• Product Sales: EUR112.5 million, a 12% increase over the prior year.
• Total Revenue: EUR116.6 million, up from EUR111.8 million in the first nine months of 2023.
• IXIARO Gross Margin: 58.8% compared to 47.2% one year ago.
• DUKORAL Sales: EUR22.3 million, a 6% increase year over year.
• Chikungunya Vaccine Sales: EUR1.8 million in the United States by September 30th.
• Operating Profit: EUR34.2 million versus an operating loss of minus EUR57.2 million in the prior year.
• Adjusted EBITDA: Improved from minus EUR46 million to positive EUR48.6 million.
• Cash Position: EUR156.3 million as of September 30th.
• R&D Expense: Increased to EUR48.6 million from EUR42.2 million in the prior year.
• Marketing and Distribution Expense: Increased by 5% to EUR35.7 million.
• General and Administrative Expense: Decreased by 7% to EUR32.6 million.
• Sale of PRV Income: EUR90.8 million.
• Cash Use in Operating Activities: Decreased from EUR136 million to EUR76.7 million.
• Guidance for Product Sales: Narrowed to EUR160 to EUR170 million for the current fiscal year.
• Guidance for Total Revenue: EUR170 to EUR180 million for the current fiscal year.

• Warning! GuruFocus has detected 9 Warning Signs with INRLF.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Valneva SE (INRLF) reported product sales of over EUR110 million for the first nine months of 2024, aligning with company guidance.
• The company has a strong cash position of more than EUR150 million, indicating solid financial health.
• Valneva SE (INRLF) is on track with its Lyme Disease vaccine program, with regulatory filings expected in 2026 and potential approval in 2027.
• The company has achieved FDA fast track designation for its Shigella vaccine program, highlighting its potential in addressing a significant health need.
• Valneva SE (INRLF) anticipates sustained profitability from 2027 onwards, driven by successful vaccine programs and improved commercial sales margins.

Negative Points

• The uptake of IXCHIQ in the US market has been slower than anticipated, leading to a narrowed sales guidance.
• Research and development expenses increased due to tech transfer costs, impacting overall financial performance.
• The company faces supply constraints affecting third-party product sales, which declined by 23% year over year.
• Valneva SE (INRLF) is still awaiting the MMWR publication, which is crucial for driving retail growth in the US.
• The transition of manufacturing operations to the new site in Scotland will continue to incur costs into 2025.

Q & A Highlights

Q: Can you provide more details on the expectations for new orders of IXIARO in 2025, especially regarding the Department of Defense (DoD)? A: Thomas Lingelbach, CEO: Historically, the DoD's demand has been stable, around 200,000 doses annually, excluding a one-time stock build in 2019. We expect this demand to remain stable, given IXIARO is a mandatory vaccine for certain military personnel. We are also in active discussions with the DoD regarding Chikungunya, though no decisions have been made yet.

Q: When do you expect the MMWR publication for IXIARO, and how will it impact the market? A: Thomas Lingelbach, CEO: The timing of the MMWR publication is uncertain, though we hoped it would be released by year-end. This publication is crucial for accessing the retail channel in the U.S., which is becoming increasingly important for vaccine distribution.

Q: Why haven't IXIARO sales grown in Q3 compared to Q2, despite positive trends in other metrics? A: Thomas Lingelbach, CEO: The sales stagnation is partly due to the current inventory levels with distributors. We didn't see the expected uptake by the end of Q3, but the situation has improved by November, and we anticipate a better growth trajectory moving forward.

Q: Can you provide an update on the development of the Epstein-Barr virus (EBV) vaccine candidate, VL A 2,112? A: Thomas Lingelbach, CEO: The EBV program is in preclinical stages, with ongoing evaluations of different antigen compositions. We aim to finalize the lead vaccine design next year, with clinical entry targeted for 2027, potentially accelerated to late 2026.

Q: How are the idle costs from the new manufacturing site in Scotland affecting gross margins, and what is the outlook? A: Peter Buhler, CFO: Idle costs are expected to decrease as we transfer manufacturing to the new site. We anticipate continued improvement in IXIARO's gross margin, aiming to return to pre-COVID levels over time.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.