Valneva Q4 2024 Earnings Report

Valneva EPS Results

• Actual EPS: -$0.54
• Consensus EPS: -$0.22
• Beat/Miss: Missed by -$0.32
• One Year Ago EPS: N/A

Valneva Revenue Results

• Actual Revenue: $56.48 million
• Expected Revenue: $55.64 million
• Beat/Miss: Beat by +$836.00 thousand
• YoY Revenue Growth: N/A

Valneva Announcement Details

• Quarter: Q4 2024
• Date: 3/20/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, March 20, 2025
• Conference Call Time: 10:00AM ET

Valneva (NASDAQ:VALN), a specialty vaccine company, develops, manufactures, and commercializes prophylactic vaccines for infectious diseases with unmet needs. It offers IXIARO, an inactivated Vero cell culture-derived Japanese encephalitis vaccine indicated for active immunization against Japanese encephalitis; DUKORAL, an oral vaccine for the prevention of diarrhea caused by Vibrio cholera and/or heat-labile toxin producing enterotoxigenic Escherichia coli bacterium; IXCHIQ, a single-dose, live-attenuated vaccine for the prevention of disease caused by chikungunya virus; and VLA2001, an inactivated whole-virus COVID-19 vaccine. The company also develops VLA15, a vaccine candidate, which is in Phase III clinical trial against Borrelia, the bacterium that causes Lyme disease; VLA1553, a vaccine candidate, which is in Phase III clinical trial against the chikungunya virus; VLA1554, a vaccine candidate targeting human metapneumovirus; and VLA2112, a vaccine candidate to treat patients with epstein-barr virus. It sells its products in the United States, Canada, Germany, Austria, Nordics, the United Kingdom, France, rest of European countries, and internationally. Valneva SE has collaborations with Pfizer, Inc. to co-develop and commercialize its Lyme disease vaccine; and Instituto Butantan for the development, manufacturing, and marketing of single-shot chikungunya vaccine. The company was founded in 1998 and is based in Saint-Herblain, France.

Valneva Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good day and thank you for standing by. Welcome to Valneva's Full Year twenty twenty four Results Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be the question and answer session. Please be advised that today's conference is being recorded.

[Operator]

I would now like to hand the conference over to our first speaker today, Joshua Drumm. Please go ahead.

[Joshua Drumm, Vice President, Global Investor Relations at Valneva]

Thank you. Hello, and thank you for joining us to discuss Bellneva's full year twenty twenty four results and corporate update. It's my pleasure to welcome you today. In addition to our press release and analyst presentation, you can find our consolidated financial results for the twelve months ended 12/31/2024, which were published earlier today, available within the Financial Reports section on our Investor website. I'm joined today by Valneva's CEO, Thomas Lingelbach and CFO, Peter Buehler, who will provide an overview and update on our business as well as our key financial results for 2024.

[Joshua Drumm, Vice President, Global Investor Relations at Valneva]

There will be an analyst Q and A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners that during this presentation, we'll be making forward looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are listed on our company website. Please note that today's presentation includes information provided as of today, 03/20/2025, and Valneva undertakes no obligation to revise or update forward looking statements except as required by applicable securities laws. With that, it's my pleasure to introduce Thomas to begin today's presentation.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Thank you so much, Josh. Good day to everyone. Yes, Valneva had another successful year in 2024, thanks to no small part to the dedication and skill of our in house teams and lawyer partners. When we look at the key highlights of the year, we achieved our targeted double digit year on year sales growth with sales above EUR160 million aligned with our 2024 guidance. We managed to have a very solid cash position at year end, close to EUR170 million, with a significantly lower operating cash burn and of course all augmented by our successful placement of almost EUR60 million and the sale of our priority review voucher.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And Peter is going to provide more details, of course, on all the financial performance indicators. We had a very strong regulatory execution with three additional exec approvals and a very significant number of upcoming label extensions around XJAK. And of course, we achieved one of our strategic objectives to augment our pipeline with a leading Phase II Xigena program. When we really look at what have we achieved and what are we expecting for 2025, this is all shown on Page five of the presentation. As I said, substantial clinical and regulatory progress as well as financial strength are really the headlines for 2024.

[Thomas Lingelbach, Director, President & CEO at Valneva]

When we look at 2025 ahead, we expect multiple data readouts. We expect product approvals. We expect label extensions. So when we look at this a little bit more in detail, so we expanded access to XJEG. We have launches underway in Canada, Europe and The United Kingdom.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And we entered into new Asian partnership for key endemic markets. And especially the low medium income countries are very important for this product. We reported further key clinical findings that supported the label extensions for IxGig into adolescence. We have clearly with this product again confirmed its product differentiation, primarily when it comes to antibody persistence. We have the VLA product profile has been confirmed through additional key news flows and results that we reported in 2024, primarily the Phase II booster results that we reported.

[Thomas Lingelbach, Director, President & CEO at Valneva]

As I mentioned earlier, we have a strong financial position, which allows us to continue R and D investments. We showed solid cash, continuous double digit revenue growth and we got an additional grant funding that supports our key exchange R and D activities. Looking ahead, we see, of course, the transformative potential for the Lyme vaccine candidate VLA15, which is right now in the Phase III study. We are on track for this study for first data readout expected by the end or at the end of the year. We have this will then result into regulatory filings anticipated for 2026.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And hopefully, if everything goes well, first approvals in 2027. So we have further expanded and will further expand access to XCheck. We expect the product approval in Brazil, which will be our very first endemic market for this product. I mentioned already the Adolescence label extensions in key markets. And of course, we are still waiting for quite a number of national recommendation, vaccination recommendations outside of The United States, which hopefully will support the uptake of that vaccine in the respective markets.

[Thomas Lingelbach, Director, President & CEO at Valneva]

We have further meaningful clinical milestones that we anticipate for 2025, the results from the Phase II studies for Shigella, but also the Phase I results for our novel Zika vaccine candidate. What are the key growth drivers for 2025 and beyond? Of course, the most important one, VLA15, our Lyme vaccine candidate. And we have clearly articulated many times that if successful, meaning successful data, successful regulatory approvals, successful commercialization, this product will have the potential to drive Valeva into sustained profitability, driven by milestone payments and royalties expected to start in the success case towards the later part of 2027. We will, in the meantime, continue to grow our commercial revenues in the near term, of course, continue the growth trajectory for IXIARO and DUKORAL augmented by further growth of IxJIG that gains more and more global traction.

[Thomas Lingelbach, Director, President & CEO at Valneva]

When we look at the future pipeline value, it's of course Shigella and CICA that are the next clinical assets in the pipeline. And our goal as articulated in the past is to have a next Phase III program ready to go into Phase III post Lyme success. When we look a little bit at the Lyme disease candidate, again, giving the background to Lyme disease represents a major medical needs and hence market opportunity. There's currently no vaccine available to prevent Lyme disease in humans and the annual disease burden is potentially at a rise. CDC reported almost five hundred thousand cases in The United States.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And in Europe, given that there is not a very comprehensive reporting system, there are definitely confirmed cases of about one hundred and thirty thousand. When we look a little bit into the clinical manifestation, and I think this explains also the severity of Lyme disease, ten percent to thirty percent of people develop really severe clinical manifestations including Lyme carditis, neuroborliosis or Lyme arthritis. Five percent to ten percent of those remain with persistent symptoms and those continue to have persistent really over years. So therefore, this is really a major issue and therefore a preventative solution would have a huge health economical benefit. When we look at people living in areas of risk and Lyme risk, we have around eighty million people in The United States living in defined Lyme endemic regions and about two hundred million in Europe.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Therefore, our current guidance agreed with Pfizer is that we expect the market to exceed one billion at peak. So we are currently in the middle of well, the latter part of the Phase III study called BALORE. You know that this Phase III study has been spanning over three tick seasons. We are now in tick season number three or just about to enter the tick season 2025. We reported last year in our joint press release the completion of the primary vaccination series.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And we have still for the second cohort the booster vaccination to be done. By way of reminder, we have about 9,000 participants in the study greater than five years of age. The study is a placebo controlled randomized study, one to one randomized vaccine against placebo, two to one randomized North America versus Europe. The primary endpoint of the study is the rate of confirmed Lyme disease cases after the respective primary Series plus booster, so after the so called three plus one vaccination. And secondary endpoints include, amongst others, the Lyme disease cases after the primary series.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And there are a whole bunch of other secondary endpoints that we have been discussing in the past. So all in all, we need to see, of course, the right level of cases and the right level of efficacy. And all of that will be shown once we have the final data readout for the prevention of the disease here, which we anticipate towards at the end of twenty twenty five. When we look at chikungunya, and again, this is a reminder for all of you, we believe that our product is a highly differentiated vaccine. It is the first vaccine that got licensed against chikungunya.

[Thomas Lingelbach, Director, President & CEO at Valneva]

It provides a strong and persistent immune response with only one dose. We have shown close to 100 response, and we have seen a sustained zero response at that level up to now. After three years, we have an antibody persistence study that is going to monitor the persistence to up to ten years. So we expect that we're going to see a very high level of persistence for a long time. And it's also important that we have seen a similar level of zero response in all age groups tested thus far.

[Thomas Lingelbach, Director, President & CEO at Valneva]

So meaning adolescents, 18 to 64 years of age and 65. And as I said, it is a true one shot vaccine. We have a number of key R and D activities associated with XCheck. They are all focused on expanding access, label extension or confirmatory studies to support the product actually is effectiveness in real life. I mentioned at the very beginning that this program is supported by a new more than $40,000,000 grant from CIPI, extending our existing and very successful partnership with CIPI.

[Thomas Lingelbach, Director, President & CEO at Valneva]

We have the post marketing effectiveness study, the Phase four study to confirm the effectiveness following the licensure process around the so called accelerated approval. It's an observational effectiveness study that we will conduct in Brazil. We will have pragmatic randomized controlled effectiveness safety study in adults, in endemic countries, and a prospective safety cohort study and practices of aliens in Brazil. So this forms the package around our Phase IV activities. When we look at label extension to expand access to the vaccine for all age groups, of course, we have the Phase III randomized controlled study in adolescents, aged 12 to 17 years of age, and we reported positive data up to month twelve already.

[Thomas Lingelbach, Director, President & CEO at Valneva]

So this is an ongoing regulatory process right now. And then we expect to enter into a Phase III study for children below 11 years of age. And we anticipate to start the study in the last quarter this year pending, of course, all positive results and those were already reported to very large extent. When we look at product profile, I mentioned already the ongoing PERSISTENCE study and the last data point that we reported after thirty six months. When we look at ShigellaHAD, the program that we brought in, it is the world's most clinically advanced tetravalent Shigella vaccine candidate called S4V2.

[Thomas Lingelbach, Director, President & CEO at Valneva]

It got exclusively licensed from our partner, Limatech. It includes the four most common pathogenic Shigella bacteria serotypes. And Vematech in the past reported positive Phase onetwo clinical data. This program got awarded FDA Fast Track designation. We have explained already during our R and D Day that we expect the market opportunity for Shigella to exceed 500,000,000.0 annually.

[Thomas Lingelbach, Director, President & CEO at Valneva]

The segments for this product, of course, the low medium income countries and here especially children in low medium income countries because there it is the second leading cause of fatal diarrhea disease, estimated 165,000,000 cases and six hundred thousand deaths annually. So a major unmet medical need. Therefore, it got also prioritized by the World Health Organization. And of course, we have the segments like chikungunya or like Japanese enterocolitis in travelers and military. When we look at the current development program, we are basically here at the Phase II CHIM study and that is currently ongoing.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And in parallel, we're going to run a Phase II pediatric study. The start of this Phase II pediatric immunogenicity study is imminent. Both studies are being conducted by Limatech. And we assume all further R and D, CMC regulatory activities from Limatech in the course of the coming months. So we are in a transition process to take over the lead on all of that.

[Thomas Lingelbach, Director, President & CEO at Valneva]

When we look at the Zika virus candidate called BLA-sixteen oh one, We expect the Phase one results by the end of this year. It is a novel adjuvanted inactivated whole virus vaccine candidate. We are leveraging the platform that we developed for our COVID vaccine called BLA2001. So it's we are testing double adjuvantation here and a large scale production platform that, of course, would be needed for a vaccine like a vaccine against the Zika virus. I mean, we all remember well that Zika virus infections can be quite devastating.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Microcephaly, severe brain defects in newborns, Guillain Barre syndrome, Menardals, all of that is well in our memories, I think. And we see more and more Zika outbreaks coming back. And again, there is currently no vaccine or specific treatment available. It is a PRV eligible disease. And there is a potential significant funding from public institutions.

[Thomas Lingelbach, Director, President & CEO at Valneva]

We have articulated previously that we are going to execute this Phase one study. We will take a look at the overall immuno neurological profile, including antibody persistence, and then we'll further study the further pathway to potential licensure. But this will also in part depend on our views at the time around medical lead, market potential and the opportunity for non dilutive external funding. With that, I would like to hand over to Peter.

[Peter Bühler, CFO at Valneva]

Thank you, Thomas, and good morning or good afternoon to all of you. Moving on to the financial review, starting with details on our top line on Slide 20. Total product sales reached EUR163.3 million, in line with our guidance and growing 13% over 2023. Excluding COVID-nineteen vaccine sales in 2023, product sales grew by 18% year over year. Ixiara sales reached EUR 94,100,000.0 compared to EUR 73,500,000.0 in 2023, representing a growth of 28.

[Peter Bühler, CFO at Valneva]

Sales to travelers grew 19% year over year and sales to U. S. Military also recorded a strong growth as the Department of Defense opted to purchase additional doses under the September 2023 contract. As a reminder, in January 2025, we announced a new one year contract with the U. S.

[Peter Bühler, CFO at Valneva]

Department of Defense. DUKORAL sales reached EUR 32,300,000.0 compared to EUR 29,800,000.0 in the previous year, a growth of 8%. The main driver for this growth came from Canada as well as from the indirect markets where improved availability of products through stock replenishments. XJIG was launched in 2024 in The United States and at the end of the year in Canada and France as we recognized initial sales for the financial year 2024 of EUR 3,700,000.0. Finally, third party sales decreased year over year by EUR 2,500,000.0 to EUR 33,200,000.0 as a result of third party supply constraints in the first half year.

[Peter Bühler, CFO at Valneva]

As discussed in the past, we expect these third party sales to continue to decrease in the future as we focus on our proprietary products. The decrease of third party products will support our goal to improve our overall gross margin. Moving on to Slide 21, looking at the P and L. Other revenues decreased from EUR 9,100,000.0 to EUR 6,300,000.0. The decrease is primarily related to lower revenues recognized from our Chikungunya collaboration with CETI and Bhutanthan.

[Peter Bühler, CFO at Valneva]

In 2023, other revenues also included some residual revenues related to our COVID-nineteen vaccine program. Looking at expenses, we reduced our cost of goods by EUR 2,400,000.0 with a decrease in both cost of goods and cost of services. The overall gross margin on commercial products, excluding Xtric, reached 50.6% compared to 46% in 2023. This improvement is primarily related to better manufacturing performance, including improved yields in our Scottish manufacturing site. As mentioned in previous earnings calls, our gross margin is adversely impacted by idle cost in our new manufacturing sites in Scotland and Sweden.

[Peter Bühler, CFO at Valneva]

IXIARO reached a gross margin of 61% compared to 52.3% in 2023. DUKORAL's gross margin has directly been lower than IXIARO and reached 38.7% compared to 42.4% in the prior year. Third party sales reached a gross margin of 32.8% and X3 cost of goods were EUR 7,200,000.0, exceeding sales driven by manufacturing overhead. Research and development expense increased from EUR 59,900,000.0 in 2023 to EUR 74,100,000.0 in 2024. The increase of 24% is in line with our guidance and is driven by the tax transfer of Ixiaro and Ixtric production to our new facility in Sparkland as well by our new in license Phase II vaccine candidate for Shigella.

[Peter Bühler, CFO at Valneva]

Furthermore, we increased our investment in preclinical activities. R and D investments in our chikungunya vaccine were stable year over year as we execute further clinical studies, in particular in pediatrics and started preparing for our mandatory Phase four activities. In 2024, we strengthened our R and D team in line with our strategy to continue focusing on innovation. Marketing and distribution expense are reported at EUR 52,400,000.0 compared to EUR 48,800,000.0 in 2023. This increase is primarily due to higher staff costs as we strengthened our commercial organization to support our sales growth, including the launch of XCheck.

[Peter Bühler, CFO at Valneva]

G and A expenses decreased from EUR 47,800,000.0 in 2023 to EUR 42,800,000.0 in 2024. This decrease is related to lower external spend, but also to structural changes to our G and A organization. In 2024, Valneva sold a priority review voucher obtained with the approval of Xtrix in The United States. The voucher was sold at USD 103,000,000, which net of expenses related to the sale of the voucher and translated into euros resulted in net proceeds of EUR 90,800,000.0. Other income and expense remained stable versus prior year at EUR 20,700,000.0 and mainly consist of grants as well as tax credits related to R and D activities in Austria and France.

[Peter Bühler, CFO at Valneva]

In 2024,

[Peter Bühler, CFO at Valneva]

Valneva reports an operating profit of EUR 20,700,000.0 compared with an operating loss of EUR 82,100,000.0 in the prior year. The operating profit in 2024 was substantially driven by the non recurring income related to the sale of the priority review voucher. After financial expense and income taxes, Valneva's loss for the period reached minus EUR 12,200,000.0, while the adjusted EBITA is reported at plus EUR 32,900,000.0. Now moving on to the financial outlook. In 2025, we expect total product sales to reach EUR 170,000,000 to EUR 180,000,000 and total revenues to EUR 180,000,000 to EUR 190,000,000.

[Peter Bühler, CFO at Valneva]

We expect the growth in product sales to come primarily from increased sales of XJIG driven by The United States, but also expansion into additional new territories. We expect IXIAR and DUCRO to continue to grow, while we assume third party, as previously mentioned, to continue to decrease significantly. We expect our investments into R and D to reach between EUR 90,000,000 and EUR 100,000,000 as we continue to advance our clinical and preclinical assets. These investments into R and D are supported by external grant funding as well as R and D related tax credits, which will be recorded in other income. As mentioned by Thomas, we report a solid cash basis at the end of twenty twenty four with $168,000,000 in cash and cash equivalents, and we expect to decrease our operational cash burn by more than 50% from over EUR 60,000,000 in 2024 to around EUR 30,000,000 in 2025.

[Peter Bühler, CFO at Valneva]

We will continue to manage our cash carefully to have sufficient runway to reach key inflection points. We will continue to grow our commercial revenues and focus on strategic R and D investments. We're targeting one clinical program to enter Phase III post Lyme data, and we will look for additional non dilutive funding for our clinical programs. As mentioned in the past, we expect to continue improving our gross margin as we focus on our proprietary products and finalize the tax transfer into our new manufacturing site in Scotland. From 2020 to '37 successful Lyme disease vaccine approval and commercialization, we have to look at the opportunity to become sustainably profitable.

[Peter Bühler, CFO at Valneva]

With that, I hand the call back to Thomas to look at our future value drivers.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Many thanks, Peter, for this comprehensive financial report for the full year 2024. Yes, let me remind you one more time, where we see really the growth drivers for 2025 and a little bit beyond 2025, it's about Lyme. As we mentioned in this presentation, again, it is certainly very, very important asset for the company and with an expected first readout by the end of the year. This is of course something that's going to have an enormous impact on the future development and prospects of the company. We have our commercial business, which has delivered quite nicely over the past years.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And we see this really continuing. As Peter mentioned, the shift from lower third party product sales, primarily given that our commercialization partnerships with BN will come to an end and more focus on our proprietary vaccines will substantially increase cost margin. And hence, the overall commercial business already this year is expected to be cash generative and will continue to provide cash that we can reinvest in R and D. And we have very nice R and D assets that we would like to progress. And we expect some meaningful clinical data readouts this year, especially around Shigella and Zika.

[Thomas Lingelbach, Director, President & CEO at Valneva]

With that, I would like to hand back to the operator to take your questions.

[Operator]

Thank you. And now we're going to take our first question. And it comes from the line of Susan Van Verheuysen from Van Land, Schott and Kempen. Your line is open. Please ask your question.

[Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen]

Hi, this is Suzanne from Kempen. Thanks for taking my question. Peter, can you elaborate a bit on the cash burn guidance? That is going down by over 50%. What are the main drivers behind this?

[Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen]

And with that, can you also give some context to the R and D expenses going up for the coming year? And then another question for Thomas, more of a vaccine sentiment question. What risks or opportunities do you see stemming from our case role now in the administration? We've seen some changes implemented at the CDC and the ACIP. But on the other hand, he also specifically mentioned his experience with Lyme.

[Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen]

Can you elaborate on this, please? Thank you.

[Peter Bühler, CFO at Valneva]

Yes. So I can start with the cash flow. Hey, Susanna, by the way. Thanks for the question. I will start with your question on cash.

[Peter Bühler, CFO at Valneva]

So I think there are various reasons why and you saw we also the of course, with the sales growth, etcetera, that will contribute. But also, I think we will focus on cost containment in 2025. Also, we will look at we will work on our working capital clearly. But also, we have a couple of initiatives with the end of the COVID program, for instance, the collection of the R and D tax credits took a little longer. So we will put in 2025, we expect to have the exceptional year where we will actually collect two years' worth of R and D tax credits.

[Peter Bühler, CFO at Valneva]

So all these are reasons why we actually see we'll see a much lower cash burn. And of course, as Thomas mentioned also, the commercial business returning to profitability will of course help our cash. Does it answer your question, Susanna?

[Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen]

Yes, for sure. But maybe in R and D going up, can you also elaborate on that?

[Peter Bühler, CFO at Valneva]

Yes. So R and D going up, I mean, a very significant contribution, of course, to that is the chikungunya Phase IV trial, the mandatory trials that we need to do under the approval we have in The U. S. So that is really going to take costs are really going to ramp up in 2025. And then of course also the rest of the pipeline that we're accelerating and also our new Shigella program that is adding on to the R and D activities.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Okay. Good. So and it is worth mentioning, Susana, that the we will have a the Phase IV program will also be augmented by the Phase III initiation in pediatrics, which is also mandatory. The mandatory post licensure activity, all that peaks a little bit in the latter part of this year. This is why you see this relatively high R and D cost.

[Thomas Lingelbach, Director, President & CEO at Valneva]

But as Peter said, this is the potential offset through the TEPI grant as well as the R and D tax credits that Peter mentioned. On RFK, well, you gave us, of course, the question that we are receiving all the time. So first of all, our position is let's not speculate. I think it is important that we monitor the situation quite carefully. Of course, all vaccine companies have been concerned about ACIP gotten getting delayed, necessary things that were supposed to be discussed at ACIP could not be discussed.

[Thomas Lingelbach, Director, President & CEO at Valneva]

So we need to really evaluate the impact. We need to see how this is going to go and develop further going forward. With regards to our existing vaccines on the market, these are mostly vaccines that are being paid out of pocket. They are currently not subject to, I would say, articulated criticism around vaccination. They are targeting areas of very high unmet medical need.

[Thomas Lingelbach, Director, President & CEO at Valneva]

The health economical analysis for those vaccines are very favorable online. The situation is that the ACIP the draft ACIP agenda had the formation of a Lyme working group on its agenda. So we hope that this is going to come very soon. And then the our view and you and I had this discussion before, my personal view is science will prevail. And so therefore, if there was an efficacious and safe vaccine against the devastating disease like Lyme disease, why should it not be used and given to people who can benefit most of it?

[Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen]

Got it. Thank you very much.

[Operator]

Thank you. Now we're going to take our next question. And the question comes from the line of Sameer Devani from Rx Securities. Your line is open. Please ask your question.

[Samir Devani, Managing Director at Rx Securities]

Hi, guys. Thanks for taking my questions. Let me just kick off perhaps with some number questions. Can you just confirm whether you took any price rises on IXIARO and DU CORAL at the beginning of this year? I guess that's question one.

[Samir Devani, Managing Director at Rx Securities]

And then I guess the only other one on the numbers is maybe two on the numbers. There was an intangible spend up to September about EUR 10,000,000 and it seems to have gone down to EUR 2,500,000.0 in the cash. I was just wondering what happened in the last quarter to do that. And you mentioned about the R and D tax credits that you're expecting. Could you just maybe quantify that for us?

[Samir Devani, Managing Director at Rx Securities]

Thanks very much.

[Thomas Lingelbach, Director, President & CEO at Valneva]

So I start with the first part of your question. Hi, Samir, by the way. So we had no material price increases in 2024 for any of our products. So you have almost a like for like volume comparison. I'm sure that was your question.

[Samir Devani, Managing Director at Rx Securities]

Actually, Thomas, it was about 2025 rather than 2020. Was it at the beginning of the year you've taken it?

[Thomas Lingelbach, Director, President & CEO at Valneva]

No, no, it's 2025. That's already Sameer.

[Thomas Lingelbach, Director, President & CEO at Valneva]

This is

[Thomas Lingelbach, Director, President & CEO at Valneva]

what I meant, yes.

[Samir Devani, Managing Director at Rx Securities]

Yes. Okay.

[Thomas Lingelbach, Director, President & CEO at Valneva]

So basically nothing at this point in time. And then Peter, to your to the other part of the question?

[Peter Bühler, CFO at Valneva]

Yes. So

[Peter Bühler, CFO at Valneva]

your question on intangible Sameer, so that was basically an upfront payment we had made to for the in licensing of the Shigella program. And as our partner, Limatech, is executing some of the R and D work, we then brought some of the there was basically, the cost that they are contributing to the Phase II right now, we actually moved out of the intangibles. So that's why this is

[Samir Devani, Managing Director at Rx Securities]

Okay. Makes sense. Yes. Okay. Makes sense.

[Samir Devani, Managing Director at Rx Securities]

And then just the one on the R and D tax credits, Peter, that you mentioned. What sort of quantity is that, if you maybe can tell us that?

[Peter Bühler, CFO at Valneva]

Well, yes. We do not give guidance on the R and D tax credit. But when you look at our 2024 financial statements, you will see that out of the $20,000,000 that you will see in other income, about half of it is R and D tax credit and the other half is grant. So that gives you a rough idea of what the tax credit was that we collected in 2024. But as I said for 2025, we have not given the detailed guidance.

[Samir Devani, Managing Director at Rx Securities]

Okay. And then just maybe if I can

[Samir Devani, Managing Director at Rx Securities]

sneak one final one in. Just on the application for approval of of X Chicken Brazil, is there any update as to when we might see that? Thanks very much.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Yes. So on Brazil, we are you know that we had anticipated the approval in Brazil in the first quarter. We have been seeing some delays on the process. And basically, we have not received any further list of questions, so that which means the review process is very close to its end. I mean, our partner, Butantan, are pushing hard on Visa right now.

[Thomas Lingelbach, Director, President & CEO at Valneva]

All the other steps have been successfully completed like pre approval inspections and so on and so forth. You know that the approval also it is a delay right now. The approval is not yet on the critical path. We need this approval to start we need this approval to start the pilot vaccination program that we anticipate and will combine then with the Phase IV requirements, which is necessary to start in the rainy season. So which means we have a bit of buffer and therefore we hope that we're going to get the approval very soon.

[Samir Devani, Managing Director at Rx Securities]

Great. Thanks very much.

[Thomas Lingelbach, Director, President & CEO at Valneva]

You're welcome.

[Operator]

Thank you. Now we're going to take our next question. Just give us a moment. And the question comes from the line of Rajan Sharma from Goldman Sachs. Your line is open.

[Operator]

Please ask the question.

[Rajan Sharma, Executive Director at Goldman Sachs]

Hi. Thanks for taking my questions. Just relating to X Chicken and maybe just following up on that policy question from earlier. Do you think the postponement of the February meeting could actually be beneficial for you near term given there was supposed to be a vote on your competitors' chicken and your vaccine as well, I believe? And then secondly, just again following up on Xtrick, could you just talk to the market dynamics that you're seeing so far?

[Rajan Sharma, Executive Director at Goldman Sachs]

Appreciate it's still relatively early, but in terms of the revenues that you have generated and the traction that the vaccines got, where is that coming from based on what you're able to see? Thank you.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Let me start with the latter part because I cannot there's not a lot I can say to the first part of your question. But let's talk a little bit about xCheck dynamic. So first of all, we are absolutely convinced that the chip market will develop over time. We discussed it in the past. We were initially a bit too optimistic with regards to the ramp up, but we are absolutely convinced that this product will lead to a good commercial opportunity.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Why is that? Because chikungunya is a severe disease and the more we see in terms of outbreaks, the more we see in terms of clinical manifestations, the more we get to the point of saying that and seeing that chikungunya is not just a flu like symptom disease, but it comes with pretty severe health impairments, some of them pretty long lasting. And what we see right now is that there is more and more disease awareness. So there is that the all the investments that we have been doing, that our competitors have been doing, are really driving the general understanding around chikungunya. On top of that, we see outbreaks.

[Thomas Lingelbach, Director, President & CEO at Valneva]

I mean, you have all noticed that there is a pretty severe outbreak on L'Arrionne right now with more than two thousand cases in a single week. We have published health economic analysis in a very renowned journal, which also shows that the health economical situation for chikungunya vaccination is very favorable. So all in all, to tell you that there is clearly a growing awareness. The growing awareness comes with growing demand. And we see, of course, substantial prospects in the low medium income countries.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Both of our partners have signaled quite substantial initial demand for their respective launch years, which in reality will be next year, but we will supply already drug substance to them this year. In The United States, we are still waiting for the MMWR. And you heard Susana's question up at the beginning. I mean, there were many things that were supposed to be discussed at ACIP. We have been this delay of MMWR does not help access to the retail channel.

[Thomas Lingelbach, Director, President & CEO at Valneva]

So all of that will hopefully be resolved soon and then drive uptake. The initial situation that we see in Europe and thus far, we have launched in France, we have launched in Canada, we are going to launch in UK. The initial signs look good. And everyone can based on our guidance and based on what we have said about the decline of third party products and the increase of IXIARO and DU CORAL, everyone can make the math of what we have assumed in terms of X6 sales this year. And then from there, we have to see how it's further going to develop.

[Thomas Lingelbach, Director, President & CEO at Valneva]

I think this is all I can say at this point in time about the extract dynamic and the market dynamic around Chikungunya.

[Rajan Sharma, Executive Director at Goldman Sachs]

Okay. Thank you.

[Operator]

Thank you. Now we're going to take our next question. Just give us a moment. And the question comes from the line of Oscar Hafenlam from Brian Garnier. Your line is open.

[Operator]

Please ask your question.

[Oscar Haffen Lamm, Equity Research Analyst - Healthcare at Bryan Garnier]

Hi, Sima. Asi here from BG. I believe most of my questions have been taken in, but maybe on Zika. I was curious what your view was on the evolution of the epidemiology and ultimately how this would affect the potential continuation of the program to Phase II? And then what when would you expect the Phase II to start and your estimated cost on that one?

[Oscar Haffen Lamm, Equity Research Analyst - Healthcare at Bryan Garnier]

Thank you.

[Thomas Lingelbach, Director, President & CEO at Valneva]

You're talking about Shigella Phase II?

[Oscar Haffen Lamm, Equity Research Analyst - Healthcare at Bryan Garnier]

The Zika Phase II.

[Thomas Lingelbach, Director, President & CEO at Valneva]

The Zika Phase II. No, on the so basically on the Zika, at this moment in time, we are with Zika in the Phase As you know, we have a first data readout expected by the end of the year. This will then followed by an antibody persistence period. We want to really understand antibody persistence since this has been an issue in the past. And basically then, we will take it from there and talk to the authorities about the clinical development pathway.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And I would say the earliest we could start a Phase II study, if we decided to progress into Phase II, would probably be at the end of twenty twenty six, early '20 '20 '7. So this is the current time horizon.

[Oscar Haffen Lamm, Equity Research Analyst - Healthcare at Bryan Garnier]

Got it. Thank you.

[Operator]

Thank you. Now we're going to take our next question. And the question comes from the line of Vamil Divan from Guggenheim Securities. Your line is open. Please ask your question.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

Great. Thanks for hosting the call and taking my question. So a couple, I apologize that I missed this, but on the exchange, just the you've talked previously about your midterm guidance and kind of being relooked at. I'm wondering just kind of given all the dynamics, when you think is an appropriate time for us to expect that to be announced? And then second on Lyme, I know, Pfizer, as you mentioned here, Pfizer aims to submit the application next year, assuming positive data.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

I'm just trying to get clarity on the exact timing for the data readout because Pfizer actually doesn't list it as sort of a key event on their Catalyst page for this year. I know you guys think it's coming. So I'm just trying to clarify, do you expect the data this like end of this year or do you think the actual data readout itself may go into next year? And just kind of how we should think about that? Thank you.

[Peter Bühler, CFO at Valneva]

So, yes, thanks for the questions. So, on Xtrix, yes, we did give indeed the midterm guidance in the past. We did say earlier on that we might have to revise that and indeed we think we have to revise it as you saw that the ramp up of sales was lower than we had anticipated. We still believe in the potential of the product and we still think that the guidance we gave in terms of level of sales is achievable, but it will certainly take a little longer. And as we said, we need a few more data points.

[Peter Bühler, CFO at Valneva]

The 2025 started, right, we just had two months now where we have more data points and we're launching a new territory. So I think we still need a bit of time to really confirm by when we will get to the critical number. And this is also why we have not decided to give a new midterm guidance at this stage. We will we may in the future come back and give more indication, but it just took us a bit more time. Thomas, on the timing of the data readout for Lyme?

[Thomas Lingelbach, Director, President & CEO at Valneva]

Yes. So I mentioned at the beginning of the call and throughout the presentation that we are expecting first data readout at the end of twenty twenty five. This will be followed by further analysis, further secondary endpoint readout in the earlier part of 2026. We have previously in our joint press releases Pfizer said that we're going to submit the regulatory submissions in 2026 and that we anticipate to ideally bring the product into the market in time so that people can benefit from it for the 2028 tick season.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

Okay. All right. Thank you.

[Thomas Lingelbach, Director, President & CEO at Valneva]

You're more than welcome.

[Operator]

Thank you. And now we're going to take our next question. And the question comes from the line of Marie Raycroft from Jefferies. Your line is open. Please ask your question.

[Maury Raycroft, Equity Research Analyst at Jefferies]

Hi, congrats on the pricing. Thanks for taking my questions. I was just going to I'll ask one on chicken guinea. So with Bavarian Nordic recently approved, maybe just talk about that and how you plan to leverage your first mover advantage and accelerate the launch in 2025? I'm also wondering if you still expect that the CDC will publish the MMWR this year on July and how we should think about that as well?

[Thomas Lingelbach, Director, President & CEO at Valneva]

So basically, so first of all, we are very careful right now in predicting any timelines when it comes to MMWR, CDC, ACIP processes because I mean, realities have shown that we have big unknowns here. So we have to see really how this is going to evolve. But yes, our internal planning is still assuming that we're going to get MMWR this year. When it comes to Bavarian, of course, I mean, you know what I said in the past, we're not going to talk about competitive products and their dynamic and what it will do or not do. I mean, the point is, I believe that there is a strong share of voice, because I mentioned a couple of times that for chikungunya disease awareness is key.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And I think the more we see there really work around further increasing the awareness of the disease, the better it is.

[Maury Raycroft, Equity Research Analyst at Jefferies]

Understood. That makes sense. And also just wanted to see if there's any additional perspective you can share related to the vaccinated subjects that were hospitalized after getting a check and what your expectations or some scenarios that could come out of the discussion at the upcoming ACIP meeting?

[Thomas Lingelbach, Director, President & CEO at Valneva]

Yes. So I think what we are seeing here is a normal process. Cases were reported under the VAERS system. The causality of those cases with the vaccination is being assessed. We have provided all the necessary information to ACIP, stroke CDC as well as FDA.

[Thomas Lingelbach, Director, President & CEO at Valneva]

We don't want to speculate and we don't want to say anything right now about how they conclude on the causality. We have, of course, our own opinion around that, but let the process prevail. So and I think we take it from there, whatever the outcome is going to be.

[Maury Raycroft, Equity Research Analyst at Jefferies]

Makes sense. Okay. Thanks for taking my questions.

[Thomas Lingelbach, Director, President & CEO at Valneva]

More than welcome, Maury.

[Operator]

Thank you. There are no further questions for today. I would now like to hand the conference over to the management team for any closing remarks.

[Thomas Lingelbach, Director, President & CEO at Valneva]

Yes. Thanks a lot for your attendance today. Thanks a lot for your great questions. As usual, we are looking ahead with confidence. We are looking ahead for into a great 2025, knowing, of course, that 2025 is a transitional year for the company as we are moving towards Lyme data, which will be very critical for the further strategic development of the company.

[Thomas Lingelbach, Director, President & CEO at Valneva]

And as such, we are looking forward to some very interesting further readouts this year as mentioned. And again, thank you so much for your attention. Thanks so much for your interest and support of the company and wishing you all the best for the rest of the day. Thank you.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.

Participants

Executives

• Joshua Drumm, Vice President, Global Investor Relations
• Thomas Lingelbach, Director, President & CEO
• Peter Bühler, CFO

Analysts

• Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen
• Samir Devani, Managing Director at Rx Securities
• Rajan Sharma, Executive Director at Goldman Sachs
• Oscar Haffen Lamm, Equity Research Analyst - Healthcare at Bryan Garnier
• Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC
• Maury Raycroft, Equity Research Analyst at Jefferies