Good afternoon. This is the conference operator. Welcome, and thank you for joining the Valneva first half 2022 financial results conference call and webcast. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Thomas Lingelbach, CEO of Valneva. Please go ahead, sir.
Thank you so much. Good day and welcome to our H1 2022 analyst call, providing you an update on our financials and general business overall. Let me start with the introduction on page 4 of the presentation. Of course, the H1 2022 has been quite eventful, first half of the year, marked by excellent progress on our R&D programs. We initiated phase III for our Lyme disease vaccine candidate. We completed all necessary final phase III results of the necessary trials in support of initial licensure as well as initiated the adolescent phase III trial and the rolling submission with the U.S. FDA is expected imminently. We achieved 4 marketing authorizations for our COVID-19 vaccine in the EU, U.K., Bahrain and the Emirates.
We reset our Lyme disease collaboration agreement with Pfizer, including a EUR 90.5 million equity investment by Pfizer in Valneva. We upsized our financial agreements with leading U.S. healthcare funds, Deerfield and OrbiMed. Of course, the financials, which will be reported by our CFO, Peter Bühler, reflect changes to our COVID-19 business prospects. Also in connection with the COVID-19 prospects, we have initiated the execution of what we call our reshaped strategy after two years of focus on COVID-19, which I will explain in further detail later on during the presentation. Let's start with R&D and the pipeline slides, which is shown on page 6 of the presentation. From top to bottom, of course, our chikungunya vaccine, you know, now approaching rolling submission, as I said, to begin imminently.
Our Lyme disease vaccine candidates now in phase three, and our three commercial products at the bottom of the pipeline slide, namely our Japanese encephalitis vaccine, IXIARO, our cholera, and in some markets, ETEC vaccine, DUKORAL, and our COVID-19 vaccine, VLA2001. Of course, people ask from time to time, you know, what else does Valneva have in its pipeline, given that it has a very, very advanced clinical pipeline and three approved products. I would like to remind you that we have still a Clostridium difficile candidate, VLA84, which we, you know, kind of paused at the end of clinical phase two and for which we are open for any potential partnering.
The same is true for our Zika vaccine candidate, VLA1601, for which we generated successful phase I data and for which we are also evaluating future prospects. I would like to draw your attention to two pre-clinical assets that we have recently prioritized. One, a vaccine candidate VLA1554 against the human metapneumovirus, for which we expect pre-clinical proof of concept by the end of this year. A prophylactic product candidate, EBV, Epstein-Barr virus, that is currently undergoing late stages of discovery and for which we have also agreed to focus on with regards to further pre-clinical R&D. With that, I would like to turn over to our multivalent Lyme disease vaccine candidate VLA15.
You know that this is the only Lyme disease program in advanced clinical development today. We initiated the phase III study following positive results for 3 phase II clinical studies, including first pediatric data. We have an exclusive worldwide partnership with Pfizer. As I mentioned at the beginning, the terms have been updated in June 2022 in conjunction with Pfizer's EUR 90.5 million equity investment in Valneva. By way of reminder, this vaccine is a vaccine that contains 6 serotypes to help protect against Lyme disease on both sides of the Atlantic. It follows a proven mode of action, namely anti-OspA antibodies, and this was proven through efficacy studies in the late 1990s. The program got FDA Fast Track designation granted phase III.
On page eight of the presentation you can see the outline of the phase III efficacy study called VALOR. It's a randomized, placebo-controlled study including around 6,000 participants 5 years of age and above at high risk of Lyme disease, either by residence or occupational or recreational activities, and is being conducted in U.S. and Europe with a randomization of approximately 2 to 1 U.S. versus Europe. The primary endpoint is the rate of confirmed Lyme disease cases after the second Lyme season, meaning after completion of a full vaccination series, 3 primary plus first booster. The secondary endpoint includes rate of confirmed Lyme disease cases after the first Lyme season, including after completion of the primary vaccination series, among other secondary endpoints as defined in the phase III protocol.
Pending successful completion of the phase III study, Pfizer could potentially submit a BLA to the U.S. FDA and the Marketing Authorization Application, MAA, to the EMA in 2025. By way of reminder, you know, VLA15 has undergone three positive phase II studies, continuing to demonstrate strong immunogenicity with acceptable safety profile across more than 1,000 adults and pediatric participants. In the reverse order, you know, the VLA15-201 study included first positive pediatric data, a strong and balanced immunogenicity profile in adult and pediatric participants. We saw that, as expected, the product candidate is more immunogenic in pediatric participants than in adults, with both 2-dose and 3-dose vaccination schedules. We have, however, selected a 3-dose schedule as shown before for all ages in the phase III study.
VLA15 was generally safe and well-tolerated across all age groups tested and no related SAEs were observed in any of the treatment groups. The study VLA15-202 was the first study where we tested also booster and we saw high antibody responses across all serotypes and doses after primary vaccination series and the 12-month booster dose elicited strong and anamnestic response. The safety profile was similar to what we saw in 201 and the study VLA15-201 was the first phase II study where we tested also for immunogenicity and safety in older adults. Let me turn to our chikungunya vaccine candidate, VLA1553. It is the most clinically advanced chikungunya vaccine program worldwide. We completed, as mentioned at the beginning, our pre-licensure phase III clinical program successfully.
The adolescent phase three trial supporting potential further regulatory submissions and label extensions has been initiated in January 2022. The program has all different kinds of regulatory goodies, I would say, FDA Breakthrough Therapy, Fast Track, EMA PRIME designation, and is potentially eligible for priority review voucher and is targeting the end of 2022 for completion of the BLA submission. It's a single-shot, live attenuated prophylactic vaccine targeting long-lasting immunity. We have collaborated this program with CEPI and Institute Butantan, primarily for the development in low- and middle-income countries, and grants that we got from CEPI is up to $23.4 million. As mentioned earlier, chikungunya and this chikungunya vaccine candidate is, of course, representing an excellent fit with existing commercial and manufacturing capabilities at Valneva.
The global market, including endemic regions, is estimated to exceed half a billion dollars annually by 2032. Chikungunya is a major public health threat. It's a mosquito-transmitted disease with potentially debilitating consequences. The symptoms include fever and joint muscle pain, and the infection can progress to severe chronic symptoms in many patients and substantial high economic impact. Large explosive outbreaks affecting up to one-third to three-quarters of the population have been seen in outbreak situations. Of course, it is very difficult to predict the next outbreaks and therefore we developed the program also based on the so-called accelerated approval pathway. The majority of cases were seen in Asia, Africa, Latin America, but there were also outbreaks in Italy, France, and there is a substantial outbreak risk for the United States linked to the spread of mosquitoes.
To date, there is no vaccine or specific treatment available for chikungunya. Just by way of reminder, what are the key clinical data that are expected to support the first and initial approval of the vaccine? This live attenuated vaccine candidate, single-shot, long-lasting immunity. We saw seroprotection levels of antibodies in, you know, close to 100% of participants after a single vaccination. The immunogenicity profile was maintained over time, and we saw even above 96% of participants with seroprotective levels at day 180. The older adults achieved similar seroprotection rates and neutralizing antibody titers as compared to the younger adults. 100% seroconversion after 14 days and sustained to 12 months in preceding trials could also be observed.
From a safety perspective, which is important for live attenuated vaccines, VLA1553 was generally well tolerated amongst the more than 3,000 subjects evaluated for safety to date. Only approximately 50% of the study participants experienced solicited systemic adverse events, most commonly headache, fatigue, and myalgia. The majority of solicited adverse events were mild or moderate, and 2% of the study participants reported severe solicited adverse events, most commonly fever. When we look at the global market segments for Chikungunya, shown on page 13 of the presentation, there are literally 3 major targeted segments. One, the travelers from non-endemic regions. It is clearly a travel vaccine for individuals traveling to areas with risk of Chikungunya.
There is the military segment from non-endemic regions, and clearly we see this vaccine as a vaccine for troops stationed in areas with high risk of chikungunya. The outbreak preparedness in non-endemic regions. Here we clearly expect the vaccine in areas in response to or at risk for a domestic outbreak. Of course, there is on top of that the endemic region use, as I mentioned earlier, partnered through CEPI and Instituto Butantan. Talking a little bit about our launch preparation and next steps. Of course, we are now gearing up towards launching this vaccine, leveraging our existing commercial infrastructure and our travel vaccine experience, in the risk areas for chikungunya, including the popular tourist destinations in Latin America and Asia. North to Central American air travel has recovered, as we all know.
We see that post-COVID, there is an increased likelihood of travelers to seek pre-travel health advice. Recommendations for use of chikungunya vaccines in travelers will be key to support uptake of the vaccine once approved. Valneva is engaging with public health policy makers to support development of recommendations. The rolling submission initiation is expected imminently with the U.S. FDA, and the ACIP Chikungunya Vaccines Work Group has already been established. Pre-licensure phase III clinical program was completed as mentioned, all endpoints met. We mentioned already the Breakthrough Therapy designation and the eligibility for rolling review and priority review requested. Of course, we expect completion of the BLA submission as previously announced, latest by the end of 2022. If the filing is accepted, the FDA will determine priority review eligibility and the date upon which it will complete its evaluation.
The sponsor of the first BLA approved for a vaccine against chikungunya is eligible for PRV. The U.S. CDC's Advisory Committee on Immunization Practices, ACIP, chikungunya vaccine group, has already been constituted, as mentioned. You know that since there has not been any chikungunya vaccine previously licensed, the ACIP chikungunya vaccine recommendations need to be established from scratch. An ACIP vote has already been tentatively scheduled for the February 2024 meeting. With regards to development plan and further outlook, the further regulatory submissions, the pathway beyond the U.S. FDA BLA, are expected to commence in 2023. This includes EMA. There are a few ongoing clinical trials in support of future regulatory submissions.
There is the adolescent clinical trial that we started already 750 volunteers aged 12-17 years, including a 12-month follow-up, currently ongoing in Brazil with data expected in the first half of 2023. We have an ongoing antibody persistence trial, which includes approximately 375 volunteers, and we would like to follow up for at least 5 years with 12 months data expected late this year. Then there will be, you know, anticipated future trials. Those include co-vaccination, pediatric, special population, and an observational effectiveness study. With that, I would like to turn to our COVID-19 vaccine. You all know that it is the only inactivated whole virus COVID-19 vaccine approved in Europe today. It builds on Valneva's Vero-cell manufacturing technology combined with Dynavax's CpG 1018 adjuvant.
The first COVID-19 vaccine to receive standard authorization in Europe, which was really a great achievement, and we got conditional marketing authorization from the U.K. MHRA and emergency use authorization from the Bahraini NHRA and the Emirates. The basis for licensure has been our pivotal phase three study that showed superiority versus AstraZeneca's Vaxzevria and significantly more favorable tolerability. We also showed positive top-line homologous booster data, which is particularly important in light of the fact that we see more and more people now being naturally infected. Of course, you know, an inactivated whole virus vaccine mimics closest natural infection. We also showed that we could neutralize at a certain level Omicron and Delta variants as tested in certain laboratory studies. We plan our first delivery to E.U. member states, including Germany, in August this year.
Really imminently and supply of our vaccine to Bahrain, for which we had already initial supplies, but we plan also further supplies by the end of the year. Shelf life got recently extended to 15 months and is expected to get gradually extended to at least up to 24 months. Certain ongoing trials will continue, in particular, on the potential use as a booster. Of course, we will need to reshape our operations to reflect the evolution of the COVID-19 program. In particular, in light of the reduced order volumes from the E.U. member states, we are evaluating the COVID-19 program and our associated operations. We have already suspended manufacturing of our COVID-19 vaccine and we are planning to deploy our inventory, which is approximately 8-10 million doses right now, into international markets.
Of course, we are retaining also inventory for potential additional supplies to E.U. member states participating in the advanced purchase agreement should demand increase. Valneva is continuing discussing on potential additional supply and financing agreements with potential customers around the world. It's important to note that Valneva will invest in the further development of its current or any potential second generation COVID-19 vaccine, only if it receives the necessary funding or commitment to such funding in the third quarter of this year. With this update, I would like to turn over to the commercial side of the business. Of course, we are seeing, as reported in our H1 press release already, strong growth in the commercial travel business, and also in the performance of our third-party products.
We expect travel to recover to pre-COVID-19 levels by 2024, and we see a significant number of drivers here, clearly the pent-up travel demands, the reestablishment of the travel medicine clinics, ramping up resources, elevated concern of infectious diseases among travelers, and increased troop deployments to Asia. Of course, there are barriers, which we also should not forget. We all, you know, have experienced airline capacity, slowing economic growth, and rising inflation, impact of any potential new COVID-19 wave. We have already seen now with the strong recovery that, we may even see a situation where our current supply capacity will not be enough to meet demand in the latter part of 2022. Nevertheless, we have increased guidance for our commercial business, and this is something that Peter will report later.
Going forward, I think it is important for you to understand where we're gonna focus on with regards to our commercial strategy. We are seeing here three key levers to accelerate commercial performance. One, of course, the travel health recovery and the customer engagement through Valneva Travel Health, building above brand identity, elevating Valneva's reputation as a committed travel health partner for HCP and travelers, and provide tools and services to customers supporting acceleration of travel health recovery. Of course, we are constantly evaluating to potentially expanding our vaccine portfolio. We are evaluating new in-license and product acquisitions, as well as distribution partnerships in selected regions.
We know that we are distributing for Bavarian Nordic rabies and TBE vaccines with Seqirus flu vaccines, with Kamada rabies IgG, and we are, as I said, looking for adding complementary distribution partnerships. The third pillar is, of course, the focus on our chikungunya vaccine launch preparedness and the evolution of our commercial infrastructure. We will invest in optimizing commercial infrastructure to support launch excellence. We are working and investing into market access and different recommendations and the establishment of the market and brand development. With that, I would like to hand over to Peter to provide us with the financial report.
Thank you, Thomas, and good morning or good afternoon to all of you. Let's go into the financial review of the first half of our fiscal year 2022. Total revenues reached EUR 93.2 million, an increase of 96% compared to the first half of 2021. This increase is largely driven by other revenues, and I will comment on that later. Product sales reached EUR 33.3 million, an increase of 5% versus prior year. This increase reflects the recovery of the travel market that leads to an increased demand in travel vaccines while shipments to the US Department of Defense remained low in the first half year. This was anticipated based on the planned ship delivery schedule. Moving on to slide 24 to look at the details of our product sales.
Sales of IXIARO decreased versus prior year, which is, as already mentioned, a result of the scheduled shipment to the US Department of Defense. IXIARO sales to the private travel market increased from EUR 3.1 million in the first half year of 2021 to EUR 11.3 million in the current first half year. DUKORAL sales reached EUR 5.8 million in the first half year of 2022 compared to EUR 400 thousand in the prior year. Third-party products almost doubled from EUR 5.9 million last year to EUR 11.5 million in the first half of 2022. The very positive sales performance of our travel vaccine is, as already mentioned, related to the travel market recovering faster than expected, and we expect this trend to continue.
Finally, we shipped COVID-19 vaccines for an amount of EUR 3.8 million to Bahrain in the first quarter of 2022. Moving on to slide 25 and looking at the P&L. We already covered product sales. Other revenues reached EUR 59.9 million, and the majority of these other revenues are derived from the EUR 89.4 million release of refund liabilities as a result of the settlement with the U.K. government. At the same time, we recognize the EUR 36.1 million negative revenue in the second quarter as a direct result of the amendments to the VLA15 agreement with Pfizer and the updated cost sharing.
Looking at expenses, we observe a significant increase in cost of goods, and this is primarily a result of one-off items related to the reduced volume of COVID-19 vaccines under the modified advanced purchase agreement with the European Commission. I will provide further explanations on these one-off items in a few minutes. Research and development expense decreased from EUR 78.7 million in the first half year of 2021 to EUR 51.9 million in the first half of 2022. This decrease is driven by lower spend on clinical trials of our Chikungunya vaccine, as well as our VLA2001, our COVID-19 vaccine.
Marketing and distribution expense, as well as general and administrative expense decreased compared to prior year, which is largely driven by a release of provisions for share-based compensation and the related social security cost. The cost of phantom share programs for certain employees, as well as the cost of social security on our equity plans, depend on the development of our linear share price. In total, we had a release of EUR 17.8 million in the first half of 2022, compared to the cost of EUR 7.3 million in the first half of 2021. In other words, a difference of EUR 25.1 million overall that affected all expense lines in our P&L.
Financial expense and income tax is reported at EUR 21.1 million compared to an expense of EUR 200 thousand in H1 of 2021. The difference is due to foreign exchange gains of EUR 8.7 million reported in the prior year, while in this year's first half, we had to report the foreign exchange loss of EUR 10.7 million due to the weakened euro. The total loss for the period reaches EUR 171.5 million versus EUR 86.4 million in the first half of 2021. Next slide, please. Looking at our COVID business, we see an operating loss of EUR 110 million compared to a negative EUR 55 million in the first half of 2021.
The increased operating loss is a direct result of the increased cost of goods, which in reality is mainly composed of one-off effects and partially offset by other revenues that I commented on earlier. The P&L outside of our COVID business shows product sales that are offset by negative other revenues. These negative other revenues are as already mentioned, driven by the impact of the revised Pfizer agreement that takes into account the new cost sharing. As already mentioned, our cost base is significantly impacted by the release of a provision related to our employee share program. In addition, the R&D spend outside of COVID was also favorably impacted by lower spend on clinical trials on our Chikungunya vaccine candidate. The adjusted EBITDA of our non-COVID business reported for the first half year reached -EUR 37 million.
Excluding the EUR 36 million adverse impact of the revised Pfizer agreement would lead to an adjusted EBITDA of our non-COVID business close to breakeven. Now moving to slide 27, where we summarize one-off impacts related to our COVID-19 program. Starting from our COVID-related operating loss of EUR 110.7 million, we recognized EUR 89.4 million. This amount was previously reported on the refund liabilities in our balance sheet and was brought to the P&L following the settlement agreement with the UK and revised sales expectation outside the United Kingdom. We look at a total inventory write-down of EUR 100.6 million, and you can see the different components of these inventory write-downs between raw material, work in progress, and other.
These are directly related to the revised advanced purchase agreement with the European Commission and with our decision to suspend manufacturing of our COVID-19 vaccine. Furthermore, we recognize costs related to onerous contracts with a total value of EUR 41 million and finally impaired manufacturing assets of EUR 3.3 million. In total, we recognized one-off effects for a total amount of EUR 145 million that hit our cost of goods line in the first half year of 2022. Finally, moving to the guidance. Following the revised EC advanced purchase agreement, we adjusted our full year guidance as follows. We expect COVID-19 vaccine sales for a total amount of EUR 30 million-EUR 40 million.
As Thomas mentioned earlier, Valneva aims to sell the available inventory of 8-10 million doses into international markets. We anticipate these sales to primarily impact our financial year 2023. We increased our previously announced guidance on other vaccines of EUR 60-70 million to the new guidance between EUR 70-80 million, taking into account the faster than expected recovery of the travel market. Other revenues are expected to reach approximately EUR 240 million. This number is driven by revenues recognized in relation to the EC and the U.K. COVID-19 contract and for which cash was received in the past. Finally, we reduced our R&D expense guidance to EUR 120-135 million compared to EUR 160-200 million guided previously.
This concludes the finance section of this call, and I would like to hand back to Thomas.
Thank you, Peter, for this financial report, which has certainly been a result of a very complex, you know, accounting treatment exercise. I would like to thank the entire team for this excellent piece of work. , one word about reshaping since I used the word reshaping at the beginning of the presentation. What do we mean with that? Of course, we are sharpening our focus now after two years of focus on COVID-19. We see continued success in R&D. We have differentiated assets addressing unmet medical needs, very advanced Lyme disease in phase three, chikungunya ready for BLA. We have a promising pre-clinical portfolio, and we are leveraging our first full marketing authorization in Europe for the COVID-19 vaccine.
At the same time, as I said, we need to sharpen our focus, and this means that we need to rightsize our operations in view of commercial prospects for the COVID-19 vaccine. We need to continue progressing our Valneva advanced programs. We need to achieve Chikungunya product approvals and prepare market entry and launch and support Pfizer as good as we can in progressing Lyme. We would like to progress new candidates from preclinical to clinical stage, advancing promising early-stage candidates, but continuously also evaluating clinical assets for potential in-licensing, given our strong and proven capability in bringing products from bench to licensure. Of course, we will continue maximizing the value from our commercial products, profits from our travel vaccines, and increase contributions from third-party product distribution deals, existing ones and future ones. I think this is important to outline.
With that, I would like to hand back to the operator to take the questions.
This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touch tone telephone. To remove yourself from the question queue, please press * and 2. Please pick up the receiver when asking questions. Anyone who has a question may press * and 1 at this time. The first question is from Maury Raycroft of Jefferies. Please go ahead.
Hi. Thank you for taking my questions. I was gonna ask one on ChikV for the ACIP vote. Can you clarify if that vote and opinion is required by FDA prior to approval?
No, it's not. The ACIP recommendation is, or the ACIP vote is required, to basically provide us, hopefully, with a very favorable vaccine recommendation, which is, as you know, Maury, a key requirement for successful commercialization and maximizing the commercial prospect of the vaccine, but it's not interlinked with the BLA approval.
Got it. Okay. That's helpful. Maybe just as a follow-up to that, can you talk more about how that ACIP will factor into the opportunity, how that vote will factor in? Is it possible that FDA could require some additional advisory committee meeting prior to approval for ChikV?
Let me start with the latter part of your question. At this point in time, we do not expect FDA in need of any additional, you know, consultation because as you know, the VRBPAC, there was a specific VRBPAC meeting on the route to licensure for chikungunya vaccines. Of course, we have aligned with FDA on all requirements necessary to support the so-called accelerated approval pathway. Since we have met all criteria that were predefined and pre-specified, we don't see any roadblocks or any additional requirements at this point in time. With regards to the ACIP process, there is not a lot that we can say because it's an ongoing process.
I would like to point you to the respective, you know, public statement from ACIP, which we have referenced on the bottom of the slide. You may understand that we don't want to interfere at this point in time with the process associated with that. As I said, we will be pathfinders here, since there has not been any chikungunya vaccine approved yet. We will work very collaboratively with ACIP and all key opinion leaders to maximize the possible recommendations for the vaccine.
Got it. Okay, that's helpful. I'll ask one more question and hop back in the queue. I was just for ChikV, what kind of expectations do you have for a U.S. government or military contract? Is it possible for you to start conversations with the military or government prior to approval to educate on ChikV?
Excellent question, Maury. First of all, as outlined in our presentation, we see the military potential military business for soldiers deployed to areas where there is a high risk of Chikungunya outbreaks, given the significant health-economic impairments and impacts that are expected. Yes, we have initiated dialogue with the U.S. military already, and we continue doing so ahead of the expected and anticipated approval of the vaccine.
Got it. Okay. Thanks for taking my questions.
The next question is from Seamus Fernandez of Guggenheim Securities. Please go ahead.
Hi, guys. This is Evan weighing in for Seamus. Congrats on the launch of the Lyme phase three study. Can you talk about how you and Pfizer went through the study design process, you know, particularly any feedback, you know, or with respect to regulators in terms of, you know, the primary endpoint? You know, are there any potential interim looks, you know, maybe on the one season primary endpoint or secondary endpoint? I have a few follow-ups.
I mean, you have seen that we decided to use as the primary endpoint the 3 + 1 schedule. Meaning, the 3-dose priming plus the booster because, of course, the booster ability is a very, very important component of the future, you know, commercial prospect and, more importantly, the recommendations associated and expected for this vaccine. This is why you see the trial design as reported was primary after the second season, meaning after 3 + 1, and secondary the Lyme disease cases after primary. This, of course, has all been done in close consultation with the regulators on both sides of the Atlantic.
Great. In terms of this go, no-go decision for further COVID investment, you know, are you in preliminary conversations with any governments or entities? Any color you can provide on how much is necessary for funding? Just trying to understand how much of a potential gating factor the booster trial readouts are, but I think are still planned for 3Q. Are those kind of a gating factor for, you know, potential new contracts?
Excellent question. I mean, as we reported, you know, we will not be able to further invest, you know, into COVID, unless we're gonna see a clear commercial prospect, meaning a very clear, you know, commitment, be it, you know, advanced purchase agreements with other governments and the like. Of course, we have a whole bunch of data points coming up because we are continuing the ongoing studies. Here, especially the different booster settings are of importance. You know that the world has largely gone into what we call a hybrid immunity with a combination of immunogenicity generated through vaccination plus natural infection.
Especially the data that we expect from our VLA2001-307, which is a study where we include, you know, different, you know, subjects in real-life settings, you know, are clearly expected to potentially drive further uptake of the vaccine, which is also why Peter Bühler explained that we see that the vast majority of potential sales, you know, for example, from our existing inventories, are expected for 2023.
Got it. Last one from me. Can you remind us the remaining steps, you know, as you kind of go through the Chikungunya rolling submission? Is there any possibility of meeting the 2023 ACIP meeting?
We don't see this as at this current point in time. I mean, if you take what we said earlier, namely that we anticipate or we said two things. Number one is, our initiation of rolling submission is imminent. Second, we said that we expect to complete submission before the end of the year latest. You can automatically calculate that there will probably be a PDUFA date, you know, towards the latter part of 2023. We are not expecting that we're gonna hit, you know, the 2023 ACIP. I think the timeline that we have indicated is the one, you know, is what probably the best to our knowledge at this point in time.
Great. Thank you.
The next question is from Max Herrmann of Stifel. Please go ahead.
Thanks very much for taking my questions. I've got three, if I may. Firstly, just more of a finance question on the VLA15 phase III study. Given the now reduced participant numbers and change in design, I know obviously now looking over a two-year period. I wondered what your cost expectations are over those two years for that study and what the share of that study cost would be for Valneva. Secondly, just in terms of that trial design, obviously we're all very familiar now with the prime booster and obviously with COVID, that was very much the prime doses seen as the initial approvals and then booster second.
I'm trying to understand a little bit more what the driver behind the inclusion of the booster as part of the first approval process is from the FDA. Is it because of the onerous nature in terms of the six month three doses that are required for the priming that for long-term use you need to see a boost? I wondered whether you could highlight any of the waning of immunogenicity that you've seen in the existing studies that you've already reported on. Then finally just what your expectations are for year-end cash now.
Let me start with the second question that you raised and then hand over to Peter for the financial one. Basically, I think it is very important to remember two key facts around the previous experiences with Lyme disease vaccines. You know that the efficacy that was reported for previous Lyme vaccines, also, they were very different, you know, only one serotype, you know, full length and so on, was that the efficacy rates were much higher after the booster dose.
Secondly, we know that the antibodies decline quite rapidly and that it is important to understand you know whether you know a booster will allow for a longer and much longer you know interval before revaccination occurs, which is a very important component when you think about you know vaccine recommendations and potential commercial prospect. This is why you know in consultation with the regulatory authorities, Pfizer decided actually just to go for the primary endpoint on the three plus one and only on the secondary endpoint on the three. That's in a nutshell you know the reasoning behind all of that.
I would say maximizing the chances of success, both from an efficacy readout, but also with regards to the future target product profile and hence resulting vaccination recommendations. I think with that, I hand over to Peter. Peter, anything?
Thomas, just one.
Okay.
Just to follow up, the follow-up element of the question.
Yes.
about what you've seen in your previous studies in terms of the on the priming, how quickly you see the fading of the immunogenicity that you generate?
Yes. You may recall that we reported that as part of our study VLA15-202, where we saw that basically you know after 6-9 months we are getting you know a rapid decline. Then of course we get a huge anamnestic response and antibodies you know going up by a factor after booster. This is what we saw in previous studies. And also we know where a protective threshold is in the field of Lyme. It's important to take into consideration for a phase III primary endpoint. . We certainly understand that.
Great. Thank you.
Okay, Peter.
Thank you, Thomas. I think, you know, part of your question was also on the cost we expect because of, you know, of the reduced number of participants. We haven't disclosed really in the past what the cost will be for the phase III or our share. Like we said earlier, you know, the agreement is we share 40% of the cost. Now we do not expect this cost to significantly change just purely because while the number of participants is reduced, there is also now pediatric safety study added in the phase III. That will be done in that study as well. And will be added to the cost, you know, that we would have had without that pediatric safety study. That much to the cost of the study.
In terms of year-end cash, you know, I think as a company we've never really given guidance on cash and we haven't done this time either. As you can see, looking at our balance sheets, we do have a strong cash position of still more than EUR 300 million. As we said, we do not anticipate any immediate cash constraints. We will certainly use, you know, continue to consume cash over the second part of the year, as we, you know, continue to pay our share for the Lyme trial and also, you know, continue to execute on our COVID trials.
As you can see, we do have a pretty significant cash balance at the end of June.
Great. Thank you very much.
The next question is from Samir Devani of Rx Securities. Please go ahead.
Hi, everyone. Thanks for taking my questions. I may have four. Let me kick off with IXIARO. I think we're getting up to the point of the second year option for the 250,000 doses. I'm wondering if you could just maybe enlighten us with any conversations you've had and what your expectations are around that. That's question one. Then question two is on the EUR 30-40 million COVID-19 vaccine sales. Obviously, we've seen what you've booked and the orders that you've publicly stated. Perhaps you can just give us a sense as to where that EUR 30-40 million you think is coming from and what your confidence is in achieving that, in light of saying that you expect most of the inventory revenue to come through in 2023.
Third question is really just on the disclosure of the EBV vaccine, Thomas. I'm just trying to understand what you're thinking there in terms of the clinical endpoint that you'd be assessing in a clinical trial. Just considering how pervasive EBV is and the fact that I think large pharma have avoided it due to the fact that it's just commercially very challenging. My final question is just to Peter in terms of CapEx, if you could just give us some guidance for the full year in light of what we've seen for the first half. Thanks very much.
I suggest we leave the question to the end, and we let Peter respond to your financial questions. Peter, please go ahead.
Yes. I think the question was, the financial question was really on CapEx, right? Then on guidance. On CapEx, you know, we continue to finalize our manufacturing facility in the U.K. For this, we will consume a bit of cash there in the second part of the year. It will be lower than the first part, but we haven't really given a complete guidance on it. CapEx will of course be reduced going forward. With regards to the guidance, as we've announced, you know, we have the European Commission agreement for the 1.25 million doses.
On top, we'll also have still some shipments to Bahrain, and then we do expect to have, you know, probably small orders from other countries outside of Europe. That's basically how we build the guidance for this year. Clearly, the third part are your orders from international markets. We anticipate this to be relatively low in 2022 and have minimum impact in 2023.
Okay. I think, EBV, I mean, you're pointing to a very, very important point, Samir. This is that I think around EBV, I think the vaccine industry right now generally sees EBV as a very important and indication in an area of very high unmet medical needs, especially since we know by now that there is this association or link to MS. It's also clear that right now there are many, many open questions around the endpoints for a potential clinical development. You know that different companies and institutions are working on EBV and have initiated clinical development, including, I don't know, Moderna, NIH, Sanofi.
According to our expectations, we would be probably three years behind, which means we must be best in class if this indication really you know could make sense to Valneva. Because remember, our view has always been to build a pipeline in areas of high unmet medical needs, where we could either be first only first or best in class. We are targeting a subunit coding approach, and we still consider this the best option, especially given our know-how, and the fact that the mRNA and nanoparticle modalities used by the competition. That's essentially at this point in time all we can say.
We have based on the phase II data from GSK, you know, and this is the important part right now, at least the markets are currently considering that an efficacy study seems to be feasible. I think we are still too early on all of that, Samir, in order to make a firm commitment.
That's great. Just on IXIARO as well.
The military question, you say? We have I think we are currently in advanced discussions with U.S. military, and this is why we cannot disclose the content of that. But I would say we are very positive about the continuous uptake of IXIARO by the U.S. military. If you look at you know clear indicators, and those include the number of forward deployed soldiers and rotation rates, you can already imagine that we are going rapidly back to where we were and hence to the assumptions that form the basis for the respective supply contract. That's all we can say. Sorry, it's gonna be a bit vague, but you understand why I have to be a bit vague on that. ?
That's great. Thanks very much.
The next question is from Olga Smolentseva of Bryan Garnier. Please go ahead.
Good afternoon. Hope you can hear me well, and thank you for taking my question. I actually have a follow-up on your preclinical vaccine candidates, and specifically, maybe could you speak about the strategy of developing a vaccine against HMPV and maybe a competitive angle here compared to combined, for instance, mRNA vaccine candidates? Thank you.
Sorry, I could not hear you. You were fading in and out. Are you talking about EBV?
HMPV and competitive angle compared to combined vaccines, mRNA vaccines.
Yes, of course.
Thank you.
Well, I mean, you know that we are targeting right now, with our HMPV candidate, a single protein pre-fusion. We are currently in the process of testing different adjuvants associated with it, and in order to also shift the T cell immunity towards Th1. This is something that we are currently testing in the final phases of preclinical, and of course our target population is currently elderly. Yes, I mean, we have to see.
I mean, there is certainly a market for a standalone HMPV vaccine, but there are also possibilities to combine HMPV with RSV, and therefore we see our candidate as a very interesting candidate, be it for, I would say a single indication development or be it for partnering with one of the RSV companies in development who have not yet a combo in development. I think this is a kind of a dual track that we are following with our HMPV vaccine.
That's very clear. Thank you.
You're welcome.
For any further questions, please press star and one on your telephone. Mr. Lingelbach, there are no more questions registered at this time.
Thanks so much for your active participation today and your very good questions, and we look forward to interacting with all of you in the coming months. For sure it's gonna be an equally exciting second half of the year for Valneva. Again, thanks so much for your time and have a good remaining rest of the day. Bye-bye.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.