Valneva SE (VALN) 2023 Q4 法說會逐字稿

Thank you. Hello, and thank you for joining us to discuss Valneva's full year 2023 results and corporate update. It's my pleasure to welcome you today.

In addition to our press release and analyst presentation, you can find our consolidated financial results for the 12 months ended December 31, 2023, which were published earlier today, available within the financial reports section on our investor website.

I'm joined by Valneva's CEO, Thomas Lingelbach; and our CFO, Peter Bühler, who will provide an overview and update on our business as well as our key financial results for the year. There will be an analyst Q&A session at the conclusion of the prepared remarks.

Before we begin, I'd like to remind listeners that during this presentation, we'll be making forward-looking statements, which are subject to certain risks and uncertainties that could cause the 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 listed on our company website.

Please note that today's presentation includes information provided as of today, March 20, 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 introduce Thomas to begin today's presentation.

Thank you so much, Josh, and welcome to today earnings call. Yeah the year 2023 was not a year without challenges, but also a year with many achievements we are proud of. We made excellent progress across our R&D pipeline and of course, 2023 was our chikungunya year. We got FDA approval for the work was only and first chikungunya vaccine and very recently ACIP recommendation and respective adoption.

We enrolled the Phase 3 study with Pfizer online completely, and we are just about to re-entering Phase 1 with the second generation Zika vaccine. And I'm going to go into more details on all of those programs. We have seen significant growth of our commercial business.

Our product sales surpassed pre-pandemic sales by 12%, in 2022 sales by 26%. Both IXIARO and DUKORAL, our proprietary brands grew more than 70% respectively versus 2022. And overall product sales grew 63% versus 2022, excluding the COVID-19 sales, and Peter will go into much more detail.

We are solidly funded with a strong mid-term financial outlook. We had more than EUR120 million cash at year end. We augmented that with circa to EUR100 million net proceeds from our PRV sale early this year.

And very recently, we extended the repayment of our interest-only period of existing loan facility which of course results in a significantly lower cash burn for the company. The operational business is therefore considered sufficiently funded, excluding debt repayment of course at a certain point in time until the Lyme commercial revenues enables a sustained profitability for Valneva.

When we look at the business in more detail, I would like to start this time with our strategy. Where do we see this company going, and as we have said, already more than 10 years ago when we created Valneva. Our strategy is to become a globally recognized vaccine company, fully integrated, focused on the development, manufacturing, and commercialization of vaccines in areas of unmet medical needs, contributing to our vision to a world where no one dies or suffers from a vaccine preventable disease.

We see our strategy in three key pillars. Number one, driving commercial growth. With the recent approvals of IXCHIQ in the United States and our expected forthcoming approvals in other territories, we see really the opportunity to unlock IXCHIQ value by building awareness and market and growing things.

We hereby capitalize on the bundle effect within our existing travel business. We will further expand global reach, more addressing low medium income countries through partnerships, and with a change in the overall setting and the portfolio and more focus on proprietary products, we see really cash flow positivity from the commercial business 2025 onwards.

The second pillar is to capture our R&D upside. We will continue investing in new vaccines that address high unmet medical needs and we will leverage our proven R&D engine and strategic partnerships, and we believe we are well positioned to do that having developed three vaccines in the meantime, from early discovery to licensure.

We will continue focusing on vaccines that can make a difference, first, only, best, and we will generate meaningful catalysts for our investors targeting the next Phase 3 entry post Lyme.

We will maximize our integrated business model. We believe we are one of the very few companies left in the (inaudible) vaccine space that can really build on an integrated model. So which means we will build continual value from R&D and commercial execution.

We will support the timely approvals of our Lyme vaccine, which we continue to see as a single largest catalyst going forward. And by doing so, we see the possibility to achieve sustained profitability with potential successful commercialization and revenues online from our partner Pfizer.

When we look at IXCHIQ, the world's first and only chikungunya vaccine. It's FDA proofed in adults. More additional regulatory approvals are expected this year. It's a live attenuated vaccine that offers strong and long-lasting protection from a single shot, and we target a minimum of five years here.

The FDA approval triggered also the PRV which we sold as I mentioned earlier, and the ACIP recommended vaccine for certain travelers and laboratory workers. US launch is well underway and we are selling through our existing and proven commercial infrastructure.

Going forward, we see three key segments in terms of market opportunity. One of course, travelers, military, but also an opportunity for stockpile, given that chikungunya is on the list of potential outbreak for (inaudible) diseases.

We will continue leveraging partnerships for Latin America and other LMICs. And with more visibility on the travel sector, the awareness around chikungunya, the market opportunity around chikungunya, we clearly see that the global market for chikungunya vaccine will exceed $0.5 billion and with probably $300 million to $400 million represented alone by the segment I was talking about earlier.

In terms of upcoming milestones, I mentioned the additional anticipated approvals, EMA, Health Canada, and Anvisa in Brazil. And we will of course also initiate the regulatory process in the UK. Towards the later part of this year, we will further go through the clinical development mainly the Phase 4 clinical program, but also other clinical activities, e.g., in the pediatric field. And as we generate more and more data, we will undergo filings for potential label extension.

I mentioned already that our CHIKV vaccine has a very differentiated target profile. It shows a rapid and long-lasting immunity across all age groups tested. And here I would like to specifically point out that the vaccine has very, very high [fuel] protection levels, including the most vulnerable population, namely elderly, above 65 years of age, which has been specifically mentioned in the CDC adopted ACIP recommendation.

We have close to 100% zero response rates after a single vaccination and it has been maintained at a very high level. Overtime, we got paid out already up to two years. We will generate data for three years. And on safety, the vaccine is generally well tolerated.

Of course, it is a live attenuated vaccine, live attenuated vaccine have the advantage that the single shots, you have a very long protection, but at a certain level of solidity, but this is absolutely in line with other well-established live attenuated vaccines in the market. We reported adolescent trial data and this data suggest a favorable safety profile regardless of previous CHIKV infection.

Turning to our Lyme disease vaccine candidate, VLA15. It is today the world's leading vaccine candidate against Lyme disease. It's the only program in advanced clinical development to date. By way of reminder, it is a multi-variant recombinant protein-based vaccine that target the six most prevalent serotypes of Lyme [borreliosis] in the northern hemisphere.

It follows a proven established and validated [mode of] action. We've got US FDA fast track designation. And as I mentioned at the beginning, the Phase 3 pivotal efficacy study is now fully enrolled. The program is partnered with Pfizer. They have an exclusive worldwide rights to commercialize the product, and we anticipate the market opportunity to be north of $1 billion.

We have already received under the partnership with Pfizer, a certain milestone payments, but overall, we are eligible for milestone up to $408 million. And upon successful commercialization, tiered royalties from 14% to 22%.

When we look at the upcoming milestones which are in the short term, all execution related, of course, we will, and this is an important point when we talk later about the financials, complete our financial contributions to Pfizer in the first half this year.

Then on the execution side, we expect to complete full vaccination for cohort one and the primary vaccination for the cohort two, meaning the cohort one would have received three doses priming plus adult dose booster. We will later in the year, see the two year antibody persistence and booster results, which will give us a better indication as to whether this vaccine will require an annual booster later or not.

And as guided by many, many times, we expect efficacy results from the Phase 3 trial at the end of 2025, which and if successful will support regulatory filings, which we currently foresee in parallel in the United States and Europe in 2026.

Slide 12 of the presentation shows one more time the Phase 3 efficacy study design. You remember that following initial operational issues, we split it into two cohorts, up within one study of roughly 50%, 50%. We have now enrolled more than 9,000 participants.

The study is randomized 1:1, vaccine against placebo, 2:1 North America versus EU. And the primary endpoint is the rate of confirmed Lyme disease cases after two consecutive tick seasons. And when I mentioned earlier, full vaccination to be expected for cohort one is imminent. And then of course, for cohort two, the booster vaccination will come next year.

Turning to Zika, I mentioned at the beginning that we have decided to re-enter clinical development of Zika vaccine. We are leveraging what we call our optimized second generation platform, which is a platform that originates from our Japanese encephalitis vaccine IXIARO, got further then extended and optimized for our COVID vaccine VLA2001.

And we believe that this second generation adjuvanted inactivated whole virus vaccine platform is perfectly suited for Zika. And Zika is, as many of you know, also transmitted by Aedes mosquitoes. We all have experienced and have seen the devastating impact that Zika infections can cause. And to date, there are no vaccines or specific treatments available. It is a PRV eligible disease and there is potential funding from public institutions. And we see there are clearly opportunities given the emerging epidemiology around Zika.

And in terms of next milestones, we will execute the Phase 1 clinical trial with the enhanced process and optimized vaccine formulation, and then we will decide on the further development strategy considering the results, of course, more insights around the market opportunities and external non-dilutive funding.

With this update on the business, I would like to hand over to Peter to provide us with the financial report.

Thank you, Thomas. Good morning or good afternoon to all of you. Now let's look at the financial review of our fiscal year 2023. Total product sales surpassed pre-pandemic levels by 12%, reaching EUR144.6 million towards the upper range of our sales guidance. This represents an increase of 26% versus prior year.

2023 product sales included EUR5.7 million in sales of our COVID-19 vaccine, VLA2001, which was discontinued in 2022. We do not expect for the COVID sales from 2024 onwards. Product sales, excluding VLA2001, reached EUR138.9 million, an increase of 63%. This increase was driven primarily by substantial growth of our proprietary travel vaccines.

Looking in more detail, IXIARO sales reached EUR73.5 million, an increase of 78% versus prior year, primarily the result of the continued travel market recovery as well as price increases. As at the end of September 2023, we had a new one year contract with the US Department of Defense was a minimum of $32 million of which a bit more than half is included in our 2023 sales.

DUKORAL sales reached EUR29.8 million compared to EUR17.3 million in 2022, an increase of 72%. Similar to IXIARO, DUKORAL benefited from significant recovery in the travel markets, particularly in Canada, where there is a strong overlap between travels to regions of high ETEC prevalence and the vaccines approved indication in this country.

Third party product sales increased by 34% to reach EUR35.7 million for the fiscal year 2023, which was mainly driven by sales under our distribution agreement with Bavarian Nordic. The very positive sales performance continues to be as already mentioned related to the recovery of global travel markets, several of which have reached over or even exceeded pre-COVID levels, and we expect this trend to continue.

Moving on to slide 17, looking at the P&L, we already covered product sales. Other revenues, including revenues from collaborations, licensing and services has now returned to the historic levels at EUR9.1 million compared to 2022, which as you can see, included substantial one-off non-cash revenues related to COVID.

Looking at expense, we have observed a significant decrease in cost of goods. And this is again mainly the result of one-off effects related to the wind-down of our COVID-19 program.

Research and development expenses decreased sharply from EUR104.9 million in 2022 to EUR59.9 million in 2023 which was driven solely by the lower spend on value of COVID-19 vaccine. 2023 expenses were just below our guidance range of EUR60 million to EUR7 million (sic-- see press release "EUR75 million")

At the same time costs related to the Zika vaccine candidate increased at the company plans to reinitiate clinical development imminently. As we ramped up our preparations for IXCHIQ, our marketing and distribution expense increased to EUR23.5 million in 2022 to EUR48.8 million in 2023, of which EUR20.7 million were associated with launch preparations versus only EUR7.3 million in 2022.

G&A expense increased of EUR34.1 million in 2022 to EUR47.8 million in 2023. In 2022, all expense lines benefited from substantial non-cash adjustments related to the positive effect of the cost related to the company's share-based compensation due to the share price performance.

Our G&A costs were also unfavorably impacted by a higher compliance costs related to our US listing and one-off recruiting costs. Other income increased to EUR21.5 million in 2023 from EUR12.2 million in the prior year, primarily due to grant income received from Scottish enterprise and the gain from settlement with a supplier related to our COVID activities.

In 2023, Valneva substantially reduced its operating losses to EUR82.1 million compared to EUR113.4 million in 2022, which again was negatively impacted by non-reoccurring expenses related to the wind-down of our COVID program. Adjusted EBITDAs was nearly unchanged year over year at EUR65.2 million versus EUR69.2 million in 2022.

Now moving on to financial outlook on slide 19. With the addition of IXCHIQ to our travel vaccine portfolio and with the continued growth we anticipate from our existing products, we expect our commercial business to deliver substantial growth over the midterm.

Based on current assumptions, we are targeting an approximately 2x sales growth in the next three years. This will be driven by our differentiated and highly competitive products IXIARO, which is the only Japanese encephalitis vaccine approved in the US and Europe, and mandatory vaccine for US troops deployed to Asia. IXCHIQ, the first and only approved chikungunya vaccine, and DUKORAL, the only cholera vaccine with an additional approval for ETEC in key markets.

Next slide, please. We have raised our 2024 product sales guidance since our February announcement, now estimated between EUR160 million to EUR180 million in product sales versus previously EUR150 million to EUR180 million. This revised estimate takes into account an improved outlook regarding anticipated IXIARO supply constraints and still assumes approximately 20% to 30% reduction in third party sales this year, driven by external supply constraints.

This brings us to a total revenue estimate of EUR170 million to EUR190 million in 2024. We now expect higher other income compared to our announcement in February moving from EUR95 million to EUR105 million, EUR200 million, EUR210 million, largely reflecting the EUR95 million in proceeds from the sale of the chikungunya PRV.

We also lowered, narrowed our research and development expense guidance from between EUR65 million and EUR90 million to between EUR60 million and EUR75 million. This was based on additional visibility for our chikungunya and Zika related expenses, as well as an expected non-dilutive contribution from institutions and connections with chikungunya activities and the product tech transfers to Valneva's new Almeida manufacturing facility in Scotland.

As Thomas mentioned, we ended the year with EUR126.1 million in cash, which was further augmented by EUR95 million in proceeds from the PRV sale, which puts us in a very strong position as we expect to burn significantly less cash in 2024. This is driven by a few factors, primarily the fact that we expect to complete our contribution to the ongoing Phase 3 study for VLA15 in the first half of this year.

Secondly, with continued revenue growth for IXIARO, DUKORAL and improve the efficiency in our manufacturing processes, we expect our commercial business, including IXCHIQ, to be cash positive this year and has it had been pre-pandemic. And we anticipate significant further growth going forward.

And now handing back to Thomas to complete the mid-year outlook.

Thank you so much, Peter. Yeah, so it is important that we address also many, many questions that we have received in the market about the more midterm prospects of our business and where we see this business going, which is also why I started the presentation by reminding everyone of the Valneva strategy.

When we looked at more completely until a mid-term outlook, Peter mentioned that the proprietary business, excluding IXCHIQ, will already be cash flow positive this year, including IXCHIQ, we expect the commercial business to contribute cash and [health] financing our R&D from 2025 onwards. It is driven by continued travel sales growth for IXIARO and DUKORAL.

And we see, especially for IXIARO a double digit year on year CAGR for at least next three years. We expect IXCHIQ sales to exceed EUR100 million in year three of launch, and this even assumes competitive product entry.

We will stay focused and strategic with regard to our investments in R&D. And our objective is clearly to provide our shareholder and everyone who can benefit from novel innovative vaccines with a new program to enter Phase 3 once Lyme has completed its Phase 3.

We see substantial gross margin improvement as we are focusing on proprietary sales. The majority of our third party product sales especially the collaboration with (technical difficulty)

Please stand by your conference will resume shortly.

Well, hello. Can you hear?

We can hear you, go ahead.

We expect gross margin improvement significantly as I said, as we are focusing on proprietary sales. And we are improving substantially our manufacturing efficiency by leveraging our new facilities and predominantly the facility in Scotland, Almeida. And as Peter mentioned, especially for chikungunya, but also for others, we expect sizable non-dilutive funding helping us to finance (inaudible)

When we look at the upcoming catalysts and news flow in the short term on chikungunya, we expect to initiate a Phase 3 in immunocompromised individuals still in the first half of this year. We talked in length about the upcoming potential approval by EMA, Health Canada, Anvisa.

We will file for potential label extension as we generate more data. And we have reminder, we generated already data for the 12 to 18 year olds in Brazil, and we will initiate our Phase 4 clinical program.

With regard to Lyme, as I mentioned earlier, on the VALOR trial, we expect to complete the booster vaccination for cohort one in the second quarter, then the initial three-dose primary vaccination for the cohort 2 as well in the first part of this year.

And then as Peter mentioned, we complete our financial contributions to Pfizer's Phase 3 trial costs in the first half of this year. And then later this year, the Phase 2 two-year antibody persistence and booster results data, which would help us you know, getting a better understanding about the necessity for a potential annual boosters for this vaccine once implemented.

With regards to additional new flow, we do expect a new US Department of Defense supply contract in the second half of this year, and we will give more clarity on our R&D pipeline as we go along in 2024.

With that, I would like to hand back to the operator to take your questions.

Thank you. (Operator Instructions)

Max Herrmann, Stifel.

Great. Thanks very much for taking my questions and congratulations on the milestones achieved during 2023 as well as obviously the IXCHIQ (inaudible) approval.

Three questions if I may. Firstly, just in terms of getting back to the normal travelers market, in terms of revenues, (inaudible) pretty much back to where it was pre-COVID, but still significantly below on IXIARO, and I wondered how much further catch-up there is in volume terms for both products? Question one.

Secondly is just on in your kind of guidance, overall you talked about bringing another Phase 3 assay into development in the sort of mid-term. Obviously, I assume that's not the Zika program, particularly given [Moderna's] recent announcement that they were halting development of that without further external sources of funding post Phase 2.

And then I just wanted to know finally just on IXCHIQ , when do you think you will have durability data of five years or more? Thank you.

Okay. Yeah. Hi Max, very good questions. So basically you're absolutely right that we have not in all markets reach volume wise pre COVID levels. In some markets, we are back to pre-COVID volume levels, in other markets, not yet. However, we expect to be back or better in terms of volume this year compared to pre-COVID.

And everything that we are seeing right now points in this direction. And this is specifically true for IXIARO and IXIARO US. And I think that's a very important point.

When it comes to Phase 3, we have intentionally not specified at this point in time, which program we will bring into Phase 3. We are looking at a number of internal opportunities, but also external opportunities, all just to avoid misunderstanding within our R&D budget. And so and this is why I said on the news flow, we will provide further clarity on the pipeline development in the latter part of this year.

When it comes to the antibody persistence data, we have the antibody persistence study for chikungunya, it's ongoing. We reported the two year data last September -- last December, sorry. So obviously, this means that we're going to report the three year data this December and the trial will continue up to five years. So which means every year in December, we will report one year more in terms of persistence data.

I hope this answers your questions Max.

Great, thank you very much, Thomas.

Thank you. Maury Raycroft, Jefferies.

Hi. Congrats on the progress and thanks for taking my questions. I was going to ask one on our IXCHIQ for exceeding EUR100 million for IXCHIQ by year three post launch. Can you talk about the assumptions that goes into that. Can we assume that the EUR100 million is part of the EUR300 million to 400 million market opportunity for travelers as well as military, and should we extrapolate growth trajectory based on these numbers.

Now, travel vaccines historically have shown an S-curve in the ramp-up, right. So there is a there -- this means you cannot just automatically extrapolate that because we expect the year three to be the first year of the of the period where it really goes deep up. And what we have assumed here is it indeed the let's say, travel and military segment.

We have excluded for the time being any potential stockpiling opportunity. We have excluded any potential and meaningful sales in LMICs, and we have used them in terms of modeling the [yeti] data the experience that we have from IXIARO with regard to adoption rates in travelers and the most recent communicated price point for our IXCHIQ in the United States and on which basis we are also extrapolating the other price points and market opportunities into travel segments. I hope this answers your question.

Yes, definitely helpful. And Thomas, right the beginning of your response broke out a little bit and it came back in when you mentioned S-curve for the military segment.

Sorry.

Can you repeat

Sorry, Let me just do it one more time. So I just said that all travel vaccines show from an uptake perspective an S-curve. And historically, and this will certainly be also true for IXCHIQ, so we expect the year three, which is why we have guided the three as the first year where we see the program going into the steeper curve -- the steeper part of the S-curve. And EUR100 million that we or the greater than EUR100 million include travel and military.

Got it. Okay. Makes sense. In for that $100 million exceeding $100 million so that includes presumably a US military contract in there -- is there anything more you can say about that and just the progress in those communications with the military and when that could be announced?

Yeah. So this is, of course, a good question. So we are following approval and following recommendation we are now in active dialogue, with the US military, but also with other public institutions and governments with regard to potential government contracts, which include potentially even stockpile. And so those discussions are ongoing. But please keep in mind that we got the ACIP recommendation very, very recently and also for IXIARO, it took a certain period after the ACIP recommendation before we got into the first contract. And this is what we are currently assuming as well.

Got it. That's helpful. And maybe one more question, just following the ACIP recommendation. Maybe if you can talk about on what your sales force is emphasizing for as it relates to the IXCHIQ data with payers and providers and is it the strong data in subjects 65 and up? I guess just what are some of the key points to emphasizing? And then how are you addressing the onset of immunogenicity?

So basically the let's start from the very end of your series of different questions. So that the product got approved by way of accelerated, approval pathway like many other vaccines that by the way. So this means that the immunogenicity level of zero protective thresholds are predictive and considered predictive for efficacy.

And we are, of course, emphasizing our very strong data year that we are close to 100% and that this includes elderly where we see also a major differentiation against potential other vaccines that may enter. And the second point is, of course, the unique setting that you have with a single shot a very, very long protection and which of course means that, that is a very important feature when people think about chikungunya vaccination, the traveler, that's that go there, are very, very often travelers who go multiple times.

And there's a lot of [yeti] data that supports that, and therefore, we emphasize this. And of course, we paid at the focus specifically the travelers 65 and above. But we promote according to what we allowed to promote, meaning the label of have the product as approved.

Okay. That's helpful. Thanks for taking my questions. I'll hop back in the queue.

Evan Wang, Guggenheim Securities.

Hey, guys, thanks for taking the question. Just had to first on the midterm outlook and some of the update kicking down your market opportunity assumptions. It seems like the total market is consistent with what you guys have said prior, while the share of travelers, has increased at traveler so plus walk us through some of the updated assumptions here, certainly driven by the ACIP recommendation, higher travel rates or initial reception of the share price and then conversely, in terms of the reduced stockpiling endemic opportunity.

And then secondly, as we're looking at the first year of launch, it'll be a ramp in the S-curve that you described, if you could help us understand any anticipated stockpiling or seasonality since we're still early on. Thanks.

Yeah, so a couple of different questions. So first of all, market opportunity as I said, we have taken a couple of key data points into consideration. You have all seen the CDC map that define the areas where chikungunya and chikungunya transmission represents a major risk that is the basis. Then we use the [yeti] data with travelers going through this area meaning, the total population that we are targeting and focusing on.

We are also using, of course, a market that data from the acceptance or expected acceptance for the vaccine, preliminary data show that especially the longevity of immune response and the high level of protection are especially appreciated by potential customers and prescribers.

And then of course, we take adoption rate and dose adoption rate, really educated also based on our own experience from the travel vaccine sector and all that together has led us to further fine-tuning the opportunity for the vaccine in the travel segment, as I mentioned earlier, and this is including, as I mentioned, the price point or the different price point in the different countries.

Now what is important is we have not included any potential stockpiling opportunity at this point in time because we don't think that it's prudent to do that in the absence of really knowing whether there is a commercial opportunity around stockpiling business, we have not necessarily decreased the LMIC opportunity, but we have not yet a clear feel for the LMIC opportunity and we will further develop that. So that's why we have focused our guidance right now on the come on the travel segment.

Ed White, HC Wainwright.

Good morning. Thanks for taking my questions. So first, I just want to ask you about the third party sales in moving to a proprietary platform. You had stated that this is going to improve gross margins but will there be any impact on your SG&A efforts?

Yeah hi, this is Peter. So the third party business was really way for us to bridge revenues during the COVID years, we have not really added, I mean, we added a couple of people here and there, but we not significant numbers. So the focus on our proprietary products will not have a dramatic impact on our SG&A cost. It's really gross margin improvement that was driven by that because our proprietary products have obviously much better gross margins.

Okay. Thanks, Peter. And my other question was just regarding potential strategic transactions. You've mentioned it before, and I'm just wondering what is your strategy there? Maybe give us your thoughts on what makes for good acquisition or what makes for good target?

Yeah. So basically, we will target a next Phase 3 program as I mentioned at the time when the Pfizer Lyme Phase 3 trial will be completed. And we have a couple of interesting internal programs we are currently working on that could be advanced and accelerated to match this time line. And we put it in direct competition to a couple of external opportunities that we are evaluating.

When it comes to the criteria that we going to use. We have, in the past always focused our R&D pipeline development on trying to build vaccines and develop vaccine solutions in the areas of unmet medical need and where we can have a differentiated position. First best only and basically, this is what we going to do forward. And as mentioned earlier, as part of the news flow update, we hope to present a more detailed pipeline strategy in the latter part of this year.

Okay, great. Thank you for taking my questions.

You're more than welcome to.

[Nick Hollard], Goldman Sachs.

Hi there. Thank you for taking my questions. Just coming back to the chikungunya program if I could, on the Phase 4 trial costs. How should we be thinking about phasing of these costs? And how significant are the non-dilutive contributions you're expecting towards those costs?

And then second, if I may, on financing and if we assume that there's no impact from potential business development deals in the near term. Should we assume you that you won't be required to raise equity at least post a potential launch in line? Thank you.

So let me start with the first part, and then I'll let Peter develop a little bit this cash outlook. So basically, when we look at the pipeline development, you're absolutely right so, we are not expecting pipeline or any potential pipeline injection to negatively influence in our cash runway that we have projected before, when it comes to the Phase 4 activities for chikungunya, as part of our approvals, and we have disclosed this earlier so Phase 4 programs go over a long period of time.

We have roughly four to five years to complete of the two Phase 4 studies. We have included this in our company deck, and it's still included, I think in the company deck with regards to the time line. So there is not necessarily an equal spread over there when it comes to spending, but it's many, many years of Phase 4 spending. We have said earlier that we are expecting approximately 30% of our contributions to those costs, and that's part of our planning going forward. Peter, on the cash runway discussion?

Yeah, I think as Thomas alluded to, so we like, we said we were sufficiently financed for our operating business. I think debt repayment is a different story. And for this, I'm sure we will find a solution. And to that sufficiently finance for our operating business would include, as Tomas said, a potential injector so we could still cover that. And so right now, we do not have any plans to raise further equity.

Okay, thank you guys.

Samir Devani, Rx Securities.

Hi, guys. Thanks for taking my questions. I think I've got two or three. To kick off with IXIARO. You mentioned getting back to pre-COVID levels, I think pre-COVID IXIARO had a margin of nearly 70%. It seems quite a bit of a jump from 52%-odd that we've seen this year or 2023. If could maybe perhaps maybe a bit of commentary on how you expect the margin to evolve in line of that growth?

And then just on IXCHIQ again on margins and I guess price as well, we can see it's been listed at $350. I'm just trying to work out, what that would mean in terms of a net price to you guys, if you can help on that quite a bit that'd be great. Thanks.

You want to say?

Yeah, I can start with IXIARO and hey Samir by the way. So yes, you're right. So pre-COVID I think the margins we had published were in the 60%. And yeah, I think close to 70%, and we do not see any reason why we've not got to get back towards this range again. And then I think on the IXCHIQ though it's public so the whole wholesaler acquisition prices to $75. So that's basically what we get for it in the United States.

Okay, that's great. Thanks very much.

Suzanne Van Voorthuizen, Van Lanschot Kempen.

Hi, hello. This is [Gara] on behalf of Suzanne Van. Thanks a lot for taking my question. So I was wondering what was the trigger to put out a midterm outlook?

And if you could confirm whether the midterm outlook and it's also including or excluding any potential milestones from Pfizer? Thank you.

Yeah. So basically, we have received a lot of feedback with regard to how we see the commercial business going, especially for a new indication and new product for which no benchmarks and no real data exists. And therefore, we thought it is prudent to provide further clarity, point number on the let's say, the future of the commercial business and how we see the ramp up in the launch years.

The second part is, of course, we have received many questions around cash and cash necessities, given that we have clearly articulated that we would put on pipeline development in direct competition to potential external pipeline injection. We wanted to make sure that people do not interpret this as external means, financing needs -- on imminent financing needs, when it comes to the line payments that the line payments come at the point where we actually commercialize the vaccine or where Pfizer is going to commercialize the vaccine. So they will be part of when of the influx that we expect to and the business turned into sustain profitability.

Okay, great. Thank you.

Welcome.

(Operator Instructions) As there are no further questions. I would now like to hand back to the speakers for closing remarks.

Thank you so much for your time. Thank you for your support and the excellent questions today and wish you a good remainder of the day. All the best.