Q3 2025 Valneva SE Earnings Call
Speaker #1: Good day, and thank you for standing by. Welcome to the Valneva nine-month 2025 financial results conference call and webcast. At this time, all participants are in a listen-only mode.
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 turn the conference over to your first speaker, Joshua Drumm. Please go ahead.
Speaker #1: ahead.
Speaker #2: Thank you. Hello, and thank you for joining us to discuss
Speaker #2: Valneva's financial results for the first nine months of 2025 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 nine months ended September 30th, 2025, which were published earlier today, available within the financial reports section of 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 of our business, as well as our financial results.
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.
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, November 20, 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 so much, Josh. Good day, everyone. Welcome to our nine-month call. So before we go into the business highlights and also Peter will provide a very detailed financial report, I would like to start off by providing a couple of key financial management highlights.
Speaker #3: Total revenues reached 127 million euros at the nine-month time point, which is essentially growth of almost 9% despite some headwinds be it from a geopolitical perspective, but also from an exchange perspective in particular.
Speaker #3: And we are very glad that we have been able to deliver on that growth year to date. We have also been able to significantly reduce our operating cash burn which has been one of our key objectives in continuously improving efficiency for our operations.
Speaker #3: This resulted in a cash position of more than 140 million euros which includes also the net proceeds from different ATM transactions Peter will further detail.
Speaker #3: And most importantly, we successfully completed our debt refinancing, which, of course, substantially enhances our financial flexibility. We are very glad that we have found in Pharmacon a new partner to support Valneva in the years to come.
Speaker #3: Recapping a little bit on the first nine months, key business highlights. Around exchange, we responded to significant unmet medical needs on the La Réunion and Mayotte.
Speaker #3: The respective outbreaks we also responded to a cholera outbreak in Mayotte by supplying doses of Ducoral and we again finalized a new Xiaro US Department of Defense contract, all of that supporting our mission in targeting unmet medical needs.
Speaker #3: On the regulatory and commercial side of things, we secured additional marketing organizations for exchange in the UK and Brazil, label extensions for adolescents, 12 years of age, and older in Europe and Canada.
Speaker #3: And we announced an exclusive vaccine marketing and distribution agreement for Germany with CSL Securious replacing Bavarian Nordic by the end of this year for our established brands and they already started distributing exchange in Germany.
Speaker #3: Of course, on the clinical side, it's all about Lyme. Right now, and we completed all vaccinations in the Valois phase three study according to plan.
Speaker #3: We also reported further positive safety and immunogenicity data following the third annual booster as part of our phase three follow-up study VLA15221. On exchange, the vaccine profile got further substantiated with the antibody persistence data now after four years still showing the 95% zero response rate after a single shot, which is the key differentiation for this live attenuated single shot vaccine.
Speaker #3: We further reported immune response in adolescents and positive pediatric safety and immunogenicity data last but not least, we also reported positive phase one results from our second generation CICA vaccine candidate VLA1601.
Speaker #3: Going a little bit into the details of the individual programs, I would like to start off with Lyme. We've been talking a lot about Lyme, and we will be talking a lot about Lyme.
Speaker #3: The Lyme continues representing a major unmet medical need and hence market opportunity close to half a million cases every year confirmed in the United States, probably now in Europe the same order of magnitude also there are limited reporting systems available.
Speaker #3: You remember that we have about 90 million US citizens living in high-risk areas of Lyme disease and in Europe more than 200 million. In those endemic regions, most importantly, the health economical benefit for a potential vaccination against Lyme disease is considered extremely favorable.
Speaker #3: Why? Because you have very severe manifestations in connection with Lyme disease, 10 to 30% of people develop either carditis, neuroboliosis, or arthritis. And 5 to 10% persistent symptoms even following treatment with respective
Speaker #1: Pfizer reconfirmed that they're going to submit a regulatory applications in the US and Europe in 2026 . De study has been executed , according to plans and basically Pfizer guided for readout in the first half of 2026 and the study , of course , is now going through its follow up period since the official case counts ended at the end of October .
Speaker #1: Then we run the normal process through case adjudications . Further , you know , testing database activities , cleanings and all of that .
Speaker #1: Before the results will be announced the in first half of next year . Most importantly , the time point for which we expect the product to be launched hasn't changed .
Speaker #1: It is important for us and our Pfizer colleagues that the product can be launched in the autumn of 2027, well ahead of the 2028 tick season.
Speaker #1: This is important to get really people protected for the tick season 2028 . As such , we are very , very much looking forward to the data , which hopefully are going to be positive and hence provide a pathway .
Speaker #1: For a vaccine that could really address a huge unmet medical need . Turning to our highly differentiated single shot chikungunya vaccine , Vla15 Ixchiq five three or .
Speaker #1: where You know , are we at this point in time ? Of course , we have . On the regulatory side still , the situation that the product is suspended in the United States and we are still awaiting further information from FDA , which we haven't received at all at this moment in time .
Speaker #1: In all the other countries , we are working on the basis of updated prescribing information or smpcs , and we are seeing that the product is being administered and we are trying to focus essentially on the expansion into Lmic territories and are working with existing and hopefully future partners in this regard .
Speaker #1: The most imminent point now to consider in this program that is supported by CP are our post-marketing effectiveness studies . The phase four , which are about to commence with an observational effectiveness study in Brazil with pragmatic randomized control effectiveness , safety studies in adolescents and adults , including elderly in various countries , endemic and then later a prospective safety cohort study and surveillance in Brazil , as well .
Speaker #1: Of course , I mentioned already the label expansions and , you know , the reports on the positive data , which we will further submit and hopefully be granted in the different product labels .
Speaker #1: We see clearly the product differentiation for which , of course , is super important for a potential outbreak disease and for people who are planning multiple trips into areas where there is a high risk of a potential outbreak .
Speaker #1: Shigella , you may recall that we in-licensed the vaccine through a partnership Lima Tech . The program , called S four v2 , is the world's most clinically advanced tetravalent Shigella vaccine candidate .
Speaker #1: It addresses the four most common serotypes of the Shigella bacteria the program reported earlier positive one two clinical data in a different groups age in terms of medical need , Shigella represents the second leading cause of fatal diarrhea , and here , especially in infants below five years of age , the global market is expected .
Speaker #1: On the one hand side in Lmics in particular , the target population that are just mentioned , but also it represents a significant opportunity for travelers and military , given the overall medical need and also the diarrheal diseases to be seen in the context of antibiotic resistance .
Speaker #1: The Shigella development or vaccine development against shigellosis has been identified as a priority by W o we have currently a couple of studies ongoing .
Speaker #1: We have the phase two in infants for which we expect results . Still , this year , and we have the phase two .
Speaker #1: Controlled human infection model study in adult , where we changed some of the , you know , data clinical time points . The design , in order to extend the period of immunogenicity where we had the opportunity to optimize those and schedule .
Speaker #1: And we expect the pilot efficacy data next year with immunogenicity data coming in earlier upon success . And please remember that we have intentionally set up the clinical design and clinical pathway in a way that the program is highly de-risked from a capital allocation perspective .
Speaker #1: So based on positive data , based on our respective go decisions , we will assume full accountability for the program . Following those two studies , which are still sponsored by Lima Tech .
Speaker #1: With this update on our operational business and R&D in particular , I would like to hand over to Peter to provide you the financial report for the period nine months .
Speaker #1: Thank you . Thomas . Product sales reached . €119.4 million , compared to €112 million .
Speaker #2: In the nine months of 2024 . An increase of 6.2% . Foreign currency fluctuation had an adverse impact of €1.3 million , Zara sales reached €74.3 million , increasing 12.5% over prior year .
Speaker #2: The year over year growth was driven by sales to the US Department of Defense , as well as increased sales in some European countries .
Speaker #2: Foreign currency fluctuations adversely impacted sales during the first nine months by €800,000. Dukoral sales decreased from €22.3 million in the first nine months of 2024 to €21.5 million in the same period of 2025.
Speaker #2: Sales were €400,000 , adversely impacted by foreign currency fluctuation , mainly resulting from a weakening Canadian dollar and also lower sales to our German partner .
Speaker #2: As we are transitioning from our current distributor to CSL secures . Sales reached €7.6 million , compared to €1.8 million in the nine months of 2024 , while sales included the supply of 40,000 doses to combat the major chikungunya outbreak on the French island of La Réunion , the temporary and restriction US license suspension significantly adversely impacted sales in the travel segment , leading to an adjustment of our sales guidance .
Speaker #2: Third party products decreased by 28.5% year over year to €16.1 million . This decrease is a result of the anticipated discontinuation of certain third party distribution agreements .
Speaker #2: As mentioned in our previous calls , we expect third party product sales over time to account for less than 5% of total product sales .
Speaker #2: Now, moving on to the income statement, total revenues reached €127 million, compared to €112.5 million in the first nine months of 2020.
Speaker #2: For the increase of 9% is driven by higher product sales and an increase in other revenues related to revenue recognition from partnerships . Looking at expenses , cost of goods and services for the nine months of 2025 reached €71.1 million , compared to €71.3 million during the same period last year .
Speaker #2: The gross margin on commercial products , excluding Xchg , reached 57.2% in the first six months of 2025 , compared to 48.6% in the prior year .
Speaker #2: The improvement in gross margin was driven by better manufacturing performance and favorable product mix . The gross margin reached 63.2% compared to 58.8% in the first nine months of 24 and Dukoral generated a gross margin of 52.3% , compared to 34.8% in the prior year .
Speaker #2: Cost of goods related to Xchg amounted to €8.6 million , and include provisions to recognize lower demand . Cost of goods also include €8.2 million of idle capacity costs .
Speaker #2: and Research development expenses increased from €48.6 million in the nine months of 2024 to €59.7 million in the same period of 2025 . That increase is driven by costs related to the Shigella vaccine candidate .
Speaker #2: Following the R&D collaboration with Tech Biologics and cost related to the phase four post-marketing commitment , marketing and distribution expense decreased from €35.7 million in the prior year to €28.6 million in the nine months of 2025 .
Speaker #2: The decrease is related to a planned reduction in advertising and promotion spend related to Ixchiq . Following the launch in early 2024 , G&A expense reached €29.5 million in the first nine months of 2025 , compared of last to €32.6 million in the same period year .
Speaker #2: decrease is This a result of a program to operational increase efficiency across the company , and that we ran into at the end of 2024 .
Speaker #2: In the nine months of 2025 , Valneva reported an loss operating of €53.9 million compared to an operating profit of €34.2 million in the prior year .
Speaker #2: year's Last operating profit was the result of of a a sale priority review voucher , for a total net proceeds of €90.8 million , adjusted EBITDA in the first half of 2025 reached a -€37.7 million , compared to a positive impact of a positive EBITDA of €48.6 million , impacted by the sale of the PRV .
Speaker #2: Before moving to the outlook and Guidance Award on cash . As mentioned by Thomas at the beginning of the call , cash at September 30th was reported at €143.5 million , compared to €168.4 million at the end of 2020 .
Speaker #2: For the cash at the end of September . Includes a total of three ATM transactions for a value of , a total of €26 million , net of transaction cost .
Speaker #2: Cash used in operating activities was reported at €28.4 million , compared to €76.7 million in the first nine months of 2024 . Now moving to slide 19 , we confirm our financial guidance for the fiscal year 2025 with product sales of 155 to €170 million and total revenues of 165 to €180 million , we continue to project R&D expenses of 80 to €90 million , and the R&D , R&D expenses will partially be offset by funding grant and anticipated R&D tax credit , as confirmed in the results at the end of September .
Speaker #2: We expect the significant lower use of cash in operations . Cash will remain a key focus in order to ensure sufficient runway to reach key inflection points in the mid-term , we expect continued growth in our product sales focused on strategic investments into R&D and continuous improvement in gross margin .
Speaker #2: We continue to expect Valneva to be sustainably profitable post a successful approval and commercialization of the Lyme disease vaccine . With this , I hand the call back Thomas to .
Speaker #1: Thank you so much , Peter . At this moment , I would like to turn to our key growth drivers for the remainder of the year , but also , most importantly , beyond the end of 2025 .
Speaker #1: We have built Valneva now on a solid very foundation and Lyme is certainly going to be the single largest growth driver for the company in the years to come .
Speaker #1: And the single largest near-term catalyst for the company and its shareholders , but also for people who may benefit from a vaccination against Lyme .
Speaker #1: The Bla success, which is hopefully expected in the first half of next year, may drive the company, upon successful approval and commercialization, into sustained profitability driven by substantial milestones and later royalties starting in the latter part of 2027.
Speaker #1: Of course , for this year , and despite of having adjusted our guidance on product sales , we hope that we will be able to continue our growth trajectory for our established brands and dukoral .
Speaker #1: And we are working hard in , you know , gaining and regaining global traction on Ixchiq and in particular , leveraging Lmic opportunities and new territories where a product like Ixchiq was , it's highly differentiated product profile could be perfectly suited .
Speaker #1: There is more that Valneva has to offer , and it's pipeline above and beyond Lyme . Also , Lyme is of course very , very dominant and rightly so .
Speaker #1: are We advancing a number of quite promising internal candidates . We are identifying new opportunities , be it in-house , be it also external potential partnering opportunities with the aim to really build a coherent R&D pipeline with an attractive next phase three program , upon successful vla15 stroke .
Speaker #1: Lyme commercialization making us really a leading vaccine biotech in the world . As we such , see substantial growth , substantial upside and with that , I would like to hand back to the operator to take your questions .
Speaker #3: Thank you . As a reminder to ask a question , please press star one and one on your telephone and wait for your name to be announced until we your question , please press star one and one again .
Speaker #3: Once again , please press star one and one for any question and wait for your name to be announced . To withdraw your question , please press star one and one again .
Speaker #3: We are now going to proceed with our first question , and the questions come from the line of ML Divan from Guggenheim Partners .
Speaker #3: Please ask a question . Okay .
Speaker #4: Yeah . Thanks for the call . And taking our questions . So maybe just two questions that I could while we wait for the Lyme data .
Speaker #4: Obviously , the big event coming up on , as you mentioned , you're waiting to hear from the FDA . Is there any sort of timelines there , any any guidance on when you think you may hear or anything that the FDA is bound by in terms of when they need to respond by and then Dukoral , you mentioned this quarter , there were a couple of factors .
Speaker #4: That said currency . And then the distributor shift in Germany , wondering if you can quantify the impact of the second , especially and just how you think about you're about growth for that asset going forward , how you see that recovering the growth .
Speaker #4: Thank you .
Speaker #1: Okay. So let me start off with the Lyme line, the Exchequer question and the FDA. So unfortunately, the answer is there is no predefined process because similar process meaning a suspension in the same way that it was done for Exchange without, you know, WebEx, etc.
Speaker #1: has not been done to our knowledge before . So actually there is no president . There is also currently not a procedure to our knowledge , that needs to be followed from a timing perspective , and as such , you know , we are hoping for a collaborative .
Speaker #1: Interaction with the FDA, which of course could not have happened due to the government lockdown for quite a while. But we certainly hope that we will be able to embark with the FDA into a dialogue.
Speaker #1: Still , this year , let Peter , you know , answer to your question .
Speaker #2: Yeah . So , so I think I commented on the currency impact during the call . I think with regards to Germany , we have not disclosed the number .
Speaker #2: And, you know, we never disclosed numbers on individual countries. What I would say is the third quarter of last year.
Speaker #2: So , saw particularly strong quarter for Germany . And basically , as we are now moving to our new distribution partner in Germany , there's just not purchases that are made by the existing one because they they're using up .
Speaker #2: Of course , the stock they have before we then will ship products to the to the to the new one . So that's it's basically technical delay .
Speaker #2: Now to your question on looking forward . I mean , we have not yet provided , of course , guidance for 2026 , but it's safe to assume that we will continue .
Speaker #2: We will expect a continued growth of the Dukoral brand .
Speaker #4: Okay . Thank you .
Speaker #3: We are now going to proceed with our next question . And the questions come from the line of Maury Raycroft from Jefferies . Please ask your question .
Speaker #5: Hi . Congrats on the progress and thanks for taking our questions for the Lyme Phase three readout . Pfizer has to complete three months of safety follow up after the end of the tick season in October , which implies to us that the readout could come as early as mid one Q 26 , just based on the additional time required for database lock and analyses .
Speaker #5: If the readout happens later into the second quarter of 2026, would that imply that analyses of the results are just taking longer, or what are some of the reasons that could push the timing later in the second quarter?
Speaker #1: Hi , Marie . Yeah , good question . So basically Pfizer are in control of this process . All is seen I can say we have that Pfizer are taking every single step in a very professional and at most accelerated way at the same time , they will not take any regulatory risk .
Speaker #1: Understandably , in the current environment and therefore I'm assuming that they will be as early as possible . I cannot see at this point in time any major delays compared to the timelines that you have just alluded to .
Speaker #1: And of course , I think my colleagues mentioned this to you during the fireside chat . We are also hoping for the an an early , early as possible readout of the topline data .
Speaker #5: Got it . Okay . Makes sense . And maybe one other question just for the for the Bla suspension . Can you comment on what you proposed in your response to FDA as a remedy ?
Speaker #5: And are there some contingency options that you have to that you have in place that could get this back on track in the United States ?
Speaker #1: So basically , our response has solely been focused on the real medical evidence . Our response has been focusing on the individual case analysis and case assessments , both by as well as Valneva by others , including other regulatory agencies , and has been focusing on our reiteration on a positive health , economical benefit and so-called positive risk benefit ratio .
Speaker #1: As already articulated by CDC and others . And and so basically , we have already a phase four program ongoing , as you know , and and we have a more stringent pharmacovigilance review , you know , ongoing since we saw the same primarily in LA reunion and this has been the cornerstones in our response .
Speaker #1: And clarification vis a vis the FDA .
Speaker #5: Got it . Okay . Very helpful . Thanks for taking my questions .
Speaker #1: More than welcome , Marie .
Speaker #3: We are now going to proceed with our next question . Please standby . The next questions from the line of Romy Ocana from VLC .
Speaker #3: Please ask your question .
Speaker #6: Hi. Thanks for taking my questions. Two, if I may. The first one with this talk about the possibility of VLA15. Yeah.
Speaker #6: Being maybe earlier than expected . Do you think you're going to be able to launch on time then for the 2027 tick season and on Ixchiq ?
Speaker #6: I was just wondering how sales are expected to grow going forward from here and what the future drivers are. Thank you.
Speaker #1: Yeah , so so first of all , on the timeline for Vla15 . So we have Pfizer reconfirmed the regulatory submission timeline for next year .
Speaker #1: The regulatory submission timeline next year is the very pivotal and important underlying hypothesis for a launch . In the latter part of 2027 .
Speaker #1: Because the program is under accelerated full pathway , fast track , etc. . So all of that is important in order to meet the timeline of a launch in the autumn of 2027 , because remember the vaccine needs three shots for So priming .
Speaker #1: this means if you want to have people protected for the Lyme season in 2028 , you got to start vaccinating the latter part of 2027 .
Speaker #1: Currently , you know all timelines communicated by Pfizer . You know , do support that notion and that timeline . With regard to the situation , it's of course not an easy question to answer because we see we continue to see major growth opportunities for Ixchiq in the travel sector .
Speaker #1: But also in the countries where the Chik virus is endemic . Given that the single shot life attenuated approach has a particular importance for countries where you have recurrent outbreaks and working we are with many different countries right now in potentially ensuring access of the vaccine in those territories .
Speaker #1: It's a bit too early to talk about those territory expansion activities, what it will really mean in terms of commercial opportunities.
Speaker #1: We have two existing partners with Butantan for Brazil and South America , and the Serum Institute of India for Asia . are more But there countries .
Speaker #1: There are more territories . We are currently in dialogue with , and we are trying everything to accelerate market access in those countries .
Speaker #1: And, you know how long it will really take to establish vaccination against chikungunya in the world of travel. Vaccinations have to be seen.
Speaker #1: I mean , it's history has told us that it's not easy to predict growth trajectory for travel vaccines . And as such , I think we will hopefully be able to provide further guidance as part of our 2026 .
Speaker #1: Outlook. In the early part of next year, great.
Speaker #6: Thank you .
Speaker #3: Thank you . As a reminder to ask a please press question , star one and one on your telephone and wait for your name to be announced .
Speaker #3: your withdraw question , please press star one and one again . We are now going to proceed with our next question . And the comes from question the line of Theodora Rubido from Goldman Sachs .
Speaker #3: Please ask your question .
Speaker #7: Hi . Thanks for taking my question . Just one from me . So in today's release , you refer to uncertainty around private and public funding opportunities .
Speaker #7: Being a consideration in whether you take your Zika vaccine candidate forward, I was just wondering if there is any more detail you can share with us in terms of factors you're weighing up, such as some sort of level of funding you'd need to see to take the candidate forward.
Speaker #7: Any further details would be appreciated . Thank you .
Speaker #1: Yeah . So we announced already that statement as part of our Zika release that we announced two weeks ago , and we only repeated it in today's earnings release .
Speaker #1: You know , side , we the on the one hand are super happy with the data that we have generated . We have shown very good immunogenicity data , and we have excellent shown safety data for a vaccine that would also target pregnant women for example , at the same time , there is a significant uncertainty around the potential pathway to licensure because regulatory it's an outbreak disease .
Speaker #1: So a classical placebo controlled efficacy study would probably not be deemed feasible . At the same time , there are major regulatory headwinds against accelerated approval pathways .
Speaker #1: At this point in time . And the major , I would say , NGOs , but also a public health agencies have deprioritized , Zika , given the epidemiological situation as such , the return on investment for a further development is not an obvious one .
Speaker #1: And certainly absence of in the those clarifications , it would not be prudent to , you know , invest , you know , as Valneva stand alone in this program , going forward .
Speaker #1: At the same , you time know , if there was a substantial funding provided by respective institutions , public , private , we would be very happy to do it .
Speaker #1: In a similar way as we developed our chikungunya example , with substantial vaccine , for support by Cepi . At this point in time .
Speaker #1: keep the Again , we options open , but we count also on the understanding here that , you know , we need to be mindful of capital allocation and returns on investments , even if there was an exciting product candidate or there is an exciting product candidate , and certainly an interesting medical opportunity .
Speaker #3: As a reminder to ask a question , please press star one and one on your telephone and wait for your name to be announced .
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Speaker #3: We have no further questions at this time. I will now hand back to you for closing remarks.
Speaker #1: Yes . Thank you everyone , for having taken time today . We are very thankful about your support . And again , we are looking forward to delivering on our expectations for the remainder of the year .
Speaker #1: And then most importantly , to the next big and biggest catalyst for Valneva in its history . With lime , Lyme data coming in next year .