Earnings Call Transcript - VALN Q4 2023

Operator, Operator

Thank you. Hello, and thank you for joining us to discuss Valneva's full year 2023 results and corporate update. It's my pleasure to welcome you today. In addition to our press release and analyst presentation, you can find our consolidated financial results for the 12 months ended December 31, 2023, which were published earlier today available within the Financial Reports section on our Investor website. I'm joined by Valneva's CEO, Thomas Lingelbach; and our CFO, Peter Buhler, who will provide an overview and update on our business as well as our key financial results for the year. There will be an analyst Q&A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners that during this presentation, we'll be making forward-looking statements which are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French market authority, which are listed on our company website. Please note that today's presentation includes information provided as of today, March 20, 2024, and Valneva undertakes no obligation to revise or update forward-looking statements except as required by applicable securities laws. With that, it's my pleasure to introduce Thomas to begin today's presentation.

Thomas Lingelbach, CEO

Thank you so much, Josh, and welcome to today's earnings call. Yes, the year 2023 was not a year without challenges, but also a year with many achievements we are proud of. We made excellent progress across our R&D pipeline. And of course, 2023 was our chikungunya year. We got FDA approval for the world's only and first chikungunya vaccine and very recently, ACIP recommendation and respective adoptions. We enrolled the Phase III study with Pfizer on Lyme completely. And we are just about to reenter Phase I with the second-generation Zika vaccine. And I'm going to go into more detail on all of these programs. We have seen significant growth of our commercial business. Our product has surpassed prepandemic sales by 12% and 2022 sales by 26%. Both IXIARO and DUKORAL, our proprietary brands grew more than 70%, respectively, versus 2022. And overall, products grew 63% versus 2022, excluding the COVID-19 sales and Peter will go into much more detail. We are solidly funded with a strong midterm financial outlook. We had more than €120 million cash at year-end. We augmented that with close to €100 million as proceeds from our PRV sales early this year. And very recently, we extended the repayment of our interest-only period of the existing loan facility, which, of course, results in a significantly lower cash burn for the company. The operational business is, therefore, considered sufficiently funded, excluding debt repayment, of course, at a certain point in time, until the Lyme commercial revenues enable a sustained profitability for Valneva. When we look at the business in more detail, I would like to start this time with our strategy. Where do we see this company going? As we have said already more than 10 years ago when we created Valneva, our strategy is to become a globally recognized vaccine company, fully integrated, focused on the development, manufacturing, and commercialization of vaccines in areas of unmet medical needs, contributing to our vision of a world where no one dies or suffers from a vaccine-preventable disease. We see our strategy in three key pillars: number one, driving commercial growth. With the recent approval of IXCHIQ in the United States and our expected forthcoming approvals in other territories, we see the opportunity to unlock IXCHIQ value by building awareness and market growing. We hereby capitalize on the bundling effect within our existing travel business. We will further expand global reach by addressing low medium-income countries through partnerships, and with a change in the overall setting and our portfolio and more focus on proprietary products, we see cash flow positivity from the commercial business in 2025 onwards. The second pillar is to capture our R&D upside. We will continue investing in new vaccines that address high unmet medical needs, and we will leverage our proven R&D engine and strategic partnerships. We believe we are well positioned to do that, having developed three vaccines in the meantime from early discovery to licensure. We will continue focusing on vaccines that can make a difference. First, only, best, and we will generate meaningful catalysts for our investors, targeting the next Phase III entry post Lyme. We will maximize our integrated business model. We believe we are one of the few companies left in the group vaccine space that can really build on an integrated model. This means we will build continual value from R&D and commercial execution. We will support the timely approvals of our Lyme vaccine, which we continue to see as the single largest catalyst going forward. And by doing so, we see the possibility to achieve sustained profitability with potential successful commercialization and revenues on Lyme from our partner, Pfizer. When we look at IXCHIQ, the world's first and only chikungunya vaccine. It's FDA approved in adults, more additional regulatory approvals are expected this year. It's a live attenuated vaccine that offers strong and long-lasting protection from a single shot, and we target a minimum of 5 years here. The FDA approval triggered the PRV, which we sold, and the ACIP recommended the vaccine for certain travelers and laboratory workers. The U.S. launch is well underway, and we are selling through our existing and proven commercial infrastructure. Going forward, we see three key segments in terms of market opportunity: travelers, military, and an opportunity for stockpiles given that chikungunya is on the list of potential outbreak preparedness diseases. We will continue leveraging partnerships for Latin America and other low- and middle-income countries. With more visibility on the travel sector, the awareness around chikungunya, and the market opportunity around chikungunya, we clearly see that the global market for the chikungunya vaccine will exceed €0.5 billion, with probably €300 million to €400 million represented alone by the segment I was talking about earlier. In terms of upcoming milestones, I mentioned the additional anticipated approvals from EMA, Health Canada, and Anvisa in Brazil. We will also initiate the regulatory process in the U.K. Towards the latter part of this year, we will further go through the clinical development mainly through the Phase IV clinical program, but also other clinical activities, e.g. in the pediatric field. As we generate more and more data, we will undergo filings for potential label expansion. I mentioned our CHIK vaccine has a very differentiated target profile. It shows rapid and long-lasting immunity across all age groups tested. And I would like to specifically point out that the vaccine has very high sero protection levels, including the most vulnerable population, namely the elderly above 65 years of age, which has been specifically mentioned in the CDC adopted ACIP recommendation. We have close to 100% seroresponse rates after the single vaccination, and this has been maintained at a very high level over time. We got data already up to 2 years, we will generate data up to 3 years. On safety, the vaccine is generally well tolerated. Of course, it is a live-attenuated vaccine; these vaccines have the advantage that with a single shot, you have a very long protection, but there is a certain level of risk, but this is absolutely in line with other well-established live-attenuated vaccines in the market. We recorded adolescent trial data, and this data suggests a favorable safety profile regardless of previous CHIKV infection. Turning to our Lyme disease vaccine candidate, VLA15. It is today the world's leading vaccine candidate against Lyme disease. It's the only program in advanced clinical development today. By way of reminder, it is a multivalent recombinant protein-based vaccine that targets the six most prevalent serotypes of Lyme borreliosis in the Northern Hemisphere; it follows a proven, established, and validated mode of action. We received U.S. FDA Fast Track designation. The Phase III pivotal efficacy study is now fully enrolled. The program is partnered with Pfizer. They have exclusive worldwide rights to commercialize this product, and we anticipate the market opportunity to be north of $1 billion. We have already received certain milestone payments under the partnership with Pfizer, but overall, we are eligible for milestones up to $408 million. Upon successful commercialization, we anticipate tiered royalties from 14% to 22%. When we look at the upcoming milestones, which are in the short term or execution related, of course, we expect to complete our financial contributions to Pfizer in the first half of this year. Then on the execution side, we expect to complete full vaccination for Cohort 1 and the primary vaccination for Cohort 2, meaning Cohort 1 will have received three doses primary plus a booster dose. We will later in the year see the 2-year antibody persistence and booster results, which will give us a better indication as to whether this vaccine will require an annual booster later or not. As guided many times, we expect efficacy results from the Phase III trial at the end of 2025, which, if successful, will support regulatory filings that we currently foresee in parallel in the United States and Europe in 2026. Slide 12 of the presentation shows once more the Phase III efficacy study design. Following initial operational issues, we split it into two cohorts within one study, roughly 50-50. We have now enrolled more than 9,000 participants. The study is randomized 1:1 vaccine against placebo, 2:1 North America versus EU. The primary endpoint is the rate of confirmed Lyme disease cases after two consecutive tick seasons. Full vaccination for Cohort 1 is imminent, and then, of course, the booster vaccination for Cohort 2 will come next year. Turning to Zika. I mentioned at the beginning that we have decided to reenter clinical development of the Zika vaccine. We are leveraging what we call our optimized second-generation platform, originating from our Japanese encephalitis vaccine IXIARO, which got further extended and optimized for our COVID VLA2001. We believe that this second-generation adjuvanted inactivated whole-virus vaccine platform is perfectly suited for Zika. As many of you know, Zika is also transmitted by Aedes mosquitoes. We all have seen the devastating impact that Zika infection can cause. Today, there are no vaccines or specific treatments available. It is a PRV-eligible disease, and there is potential funding from public institutions. We see clear opportunities given the emerging epidemiology around Zika. In terms of next milestones, we will execute the Phase I clinical trial with the enhanced process and optimized vaccine formulation. Then we will decide on the further development strategy, considering the results, of course, more insights around the market opportunities and external nondilutive funding. With this update on the business, I would like to hand over to Peter to provide us with the financial report.

Peter Buhler, CFO

Thank you, Thomas. Good morning or good afternoon to all of you. Now let's look at the financial review of our fiscal year 2023. Total product sales surpassed prepandemic levels by 12%, reaching €144.6 million towards the upper range of our sales guidance. This represents an increase of 26% versus prior year. 2023 product sales included €5.7 million in sales of our COVID-19 vaccine, VLA2001, which was discontinued in 2022. We do not expect further COVID sales from 2024 onwards. Product sales, excluding VLA2001, reached €138.9 million, an increase of 63%. This increase was driven primarily by substantial growth of our proprietary travel vaccines. Looking in more detail, IXIARO sales reached €73.5 million, an increase of 78% versus the prior year, primarily the result of the continued market recovery and price increases. As of the end of September 2023, we signed a new one-year contract with the U.S. Department of Defense worth a minimum of €32 million, of which a bit more than half is included in our 2023 sales. DUKORAL sales reached €29.8 million compared to €17.3 million in 2022, marking an increase of 72%. Similar to IXIARO, DUKORAL benefited from significant recovery in the private and travel market, particularly in Canada, where there is a strong overlap between travelers to regions of high ETEC, the vaccine's approved indication in this country. Third-party product sales increased by 34% to reach €35.7 million for the fiscal year 2023, which was mainly driven by sales under our distribution agreement with Bavarian Nordic. The very positive sales performance continues to be, as I already mentioned, related to the recovery of global travel markets, several of which have reached or even exceeded pre-COVID levels, and we expect this trend to continue. Moving on to the P&L, we've already covered product sales. Other revenues, including revenues from collaboration, licensing, and services have now returned to historic levels at €9.1 million compared to 2022, which, as you can see, included substantial one-off noncash revenues related to COVID. Looking at expenses, we observed a significant decrease in cost of goods; this is again mainly the result of one-off effects related to the wind down of our COVID-19 program. Research and development expenses decreased sharply from €104.9 million in 2022 to €59.9 million in 2023, driven solely by the lower spending on our COVID-19 vaccine. 2023 expenses were just below our guidance range of €60 million to €70 million. At the same time, costs related to the Zika vaccine candidate increased as the company plans to reinitiate clinical development imminently. As we ramped up our preparations for IXCHIQ, our marketing and distribution expenses increased from €23.5 million in 2022 to €48.8 million in 2023, of which €20.7 million were associated with launch preparations versus only €7.3 million in 2022. G&A expenses increased from €34.1 million in 2022 to €47.8 million in 2023. In 2022, all expense lines benefited from a substantial noncash adjustment related to share-based compensation due to share price performance. Our G&A costs were also unfavorably impacted by higher compliance costs related to our U.S. listing and one-off recruiting costs. Other income increased to €21.5 million in 2023 from €12.2 million in the prior year, primarily due to grant income received from Scottish Enterprise and gains from settlement with a supplier related to our COVID activities. In 2023, Valneva substantially reduced its operating losses to €82.1 million compared to €113.4 million in 2022, which again was negatively impacted by nonrecurring expenses related to the wind down of our COVID program. The adjusted EBITDA loss was nearly unchanged year-over-year at €65.2 million versus €69.2 million in 2022. Now moving on to financial outlook. With the addition of IXCHIQ to our travel vaccine portfolio and with continued growth we anticipate from our existing products, we expect our commercial business to deliver substantial growth over the midterm. Based on current assumptions, we are targeting approximately 2x sales growth in the next 3 years. This will be driven by differentiated and highly competitive products, IXIARO, the only Japanese encephalitis vaccine approved in the U.S. and Europe, and the mandatory vaccine for U.S. troops deployed to Asia. IXCHIQ, the first and only approved chikungunya vaccine, and DUKORAL, the only cholera vaccine with additional approval for ETEC in key markets. We have raised our 2024 product sales guidance since our February announcement, now estimated between €160 million to €180 million in product sales versus previously €150 million to €180 million. This revised estimate takes into account an improved outlook regarding anticipated IXIARO supply constraints and still assumes approximately 20% to 30% reduction in third-party sales this year, driven by external supply constraints. This brings us to a total revenue estimate of €170 million to €190 million in 2024. We now expect higher other income compared to our announcement in February, moving from €95 million to €105 million to €100 million to €110 million, largely reflecting the €95 million in proceeds from the sale of the chikungunya PRV. We also lowered and narrowed our research and development expense guidance from between €65 million and €90 million to between €60 million and €75 million. This was based on additional visibility for our chikungunya and Zika-related expenses as well as expected non-dilutive contributions from institutions in connection with chikungunya activities and the product tech transfers to Valneva's new Almeida manufacturing facility in Scotland. As Thomas mentioned, we ended the year with €126.1 million in cash, which was further augmented by €95 million in proceeds from the PRV sale. This puts us in a very strong position as we expect to work significantly less cash in 2024. This is driven by a few factors, primarily the fact that we expect to complete our contribution to the ongoing Phase III study for VLA15 in the first half of this year. Secondly, with continued revenue growth for IXIARO and DUKORAL and improved efficiency in our manufacturing processes, we expect our commercial business, including IXCHIQ, to be cash positive this year, as it has been prepandemic, and we anticipate significant further growth going forward. I'm now handing back to Thomas to complete the midyear outlook.

Thomas Lingelbach, CEO

Thank you so much, Peter. Yes. It is important that we address also many, many questions that we have received in the market about the more midterm prospects of our business and where we see this business going, which is also why I started the presentation by reminding everyone of the Valneva trajectory. When we look more completely into a midterm outlook, Peter mentioned that the proprietary business, excluding IXCHIQ, will already be cash flow positive this year. Including IXCHIQ, we expect the commercial business to contribute cash and help finance our R&D from 2025 onwards. This is driven by continued travel sales growth for IXIARO and DUKORAL, and we see especially for IXIARO a double-digit year-on-year CAGR for at least the next 3 years. We expect IXCHIQ sales to exceed €100 million in year 3 of launch, and this even assumes a competitive product entry. We will stay focused and strategic with regards to our investments in R&D, and our objective is clearly to provide our shareholders and everyone who can benefit from novel innovative vaccines with a new program to enter Phase III once Lyme has completed its Phase III. We see substantial gross margin improvement as we are focusing on proprietary sales. The majority of our third-party product sales, especially the collaboration with Bavarian Nordic, has come down significantly as we focus on scaling our core products. Lastly, I would like to emphasize how we are committed to maintaining a strong cash position as we move forward.

Operator, Operator

Please standby. Your conference will resume shortly.

Thomas Lingelbach, CEO

Hello, can you hear me?

Operator, Operator

We can hear you. Go ahead.

Thomas Lingelbach, CEO

We expect gross margin improvement significantly, as I said, as we are focusing on proprietary sales. We are improving substantially our manufacturing efficiency by leveraging our new facilities and predominantly the facility in Scotland, Almeida. And as Peter mentioned, especially for chikungunya, but also for others, we expect sizable non-dilutive funding to help us finance our R&D. When we look at the upcoming catalysts and news flow in the short term, on chikungunya, we expect to initiate a Phase III in immunocompromised individuals still in the first half of this year. We talked in length about the upcoming potential approval by EMA, Health Canada, Anvisa. We will file for potential label extension as we generate more data, and we have to remember, we generated data for the 12 to 18-year-olds in Brazil, and we will initiate our Phase IV clinical program. Regarding Lyme, as I mentioned earlier, on the VALOR side, we expect to complete the booster vaccination for Cohort 1 in the second quarter, then the initial three-dose primary vaccination for Cohort 2 as well in the first part of this year. Then later this year, the Phase II year antibody persistence and booster results data, which will help us get a better understanding about the necessity for potential annual boosters for this vaccine once implemented. With regards to additional news flow, we expect new U.S. Department of Defense supply contracts in the second half of this year. We will provide more clarity on our R&D pipeline as we move along in 2024. With that, I would like to hand back to the operator to take your questions.

Max Herrmann, Analyst

Congratulations on the milestones achieved during 2023 as well as obviously the CHIK, I meant, its approval. Three questions, if I may. Firstly, just in terms of getting back to the normal travelers market. In terms of revenues, DUKORAL pretty much back to where it was pre-COVID, but still significantly below on IXIARO. I wondered how much further catch-up there is in volume terms for both products? Question one. Secondly, just on your kind of guidance overall, you talked about bringing another Phase III asset into development in the midterm; obviously, I assume that's not the Zika program, particularly given Moderna's recent announcement that they were halting development of that without further external sources of funding post Phase II. Finally, just on IXCHIQ, when do you think you will have durability data of 5 years or more?

Thomas Lingelbach, CEO

Okay. Yes. Max, very good question. So basically, you're absolutely right that we have not reached volume-wise, pre-COVID levels in all markets. In some markets, we are back to pre-COVID volume levels, in others not yet. However, we expect to catch up or exceed pre-COVID levels in volume this year compared to pre-COVID, and everything that we are seeing right now points in this direction. This is specifically true for IXIARO, particularly in the U.S. Regarding Phase III, we have intentionally not specified at this point in time, which program we will bring into Phase III. We are evaluating a number of internal opportunities, but also external opportunities, just to avoid misunderstandings within our R&D budget. So we will provide further clarity on pipeline development in the latter part of this year. Concerning the antibody persistence data, the ongoing antibody persistence study for chikungunya is ongoing. We reported 2-year data last December, meaning we will report 3-year data this coming December, and the trial will continue up to 5 years, so every year in December, we will report an additional year of persistence data. I hope this answers your questions, Max.

Maury Raycroft, Analyst

Congrats on the progress. I was going to ask one on IXCHIQ for exceeding €100 million for IXCHIQ by year three post-launch. Can you talk about the assumptions that go into that? Can we assume that the €100 million is part of the €300 million to €400 million market opportunity for travelers as well as military? And should we extrapolate the growth trajectory based on these numbers?

Thomas Lingelbach, CEO

Travel vaccines typically demonstrate an S curve during their adoption phase, indicating that one cannot merely project future growth. We anticipate that the third year will mark the beginning of a significant increase. Our current assumptions focus on the travel and military segments while temporarily setting aside potential stockpiling opportunities and meaningful sales in low- and middle-income countries. For our modeling, we incorporated IATA data and past experiences from IXIARO regarding adoption rates among travelers, along with the latest price information for IXCHIQ in the United States. Based on this, we are also forecasting other price points and market opportunities within the travel segment. I hope this clarifies your question.

Maury Raycroft, Analyst

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

Thomas Lingelbach, CEO

Let me just do it one more time. All travel vaccines show an uptake perspective from an S-curve, and historically, this will certainly be true for IXCHIQ. We expect year 3, which is why we have guided it as the first year where we see this program entering the steeper part of the S-curve. The €100 million we referred to or the greater than €100 million includes travel and military.

Maury Raycroft, Analyst

Got it. Okay. Makes sense. And for that exceeding €100 million. So that presumably includes a U.S. military contract in there. Is there anything more you can say about that and just the progress in those communications with the military and when that could be announced?

Thomas Lingelbach, CEO

Yes. This is a good question. We are following up on approvals and following recommendations. We are now in active dialogue with the U.S. military and other public institutions and governments regarding potential government contracts, including potentially even stockpiles. These discussions are ongoing, but please keep in mind that we received the ACIP recommendation very recently. For IXIARO, it also took a certain period after the ACIP recommendation before we got into the first contract, and this is what we are currently assuming as well.

Maury Raycroft, Analyst

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

Thomas Lingelbach, CEO

Basically, starting from the end of your series of different questions. The product was approved by way of the accelerated approval pathway like many other vaccines. This means that the immunogenicity level of seroprotective thresholds are predictive and considered predictive for efficacy. We emphasize our very strong data here, being close to 100% protective levels, which includes the elderly group, where we see a significant differentiation against potential other vaccines that may enter. The second point is, of course, the unique setting of a single shot that offers long protection, meaning that this is an important feature for travelers who frequently visit affected areas. We have a lot of data indicating that. Therefore, we emphasize the benefits specifically to travelers aged 65 and above, while promoting according to what we are allowed to promote, meaning the label of the product as approved.

Evan Wang, Analyst

I just had two. First, on the midterm outlook and some of the updated kicking on your market opportunity assumptions. It seems the total market is consistent with what you guys have said prior, while the share of travelers has increased at travelers. Can you help us walk us through some of the updated assumptions here? Is that driven by the ACIP recommendation, higher travel rates or initial reception? Conversely, in terms of the reduced stockpiling or endemic opportunity?

Thomas Lingelbach, CEO

Yes. A couple of different questions. First of all, market opportunity — as I said, we have taken several key data points into consideration. You have all seen the CDC maps that define areas where chikungunya represents a major risk; this is our basis. We have also used IATA data with travelers going to these areas, meaning the total population that we are targeting. We are also using, of course, market data from expected acceptance for the vaccine. Preliminary data show that especially the longevity of immune response and the high levels of protection are appreciated by potential customers and prescribers. Finally, we take into account adoption rates, educated also based on our experience from the travel vaccine sector. All that together has led us to fine-tune the opportunity for the vaccine in the travel segment, including price points in various countries. It is important to note that we have not included any potential stockpiling opportunities at this point in time because we don’t think it is prudent to do that absent clear commercial opportunity around stock product business.

Nick Hallatt, Analyst

Just coming back to the chikungunya program, if I could. On the Phase IV trial costs, how should we be thinking about the phasing of these costs? And how significant are the non-dilutive contributions you're expecting towards those costs? And then second, if I may, on financing. If we assume that there's no impact from potential business development deals in the near term. Should we assume that you won't be required to raise equity until at least post the potential launch in Lyme?

Thomas Lingelbach, CEO

Regarding the pipeline development, you are absolutely right. We are not expecting any pipeline or potential pipeline injection to negatively influence our cash runway as projected before. Concerning the Phase IV activities for chikungunya, as stated earlier, those programs go over a considerable time frame. Specifically, we have roughly four to five years to complete the two Phase IV studies. We have included this in our company presentation. Therefore, there isn't necessarily equal phasing in terms of spending since it spans multiple years. We've estimated that we expect approximately 30% of our contributions towards those costs. Regarding the cash runway discussion?

Peter Buhler, CFO

Yes. Like Thomas just mentioned, we are sufficiently financed for our operating business. I think that repayment is a different matter, and for this, I'm sure we will find a solution. As I said, sufficiently financed for our operating business would include, as Thomas mentioned, potential pipeline injections, so we could still cover that. Right now, we have no plans to raise further equity.

Samir Devani, Analyst

I think I've got two or three. Just to kick off with IXIARO. You mentioned getting back to pre-COVID levels. I think pre-COVID, IXIARO had a margin of nearly 70%. It seems quite a jump from the 52% that we've seen this year or 2023. Perhaps a bit of commentary on how you expect the margin to evolve in line with that growth? And then just on IXCHIQ, again on margins, and I guess, price as well, we can see it's being listed at $350. I'm just trying to work out what that would mean in terms of a net price to you guys if you can help.

Peter Buhler, CFO

Yes, you're right. Pre-COVID, the margins we had published were in the 60s to nearly 70%. We believe there are no reasons why we would not get back towards this range again. Regarding IXCHIQ, the wholesaler acquisition price is $275, which is essentially what we receive in the United States.

Unidentified Analyst, Analyst

This is Klara on behalf of Suzanne van. I was wondering what was the trigger for putting out a midterm outlook? And if you could confirm whether the midterm outlook includes or excludes any potential milestones from Pfizer?

Thomas Lingelbach, CEO

We have received a lot of feedback regarding how we see the commercial business going, especially for a new indication and product for which no benchmarks and no real data exist. Therefore, we thought it prudent to provide further clarity on the future of the commercial business and how we see the ramp-up in the launch years. The second part concerns cash and cash necessities, given that we have articulated that we would put pipeline development in direct competition to potential external pipeline injections. We wanted to clarify that this should not be interpreted as a need for external financing. Regarding the Lyme payments, they will come at the point where Pfizer is actually commercializing the vaccine, and they will contribute to the inflow that we expect for sustained profitability.

Operator, Operator

As there are no further questions, I would now like to hand back to the speakers for closing remarks.

Thomas Lingelbach, CEO

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