Full Year 2023 Valneva SE Earnings Call
Okay.
Good day and thank you for standing by welcome to the brand name is full year 2023 results and business update conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one one on your telephone.
You will then hear an automated message advising Johan does Reis withdraw a question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand over to the speaker today, Joshua Drumm VP Global Investor Relations. Please go ahead.
Thank you Hello, and thank you for joining us to discuss <unk> full year 2023 results and corporate update.
My pleasure to welcome you today in addition to our press release and analyst presentation. You can find our consolidated financial results for the 12 months ended December 31, 2023, which were published earlier today available within the financial reports section on our Investor website.
I'm joined by Bill Niebur, CEO, Thomas Lingelbach, and our CFO, Peter Buhler, who will provide an overview and update on our business as well as our key financial results for the year there.
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 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 commit.
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 March 22024, and <unk> 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 Josh.
<unk> come to us to date.
I think Paul.
Yeah. The year 2023 was not a year without challenges.
But also a year with many achievements.
We are proud of.
We made excellent progress across our R&D pipeline and of course <unk>.
23 wallet, our typical near year.
We got FDA approval for the West was only in for Us.
Chikungunya vaccine.
And very recently <unk> recommendation.
Respected adoption.
We enrolled.
The.
Phase III study with Pfizer online completely.
And we are just about to re entering phase one was the second generation.
Pick up.
And I'm going to go into more detail on all of our programs.
We are seeing significant growth of our commercial business product the product refund msas across defense and 2020 towards say by 26%.
Both <unk>, our proprietary brands grew more than 70%, respectively with the 2022.
And overall product grew 63% versus 2020.
Building.
<unk> phase.
We go into much more detail.
We are publicly funded with a strong mid term financial outlook.
We had more than 120 million euros cash at year end.
Message that with <unk>.
The $100 million expertise from our <unk>.
Early this year and very recently, we extended.
The repayment of our interest only period.
50 yarn facility.
Which of course.
In a significantly lower cash burn for the company.
The operational business is.
Therefore.
Consider sufficiently funded.
Excluding debt prepayment of costs at a certain point in time.
<unk> the line commercial revenues in April a sustained profitability.
When we look at the business in more detail.
I would like to start this time with our strategy.
Where do we see the company going.
And as.
As we have said already.
More than 10 years ago, when we created by lever.
Our strategy is to become a globally recognized the company.
Fully integrated focused on the development manufacturing and commercialization of vaccines in.
Areas of unmet medical need contributing to our vision.
To a world where no one dies suffered from a vaccine preventable disease.
We see our strategy in three key pillars number one.
Driving commercial growth.
With the recent approvals.
Except in the United States, and our expected forthcoming approvals in other territories.
We see really the opportunity to unlock value by building awareness and market and growing.
We hereby capitalized on the panel effect within our existing travel.
We will further expand global reach.
More attracting low medium income countries through partnerships.
And with a change in the overall setting in the portfolio and more focus on proprietary product.
We see really.
Cash flow positivity from the commercial business.
Finally trying to pipe.
The second pillar is to capture our R&D upsides.
We will continue investing in new vaccines that address unmet medical needs.
And we will leverage our proven R&D engine and strategic partnerships.
And we believe we are well positioned to do that.
Having developed three vaccines in the meantime.
Early discovery to licensure.
We will continue focusing on vaccines that can make a difference.
The only bad.
And we will generate meaningful catalysts for our investor.
Pocketing the next phase III entry host Leigh.
We will maximize our integrated business model. We believe we are one of the very few companies left in the <unk> space that can really build on an integrated model.
So which means we will built continued value from R&D and commercial execution.
Supports the timely approval of our line vaccine, which we continue to see.
Lots of catalysts going forward.
By doing so we see the possibility to achieve sustained profitability with potential successful commercialization and revenues.
Online from our partner pipeline.
When we look at.
<unk>, the world's first and only chikungunya vaccine.
It's FDA approved in adults.
More additional regulatory approvals are expected.
This year.
It's a live attenuated vaccine that offers strong and long lasting protection from a single shops, and we target a minimum of five years either.
The FDA approval triggered also the <unk>, which we sold as I mentioned earlier NPA CRP recommended the vaccine for certain travelers laboratory.
U S launch is well underway.
And we are selling through our existing and proven commercial infrastructure.
Going forward, we see three key segments in terms of market opportunity.
One of course travelers.
Military, but also an opportunity for our stock price.
Given that.
Chicken Couldnt guys on the list of potential outbreak of captain.
Diseases.
We will continue leveraging partnerships for Latin America and other fees.
And with more visibility on the travel sector the awareness around ticket going out the market opportunity around technical.
We clearly see.
That the global market for Chikungunya vaccine.
Seed half a billion.
With probably three to 400 million represented alone by the segment I was talking about earlier.
In terms of upcoming milestones I mentioned, the additional anticipated approvals.
EMA has Canada, and then lead time per vehicle.
And we will of course also initiate the regulatory process.
Towards the later part of this year.
Yes.
Further to go through the clinical development.
Mainly the phase four clinical program, but also other clinical activities EG into pediatrics.
And as we generate more and more data.
We will undergo filings for potential label expansion.
Okay.
I mentioned already that our chip vaccine has a very differentiated target profile.
It shows a rapid and.
And long lasting immunity across all age groups.
And here I would like to specifically point out that the vaccine.
It has very very high fuel protection level.
Including the most vulnerable population, namely elderly about 65 years of age which has to be specifically mentioned in the PVC.
Adopted ACI recommendation.
We have close to 100% response rates after the thing of explanation as it has been maintained at a very high level.
Over time.
We've updated our already up to two years, we will generate data out for three years.
And on safety.
<unk> is generally they have tolerated.
Of course, it is a live attenuated vaccine like attenuated vaccine.
The advantage that the distinguished shops, you have a very large protection.
But there is a certain level of rig tonicity.
Absolutely in line with other well established like attenuated vaccines to the market.
We recorded adolescent trial data and.
These data suggest a favorable safety profile, regardless of previous <unk> infection.
Turning to our Lyme disease vaccine candidate VLA 15.
It is today, the world's leading vaccine candidate against Lyme disease.
The only program in advanced clinical development today.
By way of reminder, it is a multi valence recombinant protein based vaccine that target.
Prevalent newer types of LIBOR users in the northern Hemisphere is follow a proven established and validated motive action. We've got U S. FDA prospect designation as I mentioned at the beginning the phase III pivotal efficacy study is now fully enrolled.
The program is partnered with Pfizer.
They have an exclusive worldwide rights to commercialize the product and.
And we anticipate the market opportunity to be north of $1 billion.
We have already received under the partnership with <unk>.
With Pfizer certain milestone payments, but overall.
We are eligible for milestone up to $408 million.
And.
Upon successful commercialization tiered royalties from 14% to 22% when.
When we look at the upcoming milestone, which are in the short term or execution related.
Of course, we will and this is an important point when we talk later about the financial complete our financial contribution to Pfizer.
In the first half this year.
Then on the execution side, we expect to complete full explanation for the cohort one and the primary destination for the core tool.
The court one would have received three doses primary plus adult adult to.
Sure.
We will later in the year.
Two year antibody consistent with the results.
Which will give us a better indication as to whether this vaccine.
Require an annual booster later or not.
And as guided.
Many times.
We expect efficacy results from the phase III trial at the end of 2025.
Which if successful will support regulatory filings with <unk>.
Currently foresee in parallel in the United States and Europe in 2012.
Okay.
Slide 12 of the presentation.
<unk> one more time, the phase III efficacy study designs.
Youll remember that following initial operational issues.
We split it in two court within one study.
Roughly 50 50, we have now.
Enrolling more than 9000 participants.
Saudi is randomized one to one vaccine against placebo or two to one North America versus EU and the primary endpoint is the rate of confirmed many of these cases.
After two consecutive sixth season, and when I mentioned earlier pulling back the nation to be expected for cohort one.
And then of course for cohort two.
The most of explanation will come next year.
Turning to pick out.
And at the beginning that.
We have decided to.
We enter clinical development of Zika vaccine.
Leveraging what we call our optimized second generation platform, which is a platform that.
Originated from our competitors, but I expect that <unk> got further than extended and optimize for our Colgate vaccine BLA 2001, and we believe that this second generation <unk>.
Tremendous inactivate Covid virus vaccine platform.
These two tests for.
Pickup.
And.
So T copies.
As many of you know also transmitted by IHS mosquito.
We all have experienced.
And have seen the devastating impact that you guys actually kind of cost.
And today there are no vaccines are specific treatments available it is a <unk> eligible.
Disease.
And.
And there is potential funding for public institution.
And we see their BD opportunities given.
The emerging epidemiology around CCAR.
In terms of next milestones, we will execute the phase one study to try with the enhanced both at an optimized formulation and then we will decide on the further development strategy considering the result of cost.
More insights around the market opportunities and external non diluted funding.
This is updated on the business I would like to hand over to Peter to provide us with the financial report.
Thank you Thomas.
Good morning, or good afternoon to all of you now, let's look at the financial review of our fiscal year 2023.
Total productive surpassed pre pandemic levels by 12%, reaching $144 6 million euros towards the upper range of our sales guidance.
Represents an increase of 26% versus prior year.
2023 productive included price book to the 1 billion euros and physical COVID-19 vaccine relate 2000 had one which was discontinued in 2022, we do not expect the cobot sales for 2024 onwards.
Product sales, excluding BLA two vessels, one reached $138 9 million an increase of 63%.
This increase was driven primarily by substantial growth of our proprietary travel vaccines.
Looking in more detail.
Our sales reached $73 5 million, an increase of 78% versus prior year, primarily the result of the continued struggled law because recovery as well as price increases.
Is that the.
At the end of September 2023, we signed a new one year contract as the U S Department of defense work for minimum of $32 million of which a bit more than half is included in our 2023 sale.
Two cross sales reached $29 8 million compared to 17, particularly in Europe in 2022, an increase of 17, 2%.
Similar to its tiara two crore benefited from significant recovery in the prevalence of the travel market, particularly in Canada, where there was a strong overlap between struggles to regions of Hyatt.
Hello.
A vaccine approved indication in this country.
Third party productivity increased by 34% to reach $35 7 million euros for the fiscal year 2023, which was mainly driven by sales under our distribution agreement with the very northern.
The very positive sales performance continues to be as already mentioned related to the recovery of global travel market several of which have reached out or even exceed the pre COVID-19 levels and we expect this trend to continue.
Moving on to slide 17, looking at the P&L, we already covered productivity other revenues, including revenues for collaborations licensing and services has now returned to the historic levels at length with 1 million euros.
Compared to 2022, which as you can see included substantial one off noncash revenues related to Covid.
Looking at expense, we observed a significant decrease in cost of goods and this is again, mainly the result of one off effects related to the wind down of our COVID-19 program.
Research and development expenses decreased sharply from $104 9 billion in 2022 to $59 9 million in 2023, which was driven solely by the lower spend on <unk> COVID-19 vaccine 2023 expenses were just below our guidance range of $60 7 million euros.
At the same time cost related to the Zika vaccine candidate increase as the company plans to Reinitiate clinical development imminently.
As we ramped up our preparations for <unk> or marketing or distribution expense increased to $33 500 euros in 2022 to $48 8 billion euros in 2023 of which $20 7 million euros were associated with launch preparations versus only $7 3 million in 2022.
G&A expense increased to $34 1 million euros in 2022 to $47 8 billion in 2023.
In 2022, all expense lines benefited from a substantial noncash adjustments.
Later to the positive effect of the cost related to the company's share based compensation due to the share price performance.
<unk> cost were also unfavorably impacted by a higher compliance costs related to our U S listing and one off recruiting cost.
Other income increased to $21 5 billion euros in 2023 for $12 2 million euros of the prior year, primarily due to grants income receipts with Scottish enterprise and the gains from settlement with a supplier related to the COVID-19 activities.
In 2023, the latest substantially reduce its operating losses to $82 1 million compared to $113 for renewals in 2022, which again was negatively impacted by non reoccurring expenses related to the wind down of our Covid program.
Adjusted EBITDA loss was nearly unchanged year over year at $65 2 million euros versus $62 million in 2022.
Now moving onto financial outlook on slide 19.
With addition of <unk>.
To our travel vaccine portfolio and with the continued growth we anticipate from our existing products, we expect our commercial business to deliver substantial growth over the midterm.
Based on current assumptions, we are targeting an approximately two X sales flow through the next three years this will be driven by our differentiated and highly competitive product.
Zero, which is the only Japanese encephalitis vaccine approved in the U S and Europe are the minutes with mandatory vaccine for U S troops deployed to Asia.
Take the first and only approved chikungunya vaccine.
The only color on exited with an additional approval for <unk> in key markets.
Next slide please.
We have raised our 2034 productive guidance since our February announcement, now estimated between $160 million to $180 million euros and productive.
Versus previously 150 to 280 million euros.
This revised estimates takes into account an improved outlook regarding anticipated the tiara supply constraints.
Still assumes trucks with a 20% to 30% reduction in third party sales this year driven by external supply constraints.
As to a total revenue estimate of $170 million to $190 million in 2024.
We now expect higher other income compared to our announced with the February went from 95 to 100 $500 to 100, 210 renewals largely reflecting the 95 million euros and proceeds from the sale of the chikungunya Pov.
We also lowered and narrowed our research and development expense guidance to between 65 90 million to between 60 and 75000 euros.
This was based on additional visibility for our chikungunya Zika related expenses as well as an expected non dilutive contributions from institutions and connections with chikungunya activities of the product tech transfers to deliver new logo nave us new a leader a manufacturing facility in Scotland.
Okay.
As Thomas mentioned, we ended the year with $156 1 billion yielded cash which was further augmented by 90% and use of proceeds from the <unk> sale.
This puts us in a very strong position as we expect to grow significantly less cash in 2024.
This is driven by a few factors primarily the fact that we expect to complete our contribution to the ongoing phase III study for <unk> 16, and the first half of this year.
Secondly, with continued revenue growth for HCR to grow and improve efficiency in our manufacturing processes, we expect our commercial business, excluding <unk> to be cash positive this year as it has.
As it has been pre pandemic and we anticipate significant further growth going forward and now handing back to Thomas to complete the midyear outlook. Thank you so much Peter.
Yes.
This is important that we address also many many questions that they have with piece in the market about the <unk>.
Mid term prospect of our business and where are we where we see this business going which is also why I started the presentation by reminding everyone of the <unk> strategy.
When we looked at more completely until mid term outlook.
Peter mentioned.
Theatre business excluding exchange.
We'll already be cash flow positive this year.
Including <unk>, we expect the commercial business to contribute cash and how time and see our R&D from 2025 onwards. It is driven by continued probably stayed close or download it took a while and we see especially Seattle at double digit year on year CAGR.
At least next three year.
We expect <unk> phase to exceed 100 million euros in year three of launch and this even assume a competitive product.
We will stay focused.
And strategic with regards to our investment in R&D.
And our objective is clearly to provide.
Our shareholder and.
Everyone, who can benefit from novel innovative vaccine with a new program to enter phase III. One line has completed its phase III.
We see substantial cross margin improvement as we are focusing on proprietary pain.
The majority of our third party product sales, especially.
The collaboration with BMS.
Got it.
Please go by your conference will resume shortly.
Okay.
Hello can you hear it.
We can hear you go ahead.
We expect gross margin improvement.
Significantly assist the SPF focusing on proprietary phase.
And.
We are improving substantially our manufacturing efficiency by leveraging our new facilities and predominantly at the facility in Scotland I laid out.
And as Peter mentioned, especially for chicken going out, but also for others, we expect sizable non diluted funding, helping us define it.
R&D.
When we look at the.
At the upcoming catalyst and news flow in the short term.
On chikungunya.
We expect to initiate.
Phase III and immuno compromised individuals.
In the first half of this year.
We talked at length about the upcoming potential approval by EMA has Canada in MISO.
We will file for potential label expansion as we generate more data.
We are a reminder, we generated already data for the 12 to.
18 year olds.
The yield.
And we will initiate our phase four clinical programs with.
We got to line.
As I mentioned earlier on the <unk> side as we expect to complete the booths of explanation for cohort one in the second quarter.
Then the initial $3 primary explanation for the core tool as well.
And the first part of this year.
And then S.
As Peter mentioned.
Complete our financial contribution.
Pfizer's phase III trial costs in the first half of this year and then later this year that.
Two year.
Antibody persistence and put the result is data which would help us.
Getting a better understanding about the necessity for a potential annual boosters for this vaccine.
Once implemented.
With regards traditional Newport news flow.
We do.
<unk> expects a new U S profit of defense supply contract in the second half of this year.
And in <unk>.
We will see.
Just more clarity on.
Our R&D pipeline as we go along.
In 2024.
<unk>.
I would like to hand back to the operator to take your questions.
Thank you.
Mind, you if you would like to ask a question.
One one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Please standby, while we compile the Q&A roster.
We will now take our first question.
Please standby.
Please standby and the first question comes from the line of Max Herrmann from Stifel. Please go ahead. Your line is now open.
Great. Thanks, very much for taking my questions.
Congratulations.
The milestones achieved during 2023 as well as obviously the chick momentous.
Approval three.
Three questions if I may firstly just.
In terms of getting back to the normal travelers market in terms of revenues to close pretty much back to where it was pre COVID-19, but still significantly below on <unk> and I wonder how much further catch up there is in volume terms for both products.
Question one.
Secondly.
It's just on.
And your kind of guidance overall, you talked about.
Bringing all the phase III asset into development in the sort of mid term.
Obviously.
She might not see the Zika program, particularly given <unk> recent announcement that they were holding.
Hoelting development to that.
Further external sources of funding.
Phase II.
And then.
Just wanted to know finally just on.
Thanks, Jacob when do you think you will have durability data.
Five years or more thank you.
Okay.
Hi, Max very good questions. So basically.
You're absolutely right.
We have not all market reach volume buys.
Pre <unk>.
Covid levels in some markets, we opex to pre COVID-19 volume levels in other markets not yet.
However, we expect to be back to back or better.
In terms of volume this year.
Compared to pre Covid and every everything that we are seeing right now.
Points in this direction.
And this is specifically true for CCR rule.
And <unk>.
And I think that's a very important important points.
When it comes to phase III, we have intentionally not specified at this point in time.
Which program, we will bring into phase III.
We are looking at a number of internal opportunities.
Also external opportunities all just to avoid misunderstanding within our R&D budget.
And.
And so.
This is why I said on the news flow, we will provide further clarity on the pipeline development.
The latter part of this year.
When it comes to the.
Antibody persistence data.
We we have the <unk>.
The body participant study.
For Chikungunya is ongoing we reported the two year data last September and last December sorry.
So obviously just means that we're going to report the three year data. This December.
And the <unk>.
The trial will continue up to five years, so which means every year in December we will report.
One year more in terms of persistence data.
Hope this answers to questions.
Great. Thank you very much Thomas.
Okay.
Thank you.
And we'll now take our next question.
Bye.
And the next question comes from the line of Maury Raycroft from Jefferies. Please go ahead. Your line is now open.
Hi, Congrats on the progress and thanks for taking my questions.
I was going to ask one on the exchange.
For exceeding 100 million for X check by year three post launch can you talk about the assumption that goes into that can we assume that the $100 million as part of the 300 to 400 million market opportunity for travelers.
As well as military and should we extrapolate growth trajectory based on these numbers.
No travel vaccines historically have shown an S curve in the ramp up.
So there is a gap. This means you cannot just <unk>.
<unk> extrapolate that because we expect the es read to be the <unk>.
<unk> year of the of the periods, where it really goes deep.
And what we have assumed tier.
Indeed.
The let's say travel and military segment.
We have excluded.
For the time being any potential stockpiling opportunity.
We have excluded any.
Potential in meaningful sales in LMI seeds.
And we have used.
In terms of modeling the ISR data.
The experience that we have from <unk> with regards to adoption rates.
And travelers.
And the most recent.
Communicated price point for it.
Shake in the United States and on.
Which basis, we also extrapolating D b b other price points and market opportunities to travel.
I hope this other two questions.
Yes definitely helpful.
Thomas right. The beginning of your sponsor broke out a little bit and it came back and when you mentioned S curve.
The military segment.
Sorry, sorry can you repeat.
Let me just doesn't just do it one more time, so I just said that all travel vaccines.
Shoal.
From an uptake perspective, and an S curve.
Historically and this will certainly be also true for extreme.
So we expect the <unk> suite, which is why we have guided tier three is the first year, where we see that program going into the steeper curve vascepa part of the S curve.
And the $100 million that we are the greater than $100 million.
Include travel and military.
Got it okay makes sense.
For that $100 million.
$100 million.
So that includes presumably a U S military contract and there is there anything more you can say about that in <unk>.
The progress.
Progress in those communications with the military and where that could be announced.
Yeah. So.
So this is a good question. So we are.
Following approval and following recommendation.
We are now in active dialogue.
With the U S military but also.
With other public institutions and.
And government with regard to.
Potential government contracts, which include potentially even stockpile.
So those discussions are ongoing but please keep in mind that.
We we got the ACI P recommendation very very recently.
And and also for a CR or a certain periods.
After the ACI recommendation before we got into the first contract.
And this is what we are currently assuming as well.
Got it that's helpful.
And maybe one more question just.
Following the ACI P recommendation.
Maybe if you can talk about what your sales force is emphasizing for them as it relates to the extra data with payers and providers.
Is it the strong data in subjects 65 and up.
I guess, just what are some of the key points of the sizing and then how are you addressing the onset of Immunogenicity.
So basically.
The let's start from the from the very from the very end of your of your secure the different questions.
So the product got approved by way of accelerated approval pathway.
Like many other vaccine it's by the way.
So.
This means that the.
The immunogenicity level zero protected thresholds are predictive.
Consider predictive for efficacy.
And we all cause emphasizing our very strong data here that we are close to a 100%.
And that's it.
<unk>.
<unk>, where we see also a major differentiation against potential other vaccines that may enter.
And.
And the second point is of course the.
The unique setting that you have.
With a single chart, a very very long protection.
And.
And which of which of course means that.
That.
This is an important feature when <unk>.
People think.
About chikungunya of explanation.
Travel that's the goal there.
Very very often travelers who go multiple times.
Uh huh.
And there's a lot of data that supports that.
And therefore, we emphasize this.
And of course, we paid ads b.
The focus specifically.
The travelers 65.
Bob.
But we promote according to what we are allowed to promote meaning the label of <unk>.
The product as approved.
Okay. That's helpful. Thanks for taking my questions and I'll hop back in the queue.
Thank you.
We will now take our next question.
Please standby.
And the next question comes from the line of Evan Wang from Guggenheim Securities. Please go ahead. Your line is now open.
Hey, guys. Thanks for taking the question.
Just had two first the midterm outlook and some of the updated chikungunya market opportunity assumptions. It seems like the total market. It's consistent with what you guys have said prior wallet share of travelers at travelers. So can you help us walk us through some of the updated assumptions here that really driven by the ECB recommendation.
Hydrocarbon as rates or initial reception of it.
Rice.
And then Conversely in terms of the.
Reduced stockpiling or endemic opportunity.
And then secondly, I was really looking at the first year of launch node will be a ramp in the S curve that you described.
But if you could help us understand any stockpiling and seasonality and so we're still early on.
Yes.
A couple of different questions.
So first of all market opportunity as I said.
We have taken a couple of key data points into consideration.
<unk> CBD.
CDC map that decline.
Areas where chicken.
And chikungunya transmission represents a major risk basis.
Then we use the ISR data with travelers going through this area, meaning the total population.
That we are targeting and focusing on <unk>.
Also using of course.
Market data from.
The acceptance or expected acceptance for the vaccine.
Preliminary data show that especially.
The longevity of immune response, and the high levels of protection.
Especially appreciated by.
By potential customers.
And prescribers.
And then of course, we take adoption rates.
And dose adoption rates.
No.
A really educated also.
Based on our own experience from the travel vaccines sector.
And all that together have led us.
Tool.
Further fine tuning the opportunity.
For the vaccine in the travel segment.
As I mentioned earlier and this is including as I mentioned.
This points are the different price points in the different countries. Now what is important is we have not included any potential stockpiling opportunity at this point in time, because we don't think that it's prudent to do that in the absence of really knowing.
Whether there is a commercial opportunity around Arctic business.
We have not.
Necessarily decreased the LMI see opportunity.
We but we have not yet.
A clear feel for the <unk> opportunity and we will further develop that.
That's why we have focused our guidance right now on the.
On the travel segment.
Okay.
Thanks Keith.
We will now take our next question.
Yes.
Please standby.
And the next question comes from the line of Ed White from H C. Wainwright. Please go ahead. Your line is now open.
Good morning, Thanks for taking my questions.
First I just wanted to ask you about the third party.
Sales and moving to a proprietary.
Platform.
You had stated that this is going to improve gross margins.
But.
Will there be any impact on your SG&A efforts.
Yeah, Hey, this is Peter.
So.
The third party business was really a way for us to bridge revenues to in the call with US we have not really.
Adam.
I mean, we added a couple of people here or there, but really not not not not significant numbers. So to focus on our proprietary products will not have a dramatic impact on our SG&A cost.
Really it's really gross margin improvements that will be driven by that because of our proprietary production probably see much better gross margin.
Okay. Thank you Peter and my other question was just regarding potential.
Potential strategic.
Transactions, you've mentioned it before and I'm just wondering.
What is your strategy there maybe give us your thoughts on on what makes for good acquisition or what makes for a good target.
Yes, so basically.
We'll target.
Our next phase III program as I mentioned at the time when.
When the <unk>.
Pfizer <unk> phase III trial will be completed.
And we have a couple of interesting internal.
Programs, we are currently working on that.
Be advanced and accelerated to match this timeline and we put it in direct competition to a couple of external opportunities that we are evaluating.
When it comes to the criteria that we kind of use.
We have.
In the past.
Always focused our hour.
R&D pipeline development on trying to build.
Back themes and develop vaccine solutions in areas of unmet medical needs.
And where we can have a differentiated position.
First best only.
And.
And basically this is what we can do going forward.
And as <unk>.
Mentioned earlier as part of the news flow update.
We hope to present.
A more detailed pipeline strategy in the latter part of this year.
Okay, great. Thank you for taking my question.
Welcome.
Thank you.
We will now take our next question.
Please standby.
And the next question comes from the line of Nick <unk> from Goldman Sachs. Please go ahead. Your line is now open.
Oh, Hi, there. Thank you for taking my questions and just coming back to the chicken getting pregnant, okay on that phase four trial costs.
How should we be thinking about sizing of these costs and how significant of a non diluted contributions.
We're expecting towards those costs.
Then second if I may own financing, if we assume that there's no impact from potential business development deals in the near time.
Should we assume that you're going to be required to raise equity income at least price to potential launch. Thank.
Thank you.
So let me start with depressed part and then I'll, let Peter or develop a little bit this cash.
Outlook.
So.
So basically when we look at the pipeline development.
Absolutely right.
So we are not expecting.
Pipeline or any potential pipeline injection to negatively influence.
Our.
Cash runway that we have projected before when it comes to the phase four activities for chikungunya.
As part of our approval and we have disclosed this earlier dose phase for web.
Go over a long period of time, we have.
Roughly four to five years to complete the <unk>.
Two phase four studies, we have included this in our company.
Included I think in the company deck with regard to the timeline. So there is not necessarily an equal spread over there.
Spending but it's.
Many many years.
Our phase four spending.
We have said earlier that we are expecting.
Approximately 30% our contributions.
<unk> dose to those costs.
And.
Thats part of our planning going forward.
Peter on the cash runway discussion, yeah, I think as Thomas alluded to so we like we said we were sufficiently finance for our operating business.
Debt repayment.
It's a different story and for this I'm sure we will find a solution.
And so that's the feel sufficiently finance for our operating businesses would include as Thomas said potentially injections that we could still cover that and so so right now we do not have any plans to raise further equity.
That's great. Thank you Mike.
Thank you.
We will now take our next question.
Please standby.
And the next question comes from the line of Sameer <unk> from <unk> Securities. Please go ahead. Your line is now open.
Hi, guys. Thanks for taking my questions.
I think I've got two or three.
Kickoff with Cri.
You mentioned getting back to pre Covid levels, I think pre COVID-19.
Our margin nickname.
Percent.
Quite a bit of a jump from 50 awards that we've seen.
This year over 2023.
Perhaps maybe a bit of commentary on how you expect the margin channels in line of that.
Great.
And then just on X chick.
Again on margins and I guess prices, we can see it's been lifted at $350 I'm just trying to work out what that would mean in terms of a net price to you guys think you can help on that either nice that'd be great. Thanks.
Sure.
Yes, I can start with <unk>.
Speaker Change: And hey, somebody who by the way. So so yes, youre right. So pre Covid I think the margins we had published work in the sixties.
And.
Speaker Change: Yes, I think close to 70.
We do not see any reason why we have not gone back to.
Two it's too it's this range again.
<unk>.
And then I think on the ex Chick.
It's public so the.
ex Chick: Wholesale acquisition price is $2 75 dollar.
Speaker Change: So thats basically what we do.
Speaker Change: Experts in the United States.
Speaker Change: Okay, that's great thanks very much.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: We will now take our next question.
Please standby.
Speaker Change: And the next question comes from the line of Suzanne Wang <unk> chosen from Van Landshark Kempen. Please go ahead. Your line is now open.
Boran Wang: Hi, This is <unk> on behalf of Suzanne Thanks, a lot for taking my question. So I was wondering what was the trigger to put out there.
Boran Wang: Outlook.
Speaker Change: And if you could confirm whether the midterm outlook.
Including or excluding any potential milestones from Pfizer.
Speaker Change: Thank you.
Speaker Change: Yeah. So so basically we have.
Received.
Speaker Change: A lot of feedback with regards tool.
Speaker Change: How we see the <unk>.
Speaker Change: Commercial business going, especially for a new indication and a new Kodak.
Speaker Change: For which no benchmarks and no.
Speaker Change: Real data exist.
And therefore, we thought it is.
Speaker Change: Prudent to provide.
Speaker Change: Further clarity on number one on the.
Speaker Change: Let's say the future of the commercial business.
Speaker Change: And how we see the ramp up in the launch year.
Speaker Change: The second part is of course.
Speaker Change: We have received many questions around cash and cash necessities.
Speaker Change: Given that we have.
Speaker Change: Clearly articulated that we would put on pipeline development in.
Speaker Change: In direct competition to potential external pipeline injection, we wanted to make sure that people do not interpret this as.
Speaker Change: External means.
Speaker Change: Financing needs an imminent need.
Speaker Change: When it comes to the line to the nonpayment.
Speaker Change: The line.
Speaker Change: The line payment.
Speaker Change: Hum.
Speaker Change: At the point, where we actually commercialize the vaccine or web pfizer's going to commercialize the vaccine.
Speaker Change: No.
Speaker Change: They will be part of when.
Pfizer: The influx that we expect.
Pfizer: To the business to turn into sustained profitability.
Pfizer: Okay.
Pfizer: Okay, great. Thank you.
Pfizer: Welcome.
Pfizer: Thank you.
Speaker Change: As a reminder, if you would like to ask a question you will need to press star one one on your telephone and wait for your name to be announced to ensure your question. Please press star one again.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: Yeah.
Okay.
Speaker Change: As there are no further questions I would now like to hand back to the speakers for closing remarks.
Speaker Change: Thank you so much for your time, Thank you for your support and the excellent questions today and.
Speaker Change: Wish you.
Speaker Change: A good remainder of blades are the best.
Speaker Change: This concludes today's conference call.
Speaker Change: For participating you may now disconnect.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Mhm.
Speaker Change: Hmm.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music] okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Thanks.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: No.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Thanks.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Thanks.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Okay.
Speaker Change: [noise].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Hum.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
[music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Thank you.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change:
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Thank you Hello, and thank you for joining us to discuss <unk> full year 2023 results and corporate update.
Speaker Change: My pleasure to welcome you today in addition to our press release and analyst presentation. You can find our consolidated financial results for the 12 months ended December 31, 2023, which were published earlier today available within the financial reports section on our Investor website.
Speaker Change: I'm joined by Bill Niebur, CEO, Thomas Lingelbach, and our CFO, Peter Buhler, who will provide an overview and update on our business as well as our key financial results for the year there.
Bill Niebur: There will be an analyst Q&A session session at the conclusion of the prepared remarks.
Bill Niebur: 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 peer periodic filings with the securities and exchange.
Speaker Change: And with the French market authority, which are listed on our company website.
Speaker Change: Please note that today's presentation includes information provided as of today March 20th 2024, and <unk> undertakes no obligation to revise or update forward looking statements, except as required by applicable securities laws.
Speaker Change: With that it's my pleasure to introduce Thomas to begin today's presentation.
Thomas Lingelbach: Thank you so much Josh.
Thomas Lingelbach: <unk> come to us today.
Thomas Lingelbach: I call Yeah, a year frankly, we thought a year without challenges.
Thomas Lingelbach: But also a year with many achievements.
Thomas Lingelbach: <unk>.
Speaker Change: We made excellent progress across our R&D pipeline and of course <unk>.
23 wallet: 23 wallet, our chikungunya year.
FDA: We got FDA approval for the work was only in for us.
FDA: Chikungunya vaccine.
Speaker Change: And very recently <unk> recommendation.
Speaker Change: The effective adoption.
Speaker Change: We enrolled.
Speaker Change: The.
Pfizer: Phase III study with Pfizer online completely.
Pfizer: And we are just about to re entering phase one was the second generation.
Speaker Change: Pick up.
Speaker Change: And I'm going to go into more detail on all of those programs.
Speaker Change: We have seen significant growth of our commercial business our product the product refund msas by Fox defendants and 2020 tools se.
By 26%.
Speaker Change: Both Ixia ROI took all our proprietary brands grew more than 70%.
Fox defendants: Active fleet with those 2022.
Fox defendants: And overall product basically 63% for 2020.
Fox defendants: Excluding the COVID-19 phase.
Fox defendants: Go into much more detail.
Fox defendants: We are publicly funded with a strong mid term financial outlook.
Speaker Change: We had more than 120 million euros cash at year end, we augmented that with.
Speaker Change: $400 million expertise from our <unk>.
Speaker Change: Early this year and very recently we had.
Speaker Change: And it.
Speaker Change: The repayment of our interest only period.
Speaker Change: Existing loan facility.
Speaker Change: Which of course.
Speaker Change: Results in a significantly lower cash burn for the company.
Speaker Change: The operational business.
Speaker Change: Therefore, it's.
Speaker Change: But they are sufficiently funded.
Speaker Change: Excluding debt prepayment of course at a certain point in time.
Speaker Change: Until the line commercial revenues in April a sustained profitability.
Speaker Change: Right.
Speaker Change: When we look at the business in more detail.
I: I would like to start this time with our strategy.
I: Where do we see this company going.
I: And.
Speaker Change: As we have said already.
More than 10 years ago, when we created by Libra.
Libra: Our strategy is to become a globally recognized vaccine company.
Putting integrated focused on the development manufacturing and commercialization of vaccines and <unk>.
Libra: Unmet medical needs contributed to our vision.
Libra: To a world where no one dies suffered from a vaccine preventable disease.
We see how our strategy in three key pillars number one.
Speaker Change: Driving commercial growth.
Speaker Change: With the recent approvals.
Speaker Change: Off take in the United States, and our expected forthcoming approvals in other territories.
unknown: We see really the opportunity to unlock value by building awareness and market and growing.
Speaker Change: We hereby capitalized on the bundle impact within our existing travel.
Speaker Change: We will further expand the global reach.
Speaker Change: More attracting no medium income countries through partnerships.
Speaker Change: And with a change in the overall setting in the portfolio and more focus on proprietary product.
We see really.
Speaker Change: Cash flow positivity from the commercial business.
Speaker Change: Finally trying to pipe.
The second pillar is to capture our R&D upsides.
Speaker Change: We will continue investing in new vaccines that address unmet medical needs.
Speaker Change: And we will leverage our proven R&D engine and strategic partnerships.
Speaker Change: We believe we are well positioned to do that.
Speaker Change: Having developed three vaccines in the meantime.
Speaker Change: Early discovery to licensure.
Speaker Change: We will continue focusing on vaccines that can make a difference.
Speaker Change: First only bad.
Speaker Change: And we will generate meaningful catalysts for our investor pack.
Leigh: <unk> the next phase III entry host Leigh.
We: We will maximize our integrated business model. We believe we are one of the very few companies left in the <unk> space that can really build on an integrated model.
Speaker Change: So which means we will build continue value from R&D and commercial execution.
Leigh Host: We will support the timely approval of our lime vaccine, which we continue to see.
Speaker Change: Lots of catalysts going forward.
Speaker Change: By doing so we see the possibility to achieve sustained profitability with potential successful commercialization and revenues.
Speaker Change: Online from our partner pipeline.
Speaker Change: When we look at.
Partner: <unk>, the world's first and only chikungunya vaccine.
FDA: It's FDA approved in adults.
More additional regulatory approvals are expected.
Speaker Change: This year.
Speaker Change: It's a live attenuated vaccine that offers strong and long lasting protection from a single shops, and we target a minimum of five years either.
Speaker Change:
Speaker Change: The FDA approvals triggered also the <unk>, which we sold as I mentioned earlier NPA CRP recommended the vaccine for certain travelers laboratory.
Speaker Change: U S launch is well underway.
Speaker Change: And we are selling through our existing and proven commercial infrastructure.
Speaker Change: Going forward, we see three key segments in terms of market opportunity.
NPA CRP: One of course travelers.
NPA CRP: Military, but also an opportunity for our stockpile.
NPA CRP: Even that.
She: She can put you guys on the list of potential outbreaks of captain.
She: Diseases.
Speaker Change: We will continue leveraging partnerships for Latin America, and other than that might be.
Speaker Change: And with more visibility on the travel sector, the awareness around chicken going out the market opportunity around taking putting here.
Speaker Change: We clearly see.
unknown: That the global market for chikungunya vaccine will exceed half a billion.
unknown: With probably three to 400 million represented alone by the segment I was talking about earlier.
unknown: Okay.
unknown: In terms of upcoming milestones I mentioned, the additional anticipated approvals.
unknown: EMA has Canada, and then lead time per vehicle.
And we will of course also initiate the regulatory process.
unknown: Towards the later part of this year, we will.
unknown: Yes.
Speaker Change: Further to go through the clinical development.
EMA: Mainly the phase four clinical programs, but also other clinical activities EG in the pediatric fever.
Speaker Change: And as we generate more and more data.
Speaker Change: We will undergo filings for potential label expansion.
Speaker Change: Okay.
Speaker Change: I mentioned already that our tic vaccine has a very differentiated target profile.
It shows a rapid and.
Speaker Change: And long lasting immunity across all age groups.
Speaker Change: And here I would like to specifically point out that the vaccine.
Speaker Change: It has very very high fuel protection levels.
Speaker Change: Including the most vulnerable population, namely elderly above 65 years of age which has to be specifically mentioned in D. C.
Speaker Change: <unk>.
ACI: Adopted ACI recommendation.
Speaker Change: We have close to 100% response rates after the thing of explanation as it has been maintained at a very high level.
Speaker Change: Over time.
Speaker Change: We've updated our already up to two years, we would generate data out to three years.
Speaker Change: And on safety.
Speaker Change: <unk> is generating that tolerate it.
Speaker Change #100: Of course, it is a live attenuated vaccine like attenuated vaccines.
Speaker Change #101: Have the advantage that the distinguished shocks do you have a very low protection.
Speaker Change #102: But there is a certain level of rig tonicity.
Speaker Change #103: Absolutely in line with other well established like attenuated vaccines to the market.
Speaker Change #104: We recorded adolescent trial data and.
Speaker Change #105: These data suggest a favorable safety profile, regardless of previous <unk> infection.
Speaker Change #106: Turning to our Lyme disease vaccine candidate DNA 15.
It is today, the world's leading vaccine candidate against Lyme disease.
Speaker Change #107: Only program in advanced clinical development today.
Speaker Change #108: By way of reminder, it is a multi valence recombinant protein based vaccine that target.
Speaker Change #109: Most prevalent serotype.
Speaker Change #110: <unk> in the northern Hemisphere is follows a proven established and validated motive action because U S. FDA prospect designation as I mentioned at the beginning the phase III pivotal efficacy study is now fully enrolled.
Speaker Change #110: The program is partnered with Pfizer.
Pfizer: They have an exclusive worldwide rights to commercialize Kodak.
Pfizer: And we anticipate the market opportunity to be north of $1 billion.
Pfizer: We have already received under the partnership with.
Pfizer: With Pfizer certain milestone payments, but overall.
Pfizer: We are eligible for milestone up to $408 million.
Pfizer: And.
Pfizer: Upon successful commercialization tiered royalties from 14% to 22%.
Speaker Change #111: When we look at the upcoming milestones which are.
Speaker Change #111: Short term or execution related.
Speaker Change #112: Of course, we will and this is an important point when we talk later about the financials.
Speaker Change #112: Complete our financial contribution to Pfizer.
Pfizer: In the first half this year.
Then on the execution side, we expect to complete put a explanation for the cohort one and the primary explanation for the core tool meaning.
Pfizer: The court one would have received three doses priming plus adult adult adult booster.
Speaker Change #113: We were later in the year to two year antibody consistent with the results.
Speaker Change #114: Which will give us a better indication as to whether this vaccine will require an annual booster later or not.
Speaker Change #114: And as guided.
Speaker Change #114: Many times.
Speaker Change #115: We expect efficacy results.
Speaker Change #116: From the phase III trial at the end of 2025.
Speaker Change #116: Which if successful will support regulatory filings, which we currently foresee in parallel in the United States and Europe in 2012.
Speaker Change #116: Okay.
Speaker Change #116: Slide 12 of the presentation.
Speaker Change #117: So one more time the phase III efficacy study designs.
Speaker Change #118: Youll remember that following initial operational issues.
Speaker Change #119: We split it into court one study.
Speaker Change #120: Roughly 50 50, we have now.
Speaker Change #121: Enrolling more than 9000 participants.
Speaker Change #121: <unk>.
Saudi: Saudi is randomized one to one vaccine against placebo or two to one North America versus EU and the primary endpoint is the rate of confirmed many of these cases.
Saudi: After two consecutive sixth season, and when I mentioned earlier pulling back the nation to be expected for cohort. One is imminent and then of course for cohort two.
Speaker Change #123: The booster vaccination will come next year.
Speaker Change #124: Turning to pick out I mentioned at the beginning that we.
Speaker Change #124: We have decided to.
Speaker Change #125: We enter clinical development of Zika vaccine.
Speaker Change #126: Leveraging what we call our optimized second generation platform, which is a platform that originates from our competitor, but I expect that <unk> got further than extended and optimize for our Colgate vaccine BLA 2001, and we believe.
Speaker Change #127: At this second generation axiom ended inactivate, it's called virus vaccine platform is perfectly suited for.
Speaker Change #128: Pick up.
And.
Speaker Change #129: So T copies.
unknown: As many of you know also transmitted by mosquitoes.
unknown: We all.
T: We have experienced.
We: And have seen the devastating impact that.
Speaker Change #131: <unk> action kind of car.
Speaker Change #132: And today there are no vaccines are specific treatments available it is a <unk> eligible.
Speaker Change #132: These.
Speaker Change #132: And.
Speaker Change #133: And there is potential funding for public institution.
Speaker Change #134: And we see their BD opportunities given the.
Speaker Change #135: The emerging epidemiology around CCAR.
Speaker Change #136: In terms of next milestones, we will execute the phase one study to try with the enhanced both at an optimized formulation and then we will decide on the further development strategy considering the result of cost.
Speaker Change #136: More insights around the market opportunities and external non diluted funding.
Speaker Change #136: With this update on the business I would like to hand over to Peter to provide us with the financial report.
Peter Buhler: Thank you Thomas.
Peter Buhler: Good morning, or good afternoon to all of you.
Peter Buhler: Now, let's look at the financial review of our fiscal year 2023.
Peter Buhler: Total productive surpassed pre pandemic levels by 12%, reaching $144 6 billion euros towards the upper range of our sales guidance this year.
Peter Buhler: Represents an increase of 26% versus prior year.
Peter Buhler: <unk> hundred 33 productive included quite booked to the million euros in physical COVID-19 vaccine relate 2000 had one which was discontinued in 2022.
We do not expect the cobot sales for 2024 on the road.
Speaker Change #138: Sales, excluding BLA two vessels, one reached $138 9 million an increase of 63%. This.
Speaker Change #139: This increase was driven primarily by substantial growth of our proprietary travel vaccines looking.
Speaker Change #139: Looking in more detail. If you are a sales reached $73 5 billion, an increase of 78% versus prior year, primarily the result of the continued struggled one because recovery as well as price increases.
Speaker Change #139: As I said at the end of September 2053, we signed a new one year contract as the U S Department of defense work for minimum of $32 million of which a bit more than half is included in our 2023.
Speaker Change #139: Two cross sales reached $29 8 million compared to 17, particularly in Europe in 2022, an increase of 72%.
Hyatt: Ambulatory tiara two crore benefited from significant recovery in the prevalence of travel market, particularly in Canada, where there was a strong overlap between struggles to regions of Hyatt prevalent.
Speaker Change #139: Hello.
Speaker Change #141: A vaccine approved indication in that country.
Speaker Change #141: Third party productivity increased by 34% to reach $35 7 million euros for the fiscal year 2023, which was mainly driven by sales under our distribution agreement with the very northern.
Speaker Change #142: The very positive sales performance continues to be as already mentioned related to the recovery of global travel market.
Speaker Change #142: Several of which have reached or even exceed the pre COVID-19 levels and we expect this trend to continue.
Speaker Change #142: Moving on to slide 17, looking at the P&L, we already covered product to other revenues, including revenues for collaborations licensing and services has now returned to the historic levels at length with Walgreens.
Speaker Change #142: Compared to 2022, which as you can see it could be a substantial one off noncash revenues related to COVID-19.
Speaker Change #143: Looking at expense, we observed a significant decrease in cost of goods and this is again, mainly the result of one off effects related to the wind down of our COVID-19 program.
Company Representative: Research and development expenses decreased sharply from $104 9 million in 2022 to $59 9 million euros in 2023, which was driven solely by the lower spend on <unk> COVID-19 vaccine 2023 expenses were just below our guidance range of 60 to 70 million euros.
Company Representative: At the same time cost related to the Zika vaccine candidates increase as the company plans to Reinitiate clinical development imminently.
Company Representative: As we ramped up our preparations for <unk> or marketing or distribution expense increased to $33 5 million euros in 2022 to $48 8 billion euros in 2023 of which 27 million euros were associated with launch preparations versus only $7 3 million in 2022.
Speaker Change #145: G&A expense increased to $34 1 million euros in 2022 to $47 8 billion euros in 2023.
Speaker Change #146: In 2022, all expense lines benefited from a substantial noncash adjustments related to the positive effect of the cost related to the company's share based compensation due to the share price performance.
Speaker Change #147: <unk> cost were also unfavorably impacted by a higher compliance costs related to our U S listing and one off recruiting cost.
Scottish enterprise: Other income increased to $21 5 billion euros in 2023 for $12 $2 million in the prior year, primarily due to grants income receipts with Scottish enterprise and the gains from settlement with a supplier related to the COVID-19 activities.
Scottish enterprise: In 2023, the latest substantially reduce its operating losses to $82 1 million euros compared to $113 for renewals in 2022, which again was negatively impacted by non reoccurring expenses related to the wind down of our Covid program.
Scottish enterprise: Adjusted EBITDA loss was nearly unchanged year over year at $65 2 million euros versus $6 2 million euros in 2022.
Scottish enterprise: Now moving on to financial outlook with IP.
Scottish enterprise: With addition of X gene.
Scottish enterprise: To our travel got hit portfolio and with the continued growth with dissipate from our existing products, we expect our commercial business to deliver substantial growth over the midterm.
Based on current assumptions, we are targeting an approximately two X sales flow through the next three years this will be driven by our differentiated and highly competitive product.
Speaker Change #149: Which is the only Japanese encephalitis vaccine approved in the U S and Europe are the minutes with mandatory vaccine for U S troops deployed to Asia.
unknown: <unk> first of all the approved chikungunya vaccine and to grow the only color on exited with an additional approval for key markets.
unknown: Next slide please.
Speaker Change #150: We have raised our 2020 for productivity guidance since our February announcement now estimated between 160 to 180 million euros and productive.
Speaker Change #151: Versus previously 150 to 280 million euros.
Speaker Change #152: This revised estimate takes into account an improved outlook regarding anticipated tiara supply constraints.
Speaker Change #153: <unk> assumes trucks with a 20% 30% reduction in third party sales this year driven by external supply constraints.
Speaker Change #154: This brings us to a total revenue estimate of $170 million to $190 million in 2024.
Speaker Change #155: We now expect higher other income compared to our announced with the February went from <unk> 95 to 100 500 doors to 100, 210 renewals largely reflecting the 95 million euros and proceeds from the sale of <unk>.
Speaker Change #156: We also lowered and narrowed our research and development expense guidance to between 65 90 million to between 60 and 75000 euros.
Speaker Change #157: This was based on additional visibility for our chikungunya Zika related expenses as well as an expected non dilutive contribution from institutions and connections with chikungunya activities of the product tech transfers to deliver new level any of us knew of laid up a manufacturing facility in Scotland.
Speaker Change #157: Okay.
Thomas Lingelbach: As Thomas mentioned, we ended the year with $156 1 billion yielded cash which was further augmented by 90% and used the proceeds from the <unk> sale. This.
Thomas Lingelbach: This puts us in a very strong position as we expect to grow significantly less cash in 2024.
Thomas Lingelbach: This is driven by a few factors primarily the fact that we expect to complete our contribution to the ongoing phase III studies for <unk> in the first half of this year.
Speaker Change #158: With continued revenue growth for <unk> to grow and improve efficiency in our manufacturing processes, we expect our commercial business, excluding <unk> to be cash positive this year as well.
Speaker Change #158: As it has been pre pandemic and we anticipate significant growth going forward.
I'm now handing back to Thomas to complete the midyear outlook. Thank you so much Peter.
Speaker Change #158: Yes.
Thomas Lingelbach: It's important that we address many many questions that may have received in the market about the more midterm prospects of our business and where are we where we see this business going which is also why I started the presentation by reminding everyone of the <unk>.
Thomas Lingelbach: <unk> strategy.
Speaker Change #159: When we looked at more completely until image term outlook.
Peter Buhler: Peter mentioned.
Speaker Change #160: <unk> business excluding exchange.
Speaker Change #161: We'll already be cash flow positive year.
Peter Buhler: Including <unk>, we expect the commercial business to contribute cash and help financing our R&D from 2025 onwards. It is driven by continued probably stayed close or download it took a while and we see especially Seattle at double digit year on year CAGR for at least next three.
Peter Buhler: Sure.
We expect <unk> phase to exceed 100 million euros in year three of launch and this even if fuel.
Speaker Change #162: Competitive product entry.
Speaker Change #163: We will stay focused and.
Speaker Change #163: And strategic with regards to <unk>.
Speaker Change #164: <unk> and R&D.
Speaker Change #165: And our objective is clearly to provide.
Speaker Change #166: Our shareholder and.
Everyone, who can benefit from novel innovative vaccine with a new program to enter phase III. One line has completed its phase III.
Speaker Change #166: We see substantial cross margin improvement as we are focusing on proprietary Mikael.
Mikael: The majority of our third party product sales, especially.
BMS: The collaboration with BMS.
BMS: Got it.
Speaker Change #169: Please go by your conference will resume shortly.
Speaker Change #169: <unk>.
Speaker Change #169: Yes.
Speaker Change #170: Hello can you hear it.
Speaker Change #171: We can hear you go ahead.
Speaker Change #172: We expect gross margin improvement.
Speaker Change #172: Significantly assist the SPF focusing on proprietary sales.
Speaker Change #172: And.
Speaker Change #173: We are improving substantially our manufacturing efficiency by leveraging our new facilities and predominantly at the facility in Scotland I laid out.
Peter Buhler: And as Peter mentioned, especially for chicken going out, but also for others, we expect sizable non diluted funding housing finance.
R&D.
When we look at the.
At the upcoming catalyst and news flow in the short term.
Speaker Change #173: On chikungunya.
Speaker Change #174: We expect to initiate.
Speaker Change #175: Phase III and immuno compromised individuals are still in the first half of this year.
Speaker Change #176: <unk> talked at length about the upcoming potential approval by EMA has Canada in Utah.
Speaker Change #177: We will file for potential label expansion as we generate more data.
EMA: We are a reminder, we generated already data for the 12 to.
Speaker Change #178: 18 year olds.
Speaker Change #179: The yield.
Speaker Change #180: And we will initiate our phase four clinical programs with.
Speaker Change #181: We got to line.
Speaker Change #182: As I mentioned earlier on the vanilla kind as we expect to complete the booths of explanation for cohort one in the second quarter.
Speaker Change #183: Then the initial $3 primary explanation for the core tool as well.
Speaker Change #183: And the first part of this year.
Speaker Change #184: And then S.
Peter Buhler: As Peter mentioned.
Peter Buhler: Complete our financial contribution.
Peter Buhler: Pfizer's phase III trial costs in the first half of this year and then later this year that.
Peter Buhler: Two year.
Peter Buhler: Antibody persistence and put the result data hub, which would help us.
Peter Buhler: Getting a better understanding about the necessity for a potential annual boosters for this vaccine.
Once implemented.
Peter Buhler: With regards traditional Newport news flow.
Peter Buhler: We do.
<unk>: <unk> expects a new U S profit of defense supply contracts in the second half of this year.
<unk>: And.
<unk>: We will see.
Just more clarity on.
Speaker Change #186: Our R&D pipeline as we go along.
Speaker Change #186: In 2024.
Speaker Change #186: <unk>.
Operator: I would like to hand back to the operator to take your questions.
Operator: Yeah.
Operator: Thank you as a reminder, if you would like to ask a question.
Operator: One one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Operator: Please standby, while we compile the Q&A roster.
Operator: We will now take our first question.
Operator: Please standby.
Operator: Please standby and the first question comes from the line of Max Herrmann from Stifel. Please go ahead. Your line is now open.
Max Herrmann: Great. Thanks, very much for taking my questions.
Max Herrmann: Congratulations on the.
Max Herrmann: The milestones achieved during 2023 as well as obviously the chick momentous approval three.
Max Herrmann: Three questions if I may firstly just.
Max Herrmann: In terms of getting back to the normal <unk> market in terms of revenues to close pretty much back to where it was pre COVID-19, but still significantly below on <unk> and I wonder how much further catch up there is in volume terms for both products.
Max Herrmann: Question one.
Max Herrmann: Secondly.
Max Herrmann: It's just on.
Max Herrmann: And your kind of guidance overall, you've talked about.
Max Herrmann: Bringing all the phase III asset into development in the sort of mid term.
Max Herrmann: Obviously.
Speaker Change #189: I assume that's not let's see Zika program, particularly given <unk> recent announcement that they will hold.
Speaker Change #190: Hoelting development to that.
Speaker Change #191: Further external sources of funding.
Speaker Change #191: Phase two.
And then.
Speaker Change #192: Just wanted to know finally just on.
Speaker Change #193: X chicken when do you think you will have durability data.
Speaker Change #194: Five years or more.
Speaker Change #195: Okay, Yes.
Speaker Change #195: Hi, Max very good questions. So basically.
Speaker Change #195: You're absolutely right.
Max Herrmann: We have not in all markets reach volume buys.
Max Herrmann: Pre.
Max Herrmann: Colgate levels in some markets, we opex to pre COVID-19 volume levels in other markets not yet.
Max Herrmann: However, we expect to be back to back or better.
Max Herrmann: In terms of volume this year.
Max Herrmann: Compared to pre Covid and every everything that we are seeing right now.
Max Herrmann: Points in this direction.
Max Herrmann: And this is specifically tools for CCR rule.
Speaker Change #196: And <unk>.
And I think that's a very important important points.
Speaker Change #197: When it comes to phase III, we have intentionally not specified at this point in time.
Speaker Change #197: Which program.