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Valneva CEO optimistic after signing €1.4B COVID-19 vaccine deal with UK

Valneva SE's €1.4 billion deal with the U.K. government to ramp up production of its coronavirus vaccine could accelerate its journey to approval, according to analysts.

Under the terms of the deal, the Saint-Herblain, France-based biotech will provide the U.K. with 60 million doses of its experimental vaccine, VLA2001, at a cost of €470 million next year, should it be successful in clinical trials. The government has also secured an option for an additional 130 million doses between 2022 and 2025.

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Valneva CEO Thomas Lingelbach
Source: Valneva

The U.K. deal prices a shot at between €7.50 and €7.80, an attractive offering considering what a vaccine typically costs, according to Valneva CEO Thomas Lingelbach. "The at-risk investment, the up-front investment … that's the important part of course, for a company like us that we have someone to help us sharing this investment and we are very, very grateful that the U.K. government has chosen this approach," Lingelbach said in an interview with S&P Global Market Intelligence.

The government is also investing in scaling-up vaccine production at Valneva's manufacturing facility in Livingston, Scotland, which will be recouped against the supply deal. With only a small number of pharmaceutical companies able to carry out the notoriously complex manufacturing of vaccines at scale, the industry is ramping up production capabilities around the world with the help of funding from the likes of the Coalition for Epidemic Preparedness, or CEPI, and individual governments.

"This pandemic has resulted in the fact that people think about manufacturing capacities for future potential outbreak diseases already today," said Lingelbach. "And I think this is another reason why we have been able to partner with the U.K. to really build a viral vaccine manufacturing facility that could cope in future also with any other disease outbreaks."

Valneva, which is focused on vaccines for diseases with unmet needs, received $130 million from Pfizer Inc. to advance its experimental Lyme disease vaccine candidate VLA15 into a late-stage study in May. Phase 3 trials of the company's chikungunya vaccine, which have been partly funded by CEPI, started last week.

VLA2001 is one of the few inactivated vaccine candidates in development for COVID-19 and is based on the company's approved vaccine for Japanese encephalitis, Ixiaro. Inactivated vaccines use the killed version of the virus and do not provide as strong a response hence the need for a booster shot to maintain immunity. They are considered a safe approach with a well-understood mode of action, namely generating neutralizing viral antibodies against the virus itself, according to the CEO.

Unlike at least 17 coronavirus vaccines that are already in various stages of clinical trial — including candidates already in phase 3 trials, such as AstraZeneca PLC and Moderna Inc. — VLA2001 is not expected to enter the clinic until December 2020, with a target date for possible regulatory approval in the second half of 2021 for a two-dose regimen.

Max Herrmann, an analyst at Stifel with a "'buy" rating on Valneva, said it is possible that the company's coronavirus vaccine could leapfrog others being developed. "Given VLA2001 uses a proven approach and a manufacturing platform already used to supply Ixiaro, the EMA- and FDA-approved vaccine, Valneva does not expect it will be required to conduct large phase 3 trials to gain first regulatory approval that could come in 2H21," Herrmann wrote in a note to clients.


VLA2001 is combined with an adjuvant, made by Berkeley, California-based Dynavax Technologies Corp., to boost the immune response.

"Typically adjuvants have been introduced in the vaccine industry to improve the quantity as well as the quality of the immune response," said Lingelbach. "By improving the quantity of the immune response, you can automatically also turn it around and can say I have a dose sparing effect. … But, we are not counting so much on the dose sparing effect, but rather on the quality of the immune response," he said.

Valenva is not the only company using this technique to improve its coronavirus vaccine. Fellow French vaccine-maker Sanofi is using an adjuvant by the U.K.'s GlaxoSmithKline PLC, while Dynavax Technologies Corp. already uses an adjuvant in the U.S. biotech's vaccine for hepatitis B.

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