Brazil, which would be the first potential approval for use in endemic populations. Additionally, the Company initiated a Phase 2 pediatric trial in children aged 1 to 11 years, VLA1553-221, in January 202417 to support a Phase 3 pivotal pediatric study and potentially extend the label to this age group following initial regulatory approvals in adults and possibly in adolescents. THIRD-PARTY DISTRIBUTION Valneva distributes certain third-party vaccines in countries where it operates its own marketing and sales infrastructure. The Company notably has distribution agreements with Bavarian Nordic18 and VBI Vaccines19. In the year ended December 31, 2023, third-party product sales grew 34% to €35.7 million compared to €26.5 million in the year ended December 31, 2022. Clinical Stage Vaccine Candidates LYME DISEASE VACCINE CANDIDATE – VLA15 Valneva and Pfizer are developing VLA15, a Phase 3 vaccine candidate targeting Borrelia, the bacterium that causes Lyme disease. VLA15 is a multivalent recombinant protein vaccine that targets six serotypes of Borrelia representing the most common strains found in the United States and Europe. VLA15 is the only Lyme disease program in late-stage clinical development today and has received Fast Track designation from the FDA. Valneva and Pfizer reported results for three Phase 2 clinical trials of VLA15 in both adult and pediatric populations, in which high levels of antibodies against all six strains were observed20,21,22. These include the announcement in September 2023 of positive Phase 2 pediatric andadolescent immunogenicity and safety data following a booster vaccination with VLA15. These results from the VLA15-221 Phase 2 study showed a strong anamnestic antibody response for all serotypes in pediatric (5 to 11 years of age) and adolescent participants (12 to 17 years of age), as well as in adults (18 to 65 years of age), one month after administration of a booster dose (month 19). The safety and tolerability profile of VLA15 after a booster dose was consistent with previous studies23. In August 2022, the companies initiated a Phase 3 clinical study, "Vaccine Against Lyme for Outdoor Recreationists (VALOR)", to investigate the efficacy, safety and immunogenicity of VLA15 in participants five years of age and older in highly endemic regions in the United States and Europe24. Recruitment completion for the study was announced in December 2023. 9,437 participants five years of age and older were enrolled in the trial and will receive, as part of the primary series, three doses of VLA15 or a saline placebo (1:1 ratio) within the first year, and one booster dose approximately one year after vaccination with the first three doses25. The VALOR study is currently ongoing and is designed to follow vaccinated participants over two consecutive tick seasons. In the second quarter of 2024, participants enrolled in the first cohort will receive their booster vaccination and participants of the second cohort will receive the last of their initial three doses ahead of the 2024 tick season. Topline data from the VALOR trial are expected by the end of 2025, with the aim for Pfizer to submit a Biologic License Application to the FDA and Marketing Authorization Application to the EMA in 2026, subject to positive data. ZIKA VACCINE CANDIDATE – VLA1601 VLA1601 is a highly purified inactivated, adjuvanted vaccine candidate against the mosquito-borne viral disease caused by the Zika virus (ZIKV). Disease outbreaks have been reported in tropical Africa, Southeast Asia, the Pacific Islands, and, since 2015, in the Americas. Zika virus transmission persists in several countries in the Americas and in other endemic regions. To date, a total of 89 countries and territories have reported evidence of mosquito transmitted Zika virus infection26; however, surveillance remains limited globally. There are no preventive vaccines or effective treatments available and, as such, Zika remains a public health threat and is included in the Food and Drug Administration’s Tropical Disease Priority Review Voucher Program27. VLA1601 is being developed on the original manufacturing platform of Valneva’s licensed Japanese Encephalitis vaccine IXIARO®, which was further optimized to develop the Company’s inactivated, adjuvanted COVID-19 vaccine VLA2001, the first one to receive a standard marketing authorization in Europe28. Valneva reported Phase 1 results from its first-generation Zika vaccine candidate in 2019 showing excellent immunogenicity and safety results in all tested doses and schedules29. The Company now expects to start the clinical evaluation of its second-generation vaccine in the coming weeks. A vaccine against the Zika virus (ZIKV) would nicely complement Valneva’s portfolio of travel vaccines against mosquito-borne diseases, which already includes IXCHIQ® and IXIARO®. Pre-Clinical Vaccine Candidates Valneva continues to progress select pre-clinical assets and focus on strengthening its future clinical pipeline. The Company is currently focused on VLA2112, a vaccine candidate targeting the Epstein-Barr virus (EBV), which is one of the most common human viruses. EBV can cause infectious mononucleosis30 and is strongly associated with the development of several types of cancer31 and multiple sclerosis32. Valneva has also been working on a vaccine candidate targeting the human metapneumovirus (hMPV), which is a major worldwide respiratory pathogen that causes acute upper and lower respiratory tract infection33 and is exploring potential partnering opportunities. Additionally, Valneva initiated pre-clinical work on vaccine candidates against different enteric diseases. Full Year 2023 Financial Review Revenues Valneva’s total revenues were €153.7 million in 2023 compared to €361.3 million in 2022. Total revenues in 2022 included €280.0 million of revenue recognition mainly related to the COVID-19 supply agreements in the prior year. Valneva’s total product sales reached €144.6 million in 2023 compared to €114.8 million in 2022. Currency fluctuations of €2.8 million adversely impacted product sales. COVID-19 vaccine sales in 2023 amounted to €5.7 million compared to €29.6 million in 2022. Excluding COVID-19, product sales reached €138.9 million in 2023 compared to €85.2 million in 2022, an increase of 63%. IXIARO®/JESPECT® sales were €73.5 million in 2023 compared to €41.3 million in 2022. The 78% increase in sales is primarily the result of the continued travel market recovery, as well as price increases. The increase in IXIARO®/JESPECT® product sales included an adverse €1.5 million foreign currency impact. DUKORAL® sales were €29.8 million in 2023 compared to €17.3 million in 2022. This 72% increase is also a result of the significant recovery in the private travel markets and price increases. Foreign currency fluctuations reduced DUKORAL® sales by €0.9 million. Third Party product sales were €35.7 million in 2023 compared to €26.5 million in 2022, a 34% increase which was mainly driven by sales of Rabipur®/RabAvert® and Encepur® under the distribution agreement with Bavarian Nordic. Other revenues, including revenues from collaborations, licensing and services amounted to €9.1 million in 2023 compared to €246.5 million in 2022. Other revenues in 2022 included COVID related one-time effects of €280.0 million consisting of released refund liability as a result of the settlement with the UK government, as well as released non-refundable advance payments from European Member States, partially offset by €45.9 million of negative revenue resulting from an increase in the refund liability linked to the amended VLA15 collaboration and license agreement with Pfizer. Operating Result and adjusted EBITDA Costs of goods and services sold (COGS) were €100.9 million in 2023. The gross margin on commercial product sales amounted to 46.0% compared to 45.5% in 2022. COGS of €35.1 million related to IXIARO® product sales, yielding a product gross margin of 52.3%. COGS of €17.1 million related to DUKORAL® product sales, yielding a product gross margin of 42.4%. Of the remaining COGS in 2023, €22.8 million related to the third-party products distribution business, €5.3 million to VLA2001 and €10.2 million to cost of services. In 2022, overall COGS were €324.4 million, of which €314.7 million related to cost of goods and €9.7 million related to cost of services. In 2022, COGS of the COVID-19 vaccine program amounted to €267.1 million and included effects from the significant reduction of sales volumes to the European Union Member States which resulted in impairment of fixed assets and inventories. Research and development expenses amounted to €59.9 million in 2023, compared to €104.9 million in 2022. This decrease was exclusively driven by the lower spend on Valneva’s COVID-19 vaccine, VLA2001. At the same time, costs related to the Zika vaccine candidate increased as the Company has been working towards re-initiation of clinical development. Marketing and distribution expenses in 2023 amounted to €48.8 million compared to €23.5 million in 2022. The increase is mainly related to €20.7 million of expenses associated with launch preparations for IXCHIQ® (2022: €7.3 million). In 2023, general and administrative expenses increased to €47.8 million from €34.1 million in 2022. In the previous year 2022, COGS, research and development, marketing and distribution as well as general and administrative expenses all benefited from a non-cash accrual adjustment related to the positive effect of the Company’s share price development on employee share-based compensation programs. This income compares to an expense in 2023. Other income, net of other expenses, increased to €21.5 million in 2023 from €12.2 million in 2022. The increase was mainly driven by grant income received from Scottish Enterprise in the amount of €11.1 million and by a gain from a settlement with a supplier in connection with COVID-19 activities of €4.7 million. Valneva recorded an operating loss of €82.1 million in 2023 compared to an operating loss of €113.4 million in 2022. The higher loss in 2022 was primarily driven by non-recurring expenses of goods and services related to valuation of inventory, and onerous agreement provisions for material in connection with our COVID-19 vaccine and its program suspension. Adjusted EBITDA (as defined below) loss in 2023 was €65.2 million, nearly unchanged to the Adjusted EBITDA loss of €69.2 million in 2022. Net Result In 2023, Valneva generated a net loss of €101.4 million compared to a net loss of €143.3 million in 2022. Finance expense and currency effects in 2023 resulted in a net finance expense of €16.5 million, compared to a net finance expense of €31.4 million in 2022. This increase in finance income/expenses, net was mainly due to foreign exchange gains of €5.6 million in 2023 compared to a loss of €12.6 million in 2022, primarily related to the development of the USD and GBP exchange rates. Net cash used in operating activities amounted to €202.7 million in 2023 compared to €245.3 million of cash used in operating activities in 2022. Cash outflows in 2023 were derived from the loss for the period amounting to €101.4 million and from working capital in the amount of €145.6 million, which largely were related to payments to Pfizer in conjunction with Valneva’s contribution to the Phase 3 costs of the Lyme VLA15 R&D program, reducing the refund liability. Cash outflows from investing activities amounted to €20.6 million in 2023 compared to €29.1 million in 2022, both mainly a result of construction activities across production sites in Scotland and Sweden, as well as equipment purchases. Net cash generated from financing activities decreased to €63.1 million in 2023 from €215.1 million in 2022. Cash inflows in 2023 were primarily due to €81.1 million of net proceeds from the additional tranches from the loan agreement with Deerfield and OrbiMed drawn in the second half of the year. Cash inflows in 2022 were mainly a result of proceeds from the equity subscription agreement with Pfizer, proceeds from a global offering as well as a draw-down of the loan provided by Deerfield and OrbiMed. Cash and cash equivalents were €126.1 million as at December 31, 2023, compared to €289.4 million as at December 31, 2022. Cash and Cash equivalents in 2023 included the drawing of a total of $100 million from the Deerfield and OrbiMed loan agreement as well as significant payments made to Pfizer related to the companies’ Phase 3 Lyme disease study “VALOR”. Cash at the end of 2023 does not include $103 million of proceeds from the PRV, which Valneva sold in February 2024. Non-IFRS Financial Measures Management uses and presents IFRS results as well as the non-IFRS measure of Adjusted EBITDA to evaluate and communicate its performance. While non-IFRS measures should not be construed as alternatives to IFRS measures, management believes non-IFRS measures are useful to further understand Valneva’s current performance, performance trends, and financial condition. Adjusted EBITDA is a common supplemental measure of performance used by investors and financial analysts. Management believes this measure provide additional analytical tools. Adjusted EBITDA is defined as earnings (loss) for the period before income tax, finance income/expense, foreign exchange gain/(loss), results from investments in associates, amortization, depreciation, and impairment (excluding impairment loss of disposal). A reconciliation of Adjusted EBITDA to net loss for the period, which is the most directly comparable IFRS measure, is set forth below:
About Valneva SE We have a strong track record, having advanced multiple vaccines from early R&D to approvals, and currently market three proprietary travel vaccines, including the world’s first and only chikungunya vaccine, as well as certain third-party vaccines. Revenues from our growing commercial business help fuel the continued advancement of our vaccine pipeline. This includes the only Lyme disease vaccine candidate in advanced clinical development, which is partnered with Pfizer, as well as vaccine candidates against the Zika virus and other global public health threats. About IXCHIQ® Please click here for full Prescribing Information for IXCHIQ®.
Forward-Looking Statements 1 Valneva Announces Sale of Priority Review Voucher for $103 Million - Valneva
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