Valneva Delivers Strong 2017 Financial Results
and Advances Key R&D Programs
The Company expects continued double digit
product sales growth in 2018 and to invest further in R&D,
notably the Lyme and Chikungunya programs
Strong sales and EBITDA performance in
2017
- Total revenues and grants of €109.8 million in 2017 (vs. €97.9
million in 2016)
- Product sales of €92.6 million representing 15% year on year
growth
- EBITDA of €10.8 million in 2017 (vs. €2.8 million in 2016)
- Improved gross margin of 58% (vs. 56% in 2016)
- Positive operating cash flow of €12.8 million in 2017 brought
cash position to €38.1 million at the end of 2017
Double-digit product sales growth to continue
in 2018
- The Company projects that product sales this year will grow to
over €100 million.
- Other revenues (including R&D tax credits, grants, service
revenue, royalties), which tend to fluctuate from year to year, are
expected to bring the company's overall revenue to between €110
million and €120 million for the year.
- Valneva will maintain positive EBITDA in the range of €5
million - €10 million in 2018 with higher R&D investment of €30
million - €35 million, compared to €23.4 million in 2017, driven by
the clinical development progression of its Lyme and Chikungunya
vaccine candidates.
Key R&D Progress
- Valneva recently announced positive Phase I interim results for
its Lyme disease vaccine candidate VLA15[1]. Phase II
planning and preparation activities have been initiated for this
promising FDA fast-tracked vaccine candidate and the study is
expected to commence in the second half of 2018.
- The Company also recently announced Phase I study initiations
for its Chikungunya (VLA1553)[2] and Zika (VLA1601)[3] vaccine
candidates.
David Lawrence, Valneva's Chief Financial
Officer, commented, "In 2017, we executed on our key business
goals and continued to improve our financial performance, giving us
the flexibility to invest for future portfolio growth. Achieving
product sales of over €100 million will be a major milestone for
the Company this coming year. With multiple value catalysts in
2018, we believe we are poised for a pivotal year."
Key Financial Information
€ in million |
12 months ending December 31 |
|
2017 |
2016 |
Revenues & grants |
109.8 |
97.9 |
Net profit/(loss) |
(11.5) |
(49.2) |
EBITDA[4] |
10.8 |
2.8 |
Net operating cash flow |
12.8 |
6.5 |
Cash, short-term deposits and marketable securities, end of
period |
38.1 |
42.2 |
Lyon (France), March 22, 2018 - Valneva
SE ("Valneva" or "the Company"), a fully integrated, commercial
stage biotech company focused on developing innovative lifesaving
vaccines, reported today its full year financial results ending
December 31, 2017. The annual financial report, including the
consolidated financial statements 2017, is available on the
Company's website www.valneva.com.
A webcast for financial analysts, fund managers,
investors and journalists will be held today at 2:00 pm (CET). A
replay will be available on the Company's website. Please refer to
this link: https://edge.media-server.com/m6/p/7d3fjx9c
Commercial Vaccines
JAPANESE ENCEPHALITIS VACCINE
(IXIARO®/JESPECT®)
Continued sales growth supported by market
penetration
In 2017, IXIARO®/JESPECT® sales
reached €60.0 million compared to €53.0 million in 2016,
representing 13% year-on-year growth. This increase was largely
driven by growth in the UK, German and Canadian private markets
where continued marketing and sales efforts resulted in increased
product adoption by travelers. Sales to the US military also
contributed to the growth and a new $39.6 million contract was
signed with the US government in November 2017 to supply
IXIARO® to the US Department of Defense, over a one year
period.
Valneva expects continued double digit growth in
IXIARO®/JESPECT® revenues through increased market penetration and
the development of its commercial network, including in the US
private market where the Company took direct control of sales and
marketing in late 2017.
CHOLERA / ETEC- DIARRHEA VACCINE
(DUKORAL®)
Double-digit sales growth in 2017
In 2017, DUKORAL® sales reached €28.5
million, compared to €24.6 million in 2016, representing
year-on-year growth of 16%. In addition to Canada, where more than
50% of DUKORAL® global revenues are generated, the vaccine
benefited from strong sales in the UK market. Valneva expects
DUKORAL® revenues to continue to grow healthily in 2018
through continued market penetration.
Clinical vaccine Candidates
LYME DISEASE VACCINE CANDIDATE - VLA
15
Positive Phase I interim results
reported
The Company is focusing its R&D expertise
and resources to a large extend on the development of a much-needed
vaccine against Lyme disease, the most common and one of the
fastest growing vector-borne illnesses in the Northern Hemisphere
for which there is no other clinical vaccine candidate in
development worldwide.
Valneva recently reported positive Phase I
interim data for its Lyme disease vaccine candidate VLA15. The
study met its primary endpoint. The vaccine candidate is overall
safe and was well tolerated with very few severe, related Adverse
Events (AEs) in all treatment groups and no associated safety
concerns. The safety profile of all tested doses and formulations
is considered comparable to other licensed lipidated recombinant
vaccines or lipid-containing vaccine formulations, and supports
further clinical development.
VLA15 was immunogenic in all doses and
formulations tested. OspA-specific IgG antibody responses were
induced in all treatment groups and against all OspA serotypes,
with significant dose responses seen between the lowest and the
higher dose groups. For all six OspA serotypes, IgG levels were
highest after three immunizations (Day 84) and Seroconversion Rates
(SCR) for the highest, adjuvanted dose group, which is considered
preferred for further development, ranged from 71.4% to 96.4% for
the different OspA serotypes.
Valneva's Phase I study VLA15-101 is an
observer-blind, partially randomized, dose escalation trial that
aims to evaluate the safety, tolerability and immunogenicity of its
Lyme vaccine candidate VLA15. The study enrolled 179 healthy adults
under 40 years of age in Europe and the U.S. who were not
previously infected with Borrelia burgdorferi. Subjects were
randomized into six treatment groups to receive one of three dose
levels either in an alum adjuvanted formulation or without
adjuvant. Study subjects were vaccinated at three occasions one
month apart (Day 0-28-56). The interim analysis for the primary and
secondary endpoints included safety and immunogenicity data up to
Day 84 (Month 3). Final safety and immunogenicity data including
one year follow-up are expected early 2019.
The Company is committed to advance its Lyme
vaccine candidate as quickly as possible into Phase II which is
currently expected to commence in the second half of 2018, subject
to regulatory clearances.
The next clinical phase is intended to be
conducted in Lyme-endemic regions and will include people
previously infected with Borrelia burgdorferi, the bacteria that
cause Lyme disease. Further dose optimization will be
considered.
Lyme disease is a systemic infection caused by
Borrelia bacteria transmitted to humans by infected Ixodes ticks.
According to the Centers for Disease Control and Prevention (CDC),
approximately 400,000[5] Americans are diagnosed with Lyme disease
each year with at least a further 200,000 cases in Europe[6]. Early
symptoms of Lyme disease (such as a gradually expanding
erythematous rash called Erythema migrans or more unspecific
symptoms like fatigue, fever, headache, mild stiff neck, arthralgia
or myalgia) are often overlooked or misinterpreted. Left untreated,
the disease can disseminate and cause more serious complications
affecting the joints (arthritis), the heart (carditis) or the
nervous system.
Valneva's vaccine candidate VLA15, under Fast
Track Designation by the FDA, is a multivalent, protein subunit
vaccine that targets the outer surface protein A (OspA) of Borrelia
and 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.
Vaccination with OspA was already proven to work
in the 1990s and VLA15 pre-clinical data showed that the vaccine
has the potential to provide protection against the majority of the
Borrelia species pathogenic for humans[7].
The global market for a vaccine against Lyme
disease is currently estimated at approximately €700 - €800 million
annually[8].
CHIKUNGUNYA VACCINE CANDIDATE - VLA
1553
Phase I in the U.S. ongoing
(VLA1553-101)
Valneva's Phase I study VLA1553-101 is a
randomized, observer-blinded, dose-escalation, multi-centre study
investigating three different dose levels of VLA1553 in
approximately 120 healthy adults vaccinated with a single-shot
immunization.
The trial design includes the investigation of
antibody persistence and an additional vaccination with the highest
dose at 6 or 12 months of the live-attenuated vaccine candidate.
This re-vaccination serves as intrinsic human viral challenge
demonstrating that subjects are protected from vaccine-induced
viremia and thereby potentially indicating efficacy of VLA1553
early in clinical development.
Chikungunya is a mosquito-borne viral disease
caused by the Chikungunya virus (CHIKV), a Togaviridae virus,
transmitted by Aedes mosquitoes. Clinical symptoms include acute
onset of fever, debilitating joint and muscle pain, headache,
nausea and rash potentially developing into long-term, serious
health impairments[9]. Chikungunya outbreaks were reported in Asia,
Africa, the Americas and recently (2017) in Europe. Until 2017,
there were more than 1 million reported cases in the Americas[10]
and the economic impact can be considered significant (e.g.
Columbia outbreak 2014: USD 73.6m)[11]. The medical burden is
expected to grow as the distribution of the CHIKV primary mosquito
vectors continues to further spread geographically.
There are no preventive vaccines or effective
treatments available and as such Chikungunya can be considered a
major public health threat.
VLA1553 is a monovalent, single dose,
live-attenuated vaccine candidate for protection against various
Chikungunya virus outbreak phylogroups and strains aiming for a
long-lasting protection conferred by neutralizing antibodies in
adults and children[12]. The target populations are travelers,
military personnel or individuals at risk who live in endemic
regions.
In pre-clinical development a single-vaccine
shot was highly immunogenic with a strong, long lasting
neutralizing antibody response and vaccinated Non-Human Primates
(NHP) (cynomolgus macaques) showed no signs of viremia after
challenge[13].
First data from the Phase I trial are expected
to be available by early 2019.
The global market for vaccines against
Chikungunya is estimated at up to €500 million annually8.
ZIKA VACCINE CANDIDATE - VLA 1601
Phase I in the U.S. ongoing
(VLA1601-101)3, Partnered with Emergent
BioSolutions
In July 2017, Valneva and US company Emergent
BioSolutions joined forces to accelerate the development of a
vaccine against Zika.
After finalizing the Phase I study protocol at
the end of 2017, the two companies initiated Phase I in the US in
February 2018. The Phase I study of VLA1601-101 is a randomized,
observer-blinded, placebo-controlled, single center study
investigating two dose levels with two different vaccination
schedules in approximately 65 healthy adults.
Valneva and Emergent BioSolutions are sharing
all costs until Phase I completion. Valneva is responsible for the
program's execution until completion of Phase I and Emergent will
have the option to continue the development arrangement with
Valneva for a milestone payment of €5 million, upon availability of
Phase I data. The agreement also provides Valneva potential
additional milestone payments of up to €44 million related to
product development, approval, commercialization and product sales,
as well as future royalties on annual net sales[14].
Zika is a mosquito-borne viral disease caused by
the Zika Virus (ZIKV), a flavivirus transmitted by Aedes
mosquitoes[15]. Disease outbreaks have been reported in tropical
Africa, Southeast Asia, the Pacific Islands, and, in 2015, in the
Americas. According to the World Health Organization, there is
scientific consensus that the ZIKV is a cause of microcephaly and
Guillain-Barré syndrome[16]. Between 2015 and the end of July 2017,
1 million cases of Zika infection and many cases of the congenital
syndrome associated with the ZIKV had been reported by countries
and territories in the Americas, according to the World Health
Organization[17]. Today there is no specific treatment
available.
VLA1601 is a highly purified inactivated whole
virus vaccine candidate developed using Valneva's proven and
licensed inactivated JE vaccine platform.
In pre-clinical development VLA1601 demonstrated
excellent purity, in-vivo neutralization and overall a biological,
chemical and physical profile comparable to IXIARO®.
First data from the Phase I trial are expected
to be available in late 2018 or early 2019.
Full Year 2017 Financial Review
Revenues and grants
Valneva's aggregate revenues and grants in the
full year 2017 increased to €109.8 million from €97.9 million
in 2016. This increase was largely as a result of strong growth of
IXIARO®/JESPECT® and DUKORAL® product sales.
Total product sales increased to €92.6 million
in the full year 2017, up from €80.4 million in 2016.
IXIARO®/JESPECT® product sales contributed €60.0 million to
revenues in 2017, compared to €53.0 million in 2016
(representing 13% growth). The strong increase was driven by growth
in the UK, German and Canadian private markets. US Military sales
continue to contribute significantly to overall IXIARO® sales.
DUKORAL® product sales contributed €28.5 million
to 2017 product sales representing growth of €4.0 million, or 16%
compared to 2016. Third party product sales for the year 2017
increased to €4.0 million from €2.9 million in the year
2016.
Revenues from collaborations and licensing
decreased slightly to €12.7 million in 2017 from €13.6 million in
the year 2016.
Grant income increased to €4.5 million in 2017
compared to €3.8 million in 2016.
Operating result and EBITDA
Cost of goods and services ("COGS") in 2017 were
€46.0 million, leading to an overall gross margin of 58%. €21.7
million in COGS related to IXIARO®/JESPECT® sales, yielding a
product gross margin of 64%, and €15.2 million related to DUKORAL®
sales, yielding a product gross margin of 46%. Of the remaining
COGS for full year 2017, €2.8 million related to the third party
product distribution business and €6.3 million related to cost of
services. In the comparative period in 2016, COGS were €43.1
million, of which €21.1 million related to IXIARO®/JESPECT®, €13.5
million to DUKORAL®, €2.3 million to third party products, and
€6.2 million to cost of services.
Research and development expenses for the year
2017 reached €23.4 million, representing a slight decrease compared
to 2016 R&D expenses of €24.6 million.
Marketing and distribution expenses in 2017
amounted to €17.9 million compared to €16.6 million in 2016.
General and administrative expenses in 2017
amounted to €15.5 million compared to €14.4 million in 2016. This
increase is in line with additional marketing and sales activities
that are driving product sales growth.
Amortization and impairment charges for full
year 2017 amounted to €10.7 million, and included €3.6 million
of non-cash impairment charges, which were recognized in the third
quarter, related to the Clostridium difficile vaccine
candidate.
Valneva's operating loss for the year 2017 was
€4.0 million, compared to an operating loss of €42.6 million
reported for the year 2016, which included a one-time impairment
charge amounting to €34.1 million related to the discontinued
Pseudomonas vaccine candidate.
Valneva's full year 2017 EBITDA showed continued
strong improvement and amounted to an EBITDA of €10.8 million,
compared to an EBITDA of €2.8 million in the year 2016. 2017 EBITDA
was calculated by excluding depreciation, amortization and
impairment charges amounting to €14.7 million from the operating
loss of €4.0 million as recorded in the condensed consolidated
income statement under IFRS.
Net result
Valneva's net loss for the year 2017 was €11.5
million. Excluding the one-time impairment charges related to the
Clostridium difficile project, Valneva's net loss amounted to €7.9
million for the year 2017, compared to a net loss of €15.1 million
for the year 2016 (excluding the one-time impairment charges
related to the Pseudomonas project).
The net finance result amounted to minus €8.6
million for the year 2017, compared to minus €6.3 million in
the year 2016. This increase in net finance expenses was mainly due
to adverse exchange rate effects in 2017.
Cash flow and liquidity
Net cash generated by operating activities in
2017 was €12.8 million compared to €6.5 million in 2016. This
improvement resulted from the positive EBITDA development and was
also helped by working capital effects.
Cash outflows from investing activities in the
year 2017 amounted to €4.1 million and were related to purchases of
equipment and software. Cash inflows from investing activities in
the year 2016 was €14.9 million and resulted primarily from a
payment received from Johnson & Johnson in connection with the
adjustment of the purchase consideration for the acquisition of
Crucell Sweden AB and the DUKORAL® business.
Cash out-flows from financing activities in 2017
amounted to €10.4 million and were primarily related to re-payment
of borrowings and interest and were partly offset by drawings from
an available loan facility with the European Investment Bank (EIB).
Cash-outflows from financing activities in 2016 amounted to €26.8
million and included the re-payment of borrowings to Athyrium LLC,
as well as interest payments and re-payments of loans.
Cash on December 31, 2017 stood at €38.1
million, compared to €42.2 million on December 31, 2016, and
consisted of €33.5 million in cash and cash equivalents and €4.5
million in restricted cash.
Listing strategy review
Valneva is currently reviewing its listing
strategy and specifically its secondary listing. The Company plans
to complete this process within two months and expects to announce
any decision in the second quarter of this year.
About Valneva SE
Valneva is a fully integrated, commercial stage
biotech company focused on developing innovative life-saving
vaccines.
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 proprietary vaccines in
development including unique vaccines against Lyme disease and
Chikungunya. Valneva has operations in Austria, Sweden, the United
Kingdom, France, Canada and the US with over 450 employees. More
information is available at www.valneva.com.
Valneva Investor and
Media Contacts Laetitia Bachelot-Fontaine Global Head of
Investor Relations & Corporate Communications T +33 (0)2 2807
1419 M +33 (0)6 4516 7099 investors@valneva.com |
Teresa Pinzolits
Corporate Communications Specialist T +43 1206 201 116
communications@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]http://www.valneva.com/download.php?dir=News_2018&file=2018_03_19_VLA15_Phase_I_Results_PR_ENG.pdf
[2]
http://www.valneva.com/download.php?dir=News_2018&file=2018_03_13_Chikungunya_Phase_I_initiation_EN.pdf
[3]
http://www.valneva.com/download.php?dir=News_2018&file=2018_02_26_Phase_1_Initiation_VLA1601_EN.pdf
[4] EBITDA (Earnings before interest, taxes,
depreciation and amortization) was calculated by excluding
depreciation, amortization and impairment of tangible and
intangible assets.
[5] As estimated by the CDC based on US reported cases in
2015
[6] As estimated from available national data. Case reporting is
highly inconsistent in Europe and many LB infections still go
undiagnosed.
[7] New Scientist, Lyme disease is set to explode and we still
don't have a vaccine; March 29, 2017
https://www.newscientist.com/article/mg23431195-800-lyme-disease-is-set-to-explode-and-you-cant-protect-yourself/
[8] Company estimate supported by independent market studies
[9] WHO, PAHO
[10] PAHA/WHO data: Number of reported cases of Chikungunya
Fever in the Americas - EW 51 (December 22, 2017)
[11] Cardona-Ospina et al., Trans R Soc Trip Med Hyg 2015
[12] Hallengärd et al. 2013 J. Virology 88: 2858-2866
[13] Roques et al. 2017JCI Insight 2 (6): e83527
[14]http://www.valneva.com/download.php?dir=News_2017&file=2017_07_26_VLA_Emergent_ZIKA_PR_EN.pdf
[15] https://www.cdc.gov/zika/transmission/index.html
[16] http://www.who.int/mediacentre/factsheets/zika/en/
[17]http://www.paho.org/hq/index.php?option=com_content&view=article&id=12390&Itemid=42090&lang=en
Attachment:
http://www.globenewswire.com/NewsRoom/AttachmentNg/576c0462-d4f9-4ce0-91d9-7d06f5cedfd9
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