Valneva Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 4, 2023

There are 11 speakers on the call.

Operator

Day and thank you for standing by. Welcome to the Valneva Presents Its Q1 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to your host today, Joshua Drumm, Vice President of Global Investor Relations. Please go ahead.

Speaker 1

Thank you, Sharon. Hello and thank you for joining us to discuss Valneva's Q1 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 quarter, which were published earlier today, available within the Financial Reports section of our Investor website. I'm joined by Valneva's CEO, Thomas Lingelbach and CFO, Peter Buhler, who will provide an overview and update on our business as well as our key financial results for the quarter.

Speaker 1

There will be an analyst Q and A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners that during the presentation, we will be making forward looking statements, which are subject to certain risks And uncertainties that could cause the actual results to differ materially from those expressed or implied by these forward looking statements. You can find 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, May 4, 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.

Speaker 2

Thank you so much, Josh. Good day to everyone. Great pleasure to present a couple of updates with regards to our quarter 1 and later Peter to present the financial report. Yes. We have a very good momentum right now, driven on the one hand side by our strong sales performance, but also Increasing clarity on our key catalysts.

Speaker 2

Our product sales in the Q1 nearly doubled year over year. It was primarily driven by our proprietary product Xyaro and DUKORAL, both of which more than quadrupled from quarter 1 2022. We maintain a position of financial strength with a cash position of more than $250,000,000 at the end of quarter 1, and we have reiterated our guidance with regards to expected product sales reaching or exceeding pre pandemic levels this year. We have also a clear pathway towards our key transformative catalysts, Our chikungunya vaccine, which we expect to become the world's first chikungunya vaccine if approved, It's still on track for its PDUFA date confirmed after the mid cycle review towards the end of 2023 August 2023, sorry. And we expect to commence further additional ex U.

Speaker 2

S. Regulatory processes in 2023. For Lyme, we have decided after careful evaluation of risk and benefits to keep the Phase III design and the endpoint as previously agreed with regulators. And we will have additional enrollment for primary immunization to begin In the Q2 and will include the 2025 tick season, which in turn means that we are expecting to filed in 2026. Pfizer will bear the current projected incremental costs due to the agreed additional enrollment, and I will go into more details during the R and D update.

Speaker 2

Let us turn to Page 6 of the presentation. Chikungunya, you know that our chikungunya vaccine is a live attenuated vaccine candidate under FDA priority review. This is the 1st and only chikungunya vaccine candidate that reported positive Phase III data. It was the first one to submit a biologic license application to the FDA for potential approval and to remind everyone about the key benefits of a live attenuated vaccine approach. It is targeting a very long lasting protection.

Speaker 2

And thus far, we have seen excellent antibody persistence data over time. Overall, our results demonstrated not only long lasting but on a high zero response rate after a single shot. We are now preparing full steam for our launch of VLA-fifteen fifty three, which perfectly fits within Valneva's existing infrastructure. In terms of target populations, we are looking at the non endemic countries, travelers, military, but also outbreak preparedness in key countries. And then, of course, the endemic use in low medium income countries, where we have partnered with CIFIA and Instituto Botchanthans, which includes also local manufacturing.

Speaker 2

To remind everyone about our key dates here and key KPIs, The DUFA date, as mentioned earlier, at this point in time, confirmed for the end of August 2023. And then the first company to A cheap BLA approval will be eligible to a PRV, and we are estimating that we could potentially sell This PRV, if we got it, at around $100,000,000 We have right now an adolescence trial ongoing because Initial approval will be in results 18 years and older, and we expect top line results mid of the year, which will then support also some of the regulatory filings. And as I mentioned earlier, we expect to commence additional regulatory processes for Canada, EMEA and U. K. This year.

Speaker 2

Overall, we are super excited about our And we are looking really forward to launch this product in an area of a very high unmet medical need. Talking about Lyme, Page 7 of the presentation. Lyme our Lyme disease vaccine candidates, VLA15, It's the only one in advanced clinical development today worldwide. It is a multivalent recombinant protein based vaccine candidate, which has undergone quite a substantial number of Phase III studies. And we initiated the Phase III study as planned last year.

Speaker 2

And this is basically this was the status until We had to discontinue a substantial amount of study subjects that were Integrated in the study due to uncovering GCP violations by a third party operator, CRO in this case. Yes. So to remind everyone again, this program is partnered with Pfizer. Pfizer The sponsor for the Phase 3 study. And of course, we have received a substantial number of milestones, including equity investments that Faiza did in June 2022.

Speaker 2

And all the other features of this vaccine, we have presented many times No multivalent, fixed valence because this covers the predominant stereotypes in the known hemisphere, established mode of action. And we have mentioned already the Fast Track designation that was granted for this program. Now you are all interested in how are we Going forward with the Phase 3 study and Page 8 shows the current status of the Phase 3 of efficacy study called Falloa. We plan to enroll around 9,000 Participants 5 years and older at high risk of Lyme disease in U. S, Canada and Europe.

Speaker 2

There will be a 1 to 1 randomization in between BLA-fifteen and placebo and roughly a 2 to 1 randomization U. S. Versus Europe. The primary endpoint is the rate of confirmed Lyme disease cases after 2 consecutive tick seasons and after completion of The 3 doses of Priming Plus booster. The secondary endpoint is linked to the Lyme's confirmed Lyme disease cases after the first Lyme season, which means after 3 doses or after the so called priming.

Speaker 2

And this is illustrated now with the 2 different cards in the graph below. What you see On the upper part of the graph is the current participants, which we call now the cohort 1. These are the ones that were enrolled Last year, where unfortunately, we could not enroll the full necessary cohort because of the GCP issue. And this is the Stockholm Cohort 1, which will now receive Very soon, we receive the 1st booster. And then we have the Cohort 2, which is the Which are the incremental number of target subjects that will be recruited soon.

Speaker 2

And this quarter, too, will then start with the 3 doses priming and the 18 months booster as well. Therefore, as mentioned earlier, you have to succeed in 2023 and 4, literally for the 1st cohort and 4 and 5 for the 2nd cohort. And this is this allows us to retain the initial protocol and the initial design. All of that means that we are now aiming to submit regulatory applications in the U. S.

Speaker 2

And Europe in 2026 as compared to 2025 before we had and further experienced the GCP issues. When we look at R and D as a whole and pipeline and what's next, there are a couple of quite interesting remarks to be made. Besides of chikungunya and Lyme, we are currently working on Zika. We are evaluating to potentially We entered the clinic at the end of 2023, early 2024. Given the overall status of medical need around Zika, also given the fact The WHO expressed a very clear preference in a physician paper for an inactivated whole virus approach, Given the potential target population, meaning women in childbearing age or even pregnant women, we are Working on hMPV and have concluded now the initial preclinical POC.

Speaker 2

And as we mentioned during the last call, The overall respiratory environment is moving towards a future RSV HMPV combo. And therefore, we see our assets as an interesting asset for potential partnering. And then we have the other 3 preclinical candidates with a key priority on EBV, where we expect to have our antigen education completed by the end of 2023 And Camilo Bakke and Pavel for both, we are currently working on certain work packages in order to to facilitate the respective gating reviews. And with that overview about primarily our R and D activities, I would like to hand over to Peter to provide you with the financial report.

Speaker 3

Thank you, Thomas, and good morning or good afternoon to all of you. Let's discuss our Q1 2023 financials. Total revenues reached €33,500,000 an increase of 53.4% compared to the 1st 3 months of 2022, while product sales increased by 98.6 percent to reach €32,100,000 This increase is driven by the continued recovery of the international travel market. Product sales excluding the COVID-nineteen vaccine sales in the Q1 of last year increased by 159.7 percent over prior year. On the right side of the slide, you can see the composition of product sales with small sales to U.

Speaker 3

S. Military in the Q1 of 2023. Discussions with the U. S. Department of Defense are ongoing, and we expect to sign a new contract in the coming months.

Speaker 3

Direct sales reached 71.6%, which is lower than usual. As a comparison, for the full year of 2022, direct sales reached 91%. The decreased ratio of direct sales is a result of high sales to Bavaria Nordic for the distribution in the German market. Moving on to Slide 12 to look at the details of our product sales. Sales of IXIAR are quadrupled versus prior year and the same is true for DUKORAL.

Speaker 3

Again, this reflects the strong recovery of the travel market that directly impacts the sales of our travel vaccines. We see a solid year over year growth across all markets I managed to increase prices for IXIARO and DUKORAL in most markets. 3rd party product sales decreased by almost 20% as a result of supply constraints of products sold under the distribution agreement with the Vare Nordic. Foreign currencies had no significant impact on the product sales performance versus prior year. Moving on to slide 13 and looking at the P and L.

Speaker 3

We already covered the over 50% growth in total revenues. Cost of goods and services increased by 48% year over year and gross margin of commercial products excluding COVID Promoted here, we were able to reach 48.4% compared to 68% in the Q1 of last year. However, The prior year gross margin was positively affected by one off effects. Research and development costs reached €14,100,000 compared to €20,700,000 A decrease of 32% as our chikungunya vaccine candidate progresses towards licensure. Also In Q1 of prior year, we reported more significant R and D expenses related to VLA 2,001, our COVID-nineteen vaccine.

Speaker 3

Sales and marketing expense increased from €2,000,000 in Q1 of 2022 to €9,000,000 in Q1 of the current fiscal year. Costs related to the pre launch activities of our chikungunya vaccine, including related staffs increased as a major driver of the increase in sales and marketing costs. Sales and marketing costs in Q2 of last year were particularly low due to an impact of our share based compensation. G and A costs in the Q1 increased significantly over prior year and reached €10,000,000 In the Q1 of 2022, All expense lines were favorably impacted by an adjustment of €11,700,000 related to the impact of the company's share price development on the employee share based compensation. Without that favorable impact in the Q1 of last year, G and A costs would be roughly flat.

Speaker 3

Other income, net of other expenses, is reported at €3,500,000 compared to €2,100,000 in the 1st 3 months of 2022. This increase is driven by the revenue recognition of a grant in Scotland. Operating loss for the Q1 reached Negative €16,600,000 versus negative €18,400,000 1 year ago, while adjusted EBITDA reached negative €12,300,000 versus €13,300,000 1 year ago. Before we move on to the guidance, a word about cash. Total cash and cash equivalents amounted to 254 €5,000,000 at the end of March compared to €289,400,000 at the end of December.

Speaker 3

Now moving on to the next slide on guidance. We reconfirm the guidance for the total fiscal year of 2023 with €130,000,000 €250,000,000 in product sales €90,000,000 to €110,000,000 in other income, representing the PRV mentioned by Thomas at the beginning call and R and D investments are still expected between €70,000,000 €90,000,000 With this, I would like to give

Speaker 2

the call back to Thomas. Thank you so much, Peter. Yes, to summarize, Where we see our key upcoming catalysts and news roles for the remainder of the year. Chikungunya, As mentioned, 1st adolescent study results expected mid-twenty 23. The potential BLA approval and first launch of the product in the United States alongside With the potential PRV sales immediately after the granting of the BLA.

Speaker 2

Then as mentioned earlier, 3 additional submissions plans, namely Canada for this year, Canada, EMA and the U. K. And those will happen this year. Then on Lyme disease, we had a 15. Of course, it is critical that we get the enrollment right And that the enrollment for the additional now new second cohort for primary immunization begins in the latter part of the second quarter.

Speaker 2

And then we will see as part of our general program to review Antibody persistence, also some further data in the second half of this year. When it comes to news flow outside of chikungunya in line and of course a potential DoD contract for CRO in the coming months. This is certainly something that we should expect here. We have talked in the past about the fact that We were probably evaluating, augmenting the clinical pipeline through a program acquisition or partnering In order to have more clinical and earlier clinical stage assets that could provide Substantial catalysts in the future, while we are kind of accelerating our preclinical programs towards clinical entry. And with that, I would like to go to the Page 18 of the presentation to conclude.

Speaker 2

Here, You see the slide that we have shown in the past a couple of times. This is just illustrating to you how we see the growth Over the coming years, with today, main value driven by Tiara de Brujal and 3rd party products, Adding chikungunya to our commercial part and then later coming up with VLA15 and the first monetizations around the Lyme program in our partnership with Pfizer. So all in all, Valneva is poised for the potential growth in the years to come. And with that, I would like to hand back to the operator to take your questions.

Operator

Thank you. We will now go to your first question. And your first question comes from the line of Maury Raycroft from Jefferies. Please go ahead.

Speaker 4

Hi, this is Kevin on for Maury. Congrats on the update and thanks for taking my questions. Just a couple on Lyme to start. Could you clarify what the ultimate size of each cohort is going to be? And then Just maybe if you could talk about what potential options you were considering and what ultimately led you to keep the current protocol?

Speaker 4

And then just finally with filing now in 2026, does that change how you think at all about your overall strategy or anything with the

Speaker 2

Okay. So let me Try to

Speaker 3

answer your questions in this regard. So first of all,

Speaker 2

we are not permitted at this point in time to disclose the exact Numbers of the different cohorts, but you have seen that pre the GCP issue, We had said 6000 to 7000 was the end. Pfizer reported that around 50% of the study Subject had to be abandoned. Now you see on the slide an end of 9,000, Which answers your question. Then when we talk a little bit about The strategy going forward? No.

Speaker 2

I think, yes, it is unfortunate that we are Facing a 1 year delay for the Lyme program as compared to where we were. But let's not forget that The underlying signs, the underlying strength of this product candidate is certainly still something that Has not changed. And even if someone started tomorrow with a clinical development For a Lyme disease vaccine, it would still be the same clinical development program that What we needed and we know how long it takes. So therefore, we don't see necessarily any change in strategy in connection with that. What were the other options?

Speaker 2

Of course, when you think about what has happened, It was primarily U. S. Focused. So we have evaluated, of course, going For subcorp, e. G, Europe first and then U.

Speaker 2

S. Later and or changing Primary versus secondary, secondary versus primary, all of that has been a long process in Excellent collaboration and consultation in between the 2 parties and supported also by external parties. And ultimately, we decided to keep everything as is and just add an additional cohort.

Speaker 4

Great. Thank you. And on chikungunya for the mid cycle review, you mentioned that there's no significant review or safety concerns. Just wondering if there's any other points that were discussed that you could comment on that have implications for the review process label or post approval studies? Thanks.

Speaker 2

Not at this point in time.

Speaker 4

Great. Thanks. I'll hop back in the queue.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Max Herrmann from Stifel. Please go ahead.

Speaker 5

Hi, great. Thanks very much for taking my questions and Congrats on the quarter. Just wanted to understand a little bit about the pre commercial activities For the chick vaccine, what are you doing? What are your plans? And then also on the chick, in terms of ACIP meeting in February, should we be expecting a few phases of an ACIP review?

Speaker 5

Or Do you think you can get a clear decision with one meeting? That's the first question. 2nd, just on following up on the Question with regards to Lyme. I just wanted to make sure that, that 9,000 is excluding the 9,000 subjects is excluding any of the GCP kind of patients or subjects that We're recruited by that one CRO. And then final question on commercial.

Speaker 5

Notice Usually, you have a strong Q4 and a strong Q1 with the travel vaccine business. I noticed, obviously, that the IXIARO and other In areas were down quarter on quarter, Q4 to Q1. I just wanted to get an understanding of that Stocking patterns or what was the cause of that given clearly we're still seeing a recovery in travel?

Speaker 2

Thank you. Yes. Very good questions, Max. As usual, hi. So basically, I'll try to go to address them as good as I can.

Speaker 2

The 9,000 online exclude, of course, the ones that were excluded from the study. For Chick Launch, I mean, you know that we are investing heavily. We are investing in people, processes, infrastructure, market access, activities, All the stuff that you would expect for a pre launch phase, really getting everything ready in time To get to make the launch of success and ensure that we see then Over time, a rapid uptake of the vaccine, so awareness is key Around all of that, and this requires resources, human resources, but also other resources. And I mean, you see this already in the And this will continue. Then on The whole AATIP thing, I mean, right now, the vote date is set for February.

Speaker 2

There has been already a couple of steps, And there are still a couple of additional steps planned. More, we cannot predict at this point in time. It doesn't mean that we may not see additional steps here and there, But this is as far as we can tell at this moment in time. On the commercial dynamics, please keep in mind, quarter 1 Has still been affected by supply shortages on the Valneva side. And not only on the Valneva side, also on 3rd party products.

Speaker 2

So it is at this moment, it is very difficult to predict To draw a conclusion on the pattern that you see this year to prior years, therefore, we would like Just to remind everyone that we have again reiterated the product sales guidance for this year to reach CHF 130,000,000 to CHF 150,000,000.

Speaker 5

Great. Thanks very much.

Speaker 2

Thank

Operator

you. We will now go to your next question. And your next question comes from the line of Ed White from H. C. Wainwright.

Operator

Please go ahead.

Speaker 6

Hi, thanks for taking my questions. So just on HMPV, you had mentioned today and before that you could partner looking at an RSV combo. I'm just curious as to if you've actually had any interest in that and if that's something we can expect to see this year or is this just sometime down the road that we should be thinking about this opportunity?

Speaker 2

Excellent question. So basically, we are having active discussions around hMPV, But it is by far too early to promise a partnering We clearly see that, No, for example, the mRNA company is tied towards RSV HNPV combos. We also see the committed medical needs For RSV, HPD combos, but there are only a certain number of RSV companies that Could have a potential differentiation by adding an hMPV component to the vaccine. But as I said, It is too early. This is why we are saying we are evaluating the partnering, but we are not promising the partnering at this point in time.

Speaker 6

Okay. Thank you. And just on Chick, how should we be thinking about a Potential for a DoD contract or the size of perhaps the stockpiling for Outbreak preparedness, is this going to how are you thinking about this opportunity? Is it immaterial or it's

Speaker 3

a material

Speaker 6

opportunity for the company? This is

Speaker 2

This is a very difficult to answer question. So we have I mean, you know that we have been pretty clear about our expected the expected market opportunity in the travel segment And in the LMIC countries, we have not been specific at all around the size of a potential military We have discussions both with the U. S. Military as well as with certain countries of states potentially interested in stockpiling. At this point in time, those segments do not represent a major Jump of our overall projections, but it is too early to really Give a guidance or give a range for these opportunities.

Speaker 2

I think we should Probably postpone this to next year same time or so. Once this product is approved, hopefully, and in the market, Then we will have a very much, much better understanding about those opportunities.

Speaker 6

Okay. Thank you. And my last question is just regarding the 2 different cohorts for the tick study now. Are you considering these and Pfizer are considering these cohorts as different studies or the same study? So can you release the data from the cohort 1 prior to cohort 2?

Speaker 6

Or do you have to wait for both cohorts to finish

Speaker 2

No, we are currently expecting that we're going to release so first of all, this is one study. And second, we are currently expecting to release it altogether.

Speaker 6

Okay, great. Thanks for taking my questions.

Speaker 3

More than welcome.

Operator

Thank you. We will now go to our next question. And your next question comes from the line of Evan Wang, Guggenheim Securities. Please go ahead.

Speaker 7

Hi, guys. Thanks for taking the question. I have one on Lyme and then one on chikungunya. With Lyme, as we're thinking about the additional courts being enrolled, Will that be entirely U. S.

Speaker 7

Focused or majority U. S. Focused just given the CRO patients? And for chikungunya, just following up on the stockpiling opportunity there. I believe you have had some early conversations.

Speaker 7

Are there any color you can provide in terms of The feedback is gone. Is there any kind of additional studies or bottlenecks that may need to be addressed first? Thanks.

Speaker 2

So online, additional cohorts, U. S. And Canada. So no additional enrollment in Europe. For chikungunya and the whole stockpiling, As I mentioned, we have discussions ongoing at this point in time.

Speaker 2

We do not expect further studies than the one that we have already planned. Please keep in mind, we have planned, besides the pivotal studies that we have concluded, Adolescence of pivotal Phase III in adults, we have planned, of course, the adolescent and later pediatric. We have also planned studies in immunocompromised. We have planned co vaccination studies. But we are not necessarily expecting those to become a prerequisite for a potential stockpiling.

Speaker 2

I think it would more We question once the final recommendations will be there, the final approvals will be there. And I think that would be the moment where we're going to get more clarity and that's certainly important.

Speaker 3

Got it.

Speaker 7

If I could just squeeze 1 more in. In terms of potential business development or in licensing, Is 2023 realistic or is that more a longer term

Speaker 2

piece of reference? Yes. For us, it is a 2023 Objectives. And but it depends on the opportunity, right? So we have clearly set this objective for this year for the organization, for ourselves, and we hope that we will be able to achieve that.

Speaker 2

At this point in time, we have multiple things that we are reviewing and evaluating. But As I said, a deal is done when the deal is done, right? I mean, we cannot be sure that this is going to materialize this year.

Speaker 8

Great. Thank you.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Rajan Sharma from Goldman Sachs. Please go ahead.

Speaker 8

Hi. Thanks for taking my questions. I just had a couple. So I guess firstly, just Given the strong start for the travel vaccines in 2023 and given the quarterly performance, I was just wondering how confident you are in Reaching the upper end of your sales guidance. And then secondly, just on Japanese encephalitis, given that there was a Competitor vaccine, which was acquired by a private company who kind of talked about expanding global registrations of that vaccine.

Speaker 8

I was just wondering if you could discuss your thoughts on the market and how you are kind of able to defend your position there? Thanks.

Speaker 3

So let me take a second

Speaker 2

question, and then I will give to the first part to Peter. So look, I mean, the at this point in time, we have not seen any Competitor for JE initiating the necessary clinical studies for a registration in Europe and U. S. And there is no way you can register This competitive product without a respective clinical study. And those will Take time, and I think we're going to deal with it when we see A potential competitor entry.

Speaker 2

In terms of positioning, our vaccine It has more than 10 years history. It is a vaccine that is marked by excellent effectiveness and safety. And it is a very well known and established brand. And as such, We feel strong about this product. We feel strong about its prospects.

Speaker 2

And we will also feel strong about it If we had a competitor entry, which is not on the horizon at this point in time from where we stand at this point. Peter, you want to say something about guidance?

Speaker 3

Yes. Well, thanks, Rachan, for the question. Look, I think we're very Optimistic when it comes to our sales. I think, as you said, with a very strong Q1, actually in line with pre pandemic level and in euro terms. So of course, this is great for the rest of the year also.

Speaker 3

And as Thomas said, we still had some supply constraints in Q1. So we are Very optimistic with regards to reaching our guidance. Whether it will be the upper part of the guidance, I think it's too early to tell, but we're certainly at a good start.

Operator

Thank you. Thank you. We will now take your next question. And your next question comes from the line of Sameer Devani, Rx Securities. Please go ahead.

Speaker 9

Yes. Hi, guys. Thanks for taking my questions. I think I've got a couple. Just going back to the successful mid cycle review, Thomas, I just wanted to get whether you got any more color as to whether there was likely to be a Birkak meeting or not?

Speaker 9

I guess that's the first question. And then the second one is really just on the Pfizer line collaboration. You haven't booked any That will recognize the revenue in the P and L this quarter. So I was just wondering if you could help us understand whether we should still Expect you to recognize anything for the remainder of the year? And if so, what sort of magnitude?

Speaker 9

And also, I think last In the last call, you talked about your contribution coming out of refund liabilities. There doesn't seem to have been much change in your We fund liabilities on the balance sheet. Could you just confirm whether there's been a significant payment made to Pfizer during the quarter for that R and D contribution? Thanks.

Speaker 3

Okay. So Samir,

Speaker 2

again, mid cycle review, we have not Mentioned anything about a VIRPEC, and we have not mentioned anything about any Roblox. This should be giving you the right answer, I think. Then On the regulatory recognition contribution liabilities, I hand over to Peter and his team.

Speaker 3

Yes. Thank you. Hey, Sameer. So on the revenue recognition, you're right, we have not recognized any revenue. There could still be going forward Some revenue that we could recognize potentially, which we've decided not to do so far as long as the Phase III trial is still We're in a relatively early stage and ongoing, but we certainly have Some amounts that we could potentially recognize going forward.

Speaker 3

I think on the refund liability, I think your observation is very good. So there was I think with the overall situation on the line, I think there were some, I would say, delays in issuing invoicing. So we indeed have not paid as much in Q1 as we would have anticipated and that's why probably you haven't seen a lot of movement in the refund liability. So there will be a catch up in the later part of the year, but it doesn't change the overall Cost base, we had estimated earlier on.

Speaker 9

Okay. That's very helpful. And then maybe if I could just sneak in one more. Just on your 3rd party product sales, They were quite a lot lower than what they were in Q4. Could you just explain to us what's going on there and what we should expect for the rest of the year?

Speaker 9

Thanks.

Speaker 3

Yes. Look, as I said before, I think when I look at it, we're in euro terms in line with where we were pre pandemic. So I think it's a very strong quarter. I think it's in line with our expectations. And we're optimistic for the rest of the year to deliver product sales within guidance €130,000,000 to €150,000,000

Speaker 9

Okay. That's great. Thank you very much.

Operator

Thank you. We'll now go to your next question. And your next question comes from the line of Simon Skol, First Berlin. Please go ahead. Your line is open.

Speaker 10

Yes. Hello. I've got two questions. I remember in the last call, you were discussing that A more creative solution might have with the FDA might have allowed you to submit documentation already as Already as early as 2025, despite the loss of trial participants. And I'd just be very curious to if you could Discuss what that creative solution might have entailed?

Speaker 10

And secondly, can you give us any indication? I mean, Can you tell us whether you expect the supply constraints, which hit the travel your travel vaccine business in Q1 to ease in the current quarter? Thanks.

Speaker 2

So, first of all, not so sure whether I recall having said creative.

Speaker 10

I think

Speaker 2

you did. But yes, well, I mean, as I mentioned, I answered the same question earlier on, right? I think we have Evaluated the possibility to take special sub calls earlier, But after a careful risk benefit evaluation, we have decided that it is not in the interest of this program to increase its risk profile. And that's why we have said we keep The original protocol at this. On the supply constraints side of things, yes, we have Had supply issues in still in the first half of the year because demand has just exceeded What we had anticipated, and we have a long lead time to produce the vaccines.

Speaker 2

And when we saw last year that There was a beginning recovery. We immediately started, but it takes time. So we are currently anticipating No further supply constraints going forward from where we are today.

Speaker 10

Okay. Thanks very much.

Operator

Thank you. There are currently no further questions. I will hand the call back to you.

Speaker 2

I think with that, we would like to thank you for your participation today. Thank you for your support and for following Vannevar, it's been a pleasure to provide you today's update. Have a good remainder of the day. Bye bye.

Operator

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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