Valneva SE (NASDAQ:VALN) Third Quarter 2022 Results Conference Call November 10, 2022 9:00 AMm. ET
Participating companies
Thomas Lingelbach – President and Chief Executive Officer
Peter Buhler – Chief Financial Officer
Conference Call Participants
Maury Raycroft – Jefferies
Samir Devani – Rx Values
Evan Wang – Guggenheim Partners
Max Herrmann – Stifel
Arsène Guekam – Kepler Cheuvreux
Olga Smolentseva – Bryan Garnier
Nick Hallatt-Goldman Sachs
Operator
Have a nice day and thank you for being here. Welcome to the call for Valneva effects for the first nine months of 2022 and corporate updates. At this time, all participants are in listen-only mode. After the presentation of the speakers, there will be a response session. [Operator Instructions] Please note that today’s convention is registered.
I would now like to turn the lecture on to your speaker today, Thomas Lingelbach, Executive Director. Continue.
Thomas Lingelbach
Thank you. Very smart day to all. We are excited to welcome you to our call for effects and updates for nine months. Yes, the nine months were marked by a number of possible key achievements. We are now at the nine-month turnover point of around €250 million, at a point of 3. 5 times six until 2021. We have a very strong monetary position with more than €260 million at the end of September, which excludes revenues from the recent global supply.
Our chikungunya vaccine candidate is making great strides toward licensing. The ongoing submission of BLA to the U. S. FDA. The U. S. is underway and is expected to be finalized by the end of 2022. Regarding our Lyme disease candidate, again, the wonderful progress with Phase 3 enrollment is progressing as planned. and is expected to be completed in the first part of next year.
As we move our major clinical assets, of course, we are striving to fill our pipeline. We are advancing some of our preclinical assets and are also looking to explore features to inject other clinical-stage assets into our pipeline. We have communicated in the afterlife about our transformation strategy. Of course, remodeling means for us, relying on our key assets, reducing COVID, diverting attention from COVID with a strong on our core assets, checking the advertising product online, but also rebuilding the pipeline and this is accompanied also through a resizing of the organization.
This is a procedure that we have been planning for some time. We have gone through the mandatory formalities with the representatives of the works council and, as we have seen, we aim for a relief of 20% to 25%, which in turn will translate into around EUR 12 million in savings in operating prices on an annualised basis. And Peter will expand on those things more thoroughly and in more detail on the last component of the presentation.
If we take a look at the pipeline shown on page 6 of the presentation, as a reminder, chikungunya, as I said, our program right now is on its way to the first license with a BLA presentation that will be finished before the end of the year. The first company to get BLA approval may be eligible for a precedence review voucher, which we of course plan to monetize, with Lyme Phase 3 enrollment underway, similar to the next step planned early next year in partnership with Pfizer. Again, we’ll come back to those topics in detail.
You will see here on the slide, also two essays that are marked in light blue. Many other people ask us where we are. Sanofi’s knowledge about C. diff is out and now we have tracked Pfizer’s knowledge about C. diff, we are going to explore the partnership for this asset, i. e. the licensing of this asset.
On Zika, we’ve effectively conducted a Phase 1 study. And now that Zika has received the WHO fingerprint and target product profile for this or prioritizes inactivated vaccines, we’re reactivating this program lately. Then, as an example, we highlight two of our preclinical assets, which are lately prioritized through Valneva.
One is hMPV, obviously an attractive candidate in a prefusion subunit that will experience its preclinical evidence of concept until the end of this year and could also be an attractive candidate in combination with RSV and our EBV candidate even earlier in the preclinical pipeline, still obviously, a very attractive indication that we have prioritized at this point.
And then at the back of the slide, you’ll see our 3 advertising assets, IXIARO, our Japanese encephalitis vaccine. DUKORAL, our cholera vaccine and of course our 2021 BLA COVID vaccine, talking a little bit about Lyme, all familiar with program, only one in clinical progression for Lyme disease at present. Phase 3 follows 3 successful phase 2 studies, which are added in pediatrics.
The program is an exclusive, global partner of Pfizer based on a recombinant subunit technique with six serotypes. -Proven mode of action that was validated through a placebo-controlled box efficacy study in the 90s. And the program is under the designation Fast Track.
Phase 3 that is lately underway again, illustrated on page 8 of the presentation. Currently, we are achieving a randomized, placebo-controlled Phase 3 called VALOR, which has approximately 6,000 participants. of course, we are achieving this in high-risk spaces in the U. S. US and Europe, randomization in the US, Europe two to one, zero in placebo, one to one. And basically, the main endpoint is the rate of Lyme disease cases shown after the current season.
And the secondary endpoint includes the rate of Lyme disease cases shown after season one. Therefore, we are already testing in a study the withdrawal that will be mandatory after the first gravity number one, then, of course, the thematic tool and pending good fortune. Pfizer could potentially register a biologics license application with the FDA and an MAA application with European agencies in 2025. As a result, our program remains the world’s most complex chikungunya vaccine program.
We are well in our continuous submission procedure after a successful pivotal clinical study that met all endpoints, the program has an innovative designation from the FDA, Fast Track, EMA PRIME and I have already discussed potential eligibility for proof of review priority.
As a reminder, it is a lifetime attenuated single injection vaccine. It is expected that after an injection, there will be very prolonged protection. Lately we are reading antibody patience studies that last up to five years. And we also have a partnership in this program through CEPI with the Butantan Institute where lately we are fulfilling a phase 3 for teenagers in other jurisdictions outside the United States.
We discussed above that we intend to market this product ourselves, as there is fair compatibility and significant synergy within our advertising and advertising footprint. And when we communicate the duration of the market and, of course, as we get closer to launch, that of course becomes a big question. We have reiterated at this point that we estimate that the market will exceed 500 million euros until 2032, which is when we expect a decent penetration of this vaccine.
Clinical knowledge is highlighted again, summarized in this presentation. The main ones are that we have noticed very high reaction rates and that the basis of the license is the so-called accelerated approval pathway. Therefore, there is an immune substitute to determine effectiveness. of the vaccine. Therefore, this 0 reaction rate was found to be 98. 9% after a single vaccination. The immunogenicity profile is maintained over time, even at day 180, it is still 96. 3%, attractive and very intelligent in older adults, similar degrees of Reaction rate 0, titer of neutralizing antibodies in young adults, and then conversion 0, of course incredibly superior and one hundred percent is not possible.
From a protection perspective, generally well tolerated and a protection and tolerability profile you would expect for this vaccine elegance. It’s also worth noting that we recently added some knowledge issues to examine VLA1553, 301. And this had to do with more knowledge in other people over 65, where meanwhile it is also shown through another cohort, an additional reading that zero reaction rates are at the highest levels.
When we come to the program’s progress toward FDA filing, we presented the program at CDC’s ACIP assembly in October. Continuous presentation was introduced as I mentioned earlier. And here you can see the next steps with the breakthrough review of the breakthrough treatment designation, the final touch of BLA submission until the end of 2022, and of course, PRV eligibility.
We provided a review of VLA1553 at the CPIA meeting, no CHIK vaccine has been licensed in the past. There is no existing ACIP advice at this etapa. de the ACIP vote scheduled for February 2024, plans to provide more information on the epidemiology of CHIK travelers and disease burden, a more comprehensive review of immunogenicity and protective data, as well as so-called correct assessment and longer-term knowledge in younger age groups.
Yes, when we then take a look at customers of what’s to come or what’s to come in our program, VLA1553, the ongoing clinical trials examining other regulatory filings, of course, namely antibody patience. I discussed that this is an examination that, of course, stick to the previous studies that have already been presented and we plan to stick to the respective volunteers for at least five years.
The 12-month data is expected later this year. The last clinical study I mentioned already involved 750 volunteers, aged 12 to 17 years, 12 months of follow-up and data expected for the first part of next year. And then we will be able to load more studies for the long-term commercialization of the product, adding co-vaccination, special populations. And then, of course, the Phase Four observational and effectiveness review.
When we take a look at our portfolio of advertising products, you will see, of course, here, that we have strong sales of our advertising products in the first nine months. Sales of non-COVID products increased by 11. 2% compared to the previous period. seeing a significant recovery in the markets with a significant accumulation of Japanese encephalitis in the segment.
We see that sales of cholera vaccines have increased at a similar point and that third-party products are making a significant contribution to our business. They increased to €18. 4 million compared to €11. 2 million in the comparable era of 2021. And this is of course connected to one of our main distribution agreements, basically with the Bavarian Nordic countries.
Of course, we have also sold COVID-19 vaccines as part of our EC APA. We generated €23. 9 million in revenue. All deliveries have been made to the sales of its members. There are still some materials to operate, but in general, that’s where we are in COVID. That we still plan to look for potential opportunities outside Europe and outside existing authorized areas.
Speaking of COVID, the only inactivated total virus COVID-19 vaccine approved in Europe, we were the first to download the normal marketing authorization in Europe for this vaccine belonging to a more classic generation along with a trendy adjuvant CpG. 1018 that provides the bias to Th1.
We are still waiting for a few more COVID data points, the WHO can help us sell the remaining stock we have, particularly in overseas markets for which we have already received positive heterologous booster data after the number one vaccination with the AstraZeneca vaccine. We will also be waiting for information from others who have been prepared with mRNA and/or herbal infection. All this will be over until the end of this year.
And as we move forward with this program, we also extinguish the lifespan and stability knowledge is available. And right now we’re at 18 months, yes, 15 months, archiving for 18 months. And, of course, we will stick to this until the end because inactivated vaccines have a shelf life of at least 24 months or more.
When we take a look at our size change to reflect the evolution of the COVID-19 program, we have indicated it in many other places. Due to the relief in our order volumes from EU Member States, we have suspended our internal and external production. . We have an agreement agreement with our external spouse IDT, for example. We have saved our stock for future supplies. We are going to deploy our stocks. We talked earlier between 8 million and 10 million doses.
And yes, of course, we have specifically strengthened the organization in reaction to the expected demand for COVID and, in particular, the huge amounts of COVID manufacturing. So, we’re now cutting our workforce globally by about 20% to 25%, which still means we’re going to land at 25% above the pre-COVID workforce. And this, of course, allows us to retain the skill and experience that we’re building during the COVID period. And also allow us to fully concentrate on one of our main strategic pillars strategies, namely our progress in R
With that, I would like to move on to Peter to take care of the monetary report.
Pierre Buhler
Thank you Thomas. Good morning or smart afternoons to all. Now let’s talk about our financial statements for the first nine months. Total profit reached €249. 9 million, an increase of 258% compared to the first nine months of 2021 This accumulation is largely due to other revenue and I will come back to this later.
Product sales reached €74. 4 million, an increase of 64% compared to last year. This is expanding tremendously thanks to shipments of VLA2001, our COVID vaccine to European Member States. At the same time, it also reflects the continued recovery of the market that is generating an updated demand for vaccines. Shipments to the U. S. Department of DefenseThey remain low, which was expected based on this year’s delivery schedule.
The graph on the right shows the composition of total revenue. The significant accumulation of revenue is largely due to other revenues, which reached €175. 5 million since the beginning of the year. This other source of revenue includes a release of repayment obligations that were recorded in the past on our balance sheet.
At the beginning of the year, we recorded €89. 4 million from other sources of UK government payment revenue for our VLA2001 programme. In the third quarter, we released €110. 8 million in advance invoices from European Member States similar to the VLA2001 orders that were cancelled. Other revenue also comes with negative revenue identified in the current quarter similar to the contract revision price.
Let’s move on to slide 19 to take a look at the main points of sales of our products. IXIARO sales declined from last year, which is the result of planned processing through the U. S. Department of Defense. U. S. As shown at the back of the table, IXIARO’s personal market sales increased from €4. 6 million in the first nine months of 2021 to €19. 4 million for the current year, a cumulative of 270% in uniform currency.
DUKORAL’s sales reached 9. 2 million euros in the nine months of 2022. An impressive increase to 500,000 euros reached last year. Third-party products also offered robust functionality and reached €18. 4 million to €11. 2 million in the first nine months of 2021. Finally, sales of the COVID-19 vaccine increased from 3. 8 million euros at the end of June to 23. 9 million euros in September of the year, year-on-year, driven by shipments to European member states in the third quarter, as discussed. through Thomas before.
Now let’s move on to slide 20, on P
Research and progression expenses were minimized from €117. 2 million in the first nine months of last year to €75. 4 million in the first part of 2022. This reduction is due to minimizing spending on clinical trials as our chikungunya vaccine moves toward licensing, combined with a reduction in spending on our COVID-19 vaccine candidate VLA2001.
Selling, general and administrative expenses decreased year-over-year, primarily due to the reversal of a percentage-based reimbursement provision and related payroll taxes. The prices of the fictitious percentage systems for certain employees, as well as the social security charge in percentage plans, count on the evolution of the percentage price of Valneva.
In total, we had a release of €30. 6 million during the first nine months of 2022 compared to a charge of €13. 7 million in the same era last year, a difference of over €40 million that would possibly have affected all of our P expense funds.
Other sources of income net of other expenses amount to €7. 5 million, compared to €16 million in the first nine months of 2021. This reduction is basically due to the reduction in the tax credit R
Financial expenses and the source of income tax amounted to 42 million euros compared to a rate of 8. 3 million euros in the last year. The difference is primarily due to significant unrealized foreign exchange losses due to U. S. dollar-denominated liabilities. in line with the accumulation in the loan. The total loss of the era reached €99. 1 million compared to €245. 9 million in the first nine months of 2021.
Next slide please. Looking at our COVID business, we see total turnover of €224. 1 million and an operating loss of €14. 2 million to an operating loss of almost €200 million in the first nine months of 2021. The P
The freight of goods has advanced steadily compared to last year, thanks to the reduction in prices of similar to Pfizer and the CTM unit in Sweden. In addition, 2021 figures were affected by share cancellations and prices of unused capacity. The point of operating expenses is, as already mentioned, definitely impacted by an effect similar to the company’s shareholding plan.
R Rates
Before we get to the tips, let’s move on to slide 23 to take a look at our pricing proposition and how we plan to implement it. The first pillar talks about the progression of our late-stage clinical pipeline programs. We have initiated the submission of our chikungunya vaccine candidate to the FDA and are preparing for prospective launch in the United States and later in Europe. At the same time, we continue our seamless collaboration with Pfizer on the Lyme program, and as previously discussed through Thomas, patient recruitment for the Phase 3 trial is still ongoing.
The pillar of the moment is to advance new vaccine applicants from the preclinical stage to the clinic. Obviously, this is a priority, as we are committed to renewing our clinical portfolio at an early stage. For now, the focus is on the HMPV program, as Thomas discussed earlier in this call. At the same time, we have established a small committed team that frequently scans markets for potential licensing opportunities to complement our clinical portfolio.
The third pillar is to maximize our advertising products. We need to take credit for the recovery in the market and make sure our vaccines expand at least in line with the market. We are very encouraged by the expansion we have been able to achieve through our distribution partnerships and the recent agreement with VBI. It is a representation of our preference to complement our commercial proposal where it makes sense.
Finally, as announced in the past, we aim to sell more doses of COVID-19 vaccines outside of Europe. This is an asset that will continue in 2023. Last column, we are in the process of resizing our operations. started a program to reduce our workforce by 20% to 25% due to the closure of our COVID program. The reduction is expected to generate annual savings of around €12 million and will be achieved through a combination of herbal redundancies and redundancies. To some extent, these savings are expected in our production operations. The resizing of our organization will not have an effect on our progression plans, as we are obviously committed to making an investment in what is needed to advance our R pipeline.
Before moving on to forecasts, let me briefly comment on our money position. Our balance sheet as of September 30 published this morning shows a total money and money equivalents of 261 billion euros. While this is still a liquidity peak, we fed a significant amount during the third quarter. As a company, it is vital to have sufficient funds to invest in our clinical and preclinical portfolio. Therefore, we made the decision to factor shares at the end of September and, in a complicated, controlled market to raise more than 100 million euros. Revenues from this offering are not yet reflected in the September financial statements and further strengthen our monetary position. As a result, the company is well placed to run our existing programs.
Now let’s move on to the forecast for fiscal year 2022 on slide 24. We reiterate our overall profit guidance of €340-360 million, adding €30-40 million from COVID vaccines and €70-80 million from other vaccine sales. Reminder, we have increased guidance for other vaccine sales in the half. Other earnings are expected to be approximately €240 million, based basically on the recognized earnings of the EC and UK COVID-19 contracts, meaning those gains will not have an additional effect on money in the fourth quarter. We expect R expenses
This concludes the monetary segment of this call, and I would like to pass the word to Thomas to come the catalyst.
Thomas Lingelbach
Yes, let me summarize what we have already discussed on other topics in this presentation, what are the short-term transparent catalysts for Valneva online. Of course, it’s amazing that we book everything on time given the seasonality of Lyme disease and the respective progression of the trials: the two-season trial. We are also waiting for follow-up knowledge from existing studies, which we have not discussed in particular here about key enablers.
In chikungunya, very obviously, the final touch of the BLA presentation before the end of the year, of course, also knowledge such as antibody patience knowledge at the end of this year or knowledge of adolescents at the beginning of next year, which will be vital to complete the label and presentations in other territories.
On COVID-19, we expect new knowledge until the end of the year, as I mentioned before. And, of course, we are, as we have made transparent in the past, in contact with some foreign markets, i. e. countries in the Middle East, Asia, for example, where we are looking to, to offload regulatory approval andb, prospective sales of our existing COVID-19 VLA2001 vaccine in an accredited inventory, all of course to maximize the price of existing assets. These are the main catalysts we see. So, always, very, long-awaited news sources: short-term news sources.
And with that, I would like to pass on to the operator his questions.
Q&A session
Operator
Thank you. [Operator Instructions] And the first comes from the lineage of Maury Raycroft of Jefferies. Your line is open.
Maury Raycroft
Hello. Congratulations on the progress and thank you for answering my questions. I’ll start with the preclinical assets. He discussed VLA1554 and 2112 being a priority lately. Can you tell us how many investments you plan to invest in those systems?And where will the 1554 proof-of-concept preclinical knowledge inform until the end of the year?Anything else you can say about the timeline for moving those systems into the clinic?
Pierre Buhler
Well, good. So Maury, for the moment we have distributed the investments R
So of course, when it comes to HMPV, the company will obviously compare clinical access to HMPV. We have to prepare the respective plans. In parallel, we will also read in the possible combined parameters that HMPV can be a very attractive asset for other people running RSV, given that the RSV HMPV combo is expected to charge a significant price in terms of medical advantages by carrying a large amount of unmet medical need and EBV will take a little longer to progress at this stage.
Maury Raycroft
they gave it to me Give meaning. And I’m just going to make another query about 1553 for antibody patience and adolescent studies. Can you remember what the expectations are and what would be smart or bad knowledge?I suppose for the knowledge of antibody patience in particular, is there a certainty?Antibody patience threshold that matters.
Thomas Lingelbach
So smart at the end of the day, the most important thing, Maury, is that you still see the efficacy of the vaccine. So we relied on that, on a surrogate marker derived from passive movement in non-human primates accepted by the authorities. And then it translates into a coverage point 0, i. e. a percentage of other people above the respective coverage threshold. And that there is no regulatory legal responsibility to say what is right or wrong. I mean, of course, I would expect over 80% to be a perfect result in the global vaccine in terms of long-term antibody patience points. That would be all I can say to 1553.
Maury Raycroft
It is ok. It’s useful. And I’m going to prevent there and get back in line. Thank you for answering my questions.
Pierre Buhler
Nothing, Maury.
Operator
Thank you. Just a moment for our nextArray Our next comes from the lineage of Samir Devani of Rx Securities. Your line is open.
Samir Devani
Hello everyone, thank you for answering my queries. I have a pair. The first considerations are a type of VLA15 and its contribution to Pfizer’s clinical trial prices. The press release talks about 40% in 2022 and 2023. Je I was just looking to explain with you, don’t you expect to give a contribution at the end of the study?Because it is obviously in 2025, so that is the first consultation. And then, in the consultation at the moment about the COVID-19 vaccine, you had smart sales in the quarter. I think you told us earlier that you have between 8 million and 10 million doses in your inventory. Maybe you can just tell us about the prestige of inventory?And can you just explain if you have shown orders for 2023?for those orders? Thank you so much.
Thomas Lingelbach
Hi, Samir. Let me start with the COVID factor and then I’ll pass the word to Peter, who can back up how we’re doing: how our payment for our lion percentage is working in Phase 3 as a result of the last amendment we made. with Pfizer.
So in stock, yes, I’m sure you’re right. In the past we have shown 8 to 10 million doses. That is certainly correct. We have this stock in our warehouses and lately we have not shown orders beyond the EC and existing orders in Bahrain. But as I said, we are active right now in seeking regulatory approvals in jurisdictions where we believe there is demand and where we have ongoing discussions about the potential deployment of this stock.
And, of course, as soon as something like this materializes, we will promptly inform the markets. With that, Peter, you may need to know how our contributions to the lion charge work and why it’s 2022-2023.
Pierre Buhler
Yes, of course. Samir, well, basically, the way Pfizer’s finishing works is that we pay 40% of the total cost, but our 40% is preloaded. So, necessarily, almost all the contribution will be paid in 2022 and 2023. There will be a small residual amount later, but basically, after the end of 2023, it will be Pfizer who will cover its 60% of the total cost, and we will have no more withdrawals. Here’s how it works. And I also take this opportunity to remind you that what we pay to Pfizer necessarily goes against our balance sheet, so it goes against our contractual duty and not through P.
Samir Devani
It is ok. That’s very helpful. And just to clarify, the CE contract and the Bahrain contract, do you have any planned sales for any of those contracts in 2023?
Thomas Lingelbach
There may only be a small amount similar to Bahrain’s contract even to the EC contract.
Samir Devani
It is ok. That’s very helpful. Thank you so much.
Operator
Thank you. Just a moment for our nextArray Our next comes from the lineage of Evan Wang of Guggenheim Partners. Your line is open.
Evan Wang
Hello. Thank you for answering my query. Can you?My first query is about 1553. Can you perceive some of the additional essays or analyses that can open up new opportunities, I guess in contexts like military, pediatrics, garage time opportunities?Is more testing needed for the type of driving and any kind of deadlines or expectations we might think of there?And then I have a follow-up.
Thomas Lingelbach
Well, good. So yes, let me remind you of the general program of chikungunya progression. Therefore, we conducted two pivotal Phase 3 trials, one of Phase 3 immunogenicity to determine the protection and efficacy of the vaccine in adults over the age of 18 and in parallel to this clinical examination of batch consistency, it is also required to obtain licensure. So, with those two studies, we expect the vaccine to be approved in the U. S. For anyone over the age of 18, all the segments he discussed from an American perspective. Of course, we need this vaccine to be available to everyone, probably from the age of two. So, this means that we will be conducting and conducting studies in other younger age groups.
And this is, and one of the most important studies is the study that we are recently conducting in Brazil through our husband Butantan. And this data complements and replaces or just the label from an American perspective. We also hope that this data we generated in Brazil will be categorized with the existing package so that we can have broader labels early on in terms of age range.
All the other studies I looked at on the slide, for example, covaccination studies, etc. , are voluntary studies. So, those are studies that are not necessary from a regulatory perspective, but that can provide us with additional knowledge to prospectively differentiate more and more encouragement of potential vaccine adoption in the future. And those are, for example, co-vaccination studies. Then, of course, you have for the vaccine, we have the typical post-licensing Phase Four commitments in our case, a cash efficacy examination which, of course, is a post-licensing regulatory requirement, which will take place.
Evan Wang
Super. Can you tell us about some of the competitive dynamics in the market?I think there are other tests going on, I think they are expected in the first part of next year. I guess when it comes to HCIP 2024, do you expect several vaccines to be discussed right now?And can you tell us how you see the kind of competitive dynamics?Thank you.
Thomas Lingelbach
Very smart question. So let me start with the last component first. We do not expect that at the previous FDA meeting, other chikungunya vaccines will be in a position of discussion. So at this point, as you know, there is only one more. Program in phase 3 in the “Western world”. And this program is in two phase 3 studies, in our view, one examines for which the final enrollment touch has just been announced, and another examines to complete the higher age diversity for which, in our judgment, recruitment is still ongoing. Therefore, we expect that in terms of competition, in terms of licensing, we will have to be way ahead of any competition.
Evan Wang
Super. Thanks guys.
Operator
Thank you. Just a moment for our nextArray Our next one will come from Stifel’s Max Herrmann line. Your line is open.
Max Hermann
Max Herrmann from Stifel. Thank you very much for answering my questions. Some of them can. First of all, I just wanted to understand a little bit the comment about the final touch of VLA15 enrollment, the VALOR exam in the second trimester. If you fully recruit or recruit at this point, will you allow you to recruit all patients in time for?the season, for the 2023 Lyme disease season?That’s my first question.
Thomas Lingelbach
Essentially, Max, first of all, hello, and a very smart question. You know, the season starts in March, April and continues until September, ending in the region: September, October. Of course, and the current quarter is long, right? So it’s not, it doesn’t necessarily mean we’re recruiting until the end of the current quarter. But essentially, of course, we plan to continue with registration as soon as possible so that we can get one hundred percent of the expected other people in the first season.
Max Hermann
Because, obviously, you have a six-month vaccination era to get the 3 doses, and therefore, even if you start in April, you only end up with the patients who will finally be in April, in October.
Thomas Lingelbach
He will have a number of patients that he will catch towards the end of the season.
Max Hermann
It is ok. My next questions are more financial. So I’ll put them in. In terms of COVID inventory, I know it says it has between 8 and 10 million doses available. I was wondering if you could give us a review of the grade component of your inventory that is represented. through this real COVID inventory. The moment factor is just the margin. In the fourth quarter, notoriously: gross margin, that is, had a small margin noticeably in the third quarter. I guess the most common is similar to revenue from collaboration and licensing, which I guess is a margin with no margin. I’m just looking at how we deserve to take a look at the evolution of the margin in the future.
And then, in terms of R
Thomas Lingelbach
Stone?
Pierre Buhler
Yes. Sorry, I was silenced. So, the first question, Max, about COVID actions. So, we didn’t give the main points of stocks in the third quarter, but you can assume that there is, in fact, a smart bite of the stocks we reported on our COVID-related balance sheet. it is to assume that it is a part. Most of them, of course, are finished products or finished and semi-finished products. And as we said, those are the doses that we intend to sell in markets outside Europe.
Gross margin in the fourth quarter, again, here we haven’t given any guidance on gross margin, so over time, I wouldn’t comment in particular on the fourth quarter. I think, overall, we obviously see our gross margin on our vaccines improving particularly as we accumulate volumes.
And we hope that in 2023, we’ll probably be close to what we were before COVID. And don’t forget that we were at the most sensible point in my head, 64%, I think quite a lot. Therefore, obviously objective of entry this diversity with respect to the load of goods in the vaccine. And surely he’s right. Of course, the margin is diluted a bit depending on the contracts we have with the parties at our CTM plant in Sweden.
And finally, your about the R
Max Hermann
So it delays R’s predictions a bit.
Pierre Buhler
Yes, that’s right. . .
Max Hermann
Is this the right to think about it?
Pierre Buhler
Well, yes, our R expense
Max Hermann
Right. Thank you so much.
Operator
Merci. Et a moment for nextArray Our next one comes from Kepler Cheuvreux’s Arsène Guekam line.
Arsène Guekam
Thank you for responding to myArray First, tracking R’s expenses.
Thomas Lingelbach
So, probably let me start with your last query and comment. So please stay in the brain of chikungunya target segments. Chikungunya. One is Array Therefore, among other people living in the subtropical tropics, other people living in North America, Europe, Australia. And here we have massive synergy with our existing enterprise infrastructure. in North America, that is, in the United States, Canada, Europe we have: the United Kingdom, we have France, we have Austria, we have the Nordic countries. And with that, we cover more than 80% of the mandatory markets with existing groups and existing infrastructure.
The component at the moment is similar to the garage and preparation for possible outbreaks. Again, of course, we’ll want to load resources, but we hope that, overall, we’re well placed within our existing infrastructure. Then, of course, we have a prospective segment in establishments like the military. And again, we have existing, well-established channels and infrastructure here. the right to LMIC endemic countries, making middle countries low-income.
And it is a partnership that we have established and that we are already announcing, so we will not market the product ourselves in the LMIC territories. And then, maybe, maintenance, yes, of course, we have a committed factory in Scotland for COVID-19. At the moment, we do not know what we are going to do with this plant. And therefore, we will keep the plant in a so-called hot phase. And this hot level has a charge and we haven’t revealed and we can’t reveal it right now, but it’s not, as I said, an important basis for staying warm. Therefore, it is probably not vital in the overall framework.
With that, I talked Peter about other COVID financial matters.
Pierre Buhler
Yes, from what there is about R’s spending.
Arsenio Guekam
It is ok. Thank you.
Operator
A moment for our nextArray Our next one comes from the line of Olga Smolentseva of Bryan Garnier. Your line is open.
Olga Smolenteva
Good afternoon. Congratulations on the progress and thank you for answering my question. My first meeting on the recent ACIP assembly turns out that the effectiveness of the vaccine in the adult population in particular is important. So maybe I’ll just repeat that the knowledge of that age group, which is about a hundred participants right now, would be enough. And especially in light, this emerging study reports on 400 participants in this age group.
And the question at the moment is necessarily which organization defines the threatened populations most clearly. So I’m curious to know what those faster threat teams would look like. Thank you.
Thomas Lingelbach
Hi Olga, do you mean at the time to Zika or Lyme?
Olga Smolenteva
In Zike.
Thomas Lingelbach
So smart then, so first, let me start with your first question. Yes, you saw that at the CPIA meeting, we presented more data, further reading of our cohort of seniors. We consider, in all the interactions we’ve had to date, our database with about a hundred other people over the age of 65, combined with the fact that we don’t see any age dependency on our 0-point coverage points, is sufficient for the full label.
This is our existing hypothesis, and it’s based on all interactions to date, as I said, driven by two aspects, namely, first, that we haven’t noticed age dependency in our serological and immune profile for the vaccine. And to have a hundred people, some of whom are very old in this cohort.
So, secondly, when we’re targeting the threat, of course, I mean it’s a wonderful question. And so, on the one hand, of course, other people who travel to spaces where there is a great threat of exposure to chikungunya. infection. These are spaces where you already have existing outbreaks or a high threat of outbreaks. And those are basically tropical and subtropical spaces. And it will be in the context of fitness economics research, of course it will be detailed, characterized and accurate as a component of the ACIP process.
Olga Smolenteva
It’s great. Thank you.
Thomas Lingelbach
You’re welcome, Olga.
Operator
Thank you. A moment for the next Array Our next comes from the lineage of Nick Hallatt of Goldman Sachs. Your line is open.
Nick Hallat
Hi, I’m Nick for Keyur. Thank you for answering my questions. Just a little more about chikungunya. What is your updated opinion on the possible monetization of GRP there?What if it can also give us a concept of costs and possible benchmarks that we deserve to think about?And then, if you possibly had a monetary question, your 12 million euros of annual savings via restructuring, where we deserve to think about its effect on P.
Thomas Lingelbach
Well, do you want to start?
Pierre Buhler
Yes, I can start with the savings of resizing the organization. So, Nick, essentially, I would say the vast majority of relief will be in the production space, though, because that’s where we obviously see the significant relief: the maximum relief in workload as we shut down COVID-19. So that’s where I think the maximum will go out.
Thomas Lingelbach
So, of course, in GRP to return your GRP inquiry, there was a procedure around GRP which was a respective request that we will make as part of the final touch of the submission for BLA. And then once we verify eligibility, we’re moving to get the PRV with BLA approval and of course the company will start marketing that GRP as soon as we approach the GRP.
Many or most corporations in the afterlife have had their GRPs in their wallet before receiving the GRP. And this is, of course, all we will do and try to do in the same way, as long as everything goes according to plan. and that we have explained the Fast Track and all Fast Track situations are confirmed. We expect the date of PDUFA to be in the current part of next year. So who will tell you a little bit of the timeline of possible GRPs as well?
Nick Hallat
It’s great. Thank you. And do you have that price?
Pierre Buhler
Yes, you talked about price. I mean, as I told you before when we met, we’re not right now, we’re in the middle of the procedure related to health, the economy, and then the analysis, the pricing, etc. Therefore, we do not need to interfere with this procedureand, therefore, lately we are not in a position to comment on prices.
Nick Hallat
It is ok. Sounds good. Thank you so much.
Pierre Buhler
please.
Operator
Merci. Et I don’t show any more questions in the queue. I will call Thomas again for any final comments.
Thomas Lingelbach
Thank you very much for your time today. Great questions, as usual. Thank you for following Valneva for supporting us and we look forward to keeping you updated on the exciting procedure and exciting progress ahead. Thanks a lot. Have a wonderful day.
Operator
That concludes the convening of today’s convention. Thank you for participating. You can now log out. Everyone, have a day.