Full Year 2025 Valneva SE Earnings Call

March 18, 2026

Operator: Good day, thank you for standing by. Welcome to Valneva's Full Year 2025 Results and Business Update 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Joshua Drumm, VP of Global Investor Relations. Please go ahead.

Operator: Good day, thank you for standing by. Welcome to Valneva's full year 2025 results and business update 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Joshua Drumm, VP of Global Investor Relations. Please go ahead.

Speaker #1: Good day and thank you for standing by. Welcome to Valneva's full year 2025 results and business update 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 one (*) 1 1 on your telephone; you will then hear an automated message advising your hand is raised.

Speaker #1: To withdraw your question, please press star 11 again. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Joshua Drumm, VP of Global Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Hello, and thank you for joining us to discuss Valneva's financial results for the full year 2025 and corporate update. It's my pleasure to welcome you today.

Joshua Drumm: Hello, and thank you for joining us to discuss Valneva's financial results for the full year 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 year ended 31 December 2025, which were published earlier today, available within the financial report section on our investor website. I'm 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 financial results. 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 year ended December 31st, 2025, which were published earlier today, available within the financial report section on our investor website.

Speaker #2: I'm joined today by Valneva CEO Thomas Lingelbach and our CFO Peter Buhler, who will provide an overview and update on 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.

Joshua Drumm: 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. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the Autorité des Marchés Financiers, which are listed on our company website. Please note that today's presentation includes information provided as of today, 18 March 2026, 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, March 18th, 2026, 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. Hello and thank you for joining us today. As we reflect on 2025, I'm proud to say that Valneva once again demonstrated resilience, discipline, and an unwavering sense of purpose.

Thomas Lingelbach: Thank you. Hello, and thank you for joining us today. As we reflect on 2025, I'm proud to say that Valneva once again demonstrated resilience, discipline, and an unwavering sense of purpose. In a year marked by geopolitical uncertainty, rising vaccine hesitancy, and further consolidation in the biotech sector, we stayed focused, remained agile, and continued strengthening our position as an innovative and recognized vaccine company. Our financial performance was solid. Total revenues exceeded EUR 170 million, slightly above 2024 levels, including almost EUR 160 million in product sales. This result reflects not only foreign exchange headwinds and supply reduction in third-party product sales, but also growth in our proprietary travel vaccine portfolio. We closed the year with a cash position of nearly EUR 110 million and further enhanced our financial flexibility through a successful debt refinancing.

Speaker #3: In a year marked by geopolitical uncertainty, rising vaccine hesitancy, and further consolidation in the biotech sector, we stayed focused, remained agile, and continued strengthening our position as an innovative, recognized vaccine company.

Speaker #3: Our financial performance was solid. Total revenues exceeded $170 million slightly above 2024 levels, including almost $160 million in product sales. This result reflects not only foreign exchange headwinds and the planned reduction in third-party product sales but also growth in our proprietary travel vaccines portfolio.

Speaker #3: We closed the year with a cash position of nearly $110 million and further enhanced our financial flexibility through a successful debt refinancing. We also achieved more than a 20% reduction in operating cash burn driven by our continuous discipline cash management.

Thomas Lingelbach: We also achieved more than a 20% reduction in operating cash burn, driven by our continuous disciplined cash management. Most importantly though, together with our partner, Pfizer, we further advanced our Lyme disease vaccine candidate. This program represents an important opportunity for Valneva and for the millions of people at risk of Lyme disease, and we are looking forward and crossing fingers for the pivotal phase 3 results. Turning to how we see Valneva's strategic evolution. Our strategy is geared towards becoming the leading vaccine biotech company based on three important pillars. On the one hand side, we expect to further grow our commercial business and to optimize the cash generation through the commercial business.

Speaker #3: Most importantly so, together with our partner Pfizer, we further advanced our Lyme disease vaccine candidate. This program represents an important opportunity for Valneva and for the millions of people at risk of Lyme disease and we are looking forward and crossing fingers for the pivotal phase three results.

Speaker #3: Turning to how we see Valneva's strategic evolution, our strategy is geared towards becoming the leading vaccine biotech company. Based on three important pillars: on the one-hand side, we expect to further grow our commercial business and to optimize the cash generation through the commercial business.

Speaker #3: We would certainly continue maximizing R&D upside for our investors leveraging our proven track record in R&D progression in our ability to bring products from bench to global licensure and we will do so by leveraging our integrated business model on the one-hand side commercial manufacturing and development which can be beneficial to advance and augment programs in our R&D pipeline.

Thomas Lingelbach: We will certainly continue maximizing R&D upsides for our investors, leveraging our proven track record in R&D progression, in our ability to bring products from bench to global licensure, and we will do so by leveraging our integrated business model. On the one hand side, you know, commercial, manufacturing, and development, which can be beneficial to advance and augment programs in our R&D pipeline. Let's look a little bit at the different programs in our portfolio, and I'm now starting, of course, with the leading Lyme disease vaccine candidate in the world, VLA15. If you look at page 8 of the presentation, this is a summary that shows you the growing and emerging problem that Lyme disease represents. There is currently no vaccine available to prevent Lyme disease, and also treatments are somewhat suboptimal.

Speaker #3: Let's look a little bit at the different programs in our portfolio. And I'm now starting, of course, with the leading Lyme disease vaccine candidate in the world, VLA15.

Speaker #3: So if you look at page 8 of the presentation, this is a summary that shows you the growing and emerging problem that Lyme disease represents.

Speaker #3: There is currently no vaccine available to prevent Lyme disease and also treatments are somewhat suboptimal. We are seeing a growing annual burden of the disease with reported almost 500,000 cases in the United States annually and in Europe, it's probably going to be the same order of magnitude also the reported and officially reported cases are a bit more than 130,000 annually.

Thomas Lingelbach: We are seeing a growing annual burden of the disease, with reported almost 500,000 cases in the United States annually. In Europe, it's probably gonna be the same order of magnitude also, the officially reported cases are a bit more than 130,000 annually. The important thing about Lyme disease is its severe clinical manifestations. 10 to 30% of cases develop, you know, many different clinical manifestations which can be categorized in three buckets, arthritis, neuroborreliosis, and arthritis. Most importantly, 5 to 10% of the cases continue to have persistent symptoms following treatment with antibiotics. We are evaluating VLA15 right now in a placebo-controlled field efficacy study called VALOR. This study includes approximately 10,000 individuals.

Speaker #3: The important thing about Lyme disease is its severe clinical manifestations. 10 to 30% of cases develop many different clinical manifestations which can be categorized in three buckets: gonitis, neuroborreliosis, and arthritis.

Speaker #3: And most importantly, 5% to 10% of the cases continue to have persistent symptoms following treatment with antibiotics. We are evaluating VLA15 right now in a placebo-controlled field efficacy study called VALOR.

Speaker #3: This study includes approximately 10,000 individuals; it's a study that is randomized one-to-one placebo against vaccine, two-to-one US versus European sites, or to be precise, North American versus European sites.

Thomas Lingelbach: It's a study that is randomized 1-to-1 placebo against vaccine, 2-to-1 US versus European sites, or to be precise, North American versus European sites. The primary endpoint is disease prevention after 3 + 1 doses, namely in season two, which we have also tested as part of this study. We completed last year all vaccinations, and we are now in the process of testing and evaluating the data. As I said earlier, we hope that we're gonna get, of course, good data, and we have guided for data in the first half of this year. In summary, Valneva VLA15 is a compelling opportunity in a really underserved market. It will be definitely the first vaccine, if approved, to address this disease.

Speaker #3: And the primary endpoint is disease prevention after three plus one doses, namely in season two, which we have also tested as part of this study.

Speaker #3: We completed last year all vaccinations and we are now in the process of testing and evaluating the data and, as I said earlier, we hope that we're going to get, of course, good data and we have guided for data in the first half of this year.

Speaker #3: So in summary, Valneva VLA15 is a compelling opportunity in a really underserved market. It will be definitely the first vaccine if approved to address this disease; it is a highly differentiated vaccine, state-of-the-art, when it comes to the vaccine composition, addressing the main and predominant serotypes of Lyme borreliosis in the Northern Hemisphere.

Thomas Lingelbach: It is a highly differentiated vaccine, state-of-the-art when it comes to the vaccine composition, addressing the main and predominant serotypes of Lyme borreliosis in the Northern Hemisphere. It is really representing a compelling target population and a use case with a broad addressable population. We have tested in the study people above 5 years of age. We see really an opportunity here to address a very, very large target population. Of course, there is also a strategic fit within Pfizer's vaccine franchise, and we are very pleased to have a strong partner with Pfizer for the future commercial opportunities ahead for this vaccine. Of course, you know, there is a clearly attractive commercial dynamic. Prophylactics are always cheaper than therapy.

Speaker #3: It is really representing a compelling target population and a use case with a broad addressable population; we have tested in the study people above five years of age, and we see really an opportunity here to address a very, very large target population.

Speaker #3: Of course, there is also a strategic fit within Pfizer; we're pleased to have a strong partner with Pfizer for the future: vaccine. And of course, there is more than inclusion in some of the therapies, and potentially for high-risk areas, which would really be a perfect opportunity. So with that, we see a unique and compelling opportunity that, of course, could be transformational for Valneva. So again, we are looking forward to the data—fingers crossed.

Speaker #3: Of course, there is also a strategic fit within Pfizer's pleased to have a strong partner with Pfizer for the future: vaccine. And of course, there than inclusion in some of the therapy and a potentially for high-risk areas would really be a perfect opportunity.

Thomas Lingelbach: A potential inclusion in some of the routine immunization schedules for high-risk areas would really be a perfect opportunity. With that, we see a unique and compelling opportunity that of course could be transformational for Valneva. Again, we are looking forward to the data being released. If we turn to IXCHIQ, you know that we are still investing in the further development of what we call the VLA1553 or the marketed trade name IXCHIQ. Currently, we have three major R&D activities on IXCHIQ. We are very glad that we have been able to initiate a pilot vaccination campaign, which is ongoing in Brazil. We launched it in February with our partner, Instituto Butantan, in selected municipalities in Brazil.

Speaker #3: So if we turn to Xchick, you know that we are still investing in the further development of what we call VLA15.5.3 or the marketed trade name Xchick.

Speaker #3: Currently, we have three major R&D activities on Xchick. We are very glad that we have been able to initiate a pilot vaccination campaign which is ongoing in Brazil; we launched it in February with our partner Institute of Butantan in selected municipalities in Brazil; we covered the age range currently licensed by Anvisa in Brazil, namely 18 to 59 years of age; and the objective is really to achieve a 20 to 40% coverage within the target population and right now the vaccination update is quite compelling.

Thomas Lingelbach: We covered the age range currently licensed by Anvisa in Brazil, namely 18 to 59 years of age. The objective is really to achieve 20 to 40% coverage within the target population. Right now, the vaccination uptake is quite compelling. We are further investing in post-marketing effectiveness studies to confirm the effectiveness and to optimize the description of the safety profile. This is a pragmatic, randomized, controlled effectiveness and safety study in adults and adolescents in endemic countries. Of course, we continue to work on ensuring greater access to address the unmet medical needs in endemic countries. We are in the process of expanding our network of manufacturing and distribution partners in low- and middle-income countries.

Speaker #3: We are further investing in post-marketing effectiveness studies to confirm the effectiveness and to optimize the description of the safety profile and this is a pragmatic randomized controlled effectiveness and safety study in adults and adolescents in endemic countries.

Speaker #3: And, of course, we continue to work on ensuring greater access to address the unmet medical needs in endemic countries, and we are in the process of expanding our network of manufacturing and distribution partners in low- and middle-income countries.

Speaker #3: So overall, I would say Xchick did not have a great start in the travel segment but we have been able to refine our labels and percussions and we are now focusing mainly on post-marketing effectiveness and global market access.

Thomas Lingelbach: Overall, I would say IXCHIQ did not have a great start in the travel segment, but we have been able to refine our labels and discussions. We are now focusing mainly on post-marketing effectiveness and global market access. Turning to shigellosis. Our program called S4V2 is a vaccine that targets shigellosis. It's a tetravalent Shigella vaccine candidate that we in-licensed from LimmaTech, and it's currently the clinically most advanced Shigella vaccine candidate. Therefore, we see here an opportunity to develop a first-in-class vaccine in a really life-threatening disease. When you look at the market opportunity and more importantly, the clinical and medical need, you need to recognize that it is currently representing the second leading cause of fatal diarrhea, especially in children.

Speaker #3: Turning to Shigellosis, so our program called S4V2 is a vaccine that targets Shigellosis; it's a tetravalent Shigella vaccine candidate that we in-licensed from Limatec and it's currently the clinically most advanced Shigella vaccine candidate.

Speaker #3: And therefore, we see here an opportunity to develop a first-in-class vaccine in a really life-threatening disease. When you look at the market opportunity and more importantly the clinical and medical need you need to recognize that it is currently representing the second leading cause of fatal diarrhea especially in children and therefore it has been identified as a priority vaccine by WHO.

Thomas Lingelbach: Therefore, it has been identified as a priority vaccine by WHO. Valneva has worldwide commercial rights upon potential approval. We see here really two major markets. On the one hand side, travel. This is certainly a vaccine that could complement our travel portfolio in the adult sector, and probably more importantly, children in low- and middle-income countries. We launched two parallel studies, two phase 2 studies, one in infants, the other one is a combined immunogenicity and challenge study, a so-called controlled human infection model. Both are right now ongoing, and we expect for both data mid of the year. Again, a very important milestone for the company, and subject to data, we're gonna decide on the program development pathway forward.

Speaker #3: Valneva has a worldwide commercial rights upon potential approval and we see here really two major markets. On the one-hand side, travel; this is certainly a vaccine that could complement our travel portfolio in the adult sector.

Speaker #3: And probably more importantly, children in low-medium-income countries. We launched two parallel studies; two phase two studies; one in infants; the other one is a combined immunogenicity and challenge study, a so-called controlled human infection model.

Speaker #3: Both are right now ongoing and we expect for both data mid of the year. So again, a very important milestone for the company and subject to data we're going to decide on the program development pathway forward.

Speaker #3: With that brief update on our portfolio and our key activities, I would like to turn over to Peter to provide us with the financial report.

Thomas Lingelbach: With that brief update on our portfolio and our key activities, I would like to turn over to Peter to provide us with the financial report.

Speaker #1: Thank you, Thomas, and good morning or good afternoon to all of you. Now, moving on to the financial review, starting with details on our top line on slide 16.

Peter Bühler: Thank you, Thomas, and good morning or good afternoon to all of you. Now moving on to the financial review, starting with details on our top line on slide 16. Solo product sales reached EUR 157.9 million, in line with our guidance and decreasing by -3.3% over 2024 or -1.3% at constant currency. The decrease in sales is primarily a result of the planned reduction in third-party sales and, to a lesser extent, of adverse currency impact. As mentioned by Thomas at the beginning of the call, proprietary product sales, excluding currency effect, grew by +9% year-over-year. IXIARO sales reached EUR 98.4 million compared to EUR 94.1 million in 2024, representing a growth of 4.6% or 7.2% at constant currency.

Speaker #1: Total product sales reached $157.9 million in line with our guidance and decreasing by minus 3.3% over 2024 or minus 1.3% at constant currency. The decrease in sales is primarily a result of the planned reduction in third-party sales and to a lesser extent of adverse currency impact.

Speaker #1: As mentioned by Thomas, at the beginning of the call, proprietary product sales excluding currency effects grew by plus 9% year over year. Xiara sales reached 98.4 million compared to 94.1 million in 2024, representing a growth of 4.6% or 7.2% at constant currency.

Speaker #1: The growth in Xiara sales was driven by the travel segment. Dukoral sales were essentially flat at 31.9 million compared to 32.3 million in the previous year; a decline of minus 1.2%.

Peter Bühler: The growth in IXIARO sales was driven by the travel segment. DUKORAL sales were essentially flat at EUR 31.9 million compared to EUR 32.3 million in the previous year, a decline of -1.2%. At constant currency, DUKORAL sales grew by +1.8% year-over-year. Growth in sales was impacted by a distributor change in Germany, a key indirect market. IXCHIQ sales reached EUR 8.4 million compared to EUR 3.7 million in the prior year. This includes a supply of 40,000 doses to the French island La Réunion in 2025. Finally, we reduced our third-party sales substantially year-over-year from EUR 33.2 million to EUR 19.2 million.

Speaker #1: At constant currency, Dukoral sales grew by 1.8% year over year. Growth in sales was impacted by distributor change in Germany, a key indirect market.

Speaker #1: Xchick sales reached 8.4 million compared to 3.7 million in the prior year. This includes the supply of 40,000 doses to the French island La Réunion in 2025.

Speaker #1: Finally, we reduced our third-party sales substantially year over year from 33.2 million to 19.2 million euros. As discussed previously, this decrease was the result of planned termination of our existing distribution contracts for third-party products in order to focus on our proprietary products.

Peter Bühler: As discussed previously, this decrease was the result of planned termination of our existing distribution contracts for third-party products in order to focus on our proprietary products. Moving on to slide 17, looking at the P&L. Other revenues increased from EUR 6.3 million to EUR 16.8 million. The increase is driven by a EUR 10 million revenue recognition related to the Lyme agreement with Pfizer. These EUR 10 million were previously included in refund liability on our balance sheet and represent the amounts Valneva no longer expects to owe through future payments to Pfizer. Looking at our expense, cost of goods and services increased by EUR 8.6 million. Cost of goods in Q4 were adversely impacted by a EUR 8.5 million inventory write-off, mainly related to IXCHIQ following the termination of the contract with the Serum Institute of India.

Speaker #1: Moving on to slide 17, looking at the P&L. Other revenues increased from 6.3 million to 16.8 million euros. The increase is driven by a 10 million revenue recognition related to the line agreement with Pfizer.

Speaker #1: These 10 million were previously included in refund liability on our balance sheet and represent the amount Valneva no longer expects to owe to future payments to Pfizer.

Speaker #1: Looking at our expense, cost of goods and services increased by 8.6 million euros. Cost of goods in the fourth quarter were adversely impacted by an 8.5 million inventory write-off mainly related to Xchick's prolonged determination of the contract with the Serum Institute of India.

Speaker #1: We're talking here about an accounting write-down; the product is still available and could potentially be used for supply under future contracts in endemic markets.

Peter Bühler: We're talking here about an accounting write-down. The product is still available and could potentially be used for supply under future contracts in the endemic markets. Cost of goods also includes approximately EUR 10.8 million of idle costs. IXIARO cost of goods remains stable versus prior year, while DUKORAL gross margin deteriorated due to the failure of manufacturing batches in Q4. Research and development expenses increased from EUR 74.1 million in 2024 to EUR 85.3 million in 2025. This increase is in line with our guidance and is driven by higher spend on our Phase 2 Shigella vaccine candidate, and additionally, we increased our R&D investment in our Chikungunya vaccine as we are executing on our post-marketing obligations. Marketing and distribution expense amounted to EUR 37.4 million compared to EUR 62.4 million in 2024.

Speaker #1: Cost of goods also included approximately 10.8 million euros of idle cost. Xiara cost of goods remained stable versus prior year while Dukoral gross margin deteriorated due to the failure of manufacturing batches in the fourth quarter.

Speaker #1: Research and development expenses increased from €74.1 million in 2024 to €85.3 million in 2025. This increase is in line with our guidance and is driven by higher spend on our phase two Shigella vaccine candidate. Additionally, we increased our R&D investment in our Chikungunya vaccine as we are executing on our post-marketing obligations.

Speaker #1: Marketing and the distribution expense amounted to 37.4 million compared to 52.4 million in 2024. This significant decrease is a result of a reduced Xchick spend compared to significant investment in prior launch years.

Peter Bühler: This significant decrease is a result of our reduced IXCHIQ spend, compared to significant investments in prior launch years. G&A expenses decreased from EUR 42.8 million to EUR 37.3 million as a result of our continued initiatives to decrease administrative spend across the company. In 2024, Valneva sold a priority review voucher obtained with the approval of IXCHIQ in the United States, which, net of expenses, resulted in proceeds of EUR 90.8 million. Other income and expense decreased year-over-year by roughly 60% as a result of lower R&D tax credits and a lesser expense due to lower grant income in Scotland. In 2025, Valneva reports an operating loss of EUR 82.1 million compared with an operating profit of EUR 13.3 million.

Speaker #1: G&A expenses decreased from 42.8 million to 37.3 million as a result of our continued initiatives to decrease administrative spend across the company. In 2024, Valneva sold the priority review voucher obtained with the approval of Xchick in the United States which, massive expenses, resulted in proceeds of 90.8 million euros.

Speaker #1: Other income and expense decreased year over year by roughly 50% as a result of lower R&D tax credits and to a lesser extent due to lower grant income in Scotland.

Speaker #1: In 2025, Valneva reports an operating loss of €82.1 million, compared with an operating profit of €13.3 million. The operating profit in 2024 was substantially driven by the non-recurring income statement of the sale of the priority review voucher.

Peter Bühler: The operating profit in 2024 was substantially driven by the non-recurring income from the sale of the priority review voucher. Finance expense includes the cost to refinance our debt with Deerfield with a new five-year loan with Pharmakon. Valneva's loss for the period reached EUR 115.2 million, while the adjusted EBITDA is reported at minus EUR 51.4 million. Now moving on to the financial outlook. In 2026, we expect total product sales of EUR 145 to 160 million, and total revenues of EUR 155 to 170 million. The overall decrease versus 2025 is related to further planned reduction in third-party product sales, offsetting continued growth from our proprietary products.

Speaker #1: Finance expense includes the cost to refinance our debt with Gearfield and Robimed with a new five-year borrowed loan with Pharmacom. Valneva's loss for the period reached $115.2 million while the adjusted EBITDA is reported at minus 51.4 million.

Speaker #1: Now, moving on to the financial outlook. In 2026, we expect total product sales of $145 million to $160 million and total revenues of $155 million to $170 million.

Speaker #1: The overall decrease versus 2025 is related to further planned reduction in third-party product sales offsetting continued growth from our proprietary products. We expect to progress in enhancing our R&D pipeline of differentiated vaccine candidates and cash will continue to be a focus with an emphasis on reducing our operating cash burn.

Peter Bühler: We expect to progress in enhancing our R&D pipeline of differentiated vaccine candidates, and cash will continue to be a focus with an emphasis on reducing our operating cash burn. Subject to a successful Lyme disease vaccine approval and commercialization, we expect to become financially self-sustainable and potentially profitable. With that, I'll hand the call back to Thomas to look at our future value drivers.

Speaker #1: Subject to a successful Lyme disease vaccine approval and commercialization, we expect to become financially self-sustainable and potentially profitable. With that, I hand the call back to Thomas to look at our future value drivers.

Speaker #2: Thank you so much, Peter. Yeah, well, let me turn to page 21. And talk a little bit about the future. Of course, it will heavily depend on Lyme.

Thomas Lingelbach: Thank you so much, Peter. Yeah, well, let me turn to page 21 and talk a little bit about the future. Of course, you know, it will heavily depend on Lyme and what is the significance of the phase 3 results for Valneva? Well, positive results could be transformational, delivering substantial commercial milestone and royalty revenue to fund further pipeline development and value creation. It would also further validate Valneva's position as a leading vaccine biotech company, potentially becoming the fourth vaccine we have developed from bench to market. When we look at our key initiatives and what we really would like to do going forward, on the one hand side, we would like to build scale in our R&D pipeline.

Speaker #2: And what is the significance of the phase three results for Valneva? Well, positive results could be transformational. Delivering substantial commercial milestone and loyalty revenue to fund further pipeline development and value creation.

Speaker #2: It would also further validate Valneva's position as a leading vaccine biotech company to potentially become the fourth vaccine we have developed from bench to market.

Speaker #2: When we look at our key initiatives and what we really would like to do going forward, on the one hand side, we would like to build scale.

Speaker #2: In our R&D pipeline, this includes a potential strategic in-licensing to augment our in-house pipeline while creating a risk-balanced portfolio of innovative specialty lifecycle and high-value vaccine assets.

Thomas Lingelbach: This includes potential strategic in-licensing to augment our in-house pipeline. While creating a risk-balanced portfolio of innovative specialty life cycle and high-value vaccine assets. We created Valneva 13 years ago with an investment theme and focus on vector-borne diseases. We would like to expand now beyond vector-borne diseases, targeting assets based on defined criteria. We have a couple of quite interesting programs in preclinical. Well, some of them associated with AMR, but we have also a very interesting EBV program. All of that we expect to accelerate and bring into clinical development subject to positive Lyme data. Of course, there is room to optimize our integrated operations to control our value chain by investing in enhancing our end-to-end capabilities and to structure our commercial model to optimize and maximize cash.

Speaker #2: We created Valneva 13 years ago whereas an investment theme and focus on vector-borne diseases. We would like to expand now beyond vector-borne diseases targeting assets based on defined criteria.

Speaker #2: We have a couple of quite interesting programs in preclinical. They are all kind of or some of them associated with AMR. But we have also a very interesting EBV program.

Speaker #2: All of that we expect to accelerate and bring into clinical development subject to positive Lyme data. And of course, there is room to optimize our integrated operations to control our value chain by investing in enhancing our end-to-end capabilities and to structure our commercial model to optimize and maximize cash.

Speaker #2: With that, outlook hopefully an outlook based on positive data I would like to turn back to the operator to take your questions.

Thomas Lingelbach: With that outlook, hopefully an outlook based on positive data, I would like to turn back to the operator to take your questions.

Speaker #1: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again.

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

Speaker #1: Please press star 11 to ask a question and wait for your name to be announced. Do withdraw your question, please press star 11 again.

Speaker #1: Thank you. We are now going to proceed with our first question. The questions come from the line of Maury Raycroft from Jefferies. Please ask your question.

Maury Raycroft: Hi. Thanks for taking my questions. Looking forward to seeing the Lyme data soon. I know guidance is for first half 2026, but you recently said you expect the data soon. Do you still see potential for a readout by end of Q1, or is it likely could it get pushed to Q2? Can you talk about your involvement in the data analysis? I'm wondering if you have access to the data room and can see real-time updates on the number of adjudicated Lyme cases. Do you see the split between the vaccine and placebo?

Speaker #3: Hi. Thanks for taking my questions. Looking forward to seeing the Lyme data soon. I know guidance is for first half '26, but you recently said you expect the data soon.

Speaker #3: Do you still see potential for readout by end of the first quarter, or is it likely it could get pushed to the second quarter? And also, can you talk about your involvement in the data analysis?

Speaker #3: I'm wondering if you have access to the data room and can see real-time updates on the number of adjudicated Lyme cases. And do you see the split between the vaccine and placebo?

Speaker #2: So, Maury, the sponsor for the phase three study is Pfizer. Pfizer are in sole control with regards to the execution of the study, and we are, at this point, fully blinded.

Thomas Lingelbach: Maury, the sponsor for the phase 3 study is Pfizer. Pfizer are in total control with regards to the execution of the study, and we are, at this point, fully blinded. There is an official guidance from Pfizer with regards to the data readout in H1. Of course, we can't say anything different. We are hoping so that the data will come around mid of H1, whenever this mid is. I would like to remind everyone that there is only one official guidance, and that's the one from Pfizer.

Speaker #2: There is an official guidance from Pfizer with regards to the data readout in H1. And of course, we can't say anything different. We are hoping so, that the data will come around mid of H1 whenever this mid is.

Speaker #2: But I would like to remind everyone that there is only one official guidance. And that's the one from Pfizer.

Speaker #3: Got it. Understood. And can you comment on when the last time was that you spoke with Pfizer on the program and what's the latest they're communicating to you based on stats and timing?

Maury Raycroft: Got it. Understood. Can you comment on when the last time was that you spoke with Pfizer on the program and what's the latest they're communicating to you based on stats and timing?

Speaker #2: So we have a joint development structure. We have a governance as per contract. Which includes a couple of formalized bodies and I would say we have weekly interaction.

Thomas Lingelbach: We have a joint development structure. We have a governance as per contract, which includes, you know, a couple of formalized bodies. I would say we have weekly interaction, frequent interaction, and so far, so good.

Speaker #2: Frequent interaction. And so far, so good.

Speaker #3: Got it. Okay. And maybe just last question. Just if you can remind us what gives you confidence that BLA15 will be equally efficacious and serotypes two through six versus serotype one?

Maury Raycroft: Got it. Okay. Maybe just last question, if you can remind us what gives you confidence that VLA15 will be equally efficacious in serotypes 2 through 6 versus serotype 1. Wondering if you tested serotypes 2 through 6 in preclinical challenge models similar to the 2024 publication that you had.

Speaker #3: Wondering if you’d tested serotypes two through six in preclinical challenge models similar to the 2024 publication that you had.

Speaker #2: Yes. So, first of all, this is an excellent question. So in preclinical models—different preclinical models, some of which have been published, others not yet.

Thomas Lingelbach: Yes. First of all, this is an excellent question. In different preclinical models, some of which have been published, others not yet, we have done passive and active immunization, and tested against all serotypes. What we don't know is whether the immunological protection levels in humans will be identical across different serotypes. We have a lot of grounds to believe that. Of course, as you know, Maury, you know, outside of serotype one, which was shown through LYMErix and ImuLyme, there is no data in humans today that bridges immunological response with efficacy. Even for LYMErix, there was never a formal correlate of protection established.

Speaker #2: We have done passive and active immunization and tested against all serotypes. What we don't know is whether the immunological protection levels in humans will be identical across the different serotypes.

Speaker #2: We have a lot of grounds to believe that. But of course, as you know, Maury, outside of serotype one, which was shown through Limerix and Immolime, there is no data in humans today that bridges immunological response with efficacy.

Speaker #2: And even for Limerix, there was never a formal correlate of protection established. But there has been a publication that summarized a correlation factor of 0.8, so 80% correlation in between immunological titers and protection.

Thomas Lingelbach: There has been a publication that summarized a correlation factor of 0.8, so 80% correlation in between immunological titers and protection. Of course, we hope to see the same. What gives us confidence is that in different models, different animal models. We have compared VLA15 against, I would call it an, a LYMErix biosimilar. This has been shown in, you know, and published in different publications. As I said, not everything has been published. We have seen across the board non-inferiority or superiority, after, you know, 3 doses. I think that is mainly what gives us confidence in addition, of course, to the immunological profile that we have observed across many different clinical studies.

Speaker #2: And of course, we hope to see the same what gives us confidence is that in different models, different animal models, we have compared BLA15 against, I would call it, a Limerix biosimilar.

Speaker #2: And this has been shown in and published. In different publications, it has said not everything has been published. And we have seen across the border non-inferiority or superiority after three doses.

Speaker #2: And I think that's mainly what gives us confidence, in addition, of course, to the immunological profile that we have observed across many different clinical studies.

Speaker #2: By the end of the day, data will tell and data will hopefully come soon. And then we will know.

Thomas Lingelbach: By the end of the day, data will tell, and data will hopefully come soon, and then we will know.

Speaker #3: Got it. All helpful. Thanks for taking my questions.

Maury Raycroft: Got it. All helpful. Thanks for taking my questions.

Speaker #1: We are now going to proceed with our next question. And the questions come from the line of Brandon Foulkes from HC Wainwright. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Brandon Folkes from H.C. Wainwright. Please ask your question.

Speaker #4: Hi. Thanks for taking my questions and congratulations on all the progress. Maybe just staying on Lyme, how do you think about capital allocation going forward if Lyme is successful?

Brandon Folkes: Hi, thanks for taking my questions, and congratulations on all the progress. You know, maybe just staying on Lyme, how do you think about capital allocation going forward if Lyme is successful? That obviously changes your capital profile potentially quite significantly. How should we think about that aspect of the business?

Speaker #4: That obviously changes your capital profile potentially quite significantly. So how should we think about that aspect of the business?

Speaker #2: Yeah, Brandon Hay. This is Peter. Well, look, I think it's important maybe to remind everyone that upon positive phase three data, we will not get any milestones.

Peter Bühler: Yeah. Brandon, hey, this is Peter. Well, look, I think it's important maybe to remind everyone that, you know, upon positive Phase 3 data, we will not get any milestones under the program. The next milestones will be due upon first commercial sales. Essentially it's first commercial sales in Europe and in the US, and it's a combined milestone of $143 million. But that's about, I would say, you know, probably a year and a half away from now at least. I mean, in terms of capital profiles over the short term, it's not really gonna change. Then I think, you know, we would certainly want to again accelerate and potentially augment our pipeline. This will of course take time to do that, and we'll consider carefully how we do that.

Speaker #2: Under the program, the next milestones will be due upon first commercial sales. Essentially, it's first commercial sales in Europe and in the US. And it's a compiled milestone of 143 million dollars.

Speaker #2: But that's about, I would say, probably a year and a half away from now at least. So I mean, in terms of capital profiles on the short term, it's not really going to change.

Speaker #2: And then I think we would certainly want to, again, accelerate and potentially augment our pipeline and this will, of course, take time to do that.

Speaker #2: And we will consider carefully how we do that.

Speaker #4: Great. Thanks very much. And then maybe just on Shigella, S4, V2. When we see the phase two data, later this year, sort of how should we think about the threshold there for Von Never moving forward with full development responsibility, or sort of perhaps other development parts on that program?

Brandon Folkes: Great. Thanks very much. Maybe just on Shigella, S4V2. When we see the phase 2 data later this year, sort of how should we think about the threshold there for Valneva moving forward with full development responsibility, or sort of perhaps other development paths on that program? Thank you.

Speaker #4: Thank you.

Speaker #2: Very good question, Brandon. So I would say the thing that we like about this program is that it includes a controlled human infection model in advance.

Thomas Lingelbach: Very good question, Brandon. I would say, the thing that we like about this program is that, it includes a controlled human infection model, in adults. This means, we will have adults challenged, at least with one strain, namely 2a, and we will see what we call pilot efficacy. We will see whether people are protected, and to which level they are protected, and more importantly, if there is an indication around, what level of immunogenicity is required for them to be protected. This gives us, based on prior data, also a first hint into the children population because there, of course we don't challenge, but we will have also a good understanding about the immunological threshold.

Speaker #2: So this means we will have adults challenged at least with one strain, namely Sonai. And we will see what we call pilot efficacy. So we will see whether people are protected and to which level they are protected and, more importantly, if there is an indication around what level of immunogenicity is required for them to be protected.

Speaker #2: This gives us, based on prior data also a first hint in to the children population because there of course, we don't challenge but we will have also a good understanding about the immunological threshold.

Thomas Lingelbach: Provided that we're gonna see pilot efficacy, provided that we're gonna see a decent level of, let's say, correlation, although it's not a statistical correlation between immunological titer, immunological response, and protection, we will progress this program further. If not, we have phase 2 rather cheap, which is the advantage of, you know, a program where you can really use a challenge model and see pilot efficacy ahead of extensive phase 3 studies. Of course, we are planning for success. We are working on, you know, the development pathway going forward, and as I mentioned earlier, we expect data from both studies mid this year. You know, we will of course inform the market about the next development steps.

Speaker #2: Provided that we're going to see pilot efficacy. Provided that we're going to see a decent level of, let's say, correlation also it's not a statistical correlation in between immunological titer, immunological response, and protection, we will progress this program further.

Speaker #2: If not, we have failed, and we have failed rather cheap, which is the advantage of a program where you can really use a challenge model and see pilot efficacy ahead of expensive Phase III studies.

Speaker #2: Of course, we are planning for success. We are working on the development pathway going forward. And as I mentioned earlier, we expect data from both studies mid this year.

Speaker #2: And then we will, of course, inform the market about the next development steps.

Brandon Folkes: Great. Thank you very much.

Speaker #4: Great. Thank you very much.

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

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

Speaker #3: Yes. Hello. Congrats on the good results. And thank you for taking my question. The first one is on ACIP recommendation. So when do you expect to receive an ACIP recommendation for VLF15 if approved?

Damien Choplain: Yes. Hello. Congrats on the good results, and thank you for taking my question. The first one is on the ACIP recommendation. When do you expect to receive an ACIP recommendation for VLA15 if approved? And do you believe a broad recommendation is achievable for this vaccine? And if so, what would be the key criteria to get such recommendation? Thank you.

Speaker #3: And do you believe abroad recommendation is achievable for this vaccine? And if so, what would be the key criteria to get such recommendation? Thank you.

Speaker #2: So first of all, I think it's fair to say that currently, to predict ACIP meetings, to predict ACIP outcome, to predict ACIP dynamics, is probably a mission impossible.

Thomas Lingelbach: First of all, I think it's fair to say that, currently, to predict ACIP meetings, to predict ACIP outcomes, to predict ACIP dynamics is probably a mission impossible. Given the geopolitical environment in the United States. Having said that, we believe that Pfizer will progress fast, post-approval, into the ACIP process. ACIP, at least in the past, have reviewed a couple of major criteria. One, risk benefit. This considers, of course, the safety profile that we're gonna see as part of the phase 3 study. On the other hand, the benefit of vaccination, which will be heavily driven also by the final efficacy we're gonna see in the different target groups, and probably also importantly, against serotype one, which is the most prevalent serotype in the United States.

Speaker #2: Given the geopolitical environment in the United States. Having said that, we believe that Pfizer will progress fast post-approval into the ACIP process. And ACIP at least in the past have reviewed a couple of major criteria.

Speaker #2: One, risk-benefit. It's considered of course the safety profile that we're going to see as part of the phase three study. And on the other hand, the benefit of vaccination which will be heavily driven also by the final efficacy that we're going to see in the different target groups.

Speaker #2: And probably also importantly, against serotype 1 which is the most prevalent serotype in the United States. The other criteria is the health economic benefit.

Thomas Lingelbach: The other criteria is the health economic benefits. Well, we know that the cost of treating Lyme are very, very high, and therefore we believe that the health economic benefits will be very favorable for the vaccine. Now favorable for people living in high-risk areas. We know that there is a huge difference in Lyme incidence, based on different geographies. We hope that we will get a broad recommendation for people living in high-risk areas, and representing a high-risk population in those areas. You know, what this means in detail, hard to predict at this point in time. We are very positive about a broad recommendation, provided data support, of course. Okay, thank you very much.

Speaker #2: Well, we know that the cost of treating Lyme is very, very high. And therefore, we believe that the health economic benefit will be very favorable for that vaccine.

Speaker #2: Now, favorable for people living in high-risk areas. So we know that there is a huge difference in Lyme incidence based on different geographies. And we hope that we will get a broad recommendation for people living in high-risk areas and representing a high-risk population in those areas.

Speaker #2: What this means in detail hard to predict at this point in time. But we are very positive about a broad recommendation provided data support, of course.

Speaker #3: Okay. Thank you very much.

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

Operator: We are now going to proceed with our next question. The question comes from the line of Amol Dhillon from Guggenheim. Please ask your question.

Speaker #3: Great. Thanks so much for taking our questions. So two, I could one back on Lyme and then one other topic. So on the Lyme, I appreciate everything you said around your Pfizer running the trial here.

Amol Dhillon: Great. Thanks so much for taking our question. Two, if I could, one back on Lyme and then one other topic. On the Lyme, appreciate everything you said around your Pfizer running the trial here. Just curious if you know what actually would be in the top-line press release, what should we expect in terms of what, you know, endpoint or information is planning to be disclosed. Anything you could share would be helpful just ahead of the release. The second one is on IXIARO, and this is a U.S.-specific question here just around the DoD contract, because that has been an important source of revenues for that vaccine in the past.

Speaker #3: Just curious if you know what actually would be in the top line press release. What should we expect in terms of what endpoint or information is planning to be disclosed?

Speaker #3: So anything you could share would be helpful. Just ahead of us doing that release. And then the second one is on Xiaro. And this was a specific question here just around the DOD contract.

Speaker #3: Because that has been an important source of revenues for that vaccine in the past. Do you have any information on, sort of, where that might stand in terms of a contract for this year or looking forward?

Amol Dhillon: Do you have any information on sort of, you know, where that might stand in terms of contract for this year or looking forward?

Speaker #2: Well, of course, let me start with Lyme. So, we have previously communicated that we expect Pfizer to release top-line data. Well, top-line data, as you know, is something that is not clearly defined—what it really means.

Thomas Lingelbach: Well, of course. Let me start with Lyme. So we have previously communicated that we expect Pfizer to release top-line data. Well, top-line data, as you know, is something that is not clearly defined what it really means. What it means definitely is the primary endpoint, it is safety. Whether Pfizer will decide to announce more than that, this is at their discretion, and Valneva is currently not in any possession of information regarding what else may or may not be included in the top-line release. When it comes to DoD, yes, we are expecting a new contract. It is a vaccine broadly used in the Army, in that we are under a sole supplier contract with the DoD. It's the only licensed JE vaccine in the United States.

Speaker #2: What it means definitely is the primary endpoint. It is safety. Whether Pfizer will decide to announce more than that, this is at their discretion.

Speaker #2: And Valneva is currently not in any possession of information regarding what else may or may not be included in a top-line release. When it comes to DOD, yes, we are expecting a new contract.

Speaker #2: It is a vaccine broadly used in the Army, in that we are under a source supplier contract with the DOD. It's the only licensed JE vaccine in the United States.

Speaker #2: And yes, we can expect a new contract.

Thomas Lingelbach: Yes, we can expect a new contract this year.

Speaker #3: Okay. Is there any timing around that? Like when that might happen or no? Too early to say.

Amol Dhillon: Okay. Is there any timing around that, like when that might happen or no? Too early to tell.

Thomas Lingelbach: I don't want to predict the timing because again, we are talking government. We have intentionally not guided on any timeline associated with this.

Speaker #2: I don't want to predict the timing because again, we are talking government. And we have intentionally not guided on any timeline associated with it.

Thomas Lingelbach: I don't want to predict the timing because again, we are talking government. We have intentionally not guided on any timeline associated with this.

Speaker #3: Okay. All right. Thank you.

Amol Dhillon: Okay. All right. Thank you.

Speaker #1: We are now going to proceed with our next question. And the questions come from the line of Regent Sharma from Goldman Sachs. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Rajan Sharma from Goldman Sachs. Please ask your question.

Speaker #4: Hi. Thanks for taking my question. Actually, first one for Peter. Could you maybe just help us understand the gross margin progression in 2026? Feels like there are a few moving parts in 2025.

Rajan Sharma: Hi. Thanks for taking my question. Actually, first one for Peter. Could you maybe just help us understand the gross margin progression in 2026? Feels like there are a few moving parts in 2025. What are the pushes and pulls in 2026, and how much of that EUR 10 million or so in idle capacity costs are likely to reoccur in 2026? Then also on the in-licensing and M&A that you mentioned as part of the strategy to rebuild the R&D pipeline. Could you just discuss what that could look like in terms of size, structure, and if there are any specific areas of all segments of the market that you're likely to focus on, whether that's travel or otherwise?

Speaker #4: What are the pushes and pulls in '26? And how much of that 10 million or so in idle capacity costs are likely to reoccur in 2026?

Speaker #4: And also on the in-licensing and M&A that you mentioned is part of the strategy to rebuild the R&D pipeline. Could you just discuss what that could look like in terms of size, structure, and if there are any specific areas of or segments of the market that you're likely to focus on?

Speaker #4: Whether that's travel or otherwise. And then just one very quick follow-up on the DOD contract from the prior question. Is that assumed within your revenue guidance for 2026?

Rajan Sharma: Just one very quick follow-up on the DoD contract, and from the prior question, is that assumed within your revenue guidance for 2026? Thank you.

Speaker #4: Thank you.

Speaker #2: So, where shall we start? Maybe we start off—I start off with the pipeline evolution, and then I'll let Peter talk about all the financial questions that you had.

Thomas Lingelbach: Where shall we start? Maybe we start off. I start off with the pipeline evolution and then I let Peter Bühler talk about all the financial questions that you had. As I mentioned previously, we have also last year already initiated a process to look at external opportunities in the same way we are looking at internal co-opportunities. This resulted, for example, in the in-licensing of our Shigella vaccine candidate, and we will continue doing that. As I mentioned, we will definitely now go above and beyond vector-transmitted diseases, and we will certainly go above and beyond travel. Because we believe, and again, planning for success, of course, that there are many potential vaccine-preventable diseases that are currently not covered by the big vaccine players.

Speaker #2: As I mentioned previously, we have also last year already initiated a process to look at external opportunities in the same way we are looking at internal opportunities.

Speaker #2: This resulted, for example, in the in-licensing of our Shigella vaccine candidate. And we will continue doing that. As I mentioned, we will definitely now go above and beyond that, surge in admitted diseases.

Speaker #2: And we will certainly go above and beyond travel. Because we believe and again, planning for success, of course, that there are many, many potential vaccine-preventable diseases that are currently not covered by the big vaccine players.

Thomas Lingelbach: We have already given a focus area around enteric diseases in the context of AMR. We have also started with our EBV program to build around a potential herpes franchise. These are the key areas that we are currently contemplating. Again, we have a dedicated team screening, scouting, evaluating, and we will decide, you know, on, you know, progressing internal or bringing in external opportunities in the coming months and years. Peter.

Speaker #2: And we have already given a focus area around enteric diseases in the context of AMR. But we have also started with our EBV program to build around a potential herpes franchise.

Speaker #2: And these are the key areas that we are currently contemplating. And again, we have a dedicated team screening scouting evaluating and we will decide on progressing internal or bringing in external opportunities in the coming months and years.

Speaker #2: Peter.

Speaker #3: Yeah. So on gross margin, Rachan, yes, there were a couple of things going on in 2025. When we I mean, I think the best way to look at it is by product.

Peter Bühler: Yeah. On gross margin, Rajan, yes, there were a couple of things going on in 2025. When we... I mean, I think the best way to look at it is by product. When we look at IXIARO, it is relatively stable versus 2024. What happened in 2025 is it was a bit adversely impacted by the change from the Manston facility over to the Almeida facility, so a new manufacturing site in Scotland. And also related to that, because of this transfer, a bit of lower volume in manufacturing, which of course leads then to a bit, you know, less effective overhead absorption. I think on DUKORAL, we had a very good gross margin up until the end of Q3.

Speaker #3: So when we look at Xiaro, it is relatively stable versus 2024. What happened in '25 is it was a bit adversely impacted by the change from the Manson facility over to the Almeida facility.

Speaker #3: So, our new manufacturing site in Scotland. And also related to that, because of this transfer, a bit of lower volume in manufacturing—which, of course, leads into a bit less effective overhead absorption.

Speaker #3: I think on Ducoral, we had a very good gross margin up until the end of Q3. And then what we saw in Q4 is we had a couple of batch write-offs, which quickly had quite a significant impact.

Peter Bühler: What we saw in Q4 is we had a couple of batch write-offs, which, you know, quickly had quite a significant impact. This adversely impacted our gross margin in DUKORAL. I think on IXCHIQ, you know, it's primarily, and that is of course the big hit on the cost of goods overall, the write-off we took on drug substance following the termination of the SII contract. As I said, those doses are still available. I mean, their product is good. It has quite a long shelf life. If we manage to build a business in endemic markets in Asia, those doses could still be written back basically and then sold.

Speaker #3: And this adversely impacted our gross margin on Ducoral. And I think on XGIC, as you know, it's primarily that is of course a big hit on the cost of goods overall.

Speaker #3: It's the write-off we took on drug substance following the termination of the SII contract. And as I said, those doses are still available. I mean, the product is good.

Speaker #3: It has quite a long shelf life. And if we manage to build a business in the endemic market in Asia, those could still be written back, basically, and then sold.

Speaker #3: To your question on idle capacity, yeah, I would say the 10 million is probably a number that will remain unless there is a major change in how we make usage of our manufacturing facilities, which we right now don't see.

Peter Bühler: To your question on idle capacity, yeah, I would say the EUR 10 million is probably a number that will, unless there is a major change in, you know, how we make usage of our manufacturing facilities, which we right now don't see, it's probably gonna stay a while, for a while, because we have overcapacity in both Sweden and Scotland. Oh, yes. On military, what was your question on the DoD again? And Rajan, sorry.

Speaker #3: It's probably going to stay a while for a while. Because we have overcapacities in both Sweden and Scotland. Oh yes. So on military, what was your question on the DOD again, Rachan?

Speaker #3: Sorry.

Speaker #4: It's just whether that's been your guidance for 2026.

Rajan Sharma: It's just whether that's in your guidance for 2026.

Speaker #3: Absolutely. So it's included in the guidance in 2026. With the volume that we assume right now, so they order they have a right to order additional doses within the 12-month period, which they did.

Peter Bühler: Absolutely. It's included in the guidance in 2026, you know, with the volume that we assume right now. They order, you know, they have a right to order additional doses within their 12 months period, which they did, and it's then shipped after the 12 months, which is also why, you know, it's not because there's no new contract that there is no shipment. Shipments are continuing under the old one. Then as Thomas said, we expect a new contract, and that will include the new guidance.

Speaker #3: And it then shifts after the 12 months. Which is also why it's not because there's no new contract that there is no shipment. So shipments are continuing under the old one.

Speaker #3: And then as Thomas said, we expect the new contract and that all included in the guidance.

Speaker #4: Thank you.

Rajan Sharma: Thank you.

Speaker #5: We are now going to proceed with our next question. And the questions come from the line of Simon Schultz from First Berlin. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Simon Scholes from First Berlin. Please ask your question.

Speaker #4: Yes. Good afternoon. I've just got two questions. The first is on chicken gunya, on the chicken gunya vaccine and the status of 1555, which I think is the candidate for local manufacture in Brazil.

Simon Scholes: Yes. Good afternoon. I've just got two questions. The first is on chikungunya, on the chikungunya vaccine and the status of VLA1553, which I think is the candidate for local manufacture in Brazil. Secondly, following the suspension of the SII licensing deal, I was wondering if you could just outline your next steps in Asia with regard to IXCHIQ.

Speaker #4: And then secondly, following the suspension of the SII licensing deal, I was wondering if you could outline your next steps in Asia with regard to XGIC.

Speaker #2: So both excellent questions. I would say so let me start with 1555. I mean, of course, the whole regulatory processes have slowed down the approval of 1555 by Anvisa.

Thomas Lingelbach: Both excellent questions, I would say. Let me start with VLA1553. I mean, of course, the whole regulatory processes have slowed down the approval of VLA1553 by Anvisa. Now that we have concluded all the updates with the different regulatory authorities, including Anvisa, meaning, you know, sharpening the pencil on age ranges, sharpening the pencil on warnings and precautions, contraindications, and all of that. There's no reason anymore for Anvisa to further slow down or wait for VLA1553 approval. Hence, we are expecting it quite soon. When it comes to our LMIC strategy in Asia, we decided to take control over the commercialization but also manufacturing of the product in Asia, given the growing medical needs outside of the Indian territory.

Speaker #2: Now that we have concluded all the updates with the different regulatory authorities, including Anvisa—meaning sharpening the pencil on age ranges, sharpening the pencil on warnings and precautions, contraindications, and all of that—there's no reason anymore for Anvisa to further slow down or wait for 1,555 approval.

Speaker #2: Hence, we are expecting it quite soon. When it comes to our NMIC strategy in Asia, we decided to take control over the commissionization, but also manufacturing of the product in Asia, given the growing medical need outside of the Indian territory.

Speaker #2: And we are currently in the process of evaluating potential change of custody evaluating potential partners, evaluating potential commissionization structures, and evaluating potential manufacturing strategies.

Thomas Lingelbach: We are currently in the process of, you know, evaluating potential change of custody, evaluating potential partners, evaluating potential commercialization structures, and evaluating potential, you know, manufacturing strategies. We hope that we will be able to, you know, progress and announce that in the latter part of this year.

Speaker #2: And we hope that we will be able to progress and announce that in the latter part of this year.

Speaker #4: Okay. Thanks very much. That's very helpful.

Simon Scholes: Okay, thanks very much. That's very helpful.

Speaker #5: We are now going to proceed with our next question. And the questions come from the line of Susan Ann Wunderhausen from VLK. Please ask your question.

Operator: We are now going to proceed with our next question. The question come from the line of Suzanne van Voorthuizen from VLK. Please ask your question.

Speaker #6: Hi. It's Pauline on for Suzanne. I have two questions. Regarding MIME, could you clarify if the first cohort of participants in the Phase 3 received a booster prior to the last tick season?

[Analyst] (Kempen & Co): Hi, it's Pauline on for Suzanne. I have two questions regarding Lyme. For Lyme, could you clarify if the first cohort of participants in the phase 3 received a booster prior to the last tick season? Also, what about the second cohort of participants? We're also wondering at what point in time there will be booster data, and will the data be part of the filing? Thank you.

Pauline Kreeft: Hi, it's Pauline on for Suzanne. I have two questions regarding Lyme. For Lyme, could you clarify if the first cohort of participants in the phase 3 received a booster prior to the last tick season? Also, what about the second cohort of participants? We're also wondering at what point in time there will be booster data, and will the data be part of the filing? Thank you.

Speaker #6: And also, what about the second cohort of participants? And we were also wondering at what point in time there will be booster data and will the data be part of the filing?

Speaker #6: Thank you.

Speaker #3: So we have currently not included a so-called second booster or dose five because I'm assuming that you are referring to that. But we will in a success case augment and provide an additional booster dose.

Thomas Lingelbach: We have currently not included a so-called second booster or dose five, because I'm assuming that you are referring to that. We will in a success case augment and provide an additional booster dose. Our current hypothesis is as we presented, I think already a while ago at our R&D Day in New York, that will not be part of the initial licensure process, but for example, a supplemental BLA.

Speaker #3: And our current hypothesis is as we present it, I think already a while ago at our R&D day, in New York, that we will not be part of the initial licensure process, but for example, a supplemental VLA.

Speaker #6: Thank you so much.

[Analyst] (Kempen & Co): Thank you so much.

Pauline Kreeft: Thank you so much.

Speaker #5: We have no further questions at this time. So I'll hand back to you for closing remarks.

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

Speaker #2: Thank you very much. For having joined us today. Been a pleasure. And as I said, we are looking forward to our line data. So again, fingers crossed.

Thomas Lingelbach: Thank you very much for having joined us today. Been a pleasure. As I said, we are looking forward to our Lyme data. Again, fingers crossed. I think Valneva has great prospects, great opportunities. With that, stay tuned. Thank you so much.

Speaker #2: I think Valneva has great prospects. Great opportunities. And with that, stay tuned. Thank you so much.

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

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