Half Year 2021 Valneva SE Earnings Call
[music].
Good day, and thank you for standing by and I have found either presents its half year 2021 financial results cool.
Operator: and Thank you for standing by, and now Valneva presents its half-year 2021 financial results call. 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 zero. I would now like to hand the conference over to your host today, CEO of our Farniva, Thomas Legalbach. Please go ahead.
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 zero.
I would now like to hand, the conference over to your highest day CEO of all saw NEVA Thomas legal box. Please go ahead.
Good day, everyone welcome to our report on H, 1 'twenty, 1 financial and general business update.
Thomas Lingelbach: Good day, everyone. Welcome to our report on H121 financials and general business updates. Well, the first half of 2021 has been marked by tremendous success on our R&D side of the business. We have nicely delivered against our key major R&D objective. And, of course, the most recent new law, probably, at this moment in time, the most important one, is related to our chicken gunya vaccine. We are very proud to be the first company in the world.
Well the first half of 2021.
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By tremendous success on our R&D side of the business, we have nicely delivered against our key major R&D objectives.
And of course, the most recent news flow.
Really at this moment in time, the most important 1.
It's related to our chikungunya vaccine, we are very proud to.
To be the first company in the World.
Thomas Lingelbach: world that has successfully delivered a phase three for a chicken gunya vaccine, which continues to be a significant unmet medical need. We have made excellent progress on our other clinical assets on Lyme. We successfully recruited the additional phase two study called VLA 15221, which includes now the full pediatric target group, which is a key prerequisite for having the entire target population taking part in the future field efficacy study. And for our COVID-19 vaccine, VLA2OOOO.
That has successfully delivered a phase III for a chikungunya vaccine, which continues to be a significant unmet medical need.
We made excellent progress on.
On our other clinical assets on line, we successfully recruited.
The additional phase II study called DLA 15, 2 to 1 which includes also now the full pediatric target group, which is a key prerequisite for having the entire target population, taking part of the future field efficacy study and for our COVID-19 vaccine.
BLA to over 1 we have successfully completed the enrollment and are now proceeding with the cerrado chip testing.
Thomas Lingelbach: We have successfully completed the enrollment and are now proceeding with the serodic test. Despite our commercial travel vaccine still being heavily, adversely affected by the ongoing pandemic, we have a strong financial position and platform. We successfully conducted our U.S. IPO, according to plan, with net proceeds of more than $100 million. And we have cash and cash equivalents today of more than 300 million euros. This is something that will be further detailed as part of the financial rules. Report.
Despite all of our commercial travel vaccine still being heavily adversely affected by the ongoing pandemic.
We have a strong financial position and platform. We successfully conducted our U S. IPO. According to plan with net proceeds of more than 100 million dollar and we have cash on cash equivalents per day of more than 300 million euros and this is something that will be further detailed as part of the <unk>.
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Let me first talk about chikungunya.
Thomas Lingelbach: Let me first talk about chicken gunya. The primary endpoint of our study, VLA 1553301, was to measure zero protection. Zero protection is the amount of study participants that showed protective neutralizing antibody tiders. We have agreed on a surrogate for protection. This surrogate of protection was developed together with the agencies and based on a passive transfer study in non-human primates and a few other supporting non-clinical experiments. We have shown 98.5% of subjects reaching those protective levels after a single shot, and this has been even better than one could have hoped in this regard.
On the primary endpoint of our study the L. A 15.5 3.301 was to measure zero protection Zero protection is the amount.
Of Ah study participants that showed him.
Protective neutralizing antibody titers, we have agreed on a surrogate of protection historically death protection most developed together with the agencies and based on our passive transfer study in nonhuman primates and a few other supporting net.
On clinical experiments, we have shown 98, 5% of subjects, reaching dose protective levels. After a single shot and this has been even better than 1 could have hoped in this regard and it's really remarkable.
Thomas Lingelbach: And it's really remarkable for such a type of vaccine. It is also important to note that we have seen a similar level of zero protection in the elderly, not only in younger adults, which is again a great result. It is also important to note on this slide, which is slide number six, that with 98.5%, we are well, well, above the FDA non-acceptance margin, which was set at 17%. When you look at slide seven of the presentation, you see that our vaccine induces very high neutralizing antibody tiders. We see a fantastic immunological profile across all age groups, including the elderly.
For such a type of vaccine.
It's also important to note that we have seen a similar level of zero protection in the elderly.
Not only in the younger adults, which again.
It's a great result.
It is also important to note on this slide which is slide number 6 that with 98, 5%, we are well well above.
The FBA Nonacceptance margin, which was set at 70%.
When you look at slide 7 of the presentation, you see that our vaccine and uses very high neutralizing antibody titers, we see a fantastic imminent logical profile across all age groups, including the elderly.
Safety.
With regards to safety.
The vaccine show with a safety profile that is absolutely in line with what.
1 would expect puts out some type of vaccine we evaluated safety in more than 3000 participants who received the vaccine.
Thomas Lingelbach: Safety, with regard to safety, our vaccine shows a safety profile that is absolutely in line with what one would expect for such a type of vaccine. We evaluated safety in more than 3,000 participants who received the vaccine. We had an independent data safety monitoring board continuously monitoring the study, and they identified no safety concerns. The safety profile that we have seen in phase three is consistent with what we have seen in phase one.
On an independent data safety monitoring board continuously monitoring the study and they identified no safety concerns.
Safety profile that we have seen in the phase III is consistent with what we had seen in the phase 1 the majority of solicited adverse events were mild or moderate and results within 3 days around 1.6% reported severe COVID-19.
Adverse events, mostly come in the fever.
Approximately 50% of the study participants experienced.
Gross events, most company headed fatigue and nausea.
Approximately 15% of the participants experienced visited local adverse events. So overall a good safety profile and also a very good safety profile in elderly and of course.
We need to follow the study subjects now for a further 6 months and Thats why the final analysis of the study will only be ready once the follow up period has been completed.
Thomas Lingelbach: The majority of the limited adverse events were mild or moderate and resolved within three days. Around 1.6% reported severe solicitiveness diverse events, mostly commonly fever. Approximately 50% of the study participants experienced elicceded systemic adverse events, most commonly headed fatigue and mealgia. Approximately 15% of the participants experienced solicited local adverse events.
With regards to next steps.
Of course, we are working now pause the final analysis.
Which is expected within the next 6 months as I just mentioned.
You also know that we have in parallel a lot to lot consistency study running day.
Study is fully recruited.
The data is expected later in the year.
The antibody persistence follow up trial BLA 15, 5333 is ongoing and they will be followed up annually for 5 years. After a single immunization because our hope is that with a single shot.
This vaccine may protect for a long time, even up to 5 years.
Thomas Lingelbach: So overall, a good safety profile and also a very good safety profile in the elderly. And, of course, we need to follow the study subjects now for a further six months. And that's why the final analysis of the study will only be ready once this follow-up period has been completed. With regard to next steps, of course, we are working now towards the final analysis, which is expected within the next six months, as I just mentioned. You also know that we have, in parallel, a lot-to-lock consistency study running.
Which of course would be tremendous.
And we are now in active discussions with the agencies, primarily the FDA to bring me on a 15.5 3 to a potential licensure as soon as possible.
The overall <unk>.
Very very pleased with this outstanding result.
In the area not only on high unmet medical need but also by way of reminder, the disease area that.
Allow us the first 1 to achieve BLA approval to access a priority review voucher.
Which is probably the single largest short term.
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For this pro.
Product candidate.
Talking about line.
We are still the only company that.
Has an active Lyme disease vaccine program in advanced clinical development worldwide. The program got FDA fast track designation granted.
Thomas Lingelbach: This study is fully recruited, and the data is expected later in the year. The antibody persistence follow-up trial, VLA 1553, 3, is ongoing, and they will be followed up annually for five years after single immunization because our hope is that with a single shot, this vaccine may protect for a long time, even up to five years, which, of course, would be tremendous. And we are now in active discussions with the agencies, primarily the FDA, to bring VLA 1553 to potential licensure as soon as possible.
We reported good results from the phase II trials to determine dose and schedule as I mentioned earlier, we have completed recruitment for the phase II study on a 15.2 to 1 including the peak.
5.
And Bob and this mark than the total target population that we are going to include in the pivotal field the efficacy trial.
Which is about to commence next year.
The vaccine contains 6 serotypes to protect against the most common tumor types of landlord users in the northern hemisphere and follows a proven motive action for Lyme disease vaccine.
And as you know we have an excellent partnership with Pfizer with whom we are progressing this.
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The details around the current state of play.
Thomas Lingelbach: So overall, very, very pleased with these outstanding results in an area of high unmet medical need but also by way of a minor disease area that allows the first one to achieve BLA approval to access a priority review voucher, which is probably the single largest short-term commercial return for this product candidate. Talking about Lyme, we are still the only company that has an active Lyme disease vaccine program in advanced clinical development worldwide. The program got FDA fast track designation granted.
The recruitment for the study VLA 15, 2 to 1.
Most recently completed included 625 participants 5 to 65 years of age.
The trial triggered a milestone payment from Pfizer about $10 million.
The topline results are expected in the first half of 2022.
And we will also investigate the booster dose administered 1 year following the 6 month dose.
We expect the phase III pivotal efficacy trial to commence cost pending positive readout from the phase II study in 2022.
And the clinical readout based on a 1 tick season is protected.
By the end of 2023 and this will then allow for on your initial submission for regulatory approval anticipated in <unk> 2024, assuming of course positive data.
Let's move on to our Covid vaccine BLA, 2 or 1 which is the only inactivated vaccine in clinical development in Europe today.
Thomas Lingelbach: We reported good results from the phase two trials to determine dose and schedule. As I mentioned earlier, we completed recruitment for the phase two study, BLA 152 to 1, including the P.5 and above. And this marks the total target population that we're going to include in the pivotal field efficacy trial, which is about to commence next time. The vaccine contains six zero types to protect against the most common serotypes of Lyme borreliosis in the Northern Hemisphere and follows a proven mode of action for Lyme disease vaccines.
You know that we have a partnership with the UK government. The UK government has ordered approximately $100 million of the vaccine doses.
The government is supporting us with the development and manufacturing funding and we continue to have an ongoing dialogue with the European Commission for European suppliers.
The program acceleration enabled us.
Basically.
So.
Based on our platform that we have established in Scotland, with our <unk> vaccine and the commercial manufacturing commenced in January 2021.
Our vaccine differentiate from other inactivate Covid vaccine in development for example growth in China, or India, because we combined our vaccine with a modern adjuvant don't have excess CPG $10.18, which is a tall agonist.
Thomas Lingelbach: And as you know, we have an excellent partnership with Pfizer, with whom we are progressing this development forward. The details around the current state of play, the recruitment for the study VLA 152 to 1, which was recently completed, included 625 participants, 5 to 65 years of age. The trial triggered a milestone payment from Pfizer of about 10 million. The top line results I expected in the first half of 2022.
Supposed to incur.
Increase T cell immunity by shifting the immune response towards th 1.
We have reported good phase 1.2 clinical results and are now in the middle of our phase III as I mentioned to recruitment completed.
Our study cough compare and now.
Clinical serology testing.
The regulatory submission to MH array is the plant in the autumn so in the last quarter of this year.
And then subject to.
Data approvals and so on.
We will be able to commence deliveries thereafter.
Yes.
The current study called Cove compare.
Late 2 or 1.301 was a randomized observer blind controlled comparative immunogenicity trial in over 4000 adults.
Thomas Lingelbach: And we will also investigate a booster dose administered one year following the six months. We expect the phase three pivotal efficacy trial to commence, pending a positive readout from the phase two study in 2022. And the clinical readout based on one kick season is projected by the end of 2023.
The only company that.
The targets to show effectiveness of the vaccine by immunologic in comparison against a licensed vaccine and this approach is expected to reasonably predict the vaccine efficacy. We do this by way of testing superiority of GLA to 1 and a 2 dose immunization schedule zero 28.
Right.
And we measure the GMT ratios in between the active comparator and our vaccine.
Thomas Lingelbach: And this will then allow for an initial submission for regulatory approval anticipated in H2, 2024, assuming, of course, positive data. Let's move on to our COVID vaccine, VLA 201, which is the only activated vaccine in clinical development in Europe today. You know that we have a partnership with the UK government.
At 2 weeks after the second vaccination.
The study is conducted in the U K supported by the HFC NIH are with.
Testing being conducted at Phd.
The protocol has been agreed with MH array and we have.
Advanced discussions with other regulatory bodies on.
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Top line data are expected early in the fourth quarter and we.
We expect to commence rolling submission with the NHRA in the coming weeks and subject to the phase III data. We believe that the initially approval it may be granted by the end of the year.
Thomas Lingelbach: The UK government has ordered approximately 100 million doses of the vaccine, and the government is supporting us with development and manufacturing funding, and we continue to have an ongoing dialogue with the European Commission for European supplies. The program acceleration enabled us to basically go based on our platform that we have established in Scotland with our ICSiaro vaccine, and commercial manufacturing commenced in January 2021. Our vaccine differs from other inactivated COVID vaccines in development, for example, those in China or India, because we combined our vaccine with a modern utterance, Dinovaxis ZPG-1018, which is a toaulike agonist supposed to increase T-cell immunity by shifting the immune response toward TH1.
We are also participating in the world's first COVID-19 vaccine booster trial in the UK, where our vaccine is being used to booster people was historic those who have been price with other vaccines.
And this could become a very interesting target product profile for our vaccine going forward.
In addition to the studies hours per plant, including reduced booster dose per door.
Also on studies for example in elderly.
And we are also studying other variance in order to be in a position to manufacture variant based vaccines, because you may know that especially for our whole virus inactivating platforms.
There are a lot of examples how train ovarian shifts can be addressed EG in the world of influenza.
And with this update on our R&D activities I would like to hand over to David.
Thank you Thomas.
So just to move on to slide 15.
Uh huh.
Assumption.
On.
Good morning to those of you in the U S and good afternoon to those of you.
Sure.
So just before I hand over to monitor to go through the financial results.
Unusual this year I'd like to see few months regarding the broader business genomics on the deep future guidance.
Firstly, though.
Thomas Lingelbach: We have reported good phase one, two, and clinical results and are now in the middle of our phase three, as I mentioned, recruitment completed for our study, Kov Compare, and now in clinical serology. The regulatory submission to MHRA will be the plant in the autumn, so in the last quarter of this year, and then, subject to data, approvals, and so on, we will be able to commence deliveries thereafter. The current study, called Cove Compare, VLA 201, 301, is a randomized, observed comparative emergency trial in over 4,000 adults.
Livingston site today.
Many of you will know that the team here is working hard to do.
And activate your Covid vaccine on.
Looking around the clock to complete the new plant, which is just across the road from where I'm sitting right now.
We've strengthened our teams globally.
The contents of today's call I'd also like to mention that Josh from recently joined US as VP of Investor Relations.
On Thomas Night will introduce Josh to many of you in the coming weeks and months, including hopefully some of those meetings.
Cash.
So today is very much.
Chikungunya data.
We have several strings to our book as you all know.
We are reconfirming, our core guidance, which.
Which is testament to the ongoing excellent execution in control of it on deep programs.
And with mitigating the effects of Covid.
Travel vaccine business.
And we've always been clear that we plan to invest truly unique and valuable R&D assets. So the level of R&D investment is consistent with.
So it would have been pleased to provide guidance on October program, but thats still difficult from a couple of reasons don't don't just explained.
Thomas Lingelbach: We are the only company that targets showing effectiveness of the vaccine by immunological comparison against a licensed vaccine, and this approach is expected to reasonably predict vaccine efficacy. We do this by way of testing superiority of VLA 201 in a two-dose immunization schedule, the 028, and we measure the GMT ratios between the active comparator and our vaccine at two weeks after the second vaccine.
Firstly, just Thomas has alluded to our phase III trial.
Good on time on.
On the execution is on channel itself has been managed extremely well. So we're just waiting for the.
<unk> testing and the subsequent data analysis on clearly that data from the rolling submission, Dan and Charlie Thomas also mentioned.
We've said before the phasing of the 60 million dose on.
The UK government will move across also into 2022.
And what we want to be able to do is to give meaningful guidance.
We've also got ongoing discussions with EDC as most of you will know on there.
So for now we're not giving guidance that includes COVID-19.
Thomas Lingelbach: The study is conducted in the UK, supported by DHSC and IHR, with testing being conducted at PHR. The protocol has been agreed with MHRA, and we have advanced discussions with other regulatory bodies on a similar approach. Topline data is expected early in the fourth quarter, and we expect to commence rolling submission with the MHRA in the coming weeks. And subject to the phase three data, we believe that initial approval may be granted by the end of the year.
Rest assured we will do that as soon as we are sufficiently robust information and.
And we hope that's not too far away.
I think what's most important regarding COVID-19 underneath the other programs that we're executing very well.
Fantastic.
We're still doing to provide solutions to the ongoing challenges that COVID-19 presents us with not includes the execution of non Covid R&D programs.
So on David will contribute.
To the Covid challenge.
And we will give you more economic insight into that as soon as we can.
So Mike I would like to hand back to <unk>. Thank you.
Yes, Thanks, a lot David.
I will continue to finance actually is providing more details on the product sales generated during the first 6 months of 2021.
Thomas Lingelbach: We are also participating in the world's first COVID-19 vaccine booster trial in the UK, where our vaccine is being used to boost people with a third dose who have been primed with other vaccines. And this could become a very interesting target product profile for our vaccine going forward. And additional studies are also planned, including reduced booster doses, but also studies, for example, in the elderly. And we are also studying other variants in order to be in a position to manufacture variant-based vaccines, because you may know that this is especially true for whole virus inactivated platforms. There are a lot of examples of how strain or variant shifts can be addressed, e.g.
Which in total amounted to $31.8 million euros.
Sales of third party products further gains momentum and it's driven by both in supporting our IP pool.
Contributed a total of $5.9 million viewers each from product sales ex.
Sales to U S. Military was still related to the base yields to conflict science that can September 2020, and delivered about $22.3 million euros of sales during the first half of 2021.
As we continued seeing recovery industry being impacted by COVID-19 related restrictions sales of <unk> during the first 6 months.
Still quite compressed and elimination added about $3.5 million euros 2 hour it won't topline.
As you can see on the right slide on slide.
Slide number 16.
On the older product sales, but quarter over quarter bound by about 19% at constant exchange rates.
All of our sales were delivered through our own commercial infrastructure.
Gross margins on product sales ended up at 39, 2% impacted by compressed product sales.
Some idle capacity costs and those have continued need for write offs of aging inventories.
Looks like this.
On the next item on the walk us through the <unk> profit.
Those statements.
First I want to draw your attention to the total revenues, which remains on the 1% below the first 6 months of 2020.
The reduction in product sales are almost completely offset by our other revenues, which more than doubled from about $7 million.
In each 1.2020 to about $15.7 million in the first 6 months of 2021.
Which is mainly a consequence of revenues added from the price of the collaboration per line.
Higher revenues in the <unk> unit in Sweden.
From incremental revenues related to the <unk> program for element NMFC countries.
Together with institute to put on time.
Overall costs increased from previous year as a result of idle capacity costs as well as inventory write offs.
Cost of services increased in line with the increase in our other revenues.
R&D investments continued growing significantly and again more than doubled during the first 6 months 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 amounted to 46 million euros. During the first 6 months of 2021.
Marketing and distribution expenses declined moderately compared to the first 6 months of 2020, however investments into launch preparation and market exits related to our nicely progressing chikungunya program.
Ed, It's 2 million euros of incremental sales and marketing spend in 2012.
So excluding these additional expenses for chikungunya co marketing and distribution spend reduced by about 25%.
G&A spend continued increasing materially mainly driven by loan operations costs, mostly related to corporate projects such as the U S IPO preparation.
David: in the world of influenza. And with this update on our R&B activities, I would like to hand over to David. Thank you, Thomas. So just to move on to slide 15 for those of you who are searching. Good morning to those of you in the US and good afternoon to those of you in Europe.
Bind with investments in support of our Covid program is that does include some non cash effects related to the company's stock option program.
Finally fuel more growth around so the finance results, including Texas discontinued being positively impacted by foreign currency revaluation gains.
Primarily related to the British pound denominated cash and balance sheet position.
Which almost offset the increased interest charges related to our debt financing agreement with augment and Deerfield.
David: Just before I hand over to Manfred to go through the financial results, as is unusual this year, I'd like to say a few words regarding the broader business dynamics and, indeed, future guidance. First of all, I'm at our Livingston site today, and many of you will know that the team here's working hard to produce our inactivated COVID vaccine and working around the clock to complete the new plant, which is just across the road from where I'm sitting right now. We've strengthened our teams globally.
As well as other interest charges related to our refund diabetes.
And finally EBITDA.
It shows a total loss of $80.1 million.
Mostly driven by strongly increased RF.
Investments in the first time.
Nick's sites.
So this additional slide shows the impact of the Covid activities on the Companys income statement for also showing that a considerable part of the EBITDA of the first 6 months is attributable to the COVID-19 related investments in R&D.
From the total EBITDA of $80.1 million about $53 million related to the Covid business.
Leaving about $27 million million attributable to the needles.
Core business, excluding Covid and all of the core business shows significant R&D spend of around $32.6 million euros.
Mainly driven by our investments into the phase III of our typical year program.
Also important to note that still low code revenues being recognized for the period ending June 30.
And then finally on the next slide is last quarter. We thought it would also be helpful to again give a few comments on the balance sheet statement per June 30.
Given some material movements continue impacting on our balance sheet. So.
So first PUC on fixed assets, taking a step up and Meanwhile, amounts to almost 75 million euros, which you can see on the property plant and equipment line.
Inventories keep on increasing and Meanwhile, we hold about 125 million euros of inventories, which largely a COVID-19 specific.
As expected we saw our cash position further increase.
Driven by both the proceeds generated through the global offering.
From a shares as well as per the prepayments received from the UK government, our cash position flow to increase and amounted to almost 330 million euros.
By the end of June 32021.
And on the liability side again I want to highlight the continued increase in the contract liabilities, which related to further cash consideration received from the UK government during the second quarter.
David: And in the context of today's call, I'd also like to mention that Josh Trump recently joined us as VP of Investor Relations, and Thomas and I will introduce Josh to many of you in the coming weeks and months, including hopefully some of those meetings. So while today is very much about our chicken gunya data, we have several strings to our bow, as you all know. We're reconfirming our core guidance, which is testament to the ongoing excellent execution and control of our R&B programs combined with mitigating the effects of COVID on our travel vaccine business. And we've always been clear that we plan to fully invest in our unique and valuable R&D assets.
Related to the Covid supply agreement.
The prescribed supply and Covid vaccines Paducah government, we will gradually see the contract liabilities moving into the P&L.
This concludes the finance section and hand back to Thomas.
As an update on the expected news flow thanks very much.
Thank you David from commensurate.
For the comprehensive financial report.
On page 21 of the presentation summarizes the key upcoming catalysts and potential value inflection points.
That we see ahead of us.
So for.
<unk> chicken Gunia the final phase 3 trial results, which includes the 6 month follow up period.
Including the lot to lot consistency phase III study that we expect later this year those 2 studies.
<unk> formed the basis for licensure. So these are the pivotal studies.
And our part of the submission that we expect to do with the agencies.
Then of course.
The Lyme disease vaccine candidate.
On a <unk>.
David: So the level of R&D investment is consistent with that. So we would have been pleased to provide guidance in our COVID program, but that's still difficult for a couple of reasons that I'll just explain just now. First, Thomas is led to our phase-tree trial, recruited on time, and the execution of that trial itself has been managed extremely well.
We continue of course execution on the study BLA 15, 2 to 1 and we expect some minor follow up Readouts of the phase 2 studies, which are primarily follow up time points that will.
Will come over the course of the next month.
And on Covid.
Cost is the next.
Very important readout.
Read out that we are expecting.
And here the clinical resided on.
David: So we're just waiting for the output of the serological testing and the subsequent data analysis, and clearly, that data forms part of the rolling submission to the MDRA that Thomas also mentioned. As we've said before, the phasing of the 60 million dose order to the UK government will move across also into 2022. And what we want to be able to get meaningful guidance. We've also got ongoing discussions with the EEC, as most of you will know, and therefore, for now, we're not giving guidance that includes COVID. Rest assured, we will do that as soon as we have sufficiently robust information. And we hope that's not too fast.
On our study 301 day.
Compare study.
But also the study that is being conducted in Southampton.
Where we are part of the different booster strategy called core food.
And then of course.
Later in the year.
The first initial potential licensure.
We expect to initiate and execute.
Additional clinical activities on Covid as mentioned earlier to complement.
UK trials.
Primarily to increased labor overtime.
Not necessarily for initial licensure. These are the key points and I think with that I would like to hand back to the operator to take your questions.
Thank you so as a reminder, if you would like to ask a question. Please press star 1 on your telephone keypad and wait.
From a name to be announced on if you wish to accounts. So that request. Please press the hash key once again to ask a question. Please press star 1 on your telephone keypad.
David: I think what's most important regarding COVID and indeed the other programs that are executing very well is the fantastic work that many people are still doing to provide solutions to the ongoing challenges COVID-19 presents us with, and that includes the execution of non-COVID R&D programs. I never will contribute to the COVID challenge, and we'll give you more economic insight into that as soon as we can. And with that, I'd like to hand back to Mantra. Yeah, thanks a lot, David.
On the first question comes from the line of Maury Raycroft Jefferies. Please go ahead. Your line is now open.
Hi, good afternoon.
Good morning, everyone. Thanks for taking my questions and congrats on the chikungunya.
Based on results.
First question on Chikungunya I, just wondering if you can provide any more specifics on what the regulatory timeline could look like and is there anything youre.
Youre going to be looking for in the longer term safety follow on.
So maury hi, so.
First of all the 6 month safety follow up is a prerequisite for licensure I mean in the in the non Covid vaccine World I would say.
Manfred: I want to continue the finance action by providing more details on the product sales generated during the first six months of 2021, which amounted to 31.8 million euros. Sales of third-party products further gained momentum, and driven by both Ansepur and Radipur, contributed a total of 5.9 million euros to our age-one product sales. Ixiaro's sales period for the military was still related to the base year of the contract signed back in September 2020 and delivered about 22.3 million euros of sales during the first half of 2021.
And we are basically reviewing the same that we have been reviewing already.
During the ongoing phase III study and.
But no additional readouts. So we will measure the same parameters and continue to watch the same parameters as we did.
<unk> for the ongoing study in the top line results.
We do not expect.
Any changes to this.
Profile overall with regard to the submission.
Of course, we are preparing our different pieces here.
According to the regulatory dossier different modules CMC clinical non clinical.
And as soon as we have our.
Clinical lot to lot consistency data and the 6 month follow up data.
We will start the submission process.
On this right now.
I would say.
To predict.
On timelines.
With regards to submission to approval.
Manfred: As you continue seeing the travel industry being impacted by COVID-19 related restrictions, sales of Tukovall and Nixiaro, but during the first six months, still quite compressed and, in combination, added about 3.5 million euros to our E.1 top line. As you can see on the right slide, slide number 16, the older products here have a quota down by about 19% at constant exchange rates, and almost all of our sales were delivered through our own commercial infrastructure. Cross margins on product sales ended up at 39.2%, impacted by compressed product sales, some idle capacity costs, and also the continued need for write-offs of aging inventories. Next slide, please.
For non Covid related vaccine development activities, it's difficult.
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On a loud and give priority to <unk>.
Switch related vaccine development in hand, we are careful.
And providing.
Any further detailed guidance on potential approval at this point in time.
Okay. Okay.
Okay. That's.
Thats helpful and then force.
The second Covid phase III looking at 'twenty, 1 on looking at 'twenty, 1 on 1 variance.
What could timelines look like for that 1 is there anything else you can say on how 2001 on 1 will fit into your strategy.
You are referring to which studied Murray.
This is the study in Covid variance.
You talked about the study that is on <unk> dot Gov, 3 or 4.
That sounds right I think it's 3 or 4.
So we can follow up offline, yes, no no no I can I can I can answer the question. It's not a problem head on I was just on I just want to make sure. We have a lot of Covid studies ongoing or in the plan.
Manfred: On the next slide, I want to walk you through the H1 Profit and Loss Statements. Here I would first want to draw your attention to the total revenues, which remained only 1% below the first six months of 2020, with the reduction in product sales almost completely offset by our other revenues, which more than doubled from about 7 million, in age 1, 2020, to about 15.7 million in the first six months of 2021, which is mainly a consequence of revenues added from the Pfizer collaboration for Lyme, higher revenues in the CTM unit in Sweden, and some incremental revenues related to the Kikungunya program for LMIC countries, together with Instituto Bhutanan.
It's important that we align so we are we are planning a further study called BLA 2 or 1.304.
And in this study will include elderly.
And is a study that is designed.
On to allow for a potential varian breech.
And the study is about to commence this is also why you.
<unk> already the study description on trials start growth.
Okay.
Got it okay and for that 1.
Is there any more specifics on how that could fit into.
Launch strategy for Covid.
We do not expect that this study will be needed for initial licensure.
But it is a study that is expected to support broader age range claims.
And of course as I mentioned.
Is also expected to provide a platform that we can use for a.
Clinical breech.
Into new variants and I think and I think we you will see our respective.
Manfred: Overall Cox increased from the previous year as a result of idle capacity costs as well as inventory write-offs, while the cost of services increased in line with the increase in our other revenue. R&D investments continued growing significantly and again more than doubled during the first six months of 2021, in line with our R&D portfolio progressing into later stage clinical development, but primarily impacted by incremental COVID-19. The rated R&D spend amounted to 46 million euros during the first six months of 2020.
Announcement upon.
Upon initiation of the study and.
It's fair to say that this is imminent.
Got it Okay. That's helpful. And then last question is if you can if you think the COVID-19 discussion with the EC will materialize or get finalized after the phase III Covid results are disclosed or how should we think about timing for an easy decision.
Well I would say, we hope to be earlier.
But we are we have we are in active discussions with DC for a long time.
And so and this is all we can say at this point in time.
Understood. Okay. Thank you for taking my question.
And more than welcome.
Thank you and your next question comes from the line of Seamus Fernandez at Guggenheim. Please go ahead. Your line is now only 10.
Oh, great. Thanks for the question so.
Just a couple of quick ones.
Manfred: Marketing and distribution expenses declined moderately compared to the first six months of 2020. However, investment in launch, preparation, and market access related to our nicely progressing Chicken Gunia program added 2 million euros of incremental sales and marketing spend in 2021. So, excluding these additional expenses for Chicken Gunia, our marketing and distribution spend declined by about 25%.
Just wanted to get a sense of the timing of the.
Initial sort of Covid trial dataset I believe that you had announced that patient enrollment has completed.
Towards the beginning of 2021.
And I guess the B C.
Structural sort of timeline would be 6 weeks plus.
From the timing so could you just give us a sense of the timing updates.
If additional data points are actually required to measure the sustainability of the of the antibody boost benefit.
Manfred: G&A spending continued to increase materially, mainly driven by non-operating costs, mostly related to corporate projects such as the US IPO preparation, combined with investments in support of our COVID program, as well as some non-cash effects related to the company's stock option programs. Finally, a few more words on the finance results, including Texas. This continued to be positively impacted by foreign currency valuation gains, primarily related to the British Pounds denominated Cash and Benad Sheeposition, which almost offset the increased interest charges related to our debt financing agreement with Orbumet and Deerfield, as well as other interest charges related to our refund library.
So are you is it requiring kind of evaluation of multiple time points just to see the durability of effect.
Or is it just structural to the trial from a timeline perspective.
And then in terms of the evolution.
From a manufacturing perspective towards the variance.
<unk> capabilities.
What would it take to kind of move.
Move towards an inactivated.
Variant vaccine that let's say oriented either towards delta or beta.
And how quickly can that be incorporated into your existing process showed the.
Initial ancestral effort be successful thanks.
Good question. So let me, let me start with the timeline to repeat the timeline on our current study 301 right. So.
We have the 301 study is the Cove compare study this study.
<unk>, our vaccine head to head against the Astrazeneca vaccine.
So as authentic.
Manfred: And finally, BTDA shows a total loss of 80.1 million euros, mostly driven by strongly increased R&D investments in the first, Next slide. So this additional slide shows the impact of the COVID activities on the company's income statements, also showing that a considerable part of the EBITDA of the first six months is attributable to the COVID-19 related investment in R&E. From the total of 80.1 million euros, about 53 million are related to the COVID business, leaving about 27 million euros attributable to MENA's core business excluding COVID.
On an active arm in this zone.
So technical vaccinated people are presented an active arm in the study we have completed the enrollment.
So this means that.
<unk> got a cut that into 2 charts.
And thereafter.
So were not true contesting starts and our primary endpoint.
2 weeks after completion of the primary immunizations serious.
And <unk> announced we expect that day.
This top line data early fourth quarter.
And.
So we are not entirely in control of our own destiny here, we collaborate with the UK government.
And so.
Theologically testing.
Being done.
Public Health, England, as we mentioned at 1 of our previous calls already and.
Manfred: And also, the core business shows a significant R&D spend of around 32.6 million euros, mainly driven by investment into phase three of our Chicken Kunya program. It is also important to note that still no COVID webinar has been recognized for the period and on June 30.
And from there.
We we expect that this primary endpoint data will form the basis for the initial licensure, we will in parallel.
Continue follow up time points.
To observe antibody persistence.
But this is currently not expected to be <unk>.
Manfred: And then, on the next slide, at the last quarter, we thought it would also be helpful to, again, give a few comments on the balance sheet statement as of June 30, given some material movements continuing impacting our balance sheet. So first, we see our fixed assets taking a step up, and meanwhile, they amount to almost 75 million euros, which you can see on the property plant, and equipment line. Inventories keep on increasing, and meanwhile, we hold about 125 million euros of inventories, which are largely COVID-specific.
Basis for the initial conditional.
On <unk>.
Licensure, but will be part of the I would say the ordinary if I may say so.
Process later on the same is true for.
For the for.
For the full study.
Here of course is also a primary endpoint that would be metric and at a later point in time.
There will be follow up time points to observe antibody persistence.
When it comes to the manufacturing part of your question.
So whole virus on viruses.
Require of course that you isolate the.
Manfred: As expected, we saw our cash position further increase, driven by both the proceeds generated through the global offering of new shares, as well as further prepayments received from the UK government. Our cash position further increased and amounted to almost 330 million euros by the end of June 30, 2021.
The virus.
And then.
<unk> create irrespective virus loan that you can use.
On to generate a viral seed bank.
And from the from the initial we call. It research fiber feedback tool the massive Iot bank that you can lock into production you need to assume roughly 8 to 10 weeks and this is something that is this is a timeline that is well known.
Manfred: And on the liability side, I again want to highlight the continued increase in the contract liabilities, which relate to further cash considerations received from the UK government during the second quarter related to the COVID supply. If you start to fly in COVID vaccines to the UK government, we will gradually see the contract liabilities moving into the P&L. And with that, I want to conclude the finance section and hand it back to Thomas, who will give us an update on the expected news flow. Thank you very much.
From the world of influenza.
And in <unk>.
That will allow then to commence manufacturing and it is expected that the manufacturing process will be identical so no change to manufacturing process. Overall, however, again as per influenza there are existing guidelines in the Meanwhile, also published.
We'll apply for for Covid, varian vaccines or potentially Covid Varian vaccines.
Which also based on a mono comparability.
Not big studies, but a few hundreds of people where you need to show in a head to head comparison.
Against.
<unk>, which we'll be neutralizing antibody titers.
Thomas Lingelbach: Thank you, David, and thank you, Manfred, for the comprehensive financial report. Page 21 of the presentation summarizes the key upcoming catalysts and potential value inflection points that we see ahead of us. So for Chikungunya, the final phase three trial results, which includes the six months follow-up period, including the lot to lot consistency phase three study that we expect later this year. Those two studies form the basis for licensure, so these are the pivotal studies and are part of the submission that we expect to make to the agencies.
And this coming back to <unk> question.
Earlier.
Therefore, we have also created the platform around our study DLA 2 or 1.3 or 4 where we have designed the product line in a way that we can add.
Whenever we have a potential very in vaccine ready and at this comparability on an ongoing study.
Thank you.
Okay. Thank.
Thank you and your next question comes from is from the line of semi Giovanni at ex.
Securities. Please go ahead your line is open.
Hi, everyone. Thanks for taking my question just let me add my congrats on the chikungunya data very pleasing to see that.
Just on called the police to Thomas.
Thomas Lingelbach: Then, of course, for the Lyme disease vaccine candidate VLA 15, we continue to execute on the study VLA 15 2 to 1, and we expect some minor follow-up readouts of the phase two studies, which are primarily follow-up time points that will come over the course of the next month. And on COVID, of course, this is the next very important readout that we are expecting. And here, the clinical results of our study 301, the Kov-Compaer study, but also the study that is being conducted in Southampton, where we are part of the different booster strategies called Kov Boost.
I'm just wondering is it your expectation that you need to do.
A company sponsored study to get the booster label.
Or do you think the data from that study will be sufficient.
Well. This is a good questions from you saw so basically by the end of the day.
The decision around booster ring.
Is it pay CDI decision in the U K.
And.
And so whether D. This the data that we generate payout will be sufficient or not it's a discussion that we got to have with the MH survey once we have the data at hand.
There are certainly multiple possibilities, including.
Thomas Lingelbach: And then, of course, later in the year, the first initial potential license. We expect to initiate and execute additional clinical activities on COVID, as mentioned earlier, to complement the UK trials, primarily to increase label over time, not necessarily for initial licensure. These are the key points. And I think with that, I would like to hand back to the operator to take your question.
That's the debt that we don't need it for B dubs, we don't need an additional study.
But nevertheless, we have as you may recall already announced during the last analyst call.
We amended the current protocol for phase 1 to add booster on.
Just to also include company sponsored.
On booster data in case, we need it and the same will be true by the way for study 301, where we'll also add on.
Operator: Thank you. As a reminder, if you would like to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. And if you wish to cancel that request, please press the hash key. Once again, to ask a question, please press star and one on your telephone keypad. And the first question comes from the line of Murray Raycroft at Jeffreys. Please go ahead. Your line is now open.
Our booster app.
Great and just can you remind me I know the boost is looking at.
Full dose on a half day T series into 1 pasting in your additional arms in your studies are you using the full dose of half days.
Full dose.
Okay.
Thanks very much.
Thank you and your next question comes from the line of Jacob Mccann at Kempen. Please go ahead. Your line is on its Ted.
Hi, there and thanks for taking my question.
So my question is regarding the upcoming readout to the COVID-19 vaccine.
Just curious if they're on any factors that would give consent from the expected readout.
Thomas Lingelbach: Hi, good afternoon, everyone. Thanks for taking my questions and congrats on the first question on chicken guinea. I was just wondering if you could provide any more specifics on what the regulatory timeline could look like and if there are any, you're going to be looking So, Maury. So first of all, the six-month safety follow-up is a prerequisite for licensure, I mean, in the non-COVID vaccine world, I would say. And we are basically reviewing the same that we have been reviewing already during the ongoing phase three study, and there would be no additional readout, so we will measure the same parameters and continue to watch the same parameters as we did for the ongoing study and the top line results. We do not expect any changes to this profile overall.
So basically.
We are.
Measuring <unk>.
<unk> ratio neutralizing antibody titer.
Against <unk>.
<unk>.
And.
The level of comfort that we do have said this is.
This is the reason why we.
While we entered positively in this endeavor is of course that day.
<unk> reported neutralizing antibody titers from <unk> vaccine in the U K from.
The phase 1.2 study in <unk> and from our Phase 2 study and dose.
Neutralizing antibody titers were generated at the same lapse.
With the same assays by the same people.
And and.
And dose numbers are published both ours as well as theirs.
And this and this ratios I may say, so on the order of magnitude of those neutralizing antibody titers gave us the level of confidence that we have right now of course, we added the word effects from development and by the end of the day, we had the weather biology and only did the study readout itself will tell.
Thomas Lingelbach: With regard to the submission, of course, we are preparing our different pieces here according to the regulatory dossier, different modules, CMC, clinical, and non-clinical. And as soon as we have our clinical lot to lot consistency data and the six months follow-up data, we will start the submission process. You know, right now, I would say to predict timelines with regard to submission for approval for non-COVID-related vaccine development activities is difficult. You know, authorities are allowed and give priority to COVID-related vaccine developments.
Okay. Thank you that makes sense.
Thank you and they're kind of at midnight city remind at sort of questions on <unk> as I said a reminder, if you would like to ask a question. Please press star 1 on your telephone keypad to ask a question.
Do you have another question on the line comes from the line of Simon.
Sure.
Mr. Lin. Please go ahead. Your line is now open.
Yes, good afternoon, I just have 1 question.
Wondering if the slightly later timing of the expected release of the phase III results is going to have any impact where you expect it to have any impact on the availability of your results from Cove boost.
Thomas Lingelbach: And hence, we are careful in providing any further detailed guidance on potential approval at this point. And then for the second COVID phase three, looking at the 21, at 2101 in variance. What could timelines look like for that one? Is there anything else you can say on how 2101 is?
We are not the sponsor of boost.
So there are.
From our perspective, no Intel links to that.
That we are currently envisaging.
We are indeed.
Indeed.
Few weeks just a few weeks behind original expectations, probably 2 to 3 years as I said earlier.
Thomas Lingelbach: You are referring to which study, Marie? This is the study in COVID-variance. You talk about the study that is on Trials.gov, 3 or 4. Um, I think it's the 304, um, so, I can follow up offline. Yeah, no, no, no, I can answer the question.
We are not entirely mastering the process here within the.
Within the partnership that we have with the UK government, but but it is not expected to have a knock on impact on on.
Okay. Thanks, very much that's very helpful.
More than welcome.
Thomas Lingelbach: It's not a problem at all. I just wanted to make sure that we have a lot of COVID studies ongoing or in the planning. I think it's important that we align, so we are planning a further study called VLA 201-304. And this study will include the elderly and is a study that is designed to allow for a potential variant bridge. And the study is about to commence. This is also why you can already find the study description on twice.gov. Got it.
Do you have a follow up question.
Question from the line of Sam.
Giovanni ex Securities. Please go ahead. Your line is on it then.
Thanks for taking my follow up is really just a question for David and Manfred.
I appreciate you don't want to give too much COVID-19.
Related guidance, but I'm just wondering in light of day R&D spending Q2 is that a reasonable run rate to assume going into Q3 as well. Thanks.
Now let me take the question. This is 1 per speaking.
I think so where we are sitting today I think this would be a reasonable assumption to assume continuation of the same level.
That's great thanks very much.
Thomas Lingelbach: And for that one, Is there any more specifics on how that could fit into the launch strategy? We do not expect that this study will be needed for initial licensure, but it is a study that is expected to support broader age range claims. And of course, as I mentioned, is also expected to provide a platform that we can use for a potential clinical bridge into new variants, and I think you will see a respective announcement upon initiation of the study, and it's fair to say that this is imminent. That's helpful.
Average currently no further questions on this line on the line. Please continue.
So many thanks for your time today. Many thanks for your excellent questions. Many things also for sharing.
Our level of excitement around chikungunya and really unprecedented achievement.
And in the middle of a COVID-19 pandemic, which is not to be underestimated.
And of course, we are looking forward to talking again.
Once we hopefully going to report.
Good quality data.
Have a nice day bye bye.
Thomas Lingelbach: And then last question is if you think the COVID discussions with the EC will materialize or get finalized after this phase, or how should we think about timing? Well, I would say we hope to be earlier, but we have been in active discussions with DEC for a long time. And this is all we can say at this point in time. Okay, thank you.
That does conclude today's conference. Thank you for participating you may all disconnect speakers. Please standby.
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Operator: Thank you, and your next question comes from the line of Seamus Fernandez at Guggenheim. Please go ahead. Your line is now open. Oh, great. Thanks for the question.
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Operator: Oh, great. Thanks for the question. So just a couple of quick ones.
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Operator: I just wanted to get a sense of the timing of the initial sort of COVID trial data set. I believe that you announced that patient enrollment had completed towards the beginning of 2021. And, you know, I guess the structural sort of timeline would be six weeks plus from the timing. Could you just give us a sense of the timing updates and whether additional data points are actually required to measure the sustainability of the antibody boost benefit? So are you, you know, is it requiring a kind of evaluation of multiple time points just to see the durability of effect? Or is it just structural to the trial?
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Operator: from a timeline perspective. And then, in terms of the evolution from a manufacturing perspective, towards the variance capabilities, what would it take to kind of move towards an inactivated variant vaccine that's, let's say, oriented either towards Delta or beta, you know, and how quickly can that be incorporated into your existing process should the initial ancestral effort be successful? Thank you.
Thomas Lingelbach: So let me start with the timeline to repeat the timelines for our current study 301, right? So we have the 301 study is the control compared study. This study compares our vaccine head-to-head against the Astacenica vaccine. So, Asathenica is an active arm in this, and Assatica vaccinated people are presented as an active arm in the study. We have completed enrollment.
Thomas Lingelbach: So this means that people got the two shots, and thereafter, the neurological testing starts, and our primary endpoint is two weeks after completion of the primaries in the immunization organization series. And as we announced, we expect this top line data early in the fourth quarter. And so we are not entirely in control of our own destiny here.
Thomas Lingelbach: We collaborate with the UK government, and the theological testing is being done at Public Health England, as we mentioned on one of our previous calls already. And from there, we expect that this primary endpoint data will form the basis for the basis for the basis for the initial license. We will, in parallel, continue follow-up time points to observe antibody persistence, but this is currently not expected to be the basis for the initial conditional licensensure but will be part of the, I would say, the ordinary, if I may say so, process later on. The same is true for the Koch-Boo study.
Thomas Lingelbach: Here, of course, it's also a primary endpoint that would be measured, and at a later point in time, there will be follow-up time points to observe antibody procedures. When it comes to the manufacturing part of your question, So whole viruses require, of course, that you isolate the virus, and then you create a respective viral clone that you can use to generate a viral feedbank. And from the initial, we call it the research virus feed bank to the master virus seed bank that you can blend plug into production, you need to assume roughly 8 to 10 weeks.
Thomas Lingelbach: And this is something that is, this is a timeline that is well known from the world of influenza. And that will allow them to commence manufacturing, and it is expected that the manufacturing process will be identical. So no change to the manufacturing process overall. However, again, as per influenza, there are existing guidelines that have also been published that will apply for COVID-variant vaccines or potential COVID-variant vaccines, which are also based on immunocompirability.
Thomas Lingelbach: These are not big studies, but a few hundred people where you need to show in a head-to-head comparison against a surrogate, which will be neutralizing antibody tiders. And this, coming back to Morris' question earlier, therefore, we have also created the platform around our study VLA 201304, where we have designed the protocol in a way that we can add whenever we have a potential variant vaccine ready and add this comparability arm to an ongoing study.
Operator: Thank you. Thank you. And your next question comes from the line of Samir Devani at RX Securities. Please go ahead. Your line is open.
Thomas Lingelbach: Hi everyone, thanks for taking my question to let me add my congratulations on the chicken gunya data. Very pleasing to see that just on CovBoost Thomas. I'm just wondering, is it your expectation that you need to do a company-sponsored study to get the booster label added, or do you think the data from that study will be? Well, this is a good question, Samir. So basically, by the end of the day, the decision around boostering is a JCDI decision in the UK.
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Thomas Lingelbach: And so whether the data that we generate there will be sufficient or not is a discussion that we've got to have with the MHRA once we have the data at hand. But there are certainly multiple possibilities, including that we don't need it for the purposes of, that we don't need an additional study.
Thomas Lingelbach: But nevertheless, we have, as you may recall, already announced during the last analyst call that we amended the current protocol for Phase I, 2 to add a booster arm to include company-sponsored booster data in case we're going to need it. And the same will be true, by the way, for study 301, where we'll also add a booster item. Can you remind me?
Thomas Lingelbach: I know Cobboost is looking for full dose and a half dose to 001 boosting. In your additional arms, in your studies, are you using the full dose or the half dose? Full dose. Great, thanks very much.
Operator: Thank you, and your next question comes from the line of Jacob Mikhail at Kempen. Please go ahead; your line is open.
Operator: Hi there, and thanks for taking my question. So my question is regarding the upcoming readout for the COVID-19 vaccine. I'm just curious if there are any factors that would give conflict for the expected readout. So basically, we are measuring the GMT ratio, and neutralizing antibody titers against AET. And the level of comfort that we do have, and this is the reason why we have entered positively into this endeavor, is, of course, that there were reported neutralizing antibody titers from the AIDS vaccine in the UK from their phase one to study and from our phase one to study.
Operator: And those neutralizing antibody titers were generated at the same labs with the same essays by the same people. And those numbers are published, both ours as well as theirs. And this ratio, I may say so, or the order of magnitude of those utilizing antibody titers, gives us the level of confidence that we have right now. Of course, we are in the world of vaccine development, and by the end of the day, we are in the world of biology, and only the study reader himself will know that.
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Thomas Lingelbach: Okay, thank you. Makes sense. Thank you. Thank you. There are currently no further reminders, further questions, apologies, but as a further reminder.
Operator: Thank you. There are currently no further reminders for the questions, apologies, but as a further reminder, if you would like to ask a question, please press star and one on your telephone keypad to ask a question. And you do have another question on the line. It comes from the line of Simon Scholles at First Berlin.
Operator: Please go ahead. Your line is open. Yes, good afternoon. I just have one question.
Thomas Lingelbach: We are not the sponsor, of course. So there are, from our perspective, no interlinks to that that we are currently envisaging. We are indeed a few weeks, just a few weeks behind original expectations, probably two to three. As I said earlier, we are not entirely mastering the process here within the partnership that we have with the UK government, but it is not expected to have a knock-on impact on Kovbu.
Operator: You do have a follow-up question from the line of Samir Devani, R-X securities. Please go ahead, your line is open. Thanks for taking my follow-up. It's really just a question for David and Manfred.
Manfred: Thanks for taking my follow-up. It's really just a question for David and Manfred. I appreciate you don't want to give too much COVID related guidance, but I'm just wondering, in light of the R&D spending in Q2, is that a reasonable run rate to assume going into Q3 as well? Let me take the question. This is Manfred speaking. I think so where we are sitting today, I think this would be a reasonable assumption to assume a continuation of the same level.
Operator: There are currently no further questions on this line; on the lines, please continue.
Thomas Lingelbach: Right, so many thanks for your time today, many thanks for your excellent questions, many thanks also for sharing our level of excitement around Chikungunya and this really unprecedented achievement within, in the middle of a COVID pandemic, which is not to be underestimated. And, of course, we are looking forward to talking again once we, hopefully, are going to report well with COVID data.
Operator: Have a nice day. Bye-bye. That does conclude today's conference. Thank you for participating. You may audition
Operator: That does conclude today's conference. Thank you for participating. You may all disconnect, and speakers, please stand by. Thank you.
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