Valneva Aktie

Good day, and thank you for standing by. Valneva presents its half year 2026 financial results. [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Joshua Drumm, VP of Investor Relations. Please go ahead.

Hello, and thank you for joining us to discuss Valneva's financial results for the first half 2026 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 6 months ended June 30, 2026, which were published earlier today available within the Financial Reports section on our Investor website.

I'm joined today 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 financial results. 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 actual results to differ materially from those expressed or implied by these forward-looking statements. You can find 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, August 13, 2026, 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.

Thank you so much, Josh. Good day, everyone. Let me start off with a couple of introductory remarks. The first half of 2026 has certainly been marked on our efforts to focus on enhancing our financial position, especially after the initial Lyme Phase III VALOR results and the resulting uncertainty. And we have been able to generate a strong cash position with more than EUR 120 million in cash. This is a result of our disciplined cash management and the proceeds from the recent offering.

We also included a broad restructuring program, and we expect the positive P&L and cash flow impact in the second half of this year and, of course, beyond. This included a reduction in our workforce, a reprioritization of projects, activities and a focus on our core operational business.

When we look at our general commercial business performance, we generated more than EUR 60 million in total product sales. We have reaffirmed the guidance because the half year sales performance is in line with our anticipated pacing of product sales throughout the year 2026.

We have had a number of adverse EBIT impacts in the first half of the year. Peter will explain those in greater detail. Most of them are really one-off effects and are non-recurring. But the most important thing and the most exciting thing is that Pfizer continues to be very positive about the prospect of the Lyme disease vaccine, and they recently announced during their earnings that they expect regulatory decisions for the Lyme disease vaccine candidate in the next 12 months, which is really great news.

Now turning to our general business update. And of course, I would like to start with Lyme. You know that the vaccine showed a very strong point efficacy, greater than 70%, a very good safety profile. And as we discussed multiple times, we had a miss on the lower bound of the 95% confidence interval. However, we have to note that we see here with this product candidate a very significant clinical meaningful efficacy. And we had also 95% confidence interval lower bound greater than 20% in the second pre-specified analysis. All of that in combination with the huge unmet medical need, the totality of clinical evidence and the fact that we really expect a positive health economical benefit for a potential prophylactic solution increases our confidence in the future prospects of a potential Lyme vaccine.

There is a huge unmet medical need, we have discussed this many times in the past. The annual burden of disease is increasing. And we have been noting recently close to 500,000 cases in the United States. Europe, I mean, numbers are kind of still significantly underreported because not all countries have respective surveillance systems, but certainly north of 100,000 cases every year. Some of them come along with very severe manifestations in the order of 10% to 30%, carditis, neuroborreliosis, arthritis. And unfortunately, 5% to 10% of cases continue to have persistent symptoms even following treatment. As such, we really believe that LB6V, how it's called now, is a compelling opportunity in a highly underserved market. We could really leverage a first-mover advantage.

The perception around a need for Lyme vaccination is high. We are the only Lyme disease vaccine candidate in late-stage clinical development. And it could become, if licensed, the first potential Lyme vaccine in nearly 30 years. The vaccine is based on a proven mode of action. We cover the six key serotypes prevalent in the Northern Hemisphere. And the technology is based on modern state-of-the-art recombinant protein technology.

We have a broad addressable population. At this point in time, we showed in the study results for people above 5 years of age. I mentioned already that we see a growing disease burden. And of course, with global warming, the tick population across all the high-risk areas of Lyme disease are steadily increasing.

We have a excellent partner, and there is a huge strategic fit with Pfizer's vaccine franchise. And hence, we anticipate a very attractive commercial prospects and dynamics. So all in all, we share Pfizer's positivity on the prospects of that vaccine, and we really hope that we can get this vaccine to licensure on both sides of the Atlantic.

On IXCHIQ, as part of our overall restructuring process and also reprioritization of our key strategic focus areas, we shift more and more towards the IXCHIQ access in countries where there is highest risk for chikungunya infection, meaning primarily low and medium-income countries. And we are currently executing on a significant number of post-marketing activities, all supported by our great partner, CEPI.

We have a Pilot Vaccination Campaign ongoing in Brazil. We have more than 50,000 people already vaccinated today. These are adults 18 to 59 years of age. We have a study ongoing to confirm effectiveness and optimize description of the safety profile, which, of course, over time, could potentially even lift the highly restrictive warnings, precautions and other indications we have right now in our label for travel. All of that, of course, to ensure greater access, and we are focusing a lot right now on expanding our network of manufacturing distribution partners in low and middle-income countries. And we hope that we will be able to even announce something towards the latter part of the year.

The locally manufactured vaccine in Brazil by our partner Butantan has now been approved and is expected to be incorporated into Brazil's public health system in the near future. We in-licensed an interesting candidate against shigellosis. It's the most clinically advanced tetravalent Shigella vaccine candidate. Right now, we are running two studies, one in infants, the other one in adults. One is an immunogenicity and safety study. The other one is a controlled human infection model study, so pilot efficacy through human challenge.

We expect for both studies, results in the coming months. And of course, based on the results, we will decide on the next development steps for that vaccine. Of course, there is still a significant market opportunity for shigellosis, especially given that it's the second leading cause of fatal diarrheal disease and estimated with 165 million cases and 600 deaths annually, mostly, of course, in children in LMIC countries. But there is also a very interesting opportunity to -- either in a stand-alone setting or in a combination vaccine setting to work towards a broader covering diarrheal vaccine for travelers.

With this short update on our core R&D activities and general business development, I would like to hand over to Peter to provide you with the financial report.

Yes. Thank you, Thomas. So first, looking at product sales. Product sales reached EUR 64 million compared to EUR 91 million in the first half of 2025. Sales, excluding third-party products, decreased by minus 18.3% versus prior year at constant currency. This decrease was primarily due to product-specific effects, which I will discuss shortly.

IXIARO sales reached EUR 44 million compared to EUR 54.7 million in the prior year's first half. The year-over-year decrease primarily reflects the transition to a new distributor in Germany in January 2026 as well as product sales phasing, notably the timing of deliverables to the U.S. Department of Defense. Shipments to the U.S. Department of Defense in the first half of 2026 continued under the 1-year contract signed in January 2025. We expect to sign a new contract in the coming months and beginning to recording sales under this new contract in the second half of the current fiscal year. Foreign currency fluctuation also had an adverse impact of EUR 1.5 million on IXIARO sales during the first half of 2026.

DUKORAL sales reached EUR 14.7 million compared to EUR 17.4 million in the first half of 2025. Prior year sales benefited from onetime sales associated with the supply of DUKORAL doses to Mayotte in response to a cholera outbreak. In addition, sales in the first half of 2026 were adversely affected by the distributor transition in Germany in January, 2026. Similar to the first quarter, existing inventory transferred from the previous distributor was sufficient to meet market demand during the period. Furthermore, there was a slight weakening of the travel market in certain geographies due to geopolitical factors.

IXCHIQ sales reached EUR 4.4 million compared to EUR 7.5 million in the first half of 2025. While current year sales include the first shipment of drug substance to our Brazilian partner, Instituto Butantan, the prior year benefited from 40,000 doses sold to the French Island La Reunion in response to a major chikungunya outbreak as well as travel sales in the United States. In light of the slow product uptake in travel, the company is currently evaluating its future commercial strategy for IXCHIQ, including the potential focus on the endemic markets.

Third-party products decreased substantially from EUR 11.4 million in the first half of 2025 to EUR 1 million in the first 6 months of 2026. This planned reduction is the result of the key third-party distribution agreements that ended in December 2025 without renewal.

Moving on to the income statement on the next slide. Total revenues reached EUR 65.8 million versus EUR 97.6 million in the first half year of 2025. The decrease is mostly related to the lower product sales. Last year's other revenues also included a one-off upfront payment related to the licensing agreement with the Serum Institute of India for our single-shot chikungunya vaccines.

Looking at expenses. Cost of goods and services for the first half of 2026 reached EUR 59.5 million compared to EUR 47.2 million during the same period last year. Cost of goods in the first half of 2026 were impacted by a number of non-recurring and exceptional effects. In particular, a provision of EUR 9.7 million in cancellation fees related to external manufacturing commitments for IXCHIQ and the EUR 4.5 million non-cash impairment of excess IXCHIQ inventory resulting from lower-than-anticipated sales.

In addition, cost of goods were adversely impacted by changes in manufacturing schedule and volumes and related adverse variances as well as higher idle costs following the transfer of manufacturing to our Almeida facility.

IXIARO's gross margin reached 56.4% compared to 65.5% in the prior year. The decrease is mainly related to lower volumes and an unfavorable change in the manufacturing schedule. Last year's IXIARO gross margin was exceptionally high due to high manufacturing volumes and related favorable overhead absorption.

DUKORAL generated a gross margin of 24.7% compared to 52.9% in the first half of 2025. The gross margin of DUKORAL in the first half of 2026 was adversely impacted by higher than usual failed batch costs and inventory revaluation. In contrast, the prior year gross margin benefited from a favorable overhead absorption due to manufacturing timing and higher volumes.

The IXCHIQ gross margin was negative due to the onetime cancellation fees provisioned in the second quarter as well as the inventory write-down mentioned previously, which importantly had no cash impact.

Research and development expense decreased from EUR 32.4 million in the first half of 2025 to EUR 30.2 million in the first half of 2026. That increase -- that decrease is mainly a result of reprioritization and rescheduling of R&D activities.

Marketing and distribution expenses decreased significantly from EUR 20.3 million in the prior year to EUR 13.5 million in the first half of 2026. The decrease is related to a planned reduction in advertising and promotion related to IXCHIQ as well as reduced personnel, warehousing and distribution costs.

G&A expenses decreased to EUR 15.4 million compared to EUR 19 million in the first half of 2025. The reduction was a result of lower personnel costs and savings in advisery and professional fee services.

The company implemented the restructuring program in June 2026, and operating expenses in the first half year included onetime cost of EUR 3.2 million related to that program. Savings are expected in the second half year and beyond.

In the first half of 2026, Valneva reported an operating loss of EUR 49.9 million compared to EUR 16.8 million in the prior year. Adjusted EBITDA loss in the first half of 2026 reached EUR 40.1 million compared to EUR 6 million in the prior year.

Before moving to the outlook and guidance, a word on cash. As mentioned by Thomas at the beginning of the call, cash at June 30th was EUR 121.5 million compared to EUR 109.6 million at the end of fiscal year 2025. Cash used in operations in the first half of 2026 was EUR 13.7 million compared to EUR 10.9 million in the first half of the prior year.

Now moving to the next slide, moving to Slide 18. We confirm our financial guidance for the fiscal year 2026 with product sales of EUR 135 million to EUR 150 million and total revenues of EUR 145 million to EUR 160 million. We expect the signing of a new contract with the U.S. Department of Defense for the supply of IXIARO in the coming months. We expect our commercial business to continue generating positive cash flow and the restructuring program implemented in June will have a positive impact on the P&L and cash flow in the second half of the current fiscal year and beyond. We expect product-related gross margin to improve in the second half following the non-recurring effects in the first half of the year.

We continue to see potential to become financially self-sustainable starting in 2026, pending successful regulatory approval of the Lyme disease vaccine and subsequent commercialization by Pfizer.

With this, I hand the call back to Thomas.

Thank you so much, Peter. The 2026, we mean 2027, of course, also it would be nice to be already in 2026 financially self-sustainable. Yes, let me close by giving a little bit prospect on how we see the future of Valneva, of course, provided and subject to Lyme success.

Going forward, we would really like to leverage the company's core strengths in vaccine development to deliver greater long-term value. We would like to build scale in the R&D pipeline once Lyme has been out of pipeline and hopefully successfully brought to market. We see here a clear opportunity for strategic in-licensing to augment our clinical stage pipeline.

And what we would like to do is really to create a risk balanced portfolio of innovative specialty life cycle and high-value vaccine assets, which are attractive and go very much beyond our prior focus on vector-borne diseases. We are working with the team to target new assets based on defined criteria and new targeted disease areas.

In parallel, we are advancing our internal earlier-stage candidates such as EBV or ETEC/a broader enteric disease covering candidate program. And we would like to put also emphasis on focusing on reducing antimicrobial resistance targets.

All of that will be flanked by further optimizing our integrated operations.

We have kicked off a number of initiatives already as part of our restructuring program this year. And this mainly focuses on adapting and adjusting our value chain, changes of custody, make versus buy external manufacturing partners, but also a continuous focus on optimizing our commercial models, all of that with one clear objective, namely to maximize cash from our integrated operations and commercial business in particular.

So all in all, we see a very nice prospect for Valneva going forward. But for now, we -- it's all about Lyme, and we have to wait until we hopefully see further positive development on the Lyme vaccine candidate, while executing thoroughly on our base business and continue our focus on strong cash management and disciplined cash management.

With that, I would like to conclude the presentation and hand back to the operator to take your questions.

[Operator Instructions] This question comes from Tara Bancroft from TD Cowen.

I was hoping maybe you could give us a little -- any more detail or thoughts or feelings that you have on a regulatory update? I know Pfizer still sounds optimistic about it and a decision in the near to midterm over the next 12 months. But is there anything else that you can add to the discourse that you've had with Pfizer and our regulators? That would be really appreciated.

Pfizer are making very good progress with the regulatory agencies. And we hope that we will be able to announce next steps soon. That's all we can say at this moment in time specific.

I see. Okay. So then maybe -- totally understood on that kind of commentary. So maybe then I can ask a little bit more detail about some of the scenarios that could possibly come up. One in particular that might be really helpful to get your thoughts on is the potential for you and Pfizer to maybe run another Phase III program or even a post-marketing surveillance study. What I'm hoping you can help us understand is maybe the economics of those avenues, like what you would be responsible for? And how does that factor into your capital allocation plans?

Yes. It's a good question, Tara. So the existing agreement with Pfizer included or includes that Valneva has -- is sharing development costs to licensure. Everything that comes beyond licensure is currently not part of the contractual agreement with Pfizer. Whether or not, we will further invest in Lyme on the points you mentioned, is something that may be discussed at a later point in time, but definitely not before we see the product being licensed -- hopefully being licensed in the respective jurisdictions.

We are now going to take our next question, and this one comes from Maury Raycroft from Jefferies.

Congrats on the progress. I was going to ask one on Shigella. So wondering if you can provide more color on what is gating the update? Is it operational related to the clinical study or data analysis? Or are you awaiting additional regulatory clarity on the potential development path? And then when the data are disclosed, should we also expect clarity on the path forward? And what are the latest scenarios that you're considering there?

Yes. Thanks for your question, Maury. So yes, let me -- so first of all, we have had a few delays on the program. You know that the studies are still conducted by LimmaTech. LimmaTech recently got acquired by Lilly. So there are a couple of key cleanup steps right now, but we are in the last and final steps on data validation and putting the conclusions together, final analysis, et cetera. So this is not going to take a long time until we will be able to disclose.

Now, what do we expect? I mean, please remember what we said at the very beginning, we like the fact that we run a controlled human infection model, meaning a human challenge. And the human challenge will give us a very clear understanding about the efficacy of the vaccine. Of course, it cannot be decisive or conclusive, but it's highly indicative. And it will also provide us with a view on what is the immunological threshold that we need to achieve to see a level of protection and to which level -- at which level of protection.

The flanking immunogenicity study in children will clearly provide us, a, with safety, which is very important. And it would also give us a first feel for how is the immunological profile in children as compared to adults. And of course, also it's not a direct head-to-head comparison possible, but it will also provide us with a good indication. We will take those two data packages together. And then we will see whether this is already good enough to proceed to the next development stage or if there is a need to optimize. And this could be an optimization on dose, schedule, formulation. But our objective is to announce the next development steps either with the data or very shortly thereafter. I hope this answered your question.

Yes. Do you need some regulatory feedback to do that then or...

Say it again?

Do you need some regulatory feedback to...

Yes. We have a group of regulatory advisers with whom we are working. We are currently not expecting to seek a direct regulatory advise from the relevant regulatory bodies because we had prior discussions. And I think for us, it's pretty clear what the potential expectations would look like.

Got it. Okay. Maybe just one quick one for Lyme. I know you can't say a whole lot about where Pfizer is at with the process. But I'm just wondering for the U.S. regulatory path versus the European regulatory path, can you say if those are both moving in parallel? Or is it more sequential where you want some clarity from the U.S. before you can do an update for European status?

I think both activities are progressing very nicely. These are two independent processes. And there is -- at this moment in time, I would assume that Europe probably goes first. And -- but Pfizer is working closely with the FDA in support of its planned BLA submission for the Lyme disease vaccine candidate.

We are now going to move to our next question. And this question comes from the line of Vamil Divan from Guggenheim Securities.

This is Edward from -- on for Vamil. Just maybe a couple of more questions online, if I may. First, it sounds like Pfizer told us that they have filed with -- in Europe, but not yet with the FDA. They're still in conversations. So I'm wondering if you can share any details on your learnings on why they decided to proceed that way? And then the second question is, are there any differences in how the European agency and the FDA look at vaccine data in general and VLA15 specifically that you can kind of highlight for us that would be pertinent here? And then maybe to what extent the European filing do you think that would derisk actually the FDA filing?

Yes. So first of all, yes, we can confirm that Pfizer filed with the European Medicines Agency. They disclosed that with two analysts after their last earnings. As such, we are, of course, very happy about this step. As I mentioned, following the data, they clearly advanced the regulatory processes. And as I mentioned earlier, these are two independent agencies. Also, we know from the past and our own history that there are, of course, close interactions and communications in between those agencies.

I would not speculate right now about why one earlier, the other later. I would say, let's celebrate this progress. And as we said in the past many, many times, there is a huge medical need on both sides of the Atlantic. There is a significant commercial opportunity on both sides of the Atlantic. In one of the recent analyst reports, it was clearly articulated that the market is expected to be probably the same size, which is what we have been stating for years as it being the Valneva expectation. So as such, we are quite pleased about progress. And as I said, we are looking forward to how Pfizer are going to conclude with the FDA in support of their planned BLA submission for the Lyme disease vaccine candidate.

And maybe just on just how your understanding of how European versus FDA regulators look at sort of the vaccine data and maybe VLA15, if there's anything we should be aware of in how -- just how these two different agencies approach the data and what the bar is, how they think about the efficacy, safety bar there?

I -- you know I don't know specifically how -- whether there are any differences in how they're going to look at the data. I mean the data are what the data are, right? I mean we have safety data, we have efficacy data, we have immunogenicity data and the data are the same. And of course, all agencies, and this is not Lyme specific, and I say this is to someone who has been now in vaccine development for more than 30 years. I mean they all look at the same. They look at the totality of clinical evidence. They look at risk benefit, health economical benefits, underlying mode of action, scientific fundament. So I'm not necessarily assuming that they look differently at the data. There are nuances, and we know it from, for example, our Chik vaccine, which was the last vaccine that we brought from bench to licensure that, of course, when it comes to details on statistical analysis, on -- to details on potential post-marketing commitments or post-marketing pediatric development routes, there are slight differences here and there. But I have never seen in my history that there were material differences in how the two regulatory bodies you cited were handling applications.

We are now going to take our next question, and this one comes from Suzanne van Voorthuizen from Kempen.

This is Suzanne. I have one on the Valneva ambition from here. It seems like that you are gravitating to more R&D or biotech-driven identity rather than a commercial focus. Can you elaborate to what extent this strategic direction depends on Lyme being successful? Or phrased differently, how do you envision to walk this future path independent of the state of the Lyme program? And then I have a small question on the sale of the site in France next to the EUR 6 million in proceeds. Does this also bring an ongoing cost reduction of a certain degree?

Yes. Suzanne, yes. So you are absolutely right that we see our -- we have always seen and we see our commercial business in a way being subscale, right? It is important to have a fully integrated model because the capabilities that we have on the commercial side, on the industrial side, are clearly beneficial for the vaccine development. And we have seen this across many, many different programs. And as such, we see a value in staying fully integrated. But at the same time, the key purpose of our commercial business is not to focus on top line growth or augmenting strategically. By the end of the day, we would like to take the cash out of our commercial business and reinvest it in R&D. And therefore, our focus will be really to maximize cash generation from the commercial business going forward.

We believe we are one of the very, very few remaining pure-play vaccine companies that have a proven expertise in bringing vaccines -- novel vaccines from bench to licensure, and we would leverage that.

Now the capacity, I would say, we have to invest, of course, it depends heavily on Lyme success, because you know that the economics from the deal with Pfizer are favorable. And that besides milestones, the royalties are -- from Lyme would, of course, go straight down to the bottom line and as such, it could allow us to invest significantly in enhancing our pipeline, both organically as well as strategically, while even potentially being completely financially self-sustainable.

And we believe that this is a very appealing strategy. It's a very appealing strategic outlook. But as you know that many, many times, it's all about Lyme. And of course, it depends on the licensure, be it Europe, U.S., both or just one, and the commercial success of this vaccine then later on. But we believe overall, strategically, yes, there is a benefit.

Coming to your question on Nantes, yes, we -- as part of our restructuring program that Peter mentioned earlier, and I mentioned it too, we have also consolidated all of our R&D operations into Vienna. So which means that all R&D is now centralized in Vienna, and we shut down the R&D operations we had in Nantes. This consolidation brings efficiency and cost reduction. And this is something that, of course, we don't see immediately because it comes over time. We have significant redundancy costs and restructuring costs, but this is certainly something where we see a significant benefit in the future to come besides the fact that we disclosed in the half year report, of course, we get also some proceeds from the sale of the building that we have -- that we are now executing on.

We are now going to move to our next question, and this question comes from Shyam Kotadia from Goldman Sachs.

Two on the modeling side of things. So you mentioned your ongoing restructuring program. So I just wanted to check how should we be thinking about SG&A and R&D for the remainder of the year, especially knowing SG&A came in lower than expectations? And I can see that linked to that, you no longer call out the 25% to 35% reduction in OpEx versus 2025 that you did in your prior release. So does that hold? So that's the first question.

And then the second question is on what is the realistic expectation for gross margin in second half '26? I realize you're not guiding on it specifically, but could you help us understand how it could compare to last year given that you're mentioning an uptick there?

Yes. Thanks for the questions. So no -- let me first get into your questions on the restructuring and the impact on R&D and SG&A. So you saw on SG&A, in particular, a trend that started already last year when we did some efficiency improvements, it continues this year. And we expect clearly continued efficiency in SG&A spend. So I think what you see in the first half year is in a way where we will continue to see the future. And as I said, there were some -- also some one-off costs in there that we will, of course, not have anymore, and we eliminated a number of positions. And of course, in H1, you don't see an impact of that, and you will see that going forward.

I think similarly on R&D, we would expect to see in the second half year a decrease in cost. And to your point, yes, we did provide a guidance in the last press release about overall rough guidance on where we see costs going versus last year, and that still holds true. We have not confirmed it. We have also not revised it, which means it still holds true.

On gross margin, yes, so as you understood, there was a lot of one-off events and also some non-cash effect in the first half year. So in the second half year, we clearly expect a much better gross margin than in the first half year. And I would say, overall for the year, we will probably not get exactly to where we were last year, but we will get certainly much closer to the full year gross margin we have -- we recorded last year. And then I would also expect a positive trend getting into 2027.

We are now going to take our next question, and this will come from Simon Scholes from First Berlin.

Just got a question on IXCHIQ. So the local version of the IXCHIQ vaccine has now been approved in Brazil. I was wondering if you could give us some indication of how long it might be before the start of commercial sale of the vaccine in Brazil?

Yes. So basically, the -- our partner, Butantan are currently in the midst of the launch planning. Therefore, I would consider it a bit too early to really talk about, I would say, commercial prospects. There is a clear desire to include chikungunya vaccine into the healthcare system. There is a significant opportunity, both public as well as private markets in Brazil. And you know that when we look at the demand that we have seen or we are seeing from our drug substance supplies to Butantan, and we recorded in the first half the first revenues from drug substance sales because remember, the locally produced product means we are shipping drug substance and they turn it into drug product and final products. And just by the way of what you see there, we really expect this to become a very significant opportunity. But it's too early, and I won't -- I don't want to throw out numbers here without having a clear confirmation from our partner.

And just a supplementary on the Pilot Vaccination Program. I think you've delivered -- you've vaccinated 50,000 persons so far. And how long do you expect this Pilot Vaccination Program to continue for?

Yes. It's a good question. So we have -- remember, this is a program that is owned by the Ministry of Health, so by the government. The government's objective is to have a minimum of 100,000 people vaccinated because what we are generating there is also a so-called active pharmacovigilance, especially given that chikungunya is a live attenuated vaccine, and we have been discussing in the past all the issues that arose from that. It is important that before they include it in a very, very broad public vaccination schedule, they need to see active pharmacovigilance. They need to see how this all works out. And that's why their internal target has been a minimum of 100,000 doses vaccinated, which could be reached, I think, by the latter part of the year. But -- yes, so that's all I can say to that.

There are no further questions for today. I will now hand the call back to Thomas Lingerbach for closing remarks.

Thank you so much for your questions today. Thank you so much for following Valneva so closely, and of course, Lyme in particular, right now. As I said, we share the positivity that you could see across Pfizer's different communications. We are very happy about the progress that is currently being made. And we are optimistic that we're going to see approvals for the vaccine in the next 12 months and as such, enabling a nice strategic prospects, as I responded to following Suzanne's question earlier.

So with that, thanks again, and have a good remainder of the day. Goodbye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good afternoon, everybody. It's 2:00, so we are going to be able to start that general assembly. So I'd like to welcome you all and welcome all the shareholders that are here with us physically today or remotely. As it's being broadcast live, I'd like to welcome our General Director, our CEO, Mr. Thomas Lingelbach; our Financial Director, Peter Buhler; and Mrs. Graffin, who is going to guide us all throughout this general assembly.

Thanks to our statutory auditors that are also with us today. So I'm not going to repeat or just rephrase everything that will be -- that is presented that will be presented in this -- in the document that we're going to present to you today.

So we are here steering and checking and controlling our cash flow and our treasury. So without further ado, I'd like to tell you that I will be the President of this general assembly that our main shareholders are Mr. Jim Sulat and Mr. Lingelbach.

Let me also welcome you and welcome Jim. And so you'll be the scrutineer for that general assembly. And I'd like to ask Kendra to be the Secretary or the rapporteur for this session. So we've got the entire Board with us today, and I'll leave the floor to Kendra for the instructions.

So good afternoon, everybody. Let me remind you that the signing sheet has been signed by all the participants personally and also administratively. So we've reached quorum. So that's 30%. And for the ordinary part of the assembly, we've got 57,350,886 shares, and that's the same for the extraordinary assembly. So that's more than 1/4 of the shares that are represented or that will be voted for remotely and electronically.

Let me remind you also that all the reports for the Board and the statutory auditors are available for the shareholders on our website in due time and deadlines. And now I'm going to give back the floor to Mrs. Graffin.

So just a few seconds to tell you how this assembly is going to unfold. We're going to give the floor to Thomas and Peter, who are going to present the results of the group in 2025 and some of our perspectives for 2026 and some financial elements by Peter. Then there will be a Q&A session for the written questions. But apparently, there are no questions, written questions. So we'll move on, and then we'll talk about 2025 and move on to voting for the new resolutions. So that's a very classic way of running a general assembly. And now the floor is yours, Thomas.

So good day, everyone. It's a pleasure to present the overview of Valneva and its business today here at the general assembly. Yes. So the year 2025 has been a year marked by many progresses across the entire spectrum of the business. We delivered strong sales with our existing proprietary products. Of course, we're going to talk more about that. We winded down our third-party product sales. But if you compare it like-for-like, we showed growth in an environment that has not been easy for vaccines in general and in the United States, in particular.

We have been able to successfully refinance our debt. which has also been a strategic and very important component. And we have been able to advance our key R&D programs. And again, we're going to talk more about that. So what is our Valneva strategy and where do we really see the business progressing? You have seen those 3 pillars before. On the one hand side, we are trying to maximize value from our commercial assets, be it top line, be it bottom line, which will continue to be a major focus for us.

Of course, our R&D pipeline. We would like to progress our R&D activities, leveraging our core capabilities. We want to make sure that we continue to deliver R&D candidates in areas of high unmet medical need where we could make a difference, where we could be the only ones or best-in-class, and this remains our key mission from an R&D perspective.

And of course, we believe in the integrated business model that we have established, meaning from R&D all the way to commercial, we believe there's an added value in having core capabilities across the entire value chain.

Coming back to product sales. What you see here is exactly what I described. So we have seen an overall top line drop from EUR 163 million to EUR 158 million. But when you really look into the third-party product contributions and you compare like-for-like, you see a growth. We have this year now for 2026, updated our guidance. And this year does not include any third-party product sales anymore. And our proprietary vaccines, especially IXIARO and DUKORAL will continue doing well this year despite of some setbacks that we had on IXCHIQ. This means that the total commercial business remains cash generative as a whole.

When we look at the pipeline, what is it really that Valneva is currently focusing on? Of course, Lyme, the partnered program with Pfizer, certainly the single largest catalyst for Valneva, the single largest value driver in Valneva. Also right now, as we speak today, the market unfortunately has completely written off its value. And I'm going to explain more where we are on the Lyme activities.

We still work on chikungunya, trying to make sure that we can provide this vaccine to people who are in need of it most, namely these are people living in endemic areas into -- mainly into low medium-income countries and of course, be ready for outbreak preparedness given that the outbreak of chikungunya will come. The only question is when.

And then shigellosis, we are working on the most advanced tetravalent program against Shigella right now, and we will have major readouts in the coming months. When we look at the pipeline and how we want to rebuild our pipeline over time, we have given ourselves 2 focus areas moving away from the vector transmitted disease theme that we had originally when we created the company to go into 2 major fields. One is the world of herpes viruses and the second one is enteric diseases. And here, we have a lead program in preclinical with EBV, and we have another lead activity right now on working on ETEC, where we've just very recently in-licensed a very interesting ST antigen. So the company could be the first ones to really work on a broad covering ETEC vaccine covering both LT and ST.

Yes. So let us go to Lyme because I'm sure that everyone is most keen and eager to understand the situation. So first of all, I think to set the scene on Lyme one more time, Lyme disease is the most severe vector-transmitted and tick-transmitted disease currently worldwide. It is growing mainly because of global warming. And the clinical manifestations are also more and more severe. And I think the important thing that many people do always underestimate is the antibiotic treatment against Lyme disease is only to a certain extent, effective. And there are many, many clinical symptoms that are long-lasting and represent a long-term health impairment for individuals infected with Lyme disease.

As such, a prophylactic solution against Lyme disease is certainly something that would be of huge benefit for public health especially in the Northern Hemisphere where the ticks and Lyme is most prevalent. So when we talk about people and what does it really mean in terms of market opportunity, in terms of medical need, we have around close to 100 million people living in the United States in so-called high-risk areas of Lyme disease. These are areas where you have a certain number of Lyme cases every year as defined by CDC and WHO. And we have about 200 million people living in Europe in Lyme endemic areas.

So now when you translate this into a potential market opportunity, you reach easily the -- what Pfizer have officially been guiding, namely a market opportunity north of $1 billion annual sales. We, of course, believe it's even better than that given the growing and really significantly developing epidemiology around Lyme disease.

Yes, I think we have an excellent partner with Pfizer when it comes to the future potential commercialization of the vaccine because they have certainly the strongest commercial engine in vaccines globally. We have a good deal. So we have received already some milestone payments, but we have substantial milestone payments coming up provided that the vaccine gets approved and launched. And those additional milestone payments, which we anticipate provided that we see a licensure process coming will be north of $140 million.

And later on, we expect significant royalties on sales at no cost to Valneva. And this is why this vaccine represents, and this vaccine candidate and the deal with Pfizer represents such a huge and important asset for the company. Now unfortunately, we had not the clean-cut outcome of the Phase III that we had all anticipated and hoped for. We run a Phase III pivotal efficacy study, placebo-controlled, 1:1 randomized, ;50% of the people got placebo, 50% got vaccine; 2:1 U.S. versus Europe. And we tried to show that we are able to prevent disease.

So we counted Lyme cases in the placebo group, we counted the Lyme cases in the vaccine group and the delta gives you the efficacy. Now unfortunately, we had not enough cases in the study for reasons that are hard to understand at this point in time. But we showed a very strong efficacy. So which means the number of cases that we had was not enough to have a statistically powered end result, but it was enough to show a good efficacy of more than 70%, which is exactly what we were hoping for.

We also saw that the vaccine was well tolerated. And now it's the question of how do regulators look at this data given the statistical miss. The statistical miss doesn't mean that the vaccine does not work. It works. The vaccine works, the vaccine is efficacious. But you need to have in every single study a certain confidence interval, which means, in other words, if you repeated the same study over and over and over and again, what is the probability that you get always the same result. This is what the confidence interval says. And that's unfortunately the piece that we missed.

Now the discussions are ongoing in between Pfizer, who are in-charge of the regulatory process and the different regulatory authorities. Everyone has probably been able to read in the press that Pfizer go out quite bullish. They signal confidence around the ability to bring this vaccine to licensure. This confidence is not the same confidence that we see in the capital market when it comes to Valneva and the Valneva shares. So the -- but we, as a team here at Valneva, we are really convinced that there is a positive pathway. We have -- we share the confidence that Pfizer are signaling to the Street. And we hope that we will get clarity or more certainty, let's put it this way, in the coming months.

For now, we have still sticked to our guidance that we previously provided, namely that we anticipate licensure of this product potentially during mid-2027 and a potential launch towards the end of 2027. So IXCHIQ, on chikungunya, we have, of course, a life attenuated vaccine, as you all remember, it's a vaccine that is highly efficacious, close to 100% seroprotection. It's a live vaccine. Therefore, it is reactogenic. We have been dealing with quite a number of safety signals on the vaccine, which makes it a bit difficult in order to turn into a commercial success for travelers because we had originally thought that, that would be the key area. But the risk-benefit in travelers, especially if the reactogenicity of the vaccine is too high is not ideal.

Therefore, we are currently trying to expand into low- and medium-income countries where there is a clear medical need for such a vaccine and a very positive risk-benefit given the permanent outbreak situation and the morbidity and mortality associated with those outbreaks.

We have a couple of ongoing flanking studies. And one of the things that from a public health point of view is very interesting and compelling is the pilot vaccination program in Brazil, where there are many, many people who are getting the vaccine from the Ministry of Health. We are close to 50,000 already, and we are targeting more than 150,000 people to be run through this pilot vaccination program. This will give not only real-world evidence, but it will also help fighting against a real big problem in Latin America.

So Shigella, a few additional words to what I said earlier. Shigella is a very difficult enteric disease, especially for children. And here, unfortunately, the poorest, namely children who are living in endemic, meaning in this case, also low medium-income countries. It has also a travel component. So it's a little bit like chikungunya from a disease perspective, but the mortality in children is very high. This is why the vaccine approach against shigellosis has been prioritized by WHO and other institutions globally.

Yes. So right now, we are running 2 studies in parallel. One is an immunogenicity study in children in Africa. The other one is a study that we run in adults, where we do a so-called controlled human infection model. So it's a challenge study. This is very interesting because it gives us early on an indication whether this vaccine is going to work or not. And we will have readouts now over the summer.

Our guidance on product sales for this year. I also mentioned that we had a few headwinds here that caused us to reduce the guidance by EUR 10 million, primarily, as I said earlier, the IXCHIQ situation in travel, but also some supply and demand challenges this year. Overall, the top line guidance, including other revenues, is in between EUR 145 million to EUR 160 million. We have recently reconfirmed all of that. Yes. And then going forward, I think a little bit about the outlook in general.

The most important thing is when the Lyme results came out in the way they came out and the market reacted in the way the market reacted, the company, of course, took substantial measures to contain its cash. We restructured the organization. We let close to 15% of our employees go, unfortunately, globally. We cut R&D investments, delayed projects, adjusted projects and ensured a small financing that we successfully concluded. With all of that, the company is in a good stage when it comes to cash. So there is no risk at this point in time that the company runs out before we have better clarity on Lyme and until Lyme uncertainty will be gone. This is the important message.

And we will continue, of course, to support as much as we can, Pfizer in its efforts to bring Lyme to licensure. And by the end of the day, we hope that we all will benefit from a happy end on Lyme at the end. With that, let me conclude the business update and provide -- give back to Peter, who will provide you with the financial report.

Thank you, Thomas. So we are going to move on to financial results for 2025. As you can see, the evolution of our sales has improved between 2024 and 2025, starting with IXIARO vaccine against Japanese encephalitis. You see a 4.6% increase compared to the previous year, 7.2% if you look at the exchange rate there. This increase was actually generated by the vaccine aimed at travelers and the results remained rather stable in the U.S. compared to the previous year. And as a reminder also, we had signed a contract for -- in January 2025.

We also have a vaccine against cholera, which is -- we've seen a slight reduction for this, mainly due to a change in supplier or distributor in Germany. Although for the future, we expect an increase to come back -- to happen again. When it comes to the vaccine IXCHIQ, you've seen almost EUR 4 million in 2025, which should include soon be visible that actually shows the measures that were taken to fight off the disease last year.

So when it comes to the proprietary products, we've seen an increase in 6.6% compared to 2024 or 9% if you take into account the exchange rates. And when it comes to third-party products, those have reduced -- the sales have reduced by 42.3%. We've always said we expected a reduction in the sales of these products because we had come to the end or rather not renewed some of those contracts. It's a kind of business that was started mainly during the COVID period, which would add more products to our sales representatives, mostly when there was a significant decrease in the number of travelers at that time. So in total, the product sales are down by 3.3% between '24 and '25.

So now the financial results for 2025, you see an increase, which is mainly due to our partnership with Pfizer for the Lyme vaccine. There is here a recognition of income that had been taken into account previously, which had no impact later on on liquidities. So you see that we've had almost EUR 158 million in revenues and an increase of EUR 174.7 million for products which is also due to the launching of our production unit in Scotland.

When it comes to the research and development expenses, those have increased by EUR 10 million, mostly due to IXCHIQ and Shigella, whereas the marketing and distribution expenses have actually reduced compared to the year prior, which is related to the decrease in investment and to the program we've put in place end of 2024 to gain in effectiveness.

You've also seen the vouchers we had received for the IXCHIQ, which actually led to an increase in income, which was not reproduced in 2025 and leads us to an operating profit or loss of EUR 82.1 million. You've seen an increase also in finance and income taxes, which is reduced related to the restructuring of our debt as well. So this way, we managed to reallocate some of the costs.

This is why the amount in finance and income taxes is higher even though the debt level is lower than the year prior. So this is why we now have a profit of (sic) [ loss of ] EUR 115.2 million for this period. This is also due to the reprioritization of our different projects for 2024. I believe we are now reaching the time to answer some written questions.

Yes. And I can actually confirm that no question was submitted to the company prior to this assembly. So I will give the floor to Anne-Marie.

Thank you, Kendra. So we should pursue with the reading of the auditor's reports. I would like to ask my colleagues, members of the Board of Directors to -- if they agree with not reading it through completely in detail since they are all available and have been made available for a while on the website, if that is okay with everyone. Okay. So we will now move on. I will now leave the floor to Kendra, who will be presenting the different resolutions before we proceed to the vote.

I'm sorry, I still have to give the floor to our statutory auditors for the report of the 2025 results.

Ms. Chairwoman, Mr. shareholders and members of the Board of Directors. We are here of the Deloitte & Association audit. I would like to present to you the summary of the auditor's report for 2025 financial statements in order to enlighten and educate your decisions when we come to the vote. So first, we will look at the audit that was performed in accordance with professional standards, applicable accounting principles, key audit matters as well and any element that might impact the activities of your company.

So as I said, the audit was performed in accordance with professional standards applicable in France and in compliance with independence requirements. Concerning the reports on those, we have performed them with Valneva SE as well as the consolidated financial statements and the parent entity financial statements.

We have reported to the Audit Committee of the company and have identified the consolidated financial statements without any reserves. So we can affirm that they are compliant with expectations and the financial position of the company and of the group are favorable.

Our results have led us to highlight key elements by nature -- key by their nature in the reports in order to be able to assess the different possibilities and assessment in order -- when it comes to the recognition of the liabilities for the annual financial statements. We explained in our reports our own vision of the various points and the way we actually studied them within -- during the audit.

These key points have been detailed within the report and are on Pages 245 -- 345 to 383, sorry. You will then find on Page 407 our special report on the regulated conventions in which we were given the opinion that was first validated by the Board of Directors. This is regarding the indemnity agreement entered into on November 3, 2025, between Mr. Mr. Gerd Zettlmeissl and Valneva SE.

This also includes the contract for the provision of support services entered into in April 29, the management agreement and the directors and officers' indemnity agreements. In terms of operations, we have been able to cover all the share capital decrease through cancellation of treasury shares, resolution 21. The issuance of ordinary shares and securities with and/or without preferential subscription rights from resolutions -- sorry, 22 to 24, 26, 27 and 29 to 31. Issuance of shares and all securities giving immediate and/or future access to the company's share capital with cancellation of preferential subscription rights, authorization to grant stock options, authorization to grant existing and future free shares and share capital increase reserved for employees.

Furthermore, we submitted without any observations, the additional reports issued without following the use of your -- by your Board of Directors of the delegations granted by June 26, 2024. And finally, in its third part, the report includes the limited insurance report on sustainability information. We have received limited insurance reports as presented on Page 289. We have not noted any mistakes or incorherences in particular. So the compliance with the ESRS of the process was implemented to determine the information disclosed, the compliance of the sustainability information included in the Sustainability Statement and that with the disclosure requirements set out in the Taxonomy Regulation. Thank you for your attention.

So we can now move on to the resolutions. I will start by summarizing them, the ones that we will vote on. So for this year, they have not changed much compared to last year. At the very top, we have those regular resolutions for the approval of the financial statements. We have a few more regarding the ratification of the transfer of registered office. Those regarding the renewal of Board members directorship, say-on-pay as well and financial authorizations and delegations as well as others covering stock options and free shares as well as a capital increase reserved for employees and amendments to -- for the powers of formalities and amendments to the Articles of Association.

Thank you, Kendra. Before moving on to the votes, I would like to open discussions. If anyone in this room here has any questions, I would like to ask any questions to the Board of Directors and management team of the company. Again, this meeting is broadcasted online, so you may or may not give your name when you ask questions. Do you have any questions here in the room?

I do not see any hand raised. I believe the presentations were clear enough. Thank you to everyone. So I would like to give the floor to Kendra for the votes now on the resolutions.

Okay. As usual, we will display the resolutions on the screen. And I have to first inform you that the final count for which the shareholders represented or those who voted remotely have 57,383,141 action shares, meaning 30% are in -- are allowed to vote. As a quick reminder, in the documentation you had access to in compliance with the law are the different projects that are here present and now have been taken into account for next year, and you have an integral summary of them available. So I suggest we now move on to the votes.

Just again, we will show on the screen the summary of all the resolutions and for timekeeping reasons, I will not read them out all out loud. Just now you can see how to vote. Do you have any questions? Do you all -- are you all ready to vote? So in favor, #1, against #2, if you don't want to vote #3.

First resolution is the approval of the parent entity financial statements for the fiscal year ended December 31, 2025.

[Voting]

Vote is closed. This resolution has been adopted.

Second resolution regarding the approval of the consolidated financial statements for the fiscal year. Vote is open.

[Voting]

The vote is now closed. So the resolution is approved.

Resolution #3, that's the appropriation of for the fiscal year ended on December 31, 2025.

Open the vote.

[Voting]

The vote is now closed. So the resolution #3 is also adopted.

Resolution #4, that's the ratification of the transfer of the registered office from Nantes to Lyon. So the vote is now open.

[Voting]

The vote is now closed. Resolution #4 is adopted.

Resolution #5. That's the approval of the indemnification agreement entered into in favor of Mr. Gerd Zettlmeissl in the year ended on 31st of December pursuant to Articles 225-38 of the French Commercial Code.

So the vote is now open.

[Voting]

The vote is now closed and the resolution is approved.

The resolution #6 has to do with the reappointment of Ms. Anne-Marie Salaun or Graffin as Director. The vote is now open.

[Voting]

The vote is closed and the resolution is adopted.

Resolution #7. That's the reappointment of Mr. James Sulat as Director for a year. The vote is open.

[Voting]

The vote is closed.

The resolution is adopted.

Resolution #8, the reappointment of Mr. James Edward Connolly as Director. The vote is open.

[Voting]

The vote is closed. The resolution is adopted.

Resolution #9, the reappointment of Mrs. Kathrin Jansen's mandate for year. The vote is open.

[Voting]

The vote is closed.

Resolution 9 is adopted.

Resolution #10, the reappointment of Mr. Thomas Lingelbach for 3 years. Vote is open.

[Voting]

The vote is now closed. Resolution #10 is adopted.

Resolution #11, the approval of the compensation policy applicable to Mr. Lingelbach as CEO for the fiscal year 2026. The vote is open.

[Voting]

The vote is closed and the resolution is adopted.

Resolution #12, approval of the compensation policy applicable to the members of the Board of Directors for the fiscal year 2026.

The vote is open.

[Voting]

The vote is now closed. And the resolution is adopted.

Resolution #13, that's the approval of the information referred to in Article L22-10-9 1 of the French Commercial Code pursuant to Article L22-10-34 1 of the French Commercial Code. The vote is open.

[Voting]

The vote is now closed. And the resolution is approved.

Resolution #14, that's the approval of the fixed, variable and exceptional component making up the total compensation and benefits of any kind paid during or granted in respect of the fiscal year ended on December 31, 2025, to Mrs. Graffin, Chair of the Board of Directors. The vote is open.

[Voting]

The vote is closed and the resolution is approved. Resolution #15, that's the approval of the fixed, variable and exceptional components making up the total compensation and benefits of Mr. Lingelbach as CEO in respect of the fiscal year ended on 31st of December 2025. The vote is open.

[Voting]

Vote is now closed. The resolution is approved.

Resolution 16. that's the approval of the fixed, variable and exceptional components making up for the compensation and benefits of Mr. Juan Carlos Jaramillo as the Associate Managing Officer for the fiscal year ending on the 31st of December 2025. The vote is open.

[Voting]

Vote is closed. Resolution #16 is approved.

Resolution #17, that's the approval of the fixed, variable and exceptional components making up for the total compensation and benefits for Mr. Peter Buhler as the Associate Managing Officer for the fiscal year 2025. The vote is open.

[Voting]

The vote is now closed, and the resolution is approved.

Resolution #18, that's the approval of the total compensation of Mrs. Dipal Patel in her capacity as Associate Managing Officer for fiscal year 2025. The vote is open.

[Voting]

The vote is now closed and the resolution is approved.

Resolution 19, that's the approval of the total compensation Mr. Frank Grimaud in his capacity as Associate Managing Officer for the fiscal year 2025. The vote is open.

[Voting]

The vote is now closed. The resolution is approved.

Resolution #20. That's the authorization and powers to be given to the Board of Directors for the purpose of allowing the company to make transactions on its own shares. And you've got all the details mentioned on screen, and they're all detailed in the very resolution. The vote is open.

[Voting]

The vote is closed and the resolution is approved.

Resolution 21, that's the authorization granted to the Board of Directors to cancel treasury shares for the company. So the vote is open.

[Voting]

The vote is now closed. Resolution 21 is adopted.

Resolution 22, that's the grant of authority to the Board of Directors to increase the share capital by issuing ordinary shares or any securities giving access to the capital while maintaining preferential subscription right of the shareholders. The resolution is open -- the vote is open.

[Voting]

The vote is closed. Resolution 22 is approved.

Resolution #23, that's the grant of authority to the Board of Directors to increase the capital by issuing ordinary shares or any securities giving access to the capital through a public offering, canceling preferential subscription rights of the shareholders, though including an option for a priority period. The vote is open.

[Voting]

The vote is closed and Resolution 23 is approved.

Resolution 24, that's the grant of authority to the Board of Directors to increase the share capital by issuing shares and/or securities giving immediate and/or future access to the company's share capital with cancellation of the preferential subscription rights of the shareholders, the were public offering referred to in Article L411-2 1 of the French Monetary and Financial Code. The vote is open.

[Voting]

The vote is closed and Resolution 24 is adopted.

Resolution 25, now that's the grant of authority to the Board of Directors to increase the share capital by issuing shares and/or securities giving immediate and/or future access to the company's share capital with cancellation of the preferential subscription rights of the shareholders for the benefit of certain categories of persons meeting specified characteristics. The vote is open.

[Voting]

The vote is closed. Resolution 25 is approved.

Resolution 26, the grant of authority to the Board of Directors to increase the share capital by issuing ordinary shares and/or securities giving access immediately or in the future to the company's share capital with cancellation of preferential subscription rights of the shareholders for the benefit of one or several persons specifically designated by the Board of Directors, delegation of authority to the Board to designate such persons and the vote is open.

[Voting]

The vote is closed. Resolution 26 is adopted.

Resolution 27, the grant of authority to the Board of Directors to increase the number of shares to be issued in the case of a capital increase with or without preferential subscription rights for existing shareholders within the limit of 15% of the initial issue amount. The vote is open.

[Voting]

The vote is now closed and Resolution 27 is approved, adopted.

Resolution #28, the grant of authority to the Board of Directors in order to increase the share capital through the capitalization of reserves, earnings or premium. The vote is open.

[Voting]

The vote is closed and resolution #28 is approved.

Resolution 29, that's the grant of authority to the Board of Directors to increase the share capital by issuing shares and/or securities giving immediate and/or future access to the company's share capital in consideration for contributions in kind for equity securities or other securities giving access to the capital. The vote is open.

[Voting]

The vote is closed. The resolution is adopted.

Resolution #30, the grant of authority to the Board of Directors to increase the share capital by issuing shares and/or securities giving immediate and/or future access to the company's share capital in a public offering involving an exchange component initiated by the company. The vote is open.

[Voting]

The vote is closed and resolution #30 is adopted.

Resolution 31, that's the maximum aggregate amount of capital increases. That's EUR 8,539,700. The vote is open.

[Voting]

The vote is now closed and resolution #31 is adopted.

Resolution #32, that's the authorization, the grant of authority to the Board of Directors for the purpose of granting stock options through one or more issues for the benefit of employees and/or corporate officers of the company and its affiliates entailing waiver by shareholders of their preferential subscription rights to shares to be issued after exercising stock options. The vote is open.

[Voting]

The vote is now closed. Resolution #32 is adopted.

Resolution #33, the issue of free shares, delegation of authority to the Board of Directors for this purpose. The vote is open.

[Voting]

The vote is now closed. Resolution 33 is adopted.

Resolution 34 regarding the aggregate limitation on the amount of issues made pursuant to this 32nd and 33rd resolutions, meaning 4% of the company's share capital. The vote is open.

[Voting]

The vote is now closed. Resolution 34 is adopted.

Resolution 35 regarding the grant of authority to the Board of Directors for the purpose of deciding to carry out a capital increase reserved for employees. And I may say here that the Board of Directors has recommended for the shareholders to reject this resolution. The vote is open.

[Voting]

The vote is now closed. Resolution 35 is rejected.

Resolution 36, on the amendment to Article 27 of the Articles of Association to align it with the provisions of the French Commercial Code. Vote is now open.

[Voting]

The vote is now closed. Resolution 36 is adopted.

And the last resolution, resolution 37 regarding powers for formalities. The vote is open.

[Voting]

The vote is now closed. Resolution 37 is adopted.

Right. Before I give the floor back to Anne-Marie, I would just like to take 1 minute to warmly thank my colleague, [ Alessandra ] who is about to leave us after spending her whole career here at Valneva. I would like to thank her sincerely and very much for the work she's done for us for -- in organizing all of these general assemblies. Thank you very much, Anis, and good luck for the rest for everything else.

Thank you, Kendra. Thank you, [ Aless ]. I would also like to thank the whole of Kendra's team who is working very hard every year around organizing this general assembly. It's for Valneva, but also for Peter's teams. This makes us able today to present to you today all of these reports, including the statutory auditor's reports. And so I would like to thank you all and wish you a nice end of afternoon. You have some refreshments in the next room. Thank you again.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good day, and thank you for standing by. Valneva presents its First Quarter 2026 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Joshua Drumm, Vice President, Global Investor Relations. Please go ahead.

Hello, and thank you for joining us to discuss Valneva's financial results for the first quarter 2026 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 3 months ended March 31, 2026, which were published earlier today available within the Financial Reports section on our Investor website. I'm joined today 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 financial results. 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 actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risk 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 13, 2026, 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.

Thank you, Josh. Good day, everyone. Yes, our first quarter was certainly dominated by the Lyme Phase III readout. With the strong efficacy observed, the first prespecified statistical criteria not met, but the second one met, Pfizer is planning for submissions to regulatory authorities. On financials, we reported a top line of approximately EUR 30 million. A year-on-year, quarter-to-quarter comparison is, however, with regards to this first quarter, not really meaningful because of various factors, including a different business setup, supply phasings, one-off effects on the expense side, all of that will be elaborated by Peter during his respective financial report.

Given the level of uncertainty around Lyme, our strong focus is on cash containment and management. We reported a strong cash position, which excludes the proceeds from the recent financing, more than EUR 100 million total cash at the end of the first quarter and launched a comprehensive program to reduce our operating expenses, which also includes a reduction of global workforce by approximately 10% to 15% and aims to result in a significant 25% to 35% reduction in our operating expenses as compared to last year.

With that, let me turn to our programs and to our key business activities. I reported already about the statistical miss and the fact that the second prespecified statistical criteria met the lower bound. Overall, the efficacy, as you can see on the slide, is above 70%, which is really strong. The vaccine was well tolerated. There were no safety concerns identified at the time of analysis. The reason for all of that is that we have observed fewer-than-anticipated Lyme disease cases that were accrued over the study period.

Given, however, the clinically meaningful efficacy and the fact that the 95% confidence interval lower bound was above 20 in the second prespecified analysis, Pfizer is confident in the vaccine's potential and hence, as mentioned earlier, is planning submissions to regulatory authorities. Lyme represents a major medical need and hence market opportunity. There is no vaccine currently available to prevent Lyme disease in humans. And we see a continuous rise of the annual burden of disease. We have here in this slide, reported the numbers of people who live in high-risk areas of Lyme disease, almost 90 million in North America, more than 200 million in Europe and an annual disease burden of a reported 500,000 cases in the U.S., more than 100,000 in Europe.

Also, we all acknowledge that those reported numbers are probably heavily underreported. Clinically, Lyme comes with different clinical manifestations. 10% to 30% of the individuals develop either carditis, neuroporosis or arthritis. And some, namely 5% to 10% of the cases continue to have persistent symptoms even following treatment. As such, we see VLA15 or LB6V using the Pfizer terminology as a compelling opportunity in a highly underserved market. It is the only Lyme disease vaccine candidate in such a stage of development in nearly 30 years. It's highly differentiated.

We built on a proven mode of action, but with a broad coverage addressing all the prevalent serotypes prevalent on both sides of the Atlantic. It is a modern state-of-the-art recombinant protein-based subunit vaccine. We tested individuals in the study aged 5 years and above. And as I mentioned, we continue seeing a growing disease burden across high-risk areas, and some of you have recently seen, again, articles in this regards. There is, of course, a strong strategic fit with Pfizer's existing business and franchise. And overall, we really see a prophylactic solution as the solution of choice for this disease. As such, we remain confident. We remain confident in the prospect of this vaccine to ultimately make its way to patients or to people who are in need of it.

Turning over to Chikungunya. Our IXCHIQ product is continuing its path through different R&D activities besides limited commercial sales in travel. The overall market evolution, market development and access in emerging markets and low medium-income countries is, however, quite remarkable and is progressing quite nicely. We have a very significant pilot vaccination campaign ongoing in Brazil. The vaccine is being given to adults 18 to 59 years of age. And the objective is to reach a 20% to 40% coverage within this target population across various municipalities in Brazil.

We have already vaccinated more than 30,000 people to date, and we are aiming for much more than 100,000 overall. There is also additional work ongoing to prepare for post-marketing effectiveness in Brazil and in other jurisdictions. Currently, we are focusing on creating a strong safety database with our study 406, which is well advanced and is nearing completion of the enrollment. We are working on ensuring greater access to this vaccine in endemic countries. We have a project ongoing to expand the network of manufacturing and distribution partners in those countries, and we are making good progress.

We reported very recently through our different social media channels that the locally produced Chikungunya vaccine by Butantan called Butantan-chik achieved licensure in Brazil. This has been a major, major achievement in the endeavor that is supported by CEPI and for which we are grateful on advancing this vaccine and advancing access into countries and for countries who can really benefit from it.

A few words on Shigella and our shigellosis program. It is certainly one of the most advanced, if not the most advanced tetravalent vaccine candidate against shigellosis. We are targeting the 4 most common pathogenic Shigella bacteria. And previously, our partner, LimmaTech reported positive initial Phase I/II data. We have currently 2 studies ongoing, one in children in Africa and the other one is an immunogenicity and pilot efficacy study, so-called controlled human infection model. For both, we are expecting the first readouts or the readouts over the summer. And then as we discussed and reported previously, we will decide on next development steps for this program and for this program addressing a global market that is expected north of 0.5 billion annually.

Given the severity of shigellosis, especially that it's the fact that it is the second leading cause of fatal diarrhea in children. And it, therefore, has been prioritized by WHO and other funding institutions. So overall, a lot going on, on our key R&D and business activities.

And with that, I would like to hand over to Peter to provide us with the financial report.

Thank you, Thomas. Yes. So looking at the financial report for the first quarter of fiscal year 2026. Product sales reached EUR 30.5 million compared to EUR 48.6 million 1 year ago. IXIARO sales were EUR 20.2 million compared to EUR 27.5 million in the first quarter of 2025. The year-over-year decline is primarily a result of a difference in the phasing of scheduled deliveries to the U.S. Department of Defense. Deliveries in the first quarter of 2026 has continued under the current contract signed in January 2025.

DUKORAL sales reached EUR 8.6 million compared to EUR 12.3 million in the first quarter of last year. The prior year included one-off sales related to the supply of doses to Mayotte following a local color outbreak. In addition, DUKORAL sales in the first quarter were adversely impacted by the change in our distribution partner for certain EU countries, mainly Germany, which represent a substantial travelers market. This change took effect from January 1 and included the transfer of residual inventories, which in the case of DUKORAL was sufficient to satisfy the demand for the current first quarter. We expect new product deliveries to resume in the second quarter of 2026.

IXCHIQ sales reached EUR 1.6 million compared to EUR 3 million in the first quarter of 2025, which have benefited from first shipment of doses to French islander la Reynie in response to a major outbreak as well as from travel sales in the United States. Third-party products were reduced to EUR 100,000 compared to EUR 5.8 million in last year's first quarter, and this decline reflects the intentional wind down of third-party product distribution to increase the focus on our proprietary products.

Now moving on to the income statement. We reported total revenues of EUR 30.9 million versus EUR 49.2 million in the first 3 months of 2025. Other revenues remained largely unchanged year-over-year. Cost of goods and services were EUR 26.2 million versus EUR 21.3 million in the prior year. The increased cost of goods despite lower sales were a result of several factors. Idle costs increased compared to 1 year ago following the completion of the manufacturing transfer to the new Almeida facility. The costs related to failed batches and inventory provisions in addition to onerous contracts related to IXCHIQ significantly exceeded the cost observed in the first quarter of the prior year.

Additionally, cost of goods in the first quarter of last year were particularly low due to positive impacts related to standard cost adjustments. In the first quarter of 2026, the gross margin on commercial product sales, excluding IXCHIQ, was 45.2% compared to 62.7% for the 3 months ended March 31, 2025, or approximately 50% for the full year of 2025. IXIARO's gross margin reached 50.8% compared to 72.6% in the first quarter of 2025, and the decline was driven by higher manufacturing costs following the transfer of production to the Almeida facility, increased batch write-offs and lower overhead absorption due to lower sales. In addition, as already mentioned, last year's first quarter had a significant positive impact related to standard cost revaluation.

For the full year of 2025, IXIARO gross margin reached 59.6%. The gross margin of IXCHIQ was negative, impacted by cancellation fees related to external manufacturing commitments following lower-than-anticipated sales. Additionally, cost of goods include idle capacity costs and costs not allocated to products of EUR 5 million. We expect gross margin to normalize and improve following one-off effects in the first quarter of 2026.

Research and development expense for the first quarter remained stable year-over-year at EUR 15.2 million, mainly representing investments into IXCHIQ and Shigella, as well as our preclinical EBV project. Marketing and distribution expenses in the first quarter reached EUR 7 million compared to EUR 10.4 million in the prior year. The decrease is mainly related to lower spend on IXCHIQ, in particularly in the United States. General and administrative costs decreased to EUR 8.2 million compared to EUR 9 million in the prior year. The decrease is related to lower people costs as well as savings in professional services.

The operating loss for the first quarter of 2026 is reported at minus EUR 23.7 million, driven by lower sales and gross margin. Net finance and income tax expense is reported at EUR 8.4 million compared to EUR 3.3 million in the prior year. The increased expense is driven by a foreign exchange loss of EUR 3 million compared to foreign exchange gain of EUR 3.7 million in the prior year. With this, the loss of the first quarter of fiscal year 2026 reached EUR 32.1 million compared to EUR 9.2 million in the prior year.

A word on cash. As mentioned at the beginning of this presentation, total cash and cash equivalents at the end of March were EUR 105 million compared to EUR 110 million at the end of the prior year fiscal year. In the first quarter of 2025, we continued to reduce the cash used in operations compared to the prior year. Cash at the end of March does not yet include initial proceeds from our successful reserved offering completed in April 2026.

Now moving to the next slide to review our guidance for the fiscal year. In light of emerging adverse trends in travel vaccine uptakes across our key markets, driven by geopolitical factors, we adjust our product sales guidance to EUR 135 million to EUR 150 million for the fiscal year 2026 and total revenues to EUR 145 million to EUR 160 million. In April 2026, we initiated a restructuring plan to streamline our business operations and focus our resources on key projects. As a result, we plan a global workforce reduction between 10% and 15% and expect an overall reduction in our operating expense of about 25% to 35% compared to the level of 2025. This concludes the finance section of this call, and I would like to hand back to Thomas.

Thank you so much, Peter. We have to conclude our presentation, talking a little bit about the future. Of course, and as I mentioned during the introduction, and Peter reiterated this during the financial report, while we are living through the period of uncertainty regarding the Lyme vaccine candidate, we will, of course, do everything to focus on our base business to make sure that we advance the key strategic project and activities and that we contain cash to the maximum level possible. However, we plan for Lyme success. And we plan for a successful outcome of the Lyme process that will be run by Pfizer with the respective regulatory authorities. And if successful, it would offer for Valneva very significant strategic growth opportunities.

In such a case, we want to leverage our core strength in vaccine development because this is where we believe we will be able to deliver greater long-term value. Our focus will be to build scale in the R&D pipeline post VLA15 and post successful approval and commercialization. We'll do this by a combination of organic and inorganic, meaning strategic growth in the pipeline. We clearly would like to expand and extend beyond our initial investment thesis when we created the company, namely vector-borne diseases. And you have seen that some of our preclinical activities, especially EBV and also the enteric disease focus point already in this direction.

And of course, we will continue, as we have done last year, and we will do so this year again to optimize our business operations, be it on the commercial, but also be it on the manufacturing and supply side, all to generate as much cash with the commercial business as possible.

With this, I would like to conclude our update and give back to the operator to take your questions.

And this question comes from the line of Maury Raycroft from Jefferies.

I'll ask a couple on the Lyme program. I know there's a degree of uncertainty there. But wondering if there's any perspective you can provide on the status of Pfizer's pre-BLA meeting request with FDA and whether a meeting date has been scheduled and potentially what timing for that meeting to look like?

Hi, Maury, thank you for the question. Pfizer are preparing for respective meetings. More we cannot state and say at this point in time, unfortunately.

Okay. Understood. And wondering if you can help us understand how Pfizer plans to present the totality of clinical evidence to FDA, including cases that were adjudicated out and whether there's been any discussion around reevaluating outcomes under less restrictive clinical criteria. We've discussed how you guys have used a stringent definition. And so, wondering if there's any perspective on that.

Maury, unfortunately, I can't comment to that.

Understood. Okay. And maybe one other quick clarification question. Once Pfizer has the BLA meeting scheduled, they have the BLA meeting. Do you know if there will be a disclosure around the BLA acceptance or how logistics could work going forward?

Our current hypothesis is that file acceptance will be disclosed.

Our next question comes from the line of Suzanne van from Kempen.

This is Romy on for Suzanne. The first is on IXIARO growth dynamics. So I was wondering if the decline we saw for Q1 of this year was solely driven by phasing with the U.S. DoD? Or was there also contributions from the private travel markets? And then a follow-up there. For the full year '26 guidance adjustment, is this primarily based on your thinking of the general travel dynamics expected this year?

So let me take the question first and then possibly Peter can complement. So I think as we said during our report, there is a -- it's a combination of various factors. And certainly, the major contributing factor, as reported by Peter, has to do with phasing of supplies to the DoD, our single largest customer for IXIARO. The supply schedule and the phasing is different year-over-year, and it's very hard to predict the exact supply schedule. And that makes always this quarter-to-quarter comparisons really difficult. There is, however, also a contributing point around reduced travel. And Peter presented very clearly that this is the root cause for -- and the major cause for why we have been taking a prudent stand and revised the guidance down by EUR 10 million.

It is not that we see already a huge impact in quarter 1. But what we are observing is really a reduced level of travel into the geographies which are very important for our travel vaccines. And this is also supported by airline data, and we see this trend emerging. So the -- and that's, I think, all we can say with regards to the dynamic of IXIARO and Peter, please jump in if you want to add anything.

Yes. I think the only other thing to add is to a lesser extent than these shipments to U.S. military, there is this impact on the indirect markets with the shifting of distributor, where we see a slight impact, not as much as on DUKORAL, but we see a little impact also on IXIARO, but this is more just technically in the switchover from -- to a new partner, right?

We will now take our next question. And this question comes from the line of Vamil Divan from Guggenheim Partners.

So maybe a couple more on the Lyme front, and I appreciate you may not be able to answer all these fully right now. But one, I'm curious when we would actually -- when you think the full data would be released for us to review it in totality. Second, I'm wondering, are there other examples you can point us to with vaccines where there's been the situation where the prespecified or first primary endpoint of the trial was not met in terms of the confidence interval and the vaccine is still approved? Or are there any sort of comps that you can point us to, to give confidence on this still getting through? And then just on the event rate, I'm curious if you can comment on the event rate being lower than what you saw or what you expected? And does that in any way sort of impact what you think in terms of the commercial opportunity for this vaccines or the interest in the amount of events that are happening in the community? Is there any change to your views based on what you saw in terms of how many people acquiring the disease during the trial?

Yes. So let me start from the back to the front here a little bit. So yes, I mean, as we reported in the press release, the total end, meaning the total number of reported and adjudicated cases was certainly lower than anticipated, which resulted in this wide spread confidence interval lower and upper. We don't necessarily see this with regards to what is happening in the high-risk areas of Lyme. And this is certainly something that we will need to look into and Pfizer are certainly doing that as we speak.

With regards to other vaccines, there are a few reports and publications that were made in 2 different channels, including social media, analyst reports where people focus on situations that may have been not similar, but probably comparable. I mean there were reports around a flu vaccine called Fluad. There were reports around one of the RSV vaccines. There were also references made to the immunobridging in the pneumo development areas. We don't think that -- I mean, all of that is certainly probably indicative. But by the end of the day, I don't think that there is something that one can really compare like-for-like.

In the world of vaccine development, you need to really review whether the results are clinically meaningful, and this is certainly the case. And then it's a review of the totality of clinical evidence and data that will certainly be facilitated by Pfizer in the best possible and optimal way. To your question about where and when will the data in totality be presented? Pfizer stated that they will present the full data set at a forthcoming conference. To my knowledge, it has not yet been confirmed which one this is going to be.

Our next question comes from the line of Damien Choplain from Stifel.

I have a couple of question on the restructuring plan. So can you elaborate on how the savings will phase through the year? And how should we think about the split of savings between R&D and SG&A? And the last one, when do you anticipate achieving full payback from the program?

Yes. Thanks for the question, Damien. So in terms of timing, as we -- a lot of the redundancy we're looking at -- when we look at people costs, a lot of the redundancy we're looking at are in Austria, and there's a clear legal process. So actually, this will continue for a while. And then, of course, similar to other European countries, there will be notice periods. So the full payback will certainly only be next year on that. We initiated the process now with the Austrian authorities, and I think information to staff will occur approximately in a month from now. I think when it comes to external spend, this is actually initiated now, and we will -- we are -- we do expect a significant savings for the remainder of 2026 and then, of course, carried over into 2027.

And between R&D and SG&A, sorry, most of the savings we would expect in R&D as opposed to -- if you compare to 2025, right? In sales and marketing, it's going to be more or less cosmetic in line with kind of the adjustments we did to the top line. And then in G&A, it's in a way a continuation of savings we've already seen in 2025 versus prior year, and we will continue to add on some savings, but it's not going to be as substantial as in R&D, of course.

Our next question comes from the line of Rajan Sharma from Goldman Sachs.

I've got a couple of questions. And sorry to labor the point on the Pfizer part, but I was just wondering what level of insight do you actually have into Pfizer's FDA discussions? Is it essentially the same as everybody else in the market where you get the update when Pfizer discloses it? And then I had a couple of financial questions, which I can follow up with.

So we are not actively involved in the preparations or discussions in between Pfizer and regulatory authorities. But we have a process to be informed through existing steering structures at different time points than as compared to the market.

Okay. Got it. And then a couple on the financials. So Peter, I think -- well, you guided to normalized gross margin for 2026. Could you just help us understand what a normalized gross margin is for Valneva and what the impact of idle capacity costs might be? In 2025, you had EUR 10 million of idle capacity costs, and you've reported EUR 5 million already in first quarter of '26. I think at full year results, you mentioned that idle capacity costs in '26 will be similar to 2025. So is that still the case? And then secondly, just on the outlook for revenues. Can you just help us understand or reassure that there's no further downside there? Looking at the midpoint of your new guidance range, that's about implies around a 12% decline versus 25%. In Q1 '26, you've seen a 26% decline. And I think third-party products will trend down. And it sounds like the travel market slowdown that you mentioned was not fully realized in Q1. So yes, could you just help us understand those dynamics and provide some reassurance that there's not further downside there?

Yes. Thank you, Rajan. So on gross margin, normalized gross margin, so -- and it's, of course, it's work in progress in a way, but we would expect that we probably get close to where we were for the full year 2025 for the rest of the year. In terms of idle capacity, it is a bit higher than last year. It's not the full EUR 5 million. So we said the EUR 5 million is idle plus some unallocated costs. So most of the EUR 5 million is is idle, and it is higher than last year just because we transitioned over to Almeida and then now you're fully utilizing the Almeida facility, which increased part of the idle capacity because of the pure size of this manufacturing site.

When it comes to revenues, I mean, we think we have a realistic guidance now, the range we gave, EUR 130 million to EUR 150 million. Where we will land in this range, we can't say, of course. That's why we gave the range. But right now, we feel comfortable that it's appropriate. What happens for the remainder of the year in terms of geopolitical situation, we can, of course, not give any guarantee. I mean if the overall situation in -- especially in the Middle East gets worse and the travel market gets affected, we cannot exclude it will have an impact. But as from where we stand today, we think it's a realistic assumption, the range.

We are now going to take our next question. And this question comes from the line of Brandon Folkes from H.C. Wainwright.

Just changing gears here a little bit and focusing on the Shigella Phase II readout, what are you looking for in this readout? How will you assess the go-forward decision? And has that part changed given the focus on OpEx reduction? And then maybe just looking a bit further out on this, if you were to commercialize that product, would you be selling to the same call points as DUKAROL? Can you just talk about the commercial synergies of a Shigella and cholera product?

Thank you so much. Glad that we are able to talk a little bit about Shigella for a change. Yes. So first of all, the thing that we really like about this program is that through the controlled human infection model that is currently run at John Hopkins, we will get pilot efficacy. We are challenging people with one strain, namely the Shigella sonnei strain. And what we hope to see is, a, that the challenge model works, meaning that people above a certain immunological titer are being protected and others not that we see really an effect on placebo versus vaccine in this model. And ideally, the first indication about the immunological threshold that needs to be reached in order to see protection.

On the children's side, we hope to see that we see a solid immunogenicity profile, good zero response rates and that we have a first idea about the schedule and whether this 2-dose schedule in children will be sufficient or not. So this is what we expect to see from those studies. And then we're going to take -- it's hard to say -- to predict right now what the outcome is going to be. But the good thing is, you have a huge derisking in case of positive data. And therefore, once we see the data, we are currently anticipating that we will need to turn an additional round around optimizing probably dose schedule and so on and so forth and anticipate those things to commence literally next year.

I think there is currently no strategic change with regards to the Shigella program in connection with our restructuring activities. I would say there is probably a bit of a different phasing or pace associated with it as compared to previous hypothesis. But strategically and focus-wise, we don't see a real difference.

Now coming back to your question around commercialization, which is a very good one. Shigella and shigellosis has 2 key potential markets. By far, the largest medical need and commercial opportunity sits in emerging countries and in low medium-income countries where this is a disease with a huge mortality burden and therefore, a very, very relevant risk benefit and health economical benefit. Here, in the ideal world, one would target step-by-step a multivalent vaccine covering more than just shigellosis. So combination vaccines that could potentially also include ETEC cholera and other components. But as a second step, and I think those combination vaccines in the enteric disease field is -- would certainly represent a huge commercial opportunity. And we see the introduction in those emerging markets as a first step really as a stepping stone.

The second part is travelers. There is a clear need for Shigella vaccine in travelers. Again, in the ideal world, you would have a combination vaccine to create more and more coverage in order to be able to provide a "travelers diarrhea vaccine". And in order to present the travelers diarrhea vaccine, you will need to add additional antigens above and beyond even cholera and ETEC. But again, it's a stepwise approach, whether or not Shigella stand-alone will be directly licensed and commercialized in Travelers or whether we're going to focus on combination right away is something that we are exploring. And it will be part of our review in connection with the future development plan for Shigella. And please keep in mind that we announced previously that we are working on enteric diseases also in our preclinical arena. We are working on a product covering ETEC vaccine candidate, for example, covering both AT as well as ST. And of course, with that plus our cholera vaccine in hand, we, in a way, set ourselves up for potential combination vaccines in the traveler diarrhea environment.

I hope this answers your question?

We are now going to take our next question. And this question comes from the line of Simon Scholes from First Berlin Equity Research.

I've just got one question. You wrote in the 2025 20-F that you'd received a letter from the FDA preventing you from using the Almeida facility to produce IXIARO for distribution in the U.S. I was just wondering if you could outline current measures to mitigate that and also give us some idea as to whether this will impact sales of IXIARO or your capacity to supply the Department of Defense with IXIARO.

So first of all, yes, you're right. We received 483 as part of the pre-approval inspection and the complete response letter with regards to the pre-approval supplement of Almeida as an alternative site for IXIARO manufacturing. We have, however, received approvals for the new manufacturing site from all the other regulatory bodies. Now we were smart enough to file Almeida as an additional manufacturing site and the existing facility is still active. And I think this is important to note, and we are releasing product out of the previous facility or the existing facility called [ Menson ] into the U.S. market as we speak. And of course, we are working with the FDA to address their concerns articulated in the 483 and we'll resubmit the pre-approval supplement process as soon as we can.

Okay. So you don't expect any impact from temporary inability to use Almeida on IXIARO sales in the U.S.?

Not at this point in time.

That was our final question for today. I will now hand the call back to Thomas Lingelbach for closing remarks.

Thank you so much for your attendance today. Great questions and for following Valneva. And as we said during the call today, we are looking forward, especially to the next steps in connection with the Lyme vaccine, are confident in the prospect of not only Lyme, but also Valneva. Thanks a lot.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to Valneva's Full Year 2025 Results and Business Update Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded.

I would now like to turn the conference over to your speaker, Josh Drumm, VP of Investor of Global Investor Relations. Please go ahead.

Hello, and thank you for joining us to discuss Valneva's financial results for the full year 2025 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 year ended December 31, 2025, which were published earlier today, available within the Financial Reports section on our Investor website.

I'm joined today by Valneva's CEO, Thomas Lingelbach, and our CFO, Peter Buhler, who'll provide an overview and update on our business as well as our financial results. 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 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 18, 2026, 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.

Thank you. Hello, and thank you for joining us today. As we reflect on 2025, I'm proud to say that Valneva once again demonstrated resilience, discipline and an unwavering sense of purpose. In a year marked by geopolitical uncertainty, rising vaccine hesitancy and further consolidation in the biotech sector, we stayed focused, remain agile and continue strengthening our position as an innovative and recognized vaccine company.

Our financial performance was solid. Total revenues exceeded EUR 170 million, slightly above 2024 levels, including almost EUR 160 million in product sales. These results reflect not only foreign exchange headwinds and the planned reduction in third product sales, but also growth in our proprietary travel vaccine portfolio. We closed the year with a cash position of nearly EUR 110 million and further enhanced our financial flexibility through a successful debt refinancing.

We also achieved more than a 20% reduction in operating cash burn, driven by our continues disciplined cash management. Most importantly so, together with our partner, Pfizer, we further advanced our Lyme disease vaccine candidate. This program represents an important opportunity for Valneva and for the millions of people at risk of Lyme disease, and we are looking forward and crossing fingers for the pivotal Phase III results.

Turning to how we see Valneva's strategic evolution. Our strategy is geared towards becoming the leading vaccine biotech company based on three important pillars: On the one hand side, we expect to further grow our commercial business and to optimize the cash generation through the commercial business. We will certainly continue maximizing R&D upside for our investors, leveraging our proven track record in R&D progression in our ability to bring products from bench to global licensure, and we will do so by leveraging our integrated business model. On the one hand side, commercial, manufacturing and development, which can be beneficial to advance and augment programs in our R&D pipeline.

Let's look a little bit at the different programs in our portfolio. And I'm now starting, of course, with the leading Lyme disease vaccine candidate in the world, VLA15. So if you look at Page 8 of the presentation, this is a summary that shows you the growing and emerging problem that Lyme disease represents. There is currently no vaccine available to prevent Lyme disease, and also treatments are somewhat suboptimal. We are seeing a growing annual burden of the disease with reported almost 500,000 cases in the United States annually. And in Europe, it's probably going to be the same order of magnitude also the reported and the officially reported cases are a bit more than 130,000 annually.

The important thing about Lyme disease is its severe clinical manifestations. 10% to 30% of cases develop many different clinical manifestations, which can be categorized in three buckets: carditis, neuroborreliosis and arthritis. And most importantly, 5% to 10% of the cases continue to have persistent symptoms following treatment with antibiotics.

We are evaluating VLA15 right now in a placebo-controlled field efficacy study called VALOR. This study includes approximately 10,000 individuals. It's a study that is randomized 1:1 placebo against vaccine, 2:1 U.S. versus European sites or per site North American versus European sites. And the primary endpoint is disease prevention after 3 plus 1 doses, namely in season 2, which we have also tested as part of this study. We completed last year all vaccinations and we are now in the process of testing and evaluating the data. And as I said earlier, we hope that we're going to get, of course, good data, and we have guided for data in the first half of this year.

So in summary, VLA15 is a compelling opportunity in a really underserved market. It will be definitely the first vaccine if approved to address this disease. It is a highly differentiated vaccine state-of-the-art when it comes to the vaccine composition addressing the main and predominant serotypes of Lyme borreliosis in the Northern Hemisphere. It is -- will be representing a compelling target population and a use case with a broad addressable population. We have tested in the study people above 5 years of age. And we see really an opportunity here to address a very, very large target population.

Of course, there is also a strategic fit within Pfizer's vaccine franchise, and we are very pleased to have a strong partner with Pfizer for the future, commercial opportunities ahead for this vaccine. And of course, there is a clearly attractive commercial dynamic. Prophylactics are always cheaper than therapy and a potential inclusion in some of the routine immunization schedules for high-risk areas would really be a perfect opportunity.

So with that, we see a unique and compelling opportunity that, of course, could be transformational for Valneva. So again, we are looking forward to the data, fingers crossed. So if we turn to IXCHIQ, you know that we are still investing in the further development of what we call VLA1553 or the marketed trade name, IXCHIQ. Currently, we have three major R&D activities on IXCHIQ. We are very glad that we have been able to initiate a pilot vaccination campaign which is ongoing in Brazil. We launched it in February with our partner Instituto Butantan, selected municipalities in Brazil. We cover the age range currently licensed by Anvisa in Brazil, namely 18 to 59 years of age. And the objective is really to achieve a 20% to 40% coverage within the target population. And right now, the vaccination uptake is quite compelling.

We are further investing in post-marketing effectiveness studies to confirm the effectiveness and to optimize the description of the safety profile. And this is a pragmatic randomized controlled effectiveness and safety study in adults and adolescents in endemic countries. And of course, we continue to work on ensuring greater access to address the unmet medical need in endemic countries. And we are in the process of expanding our network of manufacturing and distribution partners in low and middle income countries.

So overall, I would say, IXCHIQ did not have a great start in the travel segment, but we have been able to refine our labels and discussions. And we are now focusing mainly on post-marketing effectiveness and global market access.

Turning to shigellosis. So our program called S4V2 is a vaccine that targets shigellosis. It's a tetravalent Shigella vaccine candidate that we in-licensed from LimmaTech, and it's currently the clinically most advanced Shigella vaccine candidate. And therefore, we see here an opportunity to develop a first-in-class vaccine in a really life-threatening disease. When you look at the market opportunity and more importantly, the clinical and medical need, you need to recognize that it is currently representing the second leading cause of fatal diarrhea, especially in children. And therefore, it has been identified as a priority vaccine by WHO.

Valneva has worldwide commercial rights upon potential approval. And we see here really two major markets. On the one hand side, travel. This is certainly a vaccine that could complement our travel portfolio in the adult sector. And probably more importantly, children in low, medium-income countries. We launched two parallel studies, two Phase II studies, one in infants. The other one is a combined immunogenicity and challenge study, a so-called controlled human infection model. Both are right now ongoing, and we expect for both data mid of the year. So again, a very important milestone for the company. And subject to data, we're going to decide on the program development pathway forward.

With that brief update on our portfolio and our key activities, I would like to turn over to Peter to provide us with the financial report.

Thank you, Thomas, and good morning or good afternoon to all of you. Now moving on to the financial review, starting with details on our top line on Slide 16. Total product sales reached EUR 157.9 million, in line with our guidance and decreasing by minus 3.3% over 2024 or minus 1.3% at constant currency. The decrease in sales is primarily a result of the planned reduction in third-party sales and to a lesser extent of adverse currency impact. As mentioned by Thomas at the beginning of the call, proprietary product sales, excluding currency effects, grew by plus 9% year-over-year. IXIARO sales reached EUR 98.4 million compared to EUR 94.1 million in 2024, representing a growth of 4.6% or 7.2% at constant currency. The growth in IXIARO sales was driven by the travel segment.

DUKORAL sales were essentially flat at EUR 31.9 million compared to EUR 32.3 million in the previous year, a decline of minus 1.2%. At constant currency, DUKORAL sales grew by plus 1.8% year-over-year. Growth in sales was impacted by distributor change in Germany, a key indirect market.

IXCHIQ sales reached EUR 8.4 million compared to EUR 3.7 million in the prior year. This includes the supply of 40,000 doses to French Island La Réunion in 2025.

Finally, we reduced our third-party sales substantially year-over-year from EUR 33.2 million to EUR 19.2 million. As discussed previously, this decrease was the result of planned termination of our existing distribution contracts for third-party products in order to focus on our proprietary products.

Moving on to Slide 17, looking at the P&L. Other revenues increased from EUR 6.3 million to EUR 16.8 million. The increase is driven by a EUR 10 million revenue recognition related to the Lyme agreement with Pfizer. These EUR 10 million were previously included in refund liability on our balance sheet and represents the amount Valneva no longer expects to owe through future payments to Pfizer.

Looking at our expense. Cost of goods and services increased by EUR 8.6 million. Cost of goods in the fourth quarter were adversely impacted by EUR 8.5 million inventory write-off, mainly related to IXCHIQ following the termination of the contract with the Serum Institute of India. We're talking here about an accounting write-down. The product is still available and could potentially be used for supply under future contracts in the endemic markets.

Cost of goods also included approximately EUR 10.8 million of idle costs. IXIARO cost of goods remained stable versus prior year, while DUKORAL gross margin deteriorated due to the failure of manufacturing batches in the fourth quarter. Research and development expenses increased from EUR 74.1 million in 2024 to EUR 85.3 million in 2025. This increase is in line with our guidance and is driven by higher spend in our Phase II Shigella vaccine candidates. And additionally, we increased our R&D investment in our chikungunya vaccine as we are executing on our post-marketing obligations.

Marketing and distribution expense amounted to EUR 37.4 million compared to EUR 52.4 million in 2024. This significant decrease is a result of the reduced IXCHIQ spend compared to significant investments in prior launch years.

G&A expenses decreased from EUR 42.8 million to EUR 37.3 million, as a result of our continued initiatives to decrease administrative spend across the company.

In 2024, Valneva sold the priority review voucher obtained with the approval of IXCHIQ in the United States, which net of expenses resulted in proceeds of EUR 90.8 million. Other income and expense decreased year-over-year by roughly 50% as a result of lower R&D tax credits and to a lesser extent, due to lower grant income in Scotland.

In 2025, Valneva reports an operating loss of EUR 82.1 million compared with an operating profit of EUR 13.3 million. The operating profit in 2024 was substantially driven by the nonrecurring income statement of the sale of the priority review voucher.

Finance expense includes the cost to refinance our debt with Deerfield and OrbiMed with a new 5-year product loan with Pharmakon. Valneva's loss for the period reached EUR 115.2 million, while the adjusted EBITDA is reported at minus EUR 51.4 million.

Now moving on to the financial outlook. In 2026, we expect total product sales of EUR 145 million to EUR 160 million and total revenues of EUR 155 million to EUR 170 million. The overall decrease versus 2025 is related to further planned reduction in third-party product sales, offsetting continued growth from our proprietary products. We expect to progress in enhancing our R&D pipeline of differentiated vaccine candidates and cash will continue to be a focus with an emphasis on reducing our operating cash burn. Subject to a successful Lyme disease vaccine approval and commercialization, we expect to become financially self-sustainable and potentially profitable.

With that, I hand the call back to Thomas to look at our future value drivers.

Thank you so much, Peter. Yes. Well, let me turn to Page 21 and talk a little bit about the future. Of course, it will heavily depend on Lyme. And what is the significance of the Phase III results for Valneva? Well, positive results could be transformational, delivering substantial commercial milestone and royalty revenue to fund further pipeline development and value creation. It would also further validate Valneva's position as a leading vaccine biotech company to become -- potentially becoming the first vaccine we have developed from bench to market.

When we look at our key initiatives and what we really would like to do going forward, on the one hand side, we would like to build scale in our R&D pipeline. This includes a potential strategic in-licensing to augment our in-house pipeline while creating a risk balanced portfolio of innovative specialty life cycle and high-value vaccine assets.

We created Valneva 13 years ago, with an investment theme and focus on vector-borne diseases. We would like to expand now beyond vector-borne diseases, targeting assets based on defined criteria. We have a couple of quite interesting programs in preclinical. They are all kind of -- or some of them associated with AMR. But we have also a very interesting EBV program. All of that we expect to accelerate and bring into clinical development subject to positive Lyme data. And of course, there is room to optimize our integrated operations to control our value chain by investing in enhancing our end-to-end capabilities, and to structure our commercial model to optimize and maximize cash.

With that outlook, hopefully, an outlook based on positive data, I would like to turn back to the operator to take your questions.

[Operator Instructions] We are now going to proceed with our first question. The question come from the line of Maury Raycroft from Jefferies.

Looking forward to seeing the Lyme data soon. I know guidance is for first half '26, but you recently said you expect the data soon. Do you still see potential for a readout by end of first quarter? Or is it likely -- could it get pushed to the second quarter? And also, can you talk about your involvement in the data analysis? I'm wondering if you have access to the data room and can see real-time updates on the number of adjudicated Lyme cases. And do you see the split between the vaccine and placebo?

So Maury, the responder for the Phase III study is Pfizer. Pfizer, I don't control with regards to the execution of the study, and we are, at this point, fully blinded. There is an official guidance from Pfizer with regards to the data readout in H1. And of course, we can't say anything different. We are hoping so that the data will come around mid of H1, whenever this [indiscernible] But we -- I would like to remind everyone that there is only one official guidance, and that's the one from Pfizer.

Got it. Understood. And can you comment on when the last time was you spoke with Pfizer on the program and what's the latest they're communicating to you based on status and timing?

So we have a joint development structure. We have a governance as per contract, which includes a couple of formalized bodies. And I would say we have weekly interaction, frequent interactions and so far, so good.

Got it. Okay. And maybe just last question. Just if you can remind us what gives you confidence that VLA15 will be equally efficacious in serotypes 2 through 6 versus serotype 1. Wondering if you tested serotypes 2 through 6 in preclinical challenge models similar to the 2024 publication that you had?

Yes. So first of all, this is an excellent question. So in preclinical models, different preclinical models, some of which have been published, others not yet. We have done passive and active immunization and tested against all serotypes. What we don't know is whether the immunological protection levels in humans will be identical across the different serotypes. We have a lot of grounds to believe that. But of course, as you know, Maury, outside of serotype 1, which was shown through LYMErix and ImuLyme, there is no data in humans today that bridges immunological response with efficacy. And even for LYMErix, there was never a formal correlate of protection established, but there has been a publication that summarized a correlation factor of 0.8, so 80% correlation in between immunological titers and protection. And of course, we hope to see the same.

What gives us confidence is that in different models -- different animal models, we have compared VLA15 against, I would call it, a LYMErix biosimilar. And this has been shown and published in different publications, as I said, not everything has been published. And we have seen across the border non-inferiority or superiority after three doses. And I think that is mainly what gives us confidence in addition, of course, to the immunological profile that we have observed across many different clinical studies. By the end of the day, data will tell and data will hopefully come soon and that we will...

We are now going to proceed with our next question, and the questions come from the line of Brandon Folkes from H.C. Wainwright.

Congratulations on all the progress. Maybe just staying on Lyme. How do you think about capital allocation going forward if Lyme is successful? That obviously changes your capital profile potentially quite significantly. So how should we think about that aspect of the business?

Yes, Brandon, this is Peter. Well, look, I think it's important maybe to remind everyone that upon positive Phase III data, we will not get any milestones under the program. The next milestones will be due upon first commercial sales. Essentially, it's first commercial sales in Europe and in the U.S., and it's a combined milestone of $143 million. But that's about, I would say, probably 1.5 years away from now at least. So I mean, in terms of capital profile in the short term, it's not really going to change. And then I think we would certainly want to again accelerate and potentially augment our pipeline. And this will, of course, take time to do that, and we will consider carefully how we do that.

Great. And then maybe just on Shigella, S4V2, when we see the Phase II data later this year, sort of how should we think about the threshold there for Valneva moving forward with full development responsibility or sort of perhaps other development parts on that program?

Very good question, Brandon. So I would say the thing that we like about this program is that it includes a controlled human [ infection ] model in adults. So this means we will have adults challenged at least with one strain, namely [indiscernible] and we will see what we call pilot efficacy. So we will see whether people are protected and to which level they are protected. And more importantly, if there is an indication around what level of immunogenicity is required for them to be protected. This gives us, based on prior data, also a first hint to the children population because there, of course, we don't challenge, but we will have also a good understanding about the immunological threshold, provided that we're going to see pilot efficacy, provided that we're going to see a decent level of, let's say, correlation also it's not a statistical correlation in between immunological titer, immunological response and protection, we will progress this program further. If not, we have failed and we have failed rather cheap, which is the advantage of a program where you can really use a challenge model and see pilot efficacy ahead of extensive Phase III studies. Of course, we are planning for success. We are working on the development pathway going forward. And as I mentioned earlier, we expect data from both studies mid this year. And then we will, of course, inform the market about the next development.

We are now going to proceed with our next question, and the questions come from the line of Damien Choplain from Stifel.

Congrats on the good results. The first one is on the ACIP recommendation. So when do you expect to receive an ACIP recommendation for VLA15, if approved? And do you believe a broad recommendation is achievable for this vaccine? And if so, what would be the key criteria to get such recommendation?

So first of all, I think it's fair to say that currently to predict ACIP meetings, to predict ACIP outcome, to predict ACIP dynamics is probably a mission impossible, given the geopolitical environment in the United States. Having said that, we believe that Pfizer will progress fast post approval into the ACIP process. And ACIP, at least in the past, have reviewed a couple of major criteria: One, risk benefit. This considers, of course, the safety profile that we're going to see as part of the Phase III study. And on the other hand, the benefit of vaccination, which will be heavily driven also by the final efficacy that we're going to see in the different target groups and probably also importantly, against serotype 1, which is the most prevalent serotype in the United States.

The other criteria is the health economic benefit. Well, we know that the cost of treating Lyme are very, very high. And therefore, we believe that the health economic benefit will be very favorable for that vaccine. Now favorable for people living in high-risk areas. So we are -- we know that there is a huge difference in Lyme incidents based on different geographies. And we hope that we will get a broad recommendation for people living in high-risk areas and representing a high-risk population in those areas. What this means in detail, hard to predict at this point in time. But we are very positive about a broad recommendation provided data support, of course.

We are now going to proceed with our next question, and the question comes from the line of Vamil Divan from Guggenheim.

So two, if I could. One on back on Lyme and then one other topic. So on the Lyme, I appreciate everything you said around Pfizer running the trial here. Just curious if you know what actually would be in the top line press release, what should we expect in terms of what endpoints or information is planning to be disclosed. So anything you could share would be helpful just ahead of -- release. And then the second one is on IXIARO. And this was a specific question here just around the DoD contract because that has been an important source of revenues for that vaccine in the past. Do you have any information on sort of where that might stand in terms of contract for this year or looking forward?

Well, of course, let me start with Lyme. So we have previously communicated that we expect Pfizer to release top line data. Well, top line data, as you know, is something that is not clearly defined what it really means. What it means, definitely, is the primary endpoint. It is safety. Whether Pfizer will decide to announce more than that, this is their discretion. And Valneva is currently not in any possession of information regarding what else may or may not be included in the top Lyme release.

When it comes to DoD, yes, we are expecting a new contract. It is a vaccine broadly used in the army that we are under a sole supplier contract with the DoD. It's the only licensed -- vaccine in the United States. And yes, we can expect a new contract this year.

Okay. Is there any timing around that like when that might happen or not, too early to tell?

I don't want to predict the timing because again, we are talking government. And we have intentionally not guided on any time line associated with this.

We are now going to proceed with our next question, and the questions come from Rajan Sharma from Goldman Sachs.

Actually, first one for Peter. Could you maybe just help us understand the gross margin progression in 2026? It feels like there are a few moving parts in 2025. What are the pushes and pulls in '26? And how much of that EUR 10 million or so in idle capacity costs are likely to reoccur in 2026? Then also on the in-licensing and M&A that you mentioned as part of the strategy to rebuild the R&D pipeline. Could you just discuss what that could look like in terms of size, structure and if there are any specific areas or segments of the market that you're likely to focus on, whether that's travel or otherwise? And then just one very quick follow-up on the DoD contract from the prior question. Is that assumed within your revenue guidance for 2026?

So where shall we start? Maybe we start off -- I start off with the pipeline evolution, and then I'll let Peter talk about all the financial questions that you had. As I mentioned previously, we have also last year already initiated a process to look at external opportunities in the same way we are looking at internal opportunities. This resulted, for example, in the in-licensing of our Shigella vaccine candidate, and we will continue doing that. As I mentioned, we will definitely now go above and beyond vascularly transmitted diseases. And we will certainly go above and beyond travel. Because we believe, again, planning for success, of course, that there are many, many potential vaccine preventable diseases that are currently not covered by the big vaccine players. And we have already given a focus area around enteric diseases in the context of AMR. But we have also started with our EBV program to build around a potential herpes franchise. And these are the key areas that we are currently contemplating. And again, we have a dedicated team, screening, scouting, evaluating. And we will decide on progressing internal or bringing in external opportunities in the coming months and years. Peter?

Yes. So on gross margin, Rajan, yes, there are a couple of things going on in 2025. We now when we -- I mean, I think the best way to look at it is by product. So when we look at IXIARO, it is relatively stable versus 2024. What happened in '25 is it was a bit adversely impacted by the change from the Manson facility over to the Almeda facility, so our new manufacturing site in Scotland. And also related to that, because of this transfer, a bit of lower volume in manufacturing, which, of course, leads to a bit less effective overhead absorption.

I think on DUKORAL, we had a very good gross margin up until the end of Q3. And then what we saw in Q4 is we had a couple of batch write-offs, which quickly has a quite a significant impact, and this adversely impacted our gross margin in DUKORAL. And I think on the [indiscernible] always primarily and that is, of course, a big hit on the cost of goods overall. Is the write-off we took on drug substance following the termination of the SII contract. And as I said, those doses are still available. I mean the product is good. It has quite a long shelf life. And if the -- if we manage to build a business in endemic market in Asia, those doses could still be written back basically and then sold.

To your question on idle capacity, yes, I would say the EUR 10 million is probably a number that will -- unless there is a major change in how we make usage of our manufacturing facilities, which we right now don't see. It's probably going to stay for a while because we have overcapacities in both Sweden and Scotland.

Yes. So military, what was your question on the DoD again and Russia, sorry?

It's just the guidance for 2026.

Absolutely. So it's included in the guidance in 2026 with the volume that we assume right now. So they order -- they have a right to order additional doses within the 12-month period, which they did and it's then shipped after 12 months, which is also why it's not because there's no new contract that there is no shipments. So shipments are continuing under the old one. And then as Thomas said, we expect the new contract and that all included in the guidance.

We are now going to proceed with our next question, and the questions come from the line of Simon Scholes from First Berlin.

I've just got two questions. The first is on chikungunya -- on the chikungunya vaccine and the status of 1555, which I think is the candidate for the local manufacturer in Brazil. And then secondly, following the suspension of the SII licensing deal, I was wondering if you could just outline your next steps in Asia with regard to IXCHIQ.

So both excellent questions, I would say. So let me start with 1555. I mean, of course, the whole regulatory processes have slowed down the approval of 1555 by Anvisa. Now that we have concluded all the updates with the different regulatory authorities, including Anvisa, meaning sharpening the pencil on age ranges, sharpening the pencil on warnings and precussions, contraindications and all of that. There's no reason anymore for Anvisa to further slow down or wait for 1555 approval. Hence, we are expecting it quite soon.

When it comes to our LMIC strategy in Asia, we decided to take control over the commercialization, but also manufacturing of the product in Asia, given the growing medical need outside of the Indian territory. And we are currently in the process of evaluating potential change of custody, evaluating potential partners, evaluating potential commercialization structures and evaluating potential manufacturing strategies. And we hope that we will be able to progress and announce that in the latter part of this year.

We are now going to proceed with our next question, and the questions come from the line of Suzanne van Voorthuizen from VLK.

It's [indiscernible] on for Suzanne. I have two questions regarding Lyme. For Lyme, could you clarify if the first cohort of participants in the Phase III received a booster prior to the last peak season? And also what about the second cohort of participants? And we're also wondering at what point in time there will be booster data? And will the data be part of the filing?

So we have currently not included a so-called second booster or dose 5 because I'm assuming that you are referring to that, but we will in a success case augment and provide an additional booster dose. And our current hypothesis is, as we presented, I think, already a while ago at our R&D Day in New York that we will not be part of the initial licensure process but, for example, a supplemental VLA.

We have no further questions at this time. So I'll hand back to you for closing remarks.

Thank you very much for having joined us today. It's been a pleasure. And as I said, we are looking forward to our Lyme data. So again, fingers crossed. I think Valneva has great prospects, great opportunities. And with that, stay tuned. Thank you so much.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

Good day, and thank you for standing by. Welcome to the Valneva 9 Months 2025 Financial Results Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded.

I would now like to turn the conference over to your first speaker, Josh Drumm. Please go ahead.

Thank you. Hello, and thank you for joining us to discuss Valneva's financial results for the first 9 months of 2025 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 9 months ended September 30, 2025, which were published earlier today, available within the Financial Reports section of our Investor website.

I'm joined today by Valneva's CEO, Thomas Lingelbach; and our CFO, Peter Buhler, who will provide an overview and update of our business as well as our financial results. 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 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, November 20, 2025, 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.

Thank you so much, Josh. Good day, everyone. Welcome to our 9 months call. So before we go into the business highlights, and also, Peter will provide a very detailed financial report, I would like to start off by providing a couple of key financial management highlights. Total revenues reached EUR 127 million at the 9-month time point, which is a substantial growth of almost 9% despite of some headwinds, be it from a geopolitical perspective, but also from an IXCHIQ perspective in particular. And we are very glad that we have been able to deliver on that growth year-to-date.

We have also been able to significantly reduce our operating cash burn, which has been one of our key objectives in continuously improving efficiency of our operations. This resulted in a cash position of more than EUR 140 million, which includes also the net proceeds from different ATM transactions, Peter will further detail. And most importantly, we successfully completed our debt refinancing, which, of course, enhances substantially our financial flexibility, and we are very glad that we have found in Pharmakon a new partner to support Valneva in the years to come.

Recapping a little bit on the first 9 months key business highlights. Around IXCHIQ, we responded to significant unmet medical needs on the La Réunion and Mayotte, the respective outbreaks. We also responded to a cholera outbreak in Mayotte by supplying doses of DUKORAL. And we again finalized the new IXIARO U.S. Department of Defense contract, all of that supporting our mission in targeting unmet medical needs.

On the regulatory and commercial side of things, we secured additional marketing authorizations for IXCHIQ in the U.K. and Brazil, label extensions for adolescents, 12 years of age and older in Europe and Canada. And we announced an exclusive vaccine marketing and distribution agreement for Germany with CSL Seqirus replacing Bavarian Nordic by the end of this year for our established brands, and they already started distributing IXCHIQ in Germany.

Of course, on the clinical side, it's all about Lyme right now, and we completed all vaccinations in the VALOR Phase III study according to plan. We also reported further positive safety and immunogenicity data following the third annual booster as part of our Phase III follow-up study, VLA15-221. On IXCHIQ, the vaccine profile got further substantiated with the antibody persistence data, now after 4 years, still showing the 95% 0 response rate after a single shot, which is the key differentiation for this life-attenuated single-shot vaccine. We further reported immune response in adolescents and positive pediatric safety and immunogenicity data.

Last, but not least, we also reported positive Phase I results from our second-generation Zika vaccine candidate, VLA1601. Going a little bit into the details of the individual programs, I would like to start off with Lyme. We've been talking a lot about Lyme, and we will be talking a lot about Lyme. The Lyme continues representing a major unmet medical need, enhanced market opportunity, close to 0.5 million cases every year confirmed in the United States, probably now in Europe, the same order of magnitude. Also, there are limited reporting systems available.

You remember that we have about 90 million U.S. citizens living in high-risk areas of Lyme disease, and in Europe, more than 200 million in those endemic regions. Most importantly, the health economical benefit for a potential vaccination against Lyme disease is considered extremely favorable. Why? Because you have very severe manifestations in connection with Lyme disease. 10% to 30% of people develop either carditis, neuroborreliosis or arthritis and 5% to 10% persistent symptoms even following treatment with respective antibiotics.

By way of reminder around the Phase III study that is currently ongoing, Pfizer reconfirmed that they're going to submit regulatory applications in the U.S. and Europe in 2026. The VALOR study has been executed according to plan. And basically, Pfizer guided for readout in the first half of 2026. And the study, of course, is now going through its follow-up period since the official case counts ended at the end of October. Then, we run the normal process through case adjudications, further testing activities, database cleanings and all of that before the results will be announced in the first half of next year.

Most importantly, the time point for which we expect the product to be launched hasn't changed. It is important for us and our Pfizer colleagues that the product can be launched in the autumn of 2027, well ahead of the 2028 tick season. It is important to get really people protected for the tick season 2028. As such, we are very, very much looking forward to the data, which hopefully are going to be positive, and hence, provide a pathway for a vaccine that could really address a huge unmet medical need.

Turning to our highly differentiated, single-shot chikungunya vaccine, VLA1553 or IXCHIQ. Where are we at this point in time? Of course, we have, on the regulatory side, still the situation that the product is suspended in the United States. And we are still awaiting further information from FDA, which we haven't received at all at this moment in time. In all the other countries, we are working on the basis of updated Prescribing Information or SmPCs. And we are seeing that the product is being administered, and we are trying to focus substantially on the expansion into LMIC territories and are working with existing and hopefully future partners in this regard.

The most imminent point now to consider in this program that is supported by CEPI are our post-marketing effectiveness studies, the Phase IVs, which are about to commence with an observational effectiveness study in Brazil with pragmatic randomized controlled effectiveness safety studies in adolescents and adults, including elderly in various endemic countries, and then, later, a prospective safety cohort study and surveillance in Brazil as well.

Of course, I mentioned already, the label extensions and the report on the positive data, which we will further submit and hopefully be granted in the different product labels. We see clearly the product differentiation for IXCHIQ, which, of course, is super important for a potential outbreak disease and for people who are planning multiple trips into areas where there is a high risk of a potential outbreak.

Shigella, you may recall that we in-licensed the vaccine through a partnership with LimmaTech, the program called S4V2, is the world's most clinically advanced tetravalent Shigella vaccine candidate. It addresses the 4 most common serotypes of the Shigella bacteria. The program reported earlier positive I/II clinical data in different age groups.

In terms of medical need, Shigella represents second leading cause of fatal diarrhea. And here, especially in infants, below 5 years of age, the global market is expected on the one hand side in LMICs, in particular, the target population that I just mentioned, but also it represents significant opportunity for travelers and military.

Given the overall medical need, and also, the diarrheal diseases to be seen in the context of antibiotic resistance, the Shigella development or vaccine development against Shigellosis has been identified as a priority by WHO. We have currently a couple of studies ongoing. We have the Phase II in infants, for which we expect results still this year. And we have the Phase IIb controlled human infection model study in adults, where we changed some of the data time points, the clinical design in order to extend the period of immunogenicity, where we had the opportunity to optimize dose and schedule. And we expect the pilot efficacy data next year with immunogenicity data coming in earlier upon success.

And please remember that we have intentionally set up the clinical design and the clinical pathway in a way that the program is highly derisked from a capital allocation perspective. So based on positive data, based on our respective go decisions, we will assume full accountability for the program following those 2 studies, which are still sponsored by LimmaTech, yes, or just update on our operational business and R&D, in particular.

I would like to hand over to Peter to provide you the financial report for the 9-month period.

Thank you, Thomas. Product sales reached EUR 119.4 million compared to EUR 112 million in the 9 months of 2024, an increase of 6.2%. Foreign currency fluctuation had an adverse impact of EUR 1.3 million. IXIARO sales reached EUR 74.3 million, increasing 12.5% over prior year. The year-over-year growth was driven by sales to the U.S. Department of Defense as well as increased sales in some European countries.

Foreign currency fluctuation adversely impacted IXIARO sales during the first 9 months by EUR 800,000.

DUKORAL sales decreased from EUR 22.3 million in the first 9 months of 2024 to EUR 21.5 million in the same period of 2025. Sales were EUR 400,000, adversely impacted by foreign currency fluctuation, mainly resulting from a weakening Canadian dollar and also lower sales to our German partner, as we are transitioning from our current distributor to CSL Seqirus.

IXCHIQ's sales reached EUR 7.6 million compared to EUR 1.8 million in the 9 months of 2024. While IXCHIQ sales included the supply of 40,000 doses to combat the major chikungunya outbreak on the French Island of La Réunion, the temporary restriction and U.S. license suspension significantly adversely impacted sales in the Travel segment, leading to an adjustment of our sales guidance.

Third-party products decreased by 28.5% year-over-year to EUR 16.1 million. This decrease is a result of the anticipated discontinuation of certain third-party distribution agreements. As mentioned in our previous calls, we expect third-party product sales over time to account for less than 5% of total product sales.

Now, moving on to the income statement. Total revenues reached EUR 127 million versus EUR 112.5 million in the first 9 months of 2024. The increase of 9% is driven by higher product sales and an increase in other revenues related to revenue recognition from partnerships. Looking at expenses, cost of goods and services for the 9 months of 2025 reached EUR 71.1 million compared to EUR 71.3 million during the same period last year.

The gross margin on commercial products, excluding IXCHIQ, reached 57.2% in the first 6 months of 2025 compared to 48.6% in the prior year. The improvement in gross margin was driven by better manufacturing performance and favorable product mix. IXIARO gross margin reached 63.2% compared to 58.8% in the first 9 months of '24, and DUKORAL generated a gross margin of 52.3% compared to 34.8% in the prior year.

Cost of goods related to IXCHIQ amount to EUR 8.6 million and include provisions to recognize lower IXCHIQ demand. Cost of goods also includes EUR 8.2 million of idle capacity costs. Research and development expense increased from EUR 48.6 million in the 9 months of 2024 to EUR 59.7 million in the same period of 2025. That increase is what is driven by costs related to the Shigella vaccine candidate following the R&D collaboration with LimmaTech Biologics and costs related to the IXCHIQ Phase IV post-marketing commitment.

Marketing and distribution expense decreased from EUR 35.7 million in the prior year to EUR 28.6 million in the 9 months of 2025. The decrease is related to a planned reduction in advertising and promotion spend related to IXCHIQ following the launch in early 2024. G&A expense reached EUR 29.5 million in the first 9 months of 2025 compared to EUR 32.6 million in the same period of last year. This decrease is a result of a program to increase operational efficiency across the company that we ran at the end of 2024.

In the 9 months of 2025, Valneva reported an operating loss of EUR 53.9 million compared to an operating profit of EUR 34.2 million in the prior year. Last year's operating profit was the result of a sale of a Priority Review Voucher for a total net proceed of EUR 90.8 million. Adjusted EBITDA in the first half of 2025 reached a negative EUR 37.7 million compared to a positive impact -- positive EBITDA of EUR 48.6 million, impacted by the sale of the PRV.

Before moving to the outlook and guidance, a word on cash. As mentioned by Thomas at the beginning of the call, cash at September 30 was reported at EUR 143.5 million compared to EUR 168.4 million at the end of 2024. The cash at the end of September includes a total of 3 ATM transactions for a value of a total of EUR 26 million net of transaction costs. Cash used in operating activities was reported at EUR 28.4 million compared to EUR 76.7 million in the first 9 months of 2024.

Now moving to Slide 19. We confirm our financial guidance for the fiscal year of 2025 with product sales of EUR 155 million to EUR 170 million and total revenues of EUR 165 million to EUR 180 million. We continue to project R&D expense of EUR 80 million to EUR 90 million, and the R&D expenses will partially be offset by grant funding and the anticipated R&D tax credit.

As confirmed in the results at the end of September, we expect a significant lower use of cash in operations. Cash will remain a key focus in order to ensure sufficient runway to reach key inflection points. In the midterm, we expect continued growth in our product sales, focused and strategic investments into R&D and continued improvement in gross margin. We continue to expect Valneva to be sustainably profitable post successful approval and commercialization of the Lyme disease vaccine.

With this, I hand the call back to Thomas.

Thank you so much, Peter. At this moment, I would like to turn to our key growth drivers for the remainder of the year, but also most importantly, beyond the end of 2025. We have built Valneva now on a very solid foundation. And Lyme is certainly going to be the single largest growth driver for the company in the years to come and the single largest near-term catalyst for the company and its shareholders, but also for people who may benefit from a vaccination against Lyme disease.

The VLA15 success, which is hopefully expected in the first half of next year, may drive the company upon successful approval and commercialization into sustained profitability, driven by substantial milestones and later royalties starting in the latter part of 2027. Of course, for this year, and despite of having adjusted our guidance on product sales, we hope that we will be able to continue our growth trajectory for our established brands, IXIARO and DUKORAL. And we are working hard in gaining and regaining global traction on IXCHIQ, and in particular, leveraging LMIC opportunities and new territories where a product like IXCHIQ with its highly differentiated product profile could be perfectly suited.

There is more that Valneva has to offer in its pipeline above and beyond Lyme. Also, Lyme is, of course, very, very dominant and rightly so. We are advancing a number of quite promising internal candidates. We are identifying new opportunities, be it in-house, be it also external potential partnering opportunities with the aim to really build a coherent R&D pipeline with an attractive next Phase III program upon successful VLA15 [ stroke ]/Lyme commercialization, making us really a leading vaccine biotech in the world. As such, we see substantial growth, substantial upside.

And with that, I would like to hand back to the operator to take your questions.

[Operator Instructions] We are now going to proceed with our first question. And the questions come from the line of Vamil Divan from Guggenheim Partners.

So maybe just 2 questions. I could wait for the Lyme data, obviously, the big event coming. On IXCHIQ, you mentioned you're waiting to hear from the FDA. Is there any sort of timelines there? Any guidance on when you think you may hear or anything that the FDA is bound by in terms of when they need to respond by?

And then, DUKORAL, you mentioned this quarter, there were a couple of factors, I think the currency and then the distributor shift in Germany. Wondering if you can quantify the impact of the second, especially? And just how you think about sort of -- you're talking about growth for that asset going forward? How you sort of see that recovering to growth?

Okay. So let me start off with the Lyme -- the IXCHIQ question and FDA. So unfortunately, the answer is there is no predefined process because a similar process, meaning a suspension in the same way that it was done for IXCHIQ without WebPAX, et cetera, has not been done to our knowledge before. So actually, there is no precedent.

There is also currently not a procedure to our knowledge that needs to be followed from a timing perspective. And as such, we are hoping for a collaborative interaction with the FDA, which, of course, could not have happened due to the government lockdown for quite a while, but we certainly hope that we will be able to embark with the FDA into a dialogue still this year.

I'll let Peter answer to your DUKORAL question.

Yes. So I think I commented on the currency impact during the call. I think with regards to Germany, we have not disclosed the number, and we never disclose numbers on individual countries. What I would say is the third quarter of last year saw a particularly strong quarter for Germany. And basically, as we are now moving to our new distribution partner in Germany, there's just not purchases that are made by the existing one because they're using up, of course, the stock they have before we then will ship products to the new one. So that -- it's basically a technical delay.

Now, to your question on looking forward, I mean, we have not yet provided, of course, guidance for 2026, but it's safe to assume that we will continue -- we will expect the continued growth of the DUKORAL brand.

We are now going to proceed with our next question. And the questions come from the line of Maury Raycroft from Jefferies.

Congrats on the progress. For the Lyme Phase III readout, Pfizer has to complete 3 months of safety follow-up after the end of the tick season in October, which implies to us that the readout could come as early as mid-1Q '26, just based on the additional time required for database lock and analysis. If the readout happens later into the second quarter of 2026, would that imply that analyses of the results are just taking longer? Or what are some of the reasons that could push the timing to later in the second quarter?

Maury, yes, good question. So basically, Pfizer are in control of this process. All I can say is we have seen that Pfizer are taking every single step in a very professional and at most accelerated way. At the same time, they will not take any regulatory risk understandably in the current environment. And therefore, I'm assuming that they will be as early as possible. I cannot see at this point in time any major delays compared to the timelines that you have just alluded to. And, of course, I think my colleagues mentioned this to you during the fireside chat. We are also hoping for as early as possible readout of the topline data.

Got it. Okay. Makes sense. And maybe one other question just for the IXCHIQ VLA suspension. Can you comment on what you proposed in your response to FDA as a remedy? And are there some contingency options that you have to -- that you have in place that could get this back on track in the United States?

So basically, our response has solely been focused on the real medical evidence. Our response has been focusing on the individual case analysis and case assessments, both by Valneva as well as by others, including other regulatory agencies and has been focusing on our reiteration on a positive health economical benefit, so-called positive risk-benefit ratio as already articulated by CDC and others. And so basically, we have already a Phase IV program ongoing, as you know. And we have a more stringent pharmacovigilance review, ongoing since we saw the SAEs primarily in La Réunion. And this has been the cornerstones in our response and clarification vis-a-vis the FDA.

We are now going to proceed with our next question. The next questions come from the line of Romy O'Connor from VLK.

Two, if I may. The first one, with this talk about possibility of VLA15, yes, being maybe earlier than expected, do you think you're going to be able to launch on time then for the 2027 tick season? And on IXCHIQ, I was just wondering how sales are expected to grow going forward from here and what the future drivers are?

Yes. So first of all, on the timeline for VLA15, so we have Pfizer reconfirmed the regulatory submission timeline for next year. The regulatory submission timeline next year is the very pivotal and important underlying hypothesis for launch in the latter part of 2027 because the program is under accelerated approval pathway, fast track, et cetera. So all of that is important in order to meet the timeline of a launch in the autumn of 2027 because remember, the vaccine needs 3 shots for priming, so this means if you want to have people protected for the Lyme season in 2028, you've got to start vaccinating at the latter part of 2027. Currently, all timelines communicated by Pfizer do support that notion and that timeline.

With regards to the IXCHIQ situation, it's, of course, not an easy question to answer because we see -- we continue to see major growth opportunities for IXCHIQ in the travel sector, but also in the countries where the chik virus is endemic given that the single-shot live-attenuated approach has a particular importance for countries where you have recurrent outbreaks. And we are working with many different countries right now in potentially ensuring access of the vaccine in those territories.

It's a bit too early to talk about the -- those territory expansion activities and what it will really mean in terms of commercial opportunities. We have 2 existing partners with Butantan for Brazil and South America and the Serum Institute of India for Asia, but there are more countries. There are more territories we are currently in dialogue with. And we are trying everything to accelerate market access in those countries.

And how long it will really take to establish vaccination against chikungunya in the world of travel vaccinations has to be seen. I mean, its -- history has told us that it's not easy to predict growth trajectory for travel vaccines. And as such, I think we will hopefully be able to provide further guidance as part of our 2026 outlook in the earlier part of next year.

[Operator Instructions] We are now going to proceed with our next question. And the questions come from the line of [ Theodora Robigl ] from Goldman Sachs.

Just one from me. So in today's release, you referred to uncertainty around private and public funding opportunities being a consideration and whether you take your Zika vaccine candidate forward. I was just wondering, is there any more detail you can share with us in terms of factors you're weighing up, some sort of level of funding you need to see to take the candidate forward? Any further details would be appreciated.

Yes. So we announced already that statement as part of our Zika release that we announced 2 weeks ago. And we only repeated it in today's earnings release. On the one hand side, we are super happy with the data that we have generated. We have shown very good immunogenicity data, and we have shown excellent safety data for a vaccine that would also target pregnant women, for example.

At the same time, there is a significant uncertainty around the potential regulatory pathway to licensure because it's an outbreak disease, so a classical placebo-controlled efficacy study would probably not be deemed feasible. At the same time, there are major regulatory headwinds against accelerated approval pathways at this point in time. And the major, I would say, NGOs, but also public health agencies have deprioritized Zika given the epidemiological situation.

As such, the return on investment for further development is not an obvious one. And certainly, in the absence of those clarifications, it would not be prudent to invest as Valneva stand-alone in this program going forward. At the same time, if there was a substantial funding provided by respective institutions, public, private, we would be very happy to do it in a similar way, as we developed our chikungunya vaccine, for example, with substantial support by CEPI.

At this point in time, again, we keep the options open, but we count also on the understanding here that we need to be mindful of capital allocation and returns of investments even if there was an exciting product candidate or there is an exciting product candidate and certainly an interesting medical opportunity.

[Operator Instructions] We have no further questions at this time. I will now hand back to you for closing remarks.

Yes. Thank you, everyone, for having taken time today. We are very thankful about your support. And again, we are looking forward to delivering on our expectations for the remainder of the year. And then, most importantly, to the next big and biggest catalyst for Valneva in its history with Lyme data coming in next year.

Thanks so much, and have a good remainder of the day. Bye-bye.