Valneva Reports Strong Operational
Performance for the First Nine Months of 2017
Strong financial performance for first nine months of
2017 and full year outlook leads to upward revision of EBITDA
guidance
- Total revenues of €79.8 million in the first nine months
2017 compared to €70.7 million in the first nine months of 2016
benefiting from a 20% year-on-year growth in product sales. Full
year revenue expectation confirmed in the previously guided range
of €105-115 million.
- EBITDA at €12.3 million in the first nine months of 2017
compared to €3.5 million in the first nine of months 2016. As
announced in first half results, following major R&D progress,
Valneva expects higher R&D costs in 2017 than initially
anticipated of €23-25 million. Despite this, the Company
increases its full year EBITDA guidance to €10m - €13 million
compared to previous guidance of €5 - €10 million.
- Positive operating cash flow of €18.2 million in the first
nine months of 2017 brought cash position to €43.8 million at
the end of September 2017.
- As planned, noting the increase in R&D expenditure driven
by progression of key R&D programs, under the €25 million
loan agreement announced in July 2016 with the European Investment
Bank, Valneva expects to draw down a further €5 million prior
to the end of this year.
Major R&D Progress - Lyme Phase I study
fully recruited; two further programs ready to enter clinical
development in the first quarter of 2018
- Phase I study for Valneva's Lyme disease vaccine VLA15 is now
fully recruited and the Company expects to announce Phase I data in
the first quarter of 2018 followed directly by the launch of Phase
II.
- FDA's fast track designation for VLA15 expected to offer a
faster way to market approval through frequent interactions with
the FDA.
- Valneva confirms plans to commence Phase I trials of its
Chikungunya and Zika vaccine candidates in the first quarter of
2018.
- Valneva decides on a new development and partnering approach
for its Clostridium difficile vaccine candidate VLA84.
David Lawrence, Valneva's Chief Financial Officer,
commented, "Strong business performance, including sales of our two
commercial products and overall business productivity, means that
we increase EBITDA guidance for the full year. We are also
extremely pleased with the current progression of our R&D
portfolio and very much look forward to the further development of
these assets, each of which has significant potential. "
Key Financial Information
(Unaudited)
€ in thousands |
9 months ended September 30 |
|
2017 |
2016 |
Revenues & Grants |
79,757 |
70,741 |
Net profit/(loss) |
(7,804) |
(46,467) |
EBITDA |
12,250 |
3,463 |
Net operating cash flow |
18,250 |
7,990 |
Cash, cash equivalents and short-term deposits, end of period |
43,797 |
40,293 |
Lyon (France), November 9, 2017 - Valneva SE ("Valneva"
or "the Company"), a fully integrated, commercial stage biotech
company focused on developing and commercialising innovative,
life-saving vaccines, reported today its consolidated financial
results for the first nine months of the year ended September 30,
2017. The financial report, including the condensed consolidated
interim financial results, 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/255tsheb
Commercial vaccines
JAPANESE ENCEPHALITIS VACCINE (IXIARO®/JESPECT®)
Continued sales growth
In the first nine months of 2017, revenues from IXIARO®/JESPECT®
product sales reached €45.9 million compared to
€40.1 million in the same period last year. The increase was
mainly driven by growth in the UK, German and Canadian private
markets as well as U.S. military. Earlier this week Valneva also
announced the signing of a further contract with the U.S. military
worth up to $39.6 million.
Based on nine-month sales, Valneva confirms its expectation to
achieve its IXIARO®/JESPECT® full year 2017 revenue guidance of
between €58 to €62 million (compared to €53.2 million in 2016)
and double-digit growth.
CHOLERA / ETEC- DIARRHEA VACCINE (DUKORAL®)
Sales increase 34% in the first nine months of 2017
In the first nine months of 2017, revenues from DUKORAL® sales
reached €19.9 million compared to €14.9 million in the
same period last year, representing a growth of 34%. In addition to
Canada, where more than 50% of DUKORAL® global revenues are
generated, the vaccine benefited from strong sales in the UK
market.
Based on nine-month sales, Valneva reaffirms its DUKORAL® full
year 2017 revenue guidance to approximately €27 million
(compared to €24.7 million in 2016).
Clinical vaccine candidates
CLOSTRIDIUM DIFFICILE VACCINE CANDIDATE - VLA 84
New development and partnering approach
Valneva's Clostridium difficile vaccine candidate VLA 84 is
targeting the primary prevention of healthcare-associated diarrhea,
an increasing threat to elderly in a >$1billion expected market
potential.
VLA 84 successfully completed Phase II and is Phase III ready.
The company confirms that it views its program - based on published
immunogenicity & safety data - as not inferior to the other
vaccine candidates being developed. In addition, VLA 84 may bring
distinct competitive advantages in industrialization and future
manufacturing.
At this point, however, potential partners are hesitant about
the level of investment required to fund a Phase III clinical
trial. Noting this feedback, Valneva has reviewed its development
and partnering approach.
Valneva will consider using the first CDI vaccine approval and
to conduct a head to head, non-inferiority Phase III based on an
immunological correlate that is expected to substantially improve
the investment - risk profile of an in-house, or partnered, final
development to take the product to market.
Noting the above, the remaining value of the VLA84 intangible
assets have been reviewed in the financial statements, as set out
in the Financial Review section below.
LYME BORRELIOSIS VACCINE CANDIDATE - VLA 15
Phase I subject enrollment completed, data expected in the
first quarter of 2018
Valneva has decided to focus its R&D expertise and resources
on the development of a much-needed vaccine against Lyme disease as
it is amongst the fastest growing vector-borne infections and there
is no other clinical vaccine candidate in development
worldwide.
The company has completed subject enrollment for the ongoing
Phase I study of its Lyme vaccine candidate VLA 15 and initiated
serological testing. Valneva confirms it expects to announce data
in the first quarter of 2018 which will be immediately followed by
Phase II launch.
At the end of July 2017, the FDA granted Fast track designation
to Valneva's Lyme disease vaccine candidate with a view to
potentially accelerate the availability of the vaccine on the
market.
Lyme borreliosis (LB) is a systemic infection caused by Borrelia
bacteria, transmitted by infected ticks for which there is
currently no human vaccine available. According to the Centers for
Disease Control and Prevention (CDC), approximately 400,000[1]
Americans are diagnosed with Lyme disease each year with at least a
further 200,000 cases in Europe[2].
Valneva's Phase I study is being conducted at three sites - two
in the U.S. and one in Europe (Belgium) - and enrolled
approximately 180 subjects aged between 18 and 40 years. The
primary objective of the observer-blind, partially randomized, dose
escalation study is to evaluate the vaccine candidate's safety and
tolerability profile at different dose levels and formulations.
Immunogenicity, measured by observing IgG antibodies against the
six most prevalent serotypes of Lyme borreliosis in the US and
Europe present in the vaccine, will also be monitored for different
dose groups and formulations at different time-points.
The global market for a vaccine against Lyme disease is
currently estimated at approximately €700 - €800 million
annually[3].
CHIKUNGUNYA VACCINE CANDIDATE - VLA 1553
Phase I initiation anticipated at the beginning of
2018
Valneva is working on the development of a monovalent, live
attenuated Chikungunya vaccine candidate aimed to differentiate
against other vaccines candidates under development through
single-shot protection.
Preclinical data including studies in non-human primates showed
a good safety profile and a good immunogenicity after a single
immunization. The Phase I study protocol has now been finalized and
the Company expects to initiate Phase I in the U.S. early 2018.
The Chikungunya virus (CHIKV) is a Togaviridae virus (identified
in Tanzania in 1952) that re-emerged in 2014. There were about
180,000 reported cases in the Americas in 2016[4] and it is now
considered a major public health threat. The incidence and
geographic spread of CHIKV is expected to grow as the distribution
of its primary mosquito vectors continue to broaden.
With no effective treatment available for CHIKV infection, there
is a high unmet need for a vaccine and the global market is
estimated at approximately €500 million annually[5].
ZIKA VACCINE CANDIDATE - VLA 1601
Phase I initiation anticipated at the beginning of 2018,
Partnered with Emergent BioSolutions
In July 2017, Valneva and US Company Emergent BioSolutions
joined forces to accelerate the development of a vaccine against
the Zika virus. The Phase I study protocol has now been finalized
and the two companies aim to initiate Phase I in the U.S. early
2018, with first Phase I data anticipated in the same year.
Valneva and Emergent BioSolutions will share all costs until
Phase I completion with Valneva responsible for the program's
execution. Upon availability of Phase I data, Emergent has an
option to take the program over in exchange for an initial
€5 million milestone payment, potential additional milestones
of up to €44 million and future royalties on annual net
sales.
The agreement between the two companies also includes a
technology transfer to Emergent's Bayview manufacturing facility in
Baltimore, Maryland, in the US for Phase II/III and any future
commercial manufacturing. Valneva retains a right of first
negotiation for potential product commercialization in Europe.
The Zika virus is a flavivirus transmitted by Aedes mosquitos
that usually either causes no symptoms or a mild flu-like syndrome
in many infected persons. However, if women are infected during
pregnancy, the virus is transmitted to the fetus and has been
associated with the development of severe congenital abnormalities
including microcephaly. Zika infection has also been linked with
the risk of developing the autoimmune disorder Guillain-Barré
syndrome. In 2015, a major Zika epidemic started in Brazil and
spread to other parts of the Americas. Between 2015 and end of July
2017, 1 million cases of Zika infection and many cases of the
congenital syndrome associated with Zika virus have been reported
by countries and territories in the Americas, according to the
World Health Organization[6].
Financial Review
FIRST NINE MONTHS 2017 FINANCIAL REVIEW
(Unaudited)
Financial Reporting Policy
Valneva's revenues and expenses are not distributed equally
throughout the year nor across quarters, and this distribution can
vary from year to year, thus affecting meaningful quarterly data
comparisons. Therefore, the Company has decided to focus on year to
date (nine months) data only. However, third-quarter data is
included in the IFRS statements in accordance with Austrian Prime
Market Rules.
Total Revenues
Valneva's aggregate total revenues in the first nine months of
2017 were €79.8 million compared to €70.7 million in the
first nine months of 2016. This represents growth of 12.7%. Most of
this growth was driven by increased product sales in the first nine
months of 2017, which grew to €67.9 million from
€56.6 million in the same period of the previous year
representing growth of almost 20%.
Revenues from collaborations and licensing in the first nine
months of 2017 were €8.5 million compared to
€11.4 million in the first nine months of 2016. Grant income
in the first nine months of 2017 increased to €3.4 million
from €2.7 million in the first nine months of 2016.
Operating result and EBITDA
Cost of goods and services sold (COGS) were €32.1 million
in the first nine months of 2017 representing an overall gross
margin of 59.7% compared to 57.6% in the first nine months of
2016.
Research and development expenses in the first nine months of
2017 were €15.1 million compared to €18.7 million in the
first nine months of the previous year. This relates to the timing
of R&D activities.
Distribution and marketing expenses in the first nine months of
2017 amounted to €12.0 million, compared to €11.3 million
in the first nine months of 2016.
General and administrative expenses were €11.1 million
compared to €10.4 million in the first nine months of
2016.
Amortization and impairment charges in the first nine months of
2017 were €9.0 million and included one-time, non-cash
impairment charges amounting to €3.6 million related to the
Clostridium Difficile intangible assets. Amortization and
impairment charges of the first nine months of 2016 amounted to
€39.5 million (which included non-cash impairment charges of
€34.1 million for the Pseudomonas aeruginosa project).
Primarily as a result of the strong product sales growth as well
as driven by lower R&D spend for the year to date, Valneva
realized an operating profit of €0.2 million in the first nine
months of 2017 compared to an operating loss of €39.1 million
in the first nine months of 2016.
During the first nine months of 2017 Valneva reported an EBITDA
of €12.3 million compared to an EBITDA of €3.5 million in
the first nine months of 2016. First nine months' 2017 EBITDA was
calculated by excluding depreciation, amortization and impairment
charges amounting to €12.1 million from the operating profit
of €0.2 million as recorded in the condensed consolidated
income statement under IFRS.
Net result
Valneva's net loss in the first nine months of 2017 was
€7.8 million compared to a net loss of €46.5 million in
the first nine months of the prior year.
Finance costs and effects amounted to a net finance expense of
€7.0 million in the first nine months of both 2017 and 2016.
This largely relates to the impact of currency movements amounting
to €3.1 million in the first nine months of 2017 compared to
€2.5 million during the first nine months of 2016 while
interest expenses decreased to €3.9 million from
€4.7 million in the comparator period of 2016.
Cash flow and liquidity
Net cash generated by operating activities in the first nine
months of 2017 was €18.2 million compared to €8.0 million
in the first nine months of 2016. This strong improvement resulted
from improved EBITDA and was also supported by positive working
capital effects.
Cash outflows from investing activities in the first nine months
of 2017 amounted to €3.0 million and resulted primarily from
purchase of equipment and software. Cash inflows from investing
activities in the first nine months of 2016 amounted to
€16.7 million and primarily were related to a re-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 outflows from financing activities in the first nine months
of 2017 amounted to €10.0 million being primarily related to
re-payment of borrowings. Cash outflows from financing activities
in the first nine months of 2016 amounted to €25.9 million and
included the re-payment of borrowings to Athyrium LLC (in
connection with the adjustment of the purchase consideration for
the acquisition of Crucell Sweden AB and the DUKORAL® business), as
well as interest payments and re-payments of loans.
Liquid funds on September 30, 2017 stood at €43.8 million
compared to €42.2 million on December 31, 2016 and consisted
of €40.6 million in cash and cash equivalents and
€3.2 million in restricted cash.
Valneva to draw down a second €5 million instalment from the
European Investment Bank
As planned, noting the increasing R&D expenditure driven by
the progression of key R&D programs, under the €25 million
loan agreement concluded in July 2016 with the European Investment
Bank (EIB), Valneva expects to draw down a further €5 million
prior to the end of 2017. €5 million has already been drawn
down in April 2017. Each instalment is repayable five years after
the drawdown date.
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
a unique vaccine against Lyme disease. 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® cell
line and IC31® adjuvant).
Valneva shares are tradable on Euronext-Paris, the Vienna stock
exchange and Deutsche Börse's electronic platform Xetra®. The
Company has operations in France, Austria, Great Britain, Sweden,
Canada and the US with over 400 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 |
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 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]As estimated by the CDC based on US reported cases in
2015
[2] As estimated from available national data. Case reporting is
highly inconsistent in Europe and many LB infections still go
undiagnosed
[3]Company estimate supported by independent market studies
[4]PAHA/WHO data: Number of reported cases of Chikungunya Fever
in the Americas - EW 33 (August 19, 2016)
[5]Company estimate supported by independent market studies
[6]http://www.paho.org/hq/index.php?option=com_content&view=article&id=
12390&Itemid=42090&lang=en
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