First Berlin Equity Research has published a research update on Valneva SE (ISIN: FR0004056851). Analyst Simon Scholes downgraded the stock to ADD and decreased the price target from EUR 12.50 to EUR 12.00.

H1/22 EBITDA was below our forecast due to writedowns in connection with the scaling back of COVID-19 vaccine orders from EU member states. However, sales of the travel vaccines Ixiaro and Dukoral are recovering rapidly as the international travel market revives and last week Valneva and Pfizer announced the initiation of the phase 3 trial of their Lyme disease vaccine candidate, VLA15. Valneva also expects to complete submission of a Biologics License Application (BLA) to the FDA for the chikungunya vaccine candidate, VLA1553, by the end of this year. Furthermore, during the H1/22 results presentation, Valneva provided an update on two of the early-stage vaccine candidates which it is advancing. Management expects preclinical proof of concept to be achieved for VLA1554 (human metapneumovirus) by the end of this year, while another preclinical asset, VLA2112 (Epstein-Barr Virus), is currently in a late-stage evaluation phase. A study by Bjornevik at al., published in the periodical Science earlier this year, suggested EBV as the leading cause of multiple sclerosis, with a recent EBV infection causing a 32-fold increase in the risk of developing multiple sclerosis. However, given their preclinical status, we do not yet include these vaccine candidates in our valuation model. We have lowered our price target from €12.50 to €12.00 to reflect a reduction in our COVID-19 vaccine sales forecasts, and also lower 2022 and 2023 sales of the Ixiaro vaccine (against Japanese encephalitis) to the US Department of Defense than previously modelled. The recommendation goes from Buy to Add.