August 30, 2007 11:43 ET

VIVALIS : Results for the 1st half-year in line with targets and strategy

Signing of 7 license agreements in the vaccine business; Promising prospects for anti-cancer antibody production; Promising results for anti-hepatitis C proprietary molecules

NANTES, FRANCE--(Marketwire - August 30, 2007) - VIVALIS (Euronext Paris: VLS), a biopharmaceutical company specialised in the development and marketing of technologies for manufacturing vaccines and products for the prevention and treatment of viral diseases, today announces its results for the 1st half of 2007, ended on June 30, 2007.

1 - Results for the 1st half of 2007 in line with Vivalis targets and strategy

|In K€                    |  30/06/2007|  30/06/2006|
|French standards         |            |            |
|Sales                    |         940|       1 008|
|Other income             |       1 053|         908|
|Total revenues           |       1 993|       1 916|
|Total operating expenses |     - 3 435|     - 2 535|
|Income from operations   |     - 1 442|       - 619|
|Current pre tax result   |     - 1 480|       - 641|
|Net result               |     - 1 534|       - 702|
|Net result per share     |      - 0.17|      - 8.03|
|(euro)                   |            |            |
Stable revenues

The revenues for the 1st half of 2007 stands at KEUR 1 993, and is stable as compared with the operating revenues recorded for the first half of 2006. These revenues include KEUR 940 sales (services invoiced by Vivalis and the proceeds of license agreements) plus KEUR 1 053 other income (grants and immobilized production).

It should be noted that revenues will not be significant of Vivalis's growth and will vary from year to year for as long as Vivalis receives no royalties on the sale of products by its customers. In fact, the current revenues are bound to vary from year to year, coming as it does mainly from the initial down payments and milestones payments under the EBx® platform license agreements.

Accelerated development leading to a significant increase in operating expenses.

In line with the strategy presented by the company on first being listed on the stock exchange, operating expenses saw a substantial rise during the 1st half of 2007 owing to the company's accelerated development: active recruitment policy (with a headcount up from 37 to 46 from the end of June 2006 to the end of June 2007), acceleration of the rate of programmes inducing increased purchases of raw materials, and major R&D efforts and investments in facilities leading to a rise of almost 35.5% in operating expenses.

R&D expenses account for 46.4% of operating expenses for the 1st half of 2007, a sign of Vivalis's determination to maintain its technological edge of its EBX® platform and to reinforce its programme for developing proprietary products against hepatitis C.

On this basis the net loss on June 30, 2007 stands at MEUR 1.5 as compared with MEUR 0.7 on June 30, 2006.

A solid capital structure

On June 30, 2007, shareholders' equity amounted to MEUR 6.9. Cash flow stood at MEUR 1.4 for the 1st half of 2007, as compared with MEUR 1.8 for the first 6 months of 2006. On June 30, 2007, available cash amounted to MEUR 0.9.

Following the new issue of capital made on July 3, 2007, cash in hand stood at MEUR 27.3 at the end of July 2007. Vivalis now has a solid, healthy capital structure which will enable it to finance its development.

2 - Highlights of the 1st half of 2007

The 1st half of 2007 was highlighted by major developments for VIVALIS: the successful listing on the stock exchange enabling the company to ensure long-term growth, a strengthening of intellectual property protection of its portfolio, and most of all major advances in terms of both contracts and discoveries in VIVALIS' 3 lines of business. This dynamism reflects the company's determination to accelerate its growth and impose its innovative technology, marking a major breakthrough on growth markets (vaccines, therapeutic antibodies...).

Successful listing on the stock exchange

On June 28, 2007, Vivalis successfully completed the listing in Compartment B of Eurolist Paris by Euronext. The offer was oversubscribed 7.5 times for the portion reserved for institutional investors and 6.1 times for the portion reserved for private investors. The extension clause and over-allotment option have both been brought into play. The number of new share issues stands at 2 762 431 shares. The proceeds of this operation grossed EUR 29 033 149.81, and so the amount floated represents 30.71% of the company's capital.

Strengthening of the intellectual property position

During the first half of 2007, VIVALIS extended its portfolio of patents:

- March 2007: patent application in Europe to cover the use of EBx® cells for manufacturing therapeutic proteins of interest, notably monoclonal antibodies.

- April 2007: patent application to protect the EBx® duck cell lines and their use in manufacturing vaccines and recombinant proteins.

- Strengthening of the intellectual property position in areas relating to the EBx® cellular platform derived from avian embryonic stem (ES) cells. VIVALIS thus made an international extension through the PCT of patent application US60/801389 filed on May 15, 2006 and relating to a process for manufacturing avian EBx® cells from primordial germ cells (PGC cells). In order to exploit this invention, VIVALIS has signed with North Carolina State University an exclusive worldwide license on the US6,333,192 patent family to cover in vitro culture of PGC cells; European patent EP1200556, corresponding to this American patent, was issued in February of 2007.

Acceleration of across the board development of Vivalis' 3 lines of business: EBx® platforms to produce vaccines, EBx® platforms to produce therapeutic proteins and proprietary products

EBx® platform on the vaccine market: signing of 3 major license agreements in the field of influenza and 4 new agreements in other vaccine areas.

In May, the company announced 3 commercial licensing agreements with Glaxosmithkline, joint world leader for vaccines, CSL, world n degrees4 for influenza vaccines, and Nobilon, a company in the Organon Biosciences group recently taken over by the American laboratory Schering Plough. These three agreements confirm the value of the EBx® lines for manufacturing many vaccine types. In the event of successful clinical development, the marketing of these vaccines by Vivalis customers is awaited in 2011-2012, when the first revenue from royalties is expected in the human field.

A new commercial licensing agreement has also been signed with Sanofi Pasteur, joint world leader in human vaccine and a partner since 2002, in a, undisclosed area.

Lastly one final commercial licensing agreement has been completed with the veterinary pharmaceuticals company Virbac, for one of their biological products under development, which takes to 8 the number of current commercial license agreements bringing in upfront payments, milestone payments and royalties.

Two new research licenses have been signed. One is with Bavarian Nordic for the production test on their recombinant vaccines for measles (in phase I/II clinical studies), RSV(phase I/II) and cancer (phase II); the other with the veterinary company Fort Dodge (a subsidiary of the American Wyeth, world N degrees4 for human vaccines) to test manufacturing of several veterinary vaccines.

EBx® platforms on the therapeutic protein market: new developments in the anti-cancer antibody area

VIVALIS has launched developments of its EBx® platform in the anti-cancer antibody area, a market worth $ 20 billion in 2006, twice the size of the vaccine market.

VIVALIS and MAT BIOPHARMA demonstrated that the glycosylation profile of monoclonal antibody of IgG1 subtype produced in avian EBx® cells, is similar to human antibodies glycosylation profile, with the remarkable feature of having a reduced fucose content. This latter feature is known to be associated with a better antibody-dependent cell cytotoxicity (ADCC) activity, a biological activity particularly attractive for treating cancerous cells. Indeed, the pharma and biotech industry is looking for new cell lines, beside the traditional CHO cell line, which would produce monoclonal antibodies with a better therapeutic effect.

VIVALIS has also demonstrated that EBx® cells can be easily genetically engineered and efficiently produce MAT BIOPHARMA's monoclonal antibody in bioreactors, in an animal serum-free cell culture medium.

These early results show that EBx ® avian cells have the potential to constitute a new cellular platform for the production of recombinant proteins, in particular monoclonal antibodies with increased cytotoxic activity. There is today a strong demand for monoclonal antibodies having improved biological activities, in order to reduce therapeutic doses and production costs. The recent signing of collaboration agreements with MAT BIOPHARMA confirms the interest of this new cellular platform for the production of antibody with increased ADCC activity. VIVALIS aims to sign licence agreements with upfront payments, milestone payments and royalties on product sales, as already achieved in the vaccine area.

Proprietary products: promising new results in the development of anti-hepatitis C molecules

The development programme regarding anti-hepatitis C molecules is progressing in line with company expectations.

Screening of the VIVATHEQUE (library containing 23,300 molecules) on the proprietary 3D-Screen platform has enabled the identification of several molecules that inhibit hepatitis C virus polymerase. These molecules have been validated in vitro for their antiviral activity, in partnership with the REGA Institute in Belgium. The molecules with promising characteristics were selected and chemical optimisation of these "hits" was initiated jointly with Idealp-Pharma (Lyon, France). This work should make it possible to validate or invalidate the usefulness of identified molecules.

A second 3D-Screen platform has been developed and validated for hepatitis C virus protease. Screening of the combinatorial library (VIVATHEQUE) in search of molecules against hepatitis C protease has just begun. This stage is important because it gives Vivalis the potential and means to build up a pipeline of therapeutic products targeting the 2 major proteins of the hepatitis C virus.


3 - Prospects

On the strength of results obtained during the 1st semester and given its comfortable cash position, VIVALIS intends to pursue its developments and strategy, now focusing on 3 areas:

- Qualification of the EBx® cell line and filing of a BMF (Biological Master File), during the first half of 2008 with the FDA (American Food and Drug Administration),

- Confirmation of the performances of the EBx® lines for anti-cancer antibody production, in order to fast track marketing of technology in this area,

- Strengthening of research and development in anti-hepatitis C molecules.

VIVALIS CEO Franck GRIMAUD has the last word: "the 1st half of 2007 marks a key stage in VIVALIS's development with the signing of contracts in the vaccine business, some very promising results on the anti-cancer antibody market and also promising results in the development of anti Hepatitis C molecules. On the strength of our successful listing on the stock exchange, we shall be stepping up our R&D efforts and our development programmes across the board in all 3 lines of business with results and contracts that ought to be coming to fruition over the coming months."


Next official statement:

November 15, after Euronext market closing: 3rd quarter sales


VIVALIS (Euronext:VLS) is a biopharmaceutical company specialised in vaccines and in viral diseases. VIVALIS' know-how and proprietary technologies are commercially exploited in three main areas:

1. Vaccine development and manufacturing. VIVALIS grants research and commercial licences to its proprietary embryonic stem cell lines to pharmaceutical and biotechnology companies active in the viral vaccine business.

2. Recombinant therapeutic protein and monoclonal antibody expression systems development. VIVALIS partners with pharmaceutical and biotechnology companies in this area, to which it licenses its proprietary EBx® embryonic stem cell lines to manufacture recombinant therapeutic proteins.

3. The build-up of a proprietary portfolio of vaccines and anti-viral molecules.

Based in Nantes (France), Vivalis was created in 1999 by Group GRIMAUD (1350 employees), the n degrees2 group worldwide in avian genetic breeding. Vivalis has established several partnerships with companies that are worldwide leaders in their respective fields, including Sanofi Pasteur, GlaxoSmithKline, Novartis Vaccines, Merial and SAFC Biosciences. VIVALIS is a member of the French ATLANTIC BIOTHERAPIES cluster.

VIVALIS filed its Registration Document under the number I.07-077 dated 23 May 2007, with the Autorité des Marchés Financiers ("AMF"). The Registration Document approved the 23 May 2007 under the number I.07-077 is available free of charge from Vivalis' head office, 6 rue Alain Bombard, 44800 Saint-Herblain, and in electronic form on the Company's web site ( and on the web site of the AMF ( VIVALIS draws the readers' attention to the chapter 4 "Risks factors" of the Registration Document approved by the AMF. This press release, together with the material set forth herein, does not constitute an offer of securities for sale nor the solicitation of an offer to purchase securities in any jurisdiction. Distribution of such press release in certain jurisdiction may constitute a breach of applicable laws and regulation

Compartment B of Eurolist Paris - FR0004056851

Reuters: VLS.PA - Bloomberg: VLS FP

Investors' contact:


Franck Grimaud, C.E.O. Financial communication Agency

Email: Steve Grobet / Emmanuel Huynh

Tel.: +33 (0) 1 44 71 94 91


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