Valneva, biggest fall in the SRD market at mid-session on Monday September 19, 2022 – – 09/19/2022 at 12:16

(AOF) –

Valneva

(- 11.86% to 7,152 euros)

Valneva falls after earlier reaching 6.84 euros, its lowest level since mid-December 2020. The Franco-Austrian vaccine manufacturer has ended its collaboration with IDT Biologika, confirming the end of its Covid adventure. The German biotech manufactured the active ingredient of Valneva’s vaccine against Covid, VLA2001. Or the latter did not receive the achievement. Orders have been so low in recent months that Valneva decided in July to suspend production. A rational but appropriate decision in the short term.

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Key points

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

– Turnover of €348m €bn drawn from Europe for 56%, ahead of the Americas (27%), then Asia-Oceania (9%) and Africa-Middle East (8%) ;

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

– Capital held at 13.02% by the Grimaud la Corbière group and 8.19% by BPI France, Frédéric Grimaud chairing the 5-member supervisory board and Thamas Lingelbach the management board;

– Solid balance sheet with €307m in equity against €42m in debt, reinforced by net cash of nearly €350m in April 2022.

Challenges

– Medium-term strategy based on financing R&D through sales of the Ixiaro and Dukoral vaccines, extension of the manufacturing network (3 sites, in Scotland, Sweden and Austria) and partnerships promoting the group’s assets;

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

– Environmental strategy: energy efficiency, minimization of waste, optimal use of water and reduction of 5%, vs 2016, of CO2 emissions 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 out of 190 million by 2025, i.e. €1.4 billion in total), with Pfizer to co-develop and sell the one against Lyme disease ($308 million), with the American authorities for Ixiario against Japanese encephalitis ($70 million), with Bavarian Nordic for the marketing and distribution of specialized vaccines, with Batavia Biosciences to develop a little condemned vaccine against polio, with the Butantan institute against chikingunya for low-income countries.

Challenges

– In 2022, launch of phase 3 trials for the vaccine against Lyme disease and awaiting the approval of the American authority for the sale of the chikingunya vaccine and that of the European Union for Covid 19 (60 million doses);

– Sensitivity to travel of sales of vaccines already on the market (against Japanese encephalitis and cholera);

– Uncertainties about the commercial success of the vaccine against Covid 19 in the United Kingdom, given the strong competition already established;

– 2022 objectives: excluding Covid vaccine, turnover between €430 and €590 million and R&D expenditure between €65 and €75 million.

An inevitable race for new blockbusters

The patent for Merck’s star product, the cancer drug Keytruda, which accounts for more than 35% of its sales, expires in 2028. Despite the loss, since 2019, of the patents for its three products (Avastin, Herceptine, Rituxan ) Roche has been able to renew its portfolio by distributing new molecules on the market. However, the discovery and launch of new drugs are increasingly targeted. AstraZeneca spends about $6 billion a year on R&D in a pharmaceutical industry where the life of a patent only lasts ten to fifteen years. This will lead laboratories to withdraw from certain activities. Thus J&J, Pfizer, GSK and, no doubt, Novartis will soon prefer to refocus on specialty drugs and will abandon any ancillary activity.

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