Valneva (VALN) Stock Down 61.5% in the Past Year: Here's Why
Shares of Valneva VALN have dropped 61.5% in the trailing 12 months compared with the industry’s 39.6% decline.
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This substantial decline was attributable to the revision for the supply of doses of VLA2001, the company’s inactivated COVID-19 vaccine.
Last year in June, the European Commission (“EC”) granted marketing authorization to Valneva’s COVID-19 vaccine for use as a primary vaccine in adults aged 18 through 50 years in the European Union (EU). Following this approval, VLA2001 became the first COVID-19 vaccine to receive standard marketing authorization in Europe.
The EC’s decision to grant approval to VLA2001 was based on positive top-line data from the pivotal phase III Cov-Compare study, which evaluated VLA2001 against AstraZeneca’s AZN COVID vaccine, AZD1222. The study achieved both co-primary endpoints two weeks after the second vaccination dose. Data from this study demonstrated the superiority of VLA2001 over AstraZeneca’s AZD1222. Valneva’s COVID-19 vaccine produced superior neutralizing antibody titer levels to AstraZeneca’s vaccine. VLA2001 demonstrated the same effectiveness as the AstraZeneca vaccine in neutralizing antibody seroconversion rates by more than 95%.
Prior to securing the marketing approval in the EU, Valneva also entered into an advance purchase agreement (“APA”) with the EC in November 2021 to supply up to 60 million doses of VLA2001 to the EU member states once the vaccine is granted marketing authorization.
One of the terms of this APA provided the EC with the right to terminate the agreement if VLA2001 does not receive marketing authorization in the EU by Apr 30, 2022. The EC decided to exercise this right in May 2022 and communicated its intent to terminate the APA. Following remediation discussions between the EC and Valneva, the former approved an amendment to the APA, revising the supply down to 1.25 million doses of the vaccine. The amended APA also allows EC to purchase another 1.25 million doses.
This reduced order received from the EC resulted in management evaluating its COVID-19 program. Though this low order volume does not put pressure on its existing cash resources, management has suspended internal and terminated external manufacturing of VLA2001 doses. Management has also accelerated the wind-down of VLA2001-related activities and lowered its guidance for R&D expenses for 2022.
Currently, Valneva is focused on developing vaccine candidates in its pipeline targeting Lyme disease and chikungunya.
Valneva is developing VLA15, its vaccine candidate for Lyme disease. The candidate is being developed in collaboration with Pfizer PFE. Last August, Pfizer and Valneva initiated a phase III study to evaluate VLA15 in individuals aged five years and older. The initiation of the study has also triggered a milestone payment of $25 million payable by Pfizer to Valneva.
Last month, both Valneva and Pfizer reported six-month antibody persistence data from a phase II study in patients who completed a three-dose or a two-dose vaccination schedule of VLA15. While antibody levels in both schedules remained above baseline, they were higher in participants who received the three-dose vaccination schedule. These results validate incorporating a three-dose vaccination schedule in the above-mentioned phase III study.
Last month, Valneva announced that it had completed the rolling BLA submission with the FDA, which seeks approval to use its single-shot chikungunya vaccine, VLA1553, in adults. A regulatory filing for the vaccine in Europe is expected later this year.
If approved, VLA1553 will be the first vaccine for chikungunya and will be eligible for a priority review voucher. The vaccine has already been granted Breakthrough Therapy and Fast Track designations by the FDA and PRIME designation by the EMA.
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Zacks Rank & Stock to Consider
Valneva currently carries a Zacks Rank #2 (Buy). Another better-ranked stock in the overall healthcare sector is Allogene ALLO, which also sports a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Allogene’s 2022 loss per share have narrowed from $2.39 to $2.38. In the same period, the loss per share estimate for 2023 has narrowed from $2.84 to $2.82. Shares of Allogene have declined 46.8% in the past year.
Earnings of Allogene beat estimates in each of the last four quarters, witnessing an earnings surprise of 9.44%, on average. In the last reported quarter, Allogene’s earnings beat estimates by 6.45%.
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