Full Year 2021 Valneva SE Earnings Call

March 24, 2022

Welcome to the conference call. Please continue just come by your conference will begin shortly.

[music].

Good day and thank you for standing by welcome today they'll never presents is what did it full year 2021 financial results conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be the question and answer session to ask a question. During this session you will need your Prescott and one on the telephone keypad.

Operator: Welcome to the conference call; please continue to stand by; your conference will begin just- [inaudible] Good day, and thank you for standing by. Welcome to the Valneva Presents Its Audited Full Year 2021 Financial Results Conference Call. At this time, all participants are in listen-only mode.

Operator: After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you will need to press star and one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Thomas Lingelbach. Welcome and good day to our quarter one analyst call where we will report our full year 2021 results and provide corporate updates.

Please be advised that today's conference is being recorded.

I'd now like to hand, the conference over to our Speaker today Thomas Lee go back. Please go ahead.

Welcome and good day to our quarter, one analyst call, where we will report our full year 2021 results and provides corporate updates.

Operator: So if you move to slide two, please, and acknowledge the disclaimer, we go on to slide four of the presentation. Yeah, 2021 has been an exceptional year for Valneva, and we have been able to make excellent progress in all of our clinical programs. For our COVID-19 vaccine, we reported positive phase 3 results, obtained a first emergency use authorization from Bahrain, and are in ongoing rolling reviews for conditional approval with EMA and MHRA. For Chikungunya, we reported final positive phase 3 results and top-line lot-to-lot data and initiated the adolescent phase 3 activity.

So if you move to slide two.

To place and acknowledge the disclaimer we go on to slide.

Four of the presentation, Yeah 2021.

Has been an exceptional year for <unk>.

And we have been able to make excellent progress in all of our clinical programs.

For Lyme disease, we reported further positive phase III results, including booster data.

We determined finally, the final phase III dose and vaccination schedule.

While our COVID-19 vaccine, we reported positive phase III results.

Obtained our first emergency use authorization from Brian .

And I and ongoing rolling reviews for conditional approval with EMA and MH Charlie <unk>.

For Chikungunya, we reported final positive phase III results in top line not a lot of data and initiated the adolescent phase III activities.

Thomas Lingelbach: As you will see in the financial report. We have also been able to report strong full year 2021 revenues, and Keshav, or Total Revenues, are 348 million roughly in 2021 compared to around 110 in 2020, an increase of 216 percent. Our cash position is strong with 346.7 million as of end of December. We are very proud that we have achieved a successful NASDAQ initial public offering, European placement, and follow-on offering. With that, let me take you a little bit through the different clinical programs. Slide 6.

As you would see in our financial report.

We have also been able to report.

Strong full year 2021 revenues.

<unk> cash position or total revenues.

348 million roughly in 2021 compared to around 110, and 2020, an increase of 216% our cash position is strong with three ended $46 7 million as of end of December .

We are very proud that we have achieved successful NASDAQ initial public offering European placement and follow on offerings.

With that let me take you a little bit through the different clinical programs slide.

Thomas Lingelbach: First of all, VLA-15, our multivalent Lyme disease vaccine candidate. As you know, this is the only Lyme disease program in advanced clinical development today worldwide. We got FDA Fast-Track designation granted. We have an exclusive worldwide partnership with Pfizer. I'm going to report more about the phase two data and the booster response, as well as the phase three schedule and those that we finally selected. And, of course, we are also waiting for further phase two data, which I expect to come in the second quarter of 2020. As a way of reminder, the multivalent vaccine candidate contains six serotypes, which cover the most prevalent serotypes in the Northern Hemisphere.

Slide six.

First of all VLA 15, our multivalent Lyme disease vaccine candidate as you know this is the only non disease program in advanced clinical development today worldwide.

We got FDA fast track designation granted we have an exclusive worldwide partnership with Pfizer I'm glad to report more about the phase II data in the booth to response.

As well as the phase III schedule and dose that would be finally selected.

And of course, we are also waiting for further phase II data.

Which I expect it to come in the second quarter 2022.

As by way of reminder, the.

LT Valent vaccine candidate contains six serotypes, which covered the most prevalent serotypes in the northern hemisphere.

Thomas Lingelbach: And the vaccine candidate follows a validated mode of action for other Lyme disease vaccines that were on the market many, many years ago. In terms of results..., and we.., reported positive results from two initial studies, VLA-201 and VLA-202, initiated a study VLA-15-221, in which we recruited 625 participants, 5 to 65 years of age. We confirmed as part of that study, where we also compared head-to-head a three-dose schedule versus a two-dose schedule, that the three-dose schedule is going to be the one to be used for phase three.

And the vaccine candidate follows a validated mode of action for other Lyme disease vaccines that were on the market. Many many years ago.

In terms of results.

Thomas Lingelbach: And we reported those results in a sub-analysis in February this year. We expect further data from the pediatric and adolescent population soon in the second quarter of 2022. And, of course, we have also seen from our study 202 strong top-line booster results. VLA-15 was immunogenic across all those groups and elicited high antibody responses across all serotypes one month after primary vaccination, and the booster dose one year following the six-month dose elicited strong amnestic responses.

<unk>.

Reported positive results from two initial studies relate to a one and two O tool.

<unk> initiated a study BLA 15, two to one.

And which we recruited 625 participants five to 65 years of age.

We confirm that as part of that study, where we compare to also head to head a three dose versus a two dose schedule.

That the three dose schedule is going to be the one to be used for phase three.

And we reported dose resides in the sub analysis in February of this year.

We expect further data from the pediatric and adolescent population.

So all in the second quarter of 2022.

And of course, we have also seen.

From our study tour tool strong topline boost our results.

VLA 15.

Even a generic across all dose groups and elicited high antibody responses across all serotypes.

One month after primary vaccination and the booster dose one year following the six month dose elicited strong and then they stick response.

Thomas Lingelbach: With that, and on the basis of this data, we plan to initiate the pivotal efficacy trial in the third quarter this year. And, of course, the clinical readout, as reported many times in the past, is expected to cover tick season 2023, and hence readout is expected early 2021. The $25 million milestone payment is due to Valneva upon trial. VLA 1553 is our single shot chikungunya vaccine candidate.

With that and on the basis of this data.

We plan to initiate the pivotal efficacy trial in the third quarter. This year and of course, the clinical readout as reported many times in the past.

<unk> is expected to cover tick season 'twenty.

2023.

And hence readout is expected early 2024, but the 25% at $25 million milestone payment is due to VAT NEVA pub trial initiation.

Yeah.

<unk> III is.

Our single chart Chikungunya vaccine candidate it is the most advanced chikungunya vaccine program worldwide today.

Thomas Lingelbach: It is the most advanced chikungunya vaccine program worldwide today, and it is the only program that reported final positive pivotal phase III results. We coupled this with top-line lot-to-lot data, and, as mentioned at the beginning, we also initiated the Adolescence Phase 3 trial in January 2022. Also, the pediatric label extension is expected post-market. We got FDA Brexit Therapy, Fast Track, EMA Prime designations, and, by way of reminder. The first one to receive BLA approval will be eligible for priority review vouchers.

Only program that reported find it positive pivotal phase III results.

And we coupled this with topline locked a lot of.

Data and as mentioned at the beginning we also initiated the adolescent phase III trial in January 2022 also the pediatric label extension is expected post marketing.

We got FDA breakthrough therapy fast track EMA Prime designation.

And.

By way of reminder.

The first one to receive BLA approval would be eligible for priority review voucher.

Thomas Lingelbach: We expect to initiate the FDA pre-submission process in the second quarter of this year. Chikungunya vaccine candidate VLA-1553 is a single-shot live attenuated prophylactic vaccine that targets the Chikungunya virus neutralization, and we expect very long protection after a single shot, in order to make the product accessible to LMRC countries.

We expect to initiate the FDA pre submission process in the second quarter of this year.

Chikungunya vaccine candidates VLA.

<unk> five three.

Is it a single shot live attenuated prophylactic vaccine that targets the chikungunya virus utilization and we expect very long protection after a single shot.

In order to make the process product accessible to LMI see countries.

Thomas Lingelbach: We partnered with CEPI and Instituto Potentam. And CEPI has been granting $23.4 million in support of this program. Chicken Gunya will provide an excellent fit with our existing commercial and manufacturing capabilities.

We partnered with Sappy and Instituto put Anton.

And <unk> has been granted granting $23 4 million.

In support of this program.

Chikungunya will provide an excellent fit with our existing commercial and manufacturing capabilities.

Thomas Lingelbach: We expect the global market, including endemic regions, to exceed half a billion annually by 2032. In terms of development outlook, I mentioned already that we... We expect the FDA pre-submission process to commence in the next quarter, and a little bit about the data and phase three. So we completed the six-month follow-up period; all phase three immunogenicity and safety endpoints were met, and even after six months, we saw zero protection in 98.9% of participants after one month and 96.3% after six months, and the Good Safety and Tolerability Profile was confirmed. A positive top-line lot-to-lot consistency trial, for which we reported data earlier this year, clearly confirmed the consistency of three lots manufactured. Final data is expected in quarter two. The antibody persistence follow-up trial is ongoing. And up to 375 volunteers from the 301 study will be followed annually for five years.

We expect the COVID-19 market, including endemic regions to exceed half a billion dollars annually by 2032.

In terms of development outlook.

Mentioned already that we expect the FDA pre submission process to commence in the next quarter.

And a little bit about the data and the phase III. So we completed the six month follow up period.

All phase III, Immunogenicity and safety endpoints were met and even after six months, we saw <unk> protection in 98, 9% of participants after one month and 96, 3% after six months and the good safety and Tolerability profile was confirmed.

The positive top line not a lot consistency trial for.

For which we reported data earlier this year.

Clearly confirmed.

<unk> consistency.

Of three lots manufactured final data is expected in quarter two 2022.

The antibody persistence follow up trial is ongoing.

And.

Up to 375 volunteers from the 301 study will be followed annually for five years.

Thomas Lingelbach: The Adolescent Phase III trial was initiated in January 2022 to support potential label expansion, as I mentioned earlier, post-initial licensure in adults, and it's funded by the CFPB. The pre-submission process with FDA is expected to commence, and again, the sponsor of the first chikungunya vaccine approved in the U.S. will be eligible to receive a priority review voucher, VLA2001.

The adolescent phase III trial was initiated in January 2020 tool to support potential label expansion as I mentioned earlier post initial licensure in adults and its funded at CP.

The pre submission process with FDA is expected to commence.

And again the sponsor of the first chikungunya vaccine approved in the U S will be eligible to receive a priority review voucher.

Really 2001.

Thomas Lingelbach: Page 10, our inactivated whole virus COVID-19 vaccine candidate is the only inactivated COVID-19 vaccine program in the clinics in Europe today. It builds on our Valneva XTRO manufacturing technology combined with Dynavax's CPG1018 achievements. I mentioned earlier that the Bahrainian NHRR provided us with an emergency use authorization in March this year, and EMA and UK MHRA rolling reviews are ongoing.

Page 10.

Our inactivated whole virus COVID-19 vaccine candidate is the only inactivated COVID-19 vaccine program into clinics in Europe to date.

It builds on our <unk> manufacturing technology combined with Sinopec. This CPG 1018 adjuvant.

I mentioned earlier that the Bahrainian NH are are.

<unk> provided us with an emergency use authorization in March this year.

And he MA and UK MH array.

<unk> reviews are ongoing.

Thomas Lingelbach: Last year, we achieved an advance purchase agreement for up to 60 million doses with the European Commission, and up to one million doses was provided. The Pivotal Phase III data showed superiority versus AstraZeneca's bacteria and significantly more favorable tolerability. We also obtained positive top-line homologous booster data, and we showed, in lab experiments, neutralization against Omicron and Delta variants.

We have achieved last year and advanced purchase agreement for up to 60 million doses with the European Commission.

And for up to 1 million doses with Brian .

The pivotal phase III data showed superiority versus after obtaining costs like failure.

And significantly more favorable tolerability.

We also obtained positive topline home logos booster data and we showed in lab experiments neutrolin.

Neutralization against I'll make one in desktop variance.

Thomas Lingelbach: The ongoing clinical trials are increasingly expanding, the target product profile, as well as the geographical... As you know, we are leveraging Valneva's manufacturing sites in Scotland and Sweden, coupled with our existing CMO partners. And this all will target an installed capacity of more than 100 million doses per annum. Coming back to the data, and especially the key data stemming from our COVCompare study. Onamajanishti.

The ongoing clinical trials and to credibly expend the target product profile as well as the geographic reach.

And as you know we are leveraging by leave us manufacturing sites in Scotland and Sweden.

Coupled with our existing.

CMO partners and.

This all will target an installed capacity of more than 100 million doses.

Thomas Lingelbach: Thank you. Thank you, we met. I will copyright my endpoint. We showed superiority in terms of geometric mean titers for neutralizing antibodies, which are still today seen as the most relevant correlate for protection. And the GMT ratio that we observed was 1.39. And we showed non-inferiority in terms of zero conversion. Furthermore, we could also observe quite interesting and broad antigen-specific T cell reactivity not only against the S protein but also against the N and the M protein.

Coming back to the data and especially the key data stemming from our Cove compare study.

On Immunogenicity.

We've met of course, our co primary endpoints.

So its superiority in terms of geometric mean titers for neutralizing antibodies, which is still today seen as the most relevant correlate for protection.

And the GMT ratio that we observed with $1 39.

And we showed non inferiority in terms of Seroconversion rates.

Could also observe the quite interesting and brought antigen specific T cell activity.

Not only against the S protein, but also again the get the and the <unk>.

Thomas Lingelbach: In terms of safety and tolerability, VLA-2001 was generally well tolerated, with a significantly more favorable profile compared to the asset comparator. And we showed that the U.S. elicited adverse events, including injection site reactions and systemic reactions, which is, of course, something that is particularly important for that product and confirms what we have seen in the world of vaccinology previously for inactivated vaccines. Yeah, we also saw COVID cases in the study, as you may recall, and the occurrence of COVID cases was similar between the treatment groups; the complete absence of any severe COVID cases, could suggest that both vaccines used in the study prevented severe COVID-19 caused by the circulating variant at the time, predominantly Delta.

In terms of safety and Tolerability VL 2001 was generally well tolerated significantly more favorable profile compared to the ASX comparator.

And we showed significantly viewers solicited adverse events, including injection site reactions and systemic reactions, which is of course.

I'm, saying that is particularly important for that product.

And confirms what we have seen in the world the vaccinology previously for inactivated.

Vaccines.

Yes, we also saw Covid cases in the study as you may recall.

And the occurrence of Covid cases was similar between the treatment groups. The complete absence of any severe COVID-19 cases.

Could suggest that both vaccines Houston. This study prevented severe COVID-19 caused by the circulated at that time predominantly desktop.

Thomas Lingelbach: Slide 12 summarizes the current purchase agreements and grants that we have received in connection with VLA 2001 to date, up to 60 million doses from the European Commission to be supplied in 2022 and 2023, of which 24.3 million doses are expected to be supplied in the second and third quarters of 2022, and EC has the option to increase its initial purchase, the remainder of which would be delivered in 2020. Mr. Ryan, we have one million doses to be supplied in 2022 and 2023, and the NHHR emergency use authorization which we received allows us to make the first deliveries at the end of this month.

Slide 12 summarizes.

The current purchase agreements and grants that we have received in connection with a 2001 to date.

Up to 60 million doses from the European Commission to be supplied in 2022, and 2023 of which $24 3 million doses I expected to be supplied in the second and third quarter of 2022.

And do you see as the option to increase its initial purchase the remainder of which would be delivered in 2023.

But Ryan we have 1 million doses.

To be supplied in 2022, and 2023 and DNA trait.

Our emergency use authorization, but we received allows us.

First deliveries at the end of this month.

Yeah.

Thomas Lingelbach: We also received a grant from Scottish Enterprise to advance vaccine development. This grant is totaling up to £20 million, expected to be received over the next three years, commencing already this year. The first grant, up to £12.5 million, will support R&D related to VLA-2001 manufacturing.

We also received.

Grant from Scottish Enterprise to advanced vaccine development.

This grant is totaling up to 20 million pounds.

Expected to be received over the next three years commencing already this month.

Thomas Lingelbach: The second grant, up to £7.5 million, will support R&D connected to manufacturing Valneva's other vaccine candidates in Scotland. In terms of expected label extensions, as I mentioned earlier, we expect a gradual extension of the label for VLA-2001. We start with primary immunization in the 18 to 55-year-olds, then expand it to the elderly, 55-plus.

The first trend up to $12 5 million pounds will support R&D related to BLA 2001 manufacturing defective brand up to $7 5 million.

Pounds will support R&D connected to manufacturing of Unlevered other vaccine candidates in Scotland.

In terms of expected label extensions as I mentioned earlier, we expect the gradual.

<unk> off the label for BLA 2001, we start with primary immunization in the 18 to 55 years old then.

Thomas Lingelbach: We are currently generating a lot of additional booster data, including mixed-match, so-called heterologous booster data that we would like to generate. And then, of course, different developments under the Pediatric Investigational Plan, adolescents 12-17 years of age as well as children 2-11 years. Let me now hand over to Peter, our new CFO, for whom this is his first earnings call with Valneva, to provide the financial report. Thank you, Thomas, and good morning or good afternoon, everyone.

<unk> dose in the in the elderly 55 plus.

We are currently generating a lot of additional booster data.

Including mix match, so so called hydro logos booster.

Data that we would like to generate and then of course the.

Different developments under the pediatric investigational plan adolescents 12 to 17 years of age as well as children two to 11 years of age.

Let me now hand over to Peter our new CFO form. It is today his first earnings call with one lever to provide the financial report.

Thank you Thomas and good morning, or good afternoon, everyone.

Peter Buhler: As Thomas just said, this is my first earnings call as Valneva's CFO. In the three months that I have been with the company, I have met with a large number of colleagues to get familiar with the organization and its processes, but also with a number of investors and external partners. I'm excited to be part of Valneva and to contribute to our journey to become a highly valued, internationally known specialty vaccine company. The year 2021 was a truly exceptional year for Valneva.

Thomas Just said this is my first earnings call as <unk> CFO .

In the three months that I've been with the company met with a large number of colleagues to get familiar with the organization and its processes, but also with a number of investors and external partners I'm excited to be part of our labor and to contribute to our journey to become a highly valued internationally known specialty vaccine company.

The year 2021 was a truly exceptional year for that matter.

Peter Buhler: We invested more than ever in the history of the company, in our development programs, and in our infrastructure. And the advancement of our pipeline is a testament to our consistently excellent execution. The impact of the global pandemic on the travel industry adversely influenced Valneva's top line over the last two years.

More than ever in the history of the company and our development programs and our infrastructure and the advancement of our pipeline.

As a testament of our consistently excellent execution.

The impact of the global pandemic on the travel industry adversely influenced London as top line over the last two years.

Peter Buhler: At the same time, the company reacted by leveraging its expertise to develop the only inactivated whole virus COVID-19 vaccine in Europe. The related contracts, first with the UK government and then with the European Union and Kingdom of Bahrain, generated substantial cash flow. During this call, I will further elaborate how the investment in our pipeline and the government contract impacted our financial. With this, let's move on to slide 15.

At the same time the company reacted by leveraging its expertise to develop the only inactivated whole virus.

COVID-19 vaccine in Europe .

The related contract first with the UK government and then with the European Union and clinical operations generated substantial cash flows.

During this call I will further elaborate how the investments in our pipeline and the government contract that impacted our financials.

Peter Buhler: Look how fiscal 2021 revenue. Total revenues for the year reached €348.1 million, compared to €110.3 million in the prior year, which represents an increase of 215.5%. This increase is driven by other revenues and primarily by revenues related to the COVID-19 supply and clinical trial agreements with the UK government. In relation with these contracts, we recognize €253 million as revenues in 2021. Revenues from technologies and services are also included in other revenues and more than doubled compared to prior year to reach 28.5 million euros, product sales slightly decreased compared to prior year and reached 63 million euros.

With this let's move onto slide 15, and look at fiscal 2021 revenues.

Total revenues for the year reached $348 1 million.

Compared to $110 3 million in the prior year, which represents an increase of 215, 5%.

This increase is driven by other revenues and prevalent primarily by revenue related to the COVID-19 supply and clinical trial agreements with the UK government.

In relation with these contracts, we recognized 253 million euros as revenues in 2021.

Revenues from technologies and services are also included in other revenues has more than doubled compared to prior year to reach $28 5 million euros.

Product sales slightly decreased compared to prior year and reached 63 million euros. This decrease is a reflection of a still weak travel markets for.

Peter Buhler: This decrease is a reflection of a still weak travel model; foreign currency fluctuations had no impact on growth rates was probably, On the right side of the slide, you see the composition of our product sales with XDR just backing, generating more than 70% of total sales. Xero sales to the U.S. military were $38 million, driven by the new supply contract signed in September of last year.

Foreign currency fluctuations had no impact on grocery to a surprising on.

On the right side of the slide you see the composition of a productive year with respect to generating more than 70% of total sales.

Cirrhosis of the U S. Military were 38 million driven by the new supply contract signed in September of last year.

Peter Buhler: The vast majority of our sales in 2021 was made through our direct sales. Moving on to slide 16, where you will see a year-on-year product sales comparison. Third-party products grew by 271% over prior year, driven to a large extent by the sales of Rabipur and Encephalopram. These products are covered by distribution agreements between Valneva and Bavarian Nordic, and sales in certain geographies started in 2021. Ixialo Jazzpack sales decreased by 6.9% versus prior year, while Ducroff decreased by 81% versus prior year.

The vast majority of our sales in 2021 with rates through our direct sales channels.

Moving on to Slide 16, where you will see a year on year product sales comparison.

Third party products grew by 271%.

The prior year driven to a large extent by the sales of rapid pool, and then sits with.

These products are covered by distribution agreements between where liver ovarian Nordic and sales in certain geographies starting in 2021.

<unk> sales decreased by six 9% versus prior year, while <unk> growth decreased by 81% with prior year.

Peter Buhler: This adverse performance is, as already mentioned, caused by the still very heavy impact of the pandemic on the global travel industry. Moving on to our income statement on slide 17. We already covered the revenue part on the previous slide, so let's just focus on cost. Cost of goods and services increased significantly compared to 2020 and reached 187.9 million euros.

This adverse performance is that's already mentioned caused by the still very heavy impact of the pandemic on the global travel industry.

Moving on to our income statement on slide 17.

We already covered the revenue path on the previous slides so let's just focus on cost.

Cost of goods and services increased significantly compared to 2020 and reached $187 9 million euros.

Peter Buhler: The main driver for this increase were costs of goods related to our COVID-19 vaccine candidates. COVID-related cost of goods include inventory write-offs, cost for sales manufacturing batches, as well as advance payment for key raw materials. These advance payments were recorded as period costs in our 2021 income statement, investment in R&D more than doubled compared to prior year and reached 173.3 million. This increase reflects the significant investment in our clinical pipeline and most importantly, of course, advancement of our COVID-19 vaccine candidate.

The main driver for this increase were cost of goods related to our COVID-19 vaccine candidate <unk>.

<unk> related cost of goods include inventory write offs cost fulfills manufacturing batches as well as advanced payments for key raw materials. These advance payments were recorded as period costs in our 2021 income statement.

Investments in R&D more than doubled compared to prior year and reached 100.

<unk> reached $173 3 million. This increase reflects the significant investment in our clinical pipeline and most importantly of course advancement of our COVID-19 vaccine candidate.

Peter Buhler: Our R&D investment into our other clinical candidates slightly decreased versus prior year, which is in line with the planned progression of our pipeline. Marketing and selling costs increase as we invest in pre-launch activities of our Chikungunya program. G&A costs saw a significant increase of €20 million to reach €47.6 million, and this increase was driven by several factors.

Our R&D investments into our other clinical candidates slightly decreased versus prior year, which is in line with the planned progression of our pipeline.

Marketing and selling cost increased as we invest in prelaunch activities of all the chikungunya program.

G&A costs or any significant increase of $20 million to reach $47 6 million euros and this increase was driven by several factors our U S. IPO generated translated additional cost compared to prior year asset investments in support of our corporate program and increased noncash effects related to share based compensation and related social.

Peter Buhler: Our USIPO generated additional costs compared to the prior year, asset investment in support of our COVID program, an increased non-cash effect related to our share-based compensation, and related social security. Overall, our employee-related expense increased by more than 50 percent, a reflection of increased staff to support our development programs and the ramp-up of our manufacturing capacity, plus again, increased costs related to our share-based compensation. Other income increased from 19.1 million to 23 million euros, driven by an R&D tax credit increase from 10 to 22 million euros due to our heavy investment in our COVID vaccine program.

Securities.

Overall employee related expense increased by more than 50% a reflection of increased staff to support our development programs and ramp up of our manufacturing capacity plus again increased costs related to our share based compensation.

Other income increased from $19 1 million to 23 million euros, driven by an R&D tax credits increased from 10 to 22 million euros due to our heavy investments in a COVID-19 vaccine program.

Peter Buhler: At the same time, revenues related to grants decreased from 7.7 million in 2020 to 1.7 million euros in 2021. Finally, total financial income and expense plus income tax increased by roughly $3 million. This increase was primarily driven by higher financial expenses in relation to our refund liabilities and an increased income tax charge.

At the same time revenues related to grants decreased from $7 7 million in 2020 to $1 7 million in 2021.

Finally.

Total financial income and expense plus income tax increased by roughly $3 million. This increase was primarily driven by higher financial expense in relation to our refund liabilities that increased income tax charges.

Peter Buhler: These increased expenses were partially offset by a favorable foreign exchange gain of €8 million. As a result, we record a loss of €73.4 million for fiscal year 2021 compared with a loss of €64.4 million in the prior year. The EVTA of negative €47.1 million slightly deteriorated versus the year 2021.

These increased expenses were partially offset by favorable foreign exchange gain of 8 million euros.

As a result, we recorded a loss of $73 4 million euros for fiscal year 2021, compared with a loss of $64 4 million euros in prior year.

EBITDA of negative $47 1 million.

Slightly deteriorated versus the year 2020.

Peter Buhler: Slide 18 illustrates an analysis of the group P&L for COVID versus the rest of the business. As you can see, the COVID business generated a positive EBITDA for the year 2021. At the same time, our business, excluding COVID, generated a negative EBITDA as we continue to invest substantially to advance our pipeline, our non-COVID R&D expense were at the low end of the guidance for the year of 60 to 70 million euros.

Slide 18 illustrates an analysis of the group P&L for Covid versus the rest of the business.

As you can see the cobot business generated a positive EBITDA for the year 2021 at the same time, our business, excluding COVID-19 generated a negative EBITDA as we continue to invest substantially to advance our pipeline.

Our non Covid R&D expense were at the low end of the guidance for the year of 60 to 70 million euros.

Peter Buhler: Moving on to the balance sheet in slide 19, as already mentioned, in 2021, we invested substantially in our infrastructure, primarily driven by investment in our COVID-19 manufacturing and fill finishing sites in Scotland and Sweden. Overall, we invested €95.8 million in property, plant, and equipment.

Moving on to the balance sheet in slide 19, as already mentioned in 2021, we invested substantially in our infrastructure.

Primarily driven by investments in our COVID-19 manufacturing until finishing sites in Scotland in Sweden.

The rule, we invested $95 8 million euros in property plant and equipment at.

Peter Buhler: At the same time, our inventories increased by 97 million euros to 124.1 million euros due to stock of raw materials and work in progress related to our COVID-19 vaccine. Trade receivables increased from €77 million to €115 million, primarily driven by receivables from Member States of the European Union in relation to the Advanced Purchase Agreement for our COVID-19 vaccine candidates. To date, the mass majority of the trade receivables at December 31st have been paid. Our cash and cash equivalents increased significantly from 204 million to 346.7 million euros.

At the same time, our inventories increased by 97 million to $124 1 billion euros due to stock of raw materials and work in progress related to our COVID-19 vaccine.

Trade receivables increased from $77 million to 115 million, primarily driven by receivables tremendous states of the European Union in relation to the advanced purchase agreement for our COVID-19 vaccine candidate.

To date, the most majority of the trade receivables at December 31 have been paid.

Our cash and cash equivalents increased significantly from $204 million to $346 7 million euros. This.

Peter Buhler: This increase is a result of significant cash inflows from the contract with the UK government, the advanced purchase agreement with the European community, and the US IPO and follow-on offering. With the strongest cash position in the history of the company, Valneva has the financial flexibility to execute on its plans and further advance its clinical pipeline. Moving to slide 20. Our total equity increased by roughly 100 million compared to December 31, 2020, driven by our U.S. IPO and follow-on offering. Total liabilities increased significantly and mainly related to contract and refund liabilities. Contract liabilities increased by approximately 35 million euros.

This increase is a result of significant cash inflows from the contract with the UK government. The advanced purchase agreement with the European community and the U S. IPO and follow on offering was the strongest cash position in the history of the company.

Never has the financial flexibility to execute on its plans and further advanced its clinical pipeline.

Moving to slide 20, our total equity increased by roughly $100 million compared to December 31, 2020, driven by our U S IPO and follow on offering.

Total liabilities increased significantly and mainly related to construct and refund liabilities.

Contract liabilities increased by approximately 35 million euros. This increase was driven by payments received from member states of the European Union as well as the Kingdom of Bahrain innovation to the anticipated supply, albeit late 2001.

Peter Buhler: This increase was driven by payments received from member states of the European Union as well as the Kingdom of Bahrain in relation to the anticipated supply of VLA-2001. At the same time, we recognize the total revenue of 87 million related to the UK supply agreement that was recorded under contract liabilities at the end of fiscal year 2020. Total refund liabilities increased by about €143 million, driven by payments received from the UK government.

At the same time, we recognize the total revenue of 87 million related to the UK supply agreement that were recorded under contract liabilities at the end of fiscal year 2020.

Total refund liabilities increased by about 143 million euros, driven by payments received from the UK government.

Yeah.

Peter Buhler: Slide 21, outlines the main impact of the UK Supply Agreement and clinical trial agreements on our 2021 financial, in 2020 and 2021 received total contributions of 420 million euros. In 2021, 253 million euros were recognized as revenues, while 167 million euros remain on our balance sheet and are reflected on the refund liability, according to the supply agreement with the UK government. The company is required to pay to the UK government a low single-digit royalty on its sales of VLA-2001 to customers outside the United Kingdom. Eighty-five million euros of the remaining refund liability is set aside to cover the maximum royalty obligation.

Slide 21.

Outlines the main impact of the UK supply agreements in clinical trials.

Thousand 21 financials.

In 2020 in 2021 receive total contributions of 420 million euros.

In 2021 253 million were recognized as revenues.

167 million euros remain on our balance sheet and are reflected on the refund liabilities.

According to the supply agreement with the UK government. The company is required to pay to the UK government a low single digit royalty on net sales of nearly 2001 to customers outside the United Kingdom.

80, Franklin and use of the remaining refund liability is set aside to cover the maximum royalty obligation.

Peter Buhler: The remaining $80 million represents a potential refund liability related to advance payments received for our new manufacturing site in Scotland. We expect to recognize this amount of revenues in the future. This concludes the review of our financial statements. Now let's move to slide 23 to look at our guidance for the financial year 2022. As already disclosed at the beginning of February, we expect total revenues to be between €430 and €590 million, whereby €350 to €500 million are expected to be for our COVID-19 vaccine.

The remaining $80 million represents a potential refund liability related to advance payments received for our new manufacturing site in Scotland.

We expect to recognize this amount as revenues in the future.

This concludes the review of our financial statements now, let's move to slide 23 to look at our guidance for the financial year 2022.

As already disclosed at the beginning of February we expect total revenues to be between 430, <unk> hundred 19 million euros, whereby 350 to 500 millions I would expect it to be for our.

COVID-19 vaccine.

Peter Buhler: 60 to 7 million euros are expected for other vaccines. This range takes into account existing purchase agreements but also anticipates additional contracts to be concluded over the next few months. Revenues from collaboration, licensing and services are expected to reach approximately 20 million euros.

62, 7 million euros are expected for other vaccines.

This range takes into account existing purchase agreements, but also anticipate additional contracts to be concluded over the next few months.

Revenues from collaboration license and services are expected to reach approximately 20 million euros.

Peter Buhler: R&D investments are expected to reach between 160 and 200 million euros. This range covers the advancement of our pipeline, and the range depends on the execution of plans as well as potential new clinical trials related to our COVID-19 vaccine. With this, I would like to hand over to Thomas to provide an update on the expected news flow. Thank you so much, Peter.

R&D investments are expected to reach between 160 $200 million euros.

This range covers the advancement of our pipeline at the range depends on the execution of plans as well as potential new clinical trials related to our COVID-19 vaccine.

This concludes the finance section and with this I would like to hand back to Thomas to provide an update on the expected news flow.

Thank you so much Peter Yeah, Let me conclude with page 25 of the presentation.

Thomas Lingelbach: Yeah, let me conclude with page 25 of the presentation and summarize the key upcoming catalysts and new flow. For Lyme, we mentioned it already, first pediatric data to be expected next quarter and the phase three initiation thereafter expected in the third quarter of 2022, so probably the most relevant. Milestones and Catalysts for Lime.

And summarize the key upcoming catalyst and news flow.

For line.

We mentioned is already first pediatric data to be expected next quarter.

And the phase three initiation thereafter expected in the third quarter of 2022 step probably the most relevant.

Milestones and catalysts for line.

Thomas Lingelbach: Pratikma Gunia. As disclosed at the beginning of the presentation, we expect to commence the pre-submission process with the FDA in the next quarter. And alongside that, also the final lot-to-lot phase 3 data. You know that outside of the world of COVID, you are required to have six months of follow-up for the respective clinical studies. And yeah, for our COVID-19 vaccine candidate, VLA-2001, we've been discussing a lot about it. Of course, we hope for our regulatory approvals. Europe through EMA and MHRA, and then followed by supplies, and hopefully, further purchase agreements.

For chikungunya.

<unk>.

As disclosed at the beginning of the presentation, we expect to commence the pre submission process with the FDA in the next quarter.

And alongside with that also define the lots of lot phase III data you know that outside of the world of Covid.

You are required to have six months follow up for the.

The clinical studies.

And you have our COVID-19 vaccine candidate BLA 2001.

<unk> been discussing a lot about it.

Of course, we hope for our regulatory approvals.

In.

Europe saw EMA NHRA.

And then followed by supplies and hopefully further purchase agreements.

Thomas Lingelbach: And since we are still, in clinical development have a lot of studies ongoing and still to commence, we expect further clinical trials and data. Yeah, with that, let me conclude our presentation and open it up for your questions. Thank you. Thank you.

And.

Since we are still in.

In clinical development, a lot of studies ongoing and still to commence.

We expect further clinical trials and data yet with that let me conclude our presentation and open it up for your questions.

Thanks to the operator.

Operator: Dear participants, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. The first question comes from the line of Maurice Raycroft from Jeffreys.

Participants we will now begin the question and answer session. As a reminder, if you wish to ask a question. Please press star and one on your telephone keypad and wait for a name to be announced.

First question comes from the line of Maura Raycroft from Jefferies. Please ask your question.

Maurice Raycroft: Please ask my question. Hi, congrats on the progress, and thanks for taking my questions. I wanted to check on the potential EMA and MHRA regulatory approvals and see if there's anything additional that's gating for those approvals besides what's mentioned in the press release. And can you talk more about specific next steps for label expansions and elderly patients and with boosting? I am so happy to answer your question.

Hi, Congrats on the progress and thanks for taking my questions.

I wanted to check on the potential EMA NHRA regulatory approvals and see if there's anything additional that gating for those approvals. Besides what's mentioned in the press release and can you talk more about specific next steps for label expansions in other Lee and what boosting.

I'm, so happy to take your answer.

Thomas Lingelbach: I mean, as you know, we are in rolling review processes. We have gone through different rounds of questions, both with EMA as well as with MHRA. We have now responded to the questions, and, of course, subject to the CHMP's acceptance of Valneva's responses.

I mean as you know we are in Rolling review processes.

We have gone through different rounds of questions.

Both with <unk> as well as with <unk>. We have now responded to their questions and of course subject to the <unk> acceptance of <unk> responses.

Thomas Lingelbach: Valneva now anticipates receiving a positive CHMP recommendation for conditional approval of BLA-2001 for primary immunization in adults 18 to 55 in April. And that follows then, as you know, respective start of deliveries into the European countries in the second quarter. This is where we are with the regulatory authorities. Back to your question about the label extensions, you know, we have a – you saw the slide in our deck on page – I'm going to go back and check the page number, um, So page number 13 of the presentation illustrates how we look at the different label extension timelines. Of course you know that we, and we reported this in the past, we conducted a study in elderly in New Zealand.

And even now anticipates, receiving a positive <unk> recommendation for <unk>.

Conditional approval.

We get a 2001 for primary innovation in adults 18 to 55 in April .

And that follows then as you know.

Respective start of deliveries into the European countries in the second quarter.

This is.

Where we are with the regulatory authorities.

Back to your question about the label extensions.

You know we have a you saw the slides in our deck on page eight number and you go back and check the page number.

Okay.

Yes.

So page number 13 of the presentation.

Illustrates how we look at the different label extension timelines of course, you know that we had we reported this in the past.

We conducted a study in elderly in New Zealand.

Thomas Lingelbach: But we have also experienced a significant backlog in testing at Public Health England for binding neutralizing antibodies, binding and neutralizing antibodies. And hence, we are at this point in time not able to report a precise timeline by when we're going to get the data, on the boosters, on the booster extensions. We have, of course, reported homologous booster data from our Phase 1-2 study, and we have submitted this data as supportive data as part of our regulatory processes. We have now the homologous stroke heterologous booster extension ongoing for the 3-0-1 study, which boosters people who have either been primed with Valneva or DAZ vaccine.

But we have also experienced a significant.

Backlog in testing at public Health, England.

For finding neutralizing antibody binding and neutralizing antibodies.

And hence.

We need we are at this point in time not able to.

To report a precise timeline by when we're going to get the data.

On that bolsters the booster extensions.

We have of course reported homologous booster data from our phase one two study.

And we have submitted this data as supportive data as part of our regulatory processes.

We have now the hanmi logo stroke hydro logos.

Ulster extension ongoing forward, the 301 study, which booster as people who have either been prime fifth lever or da set vaccine.

Thomas Lingelbach: So this data will provide a first glance on heterologous booster, and this data is expected in the next quarter. And we will start, have yet not started, but will start another booster study where we will booster people primed with mRNA. The adolescent and children activities have commenced in the 12 to 17-year-olds, not yet in the two to 11-year-olds.

So this data will provide a first glance on hydro logos booster.

And.

That this data is expected in the next quarter.

And and we.

We will start have yet not started but will start.

Another poster study, where we will booster people primed with mrna.

The the adolescents and children activities have commenced.

In the 12% to 17 year olds not yet in the two to 11 year olds.

Thomas Lingelbach: Of course, we are facing difficulties in recruitment and hence we need to also extend the trial into different geographies. And this is where we are at this point in time. So for some, like the initial booster data, we can provide already precise timelines for others. We unfortunately cannot at this point in time yet. Got it.

Of course, we are facing difficulties in recruitment.

Hence we need to also extend to trial into different geographies.

And this is where we are at this point in time, so for some like the initial booster data we can provide already precise timelines for others. We unfortunately cannot at this point in time yet.

Maurice Raycroft: Okay, that's all really helpful perspective. And then I also had a question on COVID manufacturing. You said you're targeting greater than 100 million annual dose manufacturing capacity. Can you say where you are currently and when you could reach that capacity goal? Yeah, I mentioned earlier that we are targeting installed capacity, so, you know, capacity in manufacturing is always driven by, A, the technically installed capacity and then the operational capacity, which is linked to, you know, the level that you operate under from a staffing perspective and so on and so forth.

Got it Okay. That's all really helpful perspective, and then also had a question on Covid manufacturing.

You said youre targeting greater than $100 million annual dose manufacturing capacity can you say, where you are at currently and when you could reach that capacity goal.

Yes, I mentioned earlier that we are targeting an installed capacities. So.

Capacity in manufacturing as a whole, it's driven by a D. Technically installed capacity and then the operational capacity, which is linked to.

The level that you operate under from a staffing perspective, and so on and so forth.

We we.

Maurice Raycroft: We have the manufacturing facility in Scotland, the new one, you know, now under validation and we expect to be completed with that task over the summer and then be ready for commercial manufacturing in the fourth quarter. We have thus far manufactured in the existing facility in Livingston, as we reported previously, and we are working right now and manufacturing as we speak at our partner IDT in Germany.

Have the manufacturing facility in Scotland, the new one.

Now under validation and we expect to be completed with that task over the summer and then be ready for commercial manufacturing in the fourth quarter.

We have thus far manufactured.

In the existing facility in Livingston we.

We reported previously.

And.

And we are working right now and manufacturing as we speak at our partner IDT in Germany. So.

Thomas Lingelbach: So right now, we are probably, in terms of operational capacity, at half of what we may target, but our capacity and supplies are, of course, matching the anticipated revenues for this year, meaning the business that we see for the year 2020. Got it. That makes sense, and that's helpful. Okay, thank you for taking my question. Welcome.

Right now we.

We are probably.

In terms of operational capacity.

At half of what we May target.

But our capacity and supplies are of course matching with the anticipated revenues for this year, meaning.

The business that we see.

For the year 2022.

Got it that makes sense and thats helpful. Okay. Thank you for taking my questions.

Thank you. The next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please ask your question.

Operator: Thank you. The next question comes from a line of Seamus Fernandes from Guggenheim Securities. Please ask your question. Oh, thanks very much for the question. So just a couple quick ones on the plans for the pediatric opportunity. Thomas, I was just hoping that you might be able to contextualize some of the updates that we've had on the mRNA vaccines recently, sort of mixed results in the pediatric patient population. How do you see your own programs advancing there just as a starting point? Yeah, excellent question, of course. We see VLA-2001, as a perfectly suited vaccine for children. Why is that?

Oh, thanks very much for the question so.

Just a couple quick ones on the plans for the pediatric.

Opportunity. It sounds I was just hoping that you might be able to contextualize some of the updates that we've had on the mrna vaccines recently.

Sort of mixed results in the pediatric patient population, how do you see.

The your own your own programs advancing there.

Just as a starting point.

Yes excellent question of course.

We see BLA 2001.

As a perfectly suited vaccine for children.

Seamus Fernandes: You know, we know that a vast majority of childhood vaccines are based on inactivated technologies. Inactivated technologies are clearly characterized by very good safety and tolerability profiles, and inactivated vaccines, in other indications, have shown to work extremely well in children. So, therefore, we see really a significant opportunity for our vaccine in adolescents and children, and this is why we are trying everything to progress the respective studies as quickly as we can in a quite difficult environment, at least when it comes to Europe, given ongoing vaccinations.

Why is that.

We know that a vast majority of childhood vaccines are based on inactivated technologies inactivated technologies.

Clearly characterized by.

Very good safety and Tolerability profile.

And inactivated vaccines in other indications have shown to work extremely well in children.

So therefore, we see really.

Inefficient opportunity for our vaccine.

Adolescence and children and this is why we are trying everything.

To progress their respective studies as quickly as we can in a quite difficult environment at least when it comes to Europe given ongoing vaccinations.

Seamus Fernandes: And of course, we need to show the first primary vaccination in children, and that's the reason why we are now extending the clinical operations also outside Europe. Ray, and as we think about the evolution of your own vaccination series and the boosters, is the need for an additional variant something that you're focused on?

And of course, we need to show for us.

<unk> primary vaccination in children.

And that's the reason why we are extending now the clinical operations also into outside Europe .

Great and as we think about the evolution.

Your own vaccination theory.

And the boosters.

As the need for an additional variance.

Or something that you're focused on when might we see a little bit more information, whether it be related to manufacturing updates.

Thomas Lingelbach: When might we see a little bit more information, whether it be related to manufacturing updates in that regard, become a little bit more evident? It seems like an inactivated vaccine would be perfectly positioned to deliver a multivariant as the pandemic evolves to an endemic setting. Yeah, I would say another excellent strategic question, of course. I mean, as previously communicated, Valneva's inactivated technology platform is adaptable for new variants, if required, right? I mean, we have shown this for alpha, for beta, and for delta.

In that regard.

<unk> become a little bit more evident it seem like an inactivated vaccine would be perfectly positioned to.

Deliver a multi variant.

Covid vaccine.

The pandemic evolves to an academic setting.

Yes, I would.

Say another excellent strategic question of course.

I mean as previously communicated.

I'll leave us inactivated technology platform is adaptable for new variants if required right. I mean, we have we have shown days for high file for better for Delta.

We are.

We have clearly a process that can be used.

Thomas Lingelbach: We clearly have a process that can be used. It is a well-known set-up that we all understand from the world of influenza. Now the question is, what is the ideal vaccine composition? And you know that some leaders in the field are targeting bivalent vaccine compositions with Wuhan and Omicron. We are conducting a lot of KOL processes at this point in time. And, of course... We need to firm up an opinion on, you know, what is the best possible setup for a second generation vaccine, if required. And you know that there are also, you know, mixed views on that.

It is well.

Well known.

I would say set up that.

That we all understand from the world of influenza.

Now the question is what is the ideal.

Vaccine composition.

And you know that.

Some leaders in the field.

Getting I valent vaccine compositions with.

One and only con.

We are conducting.

A lot of coal.

<unk> at this point in time.

And of course, we need to firm up an opinion on what is the best possible.

Set up for a second generation vaccine if required.

Know that they're all it's all mixed views on that.

Thomas Lingelbach: And we are trying to get prepared. So we are currently in the process of preparing, more research viral seeds and manufacturing viral seeds for different variants of concern. And we could, um, you know, initiate then, um, respective large-scale, um, manufacturing relatively soon. But at this point in time, we have neither taken.., decision to proceed into the second generation vaccine development, nor have we finally concluded on the best possible.., vaccine composition from a medical needs perspective. Understood. And just one final question.

And we are trying to get prepared.

So we are currently in the process of preparing.

More research virus <unk> manufacturing viral seats four different variants of concern.

And we could.

Initiate then.

Respective large scale manufacturing relatively soon.

But at this point in time, we have neither taken.

A decision to proceed.

Into the second generation vaccine development.

Nor have we finally concluded on the best possible.

Vaccine composition from a medical needs perspective.

Seamus Fernandes: I know that you guys have limited control over progress in the Lyme disease vaccine, but I was wondering if you might be able to help us understand the kind of preparation that you think is necessary, you know, as phase three approaches. I think the timing is now early 2024 versus the prior 2023. Just wanted to get your thoughts along those lines.

Understood and just one final question.

That you guys have limited control over our progress in the Lyme disease.

The Lyme disease vaccine, but just wondering if you might be able to help us understand the kind of preparation.

You think is necessary.

As as.

Our phase III approaches I think the timing is now early 2024.

Versus the prior 2023, just wanted to get your thoughts along those lines. Thanks.

Thomas Lingelbach: Thanks. Yeah, maybe let me start off with a clarification. I think the... First of all, we are talking here about a tick-transmitted disease, and as you know, the outbreaks have a certain seasonal pattern. So you have high incidence during the tick season, so hence if you want to show efficacy in a placebo-controlled field efficacy study, you need to get people vaccinated prior to the tick season starting.

Yes, maybe let me start let me start off with a clarification.

I think the.

First of all we are talking here about a tick transmitted disease and <unk>.

As you know the outbreaks.

Have a certain seasonal pattern.

So you have high incidents during the peak season.

So hence if you want to show efficacy in a placebo controlled efficacy study you need to get people vaccinated prior to the tick season starting.

Thomas Lingelbach: So that's why phase three is expected to commence in the third quarter of this year, and this means that the first efficacy readout could occur during the tick season in 2023. This then means, in turn, that you have the final data of the study probably early 2020. And this is the current timeline that has only marginally changed from where we started.

That's why the phase III.

<unk> is expected to commence in the third quarter of this year.

And this means that the debt.

First efficacy readout.

Can occur in during the peak season 2023.

That means in turn that you have the final data.

Of this study probably early 2024 and this is the and this is the current timeline.

That has only marginally changed from where we started we had always foreseen did 2023 tick season as the let's say the core season to evaluate.

Thomas Lingelbach: We had always foreseen the 2023 tick season as the core season to evaluate efficacy. And yeah, we are working very closely with Pfizer, who, of course, are in the lead, for this phase 3 study and in between now and the... Phase 3 start. As reported in the presentation, we have, of course, the readout in the pediatric stroke adolescent population from the Phase 2 study, VLA-15-221, as well as the final preparation for phase 3, including things like end of phase 3.

Efficacy and yes, we are working very closely with Pfizer who of course are in the lead.

Seamus Fernandes: Excellent. Thanks for the clarification. I really appreciate it.

For this phase III study and in between now and the phase III start.

As reported in the presentation.

We have of course the readout.

In the pediatric stroke adolescent.

Population from the Phase II study of <unk> two to one.

As well as defined in preparation for phase III, including things like end of phase II.

Excellent. Thanks for the clarification I appreciate it.

Operator: Thank you. The next question comes from Samir Devani from RxSecurities. Please ask your question. Hi Thomas, hi Peter.

Thank you. The next question comes from the line of EMEA Giovanni from <unk> Securities. Please ask your question.

Samir Devani: I've got a couple of questions, one on the guidance and then just one on chicken gunyet. Thomas, you talk about pre-submission. I'm just wondering when you expect a complete submission for the Chicken Goon Network? As usual, Samir, you listened very, very carefully.

Yeah, Hi, Thomas Peter.

A couple of questions one on the guidance and then just one on chicken.

Thomas you took that pre submission in the statement I was just wondering when do you expect to complete submission for the chikungunya vaccine.

As usual some of you listen very very carefully.

Thomas Lingelbach: So I would say the reason why we have been a bit vague on the description of the submission process is because we don't know at this point in time which submission route we're going to take, you know, whether we're going to take a rolling review process or whether we're going to take a full standard, quote-unquote old-fashioned review process. And this will, of course, determine the overall submission strategy, but certainly we expect it to complete. And then just, Peter, just on the guidance. I've got a few questions just on the guidance. Is your guidance assuming the $25 million Pfizer milestone we're obviously looking for? The end of this.

So I.

I would say the reason why.

We have been a bit wake on the description of the submission process is because we don't know at this point in time, which submission route we going to take.

Whether we got to take a rolling review process.

Or whether we got to take a full.

Standard quote unquote oats passion.

Review process and.

And this will of course determine than the overall.

Our submission strategy.

We expect to complete this year.

Okay, that's great and then just.

Peter Buhler: And then just on R&D, could you just give us a sense of how much of the R&D guidance relates purely to VLA 2001? And then, just finally, could you give us some guidance on CAPEX for this year as well? Yes, thank you for those questions.

Peter just on the <unk>.

Guidance I've got a few questions just on the guidance.

Is your guidance, assuming the $25 million finds a milestone obviously, we're looking for.

The end of this year.

And then.

Just on R&D could you just give us a sense of how much of the R&D guidance relates purely T V.

<unk> thousand one.

And then just finally could you give us some guidance on Capex for this year as well thanks very much.

Peter Buhler: So on Pfizer, we do expect to get the $25 million as we initiate, or as Pfizer initiates, phase 3, but this will have no impact on our revenues because it will go straight to our balance sheet to cover future obligations we have under this contract for basically our share of the cost of R&D. I mean, of course, the R&D guidance is to a large extent driven by COVID, as you would expect.

Yes, thank you for those questions.

So on the Pfizer, So we do expect India to get to 25% as we initiate.

Price and initiate the phase III, but this will have no impact on our revenues because it will go straight to our balance sheet to cover for future future.

Obligations, we have under this contract could be for the.

Share of the of the cost.

On R&D.

Of course, the R&D guys to launch expense driven by by Covid as you would expect now.

Peter Buhler: Now, you know, we haven't given the numbers separately this year because we just think the way we look now at our business is basically we have a full envelope for R&D, and we're not going into details in our guidance about what COVID versus non-COVID. And then, finally, on CAPEX, we have not given guidance on CAPEX. I mean, there is still a relatively significant CAPEX spend expected to, you know, finalize our manufacturing facilities, but we have not guided them at this stage.

We haven't given the number separately this year because because we we just think the way we look now at our businesses basically we will.

Full envelope for R&D, and we are not going into into the details in our guidance. What is what is core versus non COVID-19 .

And then finally on Capex, we have not given guidance on Capex.

There is a.

Relatively significant capex spend is expected to finalize our manufacturing facilities, but we have not guided at this stage in the capex.

Peter Buhler: It will be, sorry, just to add, maybe it will be significantly lower than it was in 2020. And then just maybe one on Ducorelle, obviously, the cost of goods you're reporting is about 8 million euros. At what point do you stop selling Ducorelle? So basically, it is very clear from the numbers that at this point in time, due to the pandemic, Du Koral is a loss-making product.

Okay.

So just to add maybe it will be significantly lower than it was in 2021 of course.

Okay. That's helpful.

And then just maybe one do corral.

We'll see the cost of goods.

<unk> was about 8 million euros, what point do you stop selling do CRO.

Yeah.

So so basically.

It is very clear from the numbers that at this point in time.

Due to the pandemic.

To grow hull.

<unk> is a loss making product.

Peter Buhler: At the same time, we see significant strategic value in the travel vaccine bundle with Xyaru, and we have in the past been able to generate profit with Ducoral pre-pandemic. So now, the year 2022 will certainly be a decisive year for Dukova because we cannot continue like that if we are not seeing a rebound in Ducroal sales in the new 2022 environment, and we will certainly review the product and its future very, very carefully.

At the same time, we see a significant strategic value in the travel vaccines bundle with.

<unk>.

We have in the past been able.

To generate profit with to Corral pre pandemic. So now the 2012 the year 2022 will certainly be a decisive year four to Colorado.

Because we.

We cannot continue.

Like that.

If we are not seeing a rebound.

Of the two cross sales.

The Internet <unk>, new 2022 environment.

And we will certainly review the product and its future very very carefully.

Okay. That's great. Thanks, so much.

Thank you Dear participants as a reminder, if you wish to ask a question. Please press star and one on the telephone keypad.

Peter Buhler: Okay, that's great. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star and one on your top. If the next question comes from the land of Max Herrmann from Stifel, please ask your question.

Your next question comes from the line of Max Herrmann from Stifel. Please ask your question.

Max Herrmann: Great, thanks very much for taking the questions and congratulations on the progress that you've made in the last 12 months. Primarily, the question is on the margin, the gross margin for 2022. Obviously, we've seen quite a fluctuation in the margins, so it would be good to get some sort of guidance on how we should look at it in terms of cogs for..., towards 2021 and 2022, whether it should be going up or down, where we were in 21, and what sort of drivers... Yeah, thanks for that question. Actually, when you look at the margin on our product, on product sales for 2021, it was relatively You will be able to see that in our detailed financials.

Great. Thanks, very much for taking our questions and congratulations on.

Progress that you've been making in.

Last 12 months.

Primary question is on.

The margin gross margin for 'twenty two.

<unk>.

Obviously, we've seen.

It's quite a fluctuation in the margins so it'd be good to get some sort of guidance on.

How we should look at it in terms of Cogs.

For 2022.

So that should be going up or down from where we were in 'twenty one in Florida.

Florida drivers should we be considering thanks.

Peter Buhler: Now, when we look at 2022, with COVID sales kicking in, we would expect to see this margin to somewhat improve. And, you know, while we haven't given the guidance, I think it is it is fair to assume it will be in the range of 40 to 50%. And then just to follow up on sort of future opportunities for VLA2001, potentially future variants. How are you viewing the sort of longer term potential for a, perhaps an annual flu, COVID combination? That's something you'll.., about ways to develop. So, hi Max. Good question.

Yes, thanks for that question.

Actually when you look at the at the margin of our product on product sales for 2021, it was relatively stable versus the prior year.

You will be able to see that in our in our detailed financials.

We look at 2022.

With Covid sales kicking in we would expect to see this launch into somewhat improve and while we haven't given the guidance.

It is fair to assume it will be in the range of 40% to 50%.

Great. Thanks, and then just to follow up on.

Sort of the future.

Opportunities for BLA 2001 and potentially.

Potentially future variance how are you viewing the sort of longer term.

The potential for a perhaps an annual flu.

Blue Covid combination.

Is that something you're thinking about ways to develop something in that regard.

Thomas Lingelbach: I mean, first of all, I think there is more and more evolving consensus around the fact that there might be a need for an annual, COVID vaccination. At the same time, there is also a more and more evolving understanding that it requires modified vaccines. It requires vaccines that have an antibody persistence and longevity of an immune response that clearly protects you for a year, and and so hence, The vaccination against COVID may indeed follow a flu-like pattern in the years to come with all the caveats that we all, you know, understand these days, including, you know, what is the best vaccine composition, is there a need to adjust vaccines on an annualized basis, yes or no? I mean, these are all questions that at this point in time, certainly no one is able to answer.

So hi, Max.

Good question.

First of all.

I think there is more and more evolving consensus.

Around the fact that that might be.

Need for an annual.

Covid vaccination.

At the same time.

There is also.

More and more evolving understanding that that it needs tool. It requires modified vaccines. It requires vaccines that have.

And antibody persistence and longevity of an immune response.

That clearly protects your four year.

And.

So hence.

The vaccination against Covid may.

Indeed follow flu like pattern in the years to come with <unk>.

All the the caveat that we all understand these days include.

Including you know.

What is the best.

Vaccine composition is there a need to adjust vaccines on an annualized basis, yes or no.

I mean these are all questions that at this point in time, certainly no one is able to answer.

Thomas Lingelbach: When it comes to the combination, there are, you know, we can all see in the market today that different companies in COVID take different stances on the potential flu-COVID combo. There are certainly reasons that speak for a combination vaccine, but there are also reasons that speak against it. From a Valneva perspective and from a VLA-2001 perspective, we take it very opportunistically. An inactivated whole virus vaccine can be, from a technological perspective, and most of you know that I'm an old CMC guy. From a technological perspective, the combination of our vaccine with influenza in a co-formulation in situ is technically feasible. And whether it makes sense from a medical standpoint and whether it makes sense... From a business standpoint, we have to see.

When it comes to the combination there are.

We can all see in the market today.

Different companies in Colgate take different stance on the potential.

Flu Colgate Campbell.

There are certainly reasons that speak for a combination vaccine, but there are also reasons that speak against it.

What from a <unk> perspective, and from <unk> 2001 perspective.

We take it very opportunistically and in activated whole virus vaccine can be from a technological perspective, and most of you know that I'm, an old CMC guy from a technological perspective.

The combination of our vaccine.

With influenza and co formulation in situ is technically feasible.

And whether it makes sense from a medical standpoint at whether it makes sense.

From a business standpoint, we have to see.

Thomas Lingelbach: But we try everything to be prepared for that, and that's currently our position. We will certainly not, as Valneva, develop our own flu COVID combo. We have no access to an influenza vaccine, but we are open to any kind of collaboration in this.

We try everything to be prepared for that.

And Thats currently our position, we would certainly not as while NEVA develop and own flow.

Colgate combo, we have no access to and influenza vaccine, but we are open to any kind of collaboration in this regards.

Thomas Lingelbach: Thomas, thanks very much. Thank you, dear participants. As a reminder, if you wish to ask a question, please press star and 1 on your telephone. The speakers. There are no further questions at this time.

Thomas Thanks, Thanks very much.

Thank you Dear participants as a reminder, if you wish to ask a question. Please press star one on your telephone keypad.

Dear speakers there are no further questions at this time.

Operator: Thank you so much. This concludes today's analyst call, and we look forward to following up with many of you in due course. Have a good day. Bye-bye. That does conclude our conference for today. Thank you for participating. You may all disconnect.

Okay. Thank you so much this concludes today's call.

And we look forward to following up with many of you into costs have a good day bye bye.

That does conclude our conference for today. Thank you for participating you may all this.

Have a nice day.

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