Valneva SE (VLA) Earnings Call Transcript & Summary

All right. Hello, everyone. We'll probably get started. Hello, and thank you for joining us for Valneva's Investor Day. I'm Josh Drumm, Vice President of Global Investor Relations, and it's my pleasure to welcome you this morning as well as those listening on the webcast. Today, you'll hear from Valneva's management and senior leaders about the company's near and midterm value drivers, including the substantial opportunity for our Phase III Lyme disease vaccine candidate in collaboration with Pfizer, Valneva's growing commercial business and opportunities to build continued value from the company's promising R&D pipeline. In a few moments, I'll introduce our CEO, Thomas Lingelbach, to provide a brief overview of Valneva and our strategy for value creation. Thomas will then discuss our Lyme disease vaccine candidate, VLA15, and our partnership with Pfizer. He'll then introduce our Chief Commercial Officer, Dipal Patel, who will provide an overview of our differentiated product portfolio, including the ongoing launch of IXCHIQ, the world's first and only approved vaccine against chikungunya. We'll then pause our presentations to take some of your questions. [Operator Instructions]. Part 2 of our presentations will focus on our R&D pipeline. I'll invite Susanne Eder-Lingelbach, our Vice President of Clinical Development, to discuss some of the key data, ongoing and planned clinical development activities supporting IXCHIQ. Susanne will then hand it over to our Chief Medical Officer, Juan Carlos Jaramillo, who will provide an overview of our recently in-licensed Shigella vaccine candidate, S4V, which is advancing in Phase II as well as the potential commercial opportunity. Susanne will return to discuss our Zika virus and the creation of our second-generation vaccine candidate, VLA1601, before handing it back to Thomas to discuss our pipeline strategy and early-stage programs. Valneva's CFO, Peter Bühler, will conclude by providing a brief financial overview before inviting the rest of our speaker panel back to the stage for a final Q&A. Before we kick things off, I'd like to remind listeners that during this presentation, we will be making forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are also listed on our company website, www.valneva.com. Please note that today's presentation includes information provided as of October -- today, October 10, 2024, and Valneva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws. With that, it's my pleasure to welcome Thomas to begin today's presentation.

Josh, many thanks. Good morning, good afternoon to those on the phone. It's a pleasure to welcome you. We feel really privileged of being able to present Valneva to you today. We have many people online and here in the room, and it's really fantastic to be able to show the progress that we have made and standing here after 10 years of roller coaster with Valneva, I would say, and still being able to present a very, very nice prospect of this business is a unique honor and privilege. So where are we? You all know that Valneva is a company that is focusing on the development, manufacturing and commercialization of unique differentiated vaccines in areas of high unmet medical need. We are one of the very, very few remaining fully integrated pure-play vaccine companies that focus on prophylaxis in infectious diseases. And some of you who are a few years older, like me, know that many years ago, there were more than 20 pure-play vaccine companies north of EUR 1 billion market cap. This situation has completely changed. The vaccine space is entirely consolidated, concentrated. And therefore, there is room for companies like Valneva to be successful in playing in the specialty vaccines field. And this is exactly what we are doing. So we have an excellent proven expertise. I mean, only 3% of all biotech companies in the world can say that they have successfully brought vaccines from bench to global licensure. We did it in our history 3 times already. Our entire portfolio is really geared towards first best only in class, and we are not trying to go into the, I would say, the me-too space or the space that is dominated by the key players in the vaccine field like respiratory, for example. We have a fantastic partnership with Pfizer online, and I'm going to present more about this program, which, of course, is the single largest value driver for this company in the short term with a very important and critical readout at the end of next year. Dipal is going to present a bit more in detail where we are in our commercial business, where we are currently in investment stage, because we want to invest in the future growth of IXCHIQ. But at the same time, this commercial business has been very attractive, pre-COVID delivered EUR 30 million to EUR 40 million net operating cash that we reinvested into R&D. And yeah talking about cash injection, talking about profitability. Our objective is that at a certain point in time, we want to move into financial self-sustainability. And we believe that after 13 years of a biotech right and having invested a lot of money from the capital market, from you all, from our investors, it is time to go into a self-sustainability stage. And therefore, we target our profitability on the back of the Lyme -- successful Lyme market introduction and later royalties. Briefly on the pipeline itself, we're going to go program by program anyhow. But just to reillustrate why I said earlier that we are having a very unique and distinct portfolio. IXIARO, the only vaccine against Japanese encephalitis in reality, approved in the relevant high-income countries, cholera ETEC, our DUKORAL vaccine, certainly, a vaccine that has been nicely established in the market and where we have 90-plus percent market share today. And IXCHIQ, that we're going to present more in detail a very, very good vaccine from my perspective, vaccine that got developed in record time and where we have really been able to pioneer the space for the more regulatory focused people in the room and in the audience. This is also, when I say pioneering, we have pioneered the space in many respects there. Today, we are pioneering it by explaining to people what IXCHIQ what is. And -- but I think on the regulatory front, this is the first vaccine in a tropical disease that went through the accelerated approval pathway. And this is -- therefore, there's a lot that we are still doing, and you will hear this from Susanne later on, on IXCHIQ. Yes, we have our Lyme vaccine Phase III only one, no competition in the next 4, 5 years, even if 1 or 2 companies have started to work on a Lyme vaccine early on. Chikungunya, as we discussed right now, in label extension, very proud to have been able to partner with LimmaTech on Shigella, very interesting program, a very interesting indication, huge unmet medical need and fully in line with our mission ambition as will be presented by JC. And then yes, we -- again, a little bit like with chikungunya, where when we started many, many companies worked on it, but then we bypassed them all and went first into licensure. We are now seeing a similar situation in Zika. Many companies have started working on Zika. We have right now the only active clinical program. And again, we will present to you a little bit where we see the opportunities, but also the question marks around it. Our strategy is something that I've presented many, many times, fully integrated, means for us that we have 3 pillars. We have the pillar around commercial growth. We want to invest in making sure that our commercial assets will be able to unlock its value. And we believe that we can do this. We believe that we will, by the end of the day drive with the commercial business, a major cash generation that we can reinvest in R&D, because we believe that the R&D part of it presents the major upside to shareholders and therefore, when you address novel vaccine development, this is -- these are things that can really drive and make a big change also in the valuation model. Therefore, this integrated model where you leverage both parts of the business and where you also cross-leverage certain capabilities and capacities for us is a very appealing business model, knowing that we are one of probably 2 or 3 companies that still have this model. We had quite significant recent accomplishments. I'm not going to go through all of them in detail, because especially on the product front and on the commercial side of things, this will all be presented by my colleagues. But I think on the financials, a little bit here, I think we have done a lot to increase the financial sustainability of the company to address perceived cash overhangs, to address concerns about what if [ IXCHIQ ] sales higher or lower. But overall, we believe that by combination of various things. We have secured for the company a very nice pathway towards profitability. And Peter will allude to that further. And at that point, I would also like to thank all our partners here that have continuously supported us on the financial management, be it our debt provider, Deerfield, OrbiMed, but also our all the investors who recently supported us in a private placement. Yes. With that introduction, I will turn over to Lyme and Lyme is not only my personal favorite here, but I -- but it's also a program I like to talk a lot about, because I believe that Lyme disease is very, very devastating disease. And having now been in this field for more than 10 years and having been interacting with many, many people suffering from Lyme disease, I can assure you that this resonates extremely well with our mission and vision. Just to give you a few figures, which are very important also when you think about market, market size, market opportunity. Last year, around 500,000 confirmed Lyme cases in the United States, more than 100,000 in Europe. Also, we appreciate that the European numbers for sure are completely underreported, because when you look at the people living in endemic areas, 80 million roughly in the United States, 200 million in Europe and these are areas defined as high incidents, high incidents according to CDC, meaning greater than 0.5% confirmed Lyme cases during a given season, meaning 5 out of 1000 and when you look at the severity of Lyme disease, 10% to 30% develop severe manifestations. And then when you really look into that, another 5% to 10% develop persistent symptoms. Sometimes people do not even recall that they had a tick bite and get infected years later, because as you know, the Lyme bacteria which are spherocytes, have behaved a little bit like the latent herpes viruses. So they go in a dormant mode. And that's why you see, for example, things like neuroborreliosis sometimes years after the initial Lyme infection. So when you translate this all into a commercial opportunity, what does it mean? Of course, you can say we have 300 million people living in Lyme high-risk areas. If this was to become a regular vaccination with regular vaccination adoption rates, you would probably go as high as 50% to 60%. But even if you took a very conservative stance on around 10% adoption to start with, you can appreciate what kind of -- how this medical need turns into or could turn into a commercial opportunity. The -- we have agreed for now on the language that says that the market is estimated certainly north of EUR 1 billion every year. But as you can see here, there is definitely a significant upside to that. Of course, it requires awareness. It requires recommendation and most importantly, and this is something for any vaccine development has to come first namely, the vaccine has to be safe and efficacious. And this is the prerequisite. Science will win. And thereafter, things will follow. We have a very interesting deal with Pfizer. You have seen this many, many times. I'm not going to go into the details here. Pfizer are investing a lot right now in creating, building the prelaunch market access work, et cetera. When you look at the incidence of Lyme disease, I got the question earlier today, these are the key countries. I mean, you all know this in the U.S. Northeast. And in Europe, interesting developments like, for example, when you look at the European map. Five years ago, France was light blue. Now France is dark blue. I mean it's interesting development. So it has to do with global warming, and also with other factors in this space. Our vaccine is a vaccine that is based on a conserved protein called outer surface protein A, OspA and in order to understand some of the data that I'm going to show you later, you need to understand the mechanism of action. So the mechanism of action for Lyme disease vaccine is really that you kill or down regulate the spherocytes in the mid gut of the tick. So this means that -- in other words, you are not getting infected when tick sucks your blood. You're getting infected when the tick gives it secretes back. And therefore, what you need to do is you need to have antibodies in your human bloodstream. So that those antibodies, once they get into the mid gut of the tick are able to kill, down regulate those spirit sites and inhibit the dissemination of bacteria in the tick. And therefore, blocking the transmission to the host, meaning 2 years to the human being. That's how it works. So we have one analyst who describes it like this is a therapeutic vaccination for the tick, resulting in a prophylactic vaccination for the human. And this is probably not a bad simplified way to put it. There were prior OspA vaccines back in the '90s. And so therefore, this mechanism per se, also the vaccines were very, very different in nature, were validated. You saw there were 2 pivotal control -- placebo-controlled studies done, one by GSK, the other one by Sanofi. Efficacy range from around 50 to all the way up to 90, depending on the number of doses given, not comparable like-for-like with what we are doing right now, but just to illustrate that there was a clear mode of action. Our vaccine is a multivalent vaccine. From the start, we wanted to develop a vaccine for people living on both sides of the Atlantic. So the vaccine that we have is a 6 valent vaccine, covers more than 97% of the prevalent serotypes in the Northern Hemisphere, North America still dominated with serotype 1, whereas Europe dominated by serotype 2. We -- very different to the old vaccines, which were serotype 1 full length outer surface protein A-based vaccines. We have created modern recombinant subunit vaccines with where we fused -- created fusion proteins, always by pairing up serotype 1, 2, 3, 4, 5, 6, classical lipidation stabilization by disulfide bonds or modern, I would say, protein engineering. And therefore, 3 proteins absorbed to alum are the structure of this vaccine. Now what are the reasons to believe that this vaccine is going to work? So first of all, we did a whole variety of experiments together with our partner, Pfizer, to say, how does this vaccine behave as compared to what we know has worked, namely the old outer surface protein A, full length vaccine. So -- and what do you do as a first step because those vaccines doesn't exist anymore, you recook it. So we basically built the out the old LYMErix vaccine, if I may say so. And of course, we can't and won't call it LYMErix. So it's called Lip-OspA, meaning this is the lipidated OspA version. This is the LYMErix like. We call it LYMErix-biosimilar. And we compare everything against this. So we did then active immunization models, not only in mice, but later also in nonhuman primates. And we showed and we did the comparison of the protein ratio as published, and we basically saw that we were able to get full protections, be it with the LYMErix vaccine, be it with ours, and you see that against serotype 1, which is the relevant comparator. You see that we have even been slightly better with VLA15 as compared to the LYMErix like. The same thing. We repeat it in nonhuman primates, similar picture. Passive transfer. So we took human sera into animals then went down with the dilution. And as you can see is even at a level of GMTs of around 130, you have -- you can basically say it's still fully protective. Remember, this 130 when we talk later about other things. We repeat it, as I said, dosings into different -- in different species. So what is the -- what else did we do? We worked across all the different Phase II studies in optimizing dose, optimizing schedule across the different serotypes. And what you see here is really that we are at a good immunogenicity level after the 3 dose priming. We need 3 doses, very similar to other lipidated protein-based vaccines by the way. And you see that we are at around give or take a GMT of around 500 after the 3 priming doses, what you see is that once we give the first booster after 18 months, this is the light blue, we increased the immune response by roughly a lock scale. This shows you that you have a very significant anamnestic response. We recently published also data with multiple boosters, which I'm going to show you now. And there you see also why this vaccine will require an annual booster shot. So overall, Remember, mice showed 130 still fully protective as GMT ELISA units. Now LYMErix showed 1,400 as a beginning of the season, 400 at the end of the season, but not comparable. But if you did a like-for-like comparison, you would roughly land at the level that I showed you in the passive transfer model, so you could more or less say, our current working hypothesis is that the protective threshold is around that level. That gives us comfort that we're going to see good data at the end of the day. Now when you look at how is the immunological profile and this is a very important graph -- and what you see here is you give you 3 shots. And then the -- and then you see the immune response going up. Of course, in -- you see the younger adults, you see, let's say, the very young ones, you see the adolescents, you see the elderly, very nice curves. Then you see the antibody titers going down rapidly over the tick season. This is something that we have already seen at the time with LYMErix. That's why I said they had -- they had approximately a factor of 3.5% in between the titers preseason or at the beginning of the season and end of the season. So -- and then you see basically what happens when we give them the first booster anamnestic response, which is here month 18. You see the booster response going up. And then you see that it's -- then we test it for the second booster, again a year after and this is the data that we recently published and what is basically -- what is the key takeaway here? The immune response does not go further up. So which means we have already reached immunologic plateau after the first booster. There is a trend, as you can see, that the -- let's say, the winding of the immune response throughout the season is less pronounced from booster to booster. But this is now -- please keep in mind, this is Phase II data. This is post hoc, this is not powered for all of that. But it's something that we may need to show at a certain point in time to further justify the need for an annual booster. But right now, it's absolutely clear this vaccine requires annual boosters. Safety for VLA15 consistently has been very good. And you see here the an overview of solicited local AEs, you see solicited systemic AEs. It's also important to note that similar from dose to dose, no difference. And therefore, I would say, a very state-of-the-art safety profile for a vaccine. We also have conducted in parallel a pediatric safety study. And this is a flanking part that supports to have a strong database for the 5- to 17-year-olds and so far, we are well into this study, which is further supporting then the licensure. Phase III itself, many of you keep asking about how is it all working with the Lyme season here in the Lyme cases. You see the typical profile, which differs very, very little from season to season. You have in between May and August, you have about 56% of the yearly cases. You have another 25% of the yearly cases in between August and I would say, early October. The tick season literally ends where we are right now. It depends a little bit whether you have a beautiful Indian summer like we have it today or not. But I would say that's a little bit where we see it. So the Phase III that we have is, of course, entirely are reflecting all of that. So what you see here, so we have a Phase III that is ongoing. It's a classical placebo-controlled field efficacy study, 1:1 randomized placebo versus Verum 2:1, U.S., Europe, relevant percentage of children versus adults, everyone from 5 to upper age, low age limit. I think the oldest one is above 90 if I'm not mistaken. And we give the standard priming schedules, 3 doses, 026 and then we basically give a booster a year later. And we do the case counts. This whole thing runs over 3 tick seasons because for operational reasons, we had to split in between 2 cohorts, but it's 1 study. And by the end of the day, where are we right now? All people included, all people have received their 3-dose priming. The first cohort had received this booster mainly. And we are -- next year, the second cohort will receive its booster, and then we will have a readout at the end of the tick season 2025. So we have guided the market that at the end of 2025, we expect together with our partner here to see the relevant figures around efficacy after 3 plus 1 and efficacy after 3. So that's where we are on Lyme. Some of you have asked about what is really the endpoint? What does it all mean? Just to explain it one more time. We are looking here at prevention of disease, so which means we count the Lyme cases. All the rest is secondary. I mean, of course, we test efficacy against specific serotypes, which has -- we do immunological profiles, ideally, surrogates, correlates, all of that. But primarily, what we are trying to do is to prevent disease. So which means we need to count the cases of Lyme that we have in the placebo group as compared to the Verum group. The delta is going to give you the efficacy number. And there are, of course, assumptions around powering of the study assumptions when it comes to the percentage of Lyme cases in the areas where we have our study centers, there are assumptions on efficacy. There are assumptions on statistical conditional power. All of that is daily bread and butter for clinical development. There's nothing fancy about this. The percentage around the, I would say, the incidence rate has come from epi studies that Pfizer conducted and where many, many publications have been done, which is why we feel confident that we get the right number of cases. But the case definition is the trick. Some of you may have seen -- may have noticed that the Sanofi Phase III data in the -- that GSK Phase III data back from the 90s look very different, although the product was the same, literally, what was that? Because they were all working on different case definitions and details on how to count a Lyme case or not a Lyme case. This is why the disease algorithm is very important, and it has been agreed with the authorities. It's always a combination of a clinical diagnosis and at least 1 confirmatory diagnostic test. And there's a combination of various things. We can go into the details in the Q&A, if you like. But at this point in time, I would close it here. You can have it in the preread. If you have questions, let me know. Yes, to conclude the whole Lyme section, as I mentioned, we are very happy with the collaboration with Pfizer. We are working together, joint teams, joint efforts. And we are hoping to get at the end of next year, the critical data, then to submit in 2026 to get license and ACIP recommendation in 2027, so that we can start vaccinating people in the autumn of 2027 for the tick season 2028. On the back of that, and if this was going according to plan, we would receive milestones that would support the company's path into profitability as of 2027. And with that, I would like to conclude the Lyme section and handing over to my colleague, Dipal, who is going to provide you some insight on our commercial business. Thanks.

Thank you, Thomas. Good morning, everyone, and good afternoon to those people that have dialed in from Europe. My name is Dipal, and I'll give you an update in the next 10 minutes on Valneva's 3 differentiated products and our growing presence in the travel vaccine space. And so just as a reminder, IXIARO is the only Japanese encephalitis vaccine approved in the U.S. and Europe. And in fact, it's a vaccine that has a requirement for military -- U.S. military deployment to parts of Asia. IXCHIQ the first and only approved single shot, high sera response, and with 2 years of data that I'll go into a little bit more chikungunya vaccine. And DUKORAL is the only cholera and ETEC vaccine that's been approved. So before I go into sort of the sales numbers, I wanted to provide you a bit of context as to what happened during COVID with traveler numbers. This is quite important, because we're in the travel business and we need travelers to be getting on a plane and flying somewhere to be vaccinated. So what this slide shows you is the impact of COVID on travel, which is from, say, 2020 out to 2022. So really took a nosedive, travel took a nosedive, all the airplanes were grounded. But what's important to also note is travel is expected to resume and come back over the next 3 to 6 years. So travel to chik endemic regions will be up by 22% and JE endemic regions around 29%. So what I want to go into here is then look at the impact of COVID on our own vaccine business. And before I go into the numbers, I also wanted to give you a bit of context of what happened with our travel providers during COVID. In fact, many of our travel providers shut down their practices, because there was no one troubling. And in the last 2 to 3 years, many of these travel providers are rebuilding their practices, retraining nurses, so they can conduct travel clinics. We also interestingly see a very different mix of traveler today than we did pre-COVID. So despite these environmental changes, Valneva has already surpassed pre-pandemic levels by 12% in 2023, which sets us up really nicely for continued growth, not only in '24, but also targeting 2x growth by '26, '27. What we'll see is continued travel growth from IXIARO and DUKORAL, double-digit growth from IXIARO from -- for at least the next 3 years. Our global launch of IXCHIQ acceleration across not just U.S. but in other markets, and importantly, the label expansions will continue to drive growth of Valneva into the next few years. What I've also done is really just outline what are the key growth drivers for -- that is actually fueling this growth. And -- and essentially, it comes down to 3 main things. This is a very targeted execution, whether that's in the health care professional space or the consumer space. Channel expansion is becoming very important, especially as the type of traveler is changing and also enhanced access by IRA, and this is particularly in the 65-plus where Medicare allows reimbursement. The next few slides, I'll focus a little bit on IXCHIQ, which is very interesting to many people here today. And IXCHIQ will continue to build on its differentiators to drive future growth. So as a reminder, again, IXCHIQ the first and only vaccine against chikungunya, providing strong and persistent immune response with only 1 dose. And more specifically, the key differentiators, which will drive IXCHIQ's growth is 98.9% seroresponse at Day 29 and importantly, the seroresponse that is sustained at 97% after 2 years, which is already in the European label. The only chikungunya vaccine to show strong immunogenicity in the 18 to 64, but importantly, in the 65 and above, which is a population that's been specified by the ACIP. IXCHIQ generally well tolerated as we've found in our study population, and it's also in a convenient single dose. So the question we often get asked is what gives you confidence in the launch trajectory of IXCHIQ? And in this slide, what I'm going to aim to convey to you are some of the lead metrics and what we see happening with IXCHIQ in the market. So what gives us confidence is that we do see stronger uptake as a result of greater awareness. Awareness is not just because of disease awareness. There's also awareness that comes through travel protocol updates as well as we see more and more timely updates on chikungunya outbreaks, and Susanne will go into a little bit more detail about chikungunya outbreaks just in 2024. We also see increasing amount of accounts ordering volumes and not just first orders, we're starting to see repeat orders, which is super encouraging. We also see interestingly now a growth in the retail sector, which is extremely important, especially for our 65-plus population and increased interest from the public health systems across the states. You'll also know that recently, the DHA, this is for the U.S. military published their guidance on IXCHIQ and they adopted the CDC guidance into -- for IXCHIQ, which is extremely important, because this allows IXCHIQ to be pulled through the protocol that allows the military to start prescribing IXCHIQ. What we've also seen is an increase in insurance coverage and being a private vaccine, this becomes super important. So insurance coverage has increased from 18% in March to 55%. And this is another symptom of ACIP recommendations being pulled through. And importantly, the last point is in a recent HCP research that we did, 82% of customers or vaccinators, say that they are likely or very likely to implement IXCHIQ in their practice. And this is another great sign that shows that IXCHIQ is starting to become part of their practice lives. So the global opportunity for IXCHIQ remains around $500 million. And today, we are really scratching the tip of ice berg. So where we are today is really focusing on the ACIP population or the ACI priority population. But over time, as we expand this population, namely around additional launches around ex-U.S. label expansions, which Susanne will go into a lot more detail as well, improved surveillance, so more outbreak news in a more timely manner and the only vaccine that will have real-life effectiveness data. This will allow us to tap into the bottom of the iceberg in addition to improved access in LMIC endemic countries and expanded use through military contracts as well. So finally, the future is super exciting, I think, for IXCHIQ and Valneva as well. We will await some very important updates for IXCHIQ, namely MMWR, which we expect by the end of this year, and this is extremely important for the retailers to be able to expand their use into IXCHIQ, the European and Canadian launch, which will come in the next few months. Additional ACIP recommendations which we'll see into next year in European recommendations, which we are already starting to see flow through. The travel software protocols are being updated as we speak. And of course, as I mentioned, there will be significant label updates for IXCHIQ in the next 12 months, which will look into the 12-plus indication but also include the 24-month data. We're also going to start seeing LMIC approval. Thomas already spoke about that around Brazil. And of course, we continue discussions with the U.S. Department of Defense on how IXCHIQ can become part of their protocol. So with that, we move into a Q&A session.

So I'd like to invite our speakers to gather on the panel here. And while they assemble, just a reminder for those participating via webcast that you can submit your question using the Q&A text box at the bottom of the player as well as submit your questions by email to [email protected]. And do you have a question in the room, of course, raise your hands.

This is Suzanne from Kempen. Maybe on Lyme, starting off with a bit of a stupid question, but noticing U.S. is exclusively serotype 1 dominant. Europe has a larger variety. Is there any background on why does difference is there? Has this always been the case? And could it change over time?

It's an excellent question, Suzanne. So I would say the evolution of the serotypes has been extremely stable over the past 20, 25 years. The serotype 1 dominance in the U.S. was certainly there. We see now serotype 1 is, I think, according to the latest surveillance, it's around 95%, 96%. So you see already that there are -- it's not 100%. And -- but at the same time, there's also not a great dynamic. There are a couple of works currently ongoing in the vector transmitted disease space, but more from the vector side, so people studying the evolution of ticks and the evolution of mosquitoes. But there is not really a sound hypothesis for this for this split at this point in time.

Got it. Allow me a follow-up question as well on Lyme. With the primary endpoint being after the first booster dose for both cohorts. I'm wondering if you can use the longer follow-up from Cohort 1? Can we get a second booster already, so you can assess that data as well late next year?

I would say it's an excellent point that you are raising. And of course, as I said, this -- doing that would give us the advantage of repeating what we have done in a phase -- under Phase II protocol, but under a Phase III protocol. And I would say as such, it's under consideration.

Anyone else?

This is James Stamos from Jefferies, for Maury. So first question we have is, what are you doing -- what do you and Pfizer doing to raise awareness and increase the number of Lyme cases reported in EU?

JC, do you want to say a couple of words?

Yes, sir. Thank you very much for the question. I think if you can see there are some various publications, especially around the epidemiology there's trials ongoing, and they've actually extended some of those epidemiology trials, especially in high-incidence countries like Netherlands, for example. So once more and more data comes in, we'll be able to publish that. So Pfizer is investing heavily, especially in that space in order then to generate the market access and also the creation of the unmet medical need for this.

And then the second question we have is for the VLA15 boosters, it seems like safety improves after the first booster in the Lancet publication. Would you expect that safety like headache and muscle pain continue to improve with subsequent boosters?

Well, again, it's more or less -- I mean, right now, we haven't seen further data around that. But as you rightly commented, the information from the publication does show that. And hopefully, we will continue to see that trend once we start generating. We're analyzing additional data. So, so far, we're very happy with the safety and tolerability of the vaccine, and we'll report more on that as it continues.

Evan Wang from Guggenheim. Two for me. First on Lyme, any kind of market research you've done on vaccine uptake and kind of public acceptance of one vaccine, just given prior experience with LYMErix. And importantly, I guess, on how quickly this could kind of ramp? And second, on chikungunya, just any more details you can share on some of the launch metrics. I know you shared some color on access. And also how you expect launches to ramp in Europe and Canada?

So let me start off with the first part of what you just said. It's very -- so first of all, you cannot compare the Lyme situation that existed back in the '90s with today's environment, right? So any kind of extrapolation, any kind of analogy to what was there is not very sound. I mean because, a, the number of confirmed line cases was in a different ballpark. The number of known clinical manifestations of Lyme disease was very different. So I think right now, it is -- it will all depend on what will be the safety and immunogenicity final results, point number one. Point number two, what is ACIP's position? And I use ACIP as an analog. I mean, the same situation will happen in Europe and outside of the United States. And this will be driven by health economical analysis and health economical impact. And provided you get a safe and efficacious vaccine. I mean there's no doubt that the -- given the high cost of health impairment around Lyme disease, you always get a very positive health economic analysis. Disease burden is just too high, too expensive. So an efficacious vaccine will do it. Now then the question becomes what kind of recommendation are you going to get? And then are you going to jump the hurdle into it becoming a regular vaccination? because this is when you will go into the league of, I don't know, the RSVs and whatsoever with 50%, 60%, 70% adoption rates -- or will you stay in a restricted kind of segment where you would say, yes, people are living in certain risk area, but also on top of that, people who have a certain extraordinary exposure. And that will be exactly the difference in between probably I don't know, probably the difference in between EUR 1 billion and EUR 5 billion market opportunity.

Ed White from H.C. Wainright. Another question on Lyme. We've seen in the hepatitis B vaccine market that a 2-dose entrant has taken a lot of market share from the 3 dose. And I'm just wondering what kind of programs you're thinking of to keep patients compliant over that time frame to get their 3 doses.

I think it's an excellent question, Ed. So overall, it's very clear that the more doses you need to give, the more your compliance rate drops. This is well known from the vaccine space. This is well known from many other vaccines. At the same time, the mode of action, as I explained earlier, requires that you that you really build up the immune response and in reality, the 016 schedule, 026 schedule is a kind of a mini prime boost. And at that point in time is needed to support the mode of action. We are seeing some signs, and you saw this in the publications that the situation may be slightly different for children and for younger ones. So there might be an opportunity to further improve the schedule post-licensure. And -- but at this point in time, no. And yes, as I said, it's -- there's nothing we can do about it. I think for other vaccines, it is working well, but it is absolutely clear that you have a drop in compliance with more doses that you need to give. With that, I would like to hand over to Dipal for the second part of the question, the question around chikungunya and the market update.

Okay. Thank you. So the question was what other launch metrics we're using on chikungunya and how we're preparing for launch in other markets. So I'll put launch metrics in 3 key buckets, if I may. The first one really is around doses, ordering and reordering of doses, do we see an increase. So when we first launched, we saw a majority of the doses coming from the travel clinics, which is natural because that's where the expertise is. What we're starting to see now is not only reordering from travel clinics, but we see ordering from retailers and public health, which is very encouraging and good signs as well. The second bit of metric that we look at is around your health care professional perception and their behavior. And that's a metric that I shared earlier is that 82% of vaccinators are saying that they will implement IXCHIQ in their practice, right, which is also very encouraging. And then the third piece really is around access. And access can be divided into 3 buckets, probably. What happens when ACIP sends a recommendation now, it has to flow through the system. It's not overnight. So the first piece is we look for insurers to update their insurance policies and there's a 3- to 6-month delay depending on intra. Then you have travel protocols that need to be updated. So the ACIP gets pulled into travel protocols and there's several of those. And we see those travel protocols being updated now. And then the third piece really is around the MMWR, which means that, that opens up the retail channel, and we see very encouraging signs from that. So we continue to have discussions with the CDC, particularly on the MMWR to make sure that, that gets updated, so people that go into the retailer can access IXCHIQ. So those are the 3 ways that we measure. Sorry, and ex U.S. launches as well. So we're preparing ex U.S. launches. And what I can say is we are ready.

David Low from MTS. Maybe to follow up a little bit on the end of previous gentleman's question. Can you talk about your Asia strategy? And in particular, Japan and China.

So at this point in time, our strategy is geared towards LMICs with partners for, I would say, India, Indian subcontinent, Southeast Asia and as well as Latin America, it includes our 2 licensed vaccines against Japanese encephalitis as well as chikungunya. We have no strategy at this point in time with regard to Japan or China, to be very clear. But we are also very well aware of the fact that we got to look into this. I think for Japanese encephalitis the Japanese market was well served, which is why we had no possibility to really consider the Japanese market. But chikungunya, the situation is slightly different. And therefore, we have it in our plate, and it is certainly something that we're going to look at as part of our territory in global expansion and global access strategy.

Okay. I think we can take some questions from our European analysts. Understanding that we're running a bit behind schedule. I'll try to triage them. The first question is on coverage for IXCHIQ. It was noted on the slide that it's remained somewhat static over 50% for the last few months. What's going to drive this higher in the future?

Yes, it's a good question. So this is the coverage of the insurers.

Yes, correct.

So it's what I mentioned earlier. So each insurer takes the ACIP recommendation that updates their protocol. So what we -- what we'll start seeing is different intros will update at different times. It takes 3 to 6 months. There's another part of the slide, which looks at the unknown. And that's the piece that we're waiting to hear back from as to when they will update and how they will update. But we continue to work. By the way, 55% for a new private vaccine insurance coverage is good, after 6 months.

Another question on IXCHIQ. What additional ACIP recommendations are we expecting next year? And do you expect ACIP to consider IXCHIQ alongside our potential competitor in Bavarian Nordic separately or harmonized?

So I'll take the first question around that. So we do expect next year to look for ACIP recommendations in endemic. Also remember, with the label expansion of 12 and up, that's also another recommendation that we'll be waiting for. ACIP, we're closely working with the ACIP working groups, and this is an ongoing activity. And the second question, Josh?

I hit it, if whether the ACIP will consider IXCHIQ and Bavarian together or separately?

From previous experiences, they usually try to do both reviews and recommendations at the same time, more from a comparison perspective.

A few people are asking for an update on discussions with states for potential stockpiling as well as the current state of affairs with the military.

Yes, I can take that question. So perhaps that's up with the military. So the first step for us with the military was ensuring that the DHA update their recommendation, which has now taken place. And in fact, IXCHIQ is within their recommendation, and it's now being pulled through to the local protocols. The other piece that we continue to work with the military on is understanding the risk and impact and the deployment of their troops as well. And of course, the military will make a decision based on potential outbreaks and the impact of disease, and this continues. But the good news is because IXCHIQ is now being pulled through the protocols, the military clinics can start prescribing IXCHIQ already, right? And that was the most important first step for us because the next piece is a bit of a longer term and it takes a little bit while to understand where the risk is actually. The piece around stockpile, and again, it's the same. We're having discussions with stakeholders really to understand what is the risk and impact of the disease. And these discussions are continuing, and time will tell.

Josh, I suggest that we move on.

Yes. I think the other questions we can answer by e-mail, I apologize. Thank you.

So I think we move on. Susanne will take the next one.

So good morning also from my side. My name is Susanne. I'm the Vice President for Clinical Development at Valneva. And I would like to kick off this session on our development activities, focusing on chikungunya, and our currently ongoing as well as upcoming clinical development activities. Starting off with a short reminder about chikungunya. You all are aware, chikungunya is a mosquito transmitted disease that often causes large and explosive outbreaks. Also keep in mind that about 75% of the population worldwide lives in areas at risk of chikungunya. Today, talking about 2024, about 460,000 cases of chikungunya has been reported globally and 170 deaths associated with chikungunya. Most cases have been reported in Brazil. But also keep in mind that there were recent chikungunya outbreaks, for example, in Paraguay, late 2022, early '23. We also see significant rises of chikungunya cases in India at this point in time. Chikungunya comes with a substantial quality of life and has economic impact caused by the fact that nearly 50% of individuals infected with chikungunya develop chronic symptoms. Here, I would like to show you a summary, really starting Phase I across Phase III, including the adult and adolescent population in terms of the immunological profile of chikungunya. Starting off with day 15, this is data we generated in our Phase I clinical trial. What you see here is that 2 weeks post vaccination, we've been able to show 100% seroresponse rate. This is a result of the immune response kicking in somewhere between day 8 and day 15 following vaccination. By day 29, again, seroresponse rate close to 100%, depending on the population we are looking at. And here, this also includes data from the adolescent population with the dark blue bar, Phase I data in the adult population for our pivotal clinical trial. Again, the other point that I would make with regards to this slide is if you have a look at the very right of the slide, by month 24, we continue to see a very high seroresponse rate following vaccination 2 years later. Looking at immunogenicity from a different perspective. What you see here is titers, compared to seroresponse rates on the previous slide. And core aspects that come with this slide is that up to 2 years following vaccination we see an immune response that remains very well above the threshold, which defines seroresponse with a value of 150 and titers that we've seen in our long-term follow-up clinical trial are in the range of 750 to 950. The other point that I would like to point you to is really that looking at immune response comparing the younger adult population versus the older adult population, we see that immune response is very comparable. And that's particularly important, keeping in mind the ACIP recommendation that focuses on prioritization of vaccination of 65-year-old adults. If we have a look at the ongoing and upcoming clinical development activities, you will recognize that we are focusing on expanding access label extension and fine-tuning, if you want, the product profile. Our activities are well supported by funding from the coalition of epidemic preparedness and innovation where we've been able to obtain a grant of more than EUR 40 million supporting our development work. On this slide, we've clustered our activities in 3 buckets. On the one hand, our post-marketing effectiveness work, to confirm the effectiveness following licensure based on an immunological surrogate of protection, but also to optimize the description of the safety profile. The post marketing activities come with different studies. On the one hand, we will run an observational study to confirm effectiveness complemented by a pragmatic randomized controlled clinical trial that will look into effectiveness and safety. And in addition, as part of the Phase IV work, we will further substantiate our data around safety in a dedicated prospective safety cohort study and pregnancy surveillance that we will run in Brazil. With regards to label extension, expanding to the pediatric age group is one of the next steps. You have seen in the previous slide that we have primary endpoint data and data up to 6 months, actually, for the adolescent population. And at this point in time, we are also running a Phase II dose-finding clinical trial in children, age 1 to below 12 years of age to also expand the vaccine into this age group. In terms of product profile, Dipal has mentioned that before, an important aspect for our vaccine is the long-term durability to differentiate from potentially future upcoming chikungunya vaccines. At this point in time, we've been able to show very good antibody persistence up to 2 years following vaccination. We are expecting further data 3 years post vaccination later this year. And overall, we are aiming for monitoring antibody persistence for up to 10 years. Circling back to the Phase IV program, on the one hand, this is something we are required to do in order to meet regulatory requirements and following licensure of our vaccine. But in addition, this will allow us to generate additional safety data and effectiveness data that will continue informing our vaccinees and policymakers. If we briefly touch on the 402 study, which is going to be an observational study that we are planning to run in Brazil. This is a study that really will provide real-world evidence data. And this is based really on the established chikungunya surveillance in Brazil. A pilot vaccination program will be required to build the necessary basis for the study and the pilot vaccination program will also allow us to include close monitoring of safety in a dedicated safety cohort, pregnancy surveillance that I already had mentioned earlier. And we will also run a sero survey to make sure that we understand chikungunya preexposure in support of assessing vaccine effectiveness in that population. 402 is a pragmatic randomized controlled clinical trial. What I'm usually asked is what does pragmatic mean? So let me give it a try to explain what we have in mind here. So pragmatic means that we are really limiting the burden for the individual participant during trial participation to a minimum. In our case, this means that we plan that individuals will come to clinical trial sites to get their vaccination. In this case, our IXCHIQ or a control vaccine. From there, there will be remote follow-ups by using apps, online platforms, whatsoever. And only for case confirmation after triggering symptoms are experienced, the individual will come back to a clinical trial site for case confirmation. Again, effectiveness is the one key component that comes with this trial complemented by extensive safety monitoring as part of this trial. This trial actually is a statutory requirement for well following that requirement for well-controlled clinical investigation. And this trial is introduced to address potential biases associated with the observational design that I've described earlier. Looking at the pediatric development. I'll not go into too many details here. But what I really would like to remind everyone about is, again, we've completed the 321 clinical trial, which is the adolescent clinical trial in Brazil. This was the first time that we've generated data also in individuals, who had previously been exposed to chikungunya wild-type infection before receiving our IXCHIQ vaccination. And at this point in time, we've been able to share that we've been able to generate positive immunogenicity as well as safety data. With regards to 221, the dose finding clinical trial in the pediatric population, 1 to 11 year olds. We expect to come to a dose decision early 2025, which then will allow us to proceed towards the pivotal pediatric clinical trial in that population. This is a visualization of what I actually just shared with regards to the adolescent data that we've generated so far. Primary endpoint was in seronegative individuals looking at seroresponse rate. And this is actually the light blue bars that you see here in this chart. And similarly to what we've seen in the adult population, the seroresponse rates that we achieved by day 29 are close to 100% and sustain similarly to the adult population over the next couple of months. To conclude and summarize on the data that we've been able to generate so far. On the one hand, we've been able to show that 99% seroresponse rate was achieved after a single vaccination in the adult population and was maintained to close to 100% at levels of about 97% after 2 years following vaccination and additional data to come for antibody persistence. In the old adult population, 65 years and older, similarly, seroresponse rate and antibody levels were comparable to those in the young adult population. And the adolescent trial also met the primary endpoint with achieving a seroresponse rate close to 100%. Circling back to Phase I. As you have seen on previous slide, by day 15, we were able to show a seroresponse rate of 100%. In terms of safety, overall, the vaccine has been well tolerated in the populations tested and in particular, for the adolescent trial, and that's really the last point I would like to make here is that the safety profile was favorable regardless of previous chikungunya infection. And with that, I hand over to JC to guide us to the Shigella section.

Thank you, Susanne. So yes, you've seen that I'm called JC, but my name is Juan Carlos Jaramillo. So it's a pleasure to meet you all. And for me, it's a great opportunity to be able to share with you the Shigella vaccine program. So I think for me, I will outline the upcoming milestones that position us to the forefront of the Shigella vaccine program, which includes our clinical development time lines, expected regulatory pathways and other important details that I will share with you. So if we look at -- when we talk about the unmet medical needs shigellosis represents a significant and urgent global health challenge, especially in low middle income countries. Number one, impact in mortality rates. Shigellosis is the second leading cause of fatal diarrhea, which globally and each year, around 165 million cases are reporting. This leads to approximately 600,000 annual deaths, most of which occur in children and LMIC. If we then look at number two, the cost in transmission, the disease is caused by the shigella bacteria and is highly contagious pathogen and transmission occurs through a direct contact or contaminated food and water. The symptoms and duration usually last between 1 or 2 days and exposure is found right after contamination of a specific antigen. We also find that long-term effects are possible such as stunt growth in children. But also arthritis in the adults. So in summary, there is an urgent need to develop a vaccine against Shigella, a priority identified already by the WHO due to its potential to promote herd immunity. In addition, such a vaccine is crucial given to Shigella's association with AMR, antimicrobial resistance, as it plays a pivotal role in controlling AMR by decreasing the use of antibiotics. So here, looking at the worldwide public health threat shigellosis infections highlight global health inequalities, heavily impacting countries with poor infrastructure and health care systems. Shigella primarily affects lower-income countries, notably, Eastern sub-Saharan Africa, where limited sanitation and health care makes community highly vulnerable. In countries like India, Indonesia, Nigeria, Ethiopia, we see significant cases due to the dense population and insufficient water and sanitation systems. Overall, these regions, Shigella, impacts the health care system, which leads to high morbidity and mortality. In contrast with high-income countries, Shigella outbreaks are rare and often linked to international travel, strong health care infrastructures and effective sanitations usually contains these outbreaks, but however, global travel can spread Shigella across borders, suggesting a potential need for a vaccine for travelers. I will quickly go through as some of these points have already been presented and shared by Thomas of where we have our strategic partnership with LimmaTech for this Shigella vaccine candidate. This grants us exclusive global rights for their tetravalent Shigella vaccine, the most clinically advanced candidate available. The vaccine is designed to protect against the 4 major strengths of Shigella, building on the previous monovalent version that demonstrated promising results. The strategic partnership will support and accelerate the vaccines development. We provided a EUR 10 million upfront payment and additionally, milestone payments of EUR 40 million will be based on regulatory and sales milestones plus royalties on travel markets and low middle income countries. We have a clinical collaboration through Phase II programs where LimmaTech will lead the trial for the S. sonnei and the pediatric studies, but we will lead the trials for the second Phase II CHIM study, looking at the S. flexneri 2a, but we will also take the lead on the pivotal CHIM Phase III programs, as I will share later on, on the clinical development slide. We will also have the responsibility and accountability for the licensure, commercialization, and we will make sure that the vaccine reaches the global market. I would quickly share with you the vaccine composition. The tetravalent vaccine is built on bioconjugation technology, where the antigen polysaccharides of the serotypes S. flexneri 2a, 3a, 6 and the S. sonnei are the link to a carrier protein. To note, please see that these 4 strains account for about 75% of the shigella infections. The bioconjugate is produced in an engineered E. Coli strain as shown on the diagram. Once the process of culturing and purification occurs, we obtain a purified homogenous and conjugate vaccine. From a manufacturing and consistency advantage, the predefined conjugate sites on the EPA ensure a batch to batch consistency. It's an essential for reliable large-scale production. So when we look at the optimize of the vaccine, how we were addressing this? We are now building on the success of the monovalent vaccine where advancing and also optimizing the multivalent candidate, but targeting all 4 key shigella serotypes. Again, this was established to a successful Phase IIb study. We had seen in the monovalent that clinical results showed a 37% vaccine efficacy against shigellosis. We also saw a 52% efficacy against more severe a severe Shigella and also greater than 70% vaccine efficacy against more severe diarrhea, which is defined by 10 or more loose stool episodes. If we look at how we are optimizing the multivalent, we have and will increase the O-antigen level, looking at the glycoprotein ratio. We also are increasing the dose levels, which is total protein. And also, we are increasing the number of conjugate sites. And as shared with you and you'll see in the later slide, the second human challenge studies will be initiated imminently. And this is, of course, we will be looking at the challenging with the S. sonnei strain and also, we will continue to look for immunogenicity on this 4 serotypes and continue to gather safety data as we proceed. So quickly here, I'll illustrate more or less the clinical development plan. And you could see that from a strategic perspective and a clinical development perspective, we have also made sure from a risk mitigation, we staggered our Phase II development. But as I mentioned before, LimmaTech will initiate the Phase II CHIM sonnei imminently. Once we see data from that, we will then start the Phase II program. But in parallel, there will also be a Phase I, Phase II global health study and also a second Phase II global health that will be also in the pediatric for the -- or run by LimmaTech. We do see, and I think it's a very critical point that once we have obtained the data from the second CHIM Phase II study, we do expect to initiate a pivotal Phase III CHIM studies, which we are looking at initiation in around 2027, 2028. And then after that, we are looking for the first approval in year 2030 or '31. So if we look from a regulatory pathway, with regards to our anticipated strategy, we will, of course, look at the human challenge studies in adults combined with the pediatric field efficacy. As we see, our first indication is targeting the adult where we leverage the existing CHIM models for the S. sonnei and the S. flexneri 2a strain. We do expect -- we will expand to non-CHIM serotypes provided similar immune response can be established. And of course, we will continue to establish a well-pronounced safety database. Once we have the initiation approvals and again, as I mentioned, a staggered approach, we will look for a pediatric indication. And all this is based on the approach, which was closely aligned with the guidance from the key stakeholders such as FDA and based on the clinical and regulatory strategies for Shigella vaccine paper that was published in The Lancet Global Health. So we firmly believe our regulatory pathway supports timely access for adults while ensuring comprehensive data for future pediatric use. So quickly, I'll share with you some of the market research that we have done based on our commercial assessments for Shigella at this point. Of course, we looked at the 3 segments. We looked at travelers, children in endemic countries and military. We do estimate a peak sales of around EUR 500 million. When we looked also how do we break down each of these segments, we looked at the recommendations, acceptance and vaccination. Of course, the travel segment, we estimated around 23% of the market, knowing that we will have 100% market share once this product is approved. But we do see that we are looking at mid-high-risk destinations. And of course, remember, this is an out-of-pocket or private market where we estimated around 30% of acceptance. And then the vaccination rates, we're estimating anywhere between 2% to 5%. When we look at the children in endemic countries, please note that we've also divided this by Gavi and non-Gavi countries. One will be more from a public reimbursement perspective or the other one will be out-of-pocket, where we see various ranges from 30% to 100%. Also, the acceptance also very variability around 15% to 60%. And also in the reimbursed sector, we see anywhere between 50% to 90%. Again, the vaccination rates, we do see around 9% to 11% of -- especially in the out-of-pocket or private market. And also in the reimbursed, we see a bit more higher around 15% to 50% around that. Military more or less comes to less than 1%, but we do see higher recommendation acceptance and vaccination, and this is also going to be representing around 50% of the revenues overall. So with that said, I hand back to Susanne.

So turning to our Phase I development program, Zika vaccine candidate. Again, starting off with some background on Zika. Everyone may remember the outbreak that had occurred in Brazil 2015, 2016, but Zika is still around. And the numbers that I'm showing here, sorry, are illustrating this. So in the Americas, it's been more than 40,000 cases that have been reported in 2024 up until the end of September, which is already a considerably higher number than the Zika cases reported back in 2023. Brazil remains to be the country most significantly impacted, but there are a couple of other Latin American and South American countries. Briefly reviewing the short-term and long-term complications that come with the Zika infection. First of all, primarily transmission occurs via mosquitoes, but there are also other ways of transmission, including infectious, urine, sexual or vertical transmission or blood transfusions. In terms of short-term complications, rather mild, commonly symptoms like fever, rash, very unspecific. But there are also other more severe short-term complications, including Guillain-Barré syndrome, a rare neurological disorder or meningoencephalitis or myelitis, which may come with severe symptoms. Looking at long-term complications, particularly focusing on children, Again, I guess many of us still see pictures in front of us from the outbreak back in Brazil with babies presenting with microcephaly. This is summarized under the term of congenital Zika syndrome, resulting in developmental delays or disabilities. Seizures is another complication that may be observed in children long term. With regards to long-term complications in adults, there may be chronic issues as well, such as prolonged weakness, pain and balance problems. But overall, numbers are less clear compared to long-term sequelae in the pediatric population. Why is a Zika vaccine important? There are data out both in NHPs, but also in humans that indicate that also there is a robust immunity in the first step following Zika infection, immunity wanes over time, and there is a risk for reinfection different to, for example, chikungunya. There are question marks on cross immunity with other Flaviviruses, in particular, dengue. And taking all that into account, we can conclude that the wanning immunity implications imposed that there is a risk for public health threats in conjunction with a Zika outbreak. We as Valneva have decided to reactivate our Zika vaccine development program. We had started off what we call our first-generation Zika vaccine development back in 2016, '17 with a classical vaccine candidate, Vero cell culture-derived whole virus inactivated vaccine absorbed on aluminum hydroxide, where we leveraged the already existing IXIARO manufacturing platform. We ran a Phase I clinical trial. From that, we were able to conclude that the product came with an excellent safety profile. We were able to induce immunogenicity across all the dose levels and schedules tested. But we also saw a significant decline in antibodies over time. In this trial, we looked at a 6-month follow-up, resulting sero conversion rates of about 40%. Overall, we concluded that this is a vaccine candidate that needed optimization of the immune response. And this is exactly what we are trying to do now with our second-generation vaccine candidate for Zika vaccine. Again, considerations for our current development work and our current Zika vaccine candidate, we have previous Phase I clinical data that provided some guidance of where we need to do better. We also know that there are safe and effective vaccines for other flaviviruses. So why wouldn't we be able to develop an effective and safe vaccine for Zika. We also think that a balanced T-cell response might improve longevity and cross neutralization, keep this in our minds for our second-generation vaccine candidate. Last but not least, large-scale production at low cost is going to be crucial to react to potential outbreaks. So if we, on the other hand, look on the improvements that we introduced at the lower part of the box to your right, we adapted inactivation to BPL inactivation, expecting a higher quality antibody profile. We increased the antigen content and also are looking into double adjuvantation. So we are keeping the alum component as in the first-generation vaccine, but looking on the impact of the second adjuvant CpG 1018 or 3M in certain treatment arms. VLA-1601-102 is the currently ongoing Phase I clinical trial with our second-generation vaccine candidate, where we are looking into safety and immunogenicity in flavivirus-naive volunteers, naive because it's the first time that we are testing this vaccine, and we want to make sure that we get the cleanest possible picture, both in terms of safety and immunogenicity as a starting point. We have concluded earlier this year, Sentinel recruitment, which was like a staggered dose escalation recruitment for safety and are about to start a randomized phase shortly. There are question marks and challenges that come with the Zika vaccine development. And obviously, there are different considerations that we need to keep in our mind moving forward on our decision-making on how and if to progress the development of this vaccine. The most obvious one, I guess, is a safety and tolerability of our vaccine candidate, the immunogenicity profile, not only focusing on neutralizing antibodies, but also cellular response. And another consideration that we have in mind is comparison to an available WHO convalescent serum single sample. Based on those considerations, there may be different options of developing the Zika vaccine towards licensure. And what you see here in the 3 lower boxes is really 3 different ways or 3 different aspects for guiding our development. On the one hand, the classical option would be to go for a classically randomized Phase III field efficacy trial trying to capture symptomatic, potentially also asymptomatic infections. For Zika, there are controlled human infection models. So we may make use of those as well in support of an early indication of vaccine efficacy. Also, as we -- with each human challenge model, there are ethical considerations to be taken into account outweighing or assessing the risk with potential clinical benefits. Another option that we will have to look into is the accelerated approval pathway, similarly to our chikungunya vaccine, where we would establish a surrogate of protection via passive transfer in animals and could additionally apply to certain regulatory pathways, in particular with the FDA, including a priority review. And maybe let me also mention that Zika is on the priority review voucher list of the FDA. Which way we will move forward, data will tell us, the epidemiological situation will guide that decision-making as well as interactions with regulatory agencies in terms of agreeing the development pathway moving forward. And with that, I conclude on the clinical development. Thank you. Handing back to Thomas for preclinical.

Many thanks, Susanne. So I think we are now getting closer to the end of the presentation part. Before I let Peter talk about the financials and the outlook from a more strategic perspective, I do not want to leave the preclinical part really without any clear priority here. So just by way of reminder, what have been the guiding principles when Valneva has been thinking about its R&D? And those of you who have been following us for a very long time, some of you have been shareholders for a very long time, we have always started with the disease. We have looked at diseases where that are vaccine preventable, where we believe that we can make a change to people's life by developing a proper vaccine. Some people call it a niche play because we have not -- we have addressed indications which have probably not been addressed by some of the big players in the field. But we have always tried to look at the unmet need, the technical feasibility, the commercial value, and we've tried to find a balance in between the high-risk high-gain indications and -- but also our core, which we call our core specialty. So what is our R&D strategy today? It's geared basically on the 3 blocks on the one hand side, Lyme and chik. Of course, we need and will continue with Pfizer very closely on the execution and making sure that this desperately needed vaccine will hopefully, touch wood, make it to market successfully and will then get hopefully very good and very broad recommendations. We talked a lot about the chikungunya development. There's still a lot to do. I think the -- as Susanne presented the -- all the development work around chikungunya, I think the adolescent data have been superb. They will now ensure label expansion. Pediatric will, of course, come as a next step. And then we should not underestimate the work that we are doing around Phase 4. This is again a pioneering work that Valneva is doing. No one has done ever those Phase IV studies in such a setting. So we are again pioneering new grounds here, but we believe that we will learn more about things like tolerability and safety. And hopefully, this will also help us to get rid of some stupid pieces that are today in some of the documentation supporting recommendations. And then when we look at the next step around Shigella, we plugged Shigella into our pipeline because we felt that there is a need to have a more coherence and to have the next Phase III program as soon as Lyme gets out of the door. So -- and that's why we -- this makes so perfect sense for us. And as JC reported, the nice thing and what I like about this program, besides medical need and all the rest, it's a fantastic program when it comes to risk opportunity. You can early -- by controlled human infection models, you can early on see whether the program is going to work or not. You can see signs of efficacy, which are not absolutely determining, but they are giving you a very, very good indication early on. So that means should something not work, you can, in parenthesis, fail early and cheap. And -- or in the other way, in the other direction, looking at it in a positive way, you can, of course, build on a good success and have a higher POS as you go forward, which allows you to have a better capital allocation strategy. So then the question is what comes next? And what comes next after the -- how can we consistently build our pipeline, and how can we consistently build on our expertise, capabilities, capacities, we have, of course, CCAR, all of that, but we are also working on the, I would say, more earlier-stage things. And here, we have 2 lead activities. So thinking about back to where we started, right, this pyramid -- so high-risk, high-reward. So we believe that for a program to enter Phase III -- to enter clinical development post 2027, we can probably go into the arena of higher risk, higher reward, more -- I would say a broader commercial opportunity and something that is probably more challenging from a development perspective than we were used to. That's why we have decided to look after EBV, and we are working on EBV and EBV is part of the herpes family. It's part of the so-called latent viruses. Very significant disease burden, high hospitalization rates, high social costs, significant morbidity and negative impact on peoples' life, and primarily causing infectious mononucleosis. However, we know that there are very clear signs of association with multiple sclerosis, and there have been many different publications around the association with certain increased cancer numbers for specific cancer. So now this means an EBV program could turn us a little bit from the classical only prophylactic vaccine space also into more into purely another space into that. Now where are we today? I mean, the -- when you look at EBV development, this is something where many companies are currently working on in the vaccine space. All of them follow similar points of intervention for the vaccine development. And basically, all using or targeting to prevent infections and carcinomas by blocking infection of the epidemic cells as well as infectious mononucleosis and B cell lymphomas by blocking infection of B cells. So these are the 2 main routes, and the respective proteins or antigens that are currently in different stages of development by different companies have shown some prior successes. So when we look at the gp350 protein, that is a protein that was used and tested by GSK many years ago in a Phase IIb study in students, and it showed, really, that there was a significantly lower incidence of infectious mononucleosis as compared to placebo. Of course, dosings in those settings have to be taken with a grain of salt and caution because we are talking about 10, 11 cases, so the delta is not so easy to really show here. But nevertheless, there have been signs of efficacy in this regard. What we try to do is basically differentiate because our idea is, okay, there are certain -- people are all basing their development work on gp350. This is a base, then they add additional antigens. I mean, as you saw earlier, basically all targeting gH/gL/gp42. But then the question is what else can we do? And our strategy will be, and is right now, to add other antigens that potentially differentiate this vaccine against the development work others are doing. Appreciate this is early stage. Appreciate that this is not something that is currently on the radar screen of our investors and capital markets given the time line, but just wanted to show you that this is one area of focus where we put quite an enormous effort behind building the future of Valneva. The second one is, I think you have seen that with our cholera ETEC vaccine, with the acquisition of the Shigella vaccine, we are moving more and more into the enteric disease field. And we believe that with also the association that JC explained with AMR, the move into the enteric disease arena is a very interesting one. And so we want to expedite and accelerate our efforts in this arena, and therefore, we are working in preclinical on a modern second -- I would even call it third-generation ETEC vaccine approach. Because we believe that this is really an area that will be of growing importance in the years to come, and what we are trying to do is here, again, differentiation. We want to differentiate against what others have been doing, about other programs that are in the field. And the good thing about this indication, again, is this indication has been derisked in the past. I mean there are LT, there have been different kind of studies done that the showed protection against LT-positive ETEC, there have been human challenge studies. All of those studies without going into all the details here, have shown some proof of principle in terms of efficacy data, differently powered, differently observed. But by the end of the day, there is a clear sign of efficacy for different components. Now this is true for LT and ST, but everything has not gotten yet to the level that would be considered really appealing. So 70%, 75% plus, maybe 80%. That's why we are trying to differentiate also by combining it with certain colonization factors. And the interesting thing about all of that is that we see a great life cycle management opportunity at a certain point in time to build a combination enteric disease vaccine on the basis of the different assets that we have been collecting and are in the process of collecting. So this is a little bit just to give you a very small flavor of what else is Valneva doing outside of the clinical development arena. We do much more than that, but this is not the purpose of today. But just to illustrate that in which direction we are going. With that, I hand over to my colleague, Peter, who's going to take us through the rest of the presentation.

Thanks, Thomas. So just a couple of slides on financials. You probably all saw that last month, we did a EUR 60 million private placement. It was led by U.S. specialist health care investor and strongly supported by a number of existing but also new shareholders. And the reason why we did that was really to provide us with additional flexibility to execute on our key programs. And together with the EUR 130 million cash we reported at the end of June, we really believe this will bring us to the launch of the Lyme vaccine in 2027, at which point, we will receive substantial milestones and then followed by royalties. You saw our H1 sales that we published in August. I will not go into the details here. We reported a 7% year-on-year growth, excluding COVID, primarily driven by strong sales for the U.S. military for IXIARO and despite actually adverse impacts we had due to supply constraints on both IXIARO then primarily also in third-party products. Our P&L for H1, relatively unusual picture. We see here the EUR 90 million proceeds from the sale of our PRV, which made that the company actually reported a positive operating profit for the first half year. We have some debt on our balance sheet. Just as a reminder, we have a total debt of $200 million provided by Deerfield and OrbiMed in 2 tranches. The first tranche of $100 million, we amended the repayment terms and will now start reimbursing in Q1 of 2026, with a maturity date at the end of Q1 '27. And then the second tranche will start reimbursing in Q1 of '27, with a maturity at the end of 2028. Just to reconfirm our guidance that we issued earlier this year. So product sales guidance for the current year 2024, EUR 160 million to EUR 180 million; with an R&D spend of EUR 60 million to EUR 75 million. And as a reminder, in particular, in the second part of the year, our cash profile will look very different compared to prior year because we're done paying for the Phase III trial of Lyme according to the agreement with Pfizer. We also provided midterm outlook, and Dipal already mentioned the double-digit growth sales CAGR for IXIARO for the next 3 years, and then we target to exceed EUR 100 million in IXCHIQ sales in year 3 of launch. And then in terms of the R&D, what we said is we basically expect to have a next Phase III program post Lyme data that are, again, end of 2025. So post that, we expect a new Phase III program. In terms of near-term and midterm value drivers, so I think we talked about all these during the presentation today. So VLA15, of course, key study conclusions at the end of next year, and then, again, sustained profitability once the product is marketed. On commercial, as I just said, continued growth in IXIARO and DUKORAL. And then, of course, IXCHIQ sales ramp-up with the launch also in new territories. And then on the pipeline, as Thomas just said, particularly for Shigella, where we expect to significantly derisk the program during the Phase II. And then, of course, advancing our other vaccine candidates, primarily Zika as well. With this, we go to our second Q&A session. I'll now hand over to Josh.

Okay. Just our final Q&A session to wrap up. I'll invite our speakers back up. So again, if you have a question, please raise your hand. We can start in the room.

I'm from Van Lanschot Kempen. So for Shigella, what are you looking for in the Limma Phase II study before you decide to go ahead with your Phase II study?

So for us, the importance is -- I mean, it's a controlled human infection model, so it's a challenge study. We are challenging with 1 challenge strain. We are measuring immunogenicity across the 4 strains, so which means our objective is to ensure that we get above a certain efficacy level, so protection level and that we also see a balanced immune response across the 4 others besides, of course, safety, safety, safety like for all vaccine developments at this stage.

And just as a follow-up, what is the time spent between the end of the Limma Phase II study and before you can start your Phase II study? What are you thinking in terms of time lines?

We haven't decided yet. So we are -- I mean, you have seen that the way we have organized the collaboration is basically LimmaTech do the first CHIM study and they pay for it. We do the second. So there is a couple of -- we are currently building the joint development team. So we don't know how smooth we will transition immediately from the one operational setup into the next one. But currently, we are assuming that there won't be a lot of time in between where we are currently evaluating still a couple of points is around the CMC part because we also take over, as JC presented, the CMC activities. So which means there will also be a kind of a tech transfer in terms of making sure that all the technological know-how and accountability moves over to Valneva, and this is a little bit of an unknown right now. What we can say in terms of time line is the start of the first CHIM study is really imminent right now. All approvals are in place. And we are -- we will see data mid next year. And then as I said, how fast we're going to move then into the second CHIM, it's a bit too early to tell. Bear with us.

Evan Wang, Guggenheim. I appreciate some of that color on the Shigella optimization versus the first-gen LimmaTech program. Can you describe what degree of impairments on immunogenicity was achieved? I think LimmaTech topline some of the data in February, and confidence in getting that same profile on the CHIM study. And then a follow-up question on the commercial opportunity. I appreciate the breakdown. I guess can you talk about contribution for U.S. relative to international and how you're thinking about pursuing the endemic opportunity? And then third, on EBV, exciting to see some of the products there. And I know you previously described some work on antigen optimization on evaluating some internal and third-party antigens. I guess has that been completed? Or have you -- I guess how close are we to a preclinical candidate?

I'll take the last question, I mean, for the EBV, the enteral -- I mean we're currently working on that, so we are also looking at specific time lines of when we need to finish those results. And I think more information will be shared in the long run. Regarding your first question around -- if you could repeat that again, because...

Yes, I think you described some optimization to the Shigella candidate versus I think what we saw from the prior LimmaTech [ CALM ] study. I'm just wondering, I guess, what degree of do that kind of impact immunogenicity? Any kind of color you can provide to give some more confidence there?

So where we are on that one is -- so let me try to recap what was shown before. So first generation, very simple. One, it was a monovalent vaccine. So what we have done or what LimmaTech has done, and you remember this technology originates from a company called GlycoVaxyn, which was acquired by GSK. So basically, the bioconjugation, different to the chemical conjugation has -- there were a couple of optimizations done around the length of the sugar chains, and therefore, the glycon versus protein ratio. This has a direct impact on the, let's say, immunogenicity. And in the world of vaccines, we believe on better immunogenicity equals better protection. So therefore, these are the key things that we have been doing besides the fact that we now move from the 1 strain coverage to the 4 strain coverage. And this goes back to what has been presented also. I mean JC mentioned WHO prioritized shigellosis or Shigella for a reason. Huge public health burden, especially in children living in LMIC countries, with all the high death rates. And that's basically the point where why are we now -- why are NGOs like The Gates, like the Wellcome Trust, why are they now focusing on funding the quadrivalent? Because we see an emergence of additional subtypes and serotypes causing the disease. That's why you need to work on a quadrivalent vaccine, or probably in future, even a more multivalent vaccine. But at this point in time, we know that the 4-valent, and this was also shown in the presentation, covers 75% of the prevalence, which is not -- I mean, this is great, but it's not superb either, right? So which means over time, there will be probably an evolution where you will need to see even more coverage. What is not known at this point in time is whether there is some level of cross protection. There are some publications suggesting that, but others not. So that's part I'll let Dipal talk about. Your other question was, of course, related to the split after the commercial opportunity. And Dipal, do you want to say something to that?

Sure. So what JC presented was the commercial opportunity in the travel segment, which is the private segment, which is around 20-odd percent. And then the majority is in the LMIC, which is in the 70%. So in the travel segment, we expect, as JC mentioned, 100% share for the adult population. And the majority of that will come from the U.S. So we've used a traditional travel pyramid. So based on number of travelers to endemic areas, and that's how we've worked out the penetration rates or the adoption and penetration rates. And depending on medium risk to high-risk countries, the recommendation will be different. Within the LMIC countries, we've then broken that down into Gavi and non-Gavi countries as well. And then, of course, within the non-Gavi countries, we expect some form of reimbursement, and then in the Gavi countries, again, funding. And there, it's protection of about 10 million kids.

Then maybe one question from online. Sort of a financial question. Can you comment on the manufacturing of the tetravalent Shigella vaccine with respect to gross margins? And then other financial question. Given the geographical overlap between DUKORAL and the Shigella vaccine, would we expect any synergies in terms of SG&A?

So let me -- so first of all, we have not yet fully industrialized the Shigella process. I mean, we are still at small scale. We are still at Phase I, Phase II-grade material. However, you can -- you have basically a 4-protein-based vaccine, you have basically -- the bioconjugation is technologically not very different to a standard bacteria process. So it is -- the best analog that you can use within our own portfolio is probably Lyme, when you come to the manufacturing costs. And in general, recombinant protein-based or, let's say, bacterial protein-based manufacturing is significantly cheaper than the standard viral activities. And you can use a couple of analogs around that, when modeling potential gross margins on that product. But it's too early to say, really, where are we, and I don't want to give a number at this stage. But as I said, I appreciate that some of you will need to build respective models, and I would use as an analog, as I said, the standard protein part of that.

And the other question was on potential synergies in SG&A between DUKORAL and the Shigella program.

I'm not so sure whether I would talk about SG&A for that. But I would say, of course, it is super interesting. And I tried to mention that we are seeing the opportunity to develop, at a certain point in time, a very interesting enteric disease product covering kind of vaccine. So I see more synergy from a medical need commercialization perspective, and of course, if there's anything I've learned from my commercial colleagues, it's all about bundle, bundle, bundle. And of course, the more products we have, the better it is. So as a -- therefore, in my simple mind, there must be some level of synergy. More questions?

It's James again for Jefferies. So for making a go/no-go decision on whether to advance Zika, what do you want to see there? And how will you disclose the data and update?

Susanne, you want to take this?

Yes. So again, several aspects that we would want to look into. So again, several aspects, as I tried to outline, I think, in one of the last slides. On the one hand, what we've seen in terms of challenges with other vaccine developers is antibody persistence. So one of the key components we are looking into is antibody persistence, obviously. In particular, on the one hand, our second-generation vaccine, including the antigen -- increasing the antigen content but also testing additional adjuvantation, where we are aiming for induction of improved peak response but also better persistence, and we will also look into the role of cellular immunity. The other components, Thomas said it repeatedly, safety, safety, safety is the key point. And last but not least, it will also be key on what the path towards licensure is going to be that regulators will consider acceptable and also being the pathway away that we, as a company, feel comfortable supporting.

Yes. I think we can probably conclude there. And again, in the interest of time, I apologize we're a bit over. I can just leave you with this on the screen. You've seen it before, but this is a summary of our upcoming catalysts.

Thank you so much. Thank you for your time. Thank you for your attendance. Great to have seen you all today. Thanks.