Valneva SE (VALN) Q3 2023 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Valneva 9 Months 2023 Financial Results Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Joshua Drumm, VP, Investor Relations. Please go ahead.

Thank you for joining us to discuss Valneva's 9 months 2023 results and corporate update. It's my pleasure to welcome you today. In addition to our press release and analyst presentation, you can find our consolidated financial results for the 9 months ended September 30, 2023, which were published earlier today available within the Financial Reports section on our Investor website. As always, I'm joined by Valneva's CEO, Thomas Lingelbach; and CFO, Peter Buhler; who will provide an overview and update of our business as well as our key financial results for the first 9 months of the year. There will be an analyst Q&A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners quickly that during this presentation, we'll 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 9, 2023 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 and good day. Welcome to our 9 months financial report and general business update. Let me start with our R&D highlights. We are progressing full steam towards potential licensure of the world's first chikungunya vaccine, where we foresee the PDUFA date towards the end of this month. On Lyme disease, the Phase III study, VALOR with Pfizer continues, cohort 1 completed its first tick season and current cohort 2 is nicely enrolling. As previously discussed, we have reinitiated the Zika vaccine development and anticipated clinical trial starts early next year. On the commercial business, with total product revenues of more than EUR 100 million, we have seen an almost 2x increase on non-COVID sales as compared to prior year period. And as such, we are on track to meet our 2023 sales guidance of EUR 130 million to EUR 150 million. We remain to have a strong cash position with cash of EUR 171.3 million at the end of September. Let me go straight to chikungunya, as you know, this is our product candidate called VLA1553, a live-attenuated vaccine candidate under FDA priority review. It is the first chikungunya vaccine that reported positive Phase III data and met all trial endpoints. We submitted the BLA. In the meantime, also filed with the European Medicines Agency and Health Canada and the vaccine has very distinct features. We demonstrated long-lasting high seroresponse after a single shot. We see already 100% response after 14 days and a favorable safety profile, regardless of prior infections as recently reported as part of the study in children in Brazil. We are preparing for launch. We are investing in making sure that we can supply the product as early as possible. And as previously described, VLA1553, especially from a travelers' perspective, fits perfectly within our existing commercial infrastructure but also in the industrial infrastructure. By way of reminder, we see different markets on that, nonendemics, meaning travelers, military and outbreak preparedness in the Western world, endemic use in LMIC, where we have partnered with CEPI and Instituto Butantan. You may remember that, of course, the single largest short-term reward on this development program is the potential award and sale of the PRV upon BLA approval, which we have still included in our financial projections, to the level of roughly $100 million. The ongoing study in Brazil in adolescents, we reported already positive initial safety data and final immunogenicity and safety data on the so-called Part A, it's still expected this month. With regards to the development outlook, we continue to work collaboratively with FDA to align on our postapproval Phase IV program. And we have additional studies ongoing, meaning antibody persistence study that we will really follow through for at least 5 years. And the 2-year time point is still expected towards the latter part of this year and the adolescent trial data is expected to support the potential label expansion and licensure in Brazil. But also supported to really add onto the existing licensure processes, especially with the European Medicines Agency. Anticipated future trials will include co-vaccination in pediatric special population and as mentioned, Phase IV effectiveness. Turning onto Lyme, Page #8. This is our multivalent recombinant protein-based vaccine candidate addressing Lyme disease. It's the only Lyme disease program in advanced clinical development today. It's exclusively worldwide partnered with Pfizer and we have the Phase III well underway, which is sponsored by Pfizer and supported by positive results of 3 Phase II clinical studies including the first pediatric and adolescence data, including PRIME boost and anamnestic response data. It is, as we have reported multiple times, hexavalent or 6 valent vaccine that addresses the most prevalent serotypes causing Lyme disease in the Northern Hemisphere and that's why this vaccine really targets people living in risk areas, Lyme disease on both sides of the Atlantic. It is a rather program since it follows established modes of action for Lyme disease vaccine candidates that were shown earlier on and fast track designated by U.S. FDA. The Phase III efficacy study, we have shown it in the past, 9,000 participants in the final target population, meaning everyone above 5 years of age, randomized one-to-one vaccine against placebo and 2:1 in between North America and the European side, primary endpoint [indiscernible] confirmed Lyme disease after 2 consecutive ticks seasons, meaning after the PRIME boost and secondary endpoints include the rate of Lyme disease after the initial first Lyme season, meaning primary vaccination or in other words, 3 primary doses and then other secondary endpoints as defined in the [indiscernible] protocol. We have 2 cohorts. As mentioned before, the cohort 1 is entirely enrolled, is now expecting the next booster shot prior to the season 2024. And the enrollment of cohort 2 is well, well underway. If everything goes to plan, Pfizer aims to submit regulatory applications in the United States and Europe in 2026. In terms of trial updates, we have 2 studies that are currently ongoing. The VALOR vaccine efficacy study as I just described. And basically, here, we expect the last subject out towards the end of the ticks season 2025 when also the first initial readout is expected. In parallel, there's also the safety study ongoing with the subjects in -- achieved in December last year. The enrollment was completed in summer this year. It's more than 3,000 children there and we target completion by the end of this year, then there will be the follow-through period as well. Turning to Zika, Page 11 of the presentation. We have decided to reactivate this development of a Zika virus vaccine candidate following the and our experience on vector diseases but also diseases that may be developed under an accelerated pool pathway. Zika viral disease remains a significant, a very significant unmet medical need. And we believe that given the special target population for a potential Zika vaccine that our technology, leveraging the proven and licensed platforms for IXIARO on the one hand side but also the COVID vaccine VLA2001 may provide an excellent vaccine solution for this disease. And as mentioned before, we plan to reinitiate Phase I early next year based on updated formulations that we have. Looking overall at the pipeline of Valneva, Page 12, you see we focus strongly on the 2 late-stage assets that we just mentioned, put Zika back into the active clinical development program. We continue to evaluate partnerships for our hMPV candidate that successfully completed the preclinical proof of concept and are currently focusing our preclinical resources mainly on the Epstein-Barr virus. And with that, overall business update, especially focusing on R&D, I would like to hand over to Peter.

Thank you, Thomas and good morning and good afternoon to all of you. Now let's look at the financial review for the third quarter of fiscal year 2023. Product sales reached EUR 106.1 million and grew 42.6% over the same period in the prior year. At constant currency, product sales grew 45.8%. The strong growth was driven by all product lines, with IXIARO growing at 119.4% over prior year or 126.7% at constant currency. DUKORAL at 142.7% at constant currency and third-party products at 61.1%. This excellent sales performance is primarily driven by the recovery of the private travel market but also by price increases across the board. COVID-19 vaccine sales at the end of September are unchanged from the end of June and relate to a pre-existing contract with the Kingdom of Bahrain. Moving onto the income statement. Total revenues reached EUR 111.8 million versus EUR 249.9 million in the first 9 months of 2022. In the prior year, Valneva has recognized significant other revenues derived from its COVID program, which explains this decrease. Looking at expenses, we observed a significant decrease in cost of goods and services from over EUR 200 million in the 9 months of 2022 to EUR 74.8 million at the end of September 2023. Prior year's cost of goods and services were heavily impacted by one-off items related to the wind down of our COVID-19 program. The gross margin of both IXIARO and DUKORAL is still below pre-COVID levels but improved versus the first half year. Cost of goods are adversely impacted by IXIARO batch write-offs in our Scottish manufacturing site and high sales volumes in indirect markets where our average selling price is lower than in direct markets. In addition, cost of goods include a total of EUR 9.3 million related to the launch preparation of the company's chikungunya vaccine candidate. Research and development expense decreased from EUR 75.4 million in the first 9 months of 2022 to EUR 42.2 million in the current year. That decrease is exclusively driven by the lower spend on Valneva's COVID vaccine program. At the same time, the costs related to the Zika vaccine candidate increased as the company has been working towards reinitiation of the clinical development program. Marketing and distribution expense increased significantly year-over-year from EUR 13.1 million to EUR 33.9 million. The increase is mainly related to higher prelaunch cost for our chikungunya vaccine candidate that more than tripled versus prior year. In addition, prior year's spend had a positive impact related to employee share-based compensation. G&A expense increased from EUR 23.3 million in 2022 to EUR 35.1 million in 2023. In the prior year, all expense lines had a favorable effect for a total of EUR 30.5 million related to employee share-based compensation driven by the share price development. The increase in other income from EUR 7.5 million to EUR 17 million is mainly related to the recognition of a grant received from Scottish Enterprise. The company's operating loss is stable versus last year at negative EUR 57 million. Net finance and tax income expense is reported at negative EUR 1.1 million versus negative EUR 42 million in the prior year. The lower cost is related to high unrealized exchange losses in the first 9 months of the prior year. Total loss for the year reached negative EUR 69 million, EUR 30 million less than in the prior year. Finally, we reported cash and cash equivalents at September 30, 2023, of EUR 171 million compared to EUR 289 million at the end of December 2022. This position includes an additional $50 million drawdown on the existing credit facility with Deerfield and OrbiMed and takes into account significant payments made to Pfizer in relation to the Phase III Lyme study VALOR. Now moving onto Slide 17, to review our guidance for the fiscal year. We reiterate our guidance for revenues and other income communicated earlier this year. We expect product sales to reach between EUR 130 million to EUR 150 million and other income to reach between EUR 90 million and EUR 110 million, assuming a sale of the chikungunya PRV in the fiscal year 2023. We reduce our guidance on R&D investments to EUR 60 million to EUR 70 million versus EUR 70 million to EUR 90 million previously. This concludes the finance section of this call. Now I would like to hand back to Thomas for the upcoming catalysts.

Thank you so much, Peter. Yes. So this brings me to the point of summarizing really what we have to expect over the course of the next coming months. On chikungunya, first of all and most importantly, the PDUFA action date, with the potential BLA approval by the end of this month, still on track for that. the adolescence, immunogenicity and final safety data for Part A, also still this month. Then the additional 2-year antibody persistence data. Please be reminded that we reported the 1-year follow-up data and persistence data last December. So therefore, we expect also data on the 2-year time point in December. And then the ACIP recommendation that is still planned for February 2024, which, of course, is critical for the future potential commercial success of chikungunya, especially in travelers and U.S. travelers. On Lyme, continued trial execution, it's very critical that we have the enrollment completed for the cohort 2 so that we have all necessary subjects in the study ahead of the 2024 ticks season. And then the next real catalyst for Lyme will come at the end of the ticks season 2025, with the readout of the primary endpoint and this maybe 1 of the 2, of the first secondary endpoint. Additional revenue flows include the potential granting and sale of the FDA priority review voucher upon approval of VLA1553. The initiation of our Zika vaccine development with the new tick season, 1 part early next year and further advancement and acceleration of selected preclinical programs. With that, we are concluding that part of the presentation. When we look at the future strategic development of the company we see really very substantial strategic growth opportunity for Valneva. This includes, on the one hand side, maximizing the existing travel vaccines, leveraging continued recovery of travel to pre-COVID levels and beyond from a volume perspective. Then, of course, the potential label expansion for VLA1553, our chikungunya vaccine candidate after initial approval in adults and approvals in all the necessary markets. And as we have said multiple times, we are also looking into opportunities to potentially in-licensing or partnering or acquiring additional clinical-stage assets to leverage our proven and excellent R&D capability. And with that, I would like to conclude our presentation and hand back to the operator to take your questions.

[Operator Instructions]. Our first question comes from the line of Maury Raycroft of Jefferies.

Congrats on the progress. I was going to ask one about chikungunya. So at the recent October ACIP meeting, the chikungunya committee draft recommended vaccination to adults traveling to outbreak areas. However, they expressed some concern over the size of the safety population to detect rare adverse events as well as the use of immunogenicity as the endpoint. The post-marketing outbreak study should address both of these points. But I'm wondering if size of the safety population is also something being discussed with FDA heading into the PDUFA and separately, will the outbreak study being in the works, be sufficient ahead of that February ACIP vote or will ACIP want additional progress or evidence before they make that vote?

So Maury, of course, excellent question. So first of all, the safety database is supporting licensure and otherwise, we would not be where we are at this point in time. Of course, the program is -- or will be licensed under the accelerated approval pathway. So this means the accelerated pool pathway by definition uses a surrogate. And therefore, immunogenicity data, there is nothing one can do about it. But of course, we're going to prove real-world attractiveness as part of the Phase IV. And of course, there will be also dedicated [indiscernible] studies or safety follow-ups once the product is used in, I would say, larger cohorts. And this is all being part of the ongoing discussions and part of the ongoing process with the FDA and will, of course, form the basis for the anticipated licensure. The agreement on Phase IV protocol and conceptual design is mandatory for licensure. And therefore, the exact design will be also available to ACIP and as such, will also make clear to ACIP what they will and can expect in the years to come around of chikungunya VLA1553.

Got it. That makes sense. So the -- having the study design for ACIP should be sufficient for them ahead of the road.

This is what we are -- this is our current working hypothesis. Yes.

Okay. Makes sense. And then is there any other perspective you can share on interactions with FDA and frequency of interactions ahead of the approval as it relates to the outbreak study and potential label discussions. I just wanted to check if you're saying anything on that.

No. I think, of course, I mean, you will understand, Maury, you know this business as well enough. We can and will not comment on ongoing interactions with the agency. It is fair to say that, of course, as we are now on the, what I say to the team all the time on the last mile of the marathon and we are -- we have various and high-frequency interactions with the agency as we jointly try to conclude this entire process on time.

Got it. Makes sense. And maybe last question for me. Just for Lyme cohort 2. It sounds like enrollment is going well there. When should you have the cohort fully enrolled in order to get the required initial doses for tick season 1 for that cohort? I guess is there any perspective on timing that you can share on that.

So basically, there is not necessarily a hard drop date on all of that. But I think, as you know, we aim to have people fully immunized and having ideally peak titers, optimized against the peak of the tick season. And this gives you a little bit of a perspective given the schedule and the fact that we see then antibody titers at highest level around month 7 and this gives you a little bit of a prospect. And given that the tick, that the tick season yet hasn't peaked but there is also the [indiscernible] less than right. So that gives you a little bit of flexibility around that. So into early next year, I would say.

Our next question comes from the line of Ed White of H.C. Wainwright.

So just on the travel market, maybe I can ask a big picture question and you continue to say you're seeing recovery in the travel market. Can you give us a good comparison on your thoughts for 2024 versus pre-COVID levels? And then also just on IXIARO, with the $32 million DoD contract, were any sales recorded in this quarter, if you could break that out for us? And also how we should be thinking about the cadence of that contract should it be fulfilled by the end of this year? Or should we see the impact going into next year as well?

No. I think -- so basically, let me answer the travel market question first. This is a very good question indeed. And as we have said multiple times, when we look at -- and Peter reported this also, when we look at volume because as we have also been able to leverage price increases, we need to look at volume and compare this to pre-COVID levels. There are countries where IXIARO is being sold, where we are indeed back to pre-COVID volume levels already today. There are also countries where we are above pre-COVID volume levels today. And there are other countries where we are not yet at pre-COVID volumes. And there's a lot to do with travel behavior. Generally, we see a trend towards higher awareness and -- but it is very difficult to clearly model. I mean we really do hope that we're going to see next year, in the vast, vast majority of countries volumes back or above pre-COVID levels. And this is really the outlook that we're going to take. On the military contracts and I'll let Peter to then say something about what sales numbers we have recognized in military. But generally, the contract with the DoD is a 1-year supply contract. And therefore, the supply schedule and by the way, we have already done first shipment but the supply schedule is, of course, a supply schedule that spans over 1 year and not necessarily a fiscal year, right? So -- and this supply plan is also subject to potential changes, which we continue to respond to upon the request of the DoD. Peter, on the numbers?

Yes, maybe just -- so we had the first shipment to the U.S. military indeed in the third quarter. We have not disclosed the number in this quarter. And as Thomas said, we are actually now aligning with the U.S. military on the supply schedule for the rest of the contract and we might disclose numbers in the fourth quarter. But so far, we haven't done.

Our next question comes from the line of Evan Wang of Guggenheim Securities.

Happy to see the draft recommendation at ACIP. That's encouraging in our view, particularly with the or I guess, both risk base and exposure risk that seems to be positive for [indiscernible]. But I'm interested in hearing your thoughts on the draft recommendation as well as how you're thinking about how the recommendation will look internationally?

Well, this is -- what you are asking is a little bit crystal ball reading. So first of all, I mean, the -- on a positive note, as you rightly pointed out, ACIP recommended vaccination, right, which, of course, is already in its draft recommendations. It's great news. They have, in the draft included a kind of a few caveats to it and defined what really people at risk of chikungunya may mean. But please keep in mind, these are draft recommendations. And so this is an ongoing process and it should be an ongoing independent process and not something where we are intimately involved. We provide information. We provide the science. We provide the data. And -- but overall, we see this going into the right direction. With regards to other regulatory bodies, other recommendation bodies, I mean, first of all, you know that every single regulatory authority is taking a slightly different stance when it comes to interpretation of data. So therefore, I think the basis for potential recommendations may be different in different geographies. On top of that, we have learned and I personally have learned this through my more than 30 years in the vaccine industry that also different recommendation bodies take very different approaches. So it's very difficult to predict at this point in time how other regulatory bodies, be it in Canada or be it in Europe or even be it in other territories will position chikungunya. We continue to believe that chikungunya is representing a major unmet medical need. And therefore, we see a benefit to provide a vaccine solution.

Great. And as a follow-up in terms of the hMPV asset. I know you guys are seeking a partner there. We're seeing a pretty robust initial launch in RSV. So it seems like hMPV could be a very interesting program. Can you help us think about how you're thinking about partnering discussions and what's the scope and type of agreements you're looking at?

Yes. This is also, of course, a very good question. I think -- as you have rightly pointed out, I think the RSV market is expected to transition towards an RSV, hMPV combination market when it comes to vaccination strategies and vaccination solutions, vaccine solutions. And therefore, we decided not to develop hMPV as a stand-alone clinical asset. Right now, we are looking at different partnership opportunities. And this spans across a pure straight out-licensing all the way into potential other sets of joint development structures and the like. But it is too early at this point in time to guide really what it's going to be. What we can say is, we have multiple parties under CDA and we have -- and we are exploring opportunities here.

Our next question comes from the line of Simon Scholes of First Berlin.

Congratulations on the strong numbers. I was just wondering if you could let me know which of your planned future chikungunya trials will generate 15-day onset of immunity data for inclusion on the label subject to approval and how soon you might be able to get that data onto the label?

So right now, I mean, as you know, the -- when we started the development of chikungunya we had agreed a standard endpoint, meaning 1 month after vaccination. Of course, we had and we have already published data that show an early onset. However, this data was generated from earlier studies. And therefore, as soon as we're going to start the next study and the next study is probably going to be a study in immunocompromised. And we will include earlier immunological end point, in order to verify what we have seen already in prior studies, namely, that we got to have an immunogenicity level above the anticipated protective threshold, somewhere in between day 8 and day 14. And we will, of course, include that so that we can use this data from a well-controlled Phase III study in order to amend the label as soon as possible.

Our next question comes from the line of Samir Devani from Rx Securities.

Congrats on a good quarter. And congrats on the ACIP draft recommendation. I've got a few questions. I'll probably kick off on that first. One of the bullet highlights is that it's recommended for somebody traveling to a territory where there is a chikungunya outbreak. And I'm just wondering, as we see today, which territory would you say is the most important that's currently exhibiting a chikungunya outbreak. So I guess that's the first question.

Samir, excellent question. So I think, first of all, I mean, the question is, is it an area where there has been an outbreak? Or is there an area where there is an actual outbreak? Or is it an area where there might be an outbreak coming up very soon. It is not 100% clear from what has been drafted thus far. And it is very -- it is also not clear how outbreak is defined. And so basically, today, as you know, we have seen an outbreak literally in every single country in South America. But we have also seen geographically, I would say, distinct outbreaks in the southern part of Europe. We have seen it in France. We have seen it in Italy. We have seen it in Spain. So I think this whole definition around, let's say, outbreak, outbreak risk, I think there is a need for refinement and for precision, I would say. And we hope that this will come as part of the further ACIP process, leading then finally to a vote in February, hopefully.

Is there a resource where a traveler can go online and know if they're going somewhere there's a chikungunya outbreak?

In terms of actual outbreak, I mean, the only thing that I'm aware of is that WHO reports generally outbreaks and outbreaks here -- and -- but I -- also here, we have seen different definitions of outbreak. So I'm not aware that there is a real standardized kind of information platform. But I will be -- very happily take this as a follow-up action Samir and get back to you on that one.

Okay, that's great. And then maybe a couple of questions for Peter. There's a significant reduction in the refund liabilities on the balance sheet. And obviously, a significant payment was made in the quarter. I'm assuming it looks like there's going to be a similar payment made for Q4. Just correct me if I'm wrong on that. And then once that payment has being made, how far are you away from being capped out in terms of your liability to Pfizer?

Yes, Samir, a great question, obviously. So -- and we -- as we said, when I talked about cash, I did mention that this cash situation at the end of September takes into account the significant payment to Pfizer. Now you see how the refund liability in our balance sheet is reduced. Now how much we pay in Q4 and thereafter, we have not guided. And so I cannot disclose it, of course, in this call. But we've always said we will be done paying for ticks -- or for Lyme in the first half year of 2024.

Okay. Great. And then final question, just on the finance expense, Peter, in Q3, specifically Q3, that went up quite a lot. And is that just -- I think, Peter, you talked about non-euro cash assets, I assume. Is that just a translation effect again in Q3?

Yes, that's absolutely correct. It's translation effect. That's basically the effect between U.S. dollar and euros.

Our next question comes from the line of Max Herrmann of Stifel.

Three, if I may. Firstly, just on the chikungunya program. Conceptually, how would you just -- I'm trying to get my head around, trying to understand this Phase IV commitment. And how would you conduct logistically an outbreak study in chikungunya, given the infrequency and the uncertainty about which region it will be? That's the first question. Second is just on, again, trying to get conceptually about the booster dose with the Lyme disease VLA15, do you think -- and do you have any data to know whether this would be a seasonal booster that you would need? Or how frequently, I know, obviously the trial design requires boosters in the second year but do you think that is the right way to go forward or where would you need the booster? And then finally, just on Zika -- just in terms of reinstigating that program, what was the kind of commercial evaluation that was done in order to reinstigate that program? What are the metrics you've used to believe that there is a significant commercial opportunity there?

So number of good questions, Max. Let me start with chikungunya. I mean, of course, as you rightly pointed out, effectiveness means that you need to provide the vaccine in a country where -- or in a region where you have either an actual outbreak or where the virus is really prevalent and you see a high chance of an outbreak. This is why we are partnering with Instituto Butantan and CEPI because we believe that the best feasibility for all of that will be Brazil. And we are -- and this is also part of the protocol and it takes into consideration that you have a certain setup ready and that you then go into a real outbreak like situation with the study. On your question around booster, of course, this is a very important question. I mean you know that the booster vaccination, as shown in the follow-up studies from Phase II generates a very high anamnestic response with immunogenicity levels significantly, very significantly above . So this means whether we will need a booster every year or every other year or every third year or what it's really going to mean, is only -- this question can only be answered post efficacy study and once we see, hopefully, a correlation in between immunogenicity and efficacy. And that would then inform what kind of immunological levels need to be reached in order to have a meaningful predictive efficacy. And that's why we continue doing the antibody persistence studies with primarily the Phase II cohorts to inform that, to inform us about this situation. On Zika, I would like to remind everyone, so what is really the -- and we have been explaining this all along a couple of times, so point #1 is, I -- we have decided to reinitiate that for 2 main reasons. #1 is, we see an emerging extended logical development around Zika. We see -- you see, for example, in India, Zika cases significantly on a rise. You see also here and there, spot rises on Zika virus prevalence in other countries. And the WHO issued a blueprint and white paper around the fact that post-Zika vaccines, they recommend inactivated whole virus and/or recombinant protein-based vaccines given the tolerability profile for vaccines of that class. So that's the reason why we said let us go into that. We have also said that we're going to monitor the, I would say, the medical or the unmet medical need, meaning the real development of the epidemiology over the course of next year. We have built certain commercial models but we need to refine those models. And we said only if there is a continuous development on the medical need side and subsequently a favorable commercial opportunity, we will continue clinical development post the initial Phase I. And this we have also publicly disclosed.

Great. Just in terms of the field study, just to understand a little bit more and I know you obviously have been having lots of detailed discussions with the FDA about this but are you thinking about choosing a region where there have been recurrent chick infections and then setting up a program there and kind of waiting for an outbreak or are you looking at some sort of a quick response to an outbreak where you can vaccinate the population there.

In reality, you can think about it, it's almost a combination of the 2 things that you have just said. But this is the way you can think about it, yes.

There are no further questions. Speakers, please continue.

Well, that concludes our presentation today. Thank you all for your participation. Just note that there will be an archived version of the webcast available on our website later today. Thank you, everybody.