Valneva Reports Best Financial Results in the
Company's History with its First Year of Positive EBITDA in
2016
The Company expects to continue showing a
strong financial performance in 2017
- Total revenues and grants of €97.9 million in 2016 (vs
€83.3 million in 2015) driven mainly by a 73.1% increase in
IXIARO®/JESPECT® revenues;
- Valneva reported a positive EBITDA of €2.8 million in 2016 (vs.
an EBITDA loss of €8.5 million in 2015);
- Net loss of €49.2 million in 2016, impacted by the impairment
charges related to the Pseudomonas program termination. Excluding
these charges and the exceptional gain related to the DUKORAL®
acquisition in 2015, net loss was cut by more than half compared to
2015 to €15.1 million;
- Positive operating cash flow of €6.5 million in 2016 and equity
financing proceeds of €7.5 million brought cash position to €42.2
million at the end of 2016;
- Under the €25 million loan agreement announced in July 2016
with the European Investment Bank, Valneva expects to receive a
first installment of €5 million at the beginning of April
2017.
2017 Outlook
- Valneva expects 2017 overall IFRS revenues to reach €105 to
€115 million, reflecting up to 17% total revenue growth compared to
2016;
- The Company anticipates product sales this year to grow by
10-15% over the €80.4 million reported in 2016, driven mainly by
IXIARO®/JESPECT® and DUKORAL®;
- After reaching operational profitability in 2016 with a
positive EBITDA of €2.8 million for the full year, the Group
expects to further grow its operational performance to an EBITDA of
€5 to €10 million in 2017
- Valneva intends to invest between €21 million and €23 million
in R&D, corresponding to approximately 20% of annual
revenues.
2017 R&D catalysts
- In 2017, the Company will advance the Phase I trial of its Lyme
vaccine candidate and expects to accelerate the program's
progression towards Phase II;
- Valneva plans to advance at least one additional vaccine
candidate into Phase I in the second half of 2017. The preclinical
portfolio includes vaccine candidates against Chikungunya and
Zika.
- Valneva also seeks to partner its Phase III-ready Clostridium
difficile vaccine candidate in 2017 following the publication of
positive final Phase II results in 2016;
Thomas Lingelbach, President and CEO and
Franck Grimaud, Deputy CEO of Valneva, commented, "2016 has
been a successful and transformational year for Valneva as we have
mastered the transformation of Valneva into a fully integrated
(from Research to Sales), commercial stage biotech company and
reported the best results in the Company's history while still
making significant investments in the development of life-saving
vaccines. We have also largely exceeded our operational goals
across almost every area of our business, leading to strong
financial performance. In 2017, we will focus on pursuing this
operational performance while at the same time trying to create
R&D value through both the advancement and, when appropriate,
the partnering of our product candidates."
Key Financial Information
|
€ in thousand |
3 months ending December
31(unaudited) |
12 months ending December 31 |
|
|
2016 |
2015 |
2016 |
2015 |
|
Revenues & grants |
27,151 |
22,652 |
97,892 |
83,335 |
|
Net profit/(loss) |
(2,717) |
(16,398) |
(49,184) |
(20,617) |
|
EBITDA[1] |
(653) |
(4,185) |
2,810 |
(8,492) |
|
Net operating cash flow |
(1,469) |
(4,063) |
6,505 |
(19,828) |
|
Cash, short-term deposits and marketable securities, end of
period |
42,180 |
42,567 |
42,180 |
42,567 |
Lyon (France), March 23, 2017 - Valneva
SE ("Valneva" or "the Company"), a fully integrated, commercial
stage biotech company focused on developing innovative lifesaving
vaccines, reported today its fourth quarter and full year financial
results ending December 31, 2016. The annual financial report
including the consolidated financial statements 2016 are 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: http://edge.media-server.com/m/p/7iddjfyq.
Commercialized vaccines
JAPANESE ENCEPHALITIS VACCINE
(IXIARO®/JESPECT®)
Significant sales growth following
establishment of new commercial network
In 2016, IXIARO®/JESPECT® revenues increased to
€53.2 million compared to €30.7 million in 2015, representing
a 73.1% year-on-year growth which was supported by robust fourth
quarter revenues of €13.1 million. The increase in revenue was
largely the result of Valneva taking over marketing and
distribution responsibilities for the product in several geographic
territories. Valneva expects IXIARO®/JESPECT® revenues to continue
to grow in 2017, reaching €58 to €62 million, through continued
marketing and sales efforts and an increase in product adoption by
travelers.
CHOLERA / ETEC- DIARRHEA VACCINE
(DUKORAL®)
Strong sales performance
DUKORAL® revenues grew to €24.7 million in 2016
compared to €21.2 million reported in 2015. In the fourth quarter
of 2016, DUKORAL® revenues were €9.8 million compared to €8.5
million in the fourth quarter of 2015 primarily due to increased
sales in Canada, a country which accounts for more than 50% of
global revenue. Valneva will continue to invest in growing the
DUKORAL® vaccine by way of promotional efforts and geographic
expansion and expects DUKORAL® sales to grow by 10% in 2017 to
approximately €27 million.
Technologies and services
EB66® CELL LINE
In 2016, Valneva signed 10 new agreements (9
research agreements and 1 commercial agreement) for the development
of human and veterinary vaccines on its EB66® platform. The Company
received the first royalties for an EB66®-based human vaccine under
the exclusive agreement it signed in 2007 with GlaxoSmithKline for
the development of pandemic and influenza vaccines on the EB66®
cell line.
GE Healthcare and Valneva also announced the
launch of a new cell culture medium, CDM4Avian, to optimize virus
productivity in the EB66® cell-line.
Valneva also expects that the European Medical
Agency's decision in 2016 to issue new guidelines allowing the
production of live attenuated vaccines in immortal cell-lines such
as EB66® will open new markets for the technology.
Valneva will continue to licence its vaccine
platform in 2017 and has already signed three new research
agreements since the beginning of the year.
Vaccine Candidates
CLOSTRIDIUM DIFFICILE VACCINE CANDIDATE- VLA
84
Partnering agreement sought in 2017
Clostridium difficile (C. difficile) is the most
common infectious cause for nosocomial diarrhea in Europe and the
US. There are an estimated 450,000 cases of C. difficile in the US
annually[2] and no vaccine against the disease is commercially
available.
Valneva seeks to partner its Clostridium
difficile vaccine candidate and has ongoing discussions with
interested parties. Published Phase II data[3]from the most
advanced vaccine program targeting primary prevention of
Clostridium Difficile Infections (CDI) indicates that Valneva's
VLA84 provides a comparable immunological profile to that other
product.
LYME BORRELIOSIS VACCINE CANDIDATE - VLA
15
First subject vaccinated
Currently, there is no licensed vaccine
available to protect humans against Lyme disease, a multi systemic
tick-transmitted infection affecting 300,000 Americans each
year.
Following clearance from the Food & Drug
Administration (FDA) and the Belgian authorities at the end of
December 2016, Valneva has initiated a Phase I clinical trial in
the US and Europe, and vaccinated the first subject at the end of
January.
In 2017, the company will advance the Phase I
trial of its Lyme vaccine candidate and expects to accelerate the
program's progression towards Phase II.
The global market for a vaccine against Lyme
disease is estimated at approximately €700-€800 million
annually[4].
CHIKUNGUNYA VACCINE CANDIDATE - VLA
1553
Expected to Enter Phase I in 2017
Valneva is also working actively on the
development of a Chikungunya vaccine and expects to enter Phase I
clinical development in 2017. Pre-clinical data showed that
Valneva's live attenuated vaccine candidate was safe and has the
potential to provide long term protection against Chikungunya after
a single immunization. The Chikungunya virus (CHIKV) re-emerged
from East Africa in 2014 to cause devastating epidemics of
debilitating and often chronic arthralgia and is now considered as
a major health threat with 180,000 reported cases in the Americas
in 2016[5]. There is currently no antiviral treatment for CHIKV
infection and no licensed vaccine to prevent the disease. The
global market for a Chikungunya vaccine is estimated at
approximately €500 million annually[6].
Financial Review[7]
FOURTH quarter 2016 financial review
(unaudited)
Revenues and grants
Valneva's aggregate fourth quarter 2016 revenues
and grants were €27.2 million compared to €22.7 million
in the fourth quarter of 2015.
Product sales in the fourth quarter of 2016
increased to €23.8 million from €17.4 million in the same
period of the previous year.
Revenues from collaborations and licensing in
the fourth quarter of 2016 decreased to €2.2 million compared
to €3.6 million in the fourth quarter of 2015. Grant income in
the fourth quarter of 2016 decreased to €1.1 million from
€1.7 million in the fourth quarter of 2015.
Operating result and EBITDA
Cost of goods and services sold (COGS) were
€13.1 million in the fourth quarter of 2016 of which
€6.7 million were related to IXIARO®/JESPECT® sales, yielding
a product gross margin of 49.0%. €4.3 million of COGS were
related to DUKORAL® sales, yielding a product gross margin of
56.0%. Of the remaining COGS for the fourth quarter of 2016,
€0.6 million were related to the Third Party product
distribution business and €1.5 million related to cost of
services. In the comparative period of 2015, COGS were
€13.3 million, of which €12.0 million were related to
cost of goodsand €1.3 million to cost of services.
Research and development expenses in the fourth
quarter of 2016 decreased to €5.9 million from
€6.6 million in the fourth quarter of the previous year.
Distribution and marketing expenses in the fourth quarter of 2016
amounted to €5.3 million, compared to €3.3 million in the
fourth quarter of 2015. General and administrative expenses
amounted to €4.0 million compared to €4.2 million in the
fourth quarter of 2015. Amortization and impairment charges in the
fourth quarter of 2016 were flat to the fourth quarter of 2015 at
€1.8 million.
As a result of the increased revenues, Valneva's
operating loss for the fourth quarter 2016 decreased to
€3.5 million compared to an operating loss of
€7.1 million reported for the fourth quarter of 2015.
Valneva's fourth quarter 2016 showed an EBITDA loss of
€0.7 million which compares to an EBITDA loss of
€4.2 million in the fourth quarter of 2015. Q4 2016 EBITDA was
calculated by excluding depreciation, amortization and impairment
charges amounting to €2.8 million from the operating loss of
€3.5 million as recorded in the condensed consolidated income
statement under IFRS.
Segment overview
The Commercialized Vaccines segment showed an
operating profit of €4.0 million in the fourth quarter of
2016, which compares to an operating loss of €0.4 million in
the fourth quarter of 2015. Excluding amortization expenses for
acquired intangible assets, the operating profit of that segment
was €5.7 million in the fourth quarter of 2016 and
€1.3 million in the fourth quarter of 2015.
The Technologies and Services segment showed an
operating loss of €0.7 million in the fourth quarter of 2016
compared to an operating profit of €0.6 million in the fourth
quarter of 2015. Excluding amortization and impairment, the
operating loss of the Technologies and Services segment amounted to
€0.5 million in the fourth quarter of 2016 compared to an
operating profit of €0.8 million in the fourth quarter of
2015.
The Vaccine Candidates segment currently
represents the Company's main area of investment and showed an
operating loss of €3.0 million in the fourth quarter of 2016
compared to a €2.7 million operating loss in the fourth
quarter of 2015.
Net result
Valneva's net loss in the fourth quarter of 2016
was €2.7 million compared to a net loss of €16.4 million
in the fourth quarter of the prior year. The fourth quarter 2015
net loss included an impairment charge of €8.4 million related
to Valneva's 43.3% shareholding in BliNK Biomedical SAS.
The finance result for the fourth quarter of
2016 was positive, amounting to a net finance income of
€0.7 million compared to a net loss of €1.0 million in
the fourth quarter of 2015.
FULL-YEAR 2016 financial revieW
Revenues and grants
Valneva's aggregate revenues and grants in the
full year 2016 increased to €97.9 million from
€83.3 million in 2015. This increase was mainly a result of
strong growth of IXIARO®/JESPECT® product sales.
Total product sales increased to
€80.4 million in the full year 2016 from €61.5 million in
the year 2015. IXIARO®/JESPECT® product sales contributed
€53.0 million to revenues in 2016 compared to
€30.6 million in 2015 representing 73.1% growth. The strong
increase was driven by the capturing of additional revenue margins
under the new sales and distribution network and also benefited
from strong demand from the US military and from private markets in
Germany and the UK. DUKORAL® sales contributed €24.6 million
to 2016 product sales representing growth of €3.5 million, or
16.8% compared the year 2015. Third Party product sales for the
year 2016 decreased to €2.9 million from €9.9 million in
the year 2015, due to the fact that several GSK vaccines were no
longer marketed by Valneva in the Nordic countries.
Revenues from collaborations and licensing
decreased from €16.8 million in 2015 to €13.6 million in
the year 2016. Grant income decreased to €3.8 million in 2016
compared to €5.0 million in 2015.
Operating result and EBITDA
Cost of goods and services sold (COGS) in 2016
were €43.1 million, leading to an overall gross margin of 56%.
€21.5 million in COGS were related to IXIARO®/JESPECT® sales,
yielding a product gross margin of 59.6%, and €13.5 million
were related to DUKORAL® sales, yielding a product gross margin of
45.5%. Of the remaining COGS for full year 2016, €2.0 million
were related to the Third Party product distribution business and
€6.2 million were related to cost of services. In the
comparative period of 2015, COGS were €47.0 million, of which
€16.4 million were related to IXIARO®/JESPECT®,
€18.2 million to DUKORAL®, €7.3 million to Third Party
products, and €5.0 million to cost of services.
Research and development expenses for the year
2016 reached €24.6 million, representing a slight decrease
compared to 2015 R&D expenses of €25.4 million.
Distribution and marketing expenses in 2016
amounted to €16.6 million compared to €9.1 million in
2015. Distribution and marketing costs increased as a result of the
establishment of the Company's own sales and marketing organization
following the termination of its global distribution partnership
with GSK in June 2015.
General and administrative expenses were flat
year on year, with 2016 and 2015 expenses, both amounting to
€14.4 million.
Amortization and impairment charges for full
year 2016 amounted to €41.2 million and included
€34.1 million of non-cash impairment charges which were
recognized in the second quarter following negative Phase II/III
study results for the Pseudomonas vaccine candidate and
discontinuation of the program.
Valneva's operating loss for the year 2016 was
also impacted by the impairment charges relating to the Pseudomonas
project and amounted to €42.6 million, compared to an
operating loss of €6.8 million reported for the year 2015.
Valneva's full year 2016 EBITDA showed a strong
improvement and amounted to an EBITDA profit of €2.8 million
compared to an EBITDA loss of €8.5 million in the year 2015. 2016
EBITDA was calculated by excluding depreciation, amortization and
impairment charges amounting to €45.4 million from the
operating loss of €42.6 million as recorded in the condensed
consolidated income statement under IFRS. EBITDA also excludes the
gains from bargain purchase in the calculation for the comparator
period of the previous year.
Segment overview
The Commercialized Vaccines segment showed an
operating profit of €16.7 million for full year 2016 compared
to an operating profit of €1.7 million in full year 2015.
Excluding amortization expenses for acquired intangible assets, the
operating profit of that segment was €23.4 million in 2016 and
€8.4 million in 2015.
The Technologies and Services segment showed an
operating profit for the year 2016 of €1.7 million compared to
€4.1 million in the year 2015. Excluding amortization and
impairment, the operating profit of the Technologies and Services
segment amounted to €2.1 million in 2016 compared to
€4.6 million in 2015.
The Vaccine Candidates segment currently
represents the Company's main area of investment and showed an
operating loss of €11.9 million in the year 2016 (excluding
one-time impairment charges of €34.1 million related to the
Pseudomonas project) compared to €11.2 million in full year
2015.
Net result
Valneva's net loss for the year 2016 was
€49.2 million. Excluding the one-time impairment charges
related to the Pseudomonas project, Valneva's net loss amounted to
€15.1 million compared to a net loss of €20.6 million for
the year 2015. The 2015 result included a €13.2 million gain
on bargain purchase ("negative goodwill") related to the
acquisition of the Crucell Sweden AB business. Without taking into
account the one-time effects in both periods, the net loss
significantly improved to €15.1 million in 2016 compared to
€33.8 million in 2015.
The net finance result amounted to minus
€6.3 million for the year 2016 compared to minus
€4.6 million in the year 2015. This increase in net finance
expenses was mainly due to negative exchange rate effects in 2016
as opposed to positive effects in the previous year. In 2015 net
loss included an impairment charge of €8.4 million related to
Valneva's shareholding to the BliNK Biomedical SAS.
Cash flow and liquidity
Net cash generated by operating activities in
2016 was €6.5 million compared to a negative cash-flow from
operating activities of €19.8 million in 2015. This strong
improvement resulted from the positive EBITDA development and was
also helped by working capital effects.
Cash inflows from investing activities in the
year 2016 amounted to €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 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 other loans. Cash outflows in connection with debt
financing, were partly offset by the net proceeds from a capital
increase of €7.5 million performed in December 2016 in
connection with an investment by MVM Life Science Partners LLP.
Liquid funds on December 31, 2016 stood at
€42.2 million compared to €42.6 million on December 31,
2015 and consisted of €35.3 million in cash and cash
equivalents and €6.9 million in restricted cash.
2017 Financial Outlook
|
in million € |
2016 Actual |
2017 Estimates |
Growth |
|
Total revenues & grants |
97.9 |
105 - 115 |
up to 17% |
|
Product sales |
80.4 |
88 - 92 |
10 - 15% |
|
IXIARO®/JESPECT® sales |
53.0 |
58 - 62 |
10 - 15% |
|
DUKORAL® sales |
24.6 |
27 |
10% |
|
EBITDA |
2.8 |
5 - 10 |
80 - 250% |
|
R&D expenses (20% of revenues) |
(24.6) |
(21) - (23) |
- |
Valneva to receive a €5 million installment from the European
Investment Bank loan
Under the €25 million loan agreement concluded
in July 2016 with the European Investment Bank (EIB), Valneva
expects to receive a first installment of €5 million at the
beginning of April 2017. The Company submitted a drawdown request
under this loan following the satisfaction of all material
conditions precedent. The EIB granted the €25 million loan facility
to support Valneva's R&D activities. The loan may be utilized
by Valneva in several installments within a 24-month period
following the signing of the loan agreement. Each installment is
repayable at the end of a five-year period, starting from the
drawing date.
Valneva's CFO Reinhard Kandera to depart by end of
March
As previously announced, Valneva's Chief
Financial Officer, Reinhard Kandera, has decided to resign his
position as Management Board member and CFO to pursue other
interests. After 15 years with Valneva (Intercell) Mr. Kandera will
leave at the end of March. After his decision in February, Mr.
Kandera has worked through a handover process with the Company to
ensure a smooth transition of his responsibilities.
"Reinhard has made great contributions to the
creation of Valneva and its development into one of the few
financially sustainable biotech companies, now covering its R&D
investments by product cash-flows. He has set the finance, IT and
investor relations functions up to operate efficiently and has
built a great team in these areas. Reinhard is handing over the CFO
role with the best financial results in the Company's history and
we want to thank him for the time he spent with us on the
management board" commented Thomas Lingelbach, CEO, and Franck
Grimaud, Deputy CEO of Valneva.
Reinhard Kandera, departing CFO
said, "Leaving Valneva has been a difficult decision because
it is a great company with a lot of future potential, but after 15
years at Valneva and its predecessor company Intercell, I feel it
is time for me to do something new. It has been a privilege to be
part of such a great management team which I am convinced will lead
Valneva to continued success."
Valneva has initiated a process with Korn-Ferry
to recruit a new CFO. In the interim, Manfred Tiefenbacher, VP
Finance will manage operational finance matters. In addition, the
Company's Supervisory Board has decided to appoint Mr. Frédéric
Jacotot, General Counsel, to the Management Board, taking effect on
April 1, 2017.
About Valneva SE
Valneva is a fully integrated, commercial stage
biotech company focused on developing innovative lifesaving
vaccines.
The Company seeks financial returns through
focused R&D investments in promising product candidates and
growing financial contributions from commercial products, striving
towards financial self-sustainability.
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 candidates against Clostridium difficile and
Lyme Borreliosis. A variety of partnerships with leading
pharmaceutical companies complement the Company's value proposition
and include vaccines being developed using Valneva's innovative and
validated technology platforms (EB66® vaccine production cell line,
IC31® adjuvant).
Valneva is listed on Euronext-Paris and the
Vienna stock exchange and has operations in France, Austria, Great
Britain, Sweden, Canada and the US with over 400 employees. More
information is available at www.valneva.com.
| Contacts Valneva
SE Laetitia Bachelot Fontaine Head of Investor Relations &
Corporate Communications T +33 (0)2 2807 1419 M +33 (0)6 4516 7099
investors@valneva.com |
Nina Waibel
Corporate Communications Specialist T +43 1206 201 149 M +43
6768 455 6719 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 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 in this press
release will in fact be realized. Valneva is providing the
information in these materials as of the date of this press
release, and disclaims 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] EBITDA (Earnings before interest, taxes,
depreciation and amortization) was calculated by excluding
depreciation, amortization and impairment of tangible and
intangible assets as well as gains from bargain purchase ("negative
goodwill") from the operating loss.
[2] Lessa et al, Burden of Clostridium difficile Infection in
the United States. N Engl J Med 2015;372:825-34
[3]G. de Bruyn et al. Vaccine 34 (2016) 2170-2178
[4] Company estimate supported by independent market studies
[5]PAHA/WHO data: Number of reported cases of Chikungunya Fever
in the Americas - EW 33 (August 19, 2016)
[6] Company estimate supported by independent market studies
[7]Note: FY 2016 and FY 2015 IFRS results are
not fully comparable because of the acquisition of the Crucell
Sweden AB business in February, 2015. As a result of the
acquisition, which included all assets, licenses and privileges
related to DUKORAL® as well as a vaccine distribution business in
the Nordics, the comparator period of 2015 includes specific
acquisition-related transaction effects and the results of the
acquired business are only included from the acquisition closing
date on February 9, 2015. Furthermore, the Company amended the
presentation of its income and cash flow statements compared to the
consolidated annual financial statements for the year ended
December 31, 2015 with respect to "gain on bargain purchase" (now
presented within "operating profit/loss") and "interest paid" (now
presented within the "cash flow from financing activities"). The
previous year comparative period was adjusted accordingly.
Attachments:
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