Bavarian Nordic's Contract for Development of a Freeze-dried Version of IMVAMUNE® Smallpox Vaccine Extended to a Total Value of USD 94 million

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Kvistgård, Denmark, April 11, 2011 - Bavarian Nordic A/S (OMX: BAVA) announced today that the U.S. Government through the Biomedical Advanced Research and Development Authority (BARDA) has increased the value of the existing contract to develop a freeze-dried version of IMVAMUNE® smallpox vaccine from USD 40 million to USD 94 million.

The contract provides funds to validate the new freeze-dried manufacturing process and the associated pre-clinical and clinical studies to support the development of a freeze-dried version of IMVAMUNE®. The increased funding will support additional studies and manufacturing activities to further advance the development of the freeze-dried version of IMVAMUNE® by the end of the contract period.

The freeze-dried contract was originally awarded in November 2009 and provided base year funding, followed by optional annual funding until 2014. The first option to fund the program during 2011 was already exercised by BARDA in 2010, providing a total of USD 27 million. As of March 1st, 2011 USD 5 million were recognized as revenue. While the additional funding will have no impact on revenues for 2011, revenues from the freeze-dried contract will increase in 2012 to 2014.

This contract offers an additional business opportunity to Bavarian Nordic as a freeze-dried formulation of IMVAMUNE®offers various new advantages in terms of a potential increased shelf-life compared to the current liquid-frozen formulation and would also improve the cold chain logistics during shipment. The freeze-dried development activities are performed in parallel to the licensure and supply activities of the current liquid-frozen IMVAMUNE® formulation under the RFP-3 contract.

To date, Bavarian Nordic has been awarded development and supply contracts for IMVAMUNE® from the US Government totalling more than USD 740 million.

Anders Hedegaard, President & CEO of Bavarian Nordic said: "This contract further strengthens our long-term collaboration with the U.S. Government in the development of medical countermeasures. While the deliveries of the first 20 million doses of IMVAMUNE® in the current liquid-frozen formulation to the US Strategic National Stockpile are currently ongoing, this contract allows us to focus on advancing our development to further improve IMVAMUNE® and we believe that this will form the basis for future new contracts with the U.S. Government."