Valneva SE (VALN) 2020 Q4 法說會逐字稿

Good day, and welcome to Valneva's business update and unaudited full year 2020 financial results. Before we go into the update, I would like to reiterate what I said a couple of times at different occasions. We are proud and grateful to have insured business continuity and employee welfare during the turbulent and transformational year 2020, which is certainly one of the biggest achievements during this time. We have reported excellent progress on our clinical programs in 2020. We reported positive Phase II data on our Lyme disease vaccine and entered into the collaboration with Pfizer, which is progressing in an excellent way. And our teams have worked very hard to accelerate its -- our chikungunya program, which is now the only vaccine candidate in Phase III.

As David will report in more detail, we ended the year with full year cash and cash equivalents of more than EUR 200 million underlying a very strong balance sheet performance in 2020. And this, despite of the fact that along with the rest of the global travel industry, our commercial business has been adversely affected. And as you know, our extraordinary shareholders meeting passed resolutions to allow preparations for a possible NASDAQ listing and U.S. IPO.

With this short introduction, I would like to hand over for the business update -- sorry, still me. And we start, of course, with the Lyme disease candidate.

As I mentioned, we have seen very positive results from our Phase II studies, in particular, the study VLA15-202, and I'll come back to that later. Let me talk a little bit about the study, VLA15-221. And as you know, this program is under FDA Fast Track Designation. And it works together with Pfizer now for the late-stage development and future commercialization. Just by way of reminder, Pfizer funds 70% of the development costs through program completion, and we are eligible to receive a total of more than $300 million in upfront and milestone, of which we have already received $130 million. And then Valneva will receive tiered royalty starting at 19%.

So now we are very grateful that, together with our partner, we could decide to accelerate the pediatric development. And we announced already in December that we will now conduct another Phase II study. This study is called VLA15-221. It's a study in adult and pediatric subjects, and we expect to enroll in March. Of course, starting with adults first and then going all the way down to 5 years of age. And we will also test in this study whether we can further optimize the vaccination schedule, 0-2-6 to 0-6. And this study will trigger a milestone payment of EUR 10 million upon dosing of the first subject from Pfizer to Valneva.

And we expect the data both from the adults in the reduced schedule as well as from the children in quarter 2 of 2022. And of course, we will follow the study subjects then for 1 year in order to evaluate also a booster dose.

What -- why are we doing that? Well, basically, it gives us the unique opportunity to have field efficacy trial being conducted across the entire key target population of Lyme disease vaccine. And we expect this to start towards the latter part in 2022, with a readout projected for the end of 2023. And then, of course, subject to data and regulatory approval, a first licensure could be anticipated in the first half of 2025.

On chikungunya, we started our Phase III pivotal immunogenicity trial in September 2020. And of course, conducting a trial in more than 4,000 subjects in the middle of a pandemic is not the easiest thing to do. However, we are glad that despite of some minor delays in the enrollment, we could already achieve 80% enrollment today. And we are now working towards completion of this trial. And we expect the primary readout. And just by way of reminder, the primary readout will be the immunogenicity on day 29 after the single shot and single vaccination. And we expect this data around mid of this year. We are working according a so-called accelerated approval pathway. So this means that certain level of immunogenicity will translate into a seroprotection threshold, and this is then the measurement for effectiveness.

In parallel, we have started now our clinical lot-to-lot consistency trial to show that basically the material derived from 3 consecutive manufacturing lots behaves in an identical way in the clinics. And those 2 trials will form the basis for licensure. In addition, through our partnership, with Butantan under the CEPI agreement, we will commence an adolescent trial, which we still plan to commence this year.

And -- yes, and we have said it a couple of times already. We are today the only company with chikungunya program in Phase III. And the first one to receive BLA approval. May be eligible for a Priority Review Voucher.

Then let me turn to Page 11 of the presentation, VLA2001. You know that in response to the crisis, we mobilized our expertise, capabilities and resources to develop VLA2001 in partnership with the U.K. government, which is the only inactivated COVID-19 vaccine in Europe in clinical development to date. And the U.K. deal has a value of up to EUR 1.4 billion. And we are also in advanced discussions with the European Commission. The program VLA2001 is based on a well-known approach. Inactivated vaccines are on the market for more than 60, 70 years. And it's a technology with very, very few safety restrictions. Most inactivated vaccines can be used across all different target population, including the most vulnerable ones.

And just to remind everyone that SARS-CoV-2 inactivated vaccines also only adjuvanted with Alum-only have already reported safety and efficacy. The addition of CpG 1018, which is an adjuvant that is approved as part of HEPLISAV-B, which is a novel hepatitis B vaccine from Dynavax, in our candidate as shown to induce consistently higher antibody levels in preclinical models than Alum-only vaccine formulations. And it goes without saying that an inactivated vaccine does not need any specifics in terms of logistical handling, cold chain, stability profile or what have you.

And of course, we are leveraging for the manufacturing of VLA2001, our existing network we are -- we have started already manufacturing in Scotland with 1 production line fully up and running. And we are building 4 additional production lines in Scotland as we speak as part of the U.K. partnership and collaboration. And we are leveraging our Swedish site for the finish. Also here, we have already 1 finish line ready. Only waiting for the first product to come in order to be filled. And we are expanding right now our filling capacity in Sweden.

The U.K. collaboration, as I mentioned at the beginning, provides for a supply of up to 190 million doses, of inactivated adjuvanted vaccine to the U.K. Thus far, 100 million doses have been ordered for 2021 and 2022 supplies. And the agreement, as stated earlier, includes funding support, not only for expanding the manufacturing facilities, but also the clinical development that we are conducting in the U.K. And of course, the -- we are right now in advanced discussions with the regulators about the Phase III strategy for the product. And we hope that we will have here clarity and a clear path and a great path forward by the time we're going to receive our Phase I/II data expected for early April.

And with this update, I would like to hand over now to David.

Very good. Thank you, Thomas. And so just before I'm handing over to Manfred, I want to bring in to focus some of the main dynamics affecting our financial results. We took this approach for the 9-month results last year. And so want to provide as much continuity of understanding as we can.

So as we all know, 2020 was not a normal year really for anyone. For Valneva, it was punctuated by several key achievements, as Thomas has pointed out. While also, as Manfred will explain, understandable impact of the pandemic on our core travel business and operations.

Our COVID-19 vaccine program is now taking up most of their manufacturing capacity that would have been idle given the pandemic impact on the travel industry, including our commercial business.

So those punctuation marks. Firstly, we reported that we brought in an important loan financing arrangement with Deerfield and OrbiMed in the first quarter of 2020. We repaid a smaller loan from EIB at the same time. And what was really important is that, that flexible loan facility persisted really well in the line partnering discussions that were going on at the time. And that put the company in a great position with the comfort of the facility behind us. The facility, of course, has got no major P&L impact other than finance expenses.

So pretty soon after that, we did the Lyme collaboration with Pfizer that Thomas has talked about. That brought a significant upfront of $130 million of cash in 2020. And we began to refine and rework the development plan with our new partner, as Thomas has just talked about 221. That's a good example of that study of the partnership. So the partnership is going really well. And while we were doing that, we also had time to finalize the accounting treatment, including revenue recognition and some of the analysts have picked up on that already today. So the P&L impact for that one is not straightforward. And Manfred will touch on how that might evolve into 2021. There are several strands to the story online.

So next, in the summer and leading into autumn we fleshed out the partnership with the U.K. government on our COVID-19 vaccine program. We'd already started to reallocate resources and our discovery research group to focus on the program, and we invested some limited funds as well to upgrade some of our labs to BSL, Biosafety Level 3. And while we can't go into the details of the arrangement with the U.K. government, as Thomas has said, the U.K. is supporting the expansion of the Livingston site and the U.K. clinical trials that are ongoing. Valneva at the same time is investing in the fill/finish expansion in Solna, for example, and in the non-U. K. R&D. So what that all means is that there's a P&L impact in R&D in 2020 relating to the COVID program, which Manfred will show in our -- to meet our commitment of transparency. But the cash position at the end of 2020 included some advanced payment for the 60 million dose order from the U.K. We also operate a separate funding mechanism with HMG, Her Majesty's Government, to fund the U.K. investments outside and in addition to the EUR 204 million year-end cash. And just like with Lyme, we've been working hard with the auditors on revenue and cost recognition. We'll come back to talk about guidance later.

And then finally, we've got the core business impact. And I'd like to remind everyone that not all of our revenues are derived from the travel sector. We signed a new 3-year deal for IXIARO with the Department of Defense in August-September. And we have some third-party business for flu vaccines as well as this clinical trial manufacturing business in Solna. However, the reduction in product sales clearly affected our top line. The reduction in volume affected our cost base and manufacturing, and therefore, gross margin was adversely affected. And that was further compounded by inventory provisions and returns given the lack of consumption of travel vaccines, which means, of course, the shelf life issues. And then last but not least, following the PCAOB audit, which is part of our U.S. IPO readiness project. A reporting change also impacts margins, and Manfred will show that in line with, again, our best efforts to be transparent. What we were able to do, of course, is mitigate the downturn in the travel vaccine business by cutting our A&P write-back.

So what I hope I've made clear, as we try to do with the 9 month's results, is that there are several major dynamics in play here, including additional complexity. And I just wanted to lay that context out before we go into the numbers. So I'd like to hand over to Manfred, and we'll come back to guidance later.

Yes. Thank you, David. I would like to continue the finance section with providing an update of our cash position, which continued strengthening. Total cash, as already mentioned, at the end of 2020 was EUR 204.4 million, which exceeded our guidance of EUR 180 million to EUR 200 million. The main drivers were milestone payments from Pfizer for the Lyme R&D collaboration agreement, disbursements from the debt financing agreement with Deerfield and OrbiMed as well as payments received from the U.K. government, for the COVID vaccine supply agreement, for which payments will continue in 2021. As to our installment plan, including payments related to the exercised option for supply of additional 40 million doses.

The next slide. I think this is a known chart to most of you showing our product sales, which amounted to EUR 65.9 million, so ended up somewhat below our guidance of EUR 70 million. Shipments to the U.S. Military have continued in the fourth quarter and EUR 34.7 million of sales have been realized, representing a year-over-year decline of 28%.

The travel markets continue being impacted by the pandemic effect in both IXIARO and DUKORAL sales. Sales of third-party products grew year-over-year and reached about EUR 4.2 million. Overall sales remained 49% behind 2019, with only a small impact of about 1% driven by exchange rate fluctuations.

The ratio of direct sales, as you can see to the right, went back up and for full year 2020 and again, exceeded 80%. Gross margin remained, however, largely in line with what was reported for the 9-month results already and reached for full year 2020, 36.6%, but more about the margin on later slides.

Next page. So here I want to provide the usual view on our product sales versus previous year. At constant exchange rates, IXIARO has been impacted by the pandemic declining by 47% versus previous year. Again, at constant exchange rates. This has partly been driven by EUR 30 million lower sales to the U.S. Military, with the larger part, however, driven by the drop of around EUR 32 million related to the global travel markets.

DUKORAL sales were 58% lower than last year with declines across all markets. And our third-party distribution business grew by 8.5%, mainly driven by higher flu sales. Important to be noted here as well is that sales related to the distribution agreement signed with Bavarian Nordic will start in Q1 2021, and no sales have yet been realized in 2020.

Next slide, please. Yes, here in our usual summary of the unaudited income statement for 2020. I think product sales have already been sufficiently covered on the previous slides. In the other revenue line, we have now included an amount of EUR 31.6 million related to the Lyme collaboration agreement with Pfizer and other revenues in total reached EUR 44.4 million. Our total sales reached EUR 110.3 million so stayed slightly below our guidance of EUR 120 million for the full year.

Cost of goods has largely been covered in previous earnings reports. So to complete the picture, 2020 includes about EUR 9 million related to inventory write-offs as well as roughly EUR 3 million related to idle capacity costs. One additional comment I want to add here, as of the full year 2020 results, we will no longer show the amortization of intangible assets in a separate line but have in line with benchmark and also best practice, reclassified an amount of EUR 2.9 million previously reported here into -- mostly into the cost of goods line. So no more separate reporting of the amortization of intangibles.

Our research and development investments continued growing in line with expectation and progression of our 2 late-stage clinical candidates, being Lyme and chikungunya, and ended up below guidance at EUR 84.5 million for the full year. This amount also includes about EUR 19 million related to the COVID -- related to 2001 R&D program. Cost containment activities have contributed to a material reduction of our sales and marketing spend, which we see coming down by about EUR 5.8 million versus last year. And our G&A spend increased materially, mainly driven by nonoperational costs mostly related to corporate projects, such as the Lyme deal as well as already including some noncash effects related to the company's stock option program. The G&A line also mainly captures cost of our senior management, including [MB]. So the share price appreciation drives higher stock option costs here as well.

The increase in other income is partly a consequence of higher R&D spend, resulting also in higher R&D tax credits, which are recorded here. And also includes the income generated through the cooperation with CEPI related to our chikungunya R&D program, for which increase in grant income has been reported as other income in line with previous practice.

The increase in finance costs related -- or finance-related expenses as a consequence of higher interest charges related to the debt financing agreements with OrbiMed and Deerfield. It also includes interest charges related to refund liabilities recorded in our balance sheet.

And finally, our EBITDA line shows a total loss of EUR 45.2 million. The same level as in our 9-month results, and also well within our guidance provided to be in the range of EUR 40 million to EUR 50 million.

So next slide. As mentioned by David, we also wanted to provide an additional slide showing the impact of the COVID activities on our overall financials. So in 2020, R&D investments amounted to EUR 19 million, and incurred about EUR 1 million of dedicated G&A costs. And the R&D spend also resulted in estimated EUR 2.4 million of R&D tax credits recorded in other income, leaving a net bottom line of EUR 17.3 million for the full year.

Also important to note here is that no revenue has been recognized yet. And also payments received for the clinical trial activities as part of the U.K. COVID agreement are not yet recorded in the company's income statement. And as of 2021, COVID will also be reported as a dedicated business segment in our financials.

Next slide, please. Yes, as previously mentioned a few additional comments about the gross margin on product sales with 36.6%. The margin was very closely in line with what we had already reported in our 9-month results. And has been impacted, as mentioned already by inventory write-offs and idle capacity costs. And here also the reclassification of the amortization of intangibles for IXIARO impacted the margin for full year '20 by about 4.2%. So adjusting for this, our margin on product sales remained on the lower end of the guidance of 40% to 45% as issued previously.

The net operating margin on product sales has equally been impacted by lower sales, lower margin and also higher allocated G&A expenses. And ended up with a loss of EUR 11.1 million for the year.

So I think with this, I'd like to conclude the finance section and hand it back to David to give us the financial outlook and the news flow.

Thank you, Manfred. So to guidance. And as you can imagine, Thomas, Manfred and I would love to give detailed guidance. However, the COVID program is clearly very important for the company, and we are at a very important stage for the program itself. So the Phase I/II data is due out in a matter of weeks. And it's not just the clinical data itself is important because the dose information directly links to manufacturing and indeed supply timing. And that, of course, links to revenue and all the way down to the P&L to EBITDA. And there are several other factors that are still in motion, including the progress of our discussions with the EC being another example. So therefore, we can't give overall guidance or guidance that's linked to our COVID program at this time.

We hope that our shareholders and our stakeholders, understand that the numbers are material, particularly in comparison to our core business, and we are committed to giving that guidance as soon as we can. In the meantime, we do want to provide guidance where we can. So we are guiding non-COVID-19 revenues of EUR 100 million to EUR 115 million, which is relatively close to the 2020 actual. And non-COVID R&D investments of EUR 65 million to EUR 70 million(sic)[EUR 75] million, which again is pretty similar to the 2020 number, excluding COVID-19. So we will provide guidance as soon as we can. We understand that it's important, and we understand that it's material.

So next slide, please onto newsflow. So we clearly have an exciting year ahead of us. As Thomas said, 2020 was a transformational year for Valneva for Lyme with ongoing Phase II activity, including the imminent start of the 221 trial, which, for the first time, will include adolescence. For CHIK we're well into Phase III execution, and we remain the only company in Phase III to our knowledge. The initial primary endpoint data is expected in the middle of the year. And for our COVID program, we expect key information in the coming weeks. And then assuming the clinical data is positive, we'll be reporting various important milestones throughout this year.

And then finally, as you likely know, we have been contemplating and considering a U.S. IPO for some time, so that remains a prospect. And therefore, we remain absolutely committed to building shareholder value. Thank you. I'm going to hand back to Thomas to host the Q&A.

Back to the operator.

(Operator Instructions) And our first question comes from the line of Max Hermann from Stifel.

Hello? Can you hear me?

Yes. Now, we can hear you, Mark.

I will talk loudly. I have 3 questions. Firstly, just on the VLA15 in Lyme disease. Trying to understand the -- how the Phase III recruitment will go -- how you envisage it in one season. It seems quite a challenge. So I just wanted to understand sort of design that you're thinking of for the Phase III.

Secondly, just on the COVID vaccine, and obviously using a whole virus. How do you think that will be influenced by the variants that are appearing. In terms of are there antigenic sites within the whole virus that mean that it's not necessary that you would need to change that, like it looks like the spike protein vaccine approaches will need to?

And then finally, just on the discussions with the MHRA, could you give us a little bit of insight into how that Phase III trial might progress? Are you looking at antibody level as correlation of protection?

So okay. So let's start one by one. So first of all, the Phase III, of course, when it comes to the detailed design this is something that is currently under discussion with Pfizer. And as you know, will be led by Pfizer. The current plan is, as alluded to, that we would enroll people in the autumn in order to ensure -- and all people for the trial in the autumn. To ensure that people are participating in a placebo-controlled field efficacy trial will be protected when the tick season starts. And right now, we don't see that an issue to get those included. And we reported earlier, the order of magnitude, which will be around 15,000 probably in a placebo-controlled setting across the entire age range from 5 to no upper limit. This is the current plan for Lyme. And then we hope to get the necessary cases and the readout already in one tick season, yes.

When it comes to VLA2001, now, first of all, an inactivated virus vaccine indeed presents all different epitopes to the human immune system like the native infection as well. So this clearly means that there might be a higher degree of cross protection. But we don't know yet. What we will do is, of course, as soon as we are going to have our Phase I/II sera tested, we will immediately complement this testing with in vitro neutralization testing against the current new variants, which is something that the others have done as well. So -- and those -- through this in vitro testing, we will see immediately the level of immune response generated against those variants.

On top of that, one may expect that the addition of CpG 1018 may even further improve the quality of the immune response and possibly even the breadth of the immune response or coverage across different variants. This, of course, has all to be seen. The second point that is important is that a whole virus inactivated platform is suitable for any virus. So this means whether this is a whole virus derived from an isolate of a human being that was infected by the Wuhan virus strain or another one from, I don't know, Brazil or from England or from South Africa.

In reality, you have to develop your master virus seed bank, and you do this within a period of, let's say, give or take, 8 weeks. And then you have an identical platform, an identical process, and you have a vaccine dedicated to another variant. And this is, of course, one has then to see how this works out from a regulatory standpoint. How things can be bridged in between the one variant-based product to another one. But you know that those discussions are currently ongoing for all the different companies and all different regulators.

The other possibility that you have in an inactivated world is, of course, to do what is well established and known for influenza, namely, to develop a multivalent. So you could also say, I have, I don't know, give or take, x amount of antigen. And instead of having the x amount of antigen derived from 1 variant. You cut it by 3, for example, and you formulate 3 antigens in, derived from different variants. All that is possible, technologically possible. But of course, requires now further consideration and further discussion with both our partners, primarily in the U.K., but also with regulators. But this is a process that is ongoing. And of course, it's very, very high on our radar screen. It's very, very high on our agenda.

The last point with regards to how do we prove effectiveness and end points. This is a discussion that is currently ongoing. We hope to be able to commence Phase III by the end of April or early May. So we said right after the availability of the Phase I/II data. So this tells you that we are currently in an advanced process here.

We have disclosed previously that we would like to show effectiveness by way of noninferiority against -- in an immunogenicity trial, against a licensed SARS-CoV-2 or COVID-19 vaccine. Whether this will be enough or would need to be flanked by additional clinical activities has to be seen. However, we believe that this Phase III program can be conducted over the summer in time to allow us to fulfill our obligations vis-à-vis the U.K. government, namely, to deliver 60 million doses by the end of this year.

Our next question comes from the line of Jean Jacques Le Fur from Bryan Garnier.

I have 3, 1 on COVID and 2 on finance. First, on COVID vaccine candidate. Do you intend to deliver it in vials or in ready-to-use syringes. And we know how it is better to use ready-to-use syringes. Second question regarding the R&D expenses and starting with this guidance for 2021 of roughly EUR 70 million. Is it fair to assume that starting in 2022 when you will have the Lyme vaccine candidate program, which will start, we should assume an increase of this basis of roughly EUR 70 million. So another way to ask my question is what could be the outlook of R&D expenses without COVID beyond 2021? And my last question is for the full year 2021 sales what are your assumptions behind that product sales? I mean, what are your assumptions behind that? Do you assume that we will have a -- or you will have a sort of recovery in H2 as mentioned by many of big pharma players, meaning that you may have a recovery in sales for IXIARO market, commercial market and DUKORAL. That's my 3 questions.

Okay. So I would try to address one by one. So first of all, for -- when it comes to COVID supplies, we need to discuss here initial supplies. So meaning still within the pandemic and then supplies outside of the pandemic phase. So for as long as the pandemic is still ongoing and under the current pandemic requirement, we will fill in deca-dose vials, full liquid, where 10 doses will be individually taken out.

For post pandemic, we will go into single dose. And single dose will either be single-dose vials or syringes, which has not yet been decided, but definitely a single dose.

When it comes to the R&D costs, excluding COVID. This is, of course, very difficult to quantify at this point in time. However, what is important to say is that we are peaking in 2021 because of chikungunya. Remember, we are running a very significant Phase III program for chikungunya. And as such, we see a peak in 2021 for -- by way of reminder, also Phase III for Lyme is a very, very comprehensive study. We only got to pay 30% of this cost. So that's why you -- it's maybe fair to say that I would assume that R&D costs, excluding COVID. And notwithstanding all this highly sophisticated revenue recognition things will be peaking in 2021. And David, anything to add?

Yes. So I think the only additional comment I would make is that we do plan to refill our pipeline over time because everything is advancing very nicely. And so that level of expenditure may be a reasonable assumption going forward.

Okay. Good. So then we come to the last one on the assumptions. On sales. And I know we have Franck on the line. Franck, do you want to say a few words about what we assume in terms of what the underlying key assumptions are for sales this year.

Yes. Thank you, Thomas. So indeed, likewise, the pharmaceutical industry, we do believe that in H1 progressively -- in H2 progressively in Q3. And essentially, in Q4, we will see the travel starting again, obviously, progressively. And our midterm assumption is to go back to the 2019 level in '23, '24. So it will be a progressive restart of the travel. But indeed, it's essentially in Q3 and Q4.

Okay. If I may, just an additional one regarding IXIARO and the U.S. Military. I'm sorry because I missed the first 10 minutes of your call. So if you alluded on that, sorry about. Just to understand, did you give any proportion of this new contract for 2021? You already delivered in Q4 last year? Or is there a majority of this contract to be delivered in 2021?

No. What we said is that the military sales for 2021 will be in the same ballpark as the ones in 2020.

Our next question comes from the line of Samir Devani from Rx Securities.

I've got a few, but perhaps I'll reserve the financial questions a little bit later. Just Thomas, just in terms of the COVID-19 vaccine. I'm wondering if you may -- maybe just worth setting the scene for us as to what sort of data you will be releasing in terms of the Phase I/II results.

So the answer is relatively simple. GMTs because, as you know, that GMTs have been reported for other programs as well as for the standardized panel of convalescent sera. So we will report GMTs as compared to those, which will make a direct comparison relatively easy.

Okay. That's helpful. I guess I was pleasantly surprised by the U.K. government taking their option. It seemed a little bit early to me. Perhaps you can explain why they took the option when they did.

Well, I think we have -- as you know, we have a very close interaction with the U.K. government, and we have kept the U.K. government closely involved in the entire development and as part of this collaboration. And yes, so why they took the decision? You probably have to ask them. We are, of course, happy that they took the decision. And now it's about detailing supply time lines and what have you.

And is there a chance -- I appreciate that you've got a reasonable good sense of what the Phase III will be. But is there a chance that you supply the U.K. government before formal approval is granted?

I would not assume that at this point in time.

Okay. That's great. And then perhaps just a few for David and Manfred. I know you can't give specific guidance around 2001. But I was wondering if you can maybe help us with things like capital expenditure this year. Obviously, we know there was a big bump in Q4. Perhaps you could just steer us a little bit as to what we should expect this year. And also, you've told us what the Pfizer revenue recognition was in 2020. How much are you expecting to recognize this year.

Okay. Manfred?

Maybe first, taking your CapEx question. So I think you need to think about an amount in the range of EUR 80 million to EUR 100 million, we can see as CapEx throughout 2021. Obviously, a major part of that is going to be spent early in the year. As far as Pfizer is concerned, from a revenue recognition perspective, we mostly would expect revenue being recognized in line with our own R&D expenses for the ongoing phase 221 study. And I think you will have to think about a range of EUR 20 million to EUR 25 million of revenue in the course of 2021.

So can I just clarify because I missed it. Did you say EUR 80 million to EUR 100 million for CapEx?

Yes.

Operator, other questions?

Our last question comes from the line of Sebastiaan van der Schoot from Kempen.

I have also 3 questions. The first one is also on COVID. And I was wondering whether the initial readout could also say already something about protection against the different variants that are circulating. And then my second question is on the Lyme vaccine. Can you remind us of when we can expect the follow-up data for the first 2 Phase II trials. And what this data readout will consist of. And if you could also just justify for the Lyme trial, whether the Phase III can only start after the initial data on the pediatric population.

Yes, very good questions. So whether -- you know that as part of our COVID vaccine collaboration with the U.K. government, we are working with Public Health England who do the serology for most of the COVID vaccines that have been investigated in the U.K., including ours. And so they will, of course, conduct in vitro neutralization experiments against the -- some of the other variants. When -- by when this data will be made available and whether it will all come together for one announcement or if there will be a sequential one a couple of weeks apart. It's too early to say. We will try, but it's not -- it cannot be a promise at this point in time.

On Lyme, you know that for both studies -- we said this in the path that for a VLA15-201, this was the study with the short schedule and 202, the study was the longer schedule. We will bundle the follow-up time points with also Serum Bactericidal Antibody follow-ups and safety follow-ups. And we expect this whole package in the autumn, I would say probably around September.

The -- with regards to the Phase III, we expect that all Phase II studies will, of course, form the basis for the formal end of Phase II meeting, which will then -- which will be in time. And will work out in order to allow the Phase III start in 2022, as indicated.

Okay. And then maybe could you also expand and remind us of what the data readout will be for chikungunya in 2021. And is that specific readout would be already enough for full approval or accelerated approval? And if this will only accelerated approval, what would you need for full approval?

You're talking chikungunya or COVID. Chikungunya, you said.

Yes, chikungunya. Yes.

Yes. Okay. Now for chikungunya, so the accelerated approval pathway has nothing to do with conditional approval. The accelerated approval pathway simply means that you don't need to show field efficacy in a placebo-controlled field efficacy setting, but that an immunological surrogate, will be used to determine protection. And this surrogate is being -- or has been established by way of passive transfer in nonhuman primates. And this is in reality, a titer level, right? It's an immunological titer neutralizing antibodies, and that correlates with protection and this threshold number then determines the so-called seroprotection threshold. And that's the final end point. And this will all be supportive for full regular ordinary licensure.

Our next question comes from the line of Ross Blair from Rx Securities.

Just 2 questions from me, if that's okay. Firstly, on the Phase III study -- or potential Phase III study of the COVID vaccine. I was just wondering whether you're expecting that the trial will be held within the U.K., given the current rollout success of the current vaccines or whether you expect it might be held outside the U.K.? And second question, also on COVID. So you've also received about EUR 100 million so far for the development of your vaccine. I was just wondering if it's reasonable to assume that the rest of the first payment for the 60 million doses is coming to you on delivery at the end of this year.

So let me start with the second part of your question first. As we said a couple of times before, we are not allowed to disclose the detailed payment terms. But we mentioned in the past that the expenditures we have for our COVID program in the U.K. under the partnership will at any given point in time, ensure cash flow will not be not going into cash flow negative territory. This means that there will be a -- as costs come quite even throughout the year. This may indicate to you what we expect in terms of influx in terms of payments. More, I cannot say.

With regard to the -- this, of course, assumes that we will succeed with the noninferiority approach. And the -- what I would call the primary objective for us is clearly noninferiority in the U.K. and as part of an immunogenicity study with an active comparator, whether we're going to bundle this and combine this with some sort of efficacy trial in a country where efficacy studies from an ethical and I would say, practical standpoint can still be conducted over the summer is the basis of the current discussion.

(Operator Instructions) We have no further questions at this time.

If there are no further questions, then I would like to thank you for today's attendance. And yes, in 2021, we will, of course, focus on executing on our programs. We see great prospects ahead. Many important and decisive milestones to come. And as I said, the other day on our company video, more than ever, we will continue advancing vaccines for better life. And with that, I would like to thank you and all our shareholders and partners for their trust and confidence. Have a good day.