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
[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
2018_03_22_Valneva FY
Results_EN
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: VALNEVA via Globenewswire
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