Bavarian Nordic A/S – Interim Report for the period 1 January to 31 March 2008

During the first quarter of 2008, Bavarian Nordic completed a strategy process which resulted in an updated strategy for the company in the years to come. The company's primary current objective is the fulfilment of the RFP-3 contract with the U.S. government, including the production and delivery of 20 million doses of IMVAMUNE® as well as the further clinical development and licensing of IMVAMUNE®. The company has reordered the priorities of the other development programmes in order to expand the biodefense portfolio and put more focus into the cancer business area.
In the first quarter of 2008 Bavarian Nordic generated revenue of DKK 14 million and recorded a loss before tax of DKK 62 million. As of 31 March 2008 the Group's net free liquidity was DKK 891 million. The expectations for the financial result for the full year 2008 are maintained at revenues in the region of DKK 180 million, and a pre-tax loss in the region of DKK 225 million. The main part of the revenue comprises of a milestone payment under the RFP-3 contract, which is expected in the second half of 2008.

  • Bavarian Nordic has signed contract with Asian country for the delivery of IMVAMUNE® Bavarian Nordic has signed a three-year contract with the government of an Asian country for the delivery of a small order of IMVAMUNE® for the country's biodefense programme. This contract, which is considered as an initial order, is Bavarian Nordic's first since the award of the RFP-3 contract. The extent and value of the contract are undisclosed. Bavarian Nordic will manufacture and deliver IMVAMUNE® smallpox vaccines for this country before initiating the delivery of the 20 million doses of IMVAMUNE® for the U.S. government.
  • Anthrax programme strengthens biodefense portfolio As part of building up its biodefense portfolio, Bavarian Nordic has initiated a preclinical programme for an anthrax vaccine. The company sees a number of synergies - both in the development and in market approach which support the development of such a vaccine. Also, it is expected that a combined anthrax and smallpox vaccine can be developed and thus Bavarian Nordic would be able to offer one vaccine against two of the top biological threats. The anthrax programme is expected to enter Phase I in 2008.

Research and development
IMVAMUNE® - third generation smallpox vaccine The company expects to discuss the Phase III study design and data requirements for a biologic licence application (BLA) with the FDA in the second half of 2008. Subsequently, the clinical activities to support Phase III studies are still expected to start in 2009.
Recruitment for the Phase II study in HIV-infected subjects will be completed in the second quarter of 2008 and the interim safety data will be reported in the second half of 2008. Subsequently, the data package will be submitted to the US health authorities. The completed submission will trigger a milestone payment of USD 25 million under the RFP-3 contract.
In the second half of 2008 Bavarian Nordic expects to initiate two Phase II studies. The first study is designed to demonstrate the effect of IMVAMUNE® as a booster vaccination (re-vaccination of subjects previously vaccinated with IMVAMUNE®) and the second to investigate the safety and immunogenicity of IMVAMUNE® in an elderly population.
Cancer immunotherapy
Breast cancer Currently patients with Her-2 positive, metastatic breast cancer are being enrolled in two clinical Phase I/II studies performed in three countries. The first study is ongoing in California, USA. The second study is enrolling patients in multiple centers in Serbia and Poland. In the US study, metastatic cancer patients are vaccinated after they receive chemotherapy, in the European study chemotherapy and vaccination are combined. Patients may or may not receive Herceptin® concurrently. The studies are enrolling patients as planned and no drug-related severe adverse events have been reported thus far. Initial data regarding the patients' immune responses are expected in second quarter of 2008.
Prostate cancer An Investigational New Drug application (IND) was filed with the US FDA in December 2007 to start a clinical study in hormone-refractory prostate cancer patients. This Phase I/II study will be performed in the US and is currently planned to enroll 18 patients starting in second quarter 2008.
Infectious diseases
MVA-BN® HIV polytope Bavarian Nordic has completed one of three ongoing studies with MVA-BN® HIV polytope. As announced on 6 November 2007 in the interim report as of 30 September 2007, the company refocused its HIV strategy in order to incorporate the data generated from the MVA-BN®HIV polytope and MVA HIVnef programmes into the MVA-BN®multiantigenprogramme, which continues as the company's HIV programme.
Preliminary results from the concluded study confirm the company's previous clinical findings in that MVA-BN® based vaccines appear safe in immune compromised populations and have the ability to stimulate a broad T cell response.
MVA-BN® HIV multiantigen MVA-BN®HIV multiantigen is designed as both a prophylactic and a therapeutic vaccine candidate and has been designed to incorporate the knowledge and success of previous MVA-BN® HIV studies.
An IND has been filed with the FDA and a Phase I/II study to investigate the safety and immunogenicity of the vaccine in 15 HIV-infected subjects will be initiated in second quarter of 2008.
Measles Bavarian Nordic has previously shown that IMVAMUNE® and MVA-BN® based vaccines (including the measles vaccine candidate) are safe and highly immunogenic in new born animals. These findings offer the opportunity to develop MVA-BN® as a platform vaccine technology for childhood vaccines that have the potential to stimulate protective immune responses in children under the age of 1 year.
The first Phase I study that was initiated late in 2007 evaluated the safety and immunogenicity of the measles vaccine in 30 healthy adult subjects. The immunogenicity data from this study have revealed that the vaccine is highly immunogenic. As expected, the majority (93%) of the enrolled subjects already had measurable antibodies against measles, due either to prior vaccination or measles infection. However, following the first vaccination with the MVA-BN® vaccine the antibody response were significantly boosted in nearly all subjects. Indeed, the levels of the antibody responses against measles were approximately 4-fold greater than those previously recorded in adults boosted with a commercial measles vaccine. These results confirm animal studies that have also demonstrated that the MVA-BN® vaccine stimulates significantly higher antibody responses in adult mice compared to a commercial measles vaccine and these same levels of immunity are induced in newborn mice by the MVA-BN® measles vaccine.
Following these encouraging results Bavarian Nordic plans to conduct a Phase I study in children in the second half of 2008.




Next milestone


Smallpox (IMVAMUNE®)

Phase II

Phase III (2009)



Phase I (2008)


Breast Cancer

Phase I/II

Safety and immunogenicity data (2008)

Prostate Cancer


Phase I/II (Q2, 2008)

Infectious diseases

HIV multiantigen


Phase I/II (Q2, 2008)

Measles and RSV

Phase I

Phase I in children (H2, 2008)


Changes in management As announced on 31 March 2008, Bavarian Nordic has appointed new members of the Executive Management. Anders Gram will replace René Djurup, Executive Vice President Technical Operations, who decided to resign from his position as of 31 May 2008. Ole Larsen has been appointed as new CFO and will join the Company on 1 October 2008 at the latest. Reiner Laus, President & CEO of Bavarian Nordic's US subsidiary, BN ImmunoTherapeutics Inc., will also join the Executive Management, which hereafter consists of the following:
Anders Hedegaard, President & CEO Nicolai Buhl Andersen, EVP Commercial Affairs Paul Chaplin, EVP Research & Development Reiner Laus, EVP and CEO of BN ImmunoTherapeutics Inc. Morten Max Rasmussen, EVP Transactions, Legal & IPR Anders Gram, EVP Technical Operations Ole Larsen, EVP Finance
Report for the period (1 January - 31 March 2008, un-audited) The comparison figures for the same period 2007 are stated in parenthesis.
The revenue was DKK 14 million (DKK 29 million). The revenue derives from sale of IMVAMUNE® and from the RFP-2 contract with the US health authorities. The activity of this development contract was very low in the first quarter, which is the reason for the lower revenue compared to the same period last year.
Profit before tax was a deficit of DKK 62 million (deficit: DKK 52 million).
The Group's expenses for production increased to DKK 32 million (DKK 18 million). The increase is due to the start up of routine production at the Kvistgaard facility.
In the first quarter 2008 the Group's research and development expenses were DKK 37 million, of which DKK 9 million were development costs from the RFP-3 contract, which are capitalised as intangible assets in progress.
Sales and administrative expenses were DKK 21 million (DKK 19 million). The increase primarily derived from increase in commercial activities and IT-expenses.
As of 31 March 2008 the Group's net free liquidity was DKK 891 million (DKK 599 million).
The expectations for the financial result for the full year 2008 is still a revenue in the region of DKK 180 million, and a pre-tax loss in the region of DKK 225 million. The main part of the revenue comprises of a milestone payment under the RFP-3 contract, which is expected in the second half of 2008.
Statement from the Board of Directors and Corporate Management The Board of Directors and Corporate Management have, today reviewed and approved Bavarian Nordic A/S' interim report for the period 1 January to 31 March 2008.
The interim report has been prepared in accordance with IAS 34 "Presentation of interim reports" as adopted by the EU and additional Danish disclosure requirements for interim reports of listed companies, including those of OMX Nordic Exchange in Copenhagen. The interim report has not been audited or reviewed by the company's auditors.
In our opinion, the interim report gives a true and fair view of the group's assets and liabilities and financial position as of 31 March 2008 and the results of the group's activities and cash flows for the period 1 January to 31 March 2008.
In our opinion, the management's review provides a true and fair description of the development in the group's activities and financial affair, the results for the period and the group's financial position as a whole as well as a description of the most important risks and uncertainty factors faced by the group.
Kvistgård, 29 April 2008
Corporate Management:
Anders Hedegaard President and CEO
Board of Directors: Asger Aamund, Chaiman of the Board Eigil Bjerl Nielsen Erling Johansen Flemming Pedersen