US Army Splashes The Cash On Valneva's JE Vaccine
Executive Summary
Valneva’s 2019 guidance has been boosted by the US Army’s Ixiaro vaccine order, as other products flourish in the pipeline.
French vaccines company Valneva SE has signed a $59m contract with the US government Department of Defense for a 12-month supply of its Japanese Encephalitis (JE) vaccine Ixiaro.
The deal, which Valneva says is potentially worth up to $70m, is effective immediately and a delivery schedule is already being prepared to supply shipments of the vaccine, which is the only JE vaccine approved by the FDA.
In October 2018, the FDA also signed off an accelerated Ixiaro vaccination schedule of two doses administered seven days apart, compared to the previous 28-day schedule.
The US military has been using Ixiaro since 2010. However, the DoD order has now “substantially increased”, according to Valneva, because of increased product adoption and inventory planning in the US military, the company says. In November 2017, the DoD placed a $39.6m order for a one-year supply of Xiaro.
There are an estimated 70,000 cases of JE in Asia each year, although the actual number of cases is difficult to quantify because of unreported or undiagnosed cases in rural areas. The disease is fatal in approximately 30% of those who show symptoms, and leaves half of survivors with permanent brain damage.
Valneva now has full control of the marketing and distribution of Ixiaro, having terminated in 2015 the marketing and distribution agreement with
GlaxoSmithKline PLC, that it signed in 2006 with Novartis Vaccines. This was made possible because of specific contract provisions following the completion of the 2014 asset swap between Novartis and GSK that saw the two pharma giants swap their vaccines (Novartis) and oncology (GSK) businesses.
This strategic move has allowed Valneva to claw back control and reap the rewards of its lead product, and it is having a positive effect on the company’s 2019 guidance.
The biotech forecasts product sales to grow to between €115m to €125m, representing 15% to 20% year-on-year growth, while other revenues should remain at similar levels to 2018. Total revenues are expected to be between €125m to €135m.
The biotech expects 2018 product sales to reach between €100m and €105m; exceeding the previous guidance of €100m. This is down to increasing Ixiaro sales, says the company, with sales of its cholera vaccine Dukoral remaining largely unchanged from 2017.
Analysts have been impressed with Valneva’s numbers and its positive pipeline updates announced over the last few weeks, with First Berlin saying it felt "comfortable" with its 2019 product sales growth forecast of 12.2% to €113.4m.
Pipeline Update
In mid-December Valneva began Phase II development of its Lyme disease vaccine candidate VLA15, with interim data expected in mid-2020. One hundred and twenty patients will receive one of three dosage levels or placebo. The overall objective of the trial is to determine the optimal dosage level and schedule for use in a future Phase III study. The Phase II study is expected to last about two years.
Valneva has also recently published interim results for the Phase I trial of its Chikungunya vaccine candidate VLA1553, which has been accorded fast track designation by the FDA. The Phase I trial of VLA1553 enrolled 120 healthy adults in the US. Subjects were randomized in three different study groups to receive one of three dose levels. All subjects will be followed up for 13 months after initial vaccination with an estimated study completion date slated for 24 June 2019. The French vaccines specialist expects to discuss development acceleration options with the FDA once the month six re-vaccination data become available.
In the second half of November, Valneva also posted interim data from the Phase I trial of the Zika vaccine candidate VLA1601, which enrolled 67 healthy adults in the US. The highly purified inactivated vaccine candidate met the study’s primary endpoint showing a favorable safety profile in all doses and schedules tested. It was immunogenic in all treatment groups and induced both dose- and schedule-dependent neutralizing antibodies against the Zika virus. Seroconversion Rates (SCR) reached up to 85.7% on Day 35. Final analysis at day 208 after first vaccination is expected in the current quarter and will include additional immunogenicity data.
Valneva is co-financing the development of VLA1601 with Emergent BioSolutions Inc. until the Phase I trial is completed. Emergent has an option to continue the development and commercialization of the Zika vaccine for a milestone payment of €5m once the final Phase I data become available. The agreement stipulates potential additional milestone payments to Valneva of up to €44m as well as royalties on future net sales. Valneva also has the right to negotiate with Emergent for exclusive commercialization rights in Europe prior to a Phase III clinical trial. (Also see "Valneva/Emergent BioSolutions' Candidate Zika Vaccine Shows Early Clinical Promise" - Scrip, 22 Nov, 2018.)
For each of these products, First Berlin estimates time to market to be approximately six years, with the market for the Zika, Chikungunya, and Lyme Disease vaccines to be around €21m, €4m, and €16m per year, respectively.