Valneva SE

PAR:VLA

Earnings Call Transcript 2019-Q4

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the Valneva presents its full year 2019 results. [Operator Instructions] Also I must advise that the call is being recorded today, Thursday, the 27th of February 2020. And without any further delay, I would now like to hand over the call to your first speaker today, Thomas Lingelbach, CEO of Valneva. Thank you. Please go ahead.

[Thomas Lingelbach]

Thank you so much. Good day, and very warm welcome to all of you to our call today where we're going to present our full year 2019 financial results as well as provide you with some business updates. Well, I mean 2019 has been an exceptional year for Valneva. We have achieved our highest sales revenues ever from our 2 commercial travelers vaccines against Japanese encephalitis and cholera, and we have been able to make great progress on our 2 unique R&D programs. If we look at Slide 4 of the presentation, we basically gained full control of R&D assets through the termination of the GSK SAA. We progressed our Lyme disease vaccine candidate according to plan and guidance with Phase II patient recruitment completed last year. And we completed our Phase I for chikungunya, preparing it for the accelerated approval pathway into Phase III, and we got a very nice validation by CEPI, who awarded $23.4 million to support the vaccine development for LMIC countries. And more recently, we had a very successful end of Phase II meeting with the FDA on which I'm going to report later. Excellent and exceptional and strong. This is maybe the right word to express our financial results, which will be developed in detail by our CFO. But we reached product sales of almost EUR 130 million, which is at the top end of our guidance and had a very good cash position at the end of 2019. And started the year with a new debt financing arrangement, supporting the late-stage development of our very unique Lyme and chikungunya assets. With that introduction, let me turn over to the R&D update. We focus on our 2 leading candidates against Lyme and chikungunya, and we invest more than 80% of our R&D expenditure into those 2 programs. Lyme disease is a massively important health issue, and it's clear that there was a huge awareness as evidenced by the media attention, which spiked again in January 2020. There are no approved options that can protect humans against Lyme disease, which is really the most prevalent and emerging tick-transmitted infection in the northern hemisphere. Analysis suggests a Lyme vaccine in the U.S. and EU could have peak revenue potential of clearly more than $1 billion. And Lyme disease cases may rise due to climate changes more and more, and there are different publications around this topic. We have a very unique candidate. We have the only Lyme disease vaccine candidate in clinical development today. It's a candidate that tackles all the different serotypes, which are prevalent in the northern hemisphere on both sides of the Atlantic. We do this by so-called multivalent vaccine that includes the 6 main serotypes. We expect the Phase II primary end point data mid-2020 for the program that has been granted FDA Fast Track Designation and which we consider low risk given that it is based on an established and proven mode of action for Lyme disease vaccines. Previous data have shown a favorable safety profile and no associated safety concerns. And the Phase II running phase where we tested higher doses in order to further optimize dose and schedule confirms the favorable safety profile of VLA15 thus far. We are progressing well with our Phase II. As mentioned already, our patient recruitment for both Phase II studies was completed back in September 2019. The Phase II data are due mid-2020 and those will be the primary end point data for the 201 trial with our base immunization schedules 0, 1, 2, and we will see the data, immunogenicity and safety 1 month after primary immunization. The Phase III initiation provided that both 2 studies will give us the final answer on what is the best dose and what is the best schedule to go into Phase III, then could result in an initiation 2021, 2022, so which means initiation 2021 and tick season 2022 if the base schedule 0, 1, 2 was to be chosen. And -- this Phase III studies that we are currently planning are 2 studies that we would conduct in parallel, 8,000 subjects each, U.S. and Europe. And this is based -- the sample size is based on the current estimates of incidence rates and necessary powers and efficacy rates that we could achieve. Detailed plans for the Phase III entry will, of course, be discussed with the agencies on the back of final Phase II data. And the timing, of course, as I mentioned already, will depend on the final schedule that will then allow us to say which is the tick season that we can use, Phase II data and other factors. So Page 9 of the presentation introduces us to chikungunya. Chikungunya is a highly prevalent mosquito-transmitted infection in tropical and subtropical regions. It is a growing and enduring problem. And currently, there is no vaccine or any treatment option available for chikungunya. The global market, including endemic regions is significant, and we expect the traveler vaccine market up to EUR 250 million. There have been numerous outbreaks also recently, again, in different countries, including Africa, Asia and South America. We have a clear differentiated product candidate. We believe that we have the only single-shot vaccine against chikungunya today, and we see chikungunya strategically as the key growth driver for our future Valneva sales since the chikungunya is really -- program is expected to be plugged into our travel vaccine portfolio, both from an industrial as well as from a commercial point of view, leveraging substantial synergies within the company. Our candidate, VLA1553, is a monovalent live attenuated prophylactic vaccine targeting chikungunya virus infection -- neutralization, which means, again, a very well-established and proven mode of action. I mentioned already that there are no preventive vaccines or effective antiviral treatment available for chikungunya. Like for our Lyme vaccine program, we got FDA Fast Track Designation granted, and you all know that chikungunya is priority review voucher eligible. And we are in a very good position to strive for that. We completed the Phase I, and we will go the accelerated approval pathway with a potential Phase III start around mid of the year. We had a very successful end of Phase II meeting with the FDA. And during this end of Phase II meeting, we got confirmation for the so-called accelerated approval pathway, and we are now in discussion with the agency in order to finalize the plans for our next step, which means Phase III. This was -- this means that we have a Phase III asset in hands, and this is the first Phase III program since we started with Valneva more than 6 years ago. We expect this, as I mentioned already, to be a seamless fit with our existing commercial and manufacturing capability, and hence this is the reason why we see it as a plug-and-play asset. And we mentioned already the CEPI award, which we consider a major validation, but also an opportunity to make this vaccine available to LMIC countries where the vaccine is also desperately needed. We have seen, as I mentioned already, clear direction here for the next steps of development. I mentioned accelerated approval pathway. We completed everything that is needed to support the Phase III initiation, and we are now awaiting final confirmation from FDA on the Phase III design and other details, including the final surrogate markets. Yes. With that, I would like to hand over to our CFO, to give you the financial report.

[David Lawrence, CFO & Member of Management Board]

Thank you, Thomas, and good day to everyone on the call. As you just heard, we have a really exciting year ahead of us. But before we get to that, I'd like to take you through the 2019 results. So Slide 13, please. Let's start with the phenomenal product sales performance in 2019. IXIARO was at the heart of the year-on-year growth rate of more than 20%, irrespective of looking at constant or actual exchange rates. AER did exceed the CER growth, basically because of strength of the U.S. dollar compared to the euro, given that a significant proportion of our top line, particularly for IXIARO, comes from the U.S. Nonetheless, we are really pleased to report a 22% increase on a constant exchange rate basis. Looking at the 2 pie charts there. I think IXIARO continues to grow faster than DUKORAL, so makes up an increasing proportion of our sales. We saw excellent growth in private traveler markets, notably in the U.S., where our in-house commercial operations team went through the second year of their existence. The team in the U.S. delivered around 30% year-on-year growth in the private traveler market. I'll come back to U.S. Military in a moment, but the other highlights of product sales performance. Canadian DUKORAL sales up almost 10%. DUKORAL overall up 3% to 4%, which is a favorable performance given we guided for 0% to 5%. Germany was up by more than 30% and Austria was up by around 35%. So IXIARO growth in the private traveler markets is primarily due to ongoing education and awareness campaigns by our commercial teams and that results in increasing penetration and product uptake. DUKORAL goes well, primarily coming from Canada has also seen some modest price increases in 2019. And then also, we were unable to supply some nonpriority markets, which meant and focused on the areas where we maximize our brand equity. Just to close out on IXIARO, for the first time, we sold more than 1 million doses of IXIARO in a year. So in U.S. Military, you may recollect, we were awarded a contract by the DoD in early 2019. That contract was worth up to $70 million. The contract spanned across 2019 and the first part of this year, 2020. And indeed, we recently announced that DoD had exercised its option to take up the full contract amount, and this resulted in sales in U.S. Military in 2019 increasing by over 50%, with a volume of over 375,000 doses, which compares to around 240,000 doses in 2018. So a stellar product performance notably by IXIARO in the year of 2019. Next slide, please, Slide 14. So the combined effect of this peak year for U.S. Military sales along with the other points I just mentioned led IXIARO sales growth of over 30% at CER and overall product sales growth of over 20%. And we believe that's a truly phenomenal performance, and we would like to thank all of our teams, both in the commercial business and indeed in the manufacturing sites for delivering on that. So next slide, please, Slide 15. So the key material aspects of other revenues during 2019 was the impact of the GSK SAA termination settlement, Thomas mentioned earlier, as we basically bought back full control of our R&D assets. So we've tried to be transparent on this point since our half 1 results. And after today, we'll not be showing this slide in future earnings calls, mainly because most of the impact is now accounted for and taken in 2019. And just to remind everyone, we paid EUR 9 million in cash as a onetime exit fee, and we have potential milestones relating to marketing approvals of a further EUR 7 million. The highlights of this slide are that total revenues before the GSK impact were almost EUR 137 million and after the GSK impact are reported at just over EUR 126 million. Slide 16, please. So we're going to move on to the P&L report in just a moment, and -- but I'd like to highlight a couple of key components on this -- on this set of bar charts. So total revenues, excluding the SAA impact, were up just over 20%. EBITDA, excluding the GSK SAA impact, was almost 50%. And the cash position at EUR 64.4 million at the end of 2019 was excellent given we paid down the legacy Pharmakon loan in January 2019. And you're all aware, and Thomas mentioned that we recently inked an $85 million debt facility with Deerfield and OrbiMed to ensure that we're fully geared up to drive our Lyme and chikungunya programs through late stage development. Slide 17, please. So here is our P&L report, and it reflects excellent performance management across the business. Sales we've talked about already. So let's look at the key cost lines. So cost of goods and services was up 12.6%, and that compares together with the total revenue growth of over 20%, and that differential feeds through into margin improvement. R&D investments, they're up to just under EUR 38 million, pretty much bang in the middle of guidance that we gave of EUR 35 million to EUR 40 million for last year. And that investment level is up almost 50% compared to 2018 and was right on budget, given that both our CHIK and Lyme programs are progressing extremely well and right on track, as Thomas just reported. Other income grew by just about $2 million to over $6 million due to R&D tax credits, and this is a knock-on effect as the more we spend in R&D, the more on the tax credits we accrue. Our operating profit and EBITDA, excluding GSK impact, were both up by around 50%. And in fact, we delivered to our original 2019 EBITDA guidance of $5 million to $10 million, even with the GSK SAA impact. And all in all, we believe that this underlines we're managing our business performance tightly across the board. So Slide 18. Two other KPIs that we use as part of our performance management process. So gross margin increased to just over 65% in 2019, which compares favorably to below 62% in 2018, and the increase there is about 6%. And the underlying drivers were FX and IXIARO volume offset by somewhat -- somewhat by a minor reduction in DUKORAL gross margin. Net operating margin, and that's a KPI we introduced last year, we're reporting full year results of just over 34% for net operating margin, which is right at the top end of the guidance range of 25% to 35% that we gave and much improved to just over 24% in 2018. And what this means is that we're generating positive returns on our commercial investment, and we expect to continue this at a healthy level during 2019, noting the ongoing U.S. private travel market growth and the introduction of our own commercial operations in France. So moving on to guidance, please. So flipping on to Slide 20. So here we're showing the U.S. Military product sales line separately, so that we can illustrate the impact of the peak sales that we achieved in 2019. And we've yet to get the -- receive the new RFP, and that will come on depending on timing of news flow, but we do expect to commence discussions with the DoD any week there.We are optimistic about the new contract. But at this time, we've taken a prudent estimate until we know more, and I think we will know both in terms of value of the contract and duration of the contract by the time we get to our Q1 earnings call. And I think we've previously stated that increasing the duration of the contract is something we would value. Traveler market growth. We're expecting up to 10% growth year-on-year. We've got a number of important issues to monitor as the year unfolds, including coronavirus, including the expected introduction of Vaxchora as competition for DUKORAL. And indeed, where FX plays out, noting the recent strength of the U.S. dollar, particularly against the euro, not -- although in 2020, as we've done before, we will focus on CER performance during the year to help everyone understand the underlying business performance. So we're expecting product sales revenue in the range of EUR 125 million to EUR 135 million, and total revenue to be in the range of EUR 135 million to EUR 145 million. Our gross margin target here is about the same as 2019. U.S. Military is one of our better price segment. So we'll aim to try and improve margins, but we think that 65% was an excellent result, and we'd be pleased to repeat that or improve it slightly. Net operating margin. Last year we guided 25% to 35%, and we come in at the top end of that range. And so we're guiding 30% to 35% for this year, but our internal target will be to beat the 2019 performance of 34%. And now on the R&D investments, and noting that we await the final confirmation from the FDA to start Phase III, we're assuming that we will move forward with that, as Thomas mentioned, and therefore we will invest up to $85 million -- sorry, EUR 85 million on R&D this year. Most of that on Lyme and chikungunya, as Thomas said. More than 80% of that will go on Lyme and chikungunya. So this nets out with a negative EBITDA of up to EUR 35 million, given this much great investment into R&D, but we believe that the level of income that we can generate from this increased level of R&D investment is absolutely in the best interest of shareholders as we develop these valuable assets and maximize our share of downstream value. And with that, I'd like to hand back to Thomas to go through the guidance, and we look forward to your questions later.

[Thomas Lingelbach]

Thank you so much, David. With this presentation of our excellent financial performance and underlying business performance in 2019, I would like to turn now towards 2020. And as I mentioned, we are going to have some very significant news flow ahead of us for this year. In -- on Lyme, we are expecting the Phase II data, starting from the primary end point data for the study, VLA15-201, mid-2020. And then in the subsequent months, we will get additional data points that will all lead us then collectively to the final dose and final schedule to be selected for Phase III development. And as originally guided, this will then lead to a potential end of Phase II meeting this time of year 2021. On chikungunya, the -- I mentioned already that we got confirmation for our accelerated approval pathway, so -- which means that now we are discussing the details about Phase III, and of course, we expect those detailed discussions to be completed very soon. And in such a case, once we have the final plans like trial design, exact timing and so on and so forth, we plan to have a dedicated analyst call. David mentioned already that we expect a new IXIARO contract with the U.S. Department of Defense in the first half of this year. Again, it will give us clarity on quantities and duration of the contract. And we expect here another very strong sign of the DoD commitment towards JE vaccination, and we plan to update you during H2 2020. And with that, I think I would like to conclude this presentation, but not without this, we are looking also back into the year 2019. Thanking all of our employees, our partners and shareholders for their contributions and support in 2019, and I'm looking forward to continuing our remarkable journey in 2020. With that, I would like to hand over to the operator to take your questions.

[Operator]

[Operator Instructions] Our first question is from the line of Jean-Jacques.

[Jean-Jacques Le Fur]

Jean-Jacques Le Fur from Bryan Garnier. I have 3 questions actually. First, on the U.S. Military contract. Is there any chance you may sign this year or at any point of time, a sort of recurrent contract or annualized contract instead of this year-by-year contract with unknown quantity so to have better visibility? That is question one. Second question is regarding the R&D expenses, the EUR 85 million. Is there a possibility to get the split between CHIK and Lyme? And the reason why I ask this question is that we all know that you are waiting for a partner to share the development cost for Lyme. So I should expect this, most of the EUR 85 million are probably for CHIK, more than for Lyme, but just to have clarity there.And my third question is on the gross margin. Is the 65% where you are now maximum or do you think you may go up, I don't know, to 70% or do you have a sort of long-term target?

[Thomas Lingelbach]

Okay. Great questions. So let me start with the Military. So basically, you're absolutely right. I mean there are multiple ways how DoD are tabling their RFPs and their respective order patterns. We are trying very hard to get a better predictability. And one possibility maybe that we get a year plus, for example, 2 option years because, as you know, we have -- we had -- also for the last RFP, we had an option period, and David mentioned that this option period was a short one, but at least it gave us some possibility to plan. And the DoD has, in other cases, given, for example, a year plus and other 2 option years. And this would be something that we consider feasible. And we hope that we're going to get something along those lines, and we have to see where we actually going to land. But as David said, we are not far away from the issuance of the RFP. So by the time we're going to have our quarter 1 earnings call, we will definitely know that. And before I hand over to David on the expense side, let me say something about the gross margin and manufacturing performance. We are already with our 65% at absolute, I would say, benchmark for product that -- for vaccines using the manufacturing platforms, the technologies we are using for those too. However, there is a little bit of room for improvement, further improvement. And indeed, you mentioned a number that it's a number that we have in our internal objective, and that's -- but that's as much as it could be. However, I mentioned also earlier that chikungunya is expected to become a highly synergistic asset. And we have already set up the manufacturing for chikungunya at the same site where we are manufacturing IXIARO.Once both products will be on the market, we will leverage higher synergies, and this will certainly result in a further improvement of the mixed and combined gross margin. And then I hand over to David for the R&D split.

[David Lawrence, CFO & Member of Management Board]

Thanks, Thomas. Yes. So, Jean-Jacques, you're pretty much on the money, you're correct with the point. So of the EUR 85 million, more than 80% goes to CHIK and Lyme. So we've got EUR 10-million-or-so of other R&D expenditure to early-stage work on technologies and services. On the split of the 70-or-so that is -- that's on CHIK and Lyme goes, roughly 45% to CHIK and roughly 25% to Lyme, as things stand today.

[Operator]

Next question is from the line of Max Herrmann.

[Max Stephen Herrmann, Head of European Healthcare Equity Research & MD]

So just would like to get a little bit more detail in terms of the partnering progress on VLA15 and how we should start to think in our minds about the costs coming through? Obviously, we're seeing it now from CHIK, as you've talked about, but how we see that coming through on the potentially Phase III in Lyme in the longer term? Also, any guidance on the trial design and maybe the R&D spend over 2021 as well -- you're doing a Phase III program on chikungunya, plan to start that, I guess, second half of this year? How long will that trial take? What does that mean for the spend for 2021 as well? And then just timing in terms of competition, there are a few players in the CHIK -- chikungunya vaccine space. Are you expecting to be the first into Phase III or -- I know Themis is kind of around the same time, maybe a bit earlier? So just trying to get an understanding about how you see the market developing?

[Thomas Lingelbach]

Thanks a lot for your question, Max. As usual, spot on and very interesting questions. So let me start with Lyme partnering. I mean as communicated and reflected in all of our prior news flows, we aim for a Lyme partnering this year. The process has advanced and we are now approaching an important stage. The -- we cannot say more at this point in time, as you will certainly understand. And what it means in terms of future development costs. I would refer back to what we have previously communicated, namely that we are looking for sort of a co-development structure, cost-sharing for Phase III. The majority of the costs that we have in 2020 are related to the ongoing Phase II activities. So also, there is some level of preparation for Phase III, especially on the CMC side, the vast majority, roughly 2/3 of the costs that David mentioned earlier, are related to Phase II. And so -- that's on Lyme. On CHIK, just to be very clear, for us, we will enter Phase III. And we hope to be in Phase III towards the latter part of the second quarter. So this is why we have said earlier, mid of the year. And we are -- we do not want to communicate right now on file size because this is an ongoing conversation with the agencies. It would not be prudent or professional to try to speculate right now without having the final number. However, what is clear to you, I think, it's going to be a placebo-controlled immunogenicity trial with an immunological end point, and this immunological end point will be sort of a PRNT, switching 0 conversion into 0 protection. And we expect this trial to be fast. We expect this trial to be conducted only in the United States, and we believe that we could have the product on the market in a bit more than 2 years from now. We expect the total development costs on CHIK, from where we are till market, around about EUR 90 million. And given what David told you earlier, this allows you to make the split. And the other point on chikungunya with regards to where are we compared to competition, you would certainly understand that we will not and cannot speculate about development time lines from competitors. But what is clear is that no one is yet in Phase III. And by the end of the day, this means that we will be probably with a few companies, head-to-head towards licensure. And hence, we have a realistic chance to go after the PRV. And given that the entire manufacturing and commercialization infrastructure is already fully in place, certainly a very, very realistic chance to be first to market. And that's where we are on chikungunya.

[Operator]

So the next question is from the line of Samir Devani.

[Samir Devani, Research Analyst]

I just got a couple of questions. One for Thomas, one for David. Thomas, maybe just sticking on chikungunya, I appreciate you probably haven't had the minutes back from your end of Phase II. But I was just wondering, do you get a sense the FDA is treating the live attenuated approach any differently to just the standards with dead vaccine. So that's question one. And question 2 is really just on whether you've taken any price rises for DUKORAL or IXIARO since the beginning of the year?

[Thomas Lingelbach]

So we have no indication, Samir, that the -- that they are applying any special treatment to the live attenuated versions of the different chikungunya vaccine candidates compared to others. They have been following absolutely guidance documentation and we have developed thus far our chikungunya vaccine candidate exactly according to guidance, to regulatory guidance in this case, not the financial guidance and according to the book, with a huge amount of supporting nonclinical trials. And all what we have submitted has been deemed acceptable. And this is why we -- you hear us so confident about the further development approach. And as you know, the profile of the vaccine thus far has been, especially on immunogenicity and safety, excellent. David?

[David Lawrence, CFO & Member of Management Board]

Yes, sure. So the short answer, Samir, to your point about taking any price so far this year, no. We've got a number of pressures on DUKORAL that I mentioned during my talk. We wait to see how -- where Vaxchora comes in, and we watch that pretty carefully. So the short answer to your question is no.

[Operator]

Next question is from the line of Suzanne van Voorthuizen.

[Suzanne van Voorthuizen, Analyst]

Just stepping back again to the R&D cost. Thanks for providing the split between different programs. But can you elaborate a bit more on what's behind this? What additional activities are there for the Lyme program beyond the currently ongoing Phase II trials and for -- just double checking, you mentioned the total cost of the Phase III is somewhere in the ballpark of EUR 90 million?

[Thomas Lingelbach]

Okay. Suzanne. So basically, let's start with chikungunya. Yes, indeed, we have said that from where we are today, till licensure, we expect total R&D costs of approximately EUR 90 million. So this is everything, CMC, clinical, everything that you need to bring it from where it is today to licensure. And then, of course, you will see the typical stuff like post-marketing development costs and so on and so forth, similar to other viral vaccine development, and you can use, for example, IXIARO as a benchmark. When it comes to Lyme, we have previously communicated that we expect approximately EUR 300 million development costs for post Phase II till licensure plus market access costs, which we have not seen in our equation, right? So that's basically to give you more flavor about it and cross referencing earlier communications that we have had on this matter. I hope this helps, Suzanne.

[David Lawrence, CFO & Member of Management Board]

Yes. Suzanne, just to emphasize. So we -- until we know more about Phase III, we -- and indeed, everything else, we are sticking very much to the previous guidance that we've given and the previous estimates that we've given. So as Thomas said, EUR 300 million for Lyme and up to EUR 90 million for CHIK.

[Suzanne van Voorthuizen, Analyst]

Got it. And then a little bit more on CHIK. The end of Phase II meeting, you're awaiting the confirmation now from the FDA. Do you also plan to have the same discussion with the EMA to get by for the Phase II -- Phase III on the European side?

[Thomas Lingelbach]

Yes. So this is a very good question, Suzanne. And so the point is the following. We have planned the Phase III readiness meeting with the European agency. But as you know, we -- and we have always communicated that more than 2/3 of the market for chikungunya is expected to be in the United States. We have a full-fledged infrastructure in the United States, and we want to give priority to that. Of course, our objective is also to develop the product for Europe. And we're going to go -- we're going to take our entire package, including the end of Phase II clearance from the FDA to the European authorities and discuss then the route to licensure with the European authorities soon. And as I mentioned earlier, once we will have clarity -- not the clarity, we have clarity, but let's say, confirmation on the remaining details, we plan an analyst call dedicated to chikungunya, where we will try to present the full chikungunya story.

[Suzanne van Voorthuizen, Analyst]

All right, clear. Maybe one last question. Can we expect the surrogate neutralizing antibodies as primary end point being enough for approval? But how important is showing field efficacy for sales uptake for CHIK?

[Thomas Lingelbach]

You mean -- can you repeat your question? I'm not sure whether I got it. Are you talking about field efficacy post marketing or what?

[Suzanne van Voorthuizen, Analyst]

Yes, field efficacy or some conversion, from 0 conversion to protect this efficacy in the Phase III, to what extent will you have, yes, field efficacy in that regard from the Phase III or how much will you still need to gather post marketing?

[Thomas Lingelbach]

No. I think -- so what is clear is the accelerated approval pathway defines clearly that a surrogate marker has been accepted. The surrogate marker will be an immunological threshold. It would be, in our case, PRNT readout, where you say, above this protective threshold -- above this threshold, people are protected and this is the primary end point, right? And of course, this threshold has been established through passive transfer models in nonhuman primates and this is enough. Once accepted at the final number for licensure, then there will be post-marketing effectiveness evaluation, but not efficacy trials. But this is the same for any vaccine that got approved through an immunological threshold that has not been uniquely aligned globally for all indications, right?

[Suzanne van Voorthuizen, Analyst]

Great. And is that -- was that also the case for IXIARO back in the time?

[Thomas Lingelbach]

No. Because for IXIARO, the -- for Japanese encephalitis, there is a standardized threshold that was established many, many years ago. And for novel indications, of course, there is not an immediate standardized threshold. This threshold may come in 10, 20 years from now or so. But it's for now only, I would say, a clear line per program and per product.

[Operator]

No more further questions on the phone lines, sir. Please continue.

[Thomas Lingelbach]

Okay. With that, I would like to thank all of you for your attendance. And as David mentioned already, we are looking forward to an exciting year and to continuing our remarkable journey in 2020. Thank you so much. Have good day.

[Operator]

So that does conclude our conference for today. Thank you all for participating. You may all disconnect.