US DoD declines option for further supply of Valneva's JE vaccine

French speciality vaccines maker Valneva (Nasdaq: VALN) has announced that the US Department of Defense (DoD) has decided not to exercise the second option year of the contract to supply Valneva’s Japanese encephalitis (JE) vaccine Ixiaro.

Due to the past and ongoing impact of the COVID-19 pandemic on its operations, the DoD considers its existing Ixiaro supply levels sufficient to meet current needs. The DoD has communicated an interest in negotiating a new supply contract in 2023, once inventory returns to standard levels.

Valneva expects no impact on its 2022 financial guidance as a result of this decision and will continue deliveries of Ixiaro under the terms of the first option year, which the DoD exercised with amended terms, through the fourth quarter of 2022. The DoD has relied on Ixiaro since 2010 to help protect personnel who are deployed to JE endemic areas, for whom JE vaccination is recommended.