Half Year 2023 Valneva SE Earnings Call

September 21, 2023

Joshua Drumm: Peter Buhler, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Good day, and thank you for standing by. Welcome to the Vaniva.

Joshua Drumm: How of you at 2023 Financher Reserves Code and Webcast? Have this time all participants listen on the mind. After the speaker's presentation, there will be a question and answer session. Do I ask a question to intercession?

Joshua Drumm: You will need to press star one and one on your telephone. You will then hear an animated message advising your hand is raised. Do we throw your question? You can please press star one and one again. Please note that today's conference is being recorded.

Joshua Drumm: I would not like to add a conference over to your speaker, Joshua Drum, C.P. Global Investor Relations. Please go ahead, Sam. Thank you, Roger. Hello and thank you for joining us to discuss Vaniva's first half 2023 results and corporate update. It's my pleasure to welcome you today.

Joshua Drumm: In addition to our press release and analyst presentation, you can find our consolidated financial results for the six months and the June 30, 2023, which were published earlier today, available within the Financial Reports section on our investor website. As always, I'm joined today by Vaniva CEO, Thomas Lingelbach, and CFO Peter Buhler, who will provide an overview and update of our business as well as our key financial results for the first half of the year.

Joshua Drumm: It will be an analyst Q&A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners that during this presentation, we'll be thanking forward-looking statements, which are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are listed on our company website. Please note that today's presentation includes information provided as of today, September 21, 2023, and Vaniva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws.

Thomas Lingelbach: With that, it's my pleasure to introduce Thomas to begin today's presentation. Thank you so much, Charles. Very good day, everyone.

Thomas Lingelbach: Pleasure for me to report our half-year-one achievements. When we look at R&D, we made substantial progress towards the potential FDA approval of the world's first chicken guinea vaccine. We have online, now the core one of the Phase III Valois Study, completing its first tick season, and the core tool is currently enrolling, and I would provide more details around that. We decided to re-initiate our TCA vaccine development with an expected clinical trial start early next year. Again, I would provide more details around this.

Thomas Lingelbach: When we look at the commercial business, we are very pleased with the commercial performance. Our product sales of almost 70 million euros have more than doubled as compared to prior year, excluding all the COVID sales, of course. And hence, we are on track to meet our 2023 sales guidance of 170 to 150 million euros. We had a strong cash position at the end of June with more than 200 million euros, and very recently, further strengthened it by an up to $100 million new supplementary taxes. Scholarity.

Thomas Lingelbach: When we look at the business in detail, let me start with our Chikungunya vaccine, which is a live attenuated vaccine candidate currently under FDA priority review. It is the first Chikungunya vaccine candidate in the world that reported positive phase 3 data with all trial and report meds. It is the first Chikungunya candidate that has an ongoing DLA application with potential approval and filing accepted by health Canada.

Thomas Lingelbach: By way of reminder, our live attenuated approach was chosen because we wanted to go for a single chart vaccine that was particularly well suited to target a long lasting protection compared to other Chikungunya assets currently being evaluated in clinical trials. Our results have demonstrated that our initial development hypothesis holds true and we have excellent data year-to-date on that vaccine, which I'm going to say 553 fits perfectly within Valneva's existing commercial infrastructure or commenting our existing travel vaccine portfolio.

Thomas Lingelbach: With regards to topic population and geographic reach that we have on the one hand side of travel business, but also an endemic need, significant medical need in LMSC countries, where we have partnered SIPI and institute to put on time, including certain local manufacturing activities.

Thomas Lingelbach: To remind everyone about the key features and timelines, current FDA pedophadate end of November, extended by one quarter due to ongoing discussions around phase four applications. We have also the other lesson trial ongoing, where we reported positive initial safety and immunogenicity data we come in November 2023. And we expect additional regulatory processes to commence, including the EMA later this year.

Thomas Lingelbach: Let me turn to page seven of the presentation since we got many questions about onset of immunity. We would like to present a little bit where we are on our vaccine today. You know, we have data that all got published in different journals, including the Lancet, we have the phase three data, we have also the phase one data, and we have done a number of post-hoc analysis on the back of this data.

Thomas Lingelbach: What we can see here on this slide is that we have a very nice onset of immunity immunity already at day 15. So you see the day 15 data shows data from our phase one cohort. And you see that even at a lower dose, which is not the phase three dose and the final dose, we have well, well about the zero response threshold already on day 15, which means that in between day eight and day 15, we will support the zero response threshold, which is identified by PR and T50 greater or equal than 150. And hence, this tighter level is reasonably likely to predict protection. Scholes.

Thomas Lingelbach: Now, Slide H shows you also a little bit where we are on zero response, and the zero response is sustained at highest levels up to month 12 at this point in time. We're going to read out month 24 in the not-to-distant future, and what is also important is the craft to the right where you basically see that there are absolutely comparable titles in younger and older adults. So basically, we see no difference across the different data points that we have clinically generated, and more importantly, we also, our vaccine has fast onset of immunity, and I think that's important to note.

Thomas Lingelbach: It will be further substantiated as part of the further studies that we have planned or that are already ongoing. We recently reported positive initial safety results in other lessons and pre-exposed participants. This study was conducted in partnership with Instituto Pizentanoa, is being conducted and funded by CEPI. We had more than 700 other lessons.

Thomas Lingelbach: The randomized against placebo, and for the first time, we looked at the vaccine in participants with prior exposure to the chicken guinea virus. Importantly, and this is a very meaningful finding, the vaccine continues to be generally well tolerated, including in individuals previously infected with chicken guinea virus. The AE profile is consistent with the adults, and the initial data suggests that we see even a more favorable safety profile in the repositive patients or participants, which is in line with what we published in around our phase one data where we basically described our so-called re-vaccination challenge where people were in parenthesis over-vaccinated with the vaccine itself.

Thomas Lingelbach: Of course, as we have done for the entire study, the independent DSMB has not identified any safety concerns associated with this vaccine. So now looking forward, the phase four alignment is of course currently the number one topic that we are dealing with. It is the reason for why we got a performance on the Pudufa date in the first place.

Thomas Lingelbach: We are working very collaboratively with the FDA to align on post-apolar phase four requirements. And this is not an easy endeavor for both parties because this phase four alignment and the design of the phase four activities is likely to set two standards for outbreak disease indications on the FDA accelerator pooled pathways. Nothing exists today in this regard, and therefore we are breaking new grounds here.

Thomas Lingelbach: We have additional studies on going antibody persistent study. You know that we are following the cohort here for five years because we want to show that after seeing the shot that there's long protection, we reported the 12 months data in December and the 24 months data I expected logically by the end of this year. At the lessons phase three trial, I mentioned already that this trial is important to support potential label expansion and licensure in Brazil.

Thomas Lingelbach: It's funded by TIPI and also an important part of the data needs to be included and will be included and Peter Buhler. We are planning for co-explanation, pediatric special populations, and then, of course, execution on the phase 4 program and phase 4 effectiveness in endemic settings. So, when we look at the market, page 11 of the presentation, I mentioned it briefly, we have the travelers from nonendemic regions, high complementary, highly complementary with our existing travel portfolio, significant need, as we see more and more outbreaks, including Europe and the Americas.

Thomas Lingelbach: We see a military opportunity here as well for two stations in areas with risk of chicken guinea, and of course, in areas where we need to prepare for potential outbreaks or get already responses during outbreak situations. We are working, as mentioned before, with CPN, it's a two-to-two-ton tan, I'm very happy with this collaboration overall. So, in a nutshell, we continue to be absolutely excited about this first chicken guinea vaccine that hopefully is going to make it to market, and we are looking forward to our Pudufa date and the approval of this vaccine in the United States first, and then in other countries thereafter.

Thomas Lingelbach: Yeah, when we look at our Lyme disease program, our program VLA-15 is the only Lyme disease program in advanced clinical development today. We had multiple phase 2 studies as, you know, including first pediatric and other lessons. Data, we have currently the phase 3 ongoing called study valor, and we have partnered here with Pfizer, and this partnership with Pfizer is a very fruitful, very constructive partnership that has continued now for a number of years, and we have disclosed at multiple occasions the terms under which this exclusive worldwide partnership with Pfizer operates.

Thomas Lingelbach: By way of reminder, with regards to this vaccine, it's a recombinant protein vaccine candidate, multivalent targeting the six most prevalent zero types causing Lyme disease in the United States in Europe, because we wanted to make sure that we have a vaccine for people living and going to both sides of the Atlantic. It is targeting the auto-surface protein A of Lyme Boraliosis, and hence follows an established mechanism of action for Lyme disease vaccine, and therefore has also a high degree of derisking associated with that effect. The program operates under the process that the negation granted by the U.S. FDA in July 2017.

Thomas Lingelbach: As mentioned before, we have demonstrated strong immunogenicity results across three different phase 2 studies, which included also pediatric data. Overall, we see very strong data here, and I think that's something, especially the strong and domestic responses, strong booster response, for a vaccine that might need a booster either annually or at a longer cadence remains a very important result, and this is another key step towards a potential vaccine solution. In this field of high, high, unmet medical, on the Phase 3 efficacy study itself.

Thomas Lingelbach: We are receiving many questions around the study. So, therefore, let me repeat again the key connoisseurs of this study. Around 9,000 participants create a five years of age, so, literally, we cover the vast majority of the target population. And we are including people at high risk of Lyme disease by residents or occupational or recreational activities in the US, Canada and in Europe. We are randomizing one to one against the sea bowl and two to one US versus non-US.

Thomas Lingelbach: With regards to the primary end point, primary end point is the rate of confirmed Lyme disease cases after two consecutive six seasons, meaning after completion of this full primary season, primary serious, sorry, meaning three doses plus the booster dose. And in this part, the secondary end point, we, of course, look at the efficacy of the priming with three doses amongst other secondary end points as defined in the Phase 3 protocol. Following the discontinuation last year for one part of the study, one cohort of the study that was run through a specific set of study centers.

Thomas Lingelbach: We have now split into two cohorts still under the roof of one study. You see the enrolled participants cohort one in blue. Here you see the three doses given at month zero, two and six. And the booster in after 18 months, so basically this cohort has been completely enrolled. We are now completing the six season 2023 and will be given the booster shot next year. And the core tool is rolling and you see zero, two, six, and then the booster and six season 2025. Pfizer aims to submit the regulatory applications in the US and Europe in 2026 subject to positive data, which we hope to see at the end of 2025 after the completion of the 2025.

Thomas Lingelbach: And then we turn over to CICA, you know, that Valeva has a CICA vaccine in its R&D portfolio for a number of years. We passed the development program when we focused our resources towards the COVID vaccine development. Now that the COVID development or COVID vaccine development is behind us, we have we activated our CICA program because we believe that there is a significant unmet medical need. And basically what we see here is also a highly complimentary potential asset when it comes to leveraging our existing.

Thomas Lingelbach: Inactivated whole virus platform that we initially developed for Japanese and civilitis and then further enhanced and modified for our COVID vaccine BLA 2001. So it can be a very nice black and play onto our existing platforms at the same time this is a vaccine candidate that would also fall under an accelerated pool pathway for which we are now. So that's the reason number two reason number three is actually that that we meet the desired target product profile as articulated by WHO. All of that led us to our decision to continue or restart with our CICA. The development will try to start as early as possible, for the next year.

Thomas Lingelbach: Yeah, when you look at our portfolio, we are working on a number of things in the pre-clinical arena. I would like to point out HMPV for which we completed our pre-clinical pool of concept successfully, given that the vaccine development environment is transitioning towards an RSE, HMPV combination vaccine. We have initiated partnering discussions and those discussions are currently underway and partnering is under evaluation. Our lead candidates in the pre-clinical arena remain EBV, Epstein Barbarus.

Thomas Lingelbach: We are currently in the final antigen identification phase and hope to have a final product candidate designed by the end of this year. Of course, we are working on a number of other things in the pre-clinical shops, but we are giving, of course, priority and focus. And I would like to remind you that our overall R&D portfolio management always strikes towards delivering highly differentiated assets. First in class, best in class, or only in class.

Peter Buhler: And with that, I would like to hand over to Peter to provide us the financial report and take us to the rest of the presentation. Thank you. Thank you, Thomas. Good morning and good afternoon to all of you.

Peter Buhler: Now let's look at the financial review of the first half of fiscal year 2023. Product sales reached 69.7 million euros and grew 109 percent over a prior year. At constant currency, product sales grew 113.6 percent.

Peter Buhler: The strong growth is driven by all product lines, with XERO growing at 150 percent at constant currency, 2 coral at 213 percent and third-party product at 46.8 percent. This excellent sales performance is primarily driven by the recovery of the private travel market, but also by price increases across the board. In the first half year, we also still recorded residual COVID-19 vaccine sales related to a pre-existing contract with the Kingdom of Bahrain.

Peter Buhler: Moving on to the income statement, total revenues reached 73.7 million euros versus 93.2 million euros in the first half year of 2022. A decrease of 20.9 percent. In the prior year, the label had recognized other revenues related to its COVID program, which explains this decrease. Looking at expense, we observe a significant decrease in cost of goods and services from 171.5 million euros in the first half of 2022 to 53.8 million euros in the current fiscal first half year.

Peter Buhler: Prior years cost of goods and services were heavily impacted by one of items related to the wind down of our COVID-19 program. The growth margin of both XERO and Dukeral is still below pre-COVID levels, and is among others adversely impacted by XERO batch-ride-offs in our Scottish manufacturing sites and high sales volumes in indirect markets, where our average selling price is lower than indirect amounts. Markets.

Peter Buhler: In the first half year, we also recognized initial cost of goods, related to the launch preparation of our Jacob Gooney vaccine candidate. Research and development expense decreased from 51.9 million euros in 2022 to 26 million euros in the first half year of fiscal year 2023. That decrease is again driven by the lower spend on Valneva COVID vaccine programs.

Peter Buhler: And at the same time, the cost related to the CCA vaccine candidate increased as the company has been working towards a re-initiation of our clinical development program. Marketing and distribution expense increased significantly year over year from 7.8 million euros to 20 million euros. The increase is related to higher pre-launch costs for our Jacob Gooney vaccine candidates that more than tripled versus prior year. In addition, PIAC's spend has had a positive impact related to our share employee share-based compensation.

Peter Buhler: G&A expense increased from 16 million euros in 2022 to 22.9 million euros in 2023. In the prior year, all expense lines had a favorable effect for a total of 19.5 million euros related to employee share-based compensation due to the share-price development. The increase in other income from 3.6 million euros to 14 million euros is mainly related to the recognition of a grant received from Scottish enterprise. Overall, the company records an operating loss of negative 35 million euros versus 150.4 million euros in the prior year.

Peter Buhler: Adjusted EBTA improves from 136 million euros to 28 million euros negative. Finally, reported the cash and cash equivalence at June 30, 2023 of 204.4 million euros compared to 289.4 million euros at the end of December 2022. This position, as mentioned, does not include the increased debt facility of $100 million, of which $50 million were drawn down in the third quarter of 2023.

Peter Buhler: Now moving to slide 21 to review our guidance for the fiscal year. We reiterate our guidance for revenues and other income communicated earlier this year. We expect product sales to reach between 130 and 150 million euros and other income to reach 90 to 110 million euros. We also reiterate our guidance on R&D investment, expect a principle between 70 and 90 million euros.

Peter Buhler: This concludes the finance section of this call, and now let's move to slide 23, looking at upcoming catalysts and news flow. On our VLA-1553 program, we still anticipate the PIDUFA action dates and the potential VLA approval at the end of November. We also expect to release at all essence immunogenicity results in November 2023 and progress to its and submit actually EMA regulatory submission Q4. Also, Q4 will report additional 24 months and the body of assistance data and we expect the ASAP recommendation for Q1 in 2024.

Peter Buhler: On VLA-15, we expect the trial execution to continue with the recruitment of the cohort 2 in advance of the 2024 tick season as explained by Thomas earlier during this call. Editional Newsflow, we expect imminently to announce a new DOD contract for Xero, and then potential granting of FDI prior to review voucher as we obtain the BLA 1553 BLA approval. Also, as already mentioned, we expect initiation of our phase one clinical trial of Zika in our Q in the first quarter of 2024, and the advancement of selected pre-clinical programs mentioned just before by Thomas.

Peter Buhler: With this, we really see Valneva poised for substantial growth. The primary led by new product launches, we see in the next six to 12 months, of course, VLA 1553 reaching the market, and then longer term VLA 15 reaching the market, and for Valneva to actually be able to record significant milestones and revenue revenues. Additional growth drivers, of course, the continuous recovery of the travel market that will be reflected in substantial growth still in Xero and Ducorral, as mentioned, the DOD contract for Xero, and then potential label expansion for VLA 1553 after the initial approval in adults.

Joshua Drumm: And then, of course, longer term in licensing or acquisition of additional clinical candidates and then potential market launch, of course, of these in licensed programs. So, this concludes this part of the call and would like now like to hand back to Razia to open the Q&A session. Thank you, sir. As a reminder, to ask a question, you will need to pre-stow one and one on your telephone and wait for your name to be announced.

Joshua Drumm: To withdraw your question, you can please pre-stow one and one again. Once again, please pre-stow one and one for any question and wait for your name to be announced. Do we withdraw your question, you can please pre-stow one and one again. Please stand by where we compile the Q&A roster. This will take a few moments. Thank you. We are now going to proceed with our first question.

Maurice Raycroft: And the questions come from the line of Murray Ray Croft from Jeffries. Please answer your question.

Thomas Lingelbach: Hi, thanks for taking my questions. I'm going to ask one on Chikin-Gunia. What are your latest thoughts on what a potential phase for outbreak study might look like in terms of size, geographic areas, or any other details? And I'm also wondering is the outbreak study something that ACIP could potentially want to see for a recommendation or how do you view that study in the context of the ACIP? Hi, Murray.

Thomas Lingelbach: You, of course, will understand that given that we are in the middle of agreeing and aligning the phase for activities with the FDA, there's only very little I can say in public around that. What I can say, so it is under the accelerated pool pathway, we need to show effectiveness in a real life setting, meaning in endemic countries, and ideally during an outbreak situation. And so therefore you need to get prepared for that, and you need to have also different populations included, meaning and the lessons as well as adults. Now, the historically ACIP have not been waiting for or waiting finals effectiveness data, which sometimes take many, many years to provide their vaccine recommendations.

Maurice Raycroft: And at this point in time, we do not expect this to happen. So we have a strong database that we're going to present and have presented, and we'll continue to present to ACIP, and that's basically a strong package. More, I can at this point in time, unfortunately, you know, say, but soon we will, of course, be in a position to explain what we're going to do. And then, you know, I hope for your patience until then. Okay, yeah, it makes sense. And I was going to ask one other question about chicken guinea.

Thomas Lingelbach: You've talked about the different revenue streams, including travel sales in the US and EU, military and potential stockpiling contracts and then endemic. Can you talk about the potential cadence of the launch in terms of these different revenue streams? How are you preparing currently for the launch? Have you thought of when you might give guidance on sales for some of these groups post-launch? Yeah, that's an excellent question, Maurice.

Thomas Lingelbach: So, first of all, as you know, we have been prioritizing the travel and, let's say, outbreak preparedness in the highly developed countries. So, meaning we started with the US where we see by far the single largest market opportunity in terms of revenue then followed by Canada and EMA. So, this is the cadence.

Thomas Lingelbach: So, you know, there's the Canadian filing got accepted. We just closed that. Next step is, of course, EMA. And then we will go immediately into Brazil.

Thomas Lingelbach: And we are currently looking also into the next most important LMIC territory, which of course is Asia. So, this is probably the cadence of how we're going to approach it from a regulatory and licensure perspective with regards to outbreak preparedness stockpiling. I mean, that's not a dedicated regulatory process needed for that in the highly developed countries. Having said that, we have a quite significant number of initiatives ongoing to potentially attract a stockpiling business, you know, that this is the part where we felt so far not very comfortable providing any guidance on how big this opportunity might or might not be. But there is a lot going on, and we hope that we will also attract some business in the segment too. Thanks for taking my question. We are now going to proceed with our next question.

Simea Divani: And the questions come from the Land of Simea Divani from our Exficiencies. Could you ask your question? Hi, guys.

Peter Buhler: Thanks for taking my questions. Just a couple really on the numbers. Is this the last of the COVID-19 vaccine orders that we're expecting? And on R&D, can you just maybe explain what would make you come in at the bottom or at the top end of your guidance? Thanks very much.

Peter Buhler: So, yeah, thanks for me for the questions. So, on COVID-19, there is some small residual revenue expected still in the second half of the year, but we're mostly done with COVID-19 in terms of revenues. In terms of R&D, yeah, great question, and I guess your question really talk is to it's, you know, the level of spend we see for the first half year compared to the guidance. Obviously, yes, so we do we, you know, we're tracking to more towards the lower end of the guidance, when you look at the first half year, of course.

Peter Buhler: And that is where we land ultimately is, I think, to a large extent, of course, driven by, you know, how much do we still spend on the ongoing trials, in particular, on Chikungunya, but then also, of course, you know, how quickly do we accelerate spend on Zika? So, that's really the key drivers on the R&D spend. And in addition to that, some, yeah, it's also related to when we actually kind of initiate some of the additional studies for Chik.

Peter Buhler: You have seen that we have quite a number of of course we will and can only start some of the studies once we have gotten the approval of the vaccine. So that's why there is a couple of swing factors in there which all which may affect the final spend especially with regards to our indeed expenses which we call the best. The direct R&D expenses, meaning external R&D costs with zeroes etc in the fourth quarter of this year. Great, thanks very much.

Simon Scholes: We are now going to proceed with our next question. And the questions come from the line of Simon Scholes from Files Berlin. Disask a question. Yes, hello, thanks for taking my questions. I've got two.

Peter Buhler: First of all I was wondering on the commercial vaccine business if you could tell us how much direct sales was in Q2. I think the figure for Q1 was 71.6%. And I was also wondering if you could quantify the batch right off on XERO in Q2. Thanks.

Peter Buhler: Yes, thanks, but let's start with the second question on batch right off while we're looking for the number on direct sales. So, you know, you will understand that this is something we are not publishing. I mean, we did have the reason why we mentioned it is because it was in a higher amount that what we would usually see, which is really related to the fact that we're basically, you know, restarting full steam commercial manufacturing post-COVID.

Peter Buhler: But again, we're not we're not disclosing the actual right off in terms of the proportion of direct sales. So, it was 65% in Q2. And would you expect the number to stay around that level? No, clearly not. I think this was unusual in both Q1 and Q2. We would expect for the remainder of the YouTube with more towards ratios like we saw in the past. Especially for a 5 military kicking in remember that, yeah. Okay, yeah. Okay, thanks very much.

Damien Chaplin: And I'm going to proceed with our next question. And the questions come from the line of Damien Chaplin from ODEBHS. Please ask your question. Hello, Damien. Can you go on this open?

Damien Chaplin: Please ask a question. The next questions come from the line of Damien Chaplin from ODEBHS. Please ask a question. Yes, hello. Can you hear me? Down in here. Yeah, yeah, thank you for taking my questions. First on the card please.

Thomas Lingelbach: So why do you need to conduct a new phase one? Why don't you directly move into phase two trial first question and what would be the market potential for this vaccine? Yeah, so let me start to explain a little bit what we're going to do.

Peter Buhler: So basically what we in the phase one study, we saw very nice immunogenicity data. We saw very good safety data, but we did not reach immunologically plateau. So which means we have not yet with the formulation that we used in the phase one study maximized the potential of the vaccine. So hence what we're going to do here is we're going to update the formulation of the vaccine. We're also going to bring it on to the platform that we further enhanced for BLA 2001 because we want to have the platform advantage and by the end of the day we want to have a highly differentiated vaccine.

Peter Buhler: We want to have an inactivated vaccine that is going to be best in class and and therefore we decided we could have done a kind of a hybrid phase one two thing, but we decided that it's better to go for a new phase one protocol which in reality is required in large phase one protocol, but technically it's a phase one protocol. With regards to to market size, it is very difficult to quantify at this point in time and this is also the reason for why we clearly articulated in our age one report that that we're going to have another review time point on Zika at the end of the next clinical study.

Peter Buhler: There is clearly a huge unmet medical lead and we see again emerging outbreaks around Zika, but for outbreak diseases it is not trivial to really quantify the market potential and we need to understand three things. Number one, we need to understand will we be able to deliver a best in class vaccine and you remember that our inactivated approach here follows really WHO guidance who clearly ruled out certain other technologies for a vaccine that will target vaccination of women in child bearing age and or pregnant women in an outbreak situation and the second part is really we need to we need to understand what is the potential under the under a normal you know kind of travel tech as a view and certainly you know is there a possibility to enter into respective partnerships which could help improving the overall financials around it as we did for Chikungunya with our partnership with with with TIPI all that will be further evaluated as we go along.

Peter Buhler: For the time being as I said we see a huge unmet medical need we see the opportunity that the Vanneva could provide a best in class vaccine solution and a vaccine solution that complies fully with the expectations of the medical and scientific community. More we have to see when we need to decide you know whether on the basis of data whether we would proceed then Bernard. That may be just a quick one on your guidance.

Peter Buhler: Can you just confirm that you still include the sale of the potential PRV in 2023, despite the fact that the approval of the TIG vaccine has been delayed? Yes, Daniel, thanks for the question. Yes indeed, it still includes the other income we expect. The expected proceeds from the PRV, despite the fact that the TIG is now a bit later. Thanks.

Even Wang: We are now going to proceed with our next question. And the questions come from the line of even one from Google and Ham security, please ask your question.

Even Wang: Hi guys, thanks for taking a question. Two from me, first on Lyme, just with the ongoing trial. No, it's in the hands of Pfizer.

Thomas Lingelbach: But, you know, interested here, you know, what the companies are seeing in terms of, you know, incident rate of cases and, you know, Lyme, serotypes, both in the Europe and US. Is it kind of consistent with what you guys are expecting? And second, on Chicken Ganya, you know, happy to use some of the durability data showed, or the earlier time point data showed, just wondering if there's thoughts on including maybe a subset of patients in, you know, phase four or other studies to maybe evaluate in earlier time point tighter, you know, in a larger patient population. Thanks.

Thomas Lingelbach: Yeah, both excellent questions that we start with the second one first, because it's one of the questions that for reasons that you perfectly understand, we are getting all the time onset of immunity. I mean, as I said, we were the first ones to develop the vaccine. We agreed at the time with the authorities on the readout of day 29. Of course, we have a bunch of data sets as we presented today that clearly indicates that the vaccine has a full onset above the zero response level very early on.

Thomas Lingelbach: We will, and I mentioned this during my presentation, include those earlier time points as part of studies that we are initiating be it under phase three or under phase four protocol for sure. And there is absolutely no reason for us not to do this, and there's absolutely no reason to believe that we should not have a fantastic onset of immunity above zero response level early on. So online itself, Pfizer conducted an EP study in Europe and the US before the phase three study got even initiated.

Thomas Lingelbach: There have been partial disclosures around the results from this EP study at different conferences. Overall, this EP study confirmed the distribution of the different stereotypes on both sides of the Atlantic that we presented at different locations and that have been, that can be found in literature within reason, I would say, and within, you know, variability, but overall, no surprises on that front with regards to the Overot Case Count, that is of course being monitored at this point in time, there's nothing we can say but also the epic studies confirm the overall interest rates that have been used to also power the study. So so far so good, I would say everything is working as expected and we have and Pfizer has no issues in attracting and recruiting the respective target population into the study. Thanks Ed.

Joshua Drumm: I have a reminder once again to ask a question please press star one and one on your telephone and wait for your name to be announced. Do we draw your question you can please press star one and one again. Once again please press star one and one for any questions or comments.

Suzanne Voorthuizen: Thank you. We are now going to proceed with our next question and the questions come from the line of Susan Van Voorthuizen from VLK please go ahead with your question. Hi there, good afternoon team.

Suzanne Voorthuizen: A couple of questions from my side to start off with the product sales that are growing quite nicely again. Can you remind us of what the seasonality is that we could should keep in mind for Xero and Decorale, which quarters are typically stronger given the travel patterns and what we expect for Chikungunya over time. And then I have to follow up.

Thomas Lingelbach: Yeah, excellent question. So I would say basically if you look at prior years, you typically see a dip during the summertime, you see higher uptake earlier in the year and later in the year, this has to do with the travel pattern to Southeast Asia. You see a seasonality pattern also for Decorale given that the single largest market for Decorale is Canada and you see typically a strong strong demand early on in the year so at the end of the year early on in the year Canadians like to travel to warmer regions when it's cold in Canada.

Thomas Lingelbach: So basically this is something that we have seen in prior years, it is extremely difficult to model it precisely because we have seen, I would say, variability is across the years. But overall there is a model that we have in place that kind of mimics the seasonality and which of course we also use when we prepare our, you know, year end and projections and latest estimates. But as I said, that's the reason for why we have said we stick entirely to guidance with regards to Chikungunya and your question about seasonality. Chikungunya, that's an excellent one too. So I would say we have slightly different, I would say, territories for Chikungunya as compared to Japanese insolides some are the same, some are very different.

Thomas Lingelbach: And so there are our current hypothesis is that they probably kind of balance each other out. So we are currently not necessarily modeling yet a strong seasonality profile around Chikungunya but of course when you are pioneering in a brand new indication with brand new vaccine. You learn along the way but that our current happens. Edward White, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lamm, Peter Buhler, Simon Scholes, Thomas Lamm, Thomas Lamm, Thomas Lamm, Thomas Lamm, Thomas Lamm, Thomas Lamm, Thomas Lamm,[inaudible] Lamm, Thomas Lamm, Thomas Lamm, Thomas Lamm, Thomas[inaudible] Thomas Lamm, Thomas Lamm, Thomas Lamm, Thomas Lamm Thomas Lamm, Thomas Lamm, Thomas Lamm Thomas Lamm, Thomas Lamm, Thomas Lamm, Thomas Lamm Thomas Lamm, Thomas Lamm[inaudible] Yes. Got it. All right. Thank you. And then maybe just a last one from my side about the line program. Now that the dust has settled on the timeline.

Peter Buhler: And you're giving your current cash position in the recent additional 100 million loan facility. Can you elaborate on how we should think about your cash burn and run rate from here? And that's it from my side. Yeah. Thanks, Suzanne.

Peter Buhler: So we will still have significant payments to make on the line program. And I mean, you can you can see some extent, of course, in the liability side of our balance sheet. What is expected to do there.

Peter Buhler: I think overall after the 2022 equity offering we said we're sufficiently financed at least until the end of the fiscal year 2024 that of course still holds true. But we have not provided at this stage an updated guidance on cash burn rate. Something to consider in the future. But right now we have not given the guidance. But we're, you know, for the foreseeable future, of course, we're sufficiently financed. And then as we said, we still have appetite to potentially in license R&D programs. And if we were to do that, that might then require additional and dedicated financing, which could also be non-value, of course. Got it. Thank you.

Max Herrmann: We're not going to proceed with our next question. And the questions come from the line over Max Harman from Tissel. Please ask your question. Great. Thanks very much for taking my questions.

Max Herrmann: Three of my I may firstly just on Xero and Duke role. I know last year you had some capacity constraints. You've obviously highlighted a batch failure in the Xero in the first half of this year. And I wondered where you are with capacity compared with demand for both those products. So that's the first question.

Max Herrmann: Okay. So, so much overall we are right now managing supply demand quite well. We have here are there still some minor shortages. But overall, on an on an age 20 basis, we are fine.

Max Herrmann: The the effect that we were talking about about higher right off leading to high work higher cost of goods at where typical, I would say restart issues after the team had not done Xero manufacturing for more than two years. So, but we are back on track with regard to the manufacturing performance here too. So we are not expecting any further significant issues with supply demand from a supply perspective. Of course, we see further positive surprises on demand size. We are seeing in some countries an enormous uptake and increase of travel vaccines in general.

Max Herrmann: So, we have to see how this is all going to play out going forward, but that's far, everything found. Great. And the next couple of questions, one, just sorry if I missed it, the DOD contract you've talked about that being imminently signed, I just wondered what the sort of structure of that is, obviously you did a more multi-year kind of contract in the past, recent past, and then previously it was more an annual event, so that was kind of that question and then finally just in terms of, I know you've just said that recruitment into the Lyme disease programme is no issue, I wondered if you could be more specific a bit on the pediatric element of that recruitment, whether this is in some ways, in fact you're doing over two seasons now as maybe being helpful because I know that was one of the areas that was hardest to recruit into.

Max Herrmann: Thank you. Yeah, well I mean on the contract itself, you rightly pointed out, historically we have done single-year contracts, and that has been the standard with the DOD. We had one exception which was the 2020 BCFS option year contract, it wasn't an exception, it never materialised in reality because it unfortunately coincided with the global pandemic as you know, and this gives you the answer what we are expecting, yeah.

Joshua Drumm: So on the recruitment front itself, we continue with a certain percentage of pediatric within the study which is absolutely in line with how we have designed the protocol and how we have set also the respective analysis and powering, so there are no issues in the recruitment of the any of the type of populations that we need within the study at this point in time. Great. Thank you very much. We have no further questions at this time, I hand back to you for closing remarks, thank you.

Joshua Drumm: Yeah, I think that concludes today's call on our half year 2023 results and general corporate and business updates, we would like to thank you again for your time today, for your good questions and for following us closely and diligently and we look forward to catching up in the coming months, thank you so much and have a great day. Ladies and gentlemen, this concludes today's conference call, thank you for participating, you may now disconnect your lines, thank you.

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Operator: Good day, and thank you for standing by. Welcome to the Zulneva half-year, 2023 Financial Resource Call and Webcast. At this time, all participants are silent and listen only to their minds. 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 1 and 1 on your telephone. You will then hear an automated message advising that your hand is raised. If you wish to withdraw your question, you can please press down one and one again. Please note that today's conference is being recorded. I would like to turn the conference over to your speaker, Joshua Drum, CP, Global Investor Relations. Please go ahead, sir.

Good day and thank you for standing by. Welcome to the Zalniva half year 2023 financial results corner webcast. At this time all participants are in 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 and 1 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, you can please press star 1 and 1 again.

Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker Joshua Drom, CPE Global Investor Relations. Please go ahead, sir.

Joshua Drumm: Thank you, Ravu. Hello, and thank you for joining us to discuss Valneva's first half-2023 results and corporate update. It's my pleasure to welcome you today.

Thank you, Radja. Hello and thank you for joining us to discuss Velnova's first half of the 2023 results and corporate update. It's my pleasure to welcome you today. In addition to our press release and analyst presentation, you can find our consolidated financial results for the six months ended June 30th, 2023, which were published earlier today available within the financial report section on our investor website.

Joshua Drumm: In addition to our press release and analyst presentation, you can find our consolidated financial results for the six months ended June 30th, 2023, which were published earlier today, available in the financial report section on our investor website. As always, I'm joined today by Valneva's CEO Thomas Lingelbach and CFO Peter Bueller, who will provide an overview and update of our business, as well as our key financial results for the first half of the year.

As always, I'm joined today by Valneva CEO Thomas Lingelbach and CFO Peter Buhler, who will provide an overview and update of our business, as well as our key financial results for the first half of the year. There will be an analyst Q&A session at the conclusion of the prepared remarks.

Joshua Drumm: There will be an analyst Q&A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners that during this presentation, we'll be making forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are listed on our company website.

Before we begin, I'd like to remind listeners that during this presentation, we'll be making forward looking statements, which are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed or implied by these forward looking statements.

You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are listed on our company website.

Joshua Drumm: Please note that today's presentation includes information provided as of today, September 21, 2023, and Valneva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws. With that, it's my pleasure to introduce Thomas to begin today's presentation.

Please note that today's presentation includes information provided as of today, September 21st, 2023, and Valneva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws.

Please note that today's presentation includes information provided as of today, September 21, 2023, and Valneva undertakes no obligation to revise or update forward-looking statements except as required by applicable securities laws. With that, it's my pleasure to introduce Thomas to begin today's presentation.

Thank you so much, Joss. Very good day everyone. Pleasure for me to report our half year one.

When we look at R&D, we made substantial progress towards the potential FDA approval of the world's first chickenconia vaccine.

We have online now the cohort 1 of the phase 3 Valois study completing its first tick season and the cohort 2.

Thomas Lingelbach: Thank you so much, Joz. A very good day, everyone.

Thomas Lingelbach: It is a pleasure for me to report on our half-year-one achievements. When we look at R&D, we made substantial progress towards the potential FDA approval of the world's first chicken guinea vaccine. We have now online cohort one of the phase three Vaila study completing its first tick season, and cohort two is currently enrolling, and I will provide more details around that. We have decided to reinitiate our Cica vaccine development with an expected clinical trial start early next year. Again, I would provide more details around this.

is currently enrolling and I would provide more details around that.

we decided to re-initiate our Zika vaccine development with an expected clinical trial start early next year.

Thomas Lingelbach: When we look at the commercial business, we are very pleased with the commercial performance. Our product sales of almost 70 million euros have more than doubled as compared to the prior year, excluding all the COVID sales, of course. Hence, we are on track to meet our 2023 sales guidance of 130 to 150 million euros. We had a strong cash position at the end of June with more than 200 million euros.

Peter Buhler: Peter Buhler, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Good day and thank you for standing by.

Operator: Peter Buhler, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Good day and thank you for standing by. Welcome to the Vaniva. How of you at 2023 Financial Reserves Code and Webcast? Have this time all participants listen on the mind. After the speaker's presentation, there will be a question and answer session. To ask a question to the intercession, you will need to press style one and one on your telephone. You will then hear an animated message advising your hand is raised. To withdraw your question, you can please press style one and one again. Please note that today's conference being recorded.

Joshua Drumm: Welcome to the Vaniva. How of you at 2023 Financial Reserves Code and Webcast? Have this time all participants listen on the mind.

Joshua Drumm: After the speaker's presentation, there will be a question and answer session. To ask a question to the intercession, you will need to press style one and one on your telephone. You will then hear an animated message advising your hand is raised. To withdraw your question, you can please press style one and one again.

Joshua Drumm: Please note that today's conference being recorded.

Thomas Lingelbach: And very recently, it further strengthened it by an up to $100 million new supplementary deficit. When we look at the business in detail, let me start with our chicken guinea vaccine, which is a life-attainuated vaccine candidate currently under FDA priority review. It is the first Chikungunya vaccine candidate in the world that reported positive phase three data with all trial and port requirements met. It's the first chicken gunya candidate that has an ongoing BLA application with potential approval and the filing accepted by Health Canada. By way of reminder, our life attenuated approach was chosen because we wanted to go for a single-shot vaccine that was particularly well suited to target long-lasting protection compared to other chicken guinea as.

Joshua Drumm: I would not like to add a conference over to your speaker, Joshua Drumm, C.P Global Investor Relations. Please go ahead, Sam. Thank you, Roger.

Joshua Drumm: Hello and thank you for joining us to discuss Vaniva's first half 2023 results and corporate update. It's my pleasure to welcome you today. In addition to our press release and analyst presentation, you can find our consolidated financial results for the six months and the June 30, 2023, which were published earlier today, available within the financial report section on our investor website. As always, I'm joined today by Vaniva CEO Thomas Lingobach and CFO Peter Bueller, who will provide an overview and update of our business as well as our key financial results for the first half of the year.

Joshua Drumm: It will be an analyst Q&A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners that during this presentation we'll be focused on uncertainties that could cause the actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are listed on our company website. Please note that today's presentation includes information provided as of today, September 21, 2023, and Vaniva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws.

Joshua Drumm: Before we begin, I'd like to remind listeners that during this presentation we'll be focused on uncertainties that could cause the actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are listed on our company website. Please note that today's presentation includes information provided as of today, September 21, 2023, and Vaniva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws.

Thomas Lingelbach: It's currently being evaluated in clinical trials. Our results have demonstrated that our initial development hypothesis holds true, and we have excellent data year to date on that vaccine, which I'm going to present a bit more in detail. From a strategic point of view, VLA 1553 fits perfectly within Valneva's existing commercial infrastructure, augmenting our existing travel vaccine portfolio. With regard to target population, geographical reach, you know that we have, on the one-hand side of the travel business, but also an endemic need, and significant medical need in NMIC countries, where we have partnered with the SIPI and Institute of Putantan, including certain local manufacturing activities.

Thomas Lingelbach: With that, it's my pleasure to introduce Thomas to begin today's presentation. Thank you so much, Charles. Very good day, everyone.

Thomas Lingelbach: Pleasure for me to report our half-year-one achievements. When we look at R&D, we made substantial progress towards the potential FDA approval of the world's first chicken guinea vaccine. We have online now the the cohort one of the phase three Valois study, completing its first six season, and the cohort two is currently enrolling, and I would provide more details around that. We decided to re-initiate our Tika vaccine development with an expected clinical trial start early next year. Again, I would provide more details around this.

Thomas Lingelbach: When we look at the commercial business, we are very pleased with the commercial performance. Our product sales of almost 70 million euros have more than doubled as compared to prior year, excluding all the COVID sales, of course. And hence, we are on track to meet our 2023 sales guidance of 130 to 150 million euros. We had a strong cash position at the end of June with more than 200 million euros, and very recently, further strengthened it by an up to a hundred million dollar new supplementary Dr. Scholes.

Thomas Lingelbach: To remind everyone about the key features and timelines, current FDA-Pedufa date end of November, you know, they got extended by one quarter due to ongoing discussions around phase four obligations. We have also the adolescent trial ongoing where we reported positive initial safety and immunogenicity data will come in November, 2023. And we expect additional regulatory processes to commence, including the EMA later this year. Let me turn to page 7 of the presentation.

Thomas Lingelbach: When we look at the business in detail, let me start with our Chikungunya vaccine, which is a life-at-tenuated vaccine candidate currently under FDA priority review. It is the first Chikungunya vaccine candidate in the world that reported positive phase 3 data with all trial and report meds. It is the first Chikungunya candidate that has an ongoing DLA application with potential approval and the filing accepted by Health Canada. By way of reminder, our life-at-tenuated approach was chosen because we wanted to go for a single-shot vaccine that was particularly well-suited to target a long-lasting protection compared to other Chikungunya as it's currently being evaluated in clinical trials.

Thomas Lingelbach: Since we have received many questions about onset of immunity, we would like to present a little bit where we are on our vaccine today. You know, we have data that have all got published in different journals, including the Lancet. We have phase three data, we also have phase one data, and we have done a number of post hoc analyses on the back of this data. What we can see here on this slide is that we have a very nice onset of immunity already at day 15.

Thomas Lingelbach: Our results have demonstrated that our initial development hypothesis holds true and we have excellent data year-to-date on that vaccine, which I'm going to present in more detail. And from a strategic point of view, BLA-155-3 fits perfectly within Valneva's existing commercial infrastructure, or commenting our existing travel vaccine portfolio. With regards to topic population and geographical reach, we have on the one hand side the travel business, but also an endemic need, significant medical need in LMSC countries, where we've partnered with CIPI and Institute to put on time, including certain local manufacturing activities.

Thomas Lingelbach: So you see, the data from day 15 shows data from our phase one cohort. And you see that even at a lower dose, which is not the phase three dose and the final dose, we are well, well above the zero response threshold already on day 15, which means that between day 8 and day 15, we will surpass the zero response threshold, which is identified by PR&T 50 greater or equal to 150, and hence this tighter level is reasonably likely to predict protection.

Thomas Lingelbach: To remind everyone about the key features and timelines, current FDA pedophadate end of November. They got extended by one quarter due to ongoing discussions around Phase 4 obligations. We have also the other lesson trial ongoing, where we reported positive initial safety and immunogenicity data will come in November 2023. And we expect additional regulatory processes to commence, including the EMA later this year.

Thomas Lingelbach: Now slide eight shows you a little bit where we are on zero response, and the zero response is sustained at highest levels up to month 12. At this point in time, we're going to read out months 24 in the not too distant future. And what is also important is the graph to the right, where you basically see that there are absolutely comparable titles in young, younger, and older adults.

Thomas Lingelbach: And we expect additional regulatory processes to commence, including the EMA later this year.

Simon Scholes: Let me turn to seven of the presentations. Since we got many questions about onset of immunity, we would like to present a little bit where we are on our vaccine today. You know, we have data that all got published in different journals, including the lunch set. We have the Phase 3 data. We have also the Phase 1 data. And we have done a number of post hoc analysis on the back of this data.

Thomas Lingelbach: So basically, we see no difference across the different data points that we have clinically generated. And more importantly, we also have a fast onset of immunity. And I think that's important to note.

Simon Scholes: What we can see here on this slide is that we have a very nice onset of immunity already at day 15. So you see the day 15 data shows data from our Phase 1 cohort. And you see that even at the lower dose, which is not the Phase 3 dose and the final dose, we have well, well above the zero response threshold already on day 15, which means that in between day 8 and day 15, we will support the zero response threshold, which is identified by PRNT 50 greater or equal than 150. And hence, this tighter level is reasonably likely to predict, and protect.

Thomas Lingelbach: It will be further substantiated as part of the further studies that we have planned or that are already ongoing. We recently reported positive initial safety results in adolescents and pre-exposed participants. This study was conducted in partnership with Instituto Byzantano, is being conducted, and is funded by CEPI.

Thomas Lingelbach: We had more than 700 adolescents, randomized against placebo, and for the first time, we looked at the vaccine in participants with prior exposure to the chicken guinea virus. Importantly, and this is a very meaningful finding, the vaccine continues to be generally well-torated, including an individual who is previously infected with the chikungunya virus. The AE profile is consistent with adults, and the initial data suggests that we see even a more favorable safety profile in zero positive patients or participants, which is in line with what we published around our phase one data, where we basically described our so-called re-vaccination challenge where people were, in parenthesis, over-vaccinated with the vaccine itself.

Simon Scholes: Scholes. Now, Slide H shows you also a little bit where we are on zero response, and the zero response is sustained at highest levels up to month 12 at this point in time. We're going to read out months 24 in the not-to-distant future, and what is also important is the craft to the right, where you basically see that there are absolutely comparable titles in younger and older adults. So basically, we see no difference across the different data points that we have clearly generated, and more importantly, we also, our vaccine has a fast onset of immunity, and I think that's important to note, it will be further substantiated as part of the further studies that we have planned or that are already ongoing.

Thomas Lingelbach: And of course, as we have done for the entire study, the independent DSMB has not identified any safety concerns associated with So now looking forward, the phase four alignment is, of course, currently the number one topic that we are dealing with. It is the reason for why we got a postponement of the Budufa date in the first place.

Simon Scholes: We recently reported positive initial safety results in other lessons and pre-exposed participants. This study was conducted in partnership with Instituto Pizentanoa, it's being conducted and funded by CEPI. We had more than 700 other lessons, randomized against placebo, and for the first time we looked at the vaccine in participants with prior exposure to the chicken guinea virus. Importantly, and this is a very meaningful finding, the vaccine continues to be generally well tolerated, including in individuals previously infected with chicken guinea virus.

Thomas Lingelbach: We are working very collaboratively with the FDA to align on post-approval phase four requirements. This is not an easy endeavor for both parties because this phase four alignment and the design of the phase four activities are likely to set future standards for outbreak disease indications under FDA accelerated approval. Nothing exists today in this regard, and therefore, we are breaking new ground. We have additional studies ongoing, an antibody persistent study. You know that we are following the cohort here for five years because we want to show that after a single shot, there's long protection. We reported the 12-month data in December, and the 24-month data, I expected logically, by the end of this year.

Simon Scholes: The AEP profile is consistent with the adults, and the initial data suggests that we see even a more favorable safety profile in the repositive patients or participants, which is in line with what we published in around our phase one data where we basically described our so-called re-vaccination challenge where people were in parenthesis over-vaccinated with the vaccine itself. And of course, as we have done for the entire study, the independent DSMB has not identified any safety concerns associated with the vaccine.

Simon Scholes: So now, looking forward, the phase four alignment is, of course, currently the number one topic that we are dealing with. It is the reason for why we got a performance on the Purdue for days in the first place. We are working very collaboratively with the FDA to align on post-apolar phase four requirements. And this is not an easy and endeavor for both parties, because this phase four alignment and the design of the phase four activities is likely to set two standards for outbreak disease indications on the FDA accelerator pooled pathways.

Thomas Lingelbach: So now, looking forward, the phase four alignment is, of course, currently the number one topic that we are dealing with. It is the reason for why we got a performance on the Purdue for days in the first place. We are working very collaboratively with the FDA to align on post-apolar phase four requirements. And this is not an easy and endeavor for both parties, because this phase four alignment and the design of the phase four activities is likely to set two standards for outbreak disease indications on the FDA accelerator pooled pathways.

Multivalent targeting the six most prevalent serotypes, causing lyme disease in the United States in Europe , because we wanted to make sure that we have a vaccine for people living in going to both sides of the Atlantic.

It is targeting the altered surface protein <unk> and hence follows an established mechanism of action for Lyme disease vaccine and therefore has also a high degree of derisking associated with that effect.

The program operates under fast track designation granted by the U S FDA.

Thomas Lingelbach: Adolescent Phase 3 trial. I mentioned already that this trial is important, supports potential label expansion and licensure in Brazil, is funded by CIPI, and also an important part of the data needs to be included and will be included in the EMA submission. With regard to anticipated future trials, we are planning for co-vaccination, pediatric, and special populations, and then of course, execution on the Phase 4 program and Phase 4 effectiveness. So when we look at the market, on page 11 of the presentation, I mentioned it briefly, we have travelers from non-endemic regions, high complementary, highly complementary with our existing travel portfolio, significant need, as we see more and more outbreaks, including Europe and the Americas.

July 2017.

Simon Scholes: Nothing exists today in this regard, and therefore, we are breaking new ground here. We have additional studies ongoing, antibody persistent study. You know that we are following the cohort here for five years, because we want to show that after seeing the shot that there's long protection, we reported the 12-month data in December and the 24-month data I expected logically by the end of this year. At the lesson phase three trial, I mentioned already that this trial is important to support potential label expansion and licensure in Brazil. It's funded by TIPI and also an important part of the data needs to be included and will be included in the EMAs of Michigan.

Thomas Lingelbach: Nothing exists today in this regard, and therefore, we are breaking new ground here. We have additional studies ongoing, antibody persistent study. You know that we are following the cohort here for five years, because we want to show that after seeing the shot that there's long protection, we reported the 12-month data in December and the 24-month data I expected logically by the end of this year. At the lesson phase three trial, I mentioned already that this trial is important to support potential label expansion and licensure in Brazil. It's funded by TIPI and also an important part of the data needs to be included and will be included in the EMAs of Michigan.

As mentioned before.

We have demonstrated strong immunogenicity results.

Across three different phase two studies.

Which included also pediatric data overall.

We see very strong data here and.

I think that's something especially the strong amnestic responses from booster response.

Vaccine that might need a booster either annually or at.

A longer cadence.

Remains a very.

Portal resolved.

And.

And this is.

Another.

Key step towards a potential vaccine solution.

Thomas Lingelbach: and Peter Buhler. We are planning for co-explanation, pediatric special populations, and then, of course, execution on the phase 4 program and phase 4 effectiveness in endemic settings. So, when we look at the market, page 11 of the presentation, I mentioned it briefly, we have the travelers from nonendemic regions, high complimentary, highly complimentary with our existing travel portfolio, significant need, as we see more and more outbreaks, including Europe and the Americas.

In this field of high high unmet medical need.

On the phase III efficacy study itself.

We are receiving many questions around this study.

So therefore, let me.

Repeat again, the key cornerstones of the study.

Around 9000 participants create a five years of age so literally we cover the vast majority of the target population.

Thomas Lingelbach: We see a military opportunity here as well for troop stations in areas with the risk of chicken gunya and, of course, in areas where we need to prepare for potential outbreaks or get already responses during our. We are working, as mentioned before, with SEPI and the Institute of Putantan. I'm very happy with this collaboration overall.

And.

We are including people at high risk of Lyme disease by residents or and or occupational or occasional activities.

In the U S and Canada and in Europe , We are randomized one to one against our feeble and two to one U S versus non U S.

With regards to the primary endpoint primary endpoint is.

Thomas Lingelbach: So, in a nutshell, we continue to be absolutely excited about this first chicken polio vaccine that hopefully is going to make it to market. And we are looking forward to our PDUFA date and the approval of this vaccine in the United States first, and then in other countries there are.

The rate of confirmed Lyme disease cases, after two consecutive seasons, meaning after completion of the full primary season primary serious story, meaning three doses plus the booster dose and in this part of the secondary endpoints. We of course look at the efficacy after priming with <unk>.

Thomas Lingelbach: So, in a nutshell, we continue to be absolutely excited about this first chicken guinea vaccine that hopefully is going to make it to market, and we are looking forward to our Pudufa date and the approval of this vaccine in the United States first, and then in other countries thereafter.

<unk> doses.

Amongst other secondary endpoints as defined in the phase III protocol.

Following the discontinuation last year.

Thomas Lingelbach: Yeah, when we look at our Lyme disease program, our program VLA-15 is the only Lyme disease program in advanced clinical development today. We had multiple, you know, phase 2 studies, as you know, including first pediatric and other lessons. Data, we have currently the phase 3 ongoing called study valor, and we have partnered here with Pfizer, and this partnership with Pfizer is a very fruitful, very constructive partnership that has continued now for a number of years, and we have disclosed at multiple occasions the terms under which this exclusive worldwide partnership with Pfizer operates.

For one part of the study of one cohort of the study that was run through a specific set of study centers.

Thomas Lingelbach: Yeah, when we look at our Lyme disease program, our program VLA 15 is the only Lyme disease program in advanced clinical development today. We had multiple, you know, phase two studies, as you know, including first data on pediatric and adolescents; we currently have a phase three ongoing called Study Valor, and we have partnered here with Pfizer, and this partnership with Pfizer is a very fruitful, very constructive partnership that has continued now for a number of years, and we have disclosed at multiple locations the terms under which this inclusive worldwide partnership with Pfizer operates.

We have now split into two cohorts still under the roof of one study.

You see the enroll participants cohort one in blue.

Here you see the three.

Doses months, given it months zero to six.

And.

The booster in.

After 18 months, so basically this cohort.

<unk> been completely enrolled.

It is now completing the tick season two.

2023, and will be given the booster shot.

Year.

And the core tool is rolling.

Thomas Lingelbach: By way of reminder, with regards to this vaccine, it's a recombinant protein vaccine candidate, multivalent targeting the six most prevalent zero-types causing Lyme disease in the United States in Europe, because we wanted to make sure that we have a vaccine for people's living and going to both sides of the Atlantic. It is targeting the auto-surface protein A of Lyme Boraliosis, and hence follows an established mechanism of action for Lyme disease vaccine, and therefore has also a high degree of derisking associated with that effect.

And you see.

Zero to six and then the booster and tick season in 2025.

Fiber aims to submit the regulatory applications in the U S and Europe in 2026 subject to positive data, which.

We hope to see at the end of 2025 after the completion of the 2025 tick season.

Yeah, let me turnover to CCAR.

You know that.

<unk>.

Has a CCAR vaccine in its R&D portfolio for a number of years, we passed the development program.

Thomas Lingelbach: The program operates on the fastest destination granted by the US FDA in July 2017. As mentioned before, we have demonstrated strong immunogenicity results across three different phase two studies, which included also pediatric data. Overall, we see very strong data here, and I think that's something, especially the strong and domestic responses, strong booster response, for a vaccine that might need a booster either annually or at a longer cadence remains a very important result, and this is another key step towards a potential vaccine solution in this field of high, high-unmade medical Needs.

Thomas Lingelbach: By way of reminder, with regard to this vaccine, it's a recombinant protein vaccine candidate, multivalent, targeting the six most prevalent types causing Lyme disease in the United States and Europe, because we wanted to make sure that we had a vaccine for people living and traveling on both sides of the Atlantic. It targets the altered surface protein A of Lyme borreliosis and hence follows an established mechanism of action for a Lyme disease vaccine and therefore has a high degree of derisking associated with it.

When we we focused our resources towards the Covid vaccine development.

Now that the corporate development until Covid vaccine development is behind us.

We are free.

Activated our CCAR program, because we believe that there is a significant unmet medical need.

And basically what we see here is also.

Our highly complementary.

Potential asset when it comes to leveraging our existing inactivate it whole virus platform that we initially developed for Japanese encephalitis, and then further enhanced and modified for our Covid vaccine BLA 2001, so it can be a very nice black.

Thomas Lingelbach: The program operates under fast-acstac assassination approval granted by the US FDA in July 2017. As mentioned before, we have demonstrated strong immunogenicity results across three different phase two studies, which included also pediatric data. Overall, we see very strong data here, and I think that's something, especially the strong anesthetic response, and a booster response for a vaccine that might need a booster either annually or at a longer interval remains a very important result.

Play onto our existing platform at the same time this is a.

Thomas Lingelbach: On the phase three efficacy study itself, we are receiving many questions around the study. So therefore, let me repeat again the key connoisseurs of this study. Around 9,000 participants created five years of age. So literally we cover the vast majority of the target population. And we are including people at high risk of Lyme disease by residents or and or occupational or recreational activities in the US, Canada, and in Europe. We are randomizing one-to-one against a sea bowl and two-to-one US versus non-US.

Vaccine candidate that would also fall under an accelerated approval pathway for which we are now with the help of our chip development generating.

<unk> generated a lot of expertise and capabilities.

So thats. The reason number two reason number three is actually that.

But we need the desire to target product profile as articulated by WH Ole.

All of that led us to our decision.

To continue our restart.

With our CCAR.

Thomas Lingelbach: And this is another key step towards a potential vaccine solution in this field of high, high unmet medical needs. On the phase three efficacy study itself, we are receiving many questions around the study. So therefore, let me repeat again the key cornerstones of this study. Around 9,000 participants create five years of age.

<unk> with <unk>.

<unk> start as early as early next year.

Yeah. When you look at our portfolio, we are working on a number of things in the preclinical arena.

Thomas Lingelbach: With regards to the primary end point, the rate of confirmed Lyme disease cases after two consecutive tick seasons, meaning after completion of this full primary season, a primary serious story, meaning three doses plus the booster dose. As part of the secondary end point, we of course look at the efficacy after priming with three doses amongst other secondary end points as defined in the phase three protocols. Following the discontinuation last year for one part of the study, a one cohort of the study, that was run through a specific set of study centers.

I would like to point out.

H MPV.

For which we completed our.

Our preclinical proof of concept successfully.

Given that.

That the vaccine development environment is transitioning towards.

And RSP HBV combination vaccine.

Thomas Lingelbach: So literally, we cover the vast majority of the target population, and we are including people at high risk of Lyme disease through residents or occupational or recreational activities in the US, in Canada, and in Europe. We are randomizing one-to-one against Acebo and two-to-one US versus non-US. With regard to the primary endpoint, the primary endpoint is the rate of confirmed Lyme disease cases after two consecutive tick seasons, meaning after completion of the full primary season, primary series, sorry, meaning three doses plus the booster dose.

We have initiated partnering discussions and.

And those discussions are currently underway.

And partnering is under evaluation.

Our lead candidates in the preclinical arena remains EBV Epstein Barr virus. We are currently in the final antigen identification phase.

Thomas Lingelbach: We have now split into two cohorts still under the roof of one study. You see the enrolled participants cohort one in blue. Here you see the three doses given at month zero, two and six. And the booster in after 18 months, so basically this cohort has been completely enrolled. We are now completing the tick season 2023 and will be given the booster shot next year. And the cohort tool is rolling and you see zero, two, six, and then the booster and tick season 2025. Pfizer aims to submit the regulatory applications in the US and Europe in 2026 subject to positive data, which we hope to see at the end of 2025 after the completion of the 2025 tick season.

Thomas Lingelbach: We have now split into two cohorts still under the roof of one study. You see the enrolled participants cohort one in blue. Here you see the three doses given at month zero, two and six. And the booster in after 18 months, so basically this cohort has been completely enrolled. We are now completing the tick season 2023 and will be given the booster shot next year. And the cohort tool is rolling and you see zero, two, six, and then the booster and tick season 2025.

And hope to have a final product candidate designed.

By the end of this year.

Of course, we are working on a number of other things in the preclinical shop.

But but we are giving of course priority and focus.

And I would like to remind you that.

Our overall R&D portfolio management always strikes towards.

Thomas Lingelbach: And as part of the secondary endpoints, we will, of course, look at efficacy after priming with three doses, amongst other secondary endpoints as defined in the phase three protocol. Following the discontinuation last year of one part of the study, one cohort of the study, that was run through a specific set of study centers. We have now split into two cohorts, still under the roof of one study. You see the enrolled participants cohort, one, one. In blue, here you see the three doses given to month zero, two, and six, the booster given after 18 months. So basically, this cohort has been completely enrolled. We are now completing the tick season, 2023, and will be given the booster shot next year. And the cohort, too, is rolling, and you see 026.

Delivering highly differentiated assets.

First in class best in class owning costs and with that I would like to hand over to Peter to provide us the financial report and take us through the rest of the presentation. Thank you.

Thank you Thomas and good morning, or good afternoon to all of you.

Now, let's look at the financial review of the first half of fiscal year 2023.

Thomas Lingelbach: Pfizer aims to submit the regulatory applications in the US and Europe in 2026 subject to positive data, which we hope to see at the end of 2025 after the completion of the 2025 tick season.

<unk> sales reached $69 7 million and grew 109% over prior year.

Constant currency productivity grew 113, 6%.

The strong growth is driven by all product lines with HCR are growing at a 150% at constant currency to call at 213% at third party productive 46, 8%. This excellent sales performance is primarily driven by the recovery of the private travel market, but also by price increases across the board.

Thomas Lingelbach: Yeah, let me turn over to Zika. You know that Valeva has a Zika vaccine in its R&D portfolio for a number of years. We post the development program when we focused our resources towards the COVID vaccine development. Now that the COVID development or COVID vaccine development is behind us. We have we activated our Zika program because we believe that there is a significant unmet medical need. And basically what we see here is also a highly complimentary potential asset when it comes to leveraging our existing inactivated whole virus platform that we initially developed for Japanese encephalitis and then further enhanced and modified for our COVID vaccine in BLA 2001.

In the first half year. We are also still recorded residual COVID-19 vaccine sales related to a pre existing contract with the kingdom offering.

Moving onto the income statement.

Thomas Lingelbach: Now that the COVID development or COVID vaccine development is behind us. We have we activated our Zika program because we believe that there is a significant unmet medical need. And basically what we see here is also a highly complimentary potential asset when it comes to leveraging our existing inactivated whole virus platform that we initially developed for Japanese encephalitis and then further enhanced and modified for our COVID vaccine in BLA 2001. So it can be a very nice black and play onto our existing platforms.

Total revenues reached $73 7 million euros versus $93 2 million euros in the first half year of 2022, a decrease of 29%.

Thomas Lingelbach: At the same time, this is a vaccine candidate that would also fall under an accelerated pool pathway for which we are now with the behalf of our tick development, generating a lot of expertise and capabilities. So that's the reason number two, reason number three is actually that we need the desired target product profile as articulated by WHO.

In the prior year, while enable has recognized other revenues related to its cool with program, which explains this decrease.

Thomas Lingelbach: And then the booster in tick season 2025. Pfizer aims to submit regulatory applications in the US and Europe in 2026, subject to positive data, which we hope to see at the end of 2025 after the completion of the 2025 tick season. Let me turn over to Zika. You know that Valneva has had a Zika vaccine in its R&D portfolio for a number of years. We paused the development program when we refocused our resources towards COVID vaccine development.

Looking at expense, we observe a significant decrease in cost of goods and services from $171 5 million euros in the first half of 2022 to $53 8 million euros in the current fiscal half year first half year.

Prior years cost of goods and services.

Impacted by one off items related to wind down of our COVID-19 program.

Thomas Lingelbach: So it can be a very nice black and play onto our existing platforms. At the same time, this is a vaccine candidate that would also fall under an accelerated pool pathway for which we are now with the behalf of our tick development, generating a lot of expertise and capabilities.

The gross margin of both the axion two crore is still below pre COVID-19 levels.

It is amongst others adversely impacted by external batch write offs in our Scottish manufacturing sites and high sales volumes and indirect markets, where our average selling prices lower than indirect markets.

Thomas Lingelbach: Now that the COVID development or COVID vaccine development is behind us, we have freed up, and activated our CECA program because we believe that there is a significant unmet medical need. And basically, what we see here is also a highly complementary potential asset when it comes to leveraging our existing inactivated whole virus platform that we initially developed for Japanese encephalitis and then further enhanced. and modified for our COVID vaccine BLA 2001. So it can be a very nice plug-in play onto our existing platforms.

In the first half year. We also recognized initial cost of goods related to the launch preparation of our chikungunya vaccine candidate.

Thomas Lingelbach: So that's the reason number two, reason number three is actually that we need the desired target product profile as articulated by WHO. All of that led us to our decision to continue or restart with our Zika development with a thrice start as early as possible, for the next year.

Research and development expense decreased from $51 9 billion euros in 2022 to 26 million euros in the first half year of fiscal year 2023 that decrease is again driven by the lower spend on labor Covid vaccine programs.

Thomas Lingelbach: All of that led us to our decision to continue or restart with our Zika development with a thrice start as early as possible, for the next year.

At the same time the cost related to the CCAR vaccine candidates increased as the company has been working towards re initiation of our clinical development program.

Thomas Lingelbach: Yeah, when you look at our portfolio, we are working on a number of things in the preclinical arena.

Marketing and distribution expense increased significantly year over year from $7 8 million euros to 20 million euros the.

Thomas Lingelbach: I would like to point out HMPV for which we completed our preclinical proof of concept successfully, given that the vaccine development environment is transitioning towards an RSE, HMPV combination vaccine. We have initiated partnering discussions and those discussions are currently underway and partnering is under evaluation. Our lead candidates in the preclinical arena remain EBV, Epstein Barbaris. We are currently in the final antigen identification phase and hope to have a final product candidate designed by the end of this year.

Thomas Lingelbach: At the same time, this is a vaccine candidate that would also fall under an accelerated pool pathway, for which we are now, with the help of our chick development program, generating a lot of expertise and capabilities. So that's reason number two.

The increase is related to higher prelaunch cost for our chikungunya vaccine candidate that more than tripled versus prior year. In addition, <unk> spend has had it.

Positive impact related to our share of employee share based compensation.

G&A expense increased from 60 million euros in 2022 to 2020 to $22 9 million euros in 2023.

Thomas Lingelbach: reason number three is that we need the desired target product profile as articulated by WHO. All of that led us to our decision to continue or restart with our TECA development probably next year. Yeah, when you look at our portfolio, we are working on a number of things in the preclinical arena. I would like to point out HMPV, for which we completed our preclinical proof of concept successfully, given that the vaccine development environment is transitioning towards an RSC, HMPPV, the combination vaccine.

The prior year, all expense lines had a favorable effect.

For a total of $19 5 million euros related to employee share based compensation due to the share price development.

The increase in other income from $3 6 million to 14 million.

Mainly related to the recognition of a grant received from Scottish Enterprise.

Overall, the company recorded an operating loss of negative 35 million euros versus $150 4 million in the prior year adjusted EBITDA improved to 136 million euros to 28 million euros negative.

Thomas Lingelbach: Of course, we are working on a number of other things in the preclinical shops, but we are giving, of course, priority and focus. And I would like to remind you that our overall R&D portfolio management always strikes towards delivering highly differentiated assets. First in class, best in class or only in class.

Thomas Lingelbach: And I would like to remind you that our overall R&D portfolio management always strikes towards delivering highly differentiated assets. First in class, best in class or only in class.

Finally reported a cash and cash equivalents at June 32023 of $204 4 million euros compared to $289 4 million at the end of December 2022.

Thomas Lingelbach: We have initiated partnering discussions, and those discussions are currently underway; partnership is under evaluation. Our lead candidate in the Precunity Arena remains EBV, Epstein Bar-Vars. We are currently in the final antigen identification phase and hope to have a final product candidate designed by the end of this year. Of course, we are working on a number of other things in the preclinical laboratories, but we are giving, of course, priority and focus. And I would like to remind you that our overall R&D portfolio management always strikes towards delivering highly differentiated assets, first in class, best in class, or only. And with that, I would like to hand over to Peter to provide us with the financial report and take us through the rest of the presentation.

This position as mentioned does not include the increased debt facility of $100 million of which $50 million withdrawal drawn down in the third quarter of 2023.

Peter Buhler: And with that, I would like to hand over to Peter to provide us the financial report and take us to the rest of the presentation. Thank you. Thank you Thomas and good morning and good afternoon to all of you.

Peter Buhler: And with that, I would like to hand over to Peter to provide us the financial report and take us to the rest of the presentation. Thank you.

Peter Buhler: Thank you Thomas and good morning and good afternoon to all of you. Now let's look at the financial review of the first half of fiscal year 2023. Product sales reached 69.7 million euros and grew 109 percent over a year. At constant currency, product sales grew 113.6 percent. The strong growth is driven by all product lines, with XERO growing at 150 percent at constant currency, 2 Coral at 213 percent and third party product at 46.8 percent.

Now moving to slide 21 to review our guidance for the fiscal year.

Peter Buhler: Now let's look at the financial review of the first half of fiscal year 2023. Product sales reached 69.7 million euros and grew 109 percent over a year. At constant currency, product sales grew 113.6 percent. The strong growth is driven by all product lines, with XERO growing at 150 percent at constant currency, 2 Coral at 213 percent and third party product at 46.8 percent. This excellent sales performance is primarily driven by the recovery of the private travel market, but also by price increases across the board. In the first half year, we also still recorded residual COVID-19 vaccine sales related to a pre-existing contract with the Kingdom of Bahrain.

We Richard we reiterate our guidance for revenues and other income communicated early this year, we expect productivity to reach between 130 to 150 million euros and other income to reach 92 to 110 billion euros.

We also reiterate our guidance of R&D investment expected, principally $3 70 and $90 million.

This concludes the finance section of this call and now let's move to slide 23, looking at the upcoming catalyst and news flow.

Peter Buhler: This excellent sales performance is primarily driven by the recovery of the private travel market, but also by price increases across the board. In the first half year, we also still recorded residual COVID-19 vaccine sales related to a pre-existing contract with the Kingdom of Bahrain. Moving on to the income statements, total revenues reached 73.7 million euros versus 93.2 million euros in the first half year of 2022. A decrease of 20.9 percent. In the prior year, the label had recognized other revenues related to its COVID program, which explains this decrease.

Yeah.

Our VLA $50 53 program, we still anticipate the Purdue faction date.

Potential BLA approval at the end of November .

We also expect to release at all lessens Immunogenicity results in November 2023.

Peter Buhler: Moving on to the income statements, total revenues reached 73.7 million euros versus 93.2 million euros in the first half year of 2022. A decrease of 20.9 percent. In the prior year, the label had recognized other revenues related to its COVID program, which explains this decrease. Looking at expense, we observe a significant decrease in cost of goods and services from 171.5 million euros in the first half of 2022 to 53.8 million euros in the current fiscal first half year.

Progress towards and submit to actually EMA regulatory submission in Q4.

Peter Buhler: Thank you, Thomas, and good morning and good afternoon to all of you. Now let's look at the financial review of the first half of fiscal year 2023. Product sales reached 69.7 million euros and grew 109% over the prior year. At constant currency, product sales grew 113.6%.

Also in Q4, we will report additional 24 months antibody persistence data and we expect the ACF recommendation for Q1 in 2024.

Peter Buhler: Looking at expense, we observe a significant decrease in cost of goods and services from 171.5 million euros in the first half of 2022 to 53.8 million euros in the current fiscal first half year. Prior years cost of goods and services were heavily impacted by one of items related to the wind down of our COVID-19 program. The growth margin of both XERO and Ducral is still below pre-COVID levels and is among others adversely impacted by XERO batch ride offs in our scoffish manufacturing sites and high sales volumes in indirect markets where our average selling price is lower than indirect months.

On BLA 15.

We expect the trial execution to continue with the recruitment of the cohort two in Atlanta for 2024 peak seasons as explained by Thomas earlier during this call.

Peter Buhler: Prior years cost of goods and services were heavily impacted by one of items related to the wind down of our COVID-19 program. The growth margin of both XERO and Ducral is still below pre-COVID levels and is among others adversely impacted by XERO batch ride offs in our scoffish manufacturing sites and high sales volumes in indirect markets where our average selling price is lower than indirect months. Roberts. In the first half year, we also recognized initial cost of goods related to the launch preparation of our Jacob Gooney vaccine candidate.

Additional news flow.

We expect.

Imminently to announce a new Dod contract for zero.

And then potential granting of FDA priority review.

Peter Buhler: The strong growth is driven by all product lines, with Xero growing at 150% at constant currency, Duke Coral at 213%, and third-party products at 46.8%. This excellent sales performance is primarily driven by the recovery of the private travel market but also by price increases across the board. In the first half year, we also still recorded residual COVID-19 vaccine cells related to a pre-existing contract with the Kingdom of Bahrain.

As we obtain dvla $50 53 BLA approval.

Also ethanol as already mentioned, we expect the initiation of our phase one clinical trial of Zika.

Peter Buhler: Roberts. In the first half year, we also recognized initial cost of goods related to the launch preparation of our Jacob Gooney vaccine candidate. Research and development expense decreased from 51.9 million euros in 2022 to 26 million euros in the first half year of fiscal year 2023. That decrease is again driven by the lower spend on Valneva COVID vaccine programs, and at the same time, the cost related to the CCA vaccine candidate increased as the company has been working towards a reinitiation of our clinical development program.

The first quarter of 2024, and the advancement of selected preclinical programs mentioned just before by Thomas.

With this.

Peter Buhler: Research and development expense decreased from 51.9 million euros in 2022 to 26 million euros in the first half year of fiscal year 2023. That decrease is again driven by the lower spend on Valneva COVID vaccine programs, and at the same time, the cost related to the CCA vaccine candidate increased as the company has been working towards a reinitiation of our clinical development program. Marketing and distribution expense increased significantly year over year from 7.8 million euros to 20 million euros.

We really save on labor poised for substantial growth.

Primarily led by new product launches, we see in the next six to 12 months of course really $50 53, reaching the market and then longer term really 15, reaching the market and for labor to actually be able to record significant milestones and revenue.

Peter Buhler: Marketing and distribution expense increased significantly year over year from 7.8 million euros to 20 million euros. The increase is related to higher pre-launch costs for our Jacob Gooney vaccine candidates that more than triple versus prior year. In addition, prior year spend has had a positive impact related to our share employee share base compensation. G&A expense increased from 16 million euros in 2022 to 22.9 million euros in 2023. In the prior year, all expense lines had a favorable effect for a total of 19.5 million euros related to employee share base compensation due to the share price development.

As milestone revenues additional growth drivers.

Of course to continue to recovery of the travel market that will be reflected in substantial growth still in ECR on to Corral as mentioned that EOD contract towards zero.

Peter Buhler: The increase is related to higher pre-launch costs for our Jacob Gooney vaccine candidates that more than triple versus prior year. In addition, prior year spend has had a positive impact related to our share employee share base compensation. G&A expense increased from 16 million euros in 2022 to 22.9 million euros in 2023. In the prior year, all expense lines had a favorable effect for a total of 19.5 million euros related to employee share base compensation due to the share price development.

Peter Buhler: Moving on to the income statements, total revenues reached 73.7 million euros versus 93.2 million euros in the first half of 2022, a decrease of 20.9%. In the prior year, Valnevo had recognized other revenues related to its COVID program, which explains this decrease. Looking at expenses, we observe a significant decrease in the cost of goods and services from 171.5 million euros in the first half of 2022 to 53.8 million euros in the current fiscal first half year.

Then potential label expansion expenses were <unk> 53 after the initial approval in other and then of course longer term.

In licensing or acquisition.

In of additional clinical candidates and then potential.

Market launch of course of <unk>.

Licensed programs.

So this concludes this part of the call I would now like to hand back to Roger to open the Q&A session.

Peter Buhler: The increase in other income from 3.6 million euros to 14 million euros is mainly related to the recognition of a grant received from Scottish enterprise. Overall, the company records an operating loss of negative 35 million euros versus 150.4 million euros in the prior year. A trusted EBTA improves from 136 million euros to 28 million euros negative. Finally, we reported a cash and cash equivalence at June 30, 2023 of 204.4 million euros compared to 289.4 million euros at the end of December 2022. This position, as mentioned, does not include the increased debt facility of $100 million of which $50 million were drawn down in the third quarter of 2023.

Thank you so as a reminder to ask a question you will need to press star one and one on your telephone and wait for your name to be announced until we've try. Your question again. Please press star one and one again once again, please press star one and one for any question and wait for your name to be announced until we've got your question again, Please press <unk>.

One and one again.

Peter Buhler: Prior years' cost of goods and services was heavily impacted by one-off items related to the winding down of our COVID-19 program. The gross margin for both Iqzioro and Dukoral is still below pre-COVID levels and is, amongst others, adversely impacted by Iqzioro batch write-offs at our Scottish manufacturing site and high sales volumes in indirect markets where our average selling price is lower than in indirect markets In the first half year, we also recognized the initial cost of goods related to the launch preparation of our Jikungunya vaccine candidates. Research and Development Expense decreased from 51.9 million euros in 2022 to 26 million euros in the first half year of fiscal year 2023.

Please standby, while we compile the Q&A roster this will take a few moments.

Peter Buhler: Finally, we reported a cash and cash equivalence at June 30, 2023 of 204.4 million euros compared to 289.4 million euros at the end of December 2022. This position, as mentioned, does not include the increased debt facility of $100 million of which $50 million were drawn down in the third quarter of 2023.

Okay.

We are now going to proceed with our first question.

And the question is come from the line of Maury Raycroft from Jefferies. Please ask your question.

Hi, Thanks for taking my questions.

To ask one on our chikungunya.

What are your latest thoughts on what a potential phase four outbreak study might look like in terms of size geographic areas or any other details and I'm. Also wondering is the outbreak study is something that <unk> could potentially want to see for a recommendation or how do you view that study in the context of ACI.

Yes.

Peter Buhler: This concludes the finance section of this call and now let's move to slide 23 looking at coming catalysts and news flow. On our VLA 1553 program, we still anticipate the Purdue fraction date and the potential VLA approval at the end of November. We also expect to release at our lessons immunogenicity result in November 2023 and progress to its and submit actually email regulatory submission in Q4. Also in Q4, we report additional 24 months antibody persistent data and we expect the ASAP recommendation for Q1 in 2024.

Hi, Morry.

You of course will understand that.

Given that we are in the middle of.

Agreeing and aligning the phase four activities with the FDA. There is the only very little I can say in public around that what I can say sell it is.

Under the accelerated approval pathway, we need to show effectiveness.

<unk>.

Real life setting meaning in endemic countries.

Peter Buhler: That decrease is again driven by the lower spend on Valneva COVID vaccine programs, and at the same time, the cost related to the SECA vaccine candidate increased as the company has been working towards reinitiation of our clinical development program. Furthermore, marketing and distribution expense increased significantly year over year from 7.8 million euros to 20 million euros. The increase is related to higher pre-launch costs for our Chicungunya vaccine candidates that more than tripled versus the prior year.

And ideally during an outbreak situation.

And and.

So therefore, you need to get prepared for that.

And you need to have also.

Peter Buhler: On VLA 15, we expect the trial execution to continue with the recruitment of the cohort 2 in advance of the 2024 tick season as explained by Thomas earlier during this call, additional news flow. We expect, imminently, to announce a new DOD contract for Xero, and then potential granting of FDI prior to review voucher as we obtain the BLA 1553 BLA approval. Also, as I already mentioned, we expect initiation of our phase one clinical trial of Zika in our Q in the first quarter of 2024, and the advancement of selected pre-clinical programs mentioned just before by Thomas.

<unk> populations accumulate meaning adolescence as well as adults.

Now.

Historically.

<unk> have not been.

Awaiting for waiting final effectiveness data, which sometime take many many years.

To provide their vaccine recommendations.

And at this point in time, we do not expect this to happen. So we have a strong database that we are going to present <unk> has presented and we'll continue to prevent to ACP.

And that's.

Peter Buhler: In addition, PIA spend has had a positive impact related to our employee share-based compensation. G&A expense increased from 16 million euros in 2022 to 22.2.2.9 million euros in 2023. In the prior year, all expense lines had a favorable effect for a total of 19.5 million euros related to employee share-based compensation due to the share price development. The increase in other income from 3.6 million euros to 14 million euros is mainly related to the recognition of a grant received from Scottish Enterprise.

And Thats basically.

A strong.

Package.

More I can at this point in time, Unfortunately, not say, but soon we will of course be.

Peter Buhler: With this, we really see Valneva poised for substantial growth. Primarily led by new product launches. We see in the next six to 12 months, of course, VLA 1553 reaching the market, and then longer term VLA 15 reaching the market and for Valneva to actually be able to record significant milestones and revenue and milestone revenues. Additional growth drivers, of course, the continuous recovery of the travel market that will be reflected in a substantial growth still in Xero and Ducorral, as mentioned, the DOD contract for Xero, and then potential label expansion for VLA 1553 after the initial approval in adults.

Be in a position to explain what we're going to do.

And then I hope for your patients until then.

Joshua Drumm: And then, of course, longer term in licensing or acquisition of additional clinical candidates, and then potential market launch, of course, of these in licensed programs. So, this concludes this part of the call and would like now like to hand back to Razia to open the Q and A session.

Okay, yes, it makes sense.

I was going to ask one other question about chikungunya and you've talked about the different revenue streams, including travel sales in the U S and EU military and potentially.

Joshua Drumm: Thank you, sir.

Potential stockpiling contracts and then endemic can you talk about the potential cadence of the launch in terms of these different revenue streams. How are you preparing currently for the launch and.

Have you thought of when you might give guidance on on sales for some of these groups post launch.

That's an excellent question Maury. So so first of all I mean as you know we have been prioritizing the travel and let's say <unk> in.

Peter Buhler: Overall, the company records an operating loss of negative 35 million euros versus 150.4 million euros in the prior year. Adjusted EBTA improved from 136 million euros to 28 million euros. Finally, we reported a cash and cash equivalent at June 30th of 204.4 million euros compared to 289.4 million euros at the end of December 2022. This position, as mentioned, does not include the increased debt facility of $100 million, of which $50 million were drawn down in the third quarter of 2023.

Operator: And then, of course, longer term in licensing or acquisition of additional clinical candidates, and then potential market launch, of course, of these in licensed programs. So, this concludes this part of the call and would like now like to hand back to Razia to open the Q and A session. Thank you, sir. As a reminder, to ask a question, you will need to pre-stow one and one on your telephone and wait for your name to be announced.

The highly developed countries.

Meaning we started with the U S, where we see by far the single largest market opportunity in terms of revenue.

Joshua Drumm: As a reminder, to ask a question, you will need to pre-stow one and one on your telephone and wait for your name to be announced. Do we draw your question? You can please pre-stow one and one again. Once again, please pre-stow one and one for any question and wait for your name to be announced. Do we draw your question? You can please pre-stow one and one again. Please stand by where we compile the Q and A roster. This will take a few moments. Thank you.

Then followed by Canada and EMR. So this is the cadence. So you know that the Canadian filing got accepted we disclose that next step is of course EMA.

Operator: Do we draw your question? You can please pre-stow one and one again. Once again, please pre-stow one and one for any question and wait for your name to be announced. Do we draw your question? You can please pre-stow one and one again. Please stand by where we compile the Q and A roster. This will take a few moments. Thank you.

And then we will go.

Immediately into Brazil.

And we are currently looking also.

Into the next most.

Most important LMR territory, which of course, it's Asia.

Joshua Drumm: We are now going to proceed with our first question.

Operator: We are now going to proceed with our first question.

So this is probably the cadence of how we got to.

Peter Buhler: Now moving to slide 21 to review our guidance for the fiscal year. We reiterate our guidance for revenues and other income communicated early this year. We expect product sales to reach between 130 and 150 million euros and other income to reach 90 to 110 million euros.

We're going to approach it.

Murray Raycroft: And the questions come from the line of Murray Ray Croft from Jeffries. Please answer your question. Hi, thanks for taking my questions.

Maurice Raycroft: And the questions come from the line of Murray Ray Croft from Jeffries. Please answer your question. Hi, thanks for taking my questions.

Regulatory and licensure perspective.

With regards to outpace that stockpiling I mean, that's not dedicated.

Thomas Lingelbach: I'm going to ask one on Chikin-Gunia. What are your latest thoughts on what a potential phase for outbreak study might look like in terms of size, geographic areas, or any other details? And I'm also wondering is the outbreak study something that ACIP could potentially want to see for a recommendation or how do you view that study in the context of ACIP? Hi, Murray. You of course will understand that given that we are in the middle of agreeing and aligning the phase 4 activities with the FDA, there's only very little I can say in public around that.

Regulatory process needed for that.

The highly developed countries, having said that we have a quite significant number of initiatives ongoing.

Tool potentially.

Attract a stockpiling dizziness that this is the part where we felt satisfied not very compatible providing any.

Peter Buhler: We also reiterate our guidance on R&D investment, expecting the principle between 70 and 90 million euros. This concludes the finance section of this call, and now let's move to slide 23, looking at upcoming catalysts and news flow. On our VLA 1553 program, we still anticipate the Purdue action date and the potential VLA approval at the end of November. We also expect to release the adolescent immunogenicity result in November 2023 and progress to it and submit to email regulatory submission in Q4.

Guidance on.

How big this opportunity.

Might or might not be.

But.

There is a lot going on and.

And we hope that we will also.

<unk> done business in the second tool.

Thomas Lingelbach: What I can say, so it is under the accelerated pool pathway, we need to show effectiveness in a real life setting, meaning in endemic countries, and ideally during an outbreak situation. And so therefore, you need to get prepared for that, and you need to have also different populations included, meaning and the lessons as well as the historically ACIP have not been waiting for or waiting finals effectiveness data, which sometimes take many, many years to provide their vaccine recommendations.

Yeah.

Got it alright, thanks for taking my questions.

We are now going to proceed with our next question.

And the question is come from the line of Jimmy <unk> from <unk> Securities. Please ask your question.

Yeah, Hi, guys. Thanks for taking my questions just a couple really on the numbers.

The loss of the COVID-19 vaccine orders that we're expecting.

On R&D can you just maybe explain what would make you come in at the bottom or the top end of your guidance. Thanks very much.

So yes, thanks for the questions. So on COVID-19.

There is one there is.

Some small residual revenue expected in the second half of the year, but we're mostly done with with COVID-19 in terms of revenues.

Thomas Lingelbach: And at this point in time, we do not expect this to happen. So we have a strong database that we're going to present and have presented and will continue to present to ACIP, and that's basically a strong package. More, I can at this point in time, unfortunately, not say, but soon we will of course be in a position to explain what we're going to do. And then I hope for your patience until then. Okay. Yeah, it makes sense.

In terms of R&D.

Yes, great question and I guess.

Your question really talk to it.

Peter Buhler: Also in Q4, we will report additional 24-month antibody persistence data, and we expect the ASIP recommendation for Q1 in 2024. On VLA 15, we expect the trial execution to continue with the recruitment of cohort 2 in advance of the 2024 tick seasons, as explained by Thomas earlier during this call. Additional news flow, we expect to announce a new DOD contract for XIRO imminently and then possibly the granting of a FDI priority review voucher as we obtain VLA 1553 BLA approval.

The level of spend we see for the first half year compared to the guidance.

Obviously, yes. So we do we were tracking to more towards the lower end of the guidance. When you look at the first half year of course.

And that is where we land ultimately is is I think to launch extent of course.

Driven by <unk>.

Thomas Lingelbach: And I'm just going to ask one other question about chicken guinea. You've talked about the different revenue streams, including travel sales in the US and EU, military and potential stockpiling contracts, and then endemic. Can you talk about the potential cadence of the launch in terms of these different revenue streams? How are you preparing currently for the launch? And have you thought of when you might give guidance on on sales for some of these groups post-launch?

How much do we still spend on the on the ongoing trials in particular.

On chikungunya, but then also of course.

How do how quickly do we accelerate spend on Zika. So that's really the key drivers on the R&D spend and then in addition to that.

Some years it also related tool.

When we actually initiate some of the additional studies for trich.

Peter Buhler: Also, as already mentioned, we expect the initiation of our phase one clinical trial of Zika in our Q in the first quarter of 2024 and the advancement of selected preclinical programs mentioned just before by Thomas. With this, we really see Valneva poised for substantial growth, primarily led by new product launches. We see in the next six to 12 months, of course, VLA 15153 reaching the market, and then, longer term, VLA 15 reaching the market, and Valneva being actually able to record significant milestones and revenue at milestone revenues.

You have seen that we have quite a number of.

The study is planned for chikungunya.

Thomas Lingelbach: Yeah, that's an excellent question, Maurice. So first of all, I mean, as you know, we have been prioritizing the travel and, let's say, outbreak preparedness in the highly developed countries, so meaning we started with the US, where we see by far the single largest market opportunity in terms of revenue, then followed by Canada and EMA. So this is the cadence. So you know that the Canadian filing got accepted. We just closed that.

Of course, we.

Thomas Lingelbach: Next step is of course EMA. And then we will go immediately into Brazil. And we are currently looking also into the next most important LMIC territory, which of course is Asia. So this is probably the cadence of how we're going to we're going to approach this from a regulatory and licensure perspective with regards to outbreak preparedness stockpiling. I mean, that's not a dedicated regulatory process needed for that in the highly developed countries.

And can only start some of the studies once we have gotten the approval of the vaccine. So that's why.

There is a couple of swing factors in there, which all which may.

In fact, the final spend especially with regards to R&D expenses, which we call the direct R&D expenses, meaning external R&D costs with zero et cetera in the fourth quarter of this year.

Great. Thanks very much.

We are now going to proceed with our next question.

And that question comes from the line of Simon <unk> from <unk>. Please ask your question.

Yes, Hello, Thanks for taking my questions.

I've got two.

Peter Buhler: Additional growth drivers, of course, are the continuous recovery of the travel market that will be reflected in substantial growth still in Ixiero and Du Corral. As mentioned, the DOD contract for XIRO and then potential label expansion for 15153 after the initial approval in adults. And then, of course, longer term in licensing or acquisition of additional clinical candidates and then, potential market launch, of course, of these in licensed programs.

First of all I was wondering on the commercial vaccine business if you could.

Tell us how much direct sales was in <unk>.

Q2, I think the figure for Q1 was 71, 6% and I was also wondering if you could quantify the quantify the Bachelor write off on <unk> in Q2.

Thomas Lingelbach: Having said that we have a quite significant number of initiatives ongoing to potentially attract a stockpiling business, you know, that this is the part where we felt so far not very comfortable providing any guidance on how big this opportunity might or might not be. But there is a lot going on, and we hope that we will also attract some business in the segment too. Thanks for taking my question.

Thanks.

Yes, thanks, let's let's start with the second question on batch ride off whilst we're looking for the number on direct sales.

So you will understand that this is something we are not publishing.

We did have the reason why we mentioned it is because it wasn't a higher amount than what we usually see which is really related to the fact that we basically restarting full steam commercial manufacturing.

Samir Devani: We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question.

Covid, but again, we're not we're not disclosing the actual write offs.

In terms of the proportion of <unk>.

Direct sales.

Hum.

Frances.

It was 65% in Q2.

Okay and would you expect the number to stay around that level.

Operator: So this concludes this part of the call. I would now like to hand the call back to Razia to open the Q&A session. Thank you, sir.

Peter Buhler: And the questions come from the land of Samir Divani from our activities. You can ask your question. Yeah, hi guys. Thanks for taking my questions. Just a couple really on the numbers. Is this the last of the COVID-19 vaccine orders that we're expecting? And on R&D, can you just maybe explain what would make you come in at the bottom or at the top end of your guidance? Thanks very much.

Samir Devani: And the questions come from the land of Samir Divani from our activities.

No clearly not so I think the this was unusually high in both Q1 and Q2, we would expect for the remainder of the Youtube with more towards ratios like we saw in the past, especially.

Peter Buhler: You can ask your question. Yeah, hi guys. Thanks for taking my questions. Just a couple really on the numbers. Is this the last of the COVID-19 vaccine orders that we're expecting? And on R&D, can you just maybe explain what would make you come in at the bottom or at the top end of your guidance? Thanks very much.

Operator: Thank you, sir. As a reminder to ask a question, you will need to press store one and one on your telephone and wait for your name to be announced. To withdraw your question, you can please press 1 and 1 again. Once again, please press 1 and 1 for any question and wait for your name to be announced. Do we withdraw your question again, please press 1 and 1 again? Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. We are now going to proceed with our first question, and the questions come from the line of Maury Recroft from Jeffries. Please answer your question.

Military kicking and remember that's yeah.

Okay Yeah.

Yes.

Yeah.

Okay. Thanks very much.

Peter Buhler: So on, yeah, thanks, Samir, for the questions. So on COVID-19, there is some small residual revenue expected still in the second half of the year, but we're mostly done with COVID-19 in terms of revenues. In terms of R&D, yeah, great question. And I guess your question really talks to it's, you know, the level of spend we see for the first half year compared to the guidance. Obviously, yes, so we do, we, you know, we're tracking to more towards the lower end of the guidance when you look at the first half year, of course.

And now going to proceed with our next question.

And our question comes from the line of Jamie actual plan from <unk> BHF. Please ask your question.

Hello, Damien can you. Your line is open please ask your question.

Peter Buhler: And that is, so where we land ultimately is, I think, to a large extent, of course, driven by, you know, how much do we still spend on the ongoing trials, in particular, on Tricungunya, but then also, of course, you know, how quickly do we accelerate spend on Zika? So that's really the key drivers on the R&D spend. And in addition to that, Samir is also related to when we actually going to initiate some of the additional studies for Tric, you have seen that we have quite a number of of studies planned for Chikungunya.

Our next question comes from the line of Damian <unk> from <unk>. Please ask your question.

Yes, Hello can you hear me now next year.

Thank you for taking my questions.

So why do you need to conduct a new phase one why don't you.

Move to the.

The phase two trial.

Tough question and what would be the market potential for <unk> for this vaccine.

Yes, So let me let me start.

To expand a little bit what are we going to do so so basically what we in the phase one study.

Saw very nice Immunogenicity data, we saw very good safety data, but we did not reach immunologically plateau, so which means we have not yet with the formulation that we used in the phase one study and maximize the potential of the vaccine.

Peter Buhler: Of course, we will, and can only start some of the studies once we have gotten the approval of the vaccine. So that's why there is a couple of swing factors in there, which all, which may affect the final spend, especially with regards to our indeed expenses, which we call the direct R&D expenses, meaning external R&D costs with BROs, et cetera, in the fourth quarter of this year. Great, thanks very much.

Simon Scholes: We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question.

So hence what we're going to do here is we got to update the formulation of the vaccine. We also gonna bring it onto.

Maurice Raycroft: Hi, thanks for taking my questions. I was going to ask one on Chick and Gunya. What are your latest thoughts on what a potential phase four outbreak study might look like in terms of size, geographic areas, or any other details? And I'm also wondering, is that an outbreak study something that ACIP could potentially want to see for a recommendation, or how do you view that study in the context of the ACIP?

The.

The platform that we further enhanced for BLA 2001, because we want to have the platform advantage.

And by the end of the day, we want to have a highly differentiated vaccine. We want to have an inactivated vaccine that is going to be best in class.

Peter Buhler: And the questions come from the line of Simon Scholes from Files-Berlin, does ask a question. Yes, hello, thanks for taking my questions. I've got two. First of all, I was wondering on the commercial vaccine business, if you could tell us how much direct sales was in Q2. I think the figure for Q1 was 71.6%. And I was also wondering if you could quantify the batch right off on XERO in Q2. Thanks.

Simon Scholes: And the questions come from the line of Simon Scholes from Files-Berlin, does ask a question. Yes, hello, thanks for taking my questions. I've got two. First of all, I was wondering on the commercial vaccine business, if you could tell us how much direct sales was in Q2. I think the figure for Q1 was 71.6%. And I was also wondering if you could quantify the batch right off on XERO in Q2. Thanks.

And therefore.

We decided we.

We could have done a kind of a hybrid phase one too thin, but we decided that it's better to go for a new phase one protocol, which in reality is acquired in large phase one protocol by technically it's a phase one protocol with regard to two market size. It is.

Thomas Lingelbach: Hi Maury. You will, of course, understand that given that we are in the middle of, you know, agreeing and aligning the phase four activities with the FDA, there's only very little I can say in public about that. What I can say is that under the accelerated pool pathway, we need to show effectiveness in a real life setting, meaning in endemic countries and, ideally, during an outbreak situation. And so, therefore, you need to get prepared for that, and you also need to have different populations included, meaning adolescents as well as adults.

Very difficult to quantify at this point in time and this is also the reason for why we clearly articulated in our H one report that.

Peter Buhler: Yes, thanks, but let's start with the second question on batch right off, while we're looking for the number on direct sales. So you know, you will understand that this is something we are not publishing. I mean, we did have the reason why we mentioned it is because it was a higher amount that what we would usually see, which is really related to the fact that we're basically, you know, restarting full steam commercial manufacturing post-COVID.

Simon Scholes: Yes, thanks, but let's start with the second question on batch right off, while we're looking for the number on direct sales. So you know, you will understand that this is something we are not publishing. I mean, we did have the reason why we mentioned it is because it was a higher amount that what we would usually see, which is really related to the fact that we're basically, you know, restarting full steam commercial manufacturing post-COVID.

That we're going to have another review time point.

On <unk>.

<unk> at the end of the next clinical study.

There is clearly a huge unmet medical need and we see again.

Emerging outbreaks.

Around CCAR.

Thomas Lingelbach: Now, historically, ACIP has not been waiting for, or awaiting, final effectiveness data, which sometimes take many, many years, to provide their vaccine recommendations. And at this point in time, we do not expect this to happen. So we have a strong database that we're going to present, have presented, and will continue to present to ACIP. And that's basically a strong package. More, I can, unfortunately, not say at this point in time, but soon, we will, of course, be in a position to explain what we're going to do. And then, you know, I hope for your patience until then.

But by far outbreak diseases. It is not trivial tool.

Peter Buhler: But again, we're not disclosing the actual right off. In terms of the proportion of direct sales. It was 65% in Q2. Okay. And would you expect the number to stay around that level? No, clearly not. I think this was unusual in both Q1 and Q2. We would expect for the remainder of the YouTube with more towards ratios like we saw in the past. Especially for 85 military kicking in. Remember that. Okay. Yeah. Okay. Thanks very much.

Simon Scholes: But again, we're not disclosing the actual right off. In terms of the proportion of direct sales. It was 65% in Q2. Okay. And would you expect the number to stay around that level? No, clearly not. I think this was unusual in both Q1 and Q2. We would expect for the remainder of the YouTube with more towards ratios like we saw in the past. Especially for 85 military kicking in. Remember that. Okay. Yeah. Okay. Thanks very much.

Really quantify the market potential.

And we need to understand three things number one we need to understand will we be able to deliver a best in class vaccine.

And you'll remember that our inactivated approach here follows really WH or guidance.

Well clearly ruled out certain other technologies for a vaccine that will target.

Vaccination of women in childbearing age and or <unk>.

Pregnant women in an outbreak situation.

And the second the second part.

Maurice Raycroft: Okay, yeah, it makes sense. And I was going to ask one other question about Chicken Gunia.

It's really we need tool, we need to understand what is the potential under the.

Under our normal.

<unk>.

Maurice Raycroft: You've talked about the different revenue streams, including travel sales in the U.S. and EU, military and possibly, and potential stockpileing contracts, and then endemic. Can you talk about the potential cadence of the launch in terms of these different revenue streams? How are you preparing currently for the launch? And have you thought of when you might give guidance on sales for some of these groups post-law? That's it.

Travel is our view and certainly is there a possibility to enter into respective partnerships, which could help improve the overall.

Damien Chopeland: And I'm going to proceed with our next question. And the questions come from the line of Damien Chopeland from ODEOBHS. Please ask your question. Hello, Damien. Can you feel on this open? Please ask a question. The next question comes from the line of Damien Chopeland from ODEOBHS. Please ask a question. Yes, hello. Can you hear me? Downing here? Yeah, thank you for taking my questions. First on the card please. So, why do you need to conduct a new phase one? Why don't you directly move into phase two trial first question? And what would be the market potential for this vaccine?

Damien Chopeland: And I'm going to proceed with our next question. And the questions come from the line of Damien Chopeland from ODEOBHS. Please ask your question.

Thomas Lingelbach: Hello, Damien. Can you feel on this open? Please ask a question. The next question comes from the line of Damien Chopeland from ODEOBHS. Please ask a question. Yes, hello. Can you hear me? Downing here? Yeah, thank you for taking my questions. First on the card please. So, why do you need to conduct a new phase one? Why don't you directly move into phase two trial first question? And what would be the market potential for this vaccine?

The financials around it as we did for chikungunya.

With our partnership with with with Tippi all of that will be further evaluated as we go along.

For the time being as I said, we see a huge unmet medical needs, we see the opportunity that <unk> could provide a best in class vaccine solution.

Thomas Lingelbach: Yeah, that's an excellent question, Marie. So first of all, I mean, as you know, we have been prioritizing travel and, let's say, outbreak preparedness in highly developed countries. So we started with the US, where we see by far the single largest market opportunity in terms of revenue. Then followed by Canada and Emma. So this is the cadence.

And as a vaccine solution that complies fully.

With the expectations of.

The medical and scientific community more we have to see when we need to decide.

Whether on the basis of data, whether we would proceed then or not.

Maybe just a quick one on your guidance can you just confirm that.

It includes the sale of the potential.

In 2023.

The fact that the approval of the chicken vaccine has been delayed.

Thomas Lingelbach: Yeah, so let me start to explain a little bit what we're going to do. So basically what we, in the phase one study, we saw very nice immunogenicity data. We saw very good safety data, but we did not reach immunologically plateau. So which means we have not yet with the formulation that we used in the phase one study maximized the potential of the vaccine. So hence what we're going to do here is we're going to update the formulation of the vaccine.

Yes, Toni Thanks for the question, yes, indeed, it still includes the under other income we expect.

The expected proceeds from the PRA.

Thomas Lingelbach: So you know that the Canadian filing got accepted. We just closed that. The next step is, of course, IMA, and then we will go immediately to Brazil. And we are currently looking into the next most important LMIC territory, which of course is Asia. So this is probably the pace of how we're going to approach it from a regulatory and license perspective. With regard to Outbreak Prepared for stockpiling, I mean, there's not a dedicated regulatory process needed for that in highly developed countries.

Despite the fact that <unk> is now a bit later.

Okay. Thanks.

We're now going to proceed with our next question.

And the question is come from the line of even Wang from Guggenheim Securities. Please ask your question.

Okay.

Hi, guys. Thanks for taking the question two from me first on Lyme.

Thomas Lingelbach: We also going to bring it on to the platform that we further enhanced for BLA 2001, because we want to have the platform advantage. And by the end of the day, we want to have a highly differentiated vaccine. We want to have an inactivated vaccine that is going to be best in class. And therefore, we decided we could have done a kind of a hybrid phase one two thing, but we decided that it's better to go for a new phase one protocol, which in reality is acquired in large phase one protocol, but technically it's a phase one protocol.

To update the ongoing trial.

Handel, Pfizer, but interested to hear what.

What the companies are seeing in terms of incident rate of cases.

I'm Sara types.

Yes.

And U S kind.

Kind of consistent with what you guys are expecting.

And second on Chikungunya.

Thomas Lingelbach: Having said that, we have quite a significant number of initiatives ongoing to potentially attract a stockpile business, you know, that this is the part where we felt, so far, not very comfortable providing any guidance on a, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, on, But there is a lot going on, and we hope that we will also attract some business in this segment.

<unk>.

Patrick here some of the durability data showed her the earlier time point data showed I was just wondering if there is thoughts on including maybe a subset of patients.

Phase four others studies too.

Maybe to evaluate.

Thomas Lingelbach: With regards to to market size, it is very difficult to quantify at this point in time. And this is also the reason for why we clearly articulated in our age one report that that we're going to have another review time point on Sika at the end of the next clinical study. There is clearly a huge unmet medical need and we see again emerging outbreaks around Sika, but for outbreak diseases, it is not trivial to really quantify the market potential.

An earlier time point tighter.

In a larger patient population.

Yes.

Both excellent questions, let me start with the second one first.

Because it's one of the questions that for reasons that you perfectly understand.

We are getting all the time onset of immunity I mean as I said.

We were the first ones to develop the vaccine we agreed at the time with the authorities on the.

Maurice Raycroft: Got it. Thanks for taking my question.

Readout at day 29 of course, we have a bunch of datasets as we presented to date it clearly indicates that the vaccine.

Operator: We are now going to proceed with our next question, and the questions come from the land of Semea Devani from ORE securities. It's good to ask your questions.

Has the full onset above the zero response level very early on.

Samir Devani: So yeah, thanks for the questions. So on COVID-19, there is some small residual revenue expected still in the second half of the year, but we're mostly done with COVID-19 in terms of revenues. In terms of R&D, yeah, great question, and I guess your question really talks about the level of spend we see for the first half year compared to the guidance.

We will and I mentioned this during my presentation.

Thomas Lingelbach: And we need to understand three things. Number one, we need to understand will we be able to deliver a best in class vaccine? And you remember that our inactivated approach here follows really WHO guidance who clearly ruled out certain other technologies for a vaccine that will target vaccination of women in child bearing age and or pregnant women in an outbreak situation. And the second part is really we need to we need to understand what is the potential under the under a normal, you know, kind of travel tech as view.

Include those earlier time points as part of them.

Studies that we are initiating.

Be it.

Under phase III or under phase four product for sure and there is absolutely no reason.

For us not to do this and there is absolutely no reason to believe that that we should not have a fantastic onset of immunity a busty or response level early on so on line itself.

Peter Buhler: Obviously, yes, so we're tracking more towards the lower end of the guidance when you look at the first half year. And that is, so where we land ultimately is, I think, to a large extent, driven by, you know, how much do we still spend on the ongoing trials, in particular for Chikungunya, but then also, of course, how quickly do we accelerate that spending. on Zika.

Pfizer conducted an AP study in Europe , and the U S. Before the phase III study got even initiated there have been partial disclosure around the results from this study at different Congresses.

Thomas Lingelbach: And certainly, you know, is there a possibility to enter into respective partnerships, which could help improving the overall financials around it as we did for chicken guña with our partnership with with with TIPI? All that will be further evaluated as we go along. For the time being, as I said, we see a huge unmet medical need. We see the opportunity that a well neighbor could provide a best in class vaccine solution and a vaccine solution that complies fully with the expectations of of the medical and scientific community.

Overall this is a study confirm the distribution of.

All of the different serotypes.

On the.

On both sides of the Atlantic that we presented at different locations and that have been that can be found in literature within reason I would say and within.

Peter Buhler: So that's really the key drivers for the R&G spends. And in addition to that, Samia, it's also related to when we actually go to initiate some of the additional studies for checking. You have seen that we have quite a number of studies planned for Chikungunya. Of course, we will and can only start some of the studies once we have gotten the approval of the vaccine. So that's why there are a couple of swing factors in there, which may affect the final spend, especially with regard to R&D expenses, which we call the direct R&D expenses, meaning external R&D costs with CROs, etc. In the fourth quarter of

Variability, but overall no surprises on that front.

With regards to.

The <unk>.

Overall case count.

That is of course being monitored at this point in time, there is nothing we can say.

But but also the safety studies confirm the overall incidence rates debt.

Thomas Lingelbach: More, we have to see when we need to decide, you know, whether on the basis of data, whether we would proceed then. Bernard. That may be just a quick one on your guidance. Can you just confirm that you still include the cell of the potential PRV in 2023 despite the fact that the approval of the chick vaccine has been delayed? Yes, Daniel, thanks for the question. Yes indeed, it still includes the other income we expect. The expected proceeds from the PRV despite the fact that the pituita date is now a bit later. Okay, thanks.

That debt.

Peter Buhler: Bernard. That may be just a quick one on your guidance. Can you just confirm that you still include the cell of the potential PRV in 2023 despite the fact that the approval of the chick vaccine has been delayed? Yes, Daniel, thanks for the question. Yes indeed, it still includes the other income we expect. The expected proceeds from the PRV despite the fact that the pituita date is now a bit later. Okay, thanks.

Have been used to also powers the study so far.

So far so good I would say everything is is.

Working as expected and we have and Pfizer has no issues in.

Attracting and recruiting.

The respective target population into the study.

Yeah.

Thanks, guys.

Okay.

As a reminder, once again to ask a question. Please press star one and one on your telephone and wait for your name to be announced until we draw. Your question again, Please press star one and one again one.

Thomas Lingelbach: We are now going to proceed with our next question. And the questions come from the line of even one from Google Home Security, please ask your question. Hi guys, thanks for taking a question. Two from me, first on the line, just with the up-to-dance ongoing trial. No, it's in the hands of Pfizer, but you know, interesting here, with the companies they're seeing in terms of, you know, incident rate of cases and, you know, Lyme serotypes, both in the Europe and US.

Even Wang: We are now going to proceed with our next question. And the questions come from the line of even one from Google Home Security, please ask your question. Hi guys, thanks for taking a question.

Again, Please press star, one and one for any questions or comments.

Thank you.

Operator: We are now going to proceed with our next question, and the questions come from the line of Simon Charles from Fais, Berlin. Simon Charles asks a question.

We are now going to proceed.

Thomas Lingelbach: Two from me, first on the line, just with the up-to-dance ongoing trial. No, it's in the hands of Pfizer, but you know, interesting here, with the companies they're seeing in terms of, you know, incident rate of cases and, you know, Lyme serotypes, both in the Europe and US. Is it kind of consistent with what you guys are expecting? And second, on Chicken Ganya, you know, happy to use some of the durability data showed or the earlier time point data showed. I'm just wondering if there's thoughts on including maybe a subset of patients in the face four or other studies to maybe evaluate in the earlier time point tighter, you know, in a larger patient population.

Next question.

And that question come from the line of Susan Van <unk> from <unk>. Please go ahead with your question.

Simon Scholes: Yeah, thanks. Let's start with the second question on batch right off while we're looking for the number on direct sales. So, you know, we are not publishing this. I mean, we did have, the reason why we mentioned it is because it was a higher amount than what we would usually see, which is really related to the fact that we're basically, you know, restarting full steam commercial manufacturing post-COVID. But again, we're not disclosing the action right off in terms of the proportion of Direct sales. Let me just look at this.

Hi, there good afternoon team a couple of questions from my side to start off with the product sales that are growing.

Thomas Lingelbach: Is it kind of consistent with what you guys are expecting? And second, on Chicken Ganya, you know, happy to use some of the durability data showed or the earlier time point data showed. I'm just wondering if there's thoughts on including maybe a subset of patients in the face four or other studies to maybe evaluate in the earlier time point tighter, you know, in a larger patient population. Thanks. Yeah, both excellent questions.

Quite nicely again can you remind us what the seasonality is that we should keep in mind for Hcl integral.

Which quarters are typically stronger given the travel patterns and Watson.

What do you expect for chikungunya overtime.

And then I have a follow up.

Yeah excellent question, So I would say basically if you look at.

Susan Van Voorthuizen: Thanks. Yeah, both excellent questions. Let me start with the second one first, because it's one of the questions that for reasons that you perfectly understand, we are getting all the time on set of immunity. I mean, as I said, we were the first ones to develop the vaccine. We agreed at the time with the authorities on the without the day 29. Of course, we have a bunch of data sets as we presented today that clearly indicates that the vaccine has a full onset above the zero response level very early on.

Prior years, you'd typically see a dip during the summer time, Youll see higher uptake earlier in the year and later in the year. This has to do with the travel patterns tool.

Thomas Lingelbach: Let me start with the second one first, because it's one of the questions that for reasons that you perfectly understand, we are getting all the time on set of immunity. I mean, as I said, we were the first ones to develop the vaccine. We agreed at the time with the authorities on the without the day 29. Of course, we have a bunch of data sets as we presented today that clearly indicates that the vaccine has a full onset above the zero response level very early on.

Southeast Asia.

You see.

Peter Buhler: So it was 65% in Q2. Okay. And would you expect the number to stay around that level? No, clearly not.

Seasonality pattern also for doukhobor given that.

The single largest market for <unk> is Canada and do you see typically is strong strong.

Peter Buhler: I think this was an unusual high in both Q1 and Q2. We would expect for the remainder of the year to go with more to its ratios like we saw in the past. Especially with the military kicking in. Remember that. Yeah.

Demand early on in the year. So at the end of the year early on in the year Canadian flag to travel to a warmer regions. When it's cold in Canada. So so basically this is something that we have seen in prior years. It is it is.

Thomas Lingelbach: We will, and I mentioned this during my presentation, include those earlier time points as part of studies that we are initiating be it under phase three or under phase four protocol for sure, and there is absolutely no reason for us not to do this and there's absolutely no reason to believe that we should not have a fantastic onset of immunity above zero response level early on. So online itself, Pfizer conducted an EP study in Europe and the US before the phase three study got even initiated. There have been partial disclosures around the results from this EP study at different conferences.

Susan Van Voorthuizen: We will, and I mentioned this during my presentation, include those earlier time points as part of studies that we are initiating be it under phase three or under phase four protocol for sure, and there is absolutely no reason for us not to do this and there's absolutely no reason to believe that we should not have a fantastic onset of immunity above zero response level early on. So online itself, Pfizer conducted an EP study in Europe and the US before the phase three study got even initiated.

Is extremely difficult.

Difficult to model it precisely because we have seen.

Peter Buhler: Especially by the military kicking in, remember that, yeah?

I would say variability across the years.

Operator: We're not going to proceed with our next question. And the questions come from the line of Damien Chopin from O'Dow, BHS. Please ask your question. Hello, Damien, can you please ask your question? The next questions come from Palanoff, Damien Choplin, from Odu, BHS. Please ask your question.

But overall there is.

There is a model that we have in place that kind of mimics the seasonality and which of course, we also use when we prepare our.

Yearend projections and latest estimates.

But as I said that the reason for why we have said, we stick entirely to guidance with regards to chikungunya and your question about seasonality.

Yeah, that's an excellent one tool so.

Suzanne Voorthuizen: Overall, this EP study confirms the distribution of of the different stereotypes on both sides of the Atlantic that we presented at different locations and that can be found in literature within reason, I would say, and within variability, but overall no surprises on that front with regards to the Overall Cape Count that is of course being monitored at this point in time, there's nothing we can say, but also the epic studies confirmed the overall interesting traits that have been used to also power the study, so so far so good I would say everything is working as expected and we have and Pfizer has no issues in attracting and recruiting the respective target population into the study I have a reminder once again to ask a question please press star one and one on your telephone and wait for your name to be announced, do we draw your question you can please press star one and one again, once again please press star one and one for any questions or comments, thank you we are now going to proceed with our next question and the questions come from the line of Susan Van Voorthuizen from VLK please go ahead with your question Hi there, good afternoon team, a couple of questions from my side to start off with the product seals that are growing quite nicely again, can you remind us what the seasonality is that we should keep in mind for Xero and Decorale, which quarters are typically stronger given the travel patterns and what we expect for Chikungunya over time and then I have to follow up Yeah, excellent question, so I would say basically if you look at prior years, you typically see a dip during the summertime, you see higher uptake earlier in the year and later in the year, this has to do with the travel pattern tool South East Asia you see a seasonality pattern also for Decorale given that the single largest market for Decorale is Canada and you see typically a strong, strong demand early on in the year, so at the end of the year early on in the year Canadians like to travel to warmer regions when it's cold in Canada so basically this is something that we have seen in prior years, it is extremely difficult to model it precisely because we have seen, I would say, variability is across the years but overall there is a model that we have in place that kind of mimics the seasonality and which of course we also use when we prepare our year end projections and latest estimates but as I said that's the reason for why we have said we stick entirely to guidance, which regards to Chikungunya and your question about this analogy, Chikungunya, that's an excellent one too, so I would say we have slightly different territories for Chikungunya as compared to to Japanese insolides, some are the same, some are very different, and so there are, our current hypothesis is that they probably kind of balance each other out, so we are currently not necessarily modeling yet a strong seasonality profile around Chikungunya but of course when you are pioneering in a brand new indication with brand new vaccine, you learn along the way but that's our current hypothesis. David, OK, that's very helpful.

Susan Van Voorthuizen: There have been partial disclosures around the results from this EP study at different conferences. Overall, this EP study confirms the distribution of of the different stereotypes on both sides of the Atlantic that we presented at different locations and that can be found in literature within reason, I would say, and within variability, but overall no surprises on that front with regards to the Overall Cape Count that is of course being monitored at this point in time, there's nothing we can say, but also the epic studies confirmed the overall interesting traits that have been used to also power the study, so so far so good I would say everything is working as expected and we have and Pfizer has no issues in attracting and recruiting the respective target population into the study I have a reminder once again to ask a question please press star one and one on your telephone and wait for your name to be announced, do we draw your question you can please press star one and one again, once again please press star one and one for any questions or comments, thank you we are now going to proceed with our next question and the questions come from the line of Susan Van Voorthuizen from VLK please go ahead with your question Hi there, good afternoon team, a couple of questions from my side to start off with the product seals that are growing quite nicely again, can you remind us what the seasonality is that we should keep in mind for Xero and Decorale, which quarters are typically stronger given the travel patterns and what we expect for Chikungunya over time and then I have to follow up Yeah, excellent question, so I would say basically if you look at prior years, you typically see a dip during the summertime, you see higher uptake earlier in the year and later in the year, this has to do with the travel pattern tool South East Asia you see a seasonality pattern also for Decorale given that the single largest market for Decorale is Canada and you see typically a strong, strong demand early on in the year, so at the end of the year early on in the year Canadians like to travel to warmer regions when it's cold in Canada so basically this is something that we have seen in prior years, it is extremely difficult to model it precisely because we have seen, I would say, variability is across the years but overall there is a model that we have in place that kind of mimics the seasonality and which of course we also use when we prepare our year end projections and latest estimates but as I said that's the reason for why we have said we stick entirely to guidance, which regards to Chikungunya and your question about this analogy, Chikungunya, that's an excellent one too, so I would say we have slightly different territories for Chikungunya as compared to to Japanese insolides, some are the same, some are very different, and so there are, our current hypothesis is that they probably kind of balance each other out, so we are currently not necessarily modeling yet a strong seasonality profile around Chikungunya but of course when you are pioneering in a brand new indication with brand new vaccine, you learn along the way but that's our current hypothesis.

I would say.

We have slightly different.

Operator: Yes, hello, can you have me? No, next year.

I would say territory for chikungunya as compared to.

Damien Chopin: Yeah, yeah, thank you for taking my questions. First, on Zika, please. So why do you need to conduct a new phase one? Why don't you directly move to Trail, and what would the market potential be for?

Japanese encephalitis. Some are the same some are very different.

And.

So there are our current hypothesis is that David Provost play.

End of balanced each other out so we are currently not necessarily modeling yet.

Thomas Lingelbach: Yeah, so let me start to explain a little bit what we're going to do. So basically, in the phase one study, we saw very nice immunogenicity data, we saw very good safety data, but we did not reach an immunological plateau. So this means we have not yet maximized the potential of the vaccine with the formulation that we used in the phase one study. Hence, what we're going to do here is we're going to update the formulation of the vaccine.

The strong seasonality profile around chikungunya, but of course, when you are pioneering in a.

Brand, new indication with brand new vaccine.

You learn along the way, but but.

But that's our current hypothesis.

Got it Okay. That's very helpful and then maybe.

Continuing on the tick vaccine.

<unk> started to invest in a little bit in preparation for the launch.

Can you remind us about gross margin you believe is feasible on the on this product and how we should look at your sales and marketing expenses for the launch and the long term run rate.

Thomas Lingelbach: We are also going to bring it onto the platform that we further enhanced for VLA 2001 because we want to have the platform advantage. And by the end of the day, we want to have a highly differentiated vaccine. We want to have an inactivated vaccine that is going to be best in class. And therefore, we decided, we could have done a kind of hybrid phase one-two thing, but we decided that it's better to go for a new phase-1 protocol, which in reality is acquired in a large phase-one protocol, but technically, it's a phase one.

Then maybe let me start first of all with a more qualitative statement.

Thinking about the quantitative part as.

I would say.

Basically we are not only investing a little bit we are investing a lot.

I mean, you can see this on our sales and marketing expense line and you will continue seeing this on our marketing and sales and marketing expense line. So we are investing in.

Launch and more importantly market access.

There is a lot of work that needs to be done to educate the world around chikungunya and making sure that people understand the medical need people understand that.

Disease.

So disease awareness and all of that there's a lot that we are doing right now in parallel we are also ramping up.

Our commercial infrastructure, primarily in the U S, but not limited to the U S.

Thomas Lingelbach: With regard to market size, it is very difficult to quantify at this point in time. And this is also the reason for why we clearly articulated in our H1 report that we're going to have another review time point on CICA at the end of the next clinical study. There is clearly a huge unmet medical need, and we see again and again emerging outbreaks around CECA. But for emerging diseases, it is not trivial to really quantify the market potential.

So these are significant investments that go into into this into this vaccine.

And and of course the.

The whole topic around.

Martin.

Is it is a difficult one and as I said I'll, let Peter develop this further.

Because we have a brand new.

Chain of custody for for Chicken Bouillon.

You know that technically there is a live attenuated enhance lyophilize vaccine, so which means that we are doing part of the manufacturing in house.

Thomas Lingelbach: And we need to understand three things. Number one, we need to understand whether we will be able to deliver a best-in-class vaccine? And you remember that our inactivated approach here follows really WHO guidance, which clearly ruled out certain other technologies for a vaccine that will target the vaccination of women in childbearing age and or pregnant women in an outbreak situation.

Part of the manufacturing with third party and there are significant economies of scale.

Peter Please.

Thanks, Thomas So in terms of.

After launch constant.

Growth sales and marketing expense, how we think about chikungunya so.

As you rightly said, we you know Tom has also said we significantly invested in the prelaunch activities. I think you will continue to see high sales and marketing investments into chikungunya as we as we start commercializing the product next year.

Thomas Lingelbach: And the second part is really we need to understand what the potential is under the normal, you know, kind of travel sector view. And thirdly, you know, is there a possibility to enter into respective partnerships which could help improve the overall financials around it, as we did for Chicken Good? with our partnership with TIPI. All that will be further evaluated as we go along. For the time being, as I said, we see a huge unmet medical need.

And then over time the way, we think and our long range plan I think we expect our overall sales and marketing spend as a percentage of sales to go back into the regions, where it was pre COVID-19, but we're probably talking here.

<unk> 'twenty six 'twenty seven but before that there will be some over investments of course because of the of the of the market education et cetera.

Terms of gross margin. Similarly here I think in the first year. So as sales ramp up we expect some some some higher cost of goods that what you would have seen in the legacy business before Covid and then once we get to scale and as Tom said, there is a significant economies of scale.

Thomas Lingelbach: We see the opportunity that Valneva could provide a best-in-class vaccine solution and a vaccine solution that complies fully with the expectations of the medical and scientific community. But more we have to see when we need to decide, you know, whether on the basis of data, whether we will proceed then.

As we ramp up the volumes I think we expect to see.

At least similar gross margin said, what we would have seen was an accelerant to growth and I think over time, I think we would even see higher gross margins.

Yeah.

Got it alright. Thank you and then maybe just a last one from my side about the online program and now that the dust has settled on the timelines.

Peter Buhler: Maybe just a quick one on your guidance. Can you just confirm that you still include the cell of the potential PRV in 2023, despite the fact that the approval of the Czech vaccine has been delayed? Yes, Dania, thanks for the question. Yes, indeed, it still includes, under other income, the expected proceeds from the PRV, despite the fact that the PDUFA date is now a bit later.

And you're.

Given your current cash position and the recent additional 100 million loan facility can you elaborate on how we should think about your cash burn and the run rate from here.

Thomas Lingelbach: David, OK, that's very helpful. And then maybe continuing on the tick-sexy, you started to invest a little bit in preparation for the launch. Can you remind us what gross margin you believe is feasible on this product and how we should look at your sales and marketing expenses for the launch and the long-term run rate? Maybe let me start first of all with a more qualitative statement, what Peter is thinking about, the quantitative part.

Suzanne Voorthuizen: And then maybe continuing on the tick-sexy, you started to invest a little bit in preparation for the launch. Can you remind us what gross margin you believe is feasible on this product and how we should look at your sales and marketing expenses for the launch and the long-term run rate? Maybe let me start first of all with a more qualitative statement, what Peter is thinking about, the quantitative part. So I would say basically we are not only investing a little bit, we are investing a lot.

For myself.

Yeah.

Yes, thanks as on it so we will still have significant payments to make.

Your line program.

I mean, you can see to some extent of course in the liability side of our balance sheet what is expected to.

There I think overall after the 2022 equity offering we said we were sufficiently financed at least until the end of the fiscal.

Operator: We are now going to proceed with our next question, and the questions come from the land of Ivan Wang from Gugungham Security.

Thomas Lingelbach: So I would say basically we are not only investing a little bit, we are investing a lot. I mean, you can see this on our sales and marketing expense line, and you will continue seeing this on our marketing, sales and marketing expense line. So we are investing in launch and more importantly, market access. There is a lot of work that needs to be done to educate the world around Chikungunya and making sure that people understand the medical needs, people understand the disease, so disease awareness and all of that.

Fiscal year 2024, but of course still holds true, but we have not provided at this stage and updated guidance on cash burn rate.

Suzanne Voorthuizen: I mean, you can see this on our sales and marketing expense line, and you will continue seeing this on our marketing, sales and marketing expense line. So we are investing in launch and more importantly, market access. There is a lot of work that needs to be done to educate the world around Chikungunya and making sure that people understand the medical needs, people understand the disease, so disease awareness and all of that.

Boran Wang: Hi guys, thanks for taking the question. Here are two from me.

To consider in the future, but right now we have not given the sort of guidance, but we are for the foreseeable future of course, we are sufficiently financed and then as we said we still have appetite to potentially in license R&D.

Thomas Lingelbach: First, on Lyme, just with the ongoing trial, no, it's in the hands of Pfizer, but, you know, interested here in what the companies are seeing in terms of incident rates of cases and Lyme cirrotype, both in Europe and the US, is it kind of consistent with what you guys are expecting? And second on Tuchingunya, you know, have you seen some of the durability data shown, or the earlier time point data shown?

R&D programs and if we were to do that that might be.

Require additional dedicated financing, which could also be dilutive of course.

Got it thank you.

Yeah.

Suzanne Voorthuizen: There's a lot that we are doing right now in parallel. We are also ramping up our commercial infrastructure primarily in the US but not limited to the US. So these are significant investments that go into this vaccine. And of course, the whole topic around margin is a difficult one. And as I said, I let Peter develop this further because we have a brand new chain of custody for Chikungunya. You know that Chikungunya is alive, attenuated and hand liableized vaccines, which means that we are doing part of the manufacturing in house, part of the manufacturing with third party.

Thomas Lingelbach: There's a lot that we are doing right now in parallel. We are also ramping up our commercial infrastructure primarily in the US but not limited to the US. So these are significant investments that go into this vaccine. And of course, the whole topic around margin is a difficult one. And as I said, I let Peter develop this further because we have a brand new chain of custody for Chikungunya. You know that Chikungunya is alive, attenuated and hand liableized vaccines, which means that we are doing part of the manufacturing in house, part of the manufacturing with third party.

Okay.

We're not going to proceed with our next question.

And our question comes from the line of Max Herrmann from Stifel. Please ask your question.

Alright, thanks, very much for taking my questions three if I may.

Firstly just.

On <unk> and to grow.

Last year, you had some capacity constraints, you've obviously highlighted.

Thomas Lingelbach: Just wondering if there's thoughts on including maybe a subset of patients in either the phase four or other studies to maybe evaluate an earlier time point tighter in a larger patient population. Thanks. Yeah, both excellent questions.

Batch failure.

Failure in the <unk>.

In the first half of this year and I Wonder where you are with the capacity.

Compared with demand for both those products. So that's the.

First question.

Okay.

Overall, we are.

Thomas Lingelbach: Yeah, both excellent questions. Let me start with the second one first, because it's one of the questions that, for reasons that you perfectly understand, we are getting all the time about the onset of immunity. I mean, as I said, we were the first ones to develop the vaccine. We agreed at the time with the authorities on the readout at day 29. Of course, we have a bunch of data sets, as we presented today that clearly indicate that the vaccine has a full onset above the zero response level very early on.

Right now managing our.

Suzanne Voorthuizen: And there are significant economy of scale effects. Peter, please. Yes, thanks Thomas. So in terms of the launch cost and overall sales and marketing expense, how we think about Chikungunya. So as you rightly said, Thomas also said we significantly invested in the pre-launch activities. I think you will continue to see high sales and marketing investment into Chikungunya as we start commercializing the product next year. And then over time, the way we think in our long range plan, I think we expect our overall sales and marketing spend in percentage of sales to go back into the regions where it was pre-COVID.

Thomas Lingelbach: And there are significant economy of scale effects. Peter, please. Yes, thanks Thomas. So in terms of the launch cost and overall sales and marketing expense, how we think about Chikungunya. So as you rightly said, Thomas also said we significantly invested in the pre-launch activities. I think you will continue to see high sales and marketing investment into Chikungunya as we start commercializing the product next year. And then over time, the way we think in our long range plan, I think we expect our overall sales and marketing spend in percentage of sales to go back into the regions where it was pre-COVID.

Supply demand quite well.

We have here or there is still some minor shortages.

But but overall.

On them on a on an 80 20 basis, we're fine.

The.

The fact that we were talking about about higher write offs, leading to higher <unk> higher cost of goods.

Ah we're typical I would say restart issues. After the team had not done <unk> manufacturing for more than two years.

And so but we are back on track with regard to the manufacturing performance here too.

Suzanne Voorthuizen: But we're probably talking here, range 26, 27. And before that, there will be some over and lessons, of course, because of the market education, et cetera. In terms of cross-marketing, similarly here, I think in the first years and sales ramp up, we expect some higher cost of goods than what you would have seen in the legacy business before COVID. And then once we get to scale, as Thomas said, there's significant economies of scale as we ramp up the volumes.

Thomas Lingelbach: But we're probably talking here, range 26, 27. And before that, there will be some over and lessons, of course, because of the market education, et cetera. In terms of cross-marketing, similarly here, I think in the first years and sales ramp up, we expect some higher cost of goods than what you would have seen in the legacy business before COVID. And then once we get to scale, as Thomas said, there's significant economies of scale as we ramp up the volumes. I think we expect to see at least similar cross-markets that what we would have seen with XR and Ducral. And I think over time, I think we would even see higher cross-markets. Yes.

So we are not expecting any.

Peter Buhler: Got it. All right.

Further significant issues with.

Supply demand.

From a supply perspective unless of course, we see further positive surprises on the demand side.

Thomas Lingelbach: We will, and I mentioned this during my presentation, include those earlier time points as part of the studies that we are initiating, be it under phase three or under phase four protocols, for sure. And there is absolutely no reason for us not to do this, and there's absolutely no reason to believe that we should not have a fantastic onset of immunity above zero response level early.

We are seeing and in some countries an enormous uptake and increase of.

Travel vaccines in general.

So we have to see how.

Suzanne Voorthuizen: I think we expect to see at least similar cross-markets that what we would have seen with XR and Ducral. And I think over time, I think we would even see higher cross-markets. Yes. Got it. All right. Thank you. And then maybe just a last one from my side about the line program.

This is all going to play out going forward, but thus far everything film.

And the next couple of questions one just.

Sorry, if I missed it.

They are the.

Contract, you've talked about that being imminently.

Peter Buhler: Thank you. And then maybe just a last one from my side about the line program. Now that the dust has settled on the line and you're giving your current cash position and the recent additional 100 million loan facility, can you elaborate on how we should think about your cash burn and run rate from here.

Thomas Lingelbach: So on the internet itself, Pfizer conducted an EP study in Europe and the US before the phase three study got even initiated. There have been partial disclosures around the results of this IP study at different congresses. Overall, this epistle confirmed the distribution of the different stereotypes on both sides of the Atlantic that we presented on different occasions and that can be found in literature within reason, I would say, and within, you know, limitations, but overall, no surprises on that front with regard to the overall case count that is, of course, being monitored at this point in time.

Signed I, just wondered what sort of structure of that is.

Thomas Lingelbach: Now that the dust has settled on the line and you're giving your current cash position and the recent additional 100 million loan facility, can you elaborate on how we should think about your cash burn and run rate from here. And that's it from my side. Yeah, thanks, Suzanne. So we will still have significant payments to make on the line program. And I mean, you can see some extent, of course, in the liability side of our balance sheet, what is expected to do there.

See you did a more multi year kind of contract in the past recent past and then previously it was more an annual event so that was kind of.

That question and then finally, just in terms of I know you just said that recruitment into the.

Peter Buhler: And that's it from my side. Yeah, thanks, Suzanne. So we will still have significant payments to make on the line program. And I mean, you can see some extent, of course, in the liability side of our balance sheet, what is expected to do there. I think overall, after the 2022 equity offering, we said we were sufficiently financed, at least until the end of the fiscal year 2024, that of course, still holds true.

<unk> six program is.

With nearly no issues I wondered if you could be more specific on the pediatric element of that recruitment whether.

In some ways. The fact that you're doing over two seasons now has maybe been helpful. Because I know that was one of the areas that was harder to recruit into thank you.

Thomas Lingelbach: I think overall, after the 2022 equity offering, we said we were sufficiently financed, at least until the end of the fiscal year 2024, that of course, still holds true. But we have not provided at this stage an updated guidance and cash burn rate, something to consider in the future. But right now, we have not given the photo guidance. But we're, you know, for the foreseeable future, of course, we're divisionally financed. And then as we said, we still have appetite to potentially in license R&D programs. And if we were to do that, that might then require additional and dedicated financing, which could also be on value, too, of course. Gordon, thank you.

Yes.

The contract itself.

You rightly pointed out historically, we have done single year contract.

And.

And that has been the standard with Vod.

Peter Buhler: But we have not provided at this stage an updated guidance and cash burn rate, something to consider in the future. But right now, we have not given the photo guidance. But we're, you know, for the foreseeable future, of course, we're divisionally financed. And then as we said, we still have appetite to potentially in license R&D programs. And if we were to do that, that might then require additional and dedicated financing, which could also be on value, too, of course.

Thomas Lingelbach: There's nothing we can say. But also, the epistudies confirmed the overall incidence rates that have been used to power the study. So, so far, so good, I would say everything is working as expected. And we have, and Pfizer has no issues in attracting and recruiting the respective target population into the study.

We had one exception, which was the 2020.

CFS option year contracts it wasn't a exception it never materialized in reality because it unfortunately coincided with the global pandemic as you know and this gives you the answer what we are expecting so the on the on the recruitment front itself we continue with.

Operator: As a reminder once again, to ask a question, please press 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, you can press 1 and 1 again. Once again, please press 1 and 1 for any questions or comments. Thank you. We are now going to proceed with our next question, and the questions come from the line of Susan Van Vortezan from VLK. Please go ahead with your question.

A certain percentage of pediatric within the study which is absolutely in line with how we have designed the protocol and and how we have.

Operator: Gordon, thank you. We are going to proceed with our next question.

Set also.

The respective analysis at powering so there are no issues in the recruitment of.

Max Herrmann: And the questions come from the line of Max Herman from Diffel. Please ask your question. Great. Thanks very much for taking my questions. Three of my, I may firstly just on XCRO and Ducarole. I know last year you had some capacity constraints. You've obviously highlighted a batch failure in the XCRO in the first half of this year. And I wondered where you are with the capacity compared with demand for both those products.

Any of the target population that we need within the study at this point in time.

Great. Thank you very much.

Yes.

We have no further questions at this time I'll hand back to you for closing remarks. Thank you.

Susan Van Vortezan: Hi there, good afternoon team. A couple of questions from my side to start off with the product sales, which are growing quite nicely again. Can you remind us what the seasonality is that we should keep in mind for Ixiaro and Ducero, which quarters are typically stronger given the travel patterns and what we expect for Chikungunya over time? And then I have a follow-up.

Yeah, I think that concludes today's call.

On our half year, 2023 results and general corporate and business updates we would like to thank you again for your time today for your good questions and for following us closely and diligently and would look forward to catching up in the coming months. Thank you so much and have a great day.

Max Herrmann: So that's the first question. Okay. So Max, overall, we are right now managing supply demands quite well. We have here there still some minor shortages. But overall, on an on an H20 basis, we are fine. The the effect that we were talking about about higher right off leading to a higher cost of goods at where typical, I would say restart issues after the team had not done XCRO manufacturing for more than two years.

Thomas Lingelbach: Yeah, excellent question. So I would say basically, if you look at prior years, you typically see a dip during the summer time. You see higher uptake earlier in the year and later in the year. This has to do with the travel pattern to Southeast Asia. You also see a seasonality pattern for Duquharal, given that the single largest market for Duquharal is Canada, and you typically see very strong, strong demand early in the year.

Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect your lines. Thank you.

Okay.

[music].

Okay.

[music].

Max Herrmann: So, but we are back on track with regard to manufacturing performance here too. So we are not expecting any further significant issues with supply demand from a supply perspective. Unless, of course, we see further positive surprises on the demand side. We are seeing in some countries an enormous uptake and increase of travel vaccines in general. So we have to see how this is all going to play out going forward, but that's far everything found.

Yeah.

[music].

Yes.

[music].

Thomas Lingelbach: so at the end of the year early on in the year Canadians like to travel to warmer regions when it's cold in Canada so so basically this is something that we have seen in prior years it is it is extremely difficult to model it precisely because we have seen I would say variability across the years but overall there is there is a model that we have in place that kind of mimics the seasonality and which of course we also use when we prepare our, you know, year end and projections and latest as, But as I said, that's the reason for why we have said we stick entirely to guidance.

Thomas Lingelbach: Great. And the next couple of questions, one, just sorry if I missed it, the DOD contract you've talked about that being imminently signed, I just wondered what the sort of structure of that is, obviously you did a more multi-year kind of contract in the past, recent past and then previously it was more an annual event, so that was kind of that question and then finally just in terms of, I know you've just said that recruitment into the Lyme disease programme is no issue, I wondered if you could be more specific a bit on the pediatric element of that recruitment, whether this is in some ways, in fact you're doing over two seasons now as maybe being helpful because I know that was one of the areas that was hardest to recruit into.

Okay.

Thomas Lingelbach: Thank you. Yeah, well I mean on the contract itself, I mean you rightly pointed out, historically, we have done single year contract and that has been the standard with the DOD. We had one exception which was the 2020 BCFS option year contract, it wasn't an exception, it never materialized in reality because it unfortunately coincided with the global pandemic as you know. So, and this gives you the answer what we are expecting, yeah?

[music].

Yes.

[music].

Thomas Lingelbach: With regard to Chikungunya and your question about seasonality, chicken guinea, that's an excellent one too. So I would say we have slightly different, I would say, territories for Chikungunya as compared to Japanese and Svalides. Some are the same, some are very different. And so there are, our current hypothesis is that they probably kind of balance each other out. So we are currently not necessarily modeling yet a strong seasonality profile around Chikungunya. But of course, when you are pioneering in a brand new indication with a brand new vaccine, you learn along the way, but that's our current hypothesis.

Yes.

[music].

Thomas Lingelbach: So on the recruitment front itself, we continue with a certain percentage of pediatric within the study which is absolutely in line with how we have designed the protocol and how we have set also the respective analysis and powering. So, there are no issues in the recruitment of any of the target populations that we need within the study at this point in time.

Yes.

So.

[music].

Susan Van Vortezan: Got it. Okay, that's very helpful. And then, maybe, continuing on the Tick vaccine, you started to invest a little bit in preparation for the launch. Can you remind us what gross margin you believe is feasible on this product and how we should look at your sales and marketing expenses for the launch and the long-term run rate?

Joshua Drumm: Great, thank you very much.

Thomas Lingelbach: Great, thank you very much.

Joshua Drumm: We have no further questions at this time, I hand back to you for closing remarks. Thank you.

Thomas Lingelbach: We have no further questions at this time, I hand back to you for closing remarks. Thank you. Yeah, I think that concludes today's call on our half year 2023 results and general corporate and business updates. We would like to thank you again for your time today for your questions and for following us. So close the diligently and we look forward to catching up in the coming months. Thank you so much and have a great day.

Joshua Drumm: Yeah, I think that concludes today's call on our half year 2023 results and general corporate and business updates. We would like to thank you again for your time today for your questions and for following us. So close the diligently and we look forward to catching up in the coming months. Thank you so much and have a great day.

Joshua Drumm: Ladies and gentlemen, this concludes today's conference call, thank you for participating in our Disconnect Your Lines, thank you.

Operator: Ladies and gentlemen, this concludes today's conference call, thank you for participating in our Disconnect Your Lines, thank you.

Okay.

Yes.

Okay.

[music].

Thomas Lingelbach: Yeah, maybe I should start first of all with a more qualitative statement while Peter is thinking about the quantitative part. So I would say basically, we are not only investing a little bit; we are investing a lot. I mean, you can see this on our sales and marketing expense line, and we will continue to see this on our marketing expense line. So we are investing in our sales and marketing expense line. So we are investing in the launch and, more importantly, market access.

Okay.

Yes.

Okay.

Yeah.

[music].

Thomas Lingelbach: There is a lot of work that needs to be done to educate the world about Chikungunya and make sure that people understand the medical need, people understand the disease. Disease awareness, and all of that. There's a lot that we are doing right now in parallel. We are also ramping up our commercial infrastructure, primarily in the US, but not limited to the US. So these are significant investments that go into this vaccine.

Sure.

[music].

Peter Buhler: Edward White, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Edward White, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach,[inaudible] Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes[inaudible] Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach,[inaudible] Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach,[inaudible][inaudible] John Scholes, John Scholes, John Scholes, John Scholes, John Scholes, John Scholes, John Scholes, John Scholes,[inaudible] John Scholes, John Scholes, John Scholes, John Scholes[inaudible] Scholes, John Scholes, John Scholes, John Scholes[inaudible] Nicholas Lamm, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Nicholas Lamm, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lamm,[inaudible]

Operator: Edward White, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Edward White, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach,[inaudible] Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes[inaudible] Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach,[inaudible] Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lingelbach,[inaudible][inaudible] John Scholes, John Scholes, John Scholes, John Scholes, John Scholes, John Scholes, John Scholes, John Scholes,[inaudible] John Scholes, John Scholes, John Scholes, John Scholes[inaudible] Scholes, John Scholes, John Scholes, John Scholes[inaudible] Nicholas Lamm, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Nicholas Lamm, Max Herrmann, Peter Buhler, Simon Scholes, Thomas Lingelbach, Peter Buhler, Simon Scholes, Thomas Lamm,[inaudible]

Okay.

[music].

Okay.

[music].

Thomas Lingelbach: And of course, the whole topic around margin is a difficult one. And as I said, I let Peter develop this further because we have a brand new chain of custody for chicken gunya. You know that chicken gunia is a life attenuated and hence liophilized vaccine, which means that we are doing part of the manufacturing in the house, part of the manufacturing with third parties, and there is a significant economy of scale effect, but Peter, please.

Okay.

[music].

Peter Buhler: Yeah, thanks Thomas. So in terms of the launch cost and, you know, overall sales and marketing expense, what do we think about Chikungunya? So, as you rightly said, we, you know, Thomas also said we significantly invested in the pre-launch activities. I think you will continue to see high sales and marketing investment in Chikungunya as we start commercializing the product next year. And then over time, the way we think, in our long-range plan, I think we expect our overall sales and marketing spend in percentage of sales to go back to the regions where it was pre-COVID, but we're probably talking here about range 26, 27.

Okay.

[music].

Okay.

[music].

Peter Buhler: Before that, there will be some overinvestment, of course, because of the market education, etc. In terms of cross-marching, similarly here, I think in the first years and as sales ramp up, we're expecting some higher costs of goods than what you would have seen in the legacy business before COVID. And then, you know, once we get to scale, and as Thomas said, there's a significant economies of scale as we ramp up the volumes. I think we expect to see at least similar cross-marches as what we would have seen with ICSR and Duquharal. And I think over time, I think we will even see higher gross margins. Yes.

Yes.

[music].

Yes.

[music].

Okay.

Yes.

Okay.

Sure.

Okay.

Yes.

Okay.

[music].

Susan Van Vortezan: Got it. All right, thank you. Then maybe just one last one from my side about the Lime Program. Now that the dust has settled on the timelines and you're giving your current cash position and a recent additional $100 million loan facility, can you elaborate on how we should think about your cash burn and runway from here? And that's it for my time. Yeah, thanks, Suzanne.

Okay.

[music].

Yes.

Okay.

Sure.

[music].

Okay.

Yes.

Okay.

[music].

Okay.

[music].

Peter Buhler: Yeah, thanks, Suzanne. So we will still have significant payments to make on the line program. And I mean, you can see to some extent, of course, on the liability side of our balance sheet, what is expected to happen there. I think overall, after the 2022 equity offering, we said we were sufficiently financed at least until the end of the fiscal year 2024. That, of course, still holds true.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

Okay.

Thanks.

Okay.

Yes.

[music].

Yes.

Okay.

Peter Buhler: But we have not provided, at this stage, an updated guidance on cash burn rate, something to consider in the future, but right now, we have not given any further guidance. But we're, you know, for the foreseeable future, of course, sufficiently financed. And then, as we said, we still have an appetite to potentially in-license R&D programs. And if we were to do that, that might then require additional and dedicated financing, which could also be non-dilutive, of course. I got it.

[music].

Okay.

Yes.

[music].

Okay.

[music].

Yes.

Okay.

Yes.

[music].

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

Okay.

Thanks.

Sure.

Yes.

Thank you.

Sure.

Okay.

Yes.

Sure.

Yes.

Okay.

[music].

Operator: We're not going to proceed with our next question. And the questions come from the line of Max Harmon from Stifel. Please ask a question.

Yes.

Okay.

[music].

Max Herrmann: Great, thanks very much for taking my questions, three if I may. Firstly, just on Xero and Dukoro, I know last year you had some capacity constraints, and you've obviously highlighted a batch failure in XIRO in the first half of this year, and I wondered where you are with capacity compared with demand for both those products. So that's the first question.

Yes.

Sure.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

[music].

Thomas Lingelbach: Okay, so Max, overall, we are right now managing supply and demand quite well. We have, here and there, still some minor shortages.

Okay.

Thomas Lingelbach: But overall, on an 80, on an 80, 20 basis, we are fine. The effects that we were talking about, about higher write-offs leading to higher costs of goods, were typical, I would say, restart issues after the team had not done Ixiero manufacturing for more than two years. So, but we are back on, you know, track with regard to the manufacturing performance here too. So we are not expecting any further significant issues with supply demand from a supply perspective, unless, of course, we see further positive surprises on the demand side. We are seeing in some countries an enormous uptake and increase of Trava vaccines in general. So we have to see how this is all going to play out going forward, but that's far everything found.

Yes.

Thank you.

Yes.

Okay.

Yes.

Thanks.

Okay.

[music].

Yes.

Okay.

[music].

Yes.

[music].

Okay.

Sure.

Okay.

Max Herrmann: Great, and the next couple of questions. One, sorry if I've missed it, the DOD contract. You talked about that being imminently signed. I just wondered what the sort of structure of that is, obviously, you did a more multi-year contract in the past, recent past, and then previously it was more an annual event, so that was kind of the question. And then finally, just in terms of, I know you've just said that, recruitment into the Lyme disease program is no issue.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Max Herrmann: I wondered if you could be more specifically a bit on the pediatric element of that recruitment, whether this is, in some ways, the fact that you've done over two seasons now has maybe been helpful because I know that was one of the areas that was hardest to recruit into. Thank you.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

[music].

Thomas Lingelbach: Yeah, well, on the contract itself, I mean, you rightly pointed out that historically, we have done single-year contracts. And that has been the standard with DOD. We had one exception, which was the 2020 base year plus option year contract. It wasn't an exception. It never materialized in reality because it unfortunately coincided with the global pandemic, as you know.

Okay.

Thanks.

[music].

Okay.

Yes.

Okay.

Yes.

Sure.

Great.

Okay.

Thomas Lingelbach: So, and this gives you the answer we are expecting, yeah. So on the recruitment front itself, we continue with a certain percentage of pediatric patients within the study, which is absolutely. Absolutely in line with how we have designed the protocol and how we have also set the respective analysis and powering. So there are no issues in the recruitment of any of the target populations that we need within the study at this point. Great, thank you very much.

Yes.

Okay.

Yes.

Great.

Sure.

Thank you.

Sure.

[music].

Yes.

Sure.

Great.

Okay.

Yes.

Operator: We have no further questions at this time. I'll hand it back to you for closing remarks. Thank you.

Sure.

Thomas Lingelbach: Yeah, I think that concludes today's call on our half-year 2023 results and general corporate and business updates. We would like to thank you again for your time today, for your good questions, and for following us so closely and diligently, and would look forward to catching up in the coming months. Thank you so much and have a great day. Ladies and gentlemen, this concludes today's conference.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Sure.

Right.

Okay.

Yes.

Okay.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you, and the Thank you. Thank you.

Sure.

Yes.

Sure.

[music].

Okay.

Yes.

Okay.

Operator: and then. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you, Bhopal.

Yes.

[music].

Yes.

Sure.

Hum.

Tom.

Yes.

Okay.

Operator: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

Yes.

Okay.

Yes.

[music].

Okay.

Yeah.

Yes.

Half Year 2023 Valneva SE Earnings Call

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