Continued today… Valneva

(AOF) – Valneva has announced the establishment of an “at-the-market (ATM)” program on Nasdaq. Under this program, the vaccine specialist may issue an aggregate gross amount of up to $75 million in American Depositary Shares (ADS) to eligible investors, including unsolicited investors who have expressed interest, subject to French regulatory limits.

Valneva currently intends to use the net proceeds from this ATM program primarily for vaccine candidate research and development, working capital and general corporate purposes at its discretion in combination with its existing cash and cash equivalents.

As an example, assume that ADSs totaling $75 million (or €72.5 million) are issued at an assumed offer price of $20.83 per ADS (or €10.03 per common share) – the last published sale price of ADS on Nasdaq on August 11, 2022 – a holder of 1% of the Company’s outstanding share capital as of the date of this press release would hold 0.99% of the Company’s outstanding share capital upon closing.

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Important points

– Specialist in the development of prophylactic vaccines against infectious diseases with limited therapeutic options;

– Revenues of €348m €bn at 56% from Europe, ahead of America (27%), Asia-Oceania (9%) and Africa-Middle East (8%);

– Business model: portfolio of diversified vaccines for the general public, funding of clinical developments through a specialized infrastructure, 2 commercial vaccines (Ixiaro and Dukoral against Japanese encephalitis and cholera) and vaccine distribution rights for third parties;

– The capital is held 13.02% by the Grimaud la Corbière group and 8.19% by BPI France, Frédéric Grimaud as chairman of the 5-member board of directors and Thamas Lingelbach as director;

– Solid balance sheet with €307m in equity versus €42m in debt, bolstered by net liquidity of almost €350m in April 2022.

challenges

– Medium-term strategy based on R&D funding through the sale of Ixiaro and Dukoral vaccines, expansion of the manufacturing network (3 sites in Scotland, Sweden and Austria) and partnerships to promote the Group’s assets;

– Innovation strategy inherent in the business model, rich in a portfolio of 398 patents and supported by 173 million euros in R&D costs, with 3 main assets and 3 preclinical programs: the only vaccine in clinical development against Lyme disease, the only single-shot vaccine against Chikungunya, the only inactivated and adjuvanted whole virus COVID-19 vaccine candidate against human metapneumovirus, parvovirus and norovirus;

– Environmental strategy: energy efficiency, waste minimization, optimal use of water and reduction of CO2 emissions by 5% compared to 2016 by 2025;

– Good visibility of the activity thanks to the agreements on vaccines with: the British government (orders of 100 million doses of anti-Covid vaccines and options of 190 million by 2025, ie a total of 1.4 billion euros), with Pfizer for collaboration development and Sale of Lyme disease ($308 million), with US regulators for Ixiario for Japanese encephalitis ($70 million), with Bavarian Nordic for marketing and distribution of specialty vaccines, with Batavia Biosciences to develop a low-cost vaccine against polio, with the Butantan Institute against Chikingunya for low-income countries.

challenges

– In 2022, starting phase 3 trials for the Lyme disease vaccine and awaiting approval from the American agency for the sale of the Chikingunya vaccine and that of the European Union for Covid 19 (60 million doses);

– sensitivity to the sale of vaccines already on the market (against Japanese encephalitis and cholera);

– Uncertainties about the commercial success of the Covid-19 vaccine in the UK given the strong competition already established;

– Targets for 2022: without Covid vaccine, turnover between 430 and 590 million euros and R&D expenditure between 65 and 75 million euros.

An inevitable race for new blockbusters

The patent on Merck’s star product, cancer drug Keytruda, which accounts for more than 35% of sales, expires in 2028. Despite losing the patents for its three star products (Avastin, Herceptine, Rituxan) since 2019, Roche has been able to renew its portfolio by launching new molecules. However, discovering and bringing new drugs to market is becoming increasingly expensive. AstraZeneca spends approximately $6 billion annually on research and development in a pharmaceutical industry where the lifespan of a patent is only 10 to 15 years. This means that laboratories are withdrawing from certain activities. Thus, J&J, Pfizer, GSK and no doubt Novartis will soon prefer to refocus on specialty drugs and ditch all ancillary activities.