Valneva: VLA1553 Takes The Lead In The Chikungunya Vaccine Race

Summary:

• Positive Phase 3 data from Bavarian Nordic’s chikungunya virus (CHIKV) vaccine candidate, PXVX0317, reinforces bullish view on Valneva’s VLA1553 due to its superior clinical profile.
• Valneva’s VLA1553 demonstrated impressive seroresponse rates and durability, with future data releases from Bavarian Nordic’s additional Phase 3 trial expected to provide a comprehensive comparison between the two vaccines.
• Valneva has submitted a regulatory application to Health Canada for VLA1553 approval and received Fast Track.
• We continue to be a big fan of Valneva’s robust vaccine pipelines and maintain a buy rating.

Key update: Bavarian Nordic’s data release adds to our conviction around Valneva’s VLA1553

We believe the near-term investor focus revolves around the Chikungunya Vaccine, where the PDUFA date is expected in August 2023, which is on track, and approval should provide a meaningful stock impact of 10-20% considering its $100-150m peak sales expectation.

The recent announcement of positive Phase 3 results from Bavarian Nordic’s chikungunya virus (CHIKV) vaccine candidate, PXVX0317, provides compelling evidence to reinforce our bullish stance on Valneva’s (NASDAQ:VALN) CHIKV vaccine, VLA1553, considering its superior clinical profile compared to PXVX0317 (more robust and persistent seroresponse). PXVX0317’s data revealed a neutralizing antibody seroresponse rate of 87% by day 22 and 82% by day 15 in adults aged 65 and above, which is encouraging. The safety profile of PXVX0317 also appears robust, with comparable tolerability observed across treatment and placebo groups.

Of note, CHIKV VLP (PXVX0317) is a VLP-based vaccine in phase 3 development against chikungunya disease, where the phase 3 trial design is a multi-centered randomized controlled trial evaluating the safety and immunogenicity of the drug over 3,000 healthy individuals (aged 12-64).

Our conviction in VALN’s VLA1553 is strengthened by its superior clinical profile, as recently published in Lancet. The vaccine demonstrated impressive 98.9% seroresponse rates by day 29 in adults 18 and older, reaching 100% in individuals 65+, and showcasing durability through one year. Despite the more rapid onset observed with PXVX0317, VLA1553’s ability to induce a more robust and persistent seroresponse holds significant merit.

Future data releases from Bavarian Nordic’s additional Phase 3 trial in the 12 to 64 age group, expected in Q3 2023, will provide a more comprehensive comparison between the two vaccines. Yet, with VLA1553’s studies indicating strong seroresponse rates at day 14 and a PDUFA date in August 2023, VALN’s candidate seems to be the fastest horse in the race. Ultimately, the key focal point will be the February 2024 ACIP meeting and vote, where VLA1553 remains the only CHIKV vaccine candidate under discussion.

Chikungunya Vaccine VLA1553 Filed For Approval in Canada

Valneva recently disclosed that it had submitted a regulatory application to Health Canada seeking approval to market VLA1553, its single-dose chikungunya vaccine, for individuals aged 18 and older. If Valneva’s application is accepted, Health Canada will outline a potential approval timeline.

VLA1553 has already received Fast Track and Breakthrough Therapy Designations in the US and PRIME designation in Europe. Of note, a study of VLA1553 in Brazilian adolescents is underway, with key results anticipated by mid-2023, potentially backing future submissions for adolescent use and licensure in Europe and Brazil. More submissions are expected for VLA1553 during 2023. It’s noteworthy that Valneva may qualify for a priority review voucher (PRV), possibly valued at around $100M, based on past PRV sales.

Risks

1. Regulatory Risk: The success of Valneva’s pipeline depends heavily on regulatory approval. Any unexpected delays, additional data requirements, or rejections from regulatory bodies could impact the company’s revenue and future growth prospects.

2. Clinical Trial Risk: Valneva’s products in development are subject to the results of clinical trials. If these trials do not produce the desired results or are discontinued for any reason, the investment in these products may not yield a return.

3. Market Acceptance and Competition Risk: The success of Valneva’s products also depends on acceptance by physicians, patients, and the medical community. If competing products prove more effective, safer, or less expensive, Valneva’s sales could suffer.

4. Supply Chain and Manufacturing Risk: Any disruptions in Valneva’s supply chain or manufacturing process, such as supply shortages or manufacturing difficulties, could negatively affect the company’s ability to meet the demand for its products, impacting revenues.

Conclusion

Net-net, in light of Valneva’s strong first-quarter performance in 2023 and the promising outlook for both its current products and development pipeline, we maintain a buy rating for the company. Despite a setback in the Lyme vaccine’s Phase 3 trial, we remain optimistic about its potential and expect approval by 2026. The anticipated approval of the Chikungunya Vaccine in August 2023 should positively impact the stock value, especially after we have seen the underwhelming data of the competitor product, CHIKV VLP’s (PXVX0317), and we don’t expect a meaningful delay in approval. Moreover, the management’s interest in potential in-licensing presents opportunities for portfolio diversification, adding further excitement to Valneva’s prospects.

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