Valneva ( NASDAQ: VALN ) ( OTCPK:INRLF ) ( OTC:VNVLF ) said the U.S. Department of Defense (DoD) decided not to exercise the second option year of the contract to get the company's Japanese encephalitis (JE) vaccine Ixiaro.
Due to the impact of the COVID-19 pandemic on its operations, the DoD considers its existing supply of Ixiaro sufficient to meet current needs, the French vaccine maker said in an Aug. 18 press release.
The total minimum value of the existing supply contract was ~$118M, assuming the exercise of the second option year, which had a minimum value of $36M for 250K doses.
The company noted that it expects no impact on its 2022 financial guidance due to the decision and will continue deliveries of the vaccine under the terms of the first option year, which the DoD exercised with amended terms, through the Q4 2022.
Valneva added that the DoD expressed an interest in negotiating a new supply contract in 2023, once inventory returns to standard levels.
The company said that the The DoD has relied on Ixiaro since 2010 to help protect personnel who are deployed to JE endemic areas.
The JE vaccine is used to prevent the disease for people who travel to, or live in, endemic areas.
VALN -2.32% to $19.82 premarket Aug. 18
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Valneva stock dips as US DoD ends Japanese encephalitis vaccine Ixiaro supply deal