Bavarian Nordic posts a revenue of DKK 109 million and earnings before tax of DKK 53 million in the first quarter of 2004.
Key Highlights
Revenue of DKK 109 million and earnings before tax of DKK 53 million in first quarter 2004. Financial projections for the year maintained.
Manufacturing plans on track with final MVA-BN® optimisation process near completion.
HIV vaccine development programme moving forward. MVA-BN® nef to begin Phase ll clinical trials in the second quarter 2004.
Corporate management strengthened with the appointment of Hans Christian Teisen in the newly-created position of Vice President of Finance and Commercial Affairs as of August 2004.
In a Bavarian Nordic patent application before the U.S. Patent and Trademark Office, the examining authority found allowable the company’s claims to the MVA-BN® virus.
Financial results
Revenue for the first quarter of 2004 was DKK 109 million (2003, Q1: DKK 135 million). Revenue was generated from the sales and release of Elstree-BN (second-generation) smallpox vaccine.
Earnings before tax for the first quarter were DKK 53 million (2003, Q1: DKK 60 million).
First quarter 2004 financial results are in line with expectations. The company’s projections for the year of revenues of DKK 400 million and earnings before tax of DKK 60-80 million are maintained.
Revenue projections for 2004 are based on the further sale of Elstree-BN and MVA-BN® smallpox vaccines together with the expectation to enter into license agreements. The majority of revenue in 2004 is expected to occur in the third and fourth quarters of the year.
In response to the growing government demand for emergency stockpile of smallpox vaccines, Bavarian Nordic has established an inventory for such purchases.
Liquidity at the end of the first quarter was DKK 251 million (2003, Q1: DKK 114 million).
Purchase of the Kvistgård production facility occurred in the first quarter of 2004. Investments will continue throughout the year with a quality control laboratory established in the second quarter The majority of investments will occur in the third and fourth quarters with approximately DKK 113 million allocated for reconstruction of the production facility. Reconstruction is expected to be finalised in the first quarter of 2005, followed by the installation of technology so that trial production can be started in the second quarter of 2005.
Production
The environmental impact assessment process for approval of the Kvistgård site as a vaccine production facility is proceeding as planned.
The basic design of the new manufacturing site at Kvistgård has been completed and Bavarian Nordic has begun the purchase of technology and equipment for the re-design of the facility to manufacture vaccines.
Planning has also started on the establishment of in-house laboratory facilities for the analysis, validation and release of product when the manufacturing site is fully operational in mid-2005.
Development of the final manufacturing process for MVA-BN® is near completion. Once this milestone is met, Bavarian Nordic will move closer to the goal of large-scale commercial production in mid-2005.
Smallpox vaccine franchise
Bavarian Nordic has selected IMVAMUNE™ as the brand name for its proprietary third-generation vaccine against smallpox, to-date known as MVA-BN®.
Bavarian Nordic submitted its response to the US Government’s Request for Proposal (RFP 2) which is the second phase of a development programme for a safe smallpox vaccine based on the Modified Vaccinia Ankara (MVA) virus. The award is expected in the summer of 2004.
In cooperation with the U.S. National Institute of Health, Bavarian Nordic has begun a Phase l trial comparing IMVAMUNE™ with DryVax® in healthy volunteers in the USA. The trial will also investigate whether the immune response against IMVAMUNE™ protects against a subsequent challenge with DryVax®. This trial is expected to be completed in 2005.
Another Phase l trial to start in the third-quarter of 2004 will investigate IMVAMUNE™ in people with HIV in the USA. First results are expected in 2005.
The U.S. Patent and Trademark Office (USPTO) has issued a Notice of Allowance to Bavarian Nordic in an application claiming its MVA-BN®. The USPTO said that Bavarian Nordic claims to the MVA-BN® virus, recombinants thereof, those viruses exhibiting essentially the same replication characteristics as MVA-BN®, and methods of administering such viruses are allowable. A Notice of Allowance represents the USPTO’s determination that the application and claims have been examined for patentability and are allowed for issuance as a patent.
HIV vaccine franchise
A Phase ll trial with MVA-BN® nef in people with HIV in Europe will start in the second-quarter. Results are expected in the second half of 2005.
The clinical development programme for MVA-BN® polytope will also be initiated with trials in Europe in the fourth quarter of 2004. A Phase l trial in healthy volunteers and a Phase l/ll trial in people with HIV will be started. Results for both trials are expected in 2005.
Other clinical trials
Bavarian Nordic’s vaccine candidate MVA-BN® JEV against Japanese Encephalitis will enter a Phase l trial in healthy volunteers in Europe in the fourth quarter of this year.
Organisational growth
Hans Christian Teisen will join the corporate management group in the newly-created position of Vice President of Finance and Commercial Affairs in August, 2004. Teisen’s area of responsibility will include strategy, finance, business development, marketing and the investor relations functions. For the last seven years Teisen has held increasingly-responsible management positions at Rockwool A/S (world’s leading producer of stone wool for the construction industry), most recently as Vice President of Finance in Rockwool Scandinavia. Prior to Rockwool, Tesien held various positions in the Danish Foreign Ministry, departing in 1997 as head of the foreign policy department. In the future, Bavarian Nordic’s corporate management group will consist of Peter Wulff, President and CEO; Paul Chaplin, Vice President Research and Development and CSO; René Djurup, Vice President Technical Operations and CTO; and Hans Christian Teisen, Vice President Finance and Commercial Affairs.
Bavarian Nordic will strengthen its Research and Development organisation during the remainder of the year. The company will expand its research programme focus with two focus areas - neonatal immunology and pox virology. The preclinical group will relocate to Munich, and with it the clinical analysis and preclinical development groups further expanded. Finally, the company has also established a Regulatory Department to meet the expected demand for regulatory review in its business areas.
The company continues to strengthen its technical functions. During the first quarter, Bavarian Nordic significantly enhanced its capabilities within Quality by hiring a Chief Quality Officer and also, a Head of Quality Control.
Bavarian Nordic will move its research centre in Munich to larger facilities in the same area during the summer of 2004.
As planned Bavarian Nordic’s headquarters which includes the Technical Operations department and administrative functions have moved from the Copenhagen area to Kvistgård.
