Valneva, a specialty vaccine company, today announced that the U.S. Department of Defense (DoD) has exercised the first option of the contract signed in September 2020 to purchase further supply of its Japanese encephalitis (JE) vaccine IXIARO®.
Due to the ongoing impact of the COVID-19 pandemic on DoD operations, the option terms have been amended such that the minimum number of doses for the first option year is now 200,000 with an approximate value of $28.8 million. This brings the total minimum value of the contract to approximately $118 million, assuming the exercise of the second year option which remains unchanged, compared to a minimum value of $135 million in the initial contract.
In order to support its customer through this pandemic period, Valneva will also provide additional inventory to DoD after September 2023 to mitigate the potential impact of unused stock that may expire. This replacement inventory will be provided free of charge and will be recognized as deferred revenue of up to $9 million beginning in fiscal year 2021.
Franck Grimaud, President and Chief Business Officer of Valneva, commented “We thank the DoD for their renewed confidence. It is important that we continue to support our customers, both large and small, to help them navigate through the uncertainty caused by the impact of the COVID-19 pandemic on their operations”.
Shipments associated with the option will commence immediately.