Bavarian Nordic A/S publishes prospectus for rights issue
On 20 May 2005, Bavarian Nordic A/S publishes its prospectus for a rights issue. The Company’s shareholders have pre-emption rights to subscribe for new shares at the ratio of 1 for 4 at a price of DKK 360 per share of DKK 10. The gross proceeds from the offering are expected to total up to approximately DKK 418 million. The proceeds will be used to strengthen the activities within research and product development, including clinical trials within smallpox, HIV, measles and cancer, and production. Moreover, part of the proceeds will be used to start up the production of an order for up to 80 million doses of smallpox vaccine (RFP-III) for which the US authorities are expected to invite tenders in the summer of 2005, with the order expected to be granted in late 2005. In order to ensure this and future supplies and with a view to reducing production costs, Bavarian Nordic plans to invest approximately DKK 115 million in a vaccine filling and packing line. Finally, the Company wishes to strengthen its general capital preparedness.
Offering The offering comprises up to 1,159,871 new shares with a nominal value of DKK 10 each with pre-emption rights to the Company’s shareholders.
On 19 May 2005, the Board of Directors resolved to exercise part of the authority contained in the Company’s articles of association to increase the share capital by a minimum of 253,571 shares of DKK 10 each (DKK 2,535,710 nominal value) and a maximum of 1,159,871 shares of DKK 10 each (DKK 11,598,710 nominal value).
Subscription price The new shares are offered at DKK 360 per share of DKK 10, free of brokerage fees.
Subscription ratio The Company’s shareholders have pre-emption rights to the new shares at the ratio of 1 for 4 to the effectthat shareholders will be entitled to subscribe for 1 new share of DKK 10 for each 4 existing shares of DKK 10 held.
Subscription period The subscription period for the new shares commences on 4 June 2005 and closes on 17 June 2005. It is expected that the new shares will be listed on the Copenhagen Stock Exchange with effect from 23 June 2005.
Trading in subscription rights The subscription rights will be traded in the period from 1 June 2005 to 14 June 2005.
Allocation of subscription rights Subscription rights will be allocated to shareholders who are registered with the Danish Securities Centre as shareholders of Bavarian Nordic A/S on 3 June 2005 at noon (Copenhagen time). Shareholders will require 4 subscription rights for each new share of DKK 10 nominal value to be subscribed.
Underwriting The rights issue is not underwritten, but a number of existing shareholders, A.J. Aamund A/S and LD Pensions, have made binding advance commitments to the Company to subscribe for a total of 253,571 new shares, corresponding to total gross proceeds of approximately DKK 91 million. Out of this amount, A.J. Aamund A/S and LD Pensions will subscribe for new shares corresponding to gross proceeds of approximately DKK 60 million and approximately DKK 31 million, respectively, by exercising their respective subscription rights.
Reasons for the rights issue and use of proceeds Bavarian Nordic aims to obtain gross proceeds of approximately DKK 418 million from the rights issue.
Bavarian Nordic aims to strengthen its research and product development activities, including clinical trials within smallpox, HIV, measles and cancer, and production. In that connection, Bavarian Nordic has, inter alia, established a subsidiary in California, USA in order to increase its research and development activities within cancer immunotherapy. Moreover, Bavarian Nordic plans an expansion of its exports and marketing function.
Bavarian Nordic expects that the US authorities will place an order (RFP-III) under the clinical development and delivery programme for an MVA-based smallpox vaccine in late 2005. RFP-III is a continuation of the process that was initiated with RFP-I and RFP-II. On 28 April 2005, the US authorities confirmed that the RFP-III process will be initiated. Following this, the US authorities published a draft of the tender terms for RFP-III on 13 May 2005. During this stage of the programme, the US authorities are expected to purchase a preliminary inventory of up to approximately 80 million doses of MVA-based smallpox vaccine in one or more tranches, of which approximately 20 million doses are expected to be delivered within 18 months of award of the contract. The total order is expected to have a value of up to approximately USD 900 million. Management expects that Bavarian Nordic will be awarded the whole or a substantial portion of this contract. Bavarian Nordic will execute the RFP-III order in a commercial partnership with GlaxoSmithKline.
Part of the proceeds from the rights issue will be used as temporary financing of the necessary build-up of inventories of raw materials and ready-to-use vaccines and trade receivables in connection with the sale and delivery of these vaccines from 2006. The Company expects that the revenue from this order over the delivery period will generate a significant and increasing liquidity surplus.
In order to reduce production costs and provide maximum supply reliability to Bavarian Nordic’s customers, the Company plans to initiate an investment in a vaccine filling and packing line in Kvistgård, Denmark. This investment is expected to total approximately DKK 115 million.
Lead Manager The rights issue has been arranged by Nordea Corporate Finance, a division of Nordea Bank Danmark A/S, as Lead Manager for Bavarian Nordic A/S.
Publication and distribution of the prospectus The prospectus, which has been prepared in connection with the rights issue of Bavarian Nordic A/S, will be published through the Copenhagen Stock Exchange on Friday 20 May 2005. The prospectus will be available for inspection at Bavarian Nordic A/S’ offices at Bøgeskovvej 9, DK-3490 Kvistgård, Denmark. The prospectus will be forwarded to registered shareholders resident in Denmark, the UK and the USA. The prospectus will furthermore be available on the Company’s website – except to persons covered by legislation which prohibits this – at www.bavarian-nordic.com, and the prospectus may also be obtained from:
Nordea Bank Danmark A/S Phone: +45 3333 5092 Fax: +45 3333 3182 E-mail: corpact@nordea.com
