(CercleFinance.com) – Oddo maintains its ‘neutral’ recommendation on Valneva shares, with an unchanged price target of 16.3 euros.
The analysis office points to the high risk of termination of the contract with the European Commission (EC) concerning the supply contract for its vaccine candidate against COVID-19 (VLA2001).
Indeed, while VLA2001 did not receive marketing authorization (MA) before April 30, 2022, the EC sent Valneva last May a notice of intent to terminate the delivery (which related to 24.3 M doses in 2022).
Nevertheless, Valneva announced on Friday that it had submitted a remediation plan to the European Commission (EC).
Thus, ‘the next few weeks will be crucial for the company with the return of the CHMP expected the week of June 21 as well as the potential approval of VLA2001 by the EC soon behind’, believes Oddo. The broker thinks that ‘in a pandemic context, the results of the studies conducted so far are sufficient to obtain a conditional marketing authorization from the EMA’.
The analyst now expects ‘high short-term volatility on the stock’.
‘If the company is unable to agree on sufficient volumes or if the vaccine does not obtain its MA, the 2022 sales targets should be revised significantly downwards (the sales attached to the contract with the EC represent 220 ME in 2022 in our model, i.e. 65% of sales),’ concludes Oddo.
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