Valneva SE

Hello, and thank you for joining us to discuss Valneva's full year 2022 consolidated financial results, which were published today and are available on our website. It's my pleasure to welcome you today. I'm joined by Valneva's CEO, Thomas Lingelbach, and CFO, Peter Buehler, who will provide a brief overview of our business and our financial results for the period, as well as updated financial guidance and a summary of anticipated upcoming milestones. 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. 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 also listed on our company website, www.balneva.com. Please note that today's presentation includes information provided as of today, March 23rd, 2023, and Valneva undertakes no obligation to revise or update forward looking statements, except as required by applicable securities laws. And with that, it is my pleasure to introduce Thomas to begin today's presentation.

Thank you, Josh. Good afternoon. Good day to all of you. Well, 2022 was a year marked our ability to adopt to a changing environment. and showed our resilience. We achieved several key milestones that underpin our unique value proposition. We made continued progress across the R&D pipeline with our chikungunya vaccine now under VLA review. On Lyme disease, we started the phase three pivotal efficacy study Valor together with Pfizer. On COVID-19, we were the first company to achieve a full marketing authorization by EMA. However, given the changing environment around COVID and the prospect of that vaccine, we decided to not further invest in development and stock manufacturing for COVID. We accelerated our preclinical activities with the aim to build a new exciting R&D pipeline nothing beyond lime and chicken gunja. We have seen a significant rebound of the commercial business and we clearly capitalized on the strong recovery in the travel segment and we complemented our commercial portfolio with additional third-party product sales. We have reported strong full-year 2022 revenues and cash position with revenues above €360 million and product sales year-on-year increased well above 80%. Our cash position at the end of 2022 was close to 290 million. We also strengthened our shareholder base with a successful upside follow-on offering, which included now also our new major long-term shareholders and Pfizer. With that, let me go straight into our programs and into the business update. And I will start with Chikungunya, page six of the presentation. By way of reminder, our Chikungunya program is the most advanced Chikungunya program in development worldwide. It is a live attenuated vaccine candidate targeting long lasting high zero response after a single shot. Basically the phase three Phase 3 study met all primary endpoints in terms of zero response rate, but also in terms of lock-to-lock consistency. We reported positive 12-month antibody persistence data and the long-term persistence trial that will measure the zero response rate over time, targeting at least five years. The adolescence trial is fully enrolled by now, and we expect first data mid-2023. We are under priority review for the BLA. A PDUFA action date has currently been assigned for end August 2023, and we expect to commence other regulatory processes in the second half of this year, including EMA. The program got also granted FDA fast track and breakthrough and EMA prime designation, as you know. In terms of target population and overall geographic reach, we have explained before that we see of course the non-endemic countries and here primarily travelers, military, but also the possibility for outbreak preparedness and stockpiling. And on the other hand, the endemic use, where we have a partnership agreement with CEPI and Instituto Butantan. From there, let me turn over to the key data for Chikungunya. Serial response, 99% after a single vaccination. This immunogenicity profile has been sustained even after 12 months. And we have seen the similar zero response rate in elderly, which is particularly encouraging. And of course, on the basis of that high zero response rate, we see also 100% zero conversion. With regards to safety data, VLA1553 was generally well tolerated. We had, of course, as expected for a vaccine of that class, solicited systemic adverse events, but the majority of solicited adverse events were mild or moderate, and only 2% of study participants reported severe solicited adverse events, most commonly fever. In terms of the future commercialization, as we repeatedly communicated, VLA 1553 fits perfectly within our existing commercial infrastructure. And we have a high caliber team with significant experience in the vaccine space. And we are currently adding a significant amount of talent and people as we are preparing for the commercial launch and market access for this brand new vaccine in a brand new indication. And we are all extremely excited about the prospect of being in a position to launch such a product. Let's go to Lyme. It is, again, following our pipeline differentiation around first, only, or best in class, the only Lyme disease vaccine in advanced clinical development today. It is a multivalent recombinant protein-based vaccine. covering the six main serotypes of Lyme borreliosis prevalent in the Northern Hemisphere. We initiated the phase three study on the back of positive results for three phase two studies, including a pediatric population. You know that as part of the ongoing phase three study, there were GTP issues observed that let the study sponsor and our partner Pfizer to actually stop a significant part of the study subjects that were included in the study. Given the seasonality around Lyme development, we have currently a review of the trial design and the associated timelines ongoing. And this is, of course, a process that will still take a bit of time. I think by way of reminder with regards to the data that have always been extremely strong for Lyme, and of course, also the GMP issues, GCP issues that we have been facing now as part of the phase three conduct do not change the picture on the underlying signs. and value of this program. All three phase two studies showed strong immunogenicity. The product has been in more than a thousand people, and as I said, including pediatric population. And we have seen, as part of the booster studies, a very strong anamnestic response, which is of utmost importance for a product that is expected to be boosted When we look at our pipeline, you basically see that we are currently reviewing most of our, some of our preclinical and previous clinical candidates with regards to next clinical entry. We have a CICA candidate for which we conducted a phase one study. We did not progress that further because of the work that we commenced on COVID. However, we are currently evaluating a potential clinical reentry at the end of this year or very, very early next year. Given that we could leverage one of our existing platforms, And given that WHO made a clear recommendation for Zika vaccines to be based on inactivated whole virus technologies. HMPV, Human Immersive Pneumovirus, is a program that we developed throughout the preclinical phase. It has reached the end of the preclinical phase with the initial preclinical proof of concept being completed. But given that the market is shifting in the development arena towards combination vaccines, RSV, HMPV, we've decided to evaluate a potential partnering before taking it potentially into a first trial in humans. Our lead program in our preclinical shop today is Epsom bar virus. And we target the completion of the antigen identification for such a quite complex development in an area of a very high unmet medical needs by the end of 2023. The two other programs that we have in early R&D are Campylobacter and Parvovirus. And we are still evaluating whether we put them into the preclinical R&D and development as of now or not, but this is something that we will decide over the course of this summer. With that, I would like to hand over to Peter to provide us the financial report.

Thank you, Thomas, and good morning or good afternoon to all of you. Let's look at the financial review of our fiscal year 2022. Total revenues grew by 3.8% versus fiscal year 2021, driven by a strong product sales growth. Total product sales reached 114.8 million euros, an increase of 82.3% versus prior year, or 66.7% in constant currency. 2022 product sales include 29.6 million euros of VLA 2001, our COVID-19 vaccine. Product sales, excluding our VLA 2001 sales, reached 85.2 million euros, exceeding our guidance of 70 to 80 million euros. Moving on to slide 14, looking at product sales details. Ikeara sales reached 41.3 million euros, a decrease of minus 8.4% versus Taiye, as a result of fewer shipments to U.S. military. The decrease in sales to U.S. military was partially offset by significant increase of sales in the travel market, of 300%. DoCoral sales reached 17.3 million euros compared to 2.4 million euros in 2022, an increase of more than 600%, once again driven by the recovery of the travel market. Third-party product sales increased by 72% to reach 26.5 million euros for the fiscal year 2022. This represents a record level of this product segment, as well, and they have managed to increase third-party product sales consistently over the last few years. The very positive sales performance in our travel vaccine is, as already mentioned, related to a travel market recovering faster than expected. Finally, as already mentioned, we shipped COVID-19 vaccines for an amount of 29.6 million euros to certain member states of the European Union, as well as to the Kingdom of Bahrain. Moving on to slide 15, looking at the P&L. We already covered product sales. Other revenues reached €246.5 million and primarily consist of one-off revenues derived from the advanced purchase agreements with the European Commission and the United Kingdom. The cash related to these revenues were received in 2021 and early 2022. Also included in the other revenue line is the adverse impact related to amendments of the VLA15 agreement with Pfizer and updated cost sharing. Further details will be included in our universal registration document in 20F that we plan to publish next week. Total revenues reached €361.3 million, slightly exceeding our guidance of €340 million to €360 million. Looking at expenses, we observed a significant increase in cost of goods, and this is mainly a result of one-off items related to the wind-down of our COVID-19 program, following reduced market demand. Research and development expense decreased from 173 million euros in 2021 to 104.9 million euros in the fiscal year 2022, and stayed well within the revised guidance of 95 to 110 million euros communicated during our nine-month results release. The decrease compared to prior year is mainly driven by lower spend on our VLA2001 program, but also by decreased spend on clinical trials of the chikungunya vaccine, as the program advances towards licensure. Marketing and distribution expense remained stable compared to prior year at 23.5 million euros and contained 7.3 million euros of cost for our chikungunya vaccine candidate, twice the amount spent a year ago as we prepared for a potential launch. G&A expense decreased significantly from 47.6 million euros in 2021 to 34.1 million euros in 2022. All expense lines benefited from a substantial non-cash adjustment related to the positive effect on the cost related to the company's share based compensation due to the share price performance in 2022. Overall, an upside of 25 million euros resulted in 2022 compared to a total cost of 37 million euros in 2021. Other income of €12.2 million mainly consists of R&D tax credit and other expense related to the provision for the ongoing revised inter-cell merchant litigation procedures. Total other income decreased compared to prior year due to the lower R&D spend and the related decrease of R&D tax credit. In 2022, Valneva generated an operating loss of €113.4 million compared to €61.4 million in prior year, and an adjusted EBITDA of negative 69.2 million euros versus minus 47.1 million euros in the prime year. Next slide, please. Looking at our COVID business segment, we see total revenues of 309.6 million euros with a total cost of goods and services of 267.1 million euros. COVID cost of goods includes significant costs related to the wind-down of the COVID program. The company recognized major costs related to a write-down of all COVID-related inventories and onerous agreements, in particular the discontinuation of a third-party manufacturing contract. The operating loss for the COVID segment in 2022 reached minus 42.8 million euros. The business outside COVID generated a total revenue of 51.7 million euros. As already mentioned, the negative other revenues were driven by the revised LIME agreement. Cost of goods and services reached 57.3 million euros and consists of 9.2 million euros cost of technologies and services, 3.3 million euros for vaccine candidates, and 41.8 million euros of commercialized products. Gross margin of product sales reached 45.5% compared to 36.5% in 2021. Cost of goods of commercialized products also include impairment charges related to Ducorol. Total operating loss for the business outside COVID was 70.6 million euros compared to an operating loss of 65.3 million euros in 2021. The increased operating loss is driven by the negative revenues related to the Pfizer agreement. Moving on to slide 17 and looking at our balance sheet. Total assets decreased from 817 million euros at the end of 2021 to 621 million euros at December 31st, 2022. The main decrease in assets relate to a sharp decrease in inventories, primarily related to the full write-down of all COVID-19-related inventories. Cash and cash occurrences at the end of 2022 were at €289.4 million, compared to €346.7 million at the end of the prior year. Next slide. Well-needed equity was strengthened in 2022 through a global offering of €102 million at the end of the third quarter, as well as prices investment in Valeva shares for a total value of 90 million euros. At the same time, total liabilities decreased by 245 million euros, in particular driven by a decrease of contract and refund liabilities, driven by the revenue recognition of deferred revenues related to the COVID-19 agreement. Borrowings and other non-current liabilities remained stable, while total borrowings increased due to an increase in the Dealfield and OrbiMed loan, these liabilities decreased due to amortization and the foreign exchange impact. Provisions decreased due to lower cost of share-based compensation driven by the decrease in Balneva share price. Overall, Balneva significantly improved its debt-to-equity ratio in 2022. Now, moving on to the financial outlook on slide 20. we expect product sales to reach 130 to 150 million euros and this includes marginal remaining vla 2001 sales under the bahrain supply agreement further 90 to 100 million euros of other income are expected in relation to the sale of the prv expected upon potential approval or jikungunya vaccine candidate investments into research and development are anticipated to reach between 70 and 80 million euros This concludes the finance section of this call, and I would like to hand back to Thomas for the news flow.

Thank you so much, Peter. Yeah, so we see for the year 2023 a quite significant number of catalysts and an interesting news flow. As mentioned earlier on Chikungunya, it's of course the adolescent study results that would come middle of the year, please keep in mind that we expect to extend the label in the United States post licensure and probably include the data directly for the initial filing in other markets. Of course, then it's all about our launch here. So the potential BLA approval and the launch, and upon successful approval, the PRV and the potential PRV sale that Peter mentioned earlier. And we try to accelerate bringing this novel and unique vaccine to many markets as quickly as we can. And hence, you should expect additional XUS regulatory submissions in the second half of this year. Online, of course, we all understand that it is important that we get clarity on our phase three clinical study plans. We need to have this as quickly as we can so that we can restart enrolling people in time. And, of course, as we are running the antibody persistence studies in an ongoing way, we will also expect additional antibody persistence results in the second half of this year. Then on ICSIARO and military, we expect a potential new DOD contract still towards the latter part of H1. The progression of the selected preclinical programs towards clinical entry, so we will take a clear decision which one and by when. And as we reported earlier, we are reviewing and evaluating to potentially augmenting our clinical pipeline through a program acquisition or partnering in the R&D environment. When you look at our strategy and how we see the company evolving over time, we prepared slide 23 and you see that our value proposition will gradually be extended. The additional potential growth drivers include the continued recovery of the travel market to pre-COVID levels and beyond. new usdod contract for xero further expansion of our third party distribution segment and potential in licensing or acquisition of additional clinical and or commercial stage products with that we conclude our presentation and we hand back to the operator to take your questions thank you as a reminder to ask a question please press star 1 1 on your telephone

and wait for your name to be announced. To answer your question, please press star, one, one again. Please stand by while we compile the Q&A roster.

We will now take the first question. It comes from .

Please go ahead. Your line is open.

Hi. Congrats on the progress, and thanks for taking my questions. I was going to ask one about the Lyme disease program. So for the Phase III Lyme proposed protocol modifications that would allow Pfizer and Valneva to remain on track for a 2025 filing, I'm guessing you can't provide too much into exact interactions with FDA. But can you talk about some of the scenarios or moving parts involved with being able to maintain the timelines?

So, Maureen, hi today. It's, of course, an excellent question. You would certainly understand that, as you rightly pointed out, there is very little we can say at this point in time, and we don't want to disturb this ongoing process. It is very clear that as we discussed previously, of course, we did lose a significant number of people in the season 2023. Of course, given the seasonality, you have only a certain window where you can recruit people. And of course, one scenario is just to at another season. And this is the obvious one that you already figured out yourself and just restarting again this summer for the next tick season 2024. And there are other what I would call more creative scenarios that may potentially allow still a filing but those are in the make right now, or in the discussions, and we can't comment on those.

Got it, understood. And for CHIC-V, I'm wondering if there's been any new correspondence with FDA related to potential for an advisory committee meeting And in looking ahead, how are you preparing for the February 2024 ACIP vote? And maybe talk about how that vote, outcomes from that vote could impact your launch strategy.

Excellent question. So first of all, we are, you know, making progress in the ongoing review process at this point in time. There is nothing that has come up in an unexpected way. Otherwise, of course, we would have reported it. As far as the WERPAC is concerned, no decision has been taken yet as to whether a dedicated WERPAC for this program will be needed or not. It goes without saying that we are preparing full speed and full steam for such a WERPAC. Our teams are well prepared and we are putting everything together to enable a very positive WERPAC should it be required. With regards to the ACIP, I mean, you know that the ACIP process has been very clearly outlined. We had already a number of presentations on the program. We will continue following the path as we are being invited to present. And, of course, we do hope and do assume a positive vote as part of our launch plan for the United States.

Got it. Okay. Thanks so much for taking my questions.

Thank you. We will now take the next question. It comes from the line of Evan Wong from Guggenheim Securities. Please go ahead. Your line is open.

Hey, guys. Thanks for taking the question. Following up on Lime, just, you know, as you guys are having these discussions, you know, just wondering, have you seen this kind of situation before? Has FDA or EMA provided any kind of commentary or, you know, is there any precedence that gives confidence that a modification could be reached? And then I have a follow-up after.

I would say the situation with Lyme is in a way unprecedented because of the seasonality of the disease. Under normal circumstances, if you did not have a seasonality to be considered, you lose, for whatever reason, people in your clinical study and then you just continue recruiting and the recruitment takes longer. Here we have, of course, a situation where you need to recognize the seasonality because otherwise you don't get the necessary case counts. in a placebo-controlled field efficacy setting. And as such, there is probably not any precedence to such a specific situation. Now, the discussion with FDA on primary endpoints, secondary endpoints, co-primary endpoints, parallel endpoints, These are discussions that I've been through in my more than 30 years of vaccine development many, many times. And this is certainly nothing unusual. And these are things that need to be based on different statistical modeling. And this is clearly something that is not new to any regulatory authority. But by the end of the day, it is always a matter of risk, benefit, and judgment. And that's all I can say at this point in time.

Got it. And to follow up on Chicken Ganya, can you expand a little bit more on your travels, commercial infrastructure, and in particular, how it compares to that of Bering Nordic?

So first of all, we do have own commercial operating entities and organizations in the u.s in canada in the uk in france the nordics and austria and and we are working with bavarian nordic under a commercial agreement where some of the markets where we have our own infrastructure we sell bavarian nordic products and in other markets where bavarian have an infrastructure they sell our products as we said previously of course this whole collaboration is going to be under review but for now most parties have made a clear commitment to respect their respective contractual obligations going forward.

Great. And one last one on HMPV. It seems like maybe there's more emphasis on partnering. Am I interpreting that right? Or is there still kind of plans to bring that into clinical stage development?

So I would say right now, so basically we have, as I mentioned earlier, we've reached the point of preclinical POC completion. So this means we need to take a clinical entry decision on this asset. But the point is that we are talking here about a pre-fusion candidate that requires an adjuvant. And standalone HMPV does not really make sense from a product development perspective. And the first trial in men is certainly very valuable, but whoever would then later combine this asset with an RSV vaccine would need to go largely back to the drawing board because of the specifics around sedimentation. Therefore, we have said we give it a slight pause and look whether it would not be more valuable to bring this asset at this point already into a partnership model with one of the RSV candidates and therefore have a more efficient development route. should this not be seen as a viable and value generating option, then we would certainly consider taking it into the clinic in order to increase the assets value.

Great, thank you. Thank you. We will now take the next question.

It comes from the line of Max Herman from Stifel. Please go ahead. Your line is open.

All right. Thanks very much for taking my question, Sri, if I may. Firstly, just some financial clarity just on the COVID vaccine inventory write-off in the fourth quarter. I was interested to find out what that was. Secondly, on the Epstein-Barr virus candidate, How do you view the field given the mRNA vaccines ahead of you in the clinic already? And then just a little bit more clarity on the refund liabilities at $136 million. What do they actually, is that to do with the Pfizer funding or what's within that? If we could get a bit more clarity on that. Thank you very much.

So let me start with the non-finance question first about EBV. As you know, the Valneva's strategy is certainly based and Valneva's R&D pipeline strategy is basically based on our clear um idea to have assets where we can play a differentiating role first in class best in class only in class so if we entered into a space where others are more advanced um we will see whether we can play a differentiation game um and um if you're absolutely right um there are There is one program in clinical development, I think. But we will evaluate our, you know, candidates and then take a decision before we enter the clinic, of course.

Okay, understood. Thank you.

Thank you.

So then this brings us to the pilot question. Yeah, thanks, Max, for the question. So first question on the COVID inventory write-off. So basically the approach we took, and we communicated previously that we have eight to 10 million inventory of COVID, eight to 10 million doses of COVID vaccines in our inventory. So the approach we took at the end of 2022 is basically take a full write-down On semi finished finished product, but also on specific raw material related to to the COVID vaccine. We, of course, continue our efforts to try and sell these products in the market. But given where we are today, we decided that this is the prudent approach to to fully write down those inventories. With regards to your second question on refund liabilities, this is by and large Pfizer related. There is a small historic remaining part that relates to an old GSK contract or refund liability, which is related to the part that was only there last year. But basically the large majority of the refund liabilities is related to Pfizer.

And just on my inventory write-off, are you able to quantify it? Because it's quite hard to model these things when we're unclear about what the actual amount was. I mean, does that mean that you've written off all your inventory now, or the stuff that you planned to ship to Bahrain, that you've

you've kept at cost just try and understand the implications yeah yes so you your assumptions exactly correct we basically wrote off everything except the remaining shipments for Bahrain so that will still be included in our inventory and that's a relatively small amount but overall you can you you know you can assume we had a write-off in 20 in the financial year 2022 of over 330 million euros that goes into our cost of goods okay great thank you thank you we will now take the next question it comes from the line of rajan sharma from goldman sachs please go ahead your line is open

Hi, thanks for taking my questions. Just on the marketed travel vaccines, firstly, could you just kind of help us understand what proportion of the revenue growth in 2022 was driven by volume versus price and how we should think about this dynamic into 2023 and into the midterm? And then secondly, just again on kind of the commercial vaccine business, there's some additional detail in today's release which was helpful on growth margins. I was just wondering how we should think about this into 2023. Is it safe to assume that it's kind of at 22 levels? And what could be the pushes and pulls to this? And then just one follow-up on Lyme. In kind of a scenario where there's additional trials required, I just wanted to clarify if your potential contribution to those costs are capped at a certain level. Thanks.

So let me start with the line question and then this gives the finance team a bit more time to pick the numbers up. So I would say online, so first you use the term additional studies. No, the study is ongoing. So this means we have the study got not stopped. So which means that there is, it's only a matter of when Do you recruit the necessary additional people into the study? Because you lost some of them. And the second part is of course related then to what kind of, do you keep the readout? And when do you do the readout? And this is always in relation to readout after primary immunization versus readout after priming plus first booster. So that's more from the clinical development point of view. On the cost side of things, we have not had any discussion yet about any potential incremental costs, and this is something that will be discussed as soon as we have an agreed development plan going forward.

Yeah, and then with regards to your volume versus price question, so when we look at XTRO, as you can see on this slide, at constant exchange rate, we look at the downside of about 18.6% versus prior year. We are looking here at at the upside rate to price of a plus 10%. And then the difference is of course then volume driven. When we look at Ducoral, we have a volume upside versus the prior year of roughly 400%. And then the difference to the total 600% upside versus prior year would be price related. And I think you had a second question, but if you could just repeat that one.

Yeah, sure. It was just on the gross margin on the travel vaccines, because I think you had some additional information in the release today, and I was just wondering whether those 22 levels are kind of a fair assumption for margins going forward.

Yeah, so we look at a much stronger gross margin then for Ixiaro, then for Ducoral in 2022. And as you can see, the gross margin improved significantly versus prior year, and we would expect this improvement also to continue as we continue to increase volumes.

Okay, that's very helpful. Thank you.

Thank you.

We will now take the next question. It comes from the line of Samir Devani from RX Securities.

Please go ahead. Your line is open.

Hi, guys. Thanks for taking my questions. I think I've got three, mainly finance-related. So the first one, just on the guidance, other income, 90 to 110 million, I just wanted to confirm that that's essentially non-cash revenue recognition. So that's the first question. And then in terms of the Pfizer phase three, I was wondering whether you have made a cash contribution to that in 2022. And if so, maybe you can just explain. I think you previously talked about that not going through the P&L, but if you could just maybe explain where that's coming out in the cash flow. And then the final question is just on your distribution of marketing expenses, which saw a little bit of a bump in Q4. Is Q4 a good quarterly run rate going into this year? Thanks.

So I start with the first point on guidance. So other income, as we said, this is related to the PRV we expect to receive upon approval of our chikungunya vaccine candidate. And as we expect to sell this PRV, we assume it will be cash-related, because we would recognize that other income as we get the cash. And just also to be very clear, we expect this to go not into other revenues, but other income, i.e. further down in the P&L. With regards to the price of phase three cash, I mean, the way the agreement works is that we basically pay every quarter our share to the trial. And indeed, to your point, it does not go into the P&L, but it would go against the balance sheet, against the refund liability, which is talked about previously in Max's question. And then distribution and marketing expense. What you see in Q4 is an increase indeed versus previous quarters, which is primarily driven, of course, as we get ready with our, you know, or we get prepared, we prepare to continue our vaccine candidate launch. Also, of course, related to, you know, our overall commercial activities ramping up as the markets come back. And it's safe to assume that you could see further increases there as we get ready with our commercial activities. infrastructure, you know, strengthen the commercial infrastructure in view of the new launch.

Okay, that's great. Thanks very much.

Thank you. We will now take the next question. It comes from the line of Suzanne Van Voertweezen from VLK. Please go ahead. Your line is open.

Hi, thanks. Yes, it's Rowan calling in for Suzanne. I just had one confirmatory question. So since you've mentioned that you've written off all COVID-19 inventory in 2022, do I then understand correctly that we will see no financial impact for the current year?

I mean, we will continue to have some R&D expense as we continue to finalize certain clinical trials that we have started in the past. We will not initiate new clinical programs, of course, but we do need to ramp up some clinical trials, and that cost is included in our R&D expense. We do not expect further inventory write-offs to that point. Of course, we mentioned also the final treatments to Bahrain. So that would, of course, drive revenues. So that's basically what we expect for 2023 in terms of COVID hitting our P&L.

Okay, thanks. And then one final question. So at last year's R&D Day, you presented on various preclinical programs. such as Zika, HMPV, and EBV, which we expect in terms of updates on these programs during this year. Thanks.

Is your line on mute, please?

Our objective is to have a clinical entry by the end of this year, very, very early next year. Whether it's one program or two programs, it's still something that we're going to decide out of our own pipeline, but we will definitely, you know, inform the market, you know, which program we are expecting to enter the clinics. So this would definitely be a news flow for this year. And then we have this ongoing point about reviewing potential additional external opportunities to inject in our clinical pipeline since we have clinically relevant capacity and capability. And that's certainly an ongoing process as reported in the expected news flow and capitalism section.

Thank you. As a reminder, if you wish to ask a question, please press star 1 and 1 on your telephone. That is star 1 and 1. We will now take the next question. It comes from the line of Rajan Sharma from Goldman Sachs. Please go ahead. Your line is open.

Hi, thanks for taking my additional questions. I just wanted to follow up on the BDM&A piece or the external kind of sources of innovation. Would your preference on that be kind of a technology platform that you potentially don't have in-house right now, or would you be looking at specific assets? And then just secondly, just to follow up again on my initial question on kind of volume versus price. So I was just wondering, I guess I could ask in a different way, were you able to kind of take price increases on Ducoral third-party products and Exario in 2022, and do you expect to be able to do that in 2023? Thank you.

Yeah, thanks, Rajan. Let me start with your second question. So, yes, we did increase pricing across the board for basically Exario, Ducoral, and also some of our third-party products. And we, of course, also looking at continuous electric price increases in certain countries going forward. Can you repeat your first question, please?

So it was just in terms of kind of the external sources.

Okay, the external influx, you mean. Yeah. So basically, I mean, you know that Valneva is a technology agnostic company, right? So we are not a technology company. We have We go by indication. We go by indication where we are looking into indications where we can still play a pioneering role. I mentioned earlier first only best. Vannevar has historically worked with literally all vaccine technologies out there except mRNA. Of course, we would also be open to work on a specific indication on mRNA, but it's not our interest. to acquire a technology company or a technology platform or going back or becoming out of a certain technology company. So we will go by a specific indication and by a specific asset.

Okay, that makes sense. Thank you.

Thank you. There are no further questions at this time. I would like to hand back over to Thomas Linkenbach, CEO, for final remarks.

This one I hand over to my friend Josh. Yes.

All right. Well, thank you, everybody, for your time and participation today. Please note an archived version of today's webcast will be made available later today. And a PDF of the slides presented during today's call is already accessible on the company's website. We look forward to a productive 2023 and to welcoming you back for our next conference call in the not so distant future. Thank you and enjoy the rest of your day.