(AOF) – Valneva, a biotechnology company, reduced its net loss over nine months. Over the period from January to September 2022, this amounted to 99.1 million euros against a net loss of 245.9 million euros a year earlier. The Adjusted EBITDA loss stood at 38 million euros over the period, compared to a loss of 227.6 million over the first nine months of 2021. Valneva achieved a turnover multiplied by almost 3, 5 over the first nine months of 2022, at 249.9 million euros against 69.8 million euros a year earlier, excluding the Covid program.
The FactSet consensus was for 220.1 million euros.
Product sales amounted to 74.4 million euros, against 45.5 million a year earlier. They benefited from the recovery in sales of travel vaccines and sales of vaccines against Covid-19 in Europe. Sales of non-Covid products recorded growth of 11.2% compared to the same period of the previous year.
Other income reached €175.5 million, compared to €24.4 million in the first nine months of 2021.
The group’s cash position as of September 30, 2022 increased to €261 million, compared to €100.4 million as of June 30.
For 2022, the group continues to expect turnover of between 340 million and 360 million euros. This forecast takes into account “the continued recovery in sales of travel vaccines, further revenue recognition related to payments received under the Advance Purchase Agreements with the European Commission and the United Kingdom, and expected sales as part of the addendum to the Advance Purchase Agreement with the European Commission,” Valneva said.
Consequence of the abandonment of its vaccine program against Covid-19, biotech announced this Thursday a savings plan marked by the elimination of 20% to 25% of its workforce.
The company now expects its R&D spending to fall to between 95 million and 110 million euros this year, down from 120 to 135 million euros previously expected.
“After this reorganization, the company’s total headcount is expected to be approximately 25% higher than before the Covid-19 crisis, allowing the company to retain key talent and additional expertise to lead its strategy well. This right-sizing and refocusing should lead to annualized savings of approximately 12 million euros,” Valneva said in a statement.
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Key points
– Specialist in the development of prophylactic vaccines against infectious diseases with limited therapeutic options;
– Turnover of €348m €bn drawn from Europe for 56%, ahead of the Americas (27%), then Asia-Oceania (9%) and Africa-Middle East (8%) ;
– Business model: portfolio of diversified vaccines for the general public, financing of clinical developments by a specialized infrastructure, 2 commercial vaccines (Ixiaro and Dukoral against Japanese encephalitis and cholera) and vaccine distribution rights for third parties;
– Capital held at 11.68% by the Grimaud la Corbière group, 8.15% by BPI France, 8.14% by Pfizer at the end of September, Frédéric Grimaud presiding the supervisory board of 5 members and Thamas Lingelbach the management board;
– Solid balance sheet with €307m of equity against €42m of debt at the end of April, reinforced by available cash giving financial visibility until the end of 2024.
Challenges
– Medium-term strategy based on financing R&D through sales of the Ixiaro and Dukoral vaccines, extension of the manufacturing network (3 sites, in Scotland, Sweden and Austria) and partnerships promoting the group’s assets;
– Innovation strategy inherent in the business model, rich in a portfolio of 398 patents and supported by €173 million in R&D costs, with 3 main assets and 3 preclinical programs:
– the only vaccine in clinical development against Lyme disease,
– the only single injection vaccine against chikungunya,
– the only inactivated and adjuvanted whole virus COVID-19 vaccine,
– candidate vaccines against human metapneumovirus, parvovirus and norovirus;
– Environmental strategy: energy efficiency, minimization of waste, optimal use of water and reduction of 5%, vs 2016, of CO2 emissions by 2025;
– Good visibility of the activity thanks to the agreements on vaccines with:
– with Pfizer to co-develop and sell the one against Lyme disease ($308 million),
– with Bavarian Nordic for the marketing and distribution of specialized vaccines,
– with Batavia Biosciences to develop an inexpensive polio vaccine,
– with the Butantan institute against chikungunya for low-income countries.
Challenges
– Three major uncertainties in autumn 2022:
– the end of the production of the anti-covid VLA2001 vaccine caused by the fall in public orders, hence the recovery of the financial situation via a call on the market,
– the disposal of VLA2001 stocks on international markets,
– the pending decision from the US Department of Defense on a new order for IXIARO in 2023;
– Evolution of the shareholding after the September capital increase, amounting to €103 million (Deep Track with 6.97% of the shares, BPI France 7.6%)
– Response of the American health authority to the marketing of the vaccine against chikungunya;
– End of phase 3 clinical trials of the vaccine against Lyme disease in the 2nd quarter of 2023;
– Launch in early 2023 of the marketing, in partnership with VBI Vaccines, of PreHevbri, the only vaccine authorized in Europe against hepatitis B;
– After a doubling of revenues in the 1st half, 2022 objectives of turnover between 340 and 360 M€ and R&D expenditure between 65 and 75 M€.
An inevitable race for new blockbusters
The patent for Merck’s star product, the cancer drug Keytruda, which accounts for more than 35% of its sales, expires in 2028. Despite the loss, since 2019, of the patents for its three star products (Avastin, Herceptine, Rituxan) Roche was able to renew its portfolio by bringing new molecules to market. However, the discovery and launch of new drugs are increasingly expensive. AstraZeneca spends about $6 billion a year on R&D in a pharmaceutical industry where the life of a patent only lasts ten to fifteen years. This leads laboratories to withdraw from certain activities. Thus J&J, Pfizer, GSK and, no doubt, Novartis soon prefer to refocus on specialty drugs and abandon any ancillary activity.