Valneva Reports Strong Q1 Results and
Continues to Advance Key R&D Programs
Strong sales and EBITDA performance in Q1
2018
- Product sales of €28.9 million in Q1 2018, representing 11.5%
year on year growth, in line with Company guidance of double-digit
product sales growth in FY 2018.
- Total revenues were €32.1 million in Q1 2018 (vs. €28.4 million
in Q1 2017)[1].
- EBITDA of €4.9 million in Q1 2018 (vs. €3.4 million in Q1
2017); R&D investment to progress its Lyme and Chikungunya
vaccine candidates will increase during the year.
- Gross margin of 59.4% in Q1 2018 (vs. 53.2% in Q1 2017) driven
by Q1 country and product sales mix.
- Positive operating cash flow of €4.5 million in Q1 2018
resulting in cash position of €36.2 million at the end of March
2018.
Q1 Pipeline Highlights
- Phase 2 consultation and preparation activities ongoing for
Valneva's FDA fast-tracked Lyme vaccine candidate VLA15. The study
is expected to commence in the second half of 2018.
- Recruitment for the Company's Chikungunya vaccine candidate
VLA1553 Phase 1 progressing according to plan.
- Recruitment for Zika vaccine candidate VLA1601 Phase 1 has been
completed. Initial results expected at the end of 2018 or early
2019.
David Lawrence, Valneva's Chief Financial
Officer, commented, "The first quarter of 2018 marked a robust
start to the year. For IXIARO®, in the US Private market, we can
begin to see early, positive results from our newly established
in-house sales and marketing team. We remain focused on the
execution of our commercial products and investing in the
progression of our valuable vaccine candidates to maintain the
sustainable longer-term growth of the Company."
Key Financial Information
(Unaudited)
€ in million |
3 months ending March 31 |
|
2018 |
2017 |
Product Sales |
28.9 |
25.9 |
Total Revenues |
32.1 |
28.4[2] |
Net profit/(loss) |
1.5 |
(1.7) |
EBITDA[3] |
4.9 |
3.4 |
Cash, short-term deposits and marketable securities, end of
period |
36.2 |
45.2 |
Lyon (France), May 17, 2018 - Valneva SE
("Valneva" or "the Company"), a fully integrated, commercial stage
biotech company focused on developing innovative lifesaving
vaccines, reported today its first quarter financial results ending
March 31, 2018. The condensed consolidated interim financial
results are available on the Company's website www.valneva.com.
Commercial Vaccines
JAPANESE ENCEPHALITIS VACCINE
(IXIARO®/JESPECT®)
Strong sales growth driven by the US private
market
In the first quarter of 2018,
IXIARO®/JESPECT® sales reached €18.2 million compared
to €15.5 million in the first quarter of 2017, representing 17.3%
year-on-year growth. This increase was largely driven by growth in
the US private market where Valneva took direct control of sales
and marketing at the end of November 2017. Additional growth in the
UK, Nordics and Canadian private markets also drove the sales.
In 2018, Valneva expects continued double-digit
growth in IXIARO®/JESPECT® revenues through increased market
penetration via the development of its commercial network, notably
in the US private market.
CHOLERA / ETEC-DIARRHEA VACCINE
(DUKORAL®)
In the first quarter of 2018, DUKORAL®
sales reached €9.5 million compared to €9.8 million in the first
quarter of 2017. The slight decline in sales was attributable to
negative exchange rate movements and supply phasing in certain
European markets. The Company expects this effect to even out over
the course of the year and confirms it expects DUKORAL®
revenues to continue to grow healthily in 2018 through continued
market penetration.
Clinical Vaccine Candidates
LYME DISEASE VACCINE CANDIDATE -
VLA15
Phase 2 study to be initiated in the second
half of 2018
After reporting positive Phase 1 interim data
for VLA15 in March 2018[4], Valneva expects to launch a Phase 2
study in the second half of 2018, subject to regulatory
clearances.
Phase 2 is intended to be conducted in
Lyme-endemic regions in the US and Europe and will include subjects
previously infected with Borrelia, the bacteria that causes Lyme
disease. Further dose and schedule optimizations are being
considered.
As part of its development acceleration
strategy, the Company has elected to augment the Phase 1 study with
a booster dose, to gather additional data expeditiously.
A subset of subjects in the higher dose groups
who received a complete primary immunization schedule (three
vaccinations), will be included in a booster extension to
investigate the safety and immunogenicity of a booster dose of
VLA15 administered approximately thirteen months after the first
immunization. An analysis on safety and immunogenicity will be
performed after the last subject has completed the last study visit
six months after booster vaccination. In addition, an interim
analysis on immunogenicity data one month post booster will be
performed.
Lyme disease is 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. The systemic infection is caused by Borrelia
bacteria transmitted to humans by infected Ixodes ticks. According
to the US Centers for Disease Control and Prevention (CDC),
approximately 300,000[5] Americans are infected 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 is intended to protect against the majority of human pathogenic
Borrelia species. VLA15 is designed to confer protection by raising
antibodies that prevent Borrelia from migrating from ticks to
humans after a bite.
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 -
VLA1553
Phase 1 study (VLA1553-101) progressing
according to plan
Recruitment for Phase 1, VLA1553-101, which was
initiated in March 2018[9], to evaluate Valneva's single-shot
vaccine candidate against Chikungunya is progressing according to
plan.
VLA1553-101 is a randomized, observer-blinded,
dose-escalation, multi-center 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 of the live-attenuated vaccine candidate at 6 or 12 months.
This re-vaccination serves as an 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[10]. Chikungunya outbreaks were reported in
Asia, Africa, the Americas and recently (2017) in Europe. As of
December 2017, there have been more than 1 million reported cases
in the Americas[11] and the economic impact can be considered
significant (e.g. Columbia outbreak 2014: $73.6 million)[12]. 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[13]. 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[14].
First data from the Phase 1 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 - VLA1601
Phase 1 study fully recruited, Partnered with
Emergent BioSolutions
After initiating Phase 1 in the US in February
2018[15], Valneva has finalized the recruitment of study
participants for this clinical trial under the partnership
agreement with Emergent BioSolutions.
The Phase 1 study of VLA1601-101 is a
randomized, observer-blinded, placebo-controlled, single center
study investigating two dose levels with two different vaccination
schedules in 67 healthy adults.
First data from the Phase 1 trial are expected
to be available in late 2018 or early 2019. Upon availability of
Phase 1 data, Emergent will have the option to continue the
development arrangement with Valneva for a milestone payment of €5
million. 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[16].
Zika Virus infection is a mosquito-borne viral
disease caused by the Zika Virus (ZIKV), a flavivirus transmitted
by Aedes mosquitoes[17]. Disease outbreaks have been reported in
tropical Africa, Southeast Asia, the Pacific Islands, and, since
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[18]. Between 2015 and
beginning of January 2018, over 500,000 cases of suspected 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[19]. 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 Quarter 2018 Financial Review
(Unaudited)
Revenues
Product sales in the first quarter of 2018
increased by 11.5% to €28.9 million from €25.9 million in the
same period of the previous year.
Valneva's aggregate first quarter 2018 revenues
were €32.1 million compared to €28.4 million in the first quarter
of 2017.
Revenues from collaborations and licensing
amounted to €3.2 million compared to €2.5 million in the first
quarter of 2017. For greater clarity, reporting of grant income has
been re-classified in 2018 and is included in the Company's other
income and expenses, net. The comparator period of 2017 has been
adjusted accordingly.
Operating result and EBITDA
Cost of goods and services sold (COGS) were
€13.0 million in the first quarter of 2018, representing an overall
gross margin of 59.4% compared to 53.2% for the same period in
2017. €7.2 million of COGS were related to IXIARO®/JESPECT® sales,
yielding a product gross margin of 60.6%. €3.8 million of COGS were
related to DUKORAL® sales, yielding a product gross margin of
59.6%. Of the remaining COGS for the first quarter of 2018,
€0.8 million were related to the Third Party product
distribution business and €1.3 million were related to cost of
services. In the comparative period of 2017, COGS were €13.3
million, of which €11.5 million were related to cost of goods and
€1.8 million to cost of services.
Research and development expenses in the first
quarter of 2018 increased to €5.8 million from €5.2 million in the
first quarter of the previous year. This was driven by increased
investments into Valneva's clinical stage vaccine candidates.
Distribution and marketing expenses in the first quarter of 2018
amounted to €6.0 million, compared to €4.3 million in the first
quarter of 2017, reflecting increased direct commercial efforts. In
the first quarter of 2018, general and administrative expenses
equalled the first quarter of 2017, at €4.0 million. Amortization
and impairment charges in the first quarter of 2018 amounted to
€0.8 million compared to €1.8 million in the first quarter of
2017. The reduction is resulting from the re-assessment of the
lifetime of IXIARO®/JESPECT® related intangible assets driven by
extension of patents in both Europe and the USA.
In the first quarter of 2018, Valneva realized
an operating profit of €3.2 million compared to €0.5 million in the
first quarter of 2017. Valneva's Q1 2018 saw a positive EBITDA of
€4.9 million compared to €3.4 million in the first quarter of
2017. First quarter 2018 EBITDA was calculated by excluding
depreciation and amortization amounting to €1.7 million from the
operating profit of €3.2 million as recorded in the condensed
consolidated income statement under IFRS.
Net result
Valneva achieved in the first quarter of 2018 a
net profit amounting to €1.5 million compared to a net loss of €1.7
million in the first quarter of 2017.
Finance costs and currency effects in the first
quarter of 2018 amounted to a net finance expense of
€1.3 million compared to a net finance expense of €2.0 million
in the first quarter of 2017.
Cash flow and liquidity
Net cash generated by operating activities in
the first quarter of 2018 was €4.5 million compared to €12.1
million in the same period in 2017.
Cash outflows from investing activities in the
first quarter of 2018 amounted to €0.6 million, compared to
€1.1 million in the first quarter of 2017, and resulted
primarily from purchase of equipment.
Cash outflows from financing activities in the
first quarter of 2018 amounted to €3.8 million compared to
€4.9 million in the first quarter of 2017 and were mainly
related to re-payment of borrowings and interest payments.
Liquid funds on March 31, 2018 stood at €36.2
million compared to €38.1 million on December 31, 2017 and
consisted of €33.2 million in cash and cash equivalents and €3.0
million in restricted cash.
From the first quarter of 2018 onwards, Valneva
will only present quarterly primary statements based on IFRS with
the same accounting principles applied as for the IFRS financial
statements. Full results, in line with IAS34, will be issued for
Half Year 2018.
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 (0)1 20620 1116
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] For greater clarity, reporting of grants has been
re-classified and will, as of 2018, be included in the company's
Other Income / Expense line. The comparator period of 2017 was
adjusted accordingly.
[2] For greater clarity, reporting of grants has been
re-classified and will, as of 2018, be included in the Company's
Other Income / Expense line. The comparator period of 2017 was
adjusted accordingly.
[3] EBITDA (Earnings before interest, taxes,
depreciation and amortization) was calculated by excluding
depreciation, amortization and impairment of tangible and
intangible assets (Q1 2018: €1.7m, Q1 2017: €2.9m) from operating
profit (Q1 2018: €3.2m, Q1 2017: €0.5m).
[4]http://www.valneva.com/download.php?dir=News_2018&file=2018_03_19_VLA15_Phase_I_Results_PR_ENG.pdf
[5] As estimated by the CDC
https://wwwnc.cdc.gov/eid/article/21/9/15-0417_article
[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]
http://www.valneva.com/download.php?dir=News_2018&file=2018_03_13_Chikungunya_Phase_I_initiation_EN.pdf
[10] WHO, PAHO
[11] PAHA/WHO data: Number of reported cases of Chikungunya
Fever in the Americas - EW 51 (December 22, 2017)
[12] Cardona-Ospina et al., Trans R Soc Trip Med Hyg 2015
[13] Hallengärd et al. 2013 J. Virology 88: 2858-2866
[14] Roques et al. 2017JCI Insight 2 (6): e83527
[15]
http://www.valneva.com/download.php?dir=News_2018&file=2018_02_26_Phase_1_Initiation_VLA1601_EN.pdf
[16]http://www.valneva.com/download.php?dir=News_2017&file=2017_07_26_VLA_Emergent_ZIKA_PR_EN.pdf
[17] https://www.cdc.gov/zika/transmission/index.html
[18] http://www.who.int/mediacentre/factsheets/zika/en/
[19]http://www.paho.org/hq/index.php?option=com_content&view=article&id=12390&Itemid=42090&lang=en
- 2018_05_17_Valneva Q1 PR EN.pdf
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