All right, great. Good morning, everyone, and thanks for joining us for today's fireside discussion with Valneva's CEO, Thomas Lingelbach. I'm Evan Wang, one of the Guggenheim senior analysts on the biotech team, and pleased to have Thomas here today. Just to start off, Thomas, you've been leading the company since its founding in 2013. Last year was your ten-year anniversary. Can you briefly talk, you know, intro Valneva, you know, I guess, what you guys have accomplished? Then we'll jump to Q&A.
Yeah. Thanks so much. Yes, you know, Valneva is one of the very few remaining pure-play vaccine companies. We are focusing on developing, manufacturing, and commercializing vaccines in areas of high unmet medical need. We are a dual-listed company, Euronext and Nasdaq, with operations, especially on the commercial side, in the U.S., Canada, U.K., Scandinavia, France, Austria, so the main travel vaccine markets. We have a strong track record in bringing vaccines from bench to licensure. We have delivered three vaccines in our history that achieved that. All what we are doing, be it on the commercial side or be it on the R&D side, focuses on highly differentiated assets, assets that allow us to be either only first or best-in-class.
Basically, we are also one of the very few companies that are in the vaccine space, completely technology-agnostic, with the exception of mRNA. We have experience across all the vaccine modalities that exist today.
Great. So I guess now more forward-looking, you've had, you know, the approval in chikungunya, the phase III is underway with partner Pfizer. I guess, what are your priorities for 2024, longer term?
Yeah. So basically, of course, we are very proud that we have achieved the approval of the world's first vaccine against chikungunya. We are here working now towards the ACIP recommendation date that is coming up very soon, in the next two weeks. We hope to get a strong recommendation that allows us to unlock the value of this vaccine in an area of real unmet medical need. Of course, we are supporting our partner, Pfizer, on the progression of the Lyme phase III study, which is, of course, a major key value driver for the company. We will also ensure that we are able to grow our commercial business, which reached already sales levels compared to pre-COVID.
As you know, we are primarily focusing on selling travel vaccines. It's about rebuilding the pipeline with the successful licensure of chikungunya and all the regulatory processes that we have ongoing for this year, the Lyme phase III program and our very early Zika program. We want to add additional programs into our R&D pipeline to leverage our proven capabilities. This is on the one hand side, driven by our preclinical assets that we would like to advance as quickly as we can. But we have also publicly stated that we are looking to augment our pipeline with an earlier-stage clinical asset, be it through in-licensing or partnering. We would like to do this in the first half of the year.
And again, it needs to fulfill our key criteria for investment, meaning having the possibility to be first, only or best in class in an area of high unmet medical need, and these are the key priorities for 2024.
Great. So starting with chikungunya-
Mm-hmm.
Recently approved, for those unfamiliar, I guess, this is the first vaccine for this kind of market. Can you just walk us through some of the unmet need here?
Mm-hmm.
How are you thinking about the sizing of this market?
Yeah. So chikungunya is a mosquito-transmitted outbreak disease. And chikungunya comes through explosive outbreaks. It is from a clinical manifestation point of view, you have the direct acute phase, where people are suffering from high fever and joint pain. Around 50% of the people develop also symptoms in the so-called chronic phase, so longer-term, you know, symptoms. And it's important to note that, around 75% of the world's population lives in areas where the chikungunya virus has already manifested itself. Originally, solely focused on tropical, subtropical areas. Due to global warming, you see all those mosquito-transmitted, or in general, vector-transmitted diseases at a rise.
As such, we hope that we will be able to address a very significant unmet medical need with our vaccine to protect against chikungunya.
Great. You've, you know, talked about the ACIP meeting coming up.
Mm-hmm.
You know, I guess, what should we look for at that ACIP meeting? I know we had the draft recommendation, I think, in October.
Yes.
So I guess, what's gonna be new here? I guess, any thoughts on how the vote may play out?
So first of all, I mean, the ACIP's objective is to decide on risk-benefit and on the benefit of vaccination in general, immunization practices. And we have, of course, provided all the necessary information to all the respective ACIP members. The draft recommendation as it stands is a clear recommendation that favors the use of this vaccine for people at risk. And this is what we expect to see at the forthcoming ACIP meeting.
Great. And then, you know, how... You've been preparing to launch, I guess, are you kind of ready to launch immediately after recommendation? I guess, what's the next steps as we're thinking about, you know, the launch process for this year in the market?
Yeah. So, as you are aware, we have prioritized the United States. We have already sold first doses in the U.S., through our distribution channels. And of course, the real uptake will be determined by ACIP recommendations. These recommendations are important because it will help us to build the basis for the discussions with the healthcare professionals, that by the end of the day, need to prescribe the vaccine. And we have to see, you know, how fast we can really build the market. We have invested heavily in medical education, awareness building around the disease. You know, it's for many people, not a known disease.
It's primarily, in the U.S., a disease that is important for people traveling to the areas where chikungunya has already itself. But there are also states in the United States where we have seen, you know, small outbreaks in the past, so there might also be an opportunity to stockpile the product in some of those areas. These are all things that we expect to build and deliver on this year.
Great. I guess, how have conversations with physicians been, you know, post-approval?
Very, very intense. I would say, as I said, we are focusing on mainly building awareness, and education. You know, this vaccine has a very interesting profile because it's a single-shot, vaccine that comes with a very, very long, durability of protection. So we expect, you know, after a single shot, at least five-year plus, protection. And, as such, of course, a very interesting profile, especially also, in the most vulnerable population, 65+. This has been specifically, specified also in the draft ACIP recommendations, and here we see, a fantastic profile of our vaccine because our vaccine performed in terms of, seroresponse, equally good in elderly as compared to adults, which is also a main differentiation against, competition right now.
Great. And then you mentioned, you know, the competition. There is a competitor coming about a year behind. Do you expect that durability to be differentiated, and can you just kinda talk about the two different profiles you're seeing?
Yeah. So, I think, from everything that we have seen at this point in time, as I said, the main differentiation is that our vaccine is a true single-shot vaccine. Our vaccine is a vaccine that has an excellent durability of the immune response. So we see... We have just recently reported two years data, which show that we are close to 100% seroresponse, be it in adults, be it in elderly. This is certainly a main differentiating factor against competition.
Great. And, you know, you've talked about market segments outside of travelers-
Mm-hmm
... in the endemic space, military space. How should we think, be thinking about kind of expansion and timelines to kind of unlocking those markets? I know you have some partners there as well.
Yeah. So basically, we have on the one hand side, the travel segment, and as I mentioned, we've prioritized U.S. travelers. We have regulatory processes ongoing in Canada, in Europe, in Brazil. These are all, you know, markets addressing the private sector, addressing the travelers. We have also a partnership with Butantan to address the low, medium-income countries or some of the low, medium-income countries. Certainly, there are also other, you know, potential market segments. I mentioned earlier, the outbreak preparedness, stockpiling business.
I think, based on the profile of chikungunya, and I mentioned earlier, explosive outbreaks, so this means there could be a benefit to really have vaccine stockpiled in order to be prepared because, I mean, the, the explosive outbreaks result in not only an impact, an adverse impact on quality of life, but also the ability to work. So the health economical impact is, is quite significant, and we are working with countries and states on that potential opportunity. And then, last but not least, you know that for our Japanese encephalitis vaccine, the Department of Defense here in the United States, our single largest customer, and there is definitely also a need in the military...
For a vaccine like chikungunya, this will take, of course, a little bit of time to develop all the necessary requirements for a vaccine that they would buy under the Federal Supply Schedule.
Great. Then, you know, how do you plan to kind of leverage your existing Travelers franchise? You know, what kind of additional build-out is necessary, and are there kind of geographies that you have, you know, uniquely positioned to kind of leverage your travelers portfolio in?
Yeah, of course. On the one hand side, we have a very broad commercial infrastructure covering travel vaccination. Around 80% of our travel vaccine sales, for example, for IXIARO and Dukoral, our two existing products, we do through our own teams. So as such, we can leverage the infrastructure, we can ever leverage the channel expertise that we have. Of course, we have heavily invested in expanding both on the medical side as well as on the commercial side across all the different countries, and we will continue to do that, and you will see that also on our P&L line when it comes to sales and marketing spend, which is all investment in order to maximize the commercial opportunity.
Great. And then one thing I wanted to touch on with traveler vaccines, I know, you know, we've seen the IRA, you know, serve as a potential tailwind there. Can you remind us just, you know, how the IRA and the ACIP vote impacts traveler vaccines?
Well, I mean, so most importantly, it all has to do with the Medicare regulations. So, basically, up to now, you know, travel vaccines have to be paid largely out of pocket, across all the different, geographies. Under the Medicare, it is clear that, for recommended vaccines, people above 65 years of age don't need to pay for it. This is, of course, presenting a major tailwind, for the commercial opportunity around travel vaccination and our chikungunya vaccine, but not only the chikungunya vaccine, also Japanese encephalitis, for example. And this is clearly something we are looking forward to.
Great. And then moving to Lyme, you know, you're partnered with Pfizer here. You know, I think this may be of particular interest because we're in the Northeast here.
Mm-hmm.
Can you kind of quickly talk through your Lyme program, you know, construct there, and I guess the regimen that you're taking over into phase III studies?
Yeah. So of course, it goes without saying that our Lyme program and this Lyme vaccine is probably representing the single largest upside for Valneva in the years to come. Lyme, and you all know that because you live here, is a very devastating disease and is highly prevalent. And again, we talked earlier about mosquito-borne diseases. Lyme, being a vector-transmitted, tick-transmitted disease, is also on the rise due to global warming. So there's a huge unmet medical need around Lyme. We are the only ones in the world with an advanced clinical stage Lyme program, together with Pfizer. We have designed the vaccine as a so-called multivalent vaccine, covering the six most prevalent serotypes in the northern hemisphere.
We intentionally designed the vaccine to be a vaccine suitable for people living or going to both sides of the Atlantic. And we have gone through multiple phase I, phase II trials, over 1,000 people. We're already included in the pre-phase III clinical development program. We have seen excellent immunogenicity data, excellent safety data, and we are now well into phase III together with Pfizer, more than 9,000 people. This is a placebo-controlled randomized study that is gonna show, A, the efficacy post-priming, meaning the efficacy in the first tick season, but also the efficacy post first booster for the second season, because it is likely that this vaccine will require an annual shot like we know it from flu, for example.
And therefore, it is important that in a proper controlled setting, we are able to show those efficacy numbers. Readout is expected at the end of the tick season, 2025. So the study spans over three tick seasons. Study is, in the meantime, fully enrolled, and vaccination of the first cohort after priming has been completed. They now go into vaccination for the booster, and the second cohort comes with a year delayed, but it's one study, and one readout altogether. And as I said, we are very much looking forward to this vaccine because we truly believe that this vaccine has the ability to make a substantial change to people's life.
Great. So we've had a vaccine approved in Lyme in the past, right? Can you just remind us the kind of efficacy that showed, and maybe how some of the immunogenicity profile you've shown in your earlier studies kind of compares?
Yeah. So you are right, there was a vaccine in the 1990s, this was a monovalent vaccine targeting only one serotype of Lyme borreliosis. As such, it's not so easy to compare like for like. And unfortunately, there was no immunological correlate of protection established at the time. So which means, we can build bridges, we can build analogies, which we have done in preclinical settings. The mode of action is comparable. We are addressing the outer surface protein A of Lyme borreliosis. As I said, we are addressing, you know, multivalent different serotypes, but at least for the serotype one, we have been able to build animal models, recreating the vaccine that used to be in the market at the time, and comparing in so-called mouse tick challenge models.
What we can say is, based on this profile, we see that we have definitely a non-inferior immunological profile against serotype 1. Of course, we have a different vaccination schedule, which should further improve it. And that's where we are today. And you know, the vaccine that was going through a placebo-controlled study. By the way, there were two vaccines going through a placebo-controlled study, one from SmithKline Beecham, today GSK, the other one from Sanofi. Both showed, after three vaccinations, significant efficacy well above 70%-75%, which is definitely something that we are targeting.
Great. And then, you know, can you talk about recent Lyme seasons in the U.S., Europe, where you're kind of focused on? I guess, how have incidence rates looked? Are they kind of fitting in the the serotypes you're looking at?
Yeah. So we don't have recent data from the last tick season. What we know from the history is that there is very little, I would say, change from tick season to tick season. In general, as I said, the tick-transmitted diseases are at a rise because of global warming, because of the increase of the tick population, but also the increase, by the way, of the black deer population, which is the major last host of the tick. You know, Pfizer conducted pre-phase III, a couple of epi studies. There have been publications out by Pfizer based on certain geographical epi evaluations that they conducted, and we see certainly a very high Lyme case rate in the different countries.
Great. And so I guess, how big can this market be? How have, you know, you and Pfizer communicated, I guess, maybe about the size of the market?
Yeah. So, so basically, Pfizer do have the global commercial rights for this product. As such, it's not so easy for us to talk about commercial scale and commercial opportunity. The official language that the companies are using, it's a greater than $1 billion market opportunity.
Great. And, you know, just in the last minute or two, you know, you know, you're focused on, you know, bringing some, you know, external BD in, you have some internal programs in. Can you talk about how you're approaching BD externally? You know, any programs internally to be excited about?
Yeah. So in this last minute... So first of all, as I mentioned, we are looking to augment our clinical-stage pipeline with an additional prophylactic vaccine that fulfills our investment criteria, first, only best, with or without synergies, in connection with our existing commercial and industrial infrastructure. We have great activities in our preclinical shop, and we are most excited about our HMPV candidate, which could clearly be an interesting add-on for some of the RSV companies. And the other one is clearly our EBV candidate, where we are currently in the final vaccine design phase. These are the ones where we are probably most excited about, and I mentioned, of course, Zika, second generation Zika, where we are about to enter a clinical development very, very soon.
Great. Thank you so much.
You're more than welcome.