Q1 2021 Valneva SE Earnings Call

May 20, 2021

[music].

Operator: Good day, and thank you for standing by. Welcome to the Valneva Reports Q1 2021 Financial Results and Business Update conference call.

Good day and thank you for standing by welcome to never reported Q1, 'twenty 'twenty, 1 financial results and business update conference call. At this time all participants are in a listen only mode. After the speaker presentation that will be a question and answer session to ask a question. During this session you will need to press star 1 on your telephone.

Operator: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, Mr. Thomas Lingelbach. Please go ahead.

Please be advised that today's conference is being recorded if you quit and he said his assistance. Please press star Zero I would now like to hand, the conference over to your first speaker today. Mr. Thomas do you think of please go ahead.

Thomas Lingelbach: Very good day. Welcome to our quarterly results and business update call. So yeah, so the first quarter of 2021 has been marked by excellent progress on our clinical program. We have been able to initiate an additional Phase II study on Lyme to accelerate pediatric development in our partnership with Pfizer. We transitioned our COVID vaccine candidate into phase 3 and started the phase 3 trial for the vaccine against COVID-19, and we completed enrollment in our chikungunya phase 3 study.

Very good day, when come to our quarter, 1 results and business update call.

So yes, so the quarter 1 'twenty 'twenty 1 has been marked by excellent progress on our clinical programs.

We have been able to initiate an additional phase 2 study.

On line 2 accelerates the pediatric development.

Our partnership with Pfizer.

We transitioned our COVID-19 vaccine candidate into.

Into phase 3 and started the phase III trial.

For the vaccine against COVID-19, and we completed the enrollment of our chikungunya phase 3 study. So all 3 assets, where we will where we are either the only in class best in class first in class and we are very pleased with this progress of <unk>.

Thomas Lingelbach: So all three assets where we are either the only in class, best in class, or first in class, and we are very pleased with this progress. Of course, the key event also, not a quarter, but one event, has been our recent successful NASDAQ listing. And one more time, I would like.

Cause the key event also another quarter..1 event has been very recently our success for NASDAQ listing and 1 more time I would like to thank everyone who contributed to this outstanding success.

Thomas Lingelbach: And I would like to thank everyone who contributed to this outstanding performance. In terms of finances, and Manfred and David will give more details about our financial performance, we had cash and cash equivalents of more than 200 million euros at the end of March, and this excludes the proceeds from our global offering that we did very recently. Yes, our revenues, and particularly here, product sales are still low and affected and adversely affected by the global pandemic. Also, we all now see light at the end of the tunnel, and certainly, people will travel again when it is feasible again.

In terms of.

Financial and monthly it and David will give more details around our financial performance.

We had cash and cash equivalents of more than 200 million euros at the end of March and this excludes the proceeds from our global.

Offering that we did recently.

Yes, our revenues interest, particularly here.

The product sales I still low and affected the diversity affected by.

The global pandemic, although we all see now a light at the end of the tunnel and uncertainty people will travel again, when travel would be feasible again.

Thomas Lingelbach: With that short introduction, let me start by giving you an update on our clinical programs. I think we have talked a lot about our multivalent Lyme disease vaccine candidate in the past. By way of reminder, you know that it is the only program in clinical development today worldwide. We reported good phase two data following the two studies that optimized dose and schedule, and we accelerated, as mentioned during my introduction, pediatric development in March this year in order to test in this study children five years and above with the objective to bring the future total population eligible for that vaccine into the placebo-controlled field of study. Yeah, this is summarized also on page seven of the presentation and provides solid and good data here.

With that short introduction, let me start by giving you an update on our clinical programs I think we talked a lot about our multivalent Lyme disease.

Disease vaccine candidate in the past by way of reminder, you know that is the only program in clinical development 2 day worldwide we reported.

Good phase 2 data following the 2 studies debt optimized dose and schedule and we accelerated as mentioned during my introduction the pediatric development in March this year in order to test index.

Children 5 years at the bus with the objective to bring the future total.

Total population eligible for that vaccine into the placebo controlled efficacy study.

Yeah. This is summarized also on page 7 of the presentation.

And provided.

Solid and good day time here, we I expecting to progress into phase 3.

Thomas Lingelbach: We are expecting to progress into phase three towards the end of next year, which will allow us then to have the efficacy readout based on a single tick season within the tick season. That's in a nutshell where we are on LIME. On our COVID program, I would like to spend a little bit more time on since we didn't have the chance to go through all the data in detail. Again, here, in the highlights on the program shown on page eight of the presentation, you know that we have an existing UK government deal worth up to 1.4 billion for that vaccine, which is the only inactivated vaccine in clinical development in Europe today.

Towards the end of next year, which will allow US then to have the efficacy readout.

Based on a single peak season within the <unk> in 2023.

That's in a nutshell, where we are in line.

On our Cobot program I would like to spend a little bit more time on since we have not the chance to go through all the data in detail again here to highlight on the program shown on page 8 of the presentation.

We have an existing U K government deal with up to $1.4 billion for that vaccine, which is the only inactivated vaccine in clinical development in Europe today.

We have been able to leverage our existing.

<unk> platform, our existing manufacturing process that we developed for ex Seattle, a product that we developed all the way from bench to global licensure.

We combine the inactivated approach with a modern adjuvant, namely dynamics as a CPG 2018.

We will go through the key phase 2 results. During this presentation again, and you know that the phase III is well underway.

Thomas Lingelbach: We have been able to leverage our existing platform, our existing manufacturing process that we developed for Xero, a product that we developed all the way from bench to global licensing, and we combined the inactivated approach with a modern adjuvant, namely Dynavax's CPG 1018. We will go through the key Phase I, II results during this presentation again, and you know that Phase III is well underway with recruitment reaching almost 80% of our targeted recruits.

With our recruitment, reaching almost 80% of our targeted recruitment.

Page 9.

Shows a summary of the safety profile that we observed in the phase 1.2 study and.

And in summary, 1 can conclude here that the safety profile is as expected for an inactivated vaccine inactivated vaccines on the market for more than 50 years of already.

We see that debt.

The product candidate was well tolerated across all dose groups with no safety concerns identified by the independent DSM be no statistically significant differences between the dose groups low medium high and.

Thomas Lingelbach: Page 9 shows a summary of the safety profile that we observed in the Phase 1-2 study. In summary, one can conclude here that the safety profile is as expected for an inactivated vaccine. You know that inactivated vaccines have been on the market for more than 50 years. We see that the product candidate was well-tolerated across all the dose groups.

Actually no differences in between first and second vaccine vaccination. So all.

All in all the safety profile confirms debt inactivated vaccines.

Very nicely tolerate it.

Vaccines across the entire portfolio of vaccines that are in the market today.

When we look at the Immunogenicity on page 10, you'll see debt debt. We reached after the second dose in more than 90% of all trial participants across all the 3 dose groups significant levels of antibodies.

Thomas Lingelbach: We had no safety concerns identified by the independent DSMB, no statistically significant differences between the dose groups, low, medium, high, and actually also no differences between the first and second vaccination. So, all in all, the safety profile confirms that inactivated vaccines are very well tolerated across the entire portfolio of vaccines that are in the market today. When we look at the immunogenicity on page 10, you see that after the second dose, more than 90% of all trial participants across all the three DOS groups had significant levels of antibodies to the SARS-CoV-2 virus spike protein. The seroconversion rates at the high dose were 100%.

For the SaaS Cove to virus Spike protein.

Seroconversion rates.

The high dose where 100%.

And basically the geometric mean for reitzes from baseline in the high dose was 86 for it.

When we look at page 11.

At the functional.

Antibodies.

You'll see a very nice.

Dose response on the top left inside of the crop in between the low medium and high dose. So the high dose clearly performed best.

Giving functional antibody titer levels.

At or above the level of standardized.

Standardized panel of convalescent Sera.

For which vaccine efficacy has been reported above 80%.

We have been extremely pleased with sales results.

Confirming our development hypothesis.

We also saw cellular responses.

And and here.

Clearly T cell responses.

By interferon gamma at least for the analysis against the S. The EM and DM protein day.

Data analysis is still ongoing.

But this is also a very positive outcome of this phase 1.2 data on.

Thomas Lingelbach: And basically, the geometric mean fault rises from baseline in the high dose was 86. When we look at page 11 and look at the functional antibodies, you see a very nice dose response on the top left-hand side of the graph, in between the low, the medium, and the high dose.

On the basis of debt dataset, we have been able to progress into phase 3 with the phase III trial ongoing in the U K as we speak.

And it is the first time debt company is aiming to show effectiveness by immunological comparison against a licensed vaccine. So we are having here are more than 4000 adults are immune.

Immuno comparability study.

Thomas Lingelbach: So the high dose clearly performed best, giving functional antibody titer levels at or above the level of a standardized panel of convalescent sera, for which vaccine efficacy has been reported above 80%. We have been extremely pleased with those results, confirming our development hypothesis. We also saw cellular responses, and here, clearly, T cell responses by interferon-gamma heli-spot analysis against the S, the M, and the N

And our endpoint is GMT ratio superiority of our vaccine in a 2 dose immunization schedule for weeks apart against them against the active comparator.

I mentioned already the studies conducted in the U K of course protocol is agreed with MH array and we are in the process of aligning the development path also with other regulatory authorities.

You have seen debt by NEVA participates in the first word was first COVID-19 vaccine booster tried in the UK 7 different vaccines are being tested for fostering after different off the priming with different vaccines.

Thomas Lingelbach: Detailed analyses are still ongoing, but this is also a very positive outcome of this Phase I-II data. On the basis of that data set, we have been able to progress into Phase 3, and the Phase 3 trial is ongoing in the UK as we speak. And it is the first time that the company is aiming to show effectiveness by immunological comparison against a licensed vaccine. So we have here more than 4,000 adult immunocomparability studies. And our endpoint is the GMT ratio superiority of our vaccine in a two-dose immunization schedule four weeks apart against the active comparator. I have mentioned already the studies conducted in the UK.

3 out of the 7 with different dose levels, including ours.

And <unk>.

We are very pleased to be part of that and of course, we are planning additional studies plus this is an important point, especially because we see it.

Inactivated approach and our approach complementing very nicely in the booster strategies that different companies have different countries have established.

And and of course also as an ideal platform for variance and here. It's important to note debt, we have already developed by receipt banks, including.

BC banks against the South African other Kent variant.

So we are in a position to switch manufacturing and to start manufacturing of variant based vaccines imminently.

Thomas Lingelbach: Of course, protocol is agreed with MHRA, and we are in the process of aligning the development path also with other regulatory authorities. You may have seen that Valneva participates in the world's first COVID-19 vaccine booster trial in the UK. Seven different vaccines are being tested for boostering after priming with different vaccines, three out of seven with different dose levels, including ours.

Yeah, that's our COVID-19 vaccine candidate on Chikungunya again by way of reminder.

We have the only once in phase III today.

In the world.

And we have already enrolled our pivotal phase 3 trial fully the endpoint of this study will be based on an immunological endpoints. So it's it's zero protection levels.

So we use a surrogate marker for the surrogate marker has been confirmed by the FDA.

And this is the so called accelerated approval pathway and of course are the first company to get BLA approval in the United States.

Would it be eligible for a priority review voucher, which represents for US the single largest short term commercial return.

Thomas Lingelbach: And we are very pleased to be part of that, and, of course, we are planning additional studies. For us, this is an important point, especially because we see an inactivated approach and our approach complementing very nicely the booster strategies that different countries have established. And, of course, also as an ideal platform for variants.

We are differentiating by applying a simple chart life attenuated.

Lactic vaccine profile here.

And.

And of course, this vaccine fits nicely within our existing commercial and manufacturing capabilities. You also remember that our debt. We have partnered this vaccine which is in the firsthand.

Seed for travelers traveling to areas, where chikungunya outbreaks occur.

Thomas Lingelbach: And here it is important to note that we have already developed viral seed banks, including seed banks against the South African or the Kent variant. So we are in a position to switch manufacturing and start manufacturing variant-based vaccines imminently. Yeah, that's our COVID-19 vaccine candidate for Chikungunya. Again, by way of reminder, we have the only ones in phase three today in the world. And we have already enrolled our Pivotal Phase III trial fully. The endpoint of this study will be based on an immunological endpoint, so it's zero protection levels.

But also of course for people living in those areas and here. We are we are we.

We have partnered with <unk> and and.

Fruits happy with Instituto put Anton to.

To access the low and medium income countries.

In terms of next steps.

We have.

<unk> initiated 2 flagging studies, 1 is the loss a lot consistency study in about 400.

Subjects and the other 1 is the antibody persistence for trial.

All of that will form the basis for our licensure package in adults.

And and we expect to submit next year.

And yeah, and then in parallel week on it.

Continued.

The pediatric route.

Thomas Lingelbach: So we use a surrogate marker that has been confirmed by the FDA. And this is the so-called Accelerated Approval Pathway. And, of course, the first company to get BLA approval in the United States will be eligible for a Priority Review Voucher, which represents, for us, the single largest short-term commercial return.

And and this will then lead to.

Label extension post licensure.

Yeah, so with that update on our 3.

Highly differentiated and very unique.

R&D programs I would like to hand over to David.

Thank you Thomas.

So good afternoon or good morning, everyone, depending where you are.

I'm just going to say, if you want to talk to them.

A couple of slides before COVID-19.

2 months.

Thanks for the board.

So slide 17 I think.

Thomas mentioned upfront and I just want to emphasize what a strong cash position we have right now.

Thomas Lingelbach: We are differentiating by applying a single-shot, live-attenuated prophylactic vaccine profile here. And, of course, this vaccine fits nicely within our existing commercial and manufacturing capabilities. You also remember that we have partnered with this vaccine, which is, on the one hand, a vaccine for travelers traveling to areas where chikungunya outbreaks occur but also, of course, for people living in those areas. And here we have partnered with CEPI and, through CEPI, with Instituto Butantan to access the, In terms of next steps, we have initiated two flanking studies, one is the Lot-to-Lot Consistency Study in about 400 subjects, and the other one is the antibody persistence follow-up trial.

So.

235 million euros.

The end of Q1.

Okay. This is higher than it was at the end of 2020.

And that's based on continued to collect payments from the U K.

Relating to Covid.

New students have been triggered by the ongoing excellent execution of the Covid program.

The phase 1.2 zone Thomas explained earlier.

The cash. This was also supported by a funding mechanism for the ongoing capital investment in our Livingston plant from.

Scott in the U K.

Clinical trials.

As Thomas said, we're absolutely delighted by the recent U S IPO.

Sometimes it's almost 9 persons.

Sometimes as many other people appreciate it.

I would like to continue to also emphasize our science.

So to the internal team.

So to the buying some losses provided excellent support and a market for the capital market is not quite as frothy as it was for most of last year.

There's more than $100 million.

Those funds are not included in the cash 1 net cash number for Q1.

So in summary here.

We are.

Continuing to be well positioned to execute on our strategy.

Acceleration of our key clinical programs.

So next slide please.

Slide 18.

Yeah.

Thomas Lingelbach: All that will form the basis for our licensure package in adults, and we expect to submit it next year. And yeah, and then in parallel, we're going to continue the pediatric route, which will then lead to a label extension post-license. Okay, so with that update on our three highly differentiated and very unique R&D programs, I would like to hand over to David.

So I want to highlight some key dynamics that relate both to up to maximum operations onto guidance.

There'll be no surprise to you that the key factors here both related to Covid.

So firstly on the commercial business from Thomas to comment earlier.

Whilst we are seeing some small improvements in.

Ex the auto volumes.

The recovery of the travel industry seems to still be some way off.

In fact as highlighted in this slide are widely known of course that these factors wanted to even more conservative with our guidance.

The pandemic just hasn't gone away as we all know.

David: So good afternoon or good morning, everyone, depending on where you are. I'm just going to say a few words and talk about a couple of slides before handing over to Manfred to do the actual report. So slide 17, I think. Thomas mentioned it up front, and I just want to emphasize what a strong cash position we have right now. We have 235 million units at the end of Q1. Our cash budget is higher than it was at the end of 2020.

But we also noticed the vaccine the vaccines are the lights at the end of the tunnel and we're pleased to be a part of that.

On the slide I, probably don't have the highlights.

Tenable havoc.

Going in India, while they deal with the outbreak still I'm trying to other vaccine program.

We see some inconsistency from country to country, obviously with Canada.

There's no catching up.

It was way behind the U S. In terms of it from loads County, there was a key market for US for example for.

This growth.

So secondly.

And then this is.

What we've said before.

We're not giving guidance from COVID-19 for that.

Thomas reported the excellent progress that we're making with other vaccines.

Phase III recruitment is going well.

Have a clear plan with CMA chart, which is the U K regulator.

And then what's happening in parallel to the ongoing execution.

David: And that's based on continuing to collect payments from the UK relating to our COVID partnership. Those payments have been triggered by the ongoing excellent execution of the COVID program, including the Phase 1-2 results that Thomas explained earlier. The Caspian is also supported by a funding mechanism for the ongoing capital investment in our Livingston plant in Scotland and the UK clinical... As Thomas said, we are absolutely delighted by the recent US IPO.

We're having other discussions outside the U K, both in terms of supply deals.

In terms of the clinical and regulatory pathway.

And all of that.

For both boosters on convenience.

The announcement this morning, it was a very important announcement.

So we will participate in the UK booster studies.

Participate both for <unk>.

Dose on day 2.

For us level.

And from an addition to those sort of dynamics with credit decided in conjunction with our key customers.

We might want to switch at some stage 2 of getting this vaccine.

And of course, not Covid impact.

Supplies timelines.

And therefore, I hope you understand and agree that for the time being we can give clear guidance, but rest assured we're making the best decisions, we can to address the evolving.

Covid situation.

When we are in a position to do so we will give COVID-19 guidance.

Guidance.

David: Thomas and I have personally been working on it for some time, and many of you will appreciate it, and I would also like to continue to emphasize our thanks. To the internal team, and also to the banks and lawyers who provided excellent support in a market, in a capital market that's not quite as frothy as it was for most of last year. We raised more than 100 million dollars, and those funds are not included in the cash number for Q1.

So we have basically brought down our revenue guidance.

As a consequence for the time being.

2 of us are prudent and conservative position to take.

And hopefully what I said will help you understand the reasons for that.

Also set the tone for the rest of the financial reported so I'd like to hand over to non food.

Yeah. Thank you David I don't know from mine.

Hi, Good morning, good afternoon to everyone on the call.

I would like to continue with the financing.

It's providing a bit more details on the Q1 product sales.

Which in total amounted to 16 per 1 million euros.

Sales of third party products for the first time included revenue from in support of rocket 4.

David: So in summary, we are continuing to be well positioned to execute on our strategy, including acceleration of our key clinical. So next slide, please. So I want to highlight some key dynamics that relate both to our commercial operations and to guidance. It will be no surprise to you that the key factors here both relate to COVID. So first on the commercial business, and Thomas did make a comment earlier, we are seeing some small improvements in our Xeato volumes. The recovery of the travel industry seems to still be some way off.

For commercial infrastructure in line with other distribution agreements signed with the very normal by the end of 2020.

And that contributed $42.7 million euros to our Q1 per plane.

It sounds feels pretty good for.

For me to tell Mr related could it be easier for contract signed in September for 'twenty, and deliberate about $12.3 million euros sales.

During Q1.

We continued seeing for travel industry being impacted by COVID-19 related restrictions.

Q1 sales.

<unk> and <unk>.

And in combination added about $1.1 million 2 hour per plane.

When you look to the to the to the chart from the right you're competing for overall part sales for quarter over quarter per pound by about 48% at constant exchange rates.

David: The factors highlighted in this slide are widely known, of course, but these factors mean that we want to be even more conservative with our guidance. The pandemic just hasn't gone away, as we all know. But we also know that vaccines are the light at the end of the tunnel, and we are pleased to be a part of that. You know, on this slide, I probably don't have to highlight the terrible havoc that's ongoing in India while they deal with the outbreaks there and try to roll out their vaccine program.

Almost all of our sales are delivered through our own commercial infrastructure.

Gross margin on product sales ended up at around 41, 7% impacted by compressed reported sales.

From idle capacity costs during the first quarter.

Next slide please.

Here I want to briefly walk you through the Q1 profit and loss statement I want to highlight those areas with the most significant changes from previous year.

You already I think sufficiently covered the other product sales part, but I want to highlight that we saw a sizable increase in the revenue is generated from collaboration and license agreements.

Growing from <unk> 5 million to $7.1 million euros during.

During the first quarter of 2021.

This included about $2.6 million euros of revenue generated through the collaboration with price.

59.

For about $1 million incremental revenues related to the agreement.

Signed with Super Bowl from.

Tom.

In relation to the Chikungunya program.

For the low and medium income countries.

In this context, we also reported our Cogs line, which should now showing also split between cost of goods sold and.

Cost of services in order to better reflect the impact of the growing non product related sales on this P&L position.

The total clarity shows decline in cost of goods in line lower product sales and the effect of higher collaboration service revenues.

Cost of services line.

Our R&D investments continued growing significantly and more than doubled during the first quarter per printed for Q1 in.

In line with our R&D portfolio progressing into late stage development, but primarily impacted by incremental COVID-19 related R&D spend amounting to more than 16 billion during Q1.

David: And, you know, we see some inconsistency from country to country, obviously, where Canada is now catching up with what was way behind the U.S. in terms of its rollout, and Canada was a key market for us, for example, for Ducati.

Marketing and distribution expense has declined considerably.

Compared to the first corporate point between in line with lower sales.

And the continued its importance towards a note debt in Q1 principally.

About 1.2 million euros incremental launch preparation and market ex has been.

David: So secondly, you know, and this is consistent with what we've said before. We're not giving guidance on COVID for now. Thomas reported the excellent progress that we're making with our vaccine phase three recruitment is going well.

Related to typical winter program was included so the like for like basis marketing distribution spend.

Reduced by about 40%.

Our G&A spend continued increasing materially mainly driven by non operational costs, mostly related to corporate projects such as the U S.

Our pure preparation.

As well as including some non cash effects related to the Companys stock option program. The Chilean and also kept us many of our senior management.

Including <unk> for the share price appreciation.

David: We have a clear plan with the MHRA, which is the UK regulator, and then what's happening in parallel to the ongoing execution is that we're having other discussions outside the UK, both in terms of supply deals and in terms of the clinical and regulatory part. And within all of that, we're reviewing the outlook for both boosters and variants. And the announcement this morning was a very important announcement. So we will participate in the UK booster study, and we'll participate both at a full dose and at a half dose level.

Also drove some higher share based compensation.

Tumor words regarding the net income reported on the financial results.

This was driven by foreign currency revaluation gains primarily related to the British pound denominated cash and balance sheet positions.

More than offset increased interest charges related to the debt financing agreement with Oregon in Deerfield.

As well as the interest charges related to other refund liabilities.

In combination the final results contributed a net income of $3.4 million euros for the Q1.2021 P&L.

And finally EBITDA level shows a total loss of $28.3 million euros or.

Because mostly driven by the high level of R&D investments and by compressed product sales.

On the next slide I wanted to show it.

Additional impacts from COVID-19 activities on the company's income statement.

Also showing that a large part of the Q1 EBITDA.

Attributable to the COVID-19 related investments in R&D and from <unk>.

The beauty of printing.

About 20 million related to the Covid business.

Leaving about 8 million euros related to <unk> core business excluding COVID-19.

Oh, it's important to note that no COVID-19 revenue that you have been recognized to date.

David: In turn, in addition to those sorts of dynamics, we've got to decide in conjunction with our key customers if we might want to switch at some stage to a variant-based vaccine and, of course, that Trudyn Payne, supplies, and time. And therefore, I hope you understand and agree that, for the time being, we can't give clear guidance, but rest assured, we're making the best decisions we can to address the evolving pan And when we are in a position to do so, we will do so.

And also any payments, we see for the clinical trial activities as part of the Covid agreement on market recorded in the company's income statement.

On the next slide.

Got it for those would be helpful tools add a few comments on the Q1 balance sheet.

And here I want to focus on some of the most material movement.

Compared to the position we presented for the full year 2020 financials.

And while this shows slight tools.

Good day, and kind of balance sheet I want to highlight both areas total.

To help better understanding some of those movements from other banks.

First I want to highlight the significant increase in inventories going from about 27 million.

What level of 97 million in Q1.

As a result of building COVID-19 related inventories for commercial manufacturing.

The third increase in our cash position had been mentioned previously where they buy from us and David those are worth noting debt.

Debt, we received net proceeds from the recent global offering for.

Increasing our cash cash position by the end of the second quarter 2021.

In addition, I would like to highlight for could increase in contract liabilities.

Which related to cash considerations received from the UK government.

Related to the Covid supply agreements.

We start supplying COVID-19 vaccines to the UK government moving gradually ceb's contract liabilities moving into the other P&L.

We are still going on the concludes the finance section.

I would like to hand back to pre Covid.

Thank you so much money for it thanks, a lot for the report.

David: Cool it, Kate. So we have basically brought down our revenue guidance as a consequence for the time being. We feel that's a prudent and conservative position to take and hopefully, what I've said will help you understand the reasons for that and also set the tone for the rest of the financial report. Now I'd like to hand over to Manfred.

Was that right.

Come to page 24 of the presentation.

And we.

We would like to summarize the key upcoming catalysts and potential inflection points.

[noise] for Lyme.

Or are we expecting this year.

We are expecting.

During the year 2021.

Some follow up time points from the ongoing phase II studies.

Of course, we expect.

The progression.

Toward for children age groups, because we go HD escalation right now on the on the study phase 2 to 1.

Manfred: Thank you, David. And also, from my side, good morning, and good afternoon to everyone on the phone. I would like to continue the finance section by providing a bit more details on the Q1 product sales, which in total amounted to 16.1 million euros. Sales of third-party products for the first time included revenues from Ensipur and Radipur, which are sold by a commercial infrastructure in line with the distribution agreement signed with Bavarian Nordic by the end of 2020.

For Chikungunya of course this is the single largest short term.

Trigger and this is clearly on the R&D side here the phase III data.

And in the Phase III data, we expect as announced previously mid of the year.

We have completed enrollment testing is ongoing of course, there is still a bit of uncertainty around the exact timing, but mid of the year is certainly.

Still confront.

And on the COVID-19 activities. Let me start also here was the R&D part of things.

We are expecting phase 3 data in the third quarter.

This will be debt followed by regulatory submissions.

And we are expecting of course, assuming clinical data are positive.

Manfred: And that contributed a solid 2.7 million euros to our Q1 top line. Ifiaro sales to the US military are still related to the base year of the contract signed in September 2020 and delivered about 12.3 million euros of sales during Q1.

And approval thereafter.

And we have already announced earlier that we're going to initiate additional trials to strengthen our product candidates differentiation you've seen 1 announcement today with the participation in the booster study for boost.

And there will be more debt we are currently evaluating.

Manfred: As we continued seeing the travel industry being impacted by COVID-19-related restrictions, our Q1 sales of Tukoral and XCRO were still relatively muted, and in combination, they added about 1.1 million to our top line. When you look at the chart on the right, you can see that our overall product sales were down by about 48% at constant exchange rates, and almost all of our sales were delivered through our own commercial infrastructure. Cross-marginal product sales ended up at around 41.7%, impacted by compressed product sales and some idle capacity costs during the first quarter. Next slide, please.

As David mentioned during his initial update on.

On the commercial side, we are expecting further supply deals of course, all subject to negotiations and available capacities.

With that I would like to hand back to the operator to take your questions.

Thank you we will now taking the question answer session. As a reminder to ask a question over the phone you will need to press star 1 on your telephone and wait for your name to be taken by the operator to withdraw your question. Please press the pound key once again that is star 1 if you wish to ask a question and your first question comes from.

From the line of Max Herrmann from Stifel. Please ask your question. Your line is now open.

Right. Thanks for taking my.

<unk> and congratulations.

Obviously, the completion of the NASDAQ IPO.

Manfred: Here I want to briefly walk you through the Q1 profit and loss statements and highlight those areas with the most significant changes compared to previous years. We have already, I think, sufficiently covered the product sales part, and I wanted to highlight that we saw a sizable increase in the revenues generated from collaboration and licensing agreements, growing from 2.5 million to 7.1 million euros during the first quarter of 2021. This included about 2.6 million euros of revenues generated through the collaboration with Pfizer on VLA-15 Lyme and also saw about 1 million euros of incremental revenues related to the agreement recently signed with Instituto Butantan in relation to the Chikungunya program for low and medium-income countries.

I should go for questions if I may firstly on.

The financials first quarter yourselves.

You've obviously successfully completed the.

Phase 2 results I think early April.

<unk>.

If any of the payments reflecting.

So to that model.

In the first quarter or is that will be received a.

Subsequently.

Second question is just on being like 15.

You talked a lot about the pediatric.

Acceleration.

But I think perhaps you also have a year longer to wait before you can initiate the phase III. So I wonder whether the real impact there is the commercial potential relevance for the 2 dose regimen versus the 3 dose that you were going to go for originally.

And.

And then maybe just 1 quick question, which is we've just seen Santa Fe and GSK announced successful phase 1.2 data that going for a field study so I wonder whether there's any.

Thoughts in your mind about whether any of the regulators will require that why why are things require being required to do a field study will just tell you that I need to do field study. When you are not going in the field study route. Thank you.

Manfred: In this context, we also reported our Cox line, which is now showing a split between cost of goods sold and cost of services in order to better reflect the impact of the growing non-product-related sales on this P&L position, which also clearly shows declining cost of goods in line with lower product sales and the effect of higher collaboration service revenues on the cost of services line. Our R&D investments continued growing significantly and more than doubled during the first quarter of 2021, in line with our R&D portfolio progressing into late-stage clinical development, but primarily impacted by incremental COVID-19-related R&D spend amounting to more than €15 million during Q1.

Okay. Good.

Interest and questions Max as usual.

So maybe I start with the tour, let our questions and let David talk a little bit about the financials.

And.

And let me start with lime.

It is that.

Kelly we are at the study.

2 oh tool revealed that the longer scheduled zero to 6 substantially improved.

Non profile.

So this is the profile over to study <unk> 201 day, meaning this original scheduled 012.

With this longer schedule and the necessary follow up period of 6 months.

Prior to granting an end of phase 2 meeting they would have been no way to start the feed efficacy trial this year.

So this means anyhow since we are talking is seasonal.

I'm, saying here, we are at trial initiation for the phase III in 2022, therefore, there's no delay.

Manfred: Marketing and distribution expenses declined considerably compared to the first quarter of 2020 in line with lower sales. And I think here it's important to also note that in Q1 2021, only about 1.2 million euros of incremental launch preparation and market access spend related to the Chicken Gunja program were included. So on a like-for-like basis, marketing and distribution spend declined by about 40%.

Cost by the study 2 to 1 in connection with line.

So we plan to study in and it's a.

Because we have the time to do debt number 1.

Number tool because it gives us the opportunity to have the full target population in the phase III, which in turn will allow to get the full target population into the label right from the start.

Whether the zero zero to 6 were for series 6 is an exploratory arm in this study.

Which may or may not.

Result in a 2 dose regime.

Manfred: Our G&A spend continued increasing materially, mainly driven by non-operating costs, mostly related to corporate projects such as the US IPO preparation, as well as including some non-cash effects related to the company's stock option program. The G&A line also captures many of our senior management, including MBEs, so the share price appreciation also drove some higher share-based compensation. A few more words regarding the net income report on the financial results. This should be taken into account foreign currency valuation gains primarily related to the British Pound denominated cash and balance sheet positions, which more than offset increased interest charges related to the debt financing agreement with Aldermatt and Deerfield, as well as the interest charges related to the refund liability.

And the combined the question whether this is increasing the commercial value of the product is still under discussion and I would say.

And this is a question that of course, our commercial partner has to answer on a personal note I don't think so.

And.

And this is and this is this is maybe on the on the on the line side of things when we come to the Covid part.

You would certainly understand Max debt, we not going to comment on development strategies of other companies.

We have concluded.

Debt D.

Debt a field efficacy.

In a in a placebo controlled phase <unk> study.

From an ethical standpoint.

And from a technical feasibility standpoint in a in a situation of heavily shifting drifting.

Uh huh.

Epidemiology.

Is infeasible.

Considering a reasonable chance to succeed.

Our probability of success.

And.

1 stroke 2 authorities have followed our line of argumentation.

And and half.

And have consented to an immuno comparability approach, which is not which is an approach that is existing in.

Manfred: In combination, the finance results contributed a net income of €3.4 million to the Q1 2021 P&L. And finally, the BTA level shows a total loss of 28.3 million euros, which is mostly driven by a high level of R&D investments and by compressed products. On the next slide, I want to show the additional impact of the COVID-19 activities on the company's income statements, also showing that a large part of the Q1 EBTA is attributable to the COVID-19 related investments in R&D, and from the total EBTA of 28.3 million euros, about 20 million related to the COVID business, leaving about 8 million euros related to Valneva's core business, excluding

Regulatory guidelines.

And that's all we can say too.

And wanted to say on that very very topic.

David.

So can I just on that point just follow up 1 thing on the other Lyme disease. So you've completed the.

The area of 2 phase III studies last year.

So I'm just trying to understand the zero to 6 schedule why that would have meant its not possible this year too.

May be initiated the dosing in the phase 3 had you had you chosen to.

It's not true.

In order to in order to so let me calculate calculate backwards to take you through the through the logic here.

In order to have people being protected in.

The peak season take whatever tick season, you can think about yeah. So let's say if you want to have people vaccinated people vaccinated and protected for peak season, you've got to have them vaccinated in the September the year before.

Peak season starts.

And this means you need to start the phase III with all its preparatory activities.

Manfred: It is also important to note that no COVID revenue has yet been recognized to date, and also any payments received for the clinical trial activities as part of the UK COVID agreement are not yet recorded in the company's income statement.

With rollout and so on and so forth in the early summer in order to do debt you need to have the end of phase 2 meeting in the spring.

And we did in the end of Phase 2 meeting requires that you have for a 6 months follow up Immunogenicity data fully analyzed and reported and we don't have debt.

Okay understood. So 200 wanted to share with 2 we've reported.

Manfred: On the next slide, we thought it would also be helpful to add a few comments on the Q1 balance sheet. Here, I want to focus on some of the most material movements compared to the position we presented for the full year 2020 financials. And while this slide shows the entire balance sheet, I only want to highlight those areas to help better understand some of those movements on our balance sheet.

Right, Yeah data not the follow up data from yet.

So just on the and on the.

Obviously, if we if we triggered a milestone payment with the phase 1.2 data.

If we did that then you would expect the result came from would arrive in Q2 not Q1.

Okay. Thank you.

More than welcome.

Thank you and your next question comes from the line of Sameer <unk> ex Securities. Please ask your question. Your line is now open.

Yeah, Hi, everyone. Thanks for taking my questions I've got 3.

Manfred: First, I wanted to highlight that a significant increase in inventories, going from about $27 million to a level of $97 million in Q1, was a result of building COVID-related inventories for commercial manufacturers. The third increase in our cash position had been mentioned previously by Thomas and David. It's also worth noting that net proceeds from the recent global offering will further increase our cash position by the end of the second quarter of 2021.

1 on the financing and then just 1 on chikungunya and cabin vaccine. So just starting on the finances.

Just wanted to.

Just to clarify something on the revenue recognition from financing for them.

Uh huh.

Lime collaboration I think previously you talked in your guidance that you were expecting 20 to 25 million euros of recognition.

This year I think Keith mentioned $2.6 million.

I went through the top line in Q1, sorry, just confirming that you still expect 20 to 25 million recognized.

Manfred: In addition, I would like to highlight the further increase in contract liabilities, which is related to cash considerations received from the UK government related to the COVID supply agreement, and as we start supplying COVID vaccines to the UK government, we will gradually see these contract liabilities moving into the P&L. We still want to conclude the final section and would like to hand over to Thomas to give us an update.

Recognize this year. So that's just from the numbers.

Then in on T..001 can you just remind me Thomas.

The 2 doses that you're testing from the which are they from the low mid and high from the phase 1 and T. If you can just clarify that for me and then just on chikungunya.

Can you confirm what the the single study that's ongoing will suffice for the European regulator.

And you mentioned filing in 2022, just wanted to understand what you need to be post reporting the phase III mid this year before you file thanks very much.

Thomas Lingelbach: Thank you so much, Manfred. Thanks a lot for the report.

Thomas Lingelbach: With that, I come to page 24 of the presentation, and here we would like to summarize the key upcoming catalysts and potential inflection points. Paul Lime, What are we expecting this year?

Okay, Let me let me.

Sent me a very good question. So let me start with the last 1 first probably so so basically what we're gonna dual for chikungunya.

Is akshay.

Chikungunya assets. So first of all we have.

Agreed with both authorities that the accelerated approval pathway will be the 1 to go.

Thomas Lingelbach: We are expecting, during the year 2021, some follow-up time points from the ongoing phase 2 studies. Of course, we expect progression into the full child age groups because we have HD escalation right now in study phase 221. For Chikungunya, of course, this is the single largest short-term trigger, and this is clearly on the R&D side here, the phase three data. And in the phase three data, we expect, as announced previously, by the middle of the year.

So this means immunological surrogate.

The surrogate as a fixed number has been agreed with the FDA already and we are still awaiting the final clearance from the European authorities.

But we have no doubt that our debt this will.

Reached very very soon and before.

The day, the readout of the study we come.

D in terms of what is needed for licensure.

Let me refer back to the to the slide that I showed about the next development steps. It's we have initiated a clinical lots a lot consistency study in order to sort of requirement for licensure you need to show the 3 consecutive manufacturing lots behave identical in the clinic. This study is ongoing.

Thomas Lingelbach: We have completed enrollment, testing is ongoing, and, of course, there's still a bit of uncertainty around the exact timing, but the mid-year is certainly still confirmed. And on the COVID-19 activities, let me start also here with the R&D part of things. We are expecting phase 3 data in the third quarter, and this will then be followed by regulatory submission. And we are expecting, of course, assuming clinical data is positive, and an approval thereafter.

And it runs in parallel while the phase III assets being annualized.

The other 1 is the 6 month follow up.

Following up people.

As part of the antibody persistence study.

For a long time.

We are we let the study run for up to 5 years, because we hope that our vaccine will give a very long protection with a single shot up to 5 years EBIT.

And and but we need according to guidelines a 6 months follow up antibody persistence from the people in the 301 study for.

For the filing.

And this other 3 pieces, if I may say, so which.

Required.

For for debt.

Do you want to take the other question.

Thomas Lingelbach: And we have already announced earlier that we're going to initiate additional trials to strengthen our product candidates' differentiation. You've seen one announcement today with the participation in the booster study, CovBoost, and there will be more that we are currently evaluating. And as David mentioned during his initial update, on the commercial side, we are expecting further supply deals, of course, all subject to negotiations and availability. With that, I would like to hand back to the operator to take your questions.

I think my mantra mantra to talk about the.

The revenue guidance.

Yeah.

The piece.

Initially we didn't talk about.

I'm now happy to take your question and thank you for it from you so.

So I think overall looking at lime.

I think the way to describe this as the revenue recognition is driven almost the other costs.

Principal.

Which means ultimately it's going to be dependent on how much money, we spend and here, we would still expect to be.

Ballpark, India will be you mentioned potentially little bit on the lower end of the guidance.

But overall, even given that they only have recognized $2.6 million in the first quarter.

Expect to reach.

So end of the guidance we had given.

20 to 25 million correct.

That's great that's very helpful. Thanks very much.

Thank you and once again as a reminder, if you wish to ask a question. Please press star and for ammonia telephone and your next question comes from the line of Sebastian from the scope at Kempton. Please ask your question. Your line is now open.

Hey, good morning, and afternoon everyone.

My question is regarding.

The first 1.

I was wondering if you could provide some guidance from the how long those lumpy lot consistency study for approximately take.

Operator: Thank you. We will now begin the question and answer session. As a reminder, to ask a question over the phone, you will need to press star and one on your telephone and wait for your name to be taken by an operator. To withdraw your question, please press the pound key. Once again, that is star and one if you wish to ask a question. And your first question comes from the line of Max Herrmann at Stiefel. Please ask your question. Your line is now open.

And can you also maybe remind us.

Whether you look in earlier trials.

Antibody persistence.

<unk>.

If you could comment on debt and then for the COVID-19.

Can you maybe expand on how the booster trial of this design.

Will there be specific combinations tested or even though randomized and will the initial.

Brian dose B.

Already accepted for.

Have you seen or candles are being investigated.

Good so let me start with the chikungunya parts for us to Bastian.

So basically on chikungunya.

So we are running the trial in parallel we hope to see a readout on the lots lot consistency in the third quarter. This year.

Max Herrmann: Great, thanks for taking my questions and congratulations on the obviously completion of the NASDAQ IPO. I've actually got four questions, if I may.

We are.

We have shown.

As part of our phase 1 cohort remembered chikungunya, we went straight from phase 1 into phase III, because we had this intrinsic viral challenge from a logo challenge, which enabled us to pass at the end of Phase 2 meeting right away. So we showed seroconversion and antibody titers, even 12 months.

Max Herrmann: Firstly, on the financial first quarter results, you've obviously successfully completed the Phase 1-2 results in early April. Are any of the payments reflecting that milestone in the first quarter, or is that all to be received subsequently? The second question is just on VLA-15. You talk a lot about pediatric acceleration, but I think perhaps you also have a year longer to wait before you can initiate phase three. So I wonder whether the real impact there is the commercial potential relevance of a two-dose regimen versus the three-dose that you were going to go for originally.

After the primary organization a day were sustained at the same levels.

But unfortunately, the regulatory guidelines for as you need to do this you need.

So 6 months also from your final pivotal study cohort, but it's got to be of course, not something that we are worried about given that we have shown already at 12 months antibody persistence before.

So so this is a this is basically where we are on <unk>.

Chicken Goodyear I hope this answers your.

Question.

On on.

On Covid.

Well I mean, David do you want us to do you want to take that yeah, well I think it's yeah, it's not it's not that bad debt.

The poster design, we need to think a little bit about what we what we can disclose and what we cannot disclose here.

So these are not studies, if you have seen debt by Levi's sponsoring.

Max Herrmann: And then maybe just one third question, which is we've just seen Sanofi and GSK announce successful phase one and two data. They're going to do a field study. So I wonder whether there are any thoughts in your mind about whether any of the regulators will require that? Why are they being required to do a field study or whether they need to do a field study when you are not going the field study route?

And so what has been.

Presented thus far is debt. These are people who have been primed.

With different vaccines.

And they are being given.

Sure so meaning as Stuart shot.

<unk> same strains.

For.

From either of the 7 vaccines.

As David mentioned I mentioned that tool for 3 vaccines also with different dose levels.

Thomas Lingelbach: Okay, good. A lot of very interesting questions, Max, as usual. So maybe I start with the two letter questions and let David talk a little bit about the financials. And let me start with Lime.

And by the way this reminds me that I forgot the question from Samir on the dose.

After our top volume.

And and so yeah. So that's that's the way that the trial is designed.

We cannot.

Just quickly check, but I don't think that we can say more at this point.

Okay, great. Thank you very much more.

For more than welcome.

Thank you and that there is a follow up question from from your Devonta ex Securities. Please ask your question. Your line is now open.

Thomas Lingelbach: It is... Basically, the study 202 revealed that the longer schedule, 0 to 6, substantially improved the immune profile, and the immunogenicity profile over the study 201, meaning the original schedule 012. With this longer schedule and the necessary follow-up period of six months... prior to granting an end-of-phase II meeting. There would have been no way to start the field efficacy trial this year. So this means, anyway, since we are talking a seasonal thing here, we are at trial initiation for phase 3 in 2022.

Thanks for taking my follow up actually.

1 question regarding the booster is actually regarding the phase III thats going on now which hit the low mid and high doses are you testing that phase III V for the phase 1 team and 1 of them on current also ask you mentioned there was a higher share based payment charge. This quarter could you just tell us how much that was please thanks.

In this study in the phase III, we are only testing 1 dose and this is the high dose.

1 day slide deck for perfect. Thanks, Jeff.

So this so David you want to a month rate you want to take the financial Parkman for it you can take net debt 1 probably.

Yeah, I would probably be the minutes to.

For information out, but I can I can come back in the second half.

Good so maybe we can then move on to the next question while.

While demand for its checking your specific points from you.

Thomas Lingelbach: Therefore, there's no delay caused by the study 2-to-1 in connection with Lyme. So we plugged the study in, and because we have the time to do that, number one. Number two, because it gives us the opportunity to have the full target population in phase three, which, in turn, will allow us to get the full target population into the label right from the start.

Thanks very much.

For more than my time.

Thank you would you like to take the next day.

So question Okay. Thank you and there is another follow up question from Max Herrmann at Stifel. Please ask your question. Your line is now open.

Great. Thanks, Thanks, very much just a follow up.

Just interested in your thoughts about a vaccine persistency.

In Covid.

And whether there's any.

How would you judge obviously before you have data.

Thomas Lingelbach: Whether the 0.26 versus 0.06 is an exploratory arm in this study, which may or may not result in a two-dose regime, and the question whether this is increasing the commercial value of the product is..., still under discussion now. And this is a question that, of course, our commercial partner had to answer on a personal note. I don't think so. And this is Baby on the Lime Sardine.

Which approaches might have more.

Persistency is there any route.

To that end.

Or is it just we just have to wait for the day to day to CEOC will have a definitive answer but.

Is there a rationale for why you might get a different type of persistency from them.

On a vaccine to a Uh huh.

Viral vector or a per.

What type of approach.

So very very good question, Max I would say.

In general I mean.

Thomas Lingelbach: When we come to the COVID part, you will certainly understand, Max, that we're not going to comment on the development strategies of other companies. We have concluded that that the that has field efficacy in a placebo-controlled field efficacy study. From an ethical standpoint, And from a technical feasibility standpoint, in a situation of... heavily shifting, drifting epidemiology, considering a reasonable chance to succeed or probability of success, and, In one stroke, two authorities have followed our line of argumentation and have consented to an immunocomparability approach, which is an approach that is existing in regulatory guidance. And that's all we can say to.., on that very, very topic.

Science would wind.

And and data will drive decisions.

It is fair to say debt I to my knowledge.

Pfizer and Madonna reported very recently that they expect.

To have a booster need after approximately 9 months.

Of course, it's the first time that there is that debt that the world is seeing antibody persistence data on.

On mrna troak on soft cough tool.

The 12 months is of course.

For the persistence it depends it depends a lot on both.

The antigen.

On the pathogen itself so.

So it is true trawl conclusions on platforms is is very difficult.

And also you know 1 may expect debt.

<unk> ended approaches.

Would have an advantage.

Max Herrmann: Thomas, can I just, on that point, just follow up on one thing about Lyme disease. So you completed the phase, the earlier two phase two studies last year. So I'm just trying to understand the 0-2-6 schedule, why that would have meant it was not possible this year to have maybe initiated the...

It comes to add 2 antibody persistence at least this is something that we have seen in other indications.

1 has to prove it and the data have tool to show it.

Great. Thanks very much.

Thank you and then no further questions at this time, Jeff I would like to hand back to the speakers. Thank you for monthly have you been able in the meantime to Victor's information out for Sanmina.

Thomas Lingelbach: I just want to... In order to... So, let me calculate backwards to take you through the logic here.

Yeah, I can answer that and I also think it's in the range from below below $5 million.

That would be a fair guidance.

Good.

Again, we had great questions.

Thomas Lingelbach: In order to have people protected in a tick season, take whatever tick season you can think about, yeah? So let's say if you want to have people vaccinated and protected for the tick season, you've got to have them vaccinated in September, the year before the tick season. This means you need to start Phase 3 with all its preparatory activities, with rollouts, and so on and so forth, in the early summer.

Thanks, a lot for.

Following up thanks, a lot for following Bolivar for supporting margin Eva.

And we would we look very much forward to speaking again soon.

Have a good day.

Thank you speakers please standby.

Yeah.

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Thomas Lingelbach: In order to do that, you need to have the end of phase 2 meeting in the spring. And the end of phase 2 meeting requires that you have your six-month follow-up immunogenicity data fully analyzed and reported, and we don't have that.

Yes.

Yeah.

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Yes.

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Max Herrmann: Okay, understood.

Yes.

David: But not the follow-up data. Yeah, so just on the and on the. Obviously, if we trigger a milestone payment with the Phase 1-2 data... If we do that, then you would expect the resultant payment would arrive in Q2, not Q1. Thank you.

Yeah.

Operator: Thank you. And your next question comes from the line of Samir Devani at RX Securities. Please ask your question. Your line is now open.

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Yes.

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Yes.

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Yes.

Samir Devani: Hi everyone. Thanks for taking my questions. I've got three.

Okay.

Samir Devani: I think one on the finances and then just one on chikungunya and the COVID vaccine. So, starting on the finances, I just wanted to clarify something on revenue recognition for the Pfizer-Lyme collaboration. I think previously you talked in your guidance that you're expecting 20 to 25 million euros. I think you mentioned 2.6 million went through the top line in Q1, so are you just confirming that you still expect 20 to 25 million?

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Samir Devani: So that's just from the numbers. Then on 2001, can you just remind me, Thomas, the two doses that you're testing, which are they from the low, mid, and high from phase 1 and 2, if you can just clarify that for me. And then just on chikungunya.

Yes.

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Okay.

Samir Devani: Can you confirm whether the single study that's ongoing will suffice for the European regulator, and you mentioned filing in 2022. Just wanted to understand what you need to do post-reporting of Phase 3 mid this year before you file. Thanks very much.

Okay.

Yeah.

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Thomas Lingelbach: Okay, let me, let me, Samir, very good question. So, let me start with the last one first, probably. So basically, what we're going to do for Chicken Gunja. First of all, we have agreed with both authorities that the accelerated approval pathway will be the one to go. So this means an immunological surrogate. The surrogate as the sixth number has already been agreed with the FDA, and we are still awaiting final clearance from the European authorities. But we have no doubt that this will be reached very, very soon.

Okay.

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Yes.

Yeah.

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Yes.

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Yes.

Yeah.

Thomas Lingelbach: And before the readout of the study was completed. In terms of what is needed for licensure, let me refer back to the slide that I showed about the next development steps. We have initiated the Lot-to-Lot Consistency Study, which you know is a requirement for licensure.

Yeah.

Okay.

Yes.

Okay.

Yes.

Thomas Lingelbach: You need to show that three consecutive manufacturing lots behave identically in the clinic. This study is ongoing, and it runs in parallel while phase three is being analyzed. The other one is the six-month follow-up. You know, we are following up people as part of the antibody persistence study. For a long time, we let the study run for up to five years because we hope that our vaccine will give very long protection with a single shot for up to five years, and but we need, according to guidelines, a six-month follow-up antibody persistence from the people in the 301 study for the filing. And these are the three pieces, if I may say so, which are required for that. Would you like to take that as a question?

Yeah.

Okay.

Yes.

Yeah.

Okay.

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Yes.

Okay.

Yes.

Okay.

Yeah.

Okay.

Yes.

Okay.

Yeah.

Okay.

Thomas Lingelbach: I think Manfred will talk about the revenue guidance and the..., the pieces that we didn't talk about. Yeah, I'm not happy about it.

Okay.

Yes.

Okay.

Good day.

Yes.

Manfred: Yeah, I'm happy to take that question and thank you for it, Samir. So I think overall when we're looking at LIME, the way to describe this is that revenue recognition is driven on a cost-to-cost principle, which means, ultimately, it's going to be dependent on how much money we spend, and here we would still expect to be ballparked in the area we mentioned, potentially a little bit on the lower end of this guidance.

Yeah.

Yes.

Yeah.

Yes.

Okay.

Manfred: But overall, even given that we only recognized 2.6 million in the first quarter, we would still expect to reach, as I said, the lower end of the guidance we had given, in 20 to 25 million.

Yes.

Yeah.

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Okay.

Yes.

Samir Devani: That's great. It's very helpful.

Okay.

Operator: Thank you, and once again, as a reminder, if you wish to ask a question, please press star and 1 on your telephone. And your next question comes from the line of Sebastian van der Skorp at Kempen. Please ask a question; your line is now open.

Okay.

Yes.

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Yes.

Sebastian van der Skorp: Okay, good morning and afternoon everyone. My question is regarding...

Yes.

Okay.

Sebastian van der Skorp: the first one. I was wondering if you could provide some guidance on how long those lab-to-lab consistency studies will take, and can you also maybe remind us of whether you looked at earlier trials at Anybody Persistent, and..., if you could comment on that.

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Okay.

Yes.

Okay.

Sebastian van der Skorp: And then for COVID-19, can you maybe expand on how the booster trial is designed? Will there be specific combinations tested, or is it all randomized? And will the initial prime dose be an already accepted vaccine, or candles have been investigated?

Okay.

Yeah.

Yes.

Thomas Lingelbach: Good, so let me start with the Chikungunya part first, Sebastian. So basically, on Chikungunya, we are running the trial in parallel. We hope to see a readout on the lot-to-lot consistency in the third quarter this year.

Right.

Okay.

Yes.

Okay.

Yeah.

Okay.

Thomas Lingelbach: We are, we have shown, as part of our phase one cohort, remember in Chikungunya, we went straight from phase one into phase three because we had this intrinsic viral challenge, a homologous challenge, which enabled us to pass the endophage 2 meeting right away. So we showed seroconversion and antibody titers even 12 months after the primary immunization, and they were sustained at the same level. But unfortunately, the regulatory guidelines say you need to do this.

Okay.

Yes.

Okay.

Yeah.

[music].

Yes.

Yeah.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Thomas Lingelbach: You need to show six months of antibody persistence from your final pivotal study cohort, but it's going to be, of course, not something that we are worried about given that we have already shown 12-month antibody persistence before. So this is basically where we are on Chikungunya. I hope this answers your question about COVID. Well, I mean, David, do you want to take that?

Okay.

Yes.

Okay.

Yes.

Okay.

Sure.

Okay.

Yes.

Sure.

True.

Okay.

Yes.

David: Yeah, well, I think it's, yeah, it's not that the booster design; we need to think a little bit about what we can disclose and what we cannot disclose here. So, you know, these are not studies, as we have seen, that Valneva is sponsoring. And so what has been presented thus far is that these are people who have been primed with different vaccines, and they are being given a booster, so meaning a third shot, homologous, same strains, from either of the seven vaccines.

Okay.

Yes.

Okay.

Yeah.

David: And as David mentioned, I mentioned it too, for three vaccines also with different dose levels. And by the way, this reminds me that I forgot the question from Samir about the dose. It's half dose, half volume. And so, yeah, so that's the way that the trial is designed. We cannot, and I've quickly checked, but I don't think that we can say more.

Okay.

Yes.

Okay.

Yeah.

Yes.

Okay.

Yes.

Yeah.

Okay.

Yes.

Okay.

Right.

Sure.

Thomas Lingelbach: Thank you very much.

Yes.

Sebastian van der Skorp: You're more than welcome.

Right.

Yes.

Okay.

Yes.

Okay.

Yeah.

Okay.

Operator: Thank you. And there is a follow-up question from Samir Devani at RX Securities. Please ask your question. Your line is now open.

Okay.

Yes.

Okay.

Samir Devani: Thanks for taking my follow-up. Actually, the 2001 question wasn't regarding the booster, it was actually regarding the Phase 3 that's going on now. Which of the low, mid, and high doses are you testing in that Phase 3 vis-à-vis the Phase 1-2? And while I'm on, can I also ask you mentioned there was a higher share-based payment charge this quarter. Could you tell us how much that was, please?

Yeah.

Okay.

Uh huh.

Yeah.

<unk>.

Yeah.

Yes.

Yeah.

Yes.

Okay.

[music].

Yeah.

Thomas Lingelbach: In dummy interface 3, we are only testing one dose, and this is the high dose.

Okay.

Yes.

Okay.

Thomas Lingelbach: One dose, high dose, perfect, thanks. Yeah.

Manfred: Yeah. So, David, you want to, or Manfred, you want to take the financial part? Manfred, you can take that one, probably.

Okay.

Yeah.

Okay.

Yes.

Okay.

Yes.

Manfred: I would probably need a minute to dig this information out, but I can come back in a second.

Okay.

Yes.

Operator: Okay, good. So maybe we can then move on to the next question while... while Manfred is checking your specific points, Samir. Thanks.

Yes.

Okay.

Yes.

Right.

Okay.

Yes.

Samir Devani: These are very specific points, Samir.

Okay.

Operator: Thank you. Would you like to take the next follow-up question? Okay, thank you. And there is another follow-up question from Max Herrmann at Stiefel. Please ask your question. Your line is now open.

Okay.

Yeah.

Yes.

Max Herrmann: Great, thanks very much. Just to follow up, I'm just interested in your thoughts about vaccine persistency in COVID. And whether there's any, you know, how do you judge, obviously, before you have data which approaches might have more persistency, is there any route to that, or is it just, we'll just have to wait for the data to see, obviously, the definitive answer, but is there a rationale for why you might get a different type of persistency from an mRNA vaccine to an inactivated viral vector or an adeno vector type

Okay.

Yes.

Hum.

Okay.

Thomas Lingelbach: So, very good question, Max. I would say, in general, I mean, science will win, and data will drive decisions. It is fair to say that, to my knowledge, Pfizer and Moderna reported very recently that they expect to have a booster need after approximately nine months. Of course, this is the first time that the world is seeing antibody persistence data on mRNA stroke on SARS-CoV-2. You know, the 12 months is, of course, antibody persistence depends a lot on the antigen, on the pathogen itself, so to draw conclusions on platforms is very difficult.

Okay.

Sure.

Okay.

Yeah.

Okay.

Yes.

Oh.

Right.

Okay.

Right.

Okay.

Yes.

Okay.

Thomas Lingelbach: And also, you know, one may expect that argumentative approaches would have an advantage when it comes to antibody persistence. At least this is something that we have seen in other indications. But one has to prove it, and the data have to show it.

Okay.

Yes.

Yeah.

Max Herrmann: Great, thanks very much.

Okay.

Operator: Thank you, and there are no further questions at this time; therefore, we would like to hand the speaker back to her.

Okay.

Yeah.

Okay.

Manfred: Thank you. Manfred, have you been able, in the meantime, to dig this information out for Samir? Yes, I can answer that now. I think it's in the range of below 5 million.

Okay.

[music].

Okay.

Thank you.

Okay.

Yes.

Okay.

Thomas Lingelbach: Good. So, again, we had great questions. Thanks a lot for following up. Thanks a lot for following Valneva, for supporting Valneva, and we look very much forward to speaking again soon. Thank you. Speakers, please stand by.

Yes.

Yeah.

Uh huh.

Yeah.

Okay.

Yes.

Okay.

Yes.

Operator: Valneva, Samir Devani, Samir Drumm, Thomas Lingelbach, Samir Sharma, James Stamos, Valneva, Samir Drumm, Nicholas Hallatt, Samir Devani, Samir Drumm, Samir Sharma, Samir Drumm, Samir Drumm, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??

Yes.

Okay.

Yeah.

Okay.

Hum.

Yeah.

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