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Valneva (VALN) Stock Down 53% in the Past Year: Here's Why

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Shares of Valneva (VALN - Free Report) have plunged 52.9% in the trailing 12 months compared with the industry’s 33.8% decline.

Zacks Investment Research
Image Source: Zacks Investment Research

This substantial decline was caused by the revision of the advance purchase agreement (“APA”) of VLA2001, the company’s inactivated COVID-19 vaccine.

Last year, the European Commission (“EC”) granted marketing authorization to Valneva’s COVID-19 vaccine for use as a primary regimen 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 - Free Report) COVID vaccine, AZD1222. The study achieved 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 entered into an APA with the EC in November 2021 to supply up to 60 million doses of VLA2001 to the EU member states once the vaccine was granted marketing authorization.

One of the terms of this APA provided the EC the right to terminate the agreement, if VLA2001 failed to 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 from 60 million doses of VLA2001 to 1.25 million doses. The amended APA allows EC to purchase another 1.25 million doses.

This reduced order received from the EC resulted in management evaluating its COVID-19 program. Management decided not to continue further investment in VLA2001-related activities unless it has secured a partnership to fund the same. Instead, the company is utilizing its resources towards developing its non-COVID pipeline candidates. The successful development and potential development of these candidates will likely boost the stock’s growth prospects in the long-run.

Currently, Valneva is focused on developing vaccine candidates targeting chikungunya and Lyme disease.

Valneva is developing VLA15, its vaccine candidate for Lyme disease. The candidate is being developed in collaboration with Pfizer (PFE - Free Report) . Last year, Pfizer and Valneva initiated a phase III study to evaluate VLA15 in individuals aged five years and older.

In December, 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 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.

This February, Valneva announced that the FDA accepted the BLA submission, which seeks approval to use its single-shot chikungunya vaccine, VLA1553, in adults. This filing has been granted priority review and a decision is expected by August 2023-end. If approved, VLA1553 will be the first vaccine for chikungunya and will be eligible for a priority review voucher. A similar regulatory filing for the vaccine in Europe is expected later this year.


Zacks Rank & Stock to Consider

Valneva currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the overall healthcare sector is Arbutus Biopharma (ABUS - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, estimates for Arbutus Biopharma’s 2023 loss per share have improved from 57 cents to 44 cents. During the same period, the loss estimates per share for 2024 have narrowed from 61 cents to 53 cents. Shares of Arbutus Biopharma are up 0.8% in the year-to-date period.

Earnings of Arbutus Biopharma beat estimates in two of the last four quarters while meeting the mark twice. On average, the company’s earnings witnessed a surprise of 12.91%. In the last reported quarter, Arbutus Biopharma’searnings beat estimates by 28.57%.

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