Valneva SE (VLAN) Prices 2.318M ADS IPO at $26.41/ADS

Valneva SE (NASDAQ: VLAN), a specialty vaccine company focused on the development and commercialization of prophylactic vaccines for infectious diseases with significant unmet medical need, announced today the pricing of its initial public offering on the Nasdaq Global Select Market by way of a capital increase of 7,082,762 new ordinary shares, consisting of a public offering of 2,318,881 American Depositary Shares (“ADSs”), each representing two ordinary shares (the “U.S. Offering”), and a concurrent private placement of 2,445,000 ordinary shares in Europe (including in France) and other countries outside of the United States (the “European Private Placement”, and, together with the U.S. Offering, the “Global Offering”). The aggregate gross proceeds are expected to be approximately $93.5 million, equivalent to approximately €77.9 million, before deducting underwriting commissions and estimated expenses payable by the Company.

Goldman Sachs, Jefferies, Guggenheim Securities and Bryan, Garnier & Co. are acting as joint bookrunners for the Global Offering (together, the “Underwriters”). Namsen Capital is acting as Valneva’s capital markets advisor.

Pricing of the Global Offering and Discount

The initial offering price was set at €11 per ordinary share and at $26.41 per ADS.

The initial offering price per ADS corresponds to the offering price of €11 per ordinary share based on the May 5, 2021 exchange rate of €1.00 = $1.2005 and the two to one ratio of ordinary shares to ADS.

The offering price per ordinary share in euros (€11) represents a discount of 4.7% from the reference price determined by the Company pursuant to the 6th resolution of the Company's extraordinary general shareholders' meeting held on December 22, 2020.1

Type of Global Offering - Capital increase without shareholders' preferential subscription rights reserved to a category of purchasers

The ADSs and the ordinary shares will be issued through a capital increase without shareholders’ preferential subscription rights and for the benefit of a specified category of persons within the meaning of Article L.225-138 of the French Commercial Code (Code de commerce) and pursuant to the 6th resolution of the Company's extraordinary general shareholders' meeting held on December 22, 2020.

Under the authority granted by the shareholders in the 6th resolution, the ordinary shares and ADSs may only be purchased initially by (i) natural persons and legal entities, including companies, trusts or investment funds, organized under French or foreign law, that routinely invest in the pharmaceutical, biotechnological or medical technology sector; (ii) companies, institutions or entities of any type, French or foreign, that do a significant part of their business in the pharmaceutical, cosmetic, chemical or medical devices and/or technologies or research in these sectors; and/or (iii) French or foreign investment services companies, or any foreign establishment with an equivalent status, that could guarantee to carry out an issue to be placed with the persons described in (i) and/or (ii) above, in this context, to subscribe for securities that are issued. In order to purchase ordinary shares and/or ADSs in the Global Offering, potential investors will be required to execute and provide to the Underwriters an investor letter representing that they satisfy the foregoing investor criteria.

Option to Purchase Additional Shares

The Company granted the Underwriters an option to purchase (the “Option”) for a 30-day period (until June 4, 2021) 531,207 additional ADSs, each representing two ordinary shares, i.e. 15% of the aggregate amount of ADSs and ordinary shares to be issued in the Global Offering.

In connection with the Global Offering, Goldman Sachs, acting as stabilizing manager, may over-allot the securities or effect transactions with a view to supporting, stabilizing, or maintaining the market price of the securities at a level higher than which might otherwise prevail in the open market. However, there is no assurance that the stabilizing manager will take any stabilization action and, if begun, may be ended at any time without prior notice. Any stabilization action or over-allotment shall be carried out in accordance with all applicable rules and regulations and may be undertaken on the Nasdaq Global Select Market.

Dilution

The 7,082,762 ordinary shares issued in the Global Offering (including ordinary shares in the form of ADSs) will represent a dilution of approximately 7.72% of the share capital of the Company. If the Underwriters exercise their Option in full, the dilution would increase to 8.88%. On an illustrative basis, a shareholder holding 1% of Valneva’s capital before the Global Offering will now hold a stake of 0.93%.

The Global Offering included the support of current significant Company shareholder, Bpifrance Participations (“Bpifrance”). After completion of the Global Offering, Bpifrance will hold 9.08% of the share capital of the Company.

Terms and Conditions of the Securities to be Issued - Closing and delivery

The closing and delivery of the U.S. Offering and the European Private Placement are conditioned on each other and will occur simultaneously, on or about May 10, 2021.

All the securities in the Global Offering will be sold by the Company. The ADSs have been approved for listing on the Nasdaq Global Select Market and are expected to begin trading on May 6, 2021 under the ticker symbol “VALN”.

The ordinary shares sold in the European Private Placement and the ordinary shares underlying the ADSs sold in the U.S. Offering will be subject to an application for admission to trading on Euronext Paris (Compartment B) on the same trading line as the existing shares under the same ISIN code FR0004056851 and the ticker symbol “VLA” and are expected to be admitted to trading on May 10, 2021.

Estimated Proceeds from the Global Offering - Reasons for the offering - Use of proceeds

The gross proceeds of the sale of 7,082,762 ordinary shares, including in the form of ADSs, in the Global Offering are expected to be approximately $93.5 million (€77.9 million), assuming no exercise of the Underwriters’ Option to purchase additional ordinary shares. The Company estimates that the net proceeds of the Global Offering will be approximately $81.5 million (€67.9 million), after deducting approximately $6.5 million (€5.5 million) in underwriting commissions and approximately $5.5 million (€4.6 million) in offering expenses.

The principal purposes of the Global Offering are to increase the Company’s financial flexibility in order to advance the development of its portfolio of vaccine candidates as listed below.

The Company expects to use the net proceeds from the Global Offering, together with its existing cash and cash equivalents, as follows (assuming an exchange rate of €1.00 = $1.2005, the exchange rate on May 5, 2021, as reported by the European Central Bank):

• Approximately $100 million to fund further development of its Lyme VLA15 vaccine candidate through completion of Phase 2 clinical trials;
• Approximately $120 million to fund further development of its chikungunya VLA1553 vaccine candidate through BLA approval;
• Approximately $80 million to fund further development of its COVID-19 VLA2001 vaccine candidate through conditional licensure; and
• The remainder, if any (including proceeds received pursuant to the underwriters’ Option to purchase additional ADSs or ordinary shares, if exercised), for working capital and general corporate purposes.

As of December 31, 2020, the Company had cash and cash equivalents of €204.4 million. The Company believes its cash and cash equivalents, together with the net proceeds of the Global Offering, will be sufficient to fund its operations through at least the end of 2022.

Underwriting

The Global Offering is subject to an underwriting agreement covering the entirety of the Global Offering. The underwriting agreement was entered into on May 5, 2021 in connection with the determination of the Global Offering Price.

The underwriting agreement does not constitute a "garantie de bonne fin" within the meaning of Article L. 225-145 of the French Commercial Code (Code de commerce).

Documentation

The Company has filed a registration statement, including a prospectus, relating to these securities with the U.S. Securities and Exchange Commission (“SEC”), which was declared effective by the SEC on May 5, 2021.

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