Q2 2025 Valneva SE Earnings Call

Speaker #1: Good Good day and thank you for standing by. Welcome to the Valneva Q2 2025 financial results conference call and webcast. At this time, all participants are in a listen-only mode.

Operator: Good day and thank you for standing by. Welcome to the Valneva Presents its Half Year 2025 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please note that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Joshua Drumm, Vice President, Global Investor Relations. Please go ahead.

Speaker #1: After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, please press star one and one on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please note that today's conference is being recorded.

Speaker #1: I would now like to the conference over to your first speaker, Joshua Drumm, Vice President Global Investor Relations. Please go ahead.

Speaker #2: Thank you, operator. Hello and thank you for joining us to discuss Valneva's first half 2025 results and corporate update. It's my pleasure to welcome you today.

Joshua Drumm: Thank you, operator. Hello and thank you for joining us to discuss Valneva's first half, 2025 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 30, 2025, which were published earlier today, available within the financial reports section on our investor website. I am joined today by Valneva's CEO, Thomas Lingelbach, and our CFO, Peter Bühler, who will provide an overview and update on our business as well as our key financial results for the first half. There will be an analyst Q&A session at the conclusion of the prepared remarks.

Speaker #2: In addition to our press release and analyst presentation, you can find our consolidated financial results for the six months ended June 30th, 2025, which were published earlier today, available within the Financial Reports section on our investor website.

Speaker #2: I'm joined today by Valneva's 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 first half.

Speaker #2: 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 will 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.

Joshua Drumm: Before we begin, I would like to remind listeners that during this presentation, we will 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. Please note that today's presentation includes information provided as of today, August 12, 2025, 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.

Speaker #2: 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.

Speaker #2: Please note that today's presentation includes information provided as of today, August 12th, 2025, and Valneva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws.

Speaker #2: With that, it's my pleasure to introduce Thomas to begin today's presentation.

Speaker #3: Thank you, Josh. Good day, everyone. It's a pleasure to present our first half 2025 financial results and key business highlights. First half of the year, that has been quite eventful and marked by excellence in execution.

Thomas Lingelbach: Thank you, Josh. Good day, everyone. It is a pleasure to present our first half 2025 financial results and key business highlights. A first half of the year that has been quite eventful and marked by excellence in execution. We achieved total revenues close to €100 million, a very significant year-over-year growth, and a cash position of more than €160 million, which also marks not only a strong additional cash influx through ATM transactions, but also a significant reduction in operating cash burn, which again shows you that we are focusing on investing into the right things and really making sure that we retain a strong cash position as we go into the period of VLA15 data readout. We had further pipeline and regulatory progress around VLA15, IXCHIQ, and Shigella, and I am going to go into those in more detail.

Speaker #3: We achieved total revenues close to €100 million, a very significant year-over-year growth, and a cash position of more than €160 million. This also marks not only a strong additional cash influx through ATM transactions, but also a significant reduction in operating cash burn. This again shows you that we are focusing on investing in the right things and really making sure that we retain a strong cash position as we go into the period of line data readout.

Speaker #3: We have further pipeline and regulatory progress around line exit and Shigella, and I'm going to go into those in more detail. When we look on page five, what we have really seen or what we are seeing as our key highlights, in line with our mission and vision, we have really addressed unmet medical need in the first half of the year.

Thomas Lingelbach: When we look on page five, what we have really seen, or what we are seeing as our key highlights, in line with our mission and vision, we have really addressed unmet medical need in the first half of the year. We finalized a new supply agreement for IXIARO with the U.S. Department of Defense, and we responded to the French government's call for IXCHIQ to combat chikungunya outbreaks in La Réunion and Mayotte. We also responded to the cholera outbreak in Mayotte by supplying doses of DUKORAL. So really, by addressing those unmet medical needs, ensuring that we make a change to people's lives. On the regulatory and commercial achievements, we secured additional marketing authorizations for IXCHIQ in the UK, in Brazil, and label extensions for IXCHIQ in Europe for adolescents 12 years of age and older.

Speaker #3: We finalized a new supply agreement for its PRO with US Department of Defense, and we responded to the French government's calls for exit to combat chicken guinea outbreaks in La Réunion and Mayotte.

Speaker #3: We also responded to the cholera outbreak in Mayotte by supplying doses of tocoral. So really, by addressing those unmet medical needs, ensuring that we make a change to people's lives.

Speaker #3: On the regulatory and commercial achievements, we secured additional marketing authorizations for exit in the United Kingdom, in Brazil, and label extensions for exit in Europe for adolescents 12 years of age and older.

Speaker #3: We also announced an exclusive vaccine marketing and distribution agreement for Germany, with CSL securities. We are happy about this partnership. We had to undergo a very comprehensive safety assessment with the two key regulatory authorities, FDA and EMA, in connection with exit safety signals observed during mainly during the vaccination campaign on La Réunion.

Thomas Lingelbach: We also announced an exclusive vaccine marketing and distribution agreement for Germany with CSL Securious, and we are happy about this partnership. We had to undergo a very comprehensive safety assessment with the two key regulatory authorities, FDA and EMA, in connection with IXCHIQ safety signals observed mainly during the vaccination campaign on La Réunion. And we were able, through this collaborative interactions and approach with the agency, to lift the temporary age-related restrictions again. On VLA15, we are very happy that the Valneva study is progressing to plan. The entire program is progressing to plan, and as very recently announced by Pfizer during its earnings call, we completed the vaccination in the current Valneva phase 3 study.

Speaker #3: And we were able, through this collaborative interactions and approach with the agencies, to lift the temporary age-related restrictions again. Online, we are very happy that the Valois study is progressing to plan the entire program is progressing to plan and has very recently announced by Pfizer during its earnings call.

Speaker #3: We completed the vaccination in the current Valois Phase 3 study. On exit, we have seen a high sustained one-year immune response in adolescents, which again reconfirms what we have seen in adults.

Thomas Lingelbach: On IXCHIQ, we have seen a high sustained one-year immune response in adolescents, which again reconfirms what we have seen in adults, namely the key differentiation of this product: long-term antibody persistence and protection. We also achieved positive phase 3 pediatric safety and immunogenicity results for IXCHIQ. On Shigella, we have been progressing our first controlled human infection model study, and we initiated vaccinations in a dedicated phase 2 infant study. When we look at the programs one by one, of course, we would like to start with our VLA15 Lyme disease vaccine candidate, which is clearly the world's leading candidate in that field. As we reported at many occasions, Lyme disease represents a major medical need and hence market opportunity. There is currently no vaccine available to prevent Lyme disease in humans, and also the treatment options are very limited.

Speaker #3: Namely, the key differentiation of this product: long-term antibody persistence and protection. We also achieved positive phase three pediatric safety and immunogenicity results for exit.

Speaker #3: On Shigella, we have been progressing our first controlled human infection model study. And we initiated vaccinations in a dedicated phase two infant study. When we look at the program's one by one, of course, we would like to start with our Lyme disease vaccine candidate, which is clearly the world's leading candidate in that field.

Speaker #3: And as we reported at many occasions, Lyme disease represents a major medical need and hence market opportunity. There's currently no vaccine available to prevent Lyme disease in humans, and also the treatment options are very limited.

Speaker #3: The annual burden of disease is constantly increasing, and the most updated numbers show that we are approaching in the Northern Hemisphere more and more numbers that gear towards 1 million cases on an annual basis.

Thomas Lingelbach: The annual burden of disease is constantly increasing, and the most updated numbers show that we are approaching in the Northern Hemisphere more and more numbers that are geared towards 1 million cases on an annual basis. Many of those cases result in severe manifestations: carditis, neuroborreliosis, arthritis, and unfortunately, many people experience persistent symptoms, and those even persist following treatments with antibiotics. Therefore, there is a clear medical need and a clear objective to find a suitable, meaning efficacious, and safe preventative solution. When we look at the phase 3 study that is ongoing, this is a study that, for operational reasons, as reported many times in the past, has been split into two cohorts, but it is one study spanning over three tick seasons, tick season 2023, 2024, and 2025.

Speaker #3: Many of those cases result in severe manifestations, carditis, neuroboniosis, arthritis, and unfortunately, many people experience persistent symptoms. And in those even persistent following treatment with antibiotics.

Speaker #3: So, therefore, there is a clear medical need and a clear objective to find a suitable, meaning efficacious and safe preventative solution. When we look at the Phase 3 study that is ongoing, this is a study that, for operational reasons, as reported many times in the past, has been split into two cohorts, but it's one study.

Speaker #3: Spanning over three peak seasons—peak season 2023, four, and five—we included in this study more than 9,000 participants, aged 12 years and older. The study is randomized one-to-one vaccine against placebo, two-to-one North America versus Europe.

Thomas Lingelbach: We included in this study more than 9,000 participants aged 12 years and older, and the study is randomized one-to-one vaccine against placebo, two-to-one North America versus Europe. The primary endpoint and what we try to achieve here is prevention of the disease. Therefore, we are measuring, as part of the primary endpoint, the rate of confirmed Lyme cases after two consecutive tick seasons, meaning after completion of the full vaccination series, priming with three doses and first booster, therefore three plus one or four doses. This is the primary endpoint. With regards to secondary endpoints, of course, we will report, and we aim to report the number of Lyme disease cases and efficacy after the first tick season, and many other immunological endpoints as defined in the phase 3 protocol.

Speaker #3: The primary endpoint and what we try to achieve here is prevention of the disease. Therefore, we are measuring as part of the primary endpoint the rate of confirmed Lyme cases after two consecutive peak seasons, meaning after completion of the full vaccination series priming with three doses and first booster; therefore, three plus one or four doses.

Speaker #3: This is the primary endpoint. With regards to secondary endpoints, of course, we will report, and we aim to report the number of Lyme disease cases and efficacy after the first peak season, along with many other immunological endpoints as defined in the Phase Three protocol.

Speaker #3: On the slide on page nine, you can see that now all the little syringes here are marked green. And this is the key progress.

Thomas Lingelbach: On the slide on page 9, you can see that now all the little syringes here are marked green, and this is the key progress. With this progress, Pfizer reconfirmed that they aim to submit regulatory applications in the United States and Europe in 2026. This is in line with the timeline that we have reported, Pfizer reported in the past, namely that we aim to launch in the autumn of 2027, subject to positive data, to have people protected for the 2028 tick season. We are going to monitor this year the Lyme cases until the end of October. This is the end of the Lyme season. Thereafter, Pfizer will undergo case adjudication, database cleaning, and all of that.

Speaker #3: And with this progress, Pfizer reconfirmed that they aim to submit regulatory applications in the United States and Europe in 2026. And this is in line with the timeline that reported that we have reported Pfizer reported in the past, namely that we aim to launch in the autumn of 2027.

Speaker #3: Subject to positive theta, to have people protected for the 2028 peak season. We are going to monitor this year the Lyme cases until the end of October.

Speaker #3: This is the end of the Lyme season. Then thereafter, Pfizer will undergo case adjudication database cleaning and all of that. So everything is on track.

Thomas Lingelbach: So everything is on track, and we are looking forward to this data and hopefully to a nicely efficacious and safe vaccine that will be able to make a substantial change to people's lives and represent a major catalyst for Valneva going forward. Turning to IXCHIQ, our single-shot IXCHIQ vaccine, IXCHIQ or VLA1553, we mentioned already that FDA and EMA have now lifted again the temporary restrictions against use in elderly. You know that we had reports of serious adverse events in frail elderly individuals, primarily among elderly with multiple underlying health conditions, and most of it resulted and was observed through the mass vaccination campaigns in La Réunion in response to a very severe IXCHIQ outbreak. EMA and FDA therefore imposed temporary restrictions while they investigated together with us the reported SLE.

Speaker #3: And we are looking forward to this data and hopefully to a nicely efficacious and safe vaccine that will be able to make a potential change to people's lives and represent a major catalyst for Valneva going forward.

Speaker #3: Turning to chicken guinea, our single-shot chicken guinea vaccine, exit or VLA 1553, we mentioned already that FDA and EMA have now lifted again the temporary restrictions against youth in elderly.

Speaker #3: You know that we had reports of serious adverse events in frail elderly individuals. Primarily among elderly, with multiple underlying health conditions, and most of it resulted and was observed through the mass vaccination campaigns in La Réunion.

Speaker #3: In response to a very severe chikungunya outbreak, EMA and FDA therefore imposed temporary restrictions while they investigated, together with us, the reported SAEs.

Speaker #3: I mentioned already twice that those restrictions have now been lifted. And all the labels have been updated. What has been updated primarily are the youth conditions and the safety sections, precautions, and warnings.

Thomas Lingelbach: I mentioned already twice that those restrictions have now been lifted, and all the labels have been updated. What has been updated primarily are the use conditions and the safety sections, precautions, and warnings, either on the prescribing information in the United States or the summary of photocasted characteristics, SMPC in Europe. This reaffirms what we have been saying from the very beginning. A light attenuated vaccine has a clear advantage, especially for an outbreak disease which is unpredictable in terms of timing, and it is coming with a very, very long antibody persistence and protection. We are monitoring in a follow-up study antibody persistence for up to 10 years. Most importantly, IXCHIQ remains indicated for the prevention of disease caused by the chikungunya virus in individuals 18 years of age and older in the United States, 12 years and older in Europe, who are at high-risk exposure to chikungunya.

Speaker #3: Either on the prescribing information in the United States or the summary of products has been characteristic as NPC in Europe. And this reaffirms what we have been saying from the very beginning: a light attenuated vaccine has a clear advantage, especially for an outbreak disease, which is unpredictable in terms of timing.

Speaker #3: And it is coming with a very, very long antibody persistence and protection. We are monitoring, in a follow-up study, antibody persistence for up to 10 years.

Speaker #3: And most importantly, exit remains indicated for the prevention of disease caused by the chikungunya virus in individuals 18 years of age and older in the United States, and those 12 years and older in Europe, who are at high risk of exposure to chikungunya.

Speaker #3: So it remains an excellent vaccine solution if given to the right people in the right setting. Of course, we are continuing to focus expanding access, label extensions, and furthermore, the overall product profile for exit.

Thomas Lingelbach: It remains an excellent vaccine solution if given to the right people in the right setting. Of course, we are continuing to focus on expanding access, label extensions, and furthermore, the overall product profile for IXCHIQ. We have a very robust clinical program that is supported by a more than $40 million grant by CEPI, and we are grateful that CEPI continues to support this program and the company as a whole. The phase 4 aims to confirm effectiveness and basically is a key post-marketing commitment since the vaccine got its initial approval through an immunological surrogative protection, so-called accelerated approval pathway. There will be an observation effectiveness study in Brazil, a pragmatic randomized controlled effectiveness safety study in adults and adolescents to be confirmed in other endemic countries. We expect also further prospective safety cohort studies.

Speaker #3: We have a very robust clinical program that is supported by more than 40 million dollar grants by CIPI, and we are grateful that CIPI continues to support this program and the company as a whole.

Speaker #3: The phase four, aimed to confirm effectiveness and basically is a key post-marketing commitment since the vaccine got its initial approval to an immunological surrogate of protection, so-called accelerated approval pathway.

Speaker #3: There will be an observational effectiveness study in Brazil, a pragmatic randomized controlled effectiveness and safety study in adults, and adolescents to be confirmed in other endemic countries.

Speaker #3: And we expect also further prospective safety core studies. On the label extension, we aim to expand access to the vaccine for all age groups.

Thomas Lingelbach: On the label extension, we aim to expand access to the vaccine for all age groups and will gradually develop it accordingly. On the product profile, I think it is very important that we confirm the long-term durability of the immune response that we can show that the vaccine following a single-shot has a very long serious response rate and hence effectiveness. This ongoing antibody persistence, as I said earlier, is a study that will monitor people for up to 10 years. We reported positive three-month results today with four-year results coming up later this year. Now turning to Shigella, which is the world's most clinically advanced tetravalent Shigella vaccine candidate, we are targeting to cover with the four serotypes up to 85% of the Shigellosis infections. These infections are really life-threatening, especially in young children, and therefore also identified as a priority vaccine by WHO.

Speaker #3: And we're gradually develop it accordingly. On the product profile, I think it's very important that we confirm the long-term durability of the immune response that we have that we can show that the vaccine following a single shot has a very long response rate and hence effectiveness.

Speaker #3: And this ongoing antibody persistence, as I said earlier, is the study that will monitor people for up to 10 years. We reported positive three-month results today, with four-month or four-year results coming up later this year.

Speaker #3: Now turning to Shigella, which is the world's most clinically advanced tetravalent Shigella vaccine candidate, we are targeting to cover with the fourth serotype up to 85% of the shigellosis infections.

Speaker #3: And this infections are really life-threatening especially in young children. And therefore, also identified as a priority vaccine by WHO. We are aiming to develop the vaccine both for children living in low medium-income countries but also for travelers who are exposed to the disease.

Thomas Lingelbach: We are aiming to develop the vaccine both for children living in low-medium-income countries, but also for travelers who are exposed to the disease. Our partner, LimmaTech, reported positive phase 1 data previously in this program, which got awarded FDA FASTRAC designation. As I said at the very beginning, we launched a phase 2 infant study with data expected towards the latter part of this year. We have the ongoing phase 2B controlled human infection model study aiming to provide an early look at potential efficacy with efficacy data expected very early next year. Those studies are still led by LimmaTech. Valneva will assume all further regulatory R&D, CMC, and future commercialization activities in the near term. As we reported earlier, we are working on a novel Zika vaccine candidate. This is a candidate that we optimized against the first-generation candidate that we had pre-COVID.

Speaker #3: Our partner, Limatech, reported positive Phase 1 data previously. In this program, which was awarded FDA Trusted Designation, as I said at the very beginning, we launched a Phase 2 infant study, with data expected to accelerate part of this year.

Speaker #3: And we have the ongoing phase to be controlled human infection model study aiming to provide an early look at potential efficacy with efficacy data expected very early next year.

Speaker #3: Those studies are still led by Limatech. And Valneva will assume all further regulatory R&D, CMC, and future commercialization activities in the near term. As we reported earlier, we are working on a novel Zika virus candidate.

Speaker #3: This is a candidate that we optimized against the first-generation candidate that we had pre-COVID. It leverages our inactivated whole virus platform that we further advanced and developed as part of our COVID endeavor.

Thomas Lingelbach: It leverages our inactivated whole virus platform that we further advanced and developed as part of our COVID endeavor. Previous results showed already excellent immunogenicity safety. Now in this phase 1 study, we look at safety and immunogenicity with an enhanced process and optimized vaccine formulation. As we reported earlier, we believe that a vaccine solution against this flaviviral disease transmitted by the Aedes mosquitoes is needed because of the devastating effects those infections can have. At the same time, we will need to evaluate future development strategies based on the phase 1 results, external non-dilutive funding, and the resulting market potential to see where we really are at the point of data readout. With this update on our primarily R&D programs here, I would like to turn over to Peter Bühler to provide you with the financial report.

Speaker #3: And previous results showed already excellent immunogenicity and safety. Now, in this Phase 1 study, we look at the safety and immunogenicity with an enhanced process and optimized vaccine formulation.

Speaker #3: As we reported earlier, we believe that a vaccine solution against this fluffy viral disease transmitted by the iridescent mosquitoes is needed. Because of the devastating effects those effects infections can have, but at the same time, we will need to evaluate future development strategy and strategies based on the phase one results external non-diluted funding and the resulting market potential and to see where we really are at the point of data readout.

Speaker #3: With this update on our primary R&D programs here, I would like to turn it over to Peter to provide you with the financial report.

Speaker #4: Thank you, Thomas. Good morning and good afternoon to all of you. Now moving to the financials of the first half of 2025. Product sales reached 91 million euros compared to 68.3 million euros in the first half of 2024, an increase of 33.3%.

Peter Buhler: Thank you, Thomas. Good morning and good afternoon to all of you. Now moving to the financials of the first half of 2025. Product sales reached 91 million euros compared to 68.3 million euros in the first half of 2024, an increase of 33.3%. Foreign currency fluctuation had an adverse impact of 500,000 euros. IXIARO sales reached 54.7 million euros, increasing 30.6% over prior years. The strong year-over-year growth was equally driven by sales to travelers and to the Department of Defense. IXIARO sales during the first quarter of 2024 were adversely impacted by supply constraints. DUKORAL sales grew year over year by 16.4% and reached 17.4 million euros in the first half of 2025. The growth in DUKORAL sales was supported by a 1.1 million euro sale to the French island of Mayotte to combat a local cholera outbreak.

Speaker #4: Foreign currency fluctuation had an adverse impact of 500,000 euros. The QRO sales reached 54.7 million euros, increasing 30.6% over prior year. The strong year-over-year growth was equally driven by sales to travelers and to the Department of Defense.

Speaker #4: The QRO sales during the first quarter of 2024 were adversely impacted by supply constraints. Tucoral sales grew year-over-year by 16.4% and reached 17.4 million euros in the first half of 2025.

Speaker #4: The growth in Tucoral sales was supported by a 1.1 million euro sale to the French island of Mayotte to combat a local cholera outbreak.

Speaker #4: Exit sales reached €7.5 million compared to €1 million in the first half of 2024, when the product had been launched in the United States.

Peter Buhler: IXCHIQ sales reached 7.5 million euros compared to 1 million euros in the first half of 2024 when the product had been launched in the United States. IXCHIQ sales in the first half of 2025 benefited from a supply of 14,000 doses to the French island La Réunion as the island experienced a major chikungunya outbreak. Third-party products increased by 8.8% year over year to reach 11.4 million euros. This increase is primarily a result of supply constraints in the first half of the prior year, and we continue to expect a gradual decrease of third-party products. Moving on to the income statement. Total revenues reached 97.6 million euros, with 70.8 million euros in the first half year of 2024.

Speaker #4: Exit sales in the first half of 2025 benefited from a supply of 40,000 doses to the French island La Réunion, as the island experienced a major chikungunya outbreak.

Speaker #4: Third-party products increased by 8.8% year-over-year to reach 11.4 million euros. This increase is primarily a result of supply constraints in the first half of the prior year, and we continue to expect a gradual decrease of third-party products.

Speaker #4: Moving on to the income statement, total revenues reached 97.6 million euros, with a 70.8 million euros in the first half year of 2024. The increase of 37.8% is driven by higher product sales, and an increase in other revenues, related to the licensing agreement with the Serum Institute of India, for Valneva single-shot chicken guinea vaccine.

Peter Buhler: The increase of 37.8% is driven by higher product sales and an increase in other revenues related to the licensing agreement with the Serum Institute of India for Valneva single-shot chikungunya vaccine. Looking at expenses, cost of goods and services for the first half of 2025 reached 47.3 million euros compared to 45.6 million euros during the same period last year. The gross margin on commercial products excluding IXCHIQ reached 59.2% in the first half of 2025 compared to 47.7% in the prior year. The improvement in gross margin was driven by better manufacturing performance. IXIARO gross margin reached 65.5% compared to 57.5% in the first half of 2024, and DUKORAL generated a gross margin of 52.9% compared to 34.8% last year. Cost of goods related to IXCHIQ amounts to 2.5 million euros or a gross margin of 66%.

Speaker #4: Looking at expenses, the cost of goods and services for the first half of 2025 reached €47.3 million, compared to €45.6 million during the same period last year.

Speaker #4: The gross margin on commercial products excluding exit reached 59.2% in the first month of 2025, compared to 47.7% in the prior year. The improvement in gross margin was driven by better manufacturing performance.

Speaker #4: The QRO gross margin reached 65.5%, compared to 57.5% in the first half of 2024, and Tucoral generated a gross margin of 52.9%, compared to 34.8% last year.

Speaker #4: Cost of goods related to exit amounted to €2.5 million, or a gross margin of 66%. Cost of goods also includes a €5.9 million idle capacity cost.

Peter Buhler: Cost of goods also includes a 5.9 million euro idle capacity cost. Research and development expense increased from €29.7 million in the first half of 2024 to €32.4 million in the first half of 2025. That increase is driven by costs related to the Shigella vaccine candidate following the R&D collaboration with LimmaTech Biologics. We expect an acceleration of our R&D costs in the second half of 2025, in particular driven by the IXCHIQ phase 4 program. Marketing and distribution expense decreased from €23.2 million in the prior year to €20.3 million in the first half of 2025. The increase is related to planned reduction in advertising and promotion spend related to IXCHIQ following the launch in early 2024. The decrease was partially offset by higher costs related to warehousing and distribution. G&A expense decreased to €19 million compared to €20.8 million in the first half of 2024.

Speaker #4: Research and development expense increased from 27.7 million euros in the first half of 2024 to 32.4 million euros in the first half of 2025.

Speaker #4: That increase is driven by costs related to the Shigella vaccine candidate, following the R&D collaboration with Limatech Biologics. We expect another acceleration of our R&D costs in the second half of 2025, in particular driven by the exit phase four program.

Speaker #4: Marketing and distribution expense decreased from 23.2 million euros in the prior year to 20.3 million euros in the first half of 2025. The increase is related to a planned reduction in advertising and promotion spend related to exit, following the launch in early 2024.

Speaker #4: The decrease was partially offset by higher costs related to warehousing and distribution. G&A expense decreased to €19 million, compared to €20.8 million in the first half of 2024.

Speaker #4: At the end of 2024, the company ran a program to increase operational efficiency and the reduction in G&A spend is a direct result of this initiative.

Peter Buhler: At the end of 2024, the company ran a program to increase operational efficiency, and the reduction in G&A spend is a direct result of this initiative. In the first half of 2025, Valneva reported an operating loss of €16.8 million compared to an operating profit of €46.7 million in the last year. Last year's operating profit was the result of the sale of a priority review voucher for a total net proceed of €90.8 million. Adjusted EBITDA in the first half of 2025 reached minus €6 million compared to a positive EBITDA of €56.2 million last year. Excluding the one-off PRV sale in the prior year, adjusted EBITDA improved by 80% year over year. Before moving to the outlook and guidance, a word on cash.

Speaker #4: In the first half of 2025, Valneva reported an operating loss of 16.8 million euros, compared to an operating profit of 46.7 million euros in the last year.

Speaker #4: Last year's operating profit was the result of the sale of a priority review voucher, for a total net proceeds of 90.8 million euros. Adjusted EBTA in the first half of 2025 reached minus 6.8 million euros.

Speaker #4: Compared to a positive EBTA of 56.2 million euros last year. Excluding the one-off PRV sale in the prior year, adjusted EBTA improves by 80% year-over-year.

Speaker #4: Before moving to the outlook and guidance, a word on cash. As mentioned by Thomas at the beginning of the call, cash at June 30th was reported as €161.3 million, compared to €168.4 million at the end of 2024.

Peter Buhler: As mentioned by Thomas Lingelbach at the beginning of the call, cash at June 30th was reported as €161.3 million compared to €168.4 million at the end of 2024. Cash used in operations was reported at €10.9 million compared to €66.3 million in the first half of 2024. Moving to slide 21, we confirm our financial guidance for the fiscal year 2025 with product sales of €170 million to €180 million and total revenues of €180 million to €190 million. We continue to project R&D expenses of €90 million to €100 million. The R&D expenses will be partially offset by grant funding and anticipated R&D tax credits. As confirmed in the first half-year results, we expect a significantly lower use of cash in operations, targeting a year-over-year reduction of more than 50%. Cash will remain a key focus in order to ensure sufficient runway to reach key inflection points.

Speaker #4: Cash used in operations was reported at €10.9 million, compared to €66.3 million in the first half of 2024. Now moving to slide 21.

Speaker #4: We confirm our financial guidance for the fiscal year 2025. With product sales of 170 to 180 million euros, and total revenues of 180 to 190 million euros.

Speaker #4: We continue to project R&D expenses of 90 to 100 million euros. The R&D expenses will be partially offset by grant funding and anticipated R&D tax credits.

Speaker #4: As confirmed in the first-half results, we expect a significantly lower use of cash in operations, targeting a year-over-year reduction of more than 50%.

Speaker #4: Cash will remain a key focus in order to ensure sufficient runway to reach key inflection points. In the midterm, we expect continuous growth in our product sales, focus on strategic investments into R&D, and continuous improvement in gross margin.

Peter Buhler: In the midterm, we expect continuous growth in our product sales, focus on strategic investments into R&D, and continuous improvement in gross margins. We continue to expect Valneva to be sustainably profitable post-successful approval and commercialization of the VLA15 Lyme disease vaccine. With this, I hand the call back to Thomas for the upload.

Speaker #4: We continue to expect Valneva to be sustainably profitable post successful approval and commercialization of the Lyme disease vaccine. With this, I hand the call back to Thomas for the outlook.

Speaker #1: Thank you, Peter.

Thomas Lingelbach: Thank you, Peter. When we look at the 2025 guidance, of course, it is important that we look at the growth drivers, and the growth drivers primarily are, as Peter mentioned, less. I think the VLA15 program or the Lyme disease program with Pfizer is not only the single largest catalyst for the company and its future development and strategic optionality, but it is also the vaccine that could make the single largest impact to people's lives. As such, it is very highly matching with our purpose, our vision, and mission. Of course, in the near term, as Peter said, we will focus on growing commercial revenues, and we will reposition IXCHIQ as the right vaccine against chikungunya for the right setting and the right population and the right also geographical area.

Speaker #3: Yeah, when we look at the 2025 guidance, of course, it is important that we look at the growth drivers and the growth drivers primarily are as Peter mentioned last.

Speaker #3: I think the VLA 15 program or the Lyme disease program with Pfizer is not only the single largest catalyst for the company and its future development, and strategic optionality but it's also the vaccine that could make the single largest impact to people's lives.

Speaker #3: As such, it is very highly matching with our purpose, our vision, and mission. Of course, in the near term, as Peter said, we will focus on growing commercial revenues, and we will reposition exit as the right vaccine against chicken guinea for the right setting and the right populations and the right geographical areas.

Speaker #3: With regards to our future pipeline, we have two early-stage or mid-stage clinical assets, Shigella and Zika. Our goal is to not only progress those programs but also to possibly further augment our pipeline following a successful Phase 3.

Thomas Lingelbach: With regards to future pipeline, we have our two early-stage or mid-stage clinical assets, Shigella vaccine candidate and Zika vaccine candidate, and our goal is to not only progress those programs, but possibly even further augment our pipeline post-phase 3 successful Lyme. As such, we have really a great opportunity to become, on the back of a positive Lyme outcome, the leading vaccine biotech in the world. With that, I would like to hand back to the operator to take a question.

Speaker #3: As such, we have really a great opportunity to become on the back of a positive line outcome deleting vaccine biotech in the world. And with that, I would like to hand back to the operator to take a question.

Speaker #1: Thank you, Sam. As a reminder, to ask a question, please press *1 and 1 on your telephone and wait for your name to be announced.

Operator: Thank you, Sal. As a reminder to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Once again, please press star 1 and 1 for any question and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We are now going to proceed with our first question. The questions come from the line of Maury Raycroft from Jeffries. Please ask your question.

Speaker #1: To withdraw your question, please press star, one, and one again. Please press star, one, and one for any question, and wait for your name to be announced.

Speaker #1: To withdraw your question, please press star one and one again. We are now going to proceed with our first question. And the questions come from the line of Mori Raycroft from Jeffries.

Speaker #1: Please ask your question.

Speaker #5: Hi, this is Amin on for Mori. Congrats on the progress and thanks for taking our questions. A couple of questions from us regarding the 40,000 doses you sold to the French government.

Speaker 5: Hi. This is Amin Aan from Maury. Congrats on the progress and thanks for taking our questions. A couple of questions from us. Regarding the 40,000 doses you sold to the French government, should we expect any additional revenue recognition in Q3? Also, could you share your perspective on demand scenarios for IXCHIQ through year-end, considering the evolving chikungunya outbreak in the Indian Ocean and now it looks like China?

Speaker #5: Should we expect any additional revenue recognition in Q3? Also, could you share your perspective on demand scenarios for exit through year-end? Considering the evolving chickpea outbreak in India and now it looks like China.

Speaker #3: Yeah, so let me start with the second part of your question, and then I hand over to Peter to take the first part of your question.

Thomas Lingelbach: Let me start with the second part of your question, and then I hand over to Peter to take the first part of your question. You are absolutely right. We are seeing right now a very critical and devastating epidemiological dynamic around chikungunya. We are in contact with all the respective governments where currently outbreaks are occurring. As I mentioned earlier, we believe that especially for those countries, our vaccine proposition represents a very good vaccine solution. It is too early to state at this point in time where and how we will be able to respond. We have no supply constraints. We have sufficient material available for addressing those potential response strategies. We also would like to make sure that we stay in control over those vaccination or potential vaccination campaigns, given the experience that we had with La Réunion.

Speaker #3: So you absolutely right. I mean, we are seeing right now very critical and devastating epidemiological dynamics around chicken guinea. We are in contact with all the respective governments where currently outbreaks are occurring.

Speaker #3: As I mentioned earlier, we believe that especially for those countries, our vaccine proposition represents a very good vaccine solution. It's too early to state at this point in time where and how we will be able to respond.

Speaker #3: We have no supply constraints. We have sufficient material available for addressing those potential response strategies. But we also would like to make sure that we stay in control over those vaccination or potential vaccination campaigns, given the experience that we had with La Réunion.

Speaker #3: So therefore, bear with us that at this point in time, we don't want to promise anything other than we will be at most responsive.

Thomas Lingelbach: Therefore, bear with us that at this point in time, we do not want to promise anything other than we will be at most responsive.

Speaker #3: Peter?

Speaker #4: Yeah, so on the 40,000 doses, they were all shipped in the first half of the year as the revenue was fully recognized in the first half of the year.

Peter Buhler: Peter. Yeah. The 40,000 doses, they were all shipped in the first half year, and the revenue was fully vaccinated in the first half year. Nothing related to that 40,000 is in the second half.

Speaker #4: So nothing related to that 40,000 to come in the second half.

Speaker #5: Great, thanks.

Thomas Lingelbach: Great. Thanks.

Speaker #1: We are now going to proceed with our next question. And the questions come from the line of Sebastian van de Schoot from Van Langschut Campen.

Operator: We are now going to proceed with our next question. The questions come from the line of Sebastian van der Schot from Van Langschot Campen. Please ask your question.

Speaker #1: Please ask your question.

Speaker #6: Hi, guys. Thank you for taking our questions for us, Susan. For the Lyme vaccine, could you maybe provide some insight on how the reporting of the data readouts will transpire at year-end?

Speaker 5: Hi, guys. Thank you for taking our questions, Aman for Suzanne. For the VLA15 vaccine, could you maybe provide some insight on how the reporting of the data readouts will transpire at year end? Will the disclosure only report top-line data, or can we also expect some detailed results? Then maybe would you be able to position the vaccine in terms of immunogenicity towards vaccines of the past? Thank you.

Speaker #6: Will the disclosure only report top-line data, or can we also expect some detailed results? And then maybe, would you be able to position the vaccine in terms of immunogenicity towards vaccines of the past?

Speaker #6: Thank you.

Speaker #3: Again, vaccine? Go ahead.

Peter Buhler: Again, Sebastian, we couldn't hear the second part of your question. You were breaking up. Is there a part of the question? I'm sorry for that.

Speaker #4: We couldn't hear the second part of your question, Sebastian. You were breaking up after your first part of the question. I'm sorry for that.

Speaker #5: Sure, it's regarding the immunogenicity profile of the vaccine versus past COVID, I'm sorry, Lyme vaccines in the past from the 90s.

Speaker 5: Sure. It's regarding the immunogenicity profile of the vaccine versus past Lyme vaccines in the past from the '90s.

Speaker #3: Yeah, okay. So let us first of all address the first part of the question. Of course, the reporting of the phase three results is under the sole responsibility and accountability of Pfizer.

Thomas Lingelbach: Okay. Let us, first of all, address the first part of the question. Of course, the reporting of the phase 3 result is under the sole responsibility and accountability of Pfizer. We are currently expecting that the data readout will come in two steps, namely a report on the so-called top-line data, which primarily will include efficacy numbers, and then a subsequent data communication on all the other endpoints. Given that, as you know, the study has many endpoints and many primary, secondary, exploratory, there are many things that will need to be reported. As we said in the past, and as many of you have it already included in the respective reports, we expect all data to be out probably by the end of the first quarter, but definitely in time to support the anticipated regulatory submissions around mid-next year.

Speaker #3: We are currently expecting that the data readout will come in two steps. Namely, a report on the so-called top line data, which primarily will include efficacy numbers, and then a subsequent data communication on all the other endpoints. As you know, the study has many endpoints, including primary, secondary, and exploratory; there are many things that will need to be reported. As we said in the past, and as many of you have already included in the respective reports, we expect all data to be out probably by the end of the first quarter.

Speaker #3: But definitely in time, to support the anticipated regulatory submissions around mid next year. When it comes to the immunological profile, it is very difficult to compare what was observed from an immunological profile back in the days from vaccine that had undergone phase three studies like Limerick or Imulyme.

Thomas Lingelbach: When it comes to the immunological profile, it is very difficult to compare what was observed from an immunological profile back in the days from vaccines that had undergone, say, three studies like LIME or IMULIME because they had very different schedules. The entire formulation was different. The antigen construct was different. The assays were different. What we can say is that we have tried to compare the adult previous full-length serotype 1 antigens to our modern recombinant subunit and multivalent fusion protein VLA15 in different animal models. We have published those results in the direct comparison against what we call in parentheses a full-length OspA serotype 1 biosimilar. We have seen that across the border, we could really identify non-inferiority or, in many cases, also superiority. Any other comparison right now would just not be scientifically sound. By the end of the day, the efficacy readouts were hella.

Speaker #3: e. Because they had very different schedules the entire formulation was different. The antigen contact construct was different. The assays were different. What we can say is that we have tried to compare the dose previous full length serotype one antigen to our modern recombinant subunit and multivalent fusion protein VLA 15 in different animal models.

Speaker #3: We have published those results. In the direct comparison against what we call (in parentheses) a full-length serotype one biosimilar, we have seen that across the board we could really identify non-inferiority, or in many cases also superiority. Any other comparison right now would just not be scientifically sound.

Speaker #3: And by the end of the day, the efficacy readouts will tell us Sebastian.

Speaker #5: Great, thank you so much.

Speaker 5: Great. Thank you so much.

Speaker #3: You're welcome.

Thomas Lingelbach: You're welcome.

Speaker #1: We are now going to proceed with our next question. And the questions come from the line of Damian Chaflain from Stifel. Please ask your question.

Operator: We are now going to proceed with our next question. The questions come from the line of Damien Chauffelin from Stifel. Please ask your question.

Speaker #6: Yes, hello. Congrats on the good publication, and thank you for taking my questions. I have a first one on exit. So, could you please elaborate a bit on what might trigger an acceleration in cell attack within the traveler market?

Speaker 5: Yes. Hello. Congrats on the good publication, and thank you for taking my questions. I have a first one on IXCHIQ. Could you please elaborate a bit on what might trigger an acceleration in cell subtech within the traveler market? Are you still in discussion with states in the U.S. for potential stockpiling? My second question is on distribution agreements with CSL. What should we expect in terms of financial impact on top-line and potentially EBITDA? Thank you.

Speaker #6: And are you still in discussion with states in the U.S. for potential stockpiling? And my second question is on distribution agreements with CSL. What should we expect in terms of financial impact on top line and potentially EBITDA?

Speaker #6: Thank you.

Speaker #3: Yeah, so let me start with the second part of your question first. We have been collaborating with Bavarian Nordic for a number of years now in Germany, and for reasons that we all understand.

Thomas Lingelbach: Let me start with the second part of your question first. We have been collaborating with Bavarian Nordic for a number of years now in Germany. For reasons that we all understand, we have to change. We have been extremely pleased that we were able to find, with CSL, from our perspective, an excellent partner with an excellent phased infrastructure in Germany. The commercial terms under the agreement are very similar to what we used to have. Therefore, we do not expect an immediate difference in the prospects around Germany in the mid to long term. As CSL gears further up in Germany, we may even see a potential upside. When it comes to IXCHIQ and future market access, you would certainly appreciate that the uncertainty that we have experienced and had to experience following all those safety investigations had an impact on the market uptake for that vaccine.

Speaker #3: We have to change and we have been extremely pleased that we were able to find with CSL from our perspective an excellent partner with an excellent phase infrastructure in Germany.

Speaker #3: The commercial terms under the agreement are very similar to what we used to have. Therefore, we do not expect an immediate difference in the prospects around Germany.

Speaker #3: In the mid to long term, as CSL year further up in Germany, we may even see a potential upside. When it comes to exit and future market access, we will certainly appreciate that the uncertainty we have experienced—and had to experience—following all those safety investigations had an impact on the market uptake for that vaccine.

Speaker #3: At the same time, we know that the vaccine profile and especially the profile of a live attenuated single-shot vaccine has distinct advantages when it comes to future outbreak preparedness.

Thomas Lingelbach: At the same time, we know that the vaccine profile, and especially the profile of a live attenuated single-shot vaccine, has distinct advantages when it comes to future outbreak for pessmid. Therefore, we are expecting that now that all those restrictions got lifted, the investigations got concluded, the prescribing informations and SMPCs got updated, we will see a new momentum. We expect, as I mentioned earlier, hopefully to be able to respond to some of the emerging outbreaks across the globe right now. All the other discussions will hopefully resume now in the latter part of this year.

Speaker #3: And therefore, we are expecting that now that all those restrictions have been lifted, the investigations have concluded, and the prescribing information and SMPCs have been updated, we will see a new momentum. As I mentioned earlier, we hope to be able to respond to some of the emerging outbreaks across the globe right now.

Speaker #3: And all the other discussions will hopefully resume now in the later part of this year.

Speaker #5: Thank you very much.

Peter Buhler: Thank you very much.

Speaker #1: Has a final reminder to ask a question. Please press star one and one on your telephone and wait for your name to be announced.

Operator: As a final reminder to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We are now going to proceed with our next question. The questions come from the line of Rajin Sharma from Goldman Sachs. Please ask your question.

Speaker #1: To withdraw your question, please press star, one, and one again. We are now going to proceed with our next question. The questions come from the line of Rajin Sharma from Goldman Sachs.

Speaker #1: Please ask your question.

Speaker #6: Hi, thanks for taking my question. So a couple on Lyme and the law trial. So on clinical trials that go, the entry suggests that the primary completion date of the trial is 26th of December.

Speaker 5: Hi. Thanks for taking my question. A couple on VLA15 and the trial. On clinicaltrials.gov, the entry suggests that the primary completion date of the trial is December 26. I just wanted to double-check your confidence that the phase 3 headline data will be coming in in 2025, or is there potential that this could spill into 2026? On the trial specifically, what do you consider to be the bar for success here? I know you talked about the inability to do cross-trial comparisons with the previous sets of vaccines that were approved, but I think LIMERIX demonstrated a 49% efficacy rate after two priming doses. I think you talked previously about potentially showing better efficacy. Is that what you are looking for? If you have any color, it would be helpful to understand what the FDA's bar for approvability is as well. Thank you.

Speaker #6: So just wanted to double check your confidence that that phase three headline data will be coming in in 2025 or is there potential that this could spill into 2026?

Speaker #6: And then just on the trial specifically, what do you consider to be the bar for success here? And I know you kind of talked about the inability to kind of do cross-trial comparisons with the previous sets of vaccines that were approved, but I think Limerick's demonstrated a 49% efficacy rate after two priming doses.

Speaker #6: And I think you've talked previously about potentially showing better efficacy. So is that what you're looking for? And if you have any color, it would be helpful to understand what the FDA's bar for approve ability is as well.

Speaker #6: Thank you.

Speaker #3: So let me highlight and let me start with the second part of your question first. So you're rightly pointed out that the direct comparison to Limerick's and Imulyme is very difficult.

Thomas Lingelbach: Let me highlight, and let me start with the second part of your question first. You rightly pointed out that the direct comparison to LIMERIX and IMULIME is very difficult. You know that the schedule was different, but also the efficacy readouts of the two vaccines were very different. LIMERIX after two doses, as you mentioned, a bit below 50, IMULIME above 60. Then both very substantially increased after three doses. We have a different setup right now. We have a with 026, and then a booster after one year. We have a very different immunological profile. Hence, we are also expecting a very different efficacy profile as compared to those vaccines that were developed at the time. There was a reason for why we concluded with the authorities to set the primary endpoint after three plus one doses.

Speaker #3: And you know that the schedule was different, but also the efficacy readouts of the two vaccines were very different. The Limerick's, after two doses, as you mentioned, were a bit below 50.

Speaker #3: Imulyme levels above 60, and then both increased very substantially after three doses. We have a different setup right now: we have zero to six, and then a booster after one year.

Speaker #3: We have a very different immunological profile. And hence, we are also expecting a very different efficacy profile as compared to those vaccines that were developed at the time.

Speaker #3: There was a reason for why we concluded with the authorities to set the primary endpoint after three plus one doses. And we are, as I said earlier, all the models that were run and published in animals show a non-inferiority or superiority after the final dosage.

Thomas Lingelbach: As I said earlier, all the models that were run and published in animals show a non-inferiority or superiority after the final dosing. This is what we are expecting, of course. That is what we are hoping for. There is no communicated or aligned bar for approval with the FDA or the European Medicines Agency. But there are precedents on certain efficacy levels that you can certainly point and filter out. But I don't want to mention here specifically any number. When it comes to the data readout, Thrive.gov always includes safety follow-up periods and follow-up periods. This is what all notifications on Thrive.gov show. Thrive.gov shows very clearly that we have to do case counts until the end of October. Thereafter, as I mentioned at the beginning, Pfizer will go through their case adjudication process and their database cleaning. It will take as long as it will take.

Speaker #3: And this is what we are expecting, of course. That is what we are hoping for. There is no communicated or aligned bar for approval with the FDA or the European Medicines Agency.

Speaker #3: But there are precedents on certain efficacy levels that you can certainly point and filter out. But I don't want to mention here specifically any number.

Speaker #3: When it comes to the data readout, Pfizer.gov always includes safety follow-up periods and follow-up periods. This is what all notifications on trial.gov show. Pfizer.gov showed very clearly that we have to do case counts until the end of October.

Speaker #3: And thereafter, as I mentioned at the beginning, Pfizer will go through their case adjudication process and their data base cleaning. And it will take as long as it will take for us to be a more important thing is that Pfizer reaffirms the submission timelines and whether we will receive the top line data a month earlier or a month later.

Thomas Lingelbach: For us, the more important thing is that Pfizer reaffirms the submission timeline. Whether we will receive the top-line data a month earlier or a month later, A, it is not in our control, and B, it is not material for us. Therefore, I don't want to comment on, and put execution timeline at this moment in time into Pfizer's year. It would not be appropriate for me to do that.

Speaker #3: A, it is not in our control. And B, it is not material for us. And therefore, I don't want to comment on and put execution timeline at this moment in time into Pfizer here.

Speaker #3: It would not be appropriate for me to do that.

Speaker #5: Okay, thank you very much.

Peter Buhler: Okay. Thank you very much.

Speaker #1: We have no further questions at this time, so I'll hand it back to you for closing remarks. Thank you.

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

Speaker #3: Yeah, thank you so much for your attendance today. For you, a good questions and for following Valneva. I hope you share with us the exciting prospect that we see in the company.

Thomas Lingelbach: Thank you so much for your attendance today, for your good questions, and for following Valneva. I hope you share with us the exciting prospects that we see in the company, in our business, in our mission, and vision. Thank you so much, and have a great day.

Speaker #3: In our business, in our mission, and fit and vision. Thank you so much, and have a great day.

Operator: This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you and have a great day.