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Bavarian Nordic Receives a USD 25 Million Milestone Payment after Scaling Up for Industrial Production of IMVAMUNE®

- Upgrades expectations to year-end cash preparedness

Kvistgaard, Denmark, October 28, 2011 - Bavarian Nordic A/S (OMX: BAVA) today announced that it has received a performance-based milestone payment of USD 25 million under the contract with the U.S. government to deliver 20 million doses of its unlicensed smallpox vaccine, IMVAMUNE® to the U.S. Strategic National Stockpile.

This performance-based milestone payment has been issued in recognition of the company's recent successful scale-up of production from three to four batches per week at its Kvistgaard facility. The payment forms part of the existing total contract value and will be recognized as revenue pro rata with the deliveries of the remaining doses. The payment is subject to repayment if Bavarian Nordic, contrary to expectations, fails to fulfil the contract.

The payment will improve the 2011 cash flow with approximately DKK 125 million, thus reducing the 2012-2013 accumulated free cash flow from the contract correspondingly. As a result, the company upgrades its expectations to the 2011 year-end cash preparedness from approximately DKK 525 million to approximately DKK 650 million.

Anders Hedegaard, President & CEO of Bavarian Nordic, commented: "Scaling-up our production marks an important milestone in the industrialisation of our company, and it demonstrates our ability to produce vaccines at large scale. Now producing at four batches per week, we are on track to delivering 4 million doses of IMVAMUNE® this year as planned. We are happy to see our efforts being recognized by the U.S. government, demonstrating their continued support to our development and deliveries of IMVAMUNE® to the U.S. Strategic National Stockpile."