Valneva’s Earnings Call: Growth Amid Challenges

Valneva (0OB3) ((FR:VLA)) has held its Q1 earnings call. Read on for the main highlights of the call.

Valneva’s recent earnings call painted a picture of strong financial performance, with notable revenue growth and key regulatory achievements. The company highlighted its progress in vaccine programs for chikungunya and Lyme disease, alongside improved gross margins and a solid cash position. However, challenges such as adverse events related to IXCHIQ and a negative operating loss were also discussed.

Strong Revenue Growth

Valneva reported impressive revenue growth, with product sales reaching €48.6 million, marking a 51.2% increase compared to the first quarter of the previous year. This surge was largely driven by a 65.5% year-over-year increase in IXIARO sales, fueled by heightened demand from the US military and travel sectors.

Regulatory Achievements

The company achieved significant regulatory milestones, including marketing authorization for IXCHIQ in the UK and Brazil, and a submission for adolescent label extension for the chikungunya vaccine. These achievements underscore Valneva’s commitment to expanding its market presence and advancing its vaccine portfolio.

Pipeline Progress

Valneva made notable strides in its vaccine pipeline, initiating the first vaccination in a Phase 2 infant study in Africa for its Shigella vaccine candidate. Additionally, the company reported positive Phase 2 pediatric results for IXCHIQ, highlighting its ongoing efforts in vaccine development.

Improved Gross Margins

The earnings call revealed improved gross margins, with IXIARO’s margin rising to 72.6%, surpassing pre-COVID levels. DUKORAL also saw an increase in gross margin, reaching 52.2%, up from below 40% in the first quarter of the previous year.

Significant Cash Position

Valneva’s financial health was bolstered by a robust cash position, with total cash and cash equivalents amounting to €153 million. The company significantly reduced its operational cash burn from €28.4 million to €8.1 million compared to the prior year, reflecting effective cost management.

Adverse Events for IXCHIQ

The call addressed concerns over adverse events related to IXCHIQ, particularly in frail elderly individuals. This led to precautionary recommendations for its use in those aged 65 and older, highlighting the need for careful monitoring and response to safety issues.

Negative Operating Loss

Despite strong revenue growth, Valneva reported a negative operating loss of €6 million for the first quarter of 2025, a stark contrast to the €68.2 million operating profit in the same period of the previous year. This underscores the challenges the company faces in maintaining profitability.

Uncertain Impact of Tariffs

Valneva is closely monitoring potential impacts from tariffs and political dynamics in the United States, which remain uncertain. The company is prepared to adapt its strategies as necessary to mitigate any adverse effects.

Forward-Looking Guidance

Looking ahead, Valneva maintained its product sales forecast for fiscal year 2025 at €170 million to €180 million, with total revenues projected between €180 million and €190 million. The company aims to halve its operational cash burn and achieve key milestones with existing cash reserves. R&D expenses are expected to be offset by grant funding and tax credits, with sustained profitability targeted by 2027, contingent on the successful commercialization of its Lyme disease vaccine.

In summary, Valneva’s earnings call highlighted strong revenue growth and significant regulatory achievements, alongside challenges such as adverse events and operating losses. The company’s forward-looking guidance reflects its strategic focus on achieving sustained profitability and advancing its vaccine programs, positioning it well for future success.