Valneva SE (VALN) 2025 Q1 法說會逐字稿

Hello and thank you for joining us to discuss Valneva's first quarter 2025 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 three months ended March 31, 2025, which were published earlier today, available within the financial report section of our investor website.

I'm joined today by Valneva CEO Thomas Lingelbach and CFO Peter Buhler, who will provide an overview and update on our business as well as our key financial results for Q1 2025. 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 will 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, May 7, 2025, and Valeva 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, Josh, and good day to all of you. Pleasure to provide the update during today's earnings call. Yeah, the first quarter, 2025, was a solid quarter with strong overall financial performance. Total revenues reached almost EUR50 million. The reduction in operating cash burn is reflecting our continuous focus on cash. And cash management and this is also shown in a cash position north of EUR150 million excluding the recent proceeds from our April ATM transaction.

And in quarter one, we also made progress on the regulatory front, predominantly around IXCHIQlabel extensions and further approvals. When we look a little bit more into the details of the first quarter of 2025, we got a new IXIARO contract awarded by the US Department of Defense.

We responded to the French government's call for IXCHIQ to combat the Chikungunya outbreaks in La Reunion and Mayotte.

And we responded to the cholera outbreak in Mayotte by supplying doses of DUKORAL, so all in line with our mission to address unmet medical needs. With regards to the key regulatory achievements that I mentioned earlier, we got the marketing authorization for IXCHIQ in the UK in individuals 18 years of age and older, and we also, submitted the respective adolescent label extension application.

We got the IXCHIQ label extension in Europe for individuals 12 years of age and older by the European Medicines Agency, and the IXCHIQ marketing authorization in Brazil represents the first approval of a chikungunya vaccine in an endemic country.

On clinical data and pipeline progress, we reported high sustainable response in adolescents, one year after IXCHIQ vaccination with a single dose and it's part of our phase 3. We reported positive phase 2 pediatric results for IXCHIQ and as such, could decide the dose for the planned phase 3 study in in the pediatric population.

And we initiated the first vaccination in the phase 2 infant study in Africa of our Tetravalent Shigella vaccine candidate. S4V2 Turning our attention a little bit to lime. You all are very aware of the Lyme program and the medical needs that Lyme disease represents globally.

There is no vaccine available to prevent Lyme disease in humans, and we see a growing annual burden of disease. With almost half a million cases reported and confirmed cases reported in the United States, more than 100,000 cases reported in Europe, and those numbers are heavily impacted by underreporting or not even existing reporting systems in some of the countries.

When we look at the clinical manifestations, 2% to 30% develop really severe clinical manifestations including carditis, neuroborreliosis, or arthritis, and 5% to 10% have persistent symptoms. Even following treatment.

Therefore, we see a huge unmet medical need for a preventative solution, enhanced commercial opportunity for Valneva, especially given that we are talking about almost 90 million people in the US and more than 200 million people in Europe who live in endemic regions where Lyme represents a major risk.

You all know that we are in year 3 or in the 3rd tick season of the ongoing phase 3 study by Lyme. And we, are expecting first beta at the end of this year. This is a study that includes more than 9,000 participants, 5 years of age and above, who are at high risk of Lyme disease.

We are measuring here, against the placebo control setting, randomized 1 to 1. Against placebo 2 to 1, North America, Europe, and the primary endpoint is the rate of confirmed Lyme disease cases. So, prevention of the disease after the 2nd consecutive peak season. And, right now, we have the 2nd cohort undergoing the booster vaccination.

And then we have quite a significant number of secondary endpoints including the rate of confirmed Lyme disease cases after the first season after the primary series. So, very exciting year. And we hope to see the first data is set by the end of the year, which will be followed by, a significant number of, secondary endpoints and other data associated with the study. And provided positive data, we expect, filing, with the regulatory authorities next year.

With that, let me turn over to, IXCHIQ. You know that our chikungunya vaccine is a highly differentiated, vaccine, and we are glad that we have been able to report a strong clinical data thus far across all the studies and across all the target populations, that we have been evaluating and got licensed by now. At the same time, we have experienced recent changes to IXCHIQ recommendations in response to reports of serious adverse events, in frail elderly individuals.

As such, ACIP recommended precaution, for use in 65 plus EMA cautioned, against you, in frail older adults, especially those with comorbidities, and Francespanage recommendation for you in 65 plus all of that, pending ongoing, investigations. As we stated in our different publications, and communications, we are highly committed to, standards of safety and appreciate, therefore, these precautionary decisions.

All investigations into SAEs remain ongoing, and it's worth noting that causality has not been definitely established at this point in time. We will, of course, continue to closely monitor all reported adverse events and cooperate fully with health authorities while working proactively on a potential update of the product indication.

We have now a bit more than 40,000 doses administered, so doses of, that landed in people's arms. And we continue to see a positive risk benefit in the vast majority of people with potential exposure to the disease, and we would like to remind one more time that I must not be given to people who are immunodeficient or immunosuppressed due to the disease or treatment.

When we look at the further development of IXCHIQ, that we are currently conducting, we are preparing for the post-paring effectiveness phase 4 program. This is a program to confirm the effectiveness following licensure based on an immunological surrogate protection, the so-called accelerated approval pathway, and, to further help optimizing description of the safety profile.

We are planning an observational effectiveness study in Brazil, pragmatic randomized control effectiveness and safety study in endemic countries, and prospective safety court study and pregnancy surveillance in Brazil.

We have ongoing label extensions to expand access to the vaccine for all age groups. And the, we reported already the data, phase 3 data in adolescents, which landed in some countries and some regulatory jurisdictions already in a label extension. Others are still under review. And we plan, to start a phase 3 study in children aged 1 to 11 years of age.

On the product profile, all of that, and across all programs, we would like to confirm the long-term durability of the immune response to further differentiate our vaccine. Turning to, Shigella, the, which is, really the most advanced, program right now in the Tetravalent bioconjugate vaccine space, targeting igellosis infections.

It's a program that we have partnered, with LimmaTech. It includes the four most common, pathogenic Shigella bacteria serotypes, LimmaTech in the past reported positive phase 1 & 2 clinical data, and the program got awarded FDA fast track designation.

We expect, huge, unmet medical needs, of course, primarily in, children, living in low, medium income countries, but also, a substantial added value, for, travelers and military personnel. And the Shigella disease and the work around Shigella vaccines has been identified as a priority by the World Health Organization.

As mentioned at the beginning, we, launched a phase 2 infant study, this year, and we expect data already for the latter part of this year. We have an ongoing, phase 2B, so-called, controlled human infection models. This is a study that goes in two steps.

The first step is to optimize, those in schedule. Second is to challenge. And, get with the challenge, a first idea around, pilot efficacy, we announced that, we have slightly extended the immunogenicity phase, so the so-called step one. And as such, we, are not expecting the pirate efficacy data, as previously announced in the second half of this year, but in the first half of next year. And of course, we will work continuously on this exciting program and make sure that we progress towards the next development phases.

Turning to Zika, we expect phase one results later this year, on our, second generation optimized vaccine candidate against the Zika virus. It's an inactivated whole virus vaccine-based vaccine that leverages our technology that we developed and further optimized as part of our COVID work and our COVID vaccine, during, the pandemic, VLA 2001.

And, of course, we hope to see positive data that would enable further development, against the disease that can have quite devastating effects. And please be reminded that there is currently absolutely no vaccine or specific treatment available. And as such, we hope also for support of, public institutions, for example, to help advance a potential vaccine against Zika virus. With that, I would like to hand over to Peter to provide us with the financial report.

Thank you, Thomas. And good morning and good afternoon to all of you.

Now, let's look at the financial report for the first quarter of fiscal year 2025. Product sales reached EUR48.6 million and increased by 51.2% versus the first quarter of the prior year.

The sales reached EUR27.5 million 65.5% above last year, and the year over year growth is driven by a strong increase in sales to US military, but also into the travel channels. In addition, the first quarter includes higher sales related to stock replenishment in indirect markets. As you may recall, the first quarter of 2024 had been adversely impacted by supply constraints.

DUKORAL sales grew by 9.4% and reached EUR12.3 million. The increase in DUKORAL sales is primarily driven by a shipment of EUR1.1 million to the French island Mayotte. IXCHIQ sales reached EUR3 million in the first quarter of 2025 compared to EUR200,000 in the first quarter of last year. IXCHIQ was first launched in the United States in quarter of 2024, and the increase in sales is related to the continuous ramp up of sales in the United States and the launch in additional territories, mainly in France and Canada.

In the first quarter of 2025, we received an order for 40,000 doses of IXCHIQ to respond to the chi chikungunya outbreak on La Reunion. The significant majority of these doses were shipped early April, and the sales will be recorded in the second quarter.

Third party products increased by 41% to EUR5.8 million compared to EUR4.1 million in the first quarter of last year. As mentioned previously, we expect third party product sales to decrease over time, and this year over year increase for Q1 is primarily due to supply constraints faced by our third-party partners in Q1 of last year. Over time, we expect the continued reduction of our third-party business to have a positive impact on the company's gross margin.

Current foreign currency effect had no material impact on the year over year sales performance. I'm moving on to the income statement. Total revenues reached EUR49.2 million versus EUR32.8 million in the first three months of 2024.

Cost of goods and services increased marginally versus prior year despite the significant increase in sales. Gross margin on commercial products, excluding IXCHIQ amounted to 62.7% compared to 43.9% in the first quarter of 2024.

The significant improvement in gross margin is primarily due to better manufacturing performance, with fewer batch failures and inventory adjustments. IXIARO gross margin reached 72.6%, which is significantly better than the 52% of last year and even exceeds pre-COVID levels. DUKORAL's gross margin reached 52.2% compared to 40% to below 40% in the first quarter of last year.

Research and development expenses increased by around EUR2 million to EUR15 million driven by costs related to our new Shigella program following the start of our collaboration with LimmaTech Biologics in the fourth quarter of last year. Marketing and distribution expense in the first quarter reached EUR10.4 million compared to EUR11.3 million in the prior year. The decrease is mainly related to lower advertising and promotion expense.

General and the administrative costs were reduced to EUR9 million compared to EUR11.7 million in the present year. The decrease is related to a lower spend on recruiting, lower insurance costs, and savings and professional services.

The operating loss of the first quarter of 2025 is reported as minus EUR6 million compared to an operating profit of EUR68.2 million in the first quarter of the prior year. The first quarter of 2024, we sold the priority review voucher obtained upon approval of the chikungunya vaccine IXCHIQ in the United States. This resulted in a non-recurring revenue of EUR90.8 million.

Net finance and income tax expense is reported at EUR3.3 million compared to EUR9.3 million in the prior year. The lower expense is mainly related to a foreign exchange gain of EUR3.7 million due to the development of the US dollar versus EUR exchange rate and the related balance sheet revaluation. With this, the loss for the first quarter of fiscal 2025 reached EUR9.2 million compared to profit of EUR58.9 million in the prior year.

EBIT is slightly negative, while last year it was positive, driven by the sale of the priority review voucher. Before we move to the guidance, a word in cash. As mentioned by Thomas at the beginning of the call, total cash and cash equivalents at the end of March were EUR153 million compared to EUR168 million at the end of prior fiscal year.

In the first quarter of 2025, we significantly reduced the cash used in operations compared to the prior year from EUR28.4 million to EUR8.1 million mainly driven by higher sales and cost and good cost control.

In addition, as mentioned at the beginning of the call and as stated in our press release, in April, we issued new shares for a value of EUR14.2 million through our assets to the market program based on a reverse inquiry from Noble Holdings. Through this transaction plus additional shares acquired in the open market, Nova is now one of our top shareholders.

Now moving to slide 222 to review our guidance for fiscal year 2025. The guidance is unchanged compared to the full year 2024 earnings call. We reiterate our product sales guidance of EUR170 million to EUR180 million for the fiscal year and total revenues of EUR180 million to €190 million.

Total R&D expenses are expected between EUR90million and EUR100 million partially offset by grant funding and R&D tax credits. As demonstrated in the first quarter, we are on track to reduce our operational cash burden by 50% on a full year basis with the goal of being able to reach key inflection points with our existing cash.

In the midterm, we continue to focus on gross marching, and we see a path to potential sustained profitability from 2027 based on a successful Lyme disease vaccine approval and commercialization. This concludes the final section of this call, and I would like to hand back to Thomas to discuss our major growth drivers.

Thank you so much, Peter, for this comprehensive financial report. Turning to page 24 of the presentation, looking a little bit into our expected growth drivers for 2025 and, beyond of course, it's all about Lyme, for the time being. And, therefore, we are very much looking forward to, the results of, VLA 15 and, hopefully it's success, which, as Peter pointed out, has the potential, for sustained profitability.

Upon approval and commercialization, of course, driven by the substantial milestones and royalties, kicking in towards the latter part of 2027 according to current timelines and expectations. When we look at the commercial business, we have shown that we have been able to optimize and growth and grow our commercial business, and we expect in the near term continued growth for both of the existing older brands like [IXIARO] and DUKORAL but also expect IXCHIQ to gain further global traction.

When we look at the future pipeline, we expect really value creation through new pipeline programs and ongoing programs that we have already in the pipeline, including Shigella and Zika. And our goal, as communicated previously, is to have a next phase 3 program ready, post-successful introduction of the Lyme vaccine.

And with that we see overall a really good prospect of our business with of course major growth drivers around line but also major growth expected from our commercial business and upside from future or existing clinical and preclinical R&D assets. With that, we would like to conclude our presentation and hand back to the operator to take your questions.

(Operator Instructions)

And now we're going to take our first question, and it comes to land of Maurice Raycroft from Jefferies. Your line is open. Please ask your question.

Hi, congrats on the progress and thanks for taking my questions. I'll ask a quick one on IXCHIQ first and then one on online. I guess for IXCHIQ just wondering what our next steps regarding the label, wondering if you've heard back from FDA regarding the label extension application for adolescence, that was submitted a couple of months ago, and then what are next steps regarding potential need to add new language safety.

Yeah, thanks for your question, Maurice. So, I'll start with the last first. The review with the FDA is still ongoing. So, we have submitted, as you rightly pointed out, and we are waiting for their, reply and hopefully soon, the adoption of, the label, to include the, 12 and above. Yeah, the current situation and next steps.

At this stage, we have seen changes to the recommendation, that we are, absolutely committed, to, the highest standards of safety. So, the investigations are ongoing. We know that all of that has occurred in frail older individuals.

We have strongly recommended and continue to do so that healthcare providers apply. Individual, individualized clinical judgment, when determining the appropriateness of IXCHIQ for elderly, frail patients, and we are supporting the regulatory authorities as much as we can, on evaluating those cases. And we'll review also whether, certain additional, precautions or contraindications. In specific population groups and may be warranted.

Got it. Okay. That makes sense. And then for the phase 3 Lyme study, can you remind me what the p-value threshold is for the primary endpoint of confirmed Lyme cases? And when considering GMT from historical studies, how are you setting expectations for the bar and what antibody titer you will need to achieve To get sufficient protection.

So, unfortunately, I can't disclose the P-value for the phase 3 study, but it is sufficiently powered. According to the expectations and according to the, let's say Pfizer studies and disease burden, evaluations, which most of them got, published by Pfizer. And I think that's basically what we can say. I would like to point your attention to, a publication, a joint publication, that, we also referenced by Pfizer and Valneva where.

I would say, a potential protective immunological threshold has been, hypothesized, I would say. I think, we discussed in lengths in the past, Maury, that it is very difficult. At this point in time, there has never been, an immunological coordinate, for Lyme. And of course, essays are very different. I mean, and we can, of course, send you again the link to the respective publications.

Okay, yeah, that sounds good. That would be helpful. Okay, thanks for taking my questions. I'll hop back in the queue.

Thank you. Now we're going to take our next question. And it comes land of Rajan Sharma from Goldman Sachs. Your land is open.

Hi, thanks for taking, my question. So, just one online actually, so I think you're due $143 million in milestones from Pfizer, as an initial milestone. I was wondering, is that part would part of that be due with a potential. Positive phase 3 or is that related specifically to approvals whether that's in the US or elsewhere.

And then secondly, I was just wondering if you could just comment on tariffs which is a obviously a focus in the sector at the minute, be helpful just to get your perspectives on potential impact for Valneva could you just help us understand your manufacturing footprint and any potential mitigations you may have?

Thank you.

Yeah, hey, Rajan it's Peter. Thanks for the questions. So yes, you're absolutely right. We will, there is a milestone of $143 million that Pfizer would pay us upon first commercialization. So, it's not at the end of phase three. It's, there are basically 3 triggers for that. There are 3 parts of the $143 million. There is a first commercial sales in the US, first commercial sales in Europe, and ACIP opinion, and all three events are supposed to happen in 2027, basically.

On tariffs, and just to add maybe, that there is another, there will be another $100 million commercial milestones afterwards based on sales thresholds, cumulative sales thresholds, and royalty rates of between 14% and 22% just to remind everybody. On tariffs, it's obviously something we're closely following. I think right now it's difficult to express an opinion on it because nothing has been defined in terms of tariffs.

So, too many unknowns. We are, of course, looking at, potential mitigation strategy or initiatives, to your question on our manufacturing footprint. So, our vaccines are basically all manufactured in Europe. So, drug substance, for IXIARO, IXCHIQ is manufactured in Scotland, and then field finishing happens in Germany, and as far as DUKORAL is concerned, it's all produced in Sweden. And the IP is also in Europe.

Okay, thank you.

Thank you. Now we're going to take our next question. Vamil Divan from Guggenheim Securities. If your land is open, please ask your question.

Great, thanks, for taking my questions. Maybe a couple on the financial side. So, one, the sales this quarter quite a bit higher than consensus, you able to maintain your full year guidance. So, I'm just trying to get a sense of the nuances there maybe relative to what you see from consensus estimates right now.

You mean just one in terms of sequencing of the DOD sales that drove through the first quarter for CRO maybe is that a reason. And not be too optimistic on the way through the rest of the year, or is there maybe some IXCHIQ sort of conservatism built in, given some of the label updates that are coming on that front.

And then the second question is just more on the gross margin side and you've talked about kind of getting back to these pre-pandemic levels. I think IXCHIQ are one of the key drivers there just if there if there's a shift in sort of uptake of that.

That vaccine, given some of the you know new label updates and safety questions, would they do you still feel comfortable getting to the pre-pandemic levels and gross margins even again if your product makes maybe shifts a little bit.

Yeah, thanks for the question. So, starting with sales, yes, absolutely, our first quarter revenues are above the consensus. I think it's, it was expected by us, and as I said in the call, so we did see strong growth in particular in IXIARO on both travel and also DOD, but as I mentioned, last year was very heavily impacted by restricted supply that was resolved in April of last year.

So, you will see this year a slightly different phasing, which is also why we do not see right now any change, to our guidance. So, first quarter for us was in line with what we had anticipated. As on sales to the Department of Defense, so we have not published the number, but as you saw, we signed a new contract and we, supply is ongoing according to plan and it has indeed, is, it's also increased versus prior year.

In terms of cross marching, we said in the past that we expect IXCHIQto over time to yield a better gross margin than the other products. I think that's, we, we're still looking at, we're still considering this, of course, that has, this has not changed.

I think overall Q1 gross margin was very good, and you're right, we did say in the past we expect to reach a pre-pandemic level, although we have not defined this for 2025, we have not guided on gross marching for 2025. But of course, we're very pleased to see where we were in Q1.

Okay, thank you.

Thank you. Now we're going to take our next question, and it comes line of Samir Devani from RX Securities. Your line is open. Please ask a question.

Hi guys, thanks for taking my questions and congrats on a good quarter. Have you now fulfilled the Mayotte order? In this quarter.

Are the Mayotte. Yes, so that was the two [corral] yes, that was actually fulfilled in the first quarter.

Okay, fine, and then just on the La Reunion order, can you help us in terms of thinking how we should phase this in terms of our modeling for IXCHIQ? Is it going to lead to a reasonable spike in the next quarter and then a sort of fall away in Q3.

Yeah, so it's, so, as we said, we supplied, a small number of doses at the end of Q1, and the remaining part will be supplied in Q2. Or it was already supplied in Q2 I should say.

Okay. And then finally, just on Just on the mechanism for IXCHIQ and it's being a live attenuated. I'm just wondering, Thomas, if you could comment on has this made you reconsider the sort of dose that you might use in the pediatric studies in light of the potential adverse events you're seeing in the elderly.

It's a, it's of course, good question. So, we don't see at this point in time. Any unexpected, safety profile in, younger adults or even, adolescents. So, at this point in time, we have not reconsidered the dose for the phase 3 infant study that we had previously announced. But as I said, at this point in time. So that's all I can say for now.

Okay, that's great. Thanks very Much.

Thank you. And the question comes from the Suzanne van Voorthuizen from Van Lanschot Kempen Your line is open. Please ask a question.

Hello. This is Samuel Suzanne van Voorthuizen Thank you for taking our questions. For the Lyme phase 3 program and the last, tick season now starting, can you provide some color on the infection rate so far in this study? And is this monitored and in line with the company's expectations?

And secondly, with the study consisting of two sequential cohorts of subjects, is the first cohort receiving a second booster this season already? And will you report data on this too at the year-end readout?

And then lastly, regarding the latest news that came from vaccine policymakers, could you comment which elements may or may not affect your vaccine business? And do you see particular risks or opportunities there?

So, Many questions. So, thank you for that. So, I would say, we have not, yes, we are, of course, monitoring the, on an ongoing basis, the overall, Lyme cases during the study. We are and will not, comment on those other than, we have seen, the overall profile over the past couple of years. Be pretty consistent in terms of a number of Lyme cases and we see at this point in time, no, concerns.

With regards to the study cohort, the answer is no. With regards to, the other activities that you were mentioning, namely, impact on the business. I mean, at this point in time, probably no one is able to really say what all this political, dynamics, in the United States mean with regards to any of the vaccines on the market or in development.

And I think, we should probably not speculate about that. And will it have an impact? Probably yes, probably not. So, I think we have to wait until, certain, things become more defined and turned into real, requirements or policies.

Excuse me, any further questions?

Thank you very much.

Thank you. Now we're going to take our next question. And it comes to land of Oscar Haffen Lamm from Bryan, Garnier & Co. Your line is open. Please ask a question.

I see, thank you for taking my questions. So, the first one on IXIARO, relative to Q4 last year, sales work is similar. So, we're just wondering if there were any seasonality effects seen during this first quarter and then maybe how you forecast the growth of the asset for the remaining of the year.

So, on IXIARO, like I said, it, it's, the impact is more quarter over quarter. I don't think there is any particular seasonality impact in Q1, except as I mentioned also, particularly in one of our indirect markets, there's probably some stocking effect, but in the overall picture, I would not say it's absolutely material. And I'm sorry, I didn't get the second question. Can you maybe repeat that one?

Yeah, just, how do you forecast, the growth of the IXIARO for the remaining of the year.

Oh yeah, so we have not guided specifically on the on IXIARO, but what we did say is we expect IXIARO to continue to grow the double digit CAGR which, we would expect for this year double digit growth, but we have not guided specifically on the, on the number for IXIARO.

Okay, thanks. Then maybe quickly a second question this time on IXCHIQ. I was wondering if, following the updated recommendation from the French [IXCHIQ], there could be a potential impact related to the order book of vaccines that were ordered for the outbreak in La Reunion.

We have at this point in time, confirmed the 40,000 dose order and we delivered the 40,000 dose order and all the rest we have to see.

Okay, thank you.

(Operator Instructions)

And the question comes to land of Simon Scholes from First Berlin. Your line is open. Please ask a question.

Yes, good afternoon, thanks for taking my questions. I've got 3.

1st of all, I was wondering if you could give us some color on the idle capacity costs, and your efforts to reduce these, and secondly on the IXIARO gross margin, which was, 73% in Q1, I mean, do you think the, gross margin on IXIARO is sustainable at this level and on the DUKORAL gross margin, do you expect that to be able to get that closer to 60%? Over time, thanks.

Yeah, so let me start with the gross marching questions. So, on IXIARO, we do think that quarter one was probably not representative, but it will be for the full year. We do expect an improvement, of course, versus prior year, but I think most of 70%, I think it's probably not what we will see for the full year.

I think, on the DUKORAL, we have, I haven't, we haven't guided on the gross margin, but I think the Q1 gross margin is probably roughly, representative.

On the idle cost, so for the first quarter, I would say it was probably roughly around EUR2 million. And the, so this is primarily related, of course. One, because we have, large capacity, but also because some of the new, especially new manufacturing sites in Scotland, we are in progress of transferring over, production. So, over time, we will see a reduction that idle cost, of course.

Okay, thanks very much.

Thank you. The speakers surrender further questions for today. I would not like to hand the conference over to the management team for any closing remarks.

Thank you so much for your attention today. Good questions and as usual, and your interest in following the company and closely, and we are looking forward to staying closely in touch while we are focusing on our execution this year to build strategic value for the future.

Thank you so much.