First Berlin – Valneva SE Research Update (28/07/2020)

First Berlin Equity Research has published a research update on Valneva SE (ISIN: FR0004056851). Analyst Simon Scholes reiterated his BUY rating and increased the price target from EUR 6.90 to EUR 7.40.

Valneva has announced positive results of VLA15-201, the first of two parallel phase II studies of its Lyme vaccine candidate, VLA15. VLA15-201 met its endpoints and compared to Phase I, the higher doses used in this trial elicited higher antibody responses. VLA15 was also generally safe across all dose and age groups tested. Last week Valneva further announced that it has been selected to deliver SARS-CoV-2 vaccines to the UK. Valneva first announced on 22 April that it is developing a vaccine candidate, VLA2001, against SARS-CoV-2. VLA2001 is based on Valneva's existing platform for the Japanese encephalitis vaccine, Ixiaro, and so we think the probability that the vaccine will work is good. VLA2001 is expected to enter clinical studies by the end of this year and potentially achieve regulatory approval in H2/21. The deal with the UK Government is an in principle agreement for 60 million doses. If the vaccine is proven to be safe and effective, the UK Government has an option on a further 40 million doses. We have incorporated 60 million doses into our valuation model which we assume would generate revenue of ca. €480m if the vaccine is approved. On the basis of the UK Government deal, we raise our price target from €6.90 to €7.40. We maintain our Buy recommendation.