Valneva SE

Good day and thank you for standing by. Welcome to the Verliva nine-month 2025 financial results conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please note that today's conference is being recorded. I would now like to have the conference over to your first speaker, George Drum. Please go ahead.

Thank you. Hello, and thank you for joining us to discuss Del Nivo's financial results for the first nine months of 2025 and corporate update. It's my pleasure to welcome you today. In addition to our press release and analyst presentation, you can find our consolidated financial results for the nine months ended September 30th, 2025, which were published earlier today, available within the financial reports section of our investor website. I'm joined today by Vanneva's CEO, Thomas Lingelbach, and our CFO, Peter Buehler, who will provide an overview and update of our business as well as our financial results. 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 listed on our company website. Please note that today's presentation includes information provided as of today, November 20th, 2025, and Veneva undertakes no obligation to revise or update forward-looking statements except as required by applicable securities laws. With that, it's my pleasure to introduce Thomas to begin today's presentation.

Thank you so much, Josh. Good day, everyone. Welcome to our nine months call. So before we go into the business highlights and also Peter will provide a very detailed financial report, I would like to start off by providing a couple of key financial management highlights. Total revenues reached 127 million euros at the nine month time point. which is this essential growth of almost 9% despite of some headwinds, be it from a geopolitical perspective, but also from an industry perspective in particular. And we are very glad that we have been able to deliver on that growth year to date. We have also been able to significantly reduce our operating cost cash burn which has been one of our key objectives in continuously improving efficiency of our operations. This resulted in a cash position of more than 140 million euros, which includes also the net proceeds from different ATM transactions. Peter will further detail. And most importantly, we successfully managed completed our debt refinancing, which, of course, enhances substantially our financial flexibility. And we are very glad that we have found in Pharmacon a new partner to support Valneva in the years to come. Recapping a little bit on the first nine months, keep this in the highlights. Around ICCHEC, we responded to significant unmet medical needs on the La Réunion and Mayotte, the respective outbreaks. We also responded to a cholera outbreak in Mayotte by supplying doses of Ducoral. And we again finalized the new ICCHERO U.S. Department of Defense contract. All of that supporting our mission in targeting unmet medical needs. On the regulatory and commercial side of things, we secured additional marketing organizations for H-CHIC in the UK and Brazil, label extensions for adolescents 12 years of age and older in Europe and Canada. And we announced an exclusive vaccine marketing and distribution agreement for Germany with CSL Sequerius replacing Bavarian Nordic by the end of this year for our established brands, and they already started distributing Ixchic in Germany. Of course, on the clinical side, it's all about Lyme right now. We completed all vaccinations in the Valor phase three study according to plan. We also reported further positive safety and immunogenicity data following the third annual booster as part of our phase three follow-up study, VLA 15 221. On ixchic, the vaccine profile got further substantiated with the antibody persistence data now after four years still showing the 95% zero response rate after a single shot, which is the key differentiation for this live attenuated single shot vaccine. We further reported, you know, immune response in adolescents and positive pediatric safety and immunogenicity data Last but not least, we also reported positive phase one results from our second generation Zika vaccine candidate VLA-1601. Going a little bit into the details of the individual programs, I would like to start off with Lyme. We've been talking a lot about Lyme and we will be talking a lot about Lyme. The Lyme continues representing a major unmet medical need, enhanced market opportunity, close to half a million cases every year confirmed in the United States. Probably now in Europe, the same order of magnitude, although there are limited reporting systems available. Remember that we have about 90 million US citizens living in high-risk areas of Lyme disease, and in Europe, more than 200 million in those endemic regions. Most importantly, the health economic benefit for potential vaccination against Lyme disease is considered extremely favorable. Why? Because you have very severe manifestations in connection with Lyme disease, 10 to 30% of people develop either carditis, neuropoleiosis, or arthritis, and 5 to 10% persistent symptoms, even following treatment with respective antibiotics. By way of reminder, around the phase three study that is currently ongoing, Pfizer reconfirmed that they're going to submit regulatory applications in the US and Europe in 2026. The Valor study has been executed according to plan. And basically Pfizer guided for readout in the first half of 2026. And the study, of course, is now going through its follow-up period since the official case count ended at the end of October. Then we run the normal process through case adjudication, further testing activities, database cleanings, and all of that before the results will be announced in the first half of next year. Most importantly, The time point for which we expect the product to be launched hasn't changed. It is important for us and our colleagues that the product can be launched in the autumn of 2027, well ahead of the 2028 tick season. It is important to get really people protected for the tick season. As such, we are very, very much looking forward to the data, which hopefully are going to be positive and hence provide a pathway for a vaccine that could really address a huge unmet medical need. Turning to our highly differentiated single-shot Chikungunya vaccine VLA1553 or iX-Chik. You know, where are we at this point in time? Of course, we have on the regulatory side still the situation that the product is suspended in the United States, and we are still awaiting further information from FDA, which we haven't received at all at this moment in time. In all the other countries, we are working on the basis of updated prescribing formations or SMPCs, and we are seeing that the product is being administered, and we are trying to focus substantially on the expansion into LMRC territories and are working with existing and hopefully future partners in this regard. The most imminent point now to consider in this program that is supported by CIPI are our post-marketing effectiveness studies, the phase fours, which are about to commence with an observational effectiveness study in Brazil with pragmatic randomized control effectiveness safety studies in adolescents and adults, including elderly, in various endemic countries, and then later a prospective safety core study and surveillance in Brazil as well. Of course, I mentioned already the label expansions and, you know, the reports on the positive data, which we will further submit and hopefully be granted in the different product labels. We see clearly the product differentiation for XGIC, which, of course, is Super important for a potential outbreak disease and for people who are planning multiple trips into areas where there is a high risk of a potential outbreak. Shigella. You may recall that we in-licensed the vaccine through a partnership with Lima Tech, the program called S4V2. is the world's most technically advanced tetravalent Shigella vaccine candidate. It addresses the four most common serotypes of the Shigella bacteria. The program reported earlier positive 1, 2 clinical data in different age groups. In terms of medical needs, Shigella represents the second leading cause of fatal diarrhea, and here especially in infants below five years of age. The global market is expected on the one hand side in LMICs, in particular the target population that I just mentioned, but also it represents significant opportunity for travelers and military Given the overall medical need and also the diarrheal diseases to be seen in the context of antibiotic resistance, the Shigella development or vaccine development against Shigellosis has been identified as a priority by WHO. We have currently a couple of studies ongoing. We have the phase two. In instance, for which we expect results still this year, and we have the phase 2B controlled human infection model study in adults, where we changed some of the, you know, data, time points, the clinical design in order to extend the period of immunogenicity where we had the opportunity to optimize those and schedule. And we expect the pilot efficacy data next year with immunogenicity data coming in earlier upon success. And please remember that we have intentionally set up the clinical design and clinical pathway in a way that the program is highly de-risked from a capital allocation perspective. So based on positive data, based on our respective goal decisions, we will assume full accountability for the program following those two studies, which are still sponsored by LIMASEC. With this update on our operational business and R&D in particular, I would like to hand over to Peter to provide you the financial report for the nine-month period.

Thank you, Thomas. Product sales reached €119.4 million compared to €112 million in the nine months of 2024, an increase of 6.2%. Foreign currency fluctuation had an adverse impact of €1.3 million. Ixiaro sales reached €74.3 million, increasing 12.5% over the prior year. The year-over-year growth was driven by sales to the US Department of Defense, as well as increased sales in some European countries. Foreign currency fluctuation adversely impacted XIARA sales during the first nine months by 800,000 euros. Ducoral sales decreased from 22.3 million euros in the first nine months of 2024 to 21.5 million euros in the same period of 2025. Sales were 400,000 euros adversely impacted by foreign currency fluctuation, mainly resulting from a weakening Canadian dollar and also lower sales to our German partner as we are transitioning from our current distributor to CSL Securis. XTRIX sales reached 7.6 million euros compared to 1.8 million euros in the nine months of 2024. While XTRIX sales included the supply of 40,000 doses to combat the major chikungunya outbreak on the French island of La Réunion, the temporary restriction and the US license suspension significantly adverse impacted sales in the travel segment leading to an adjustment of our sales guidance. Third-party products decreased by 28.5% year-over-year to 16.1 million euros. This decrease is a result of the dissipated discontinuation of certain third-party distribution agreements. As mentioned in our previous calls, we expect third-party product sales over time to account for less than 5% of total product sales. Moving on to the income statement. Total revenues reached 127 million euros versus 112.5 million euros in the first nine months of 2024. The increase of 9% is driven by higher product sales and an increase in other revenues related to revenue recognition from partnerships. Looking at expenses, cost of goods and services for the nine months of 2025 reached 71.1 million euros compared to 71.3 million euros during the same period last year. The gross margin on commercial products, excluding Ixchic, reached 57.2% in the first six months of 2025, compared to 48.6% in the prior year. The improvement in gross margin was driven by better manufacturing performance and favorable product mix. The Xero gross margin reached 63.2%, compared to 58.8% in the first nine months of 2024, and Ducoral generated a gross margin of 52.3%, compared to 34.8% in the prior year. Cost of goods related to XCHIC amount to 8.6 million euros and include provisions to recognize lower XCHIC demands. Cost of goods also include 8.2 million euros of idle capacity costs. Research and development expense increased from 48.6 million euros in the nine months of 2024 to 59.7 million euros in the same period of 2025. That increase is partly driven by costs related to the Shigella vaccine candidate, following the R&D collaboration with Limbatech Biologics, and costs related to the ixtric Phase 4 post-marketing commitment. Marketing and distribution expense decreased from 35.7 million euros in the prior year to 28.6 million euros in the nine months of 2025. The decrease is related to a planned reduction in advertising and promotion spent related to ixtric, following the launch in early 2024. G&A expense reached 29.5 million euros in the first nine months of 2025, compared to 32.6 million euros in the same period of last year. This decrease is a result of a program to increase operational efficiency across the company that we ran at the end of 2024. In the nine months of 2025, Valneva reported an operating loss of 53.9 million euros, compared to an operating profit of 34.2 million euros in the prior year. Last year's operating profit was the result of a sale of a priority re-voucher for a total net receipt of €90.8 million. Adjusted EBITDA in the first half of 2025 reached the negative €37.7 million compared to a positive EBITDA of €48.6 million impacted by the sale of the PRE. Before moving to the outlook and guidance awarded cash, as mentioned by Thomas at the beginning of the call, Cash at September 30th was reported at 143.5 million euros compared to 168.4 million euros at the end of 2024. The cash at the end of September includes a total of three ATM transactions for a value of a total of 26 million euros net of transaction cost. Cash used in operating activities was reported at 28.4 million euros compared to 76.7 million euros in the first nine months of 2024. Now moving to slide 19, we confirm our financial guidance for the fiscal year 2025 with product sales of 155 to 170 million euros and total revenues of 165 to 180 million euros. We continue to project R&D expense of 80 to 90 million euros and the R&D expenses will partially be offset by grant funding and the dissipated R&D tax credit. As confirmed in the results at the end of September, We expect a significant lower use of cash in operations. Cash will remain a key focus in order to ensure sufficient runway to reach key inflection points. In the mid-term, we expect continuous growth in our product sales, focused and strategic investments into R&D, and continuous improvement in gross margin. We continue to expect Valneva to be sustainably profitable post-successful approval and commercialization of the Lyme disease vaccine. With this, I hand the call back to Thomas.

Thank you so much, Peter. At this moment, I would like to turn to our key growth drivers for the remainder of the year, but also, most importantly, beyond the end of 2025. We have built Valneva now on a very solid foundation, and Lime is certainly going to be the single largest growth driver for the company in the years to come and the single largest near-term catalyst for the company and its shareholders. But also for people who may benefit from a vaccination against Lyme disease, the BLA15 success, which is hopefully expected in the first half of next year, may drive the company upon successful approval and commercialization into sustained profitability, driven by potential milestones and later royalties starting in the latter part of 2027. Of course, for this year, and despite of having adjusted our guidance on product sales, We hope that we will be able to continue our growth trajectory for our established brands, Ixiaru and Tukoral. And we are working hard in, you know, gaining and regaining global traction on Ixchic and in particular, leveraging LMIC opportunities and new territories where a product like Xshake with its highly differentiated product profile could be perfectly suited. There is more that Vannevar has to offer in its pipeline above and beyond Lime. Also, Lime is, of course, very, very dominant and rightly so. We are advancing a number of quite promising internal candidates. We are identifying new opportunities, be it in-house, be it also external potential partnering opportunities, with the aim to really build a coherent R&D pipeline with an attractive next phase three program upon successful BLA15 stroke Lyme commercialization, making us really a leading vaccine biotech in the world. As such, we see substantial growth, substantial upside. And with that, I would like to hand back to the operator to take your questions.

Thank you. As a reminder, to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To wait for your question, please press star 1 and 1 again. Once again, please press star 1 and 1 for any question and wait for your name to be announced. To review your question, please press star 1 and 1 again. We are now going to proceed with our first question. And the questions come from the line of email. from Guggenheim Partners. Please ask a question.

Okay, yeah, thanks for the call and taking our questions. So maybe just two questions. I could only wait for the LIME data, obviously, the big event coming. You mentioned you're waiting to hear from the FDA. Is there any sort of timelines there, any guidance on when you think you may hear or anything that the FDA is bound by in terms of when they need to respond by? And then , you mentioned this quarter, there were a couple of factors. I think you said currency and then the distributor shift in Germany. Wondering if you can quantify the impact of the and just how you think about growth for that asset going forward, how you sort of see that you're recovering the growth. Thank you.

Okay. So, let me start off with the Lyme, the egg shake question and FDA. So, unfortunately, the answer is there is no predefined process because a similar process meaning a suspension in the same way that it was done for Xshake without, you know, webpacks, et cetera, has not been done to our knowledge before. So actually there is no precedence. There is also currently not a procedure to our knowledge that needs to be followed from a timing perspective. And as such, you know, we are hoping for a collaborative interaction with the FDA, which of course could not have happened due to the government lockdown for quite a while. But we certainly hope that we will be able to embark with the FDA into a dialogue still this year. I let Peter, you know, answer to your question.

Yeah, so I think I commented on the currency impact during the call. I think with regards to Germany, we have not disclosed the number and, you know, we never disclose numbers on individual countries. What I would say is The third quarter of last year saw particularly strong quarter for Germany. And basically, as we are now moving to our new distribution partner in Germany, there's just not purchases that are made by the existing one because they're using up, of course, the stock they have before we then will ship products to the new one. So that's it. It's basically a technical delay. Now to your question on looking forward, I mean, we have not yet provided, of course, guidance for 2026. But it's safe to assume that we will continue, we will expect a continuous growth of the Duke Law brand.

Okay. Thank you.

We are now going to proceed with our next question.

And the questions come from the line of Maury Raycroft from Jefferies. Please ask your question.

Hi. Congrats on the progress and thanks for taking our questions.

For the Lyme Phase 3 readout, Pfizer has to complete three months of safety follow-up after the end of the tick season in October, which implies to us that the readout could come as early as mid-1Q26, just based on the additional time required for database lock and analyses. If the readout happens later into the second quarter of 2026, would that imply that analyses of the results are just taking longer, or what are some of the reasons that could push the timing to later in the second quarter?

Hi, Mori. Yeah, good question.

So basically, Pfizer, I'm in control of this process. All I can say is we have seen that Pfizer are taking every single step in a very professional and at most accelerated way. At the same time, they will not take any regulatory risk understandably, in the current environment. And therefore, I'm assuming that they will be as early as possible. I cannot see at this point in time any major delays compared to the timelines that you have just alluded to. And of course, I think my colleagues mentioned this to you during the fireside chat. We are also hoping for as early as possible readout of the top-line data.

Got it. Okay. Makes sense.

And maybe one other question just for the ixchic BLA suspension. Can you comment on what you proposed in your response to FDA as a remedy? And are there some contingency options that you have in place that could get this back on track in the United States?

So basically our response has solely been focused on the real medical evidence. Our response has been focusing on the individual diagnosis case analysis and case assessments, both by Vannevar as well as by others, including other regulatory agencies, and has been focusing on our reiteration on a positive health economical benefit, so-called positive risk-benefit ratio, as already articulated by CDC and others. And so basically, We have already a Phase 4 program ongoing, as you know, and we have a more stringent pharmacovigilance review, you know, ongoing since we saw the SAEs primarily in La Réunion. And this has been the cornerstone in our response and clarification vis-à-vis the FDA.

Got it. Okay. Very helpful. Thanks for doing my questions. More than welcome, Maureen.

We are now going to proceed with our next question.

Please stand by.

next questions come from the line of romi o'connor from vlk please ask a question hi all thanks for taking my questions uh two if i may the first one um with this uh talk about uh possibility of vla 15 um yeah being maybe earlier than expected do you think you're going to be able to launch on time then for the 2027 tick season. And on xTick, I was just wondering how sales are expected to grow going forward from here and what the future drivers are. Thank you.

Yeah, so first of all, on the timeline for VLA 15, so we have Pfizer reconfirmed the regulatory completion timeline for next year. The regulatory submission timeline next year is the very pivotal and important underlying hypothesis for a launch in the latter part of 2027. Because the program is under accelerated school pathway, fast track, et cetera. So all of that is important in order to meet the timeline um of a launch in the autumn of 2027 because remember the vaccine needs three shots for priming so this means if you want to have people protected for the line season in 2028 you've got to start you know vaccinating for the latter part of 2027. um currently you know all timelines communicated by Pfizer um you know to support that notion and that timeline With regards to the ixchic situation, it's of course not an easy question to answer because we see, we continue to see major growth opportunities for ixchic in the travel sector, but also in the countries where the chick virus is endemic. given that the single-shot live attenuated approach has a particular importance for countries where you have recurrent outbreaks. And we are working with many different countries right now in potentially ensuring access of the vaccine in those territories. It's a bit too early to talk about the those territory expansion activities and what it will really mean in terms of commercial opportunities. We have two existing partners with Butantan for Brazil and South America and the Serum Institute of India for Asia, but there are more countries and more territories we are currently in dialogue with. And we are trying everything to accelerate market access in those countries. And, you know, how long it will really take to establish vaccination against chikungunya in the world of travel vaccinations has to be seen. I mean, history has told us it's not easy to predict growth trajectory for travel vaccines. And as such, I think we will hopefully be able to provide further guidance as part of our 2026 outlook in the earlier part of next year.

Great. Thank you.

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

We are now going to proceed with our next question.

And the questions come from the line of Theodora Robito from Goldman Sachs. Please ask your question.

Hi. Thanks for taking my question. Just one from me. So in today's release, you refer to uncertainty around private and public funding opportunities. being a consideration in whether you take your Zika vaccine candidate forward. I was just wondering, is there any more detail you can share with us in terms of factors you're weighing up, some sort of level of funding you'd need to see to take the candidate forward? Any further details would be appreciated. Thank you.

Yeah, so we announced already that statement as part of our Zika release that we announced two weeks ago. and we only repeated it in today's earnings release. On the one hand side, we are super happy with the data that we have generated. We have shown very good immunogenicity data, and we have shown excellent safety data for a vaccine that would also target pregnant women, for example. At the same time, there is significant uncertainty around the potential regulatory pathway to licensure because it's an outbreak disease. So, a classical placebo-controlled efficacy study would probably not be deemed feasible. At the same time, there are major regulatory headwinds against accelerated pool pathways at this point in time. And the major, I would say, NGOs, but also public health agencies have deprioritized Zika given the epidemiological situation. As such, the return on investment for further development is not an obvious one, and certainly in the absence of those clarifications, it would not be prudent to invest as Valiva standalone in this program going forward. At the same time, you know, if there was a substantial funding provided by respective institutions, public, private, we would be very happy to do it in a similar way as we developed our chikungunya vaccine, for example, with potential support by CP at this point in time. Again, we keep the options open, but we count also on the understanding here that, you know, we need to be mindful of capital allocation and returns on investment, even if there was an exciting product candidate or there is an exciting product candidate and certainly an interesting medical opportunity.

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We have no further questions at this time.

I will now hand back to you for closing remarks.

Thank you everyone for having taken time today. We are very thankful about your support. And again, we are looking forward to delivering on our expectations for the remainder of the year. And then most importantly, to the next big and biggest catalyst for Valneva in its history with LIME data, coming in next year. Thanks so much and have a good remainder of the day. Bye-bye.