Bavarian Nordic Updates on Business Activities and Financial Outlook

Kvistgård, Denmark, December 18, 2009 - Bavarian Nordic A/S (OMX: BAVA) announced today an update on its business activities and financial expectations for 2009 and 2010.

  • Rights Issue to be carried out in the beginning of 2010
  • Responses to FDA's observations now completed. Delivery allowance under the RFP-3 contract expected in the first half of 2010
  • Financial outlook for 2009 and 2010
  • IMVAMUNE® publications in various scientific journals
  • Acquisition of shares in BN ImmunoTherapeutics Inc. completed
  • Award of warrants to the management and certain employees

Rights Issue As previously announced, Bavarian Nordic is still planning to carry out a rights issue in the beginning of 2010 with pre-emptive rights for existing shareholders. The final timing of rights issue will be determined under consideration of market conditions among other things.

With a fully subscribed rights issue, the company expects proceeds in the level of DKK 300 million. The use of proceeds will ensure the continued momentum in the production of IMVAMUNE® to ensure speedy and sufficient delivery of the 20 million doses once delivery allowance is granted by the US authorities and allow the company to continue the phase III preparations for PROSTVAC™.

Status of the RFP-3 contract Bavarian Nordic is still awaiting delivery allowance from the US authorities in order to initiate the delivery of 20 million doses of IMVAMUNE® under the RFP-3 contract.

The delivery allowance will be granted upon the U.S. Food and Drug Administration's (FDA) review and acceptance of the responses that Bavarian Nordic has submitted, following the observations made by the FDA during their inspection of the IMVAMUNE®manufacturing facilities in the spring 2009.

In connection with the release of its third quarterly results, Bavarian Nordic announced that the company would be able to initiate the delivery of IMVAMUNE® before the end of 2009 if delivery allowance was granted no later than beginning of December.

Since the inspection, Bavarian Nordic has continuously submitted its responses to the FDA, with the last response submitted in the beginning of December. During this time, the company has had a positive dialogue with the US authorities. However, since the company has not yet received the allowance, it now expects to receive it in the first half of 2010.
Outlook for 2009 and 2010 Based on the above, the company's expectations for the financial result for 2009 will, as previously announced, reflect the lower level of the range that was announced in the third quarterly report. For 2009, the company now expects revenues in the level of DKK 75 million. The deviation from the previously announced range is due to accrual of revenue from the RFP contracts (RFP-2 and RFP 3) into 2010. The result for the year is still expected to be a loss before tax in the level of DKK 325 million. The net free liquidity at year-end is still expected to be around DKK 175 million.

For 2010, Bavarian Nordic expects to deliver and invoice 4-5 million doses of IMVAMUNE® including already produced doses which are currently on stock. The remainder of the 20 million doses is expected to be evenly delivered in 2011 and 2012. The RFP-3 deliveries and revenue from already entered contracts, including the ongoing RFP-2 contract and the RFP contract for freeze-dried IMVAMUNE®, are expected to generate total revenues in 2010 at the level of DKK 475 million. Potential IMVAMUNE® contracts with other countries are not included in the forecast. Increased costs, including costs for the continued Phase III preparations for PROSTVAC™ and the continued increase in the production activities for IMVAMUNE®, will affect the 2010 result, which is expected to be a loss before tax in the level of DKK 250 million. The estimate is based on a USD/DKK exchange rate on the current level. Investments in 2010 are primarily related to scale-up of the production of IMVAMUNE® at the Kvistgård facility, preparations for the production of PROSTVAC™ at the Berlin facility, capitalised clinical development costs under the RFP-3 contract and general maintenance. These investments are expected to amount to approximately DKK 90 million, of which one third relates to clinical development of IMVAMUNE®.

Based upon the assumptions for 2010, including among others that the delivery allowance for IMVAMUNE® to US authorities is obtained no later than first half of 2010 and that a credit facility in the amount of DKK 150 to 200 million to finance working capital is obtained, Management expects cash preparedness in the range of DKK 225 to 275 million by the end of 2010.

Provided that the rights issue is completed with the Maximum Proceeds of DKK 300 million, and that the RFP-3 contract and marketing of IMVAMUNE® will be fulfilled according to plan, Bavarian Nordic expects to have sufficient funds for its operations until the end of 2012, where upon the company expects its cash preparedness to cover the operational needs for an order-producing company.
Other pipeline activities Bavarian Nordic is continuing the preparations for the pivotal Phase III studies with IMVAMUNE® and PROSTVAC™, both expected to enter Phase III in 2010. Increased activity within these programmes has caused a slight delay in a couple of the company's other projects, leading to the postponement of completion of recruitment and analysis of data. However, the overall schedule for these projects will not be affected. Specifically, the new Phase I/II study with the breast cancer vaccine candidate; MVA‑BN® HER2 will not be initiated before 2010. The preliminary data with the MVA-based prostate cancer vaccine candidate, MVA-BN® PRO is expected in the first quarter of 2010 and finally, the recruitment of the last subjects in the measles programme will occur in the first quarter of 2010.

IMVAMUNE® To date, more than 2,800 subjects have been vaccinated with IMVAMUNE® in 14 completed or ongoing clinical studies. IMVAMUNE® has induced strong vaccinia-specific immune responses, while demonstrating an excellent safety profile in healthy as well as in at risk populations with contraindications to traditional smallpox vaccines such as Dryvax® and ACAM2000™, e.g. patients with Atopic Dermatitis (AD) and HIV.

A number of key clinical data have been published during 2009. This includes:

  • A recent publication of a phase II dose finding clinical study.Vaccine. 2009 Nov 24
  • An independent review, summarizing the latest clinical findings with IMVAMUNE®. Expert Rev Vaccines. 2009 Jan;8   
  • A study performed by the CDC demonstrating that the sera from subjects vaccinated with IMVAMUNE® induced a comparable, if not superior, ability to neutralize variola, the causative agent of smallpox in man, compared to the sera from people vaccinated with Dryvax®. J Gen Virol. 2009 Aug;90
  • Additional animal studies have shown that IMVAMUNE® induces a comparable efficacy as the currently licensed smallpox vaccine (ACAM2000™) in two monkey challenge models, while an independent study demonstrated that IMVAMUNE® was comparable, if not superior, as a traditional smallpox vaccine at protecting rabbits from a lethal challenge with rabbitpox. Vaccine. 2009 Sep 4;27

MVA-BN® Anthrax Bavarian Nordic has with interest followed BARDA's recent decision to cancel the Request for Proposal (RFP) for the acquisition of 25 million doses of an rPA anthrax vaccine, while also issuing special instructions under the existing Broad Agency Announcement (BAA) to specifically solicit solutions for developing an rPA anthrax vaccine.

Bavarian Nordic's anthrax vaccine candidate, MVA-BN®Anthrax, is currently in preclinical studies with anticipated initiation of clinical studies in 2010. The vaccine has a number of key advantages in comparison to other competitive vaccines:

  • The vaccine is designed as a prophylactic vaccine against both smallpox and anthrax, two of the highest biological threats
  • The manufacturing will be based on the existing validated IMVAMUNE® process and can be performed at the company's existing facilities
  • The vaccine will be based on the same freeze-dried formulation currently being validated under a recently announced BARDA contract for IMVAMUNE®
  • The freeze-dried formulation is planned to ensure a shelf-life of more than 5 years, exceeding the current requirements from BARDA

Given the recent development at BARDA, Bavarian Nordic considers its vaccine candidate to be in a competitive position due to its significant advantages. The company plans to respond to the recent request for solutions for developing an anthrax vaccine.




Next milestone


Smallpox (IMVAMUNE®)

Phase II

Phase III (2010)



Phase I (2010)



Phase II

Phase III (2010)

Breast Cancer  (MVA-BN®-HER2)

Phase I/II

Initiate new Phase I/II study (2010)

Prostate Cancer (MVA-BN® PRO)

Phase I/II

Phase I/II data update (2010)

Infectious diseases

HIV multiantigen

Phase I/II

Identify partner for full Phase II

Measles and RSV

Phase I

Complete recruitment (Q1, 2010)


Acquisition of shares and buy back of stock options in BN ImmunoTherapeutics Inc. completed Bavarian Nordic has completed the purchase of 400,521 shares and buy back of stock options in the US subsidiary, BN ImmunoTherapeutics Inc. Subsequently, Bavarian Nordic now holds 100% of the share capital in the subsidiary.

As previously announced, on November 11, 2009, Bavarian Nordic entered into a conditional agreement for the purchase of 400,521 shares in the US subsidiary, BN ImmunoTherapeutics Inc. from the CEO and President Reiner Laus and two former employees in the subsidiary. Furthermore, Bavarian Nordic offered to buy back stock options from employees in the subsidiary.

The transaction has now been completed, among other things, as a result of the acceptance by the share holders and the stock option holders of BN ImmunoTherapeutics Inc.

As partial consideration, Bavarian Nordic A/S increases its share capital and issues a total of 136,177 new shares, each with a nominal value of DKK 10 to the previous holders of shares in BN ImmunoTherapeutics Inc. The new shares will be admitted to trading and officially listed on NASDAQ OMX Copenhagen, expectedly by the end of December 2009.

We refer to the company announcement no. 26/2009 for further details.

After the issue of new shares, the company's share capital comprises of nominally DKK 79,517,450 divided into 7,951,745 shares each with a nominal value of DKK 10.

Bavarian Nordic awards warrants to management and certain employees The Board of Directors in Bavarian Nordic A/S has decided to award warrants to members of management, certain employees in the Company and its subsidiaries and the Board of Directors. The Board decision is made in accordance with the shareholder authorisation for the Board of Directors adopted as Article 5f of the Articles of Association and the Company's guidelines regarding incentive programs. The award is made by the Board of Directors and exercise is limited by and governed by the Danish Act on Options for Employees (the Stock Option Act/aktieoptionsloven) regarding termination of employment prior to exercise of warrants.

A total of 270,000 warrants are awarded for subscription of up to 270,000 shares of a nominal value of DKK 10 at an exercise price of DKK 184 per share. The exercise price is established as the average share price ("closing price") for the Company's share in a period of 15 business days prior to this day added a 15 % premium. However, the exercise price must at least be equal to the Company's average exchange-listed price today. In the event that the average exchange-listed price on the Company's shares today exceeds DKK 184 the exercise price shall be increased accordingly. If this becomes relevant the Company will make a separate announcement to NASDAQ OMX.

The warrants can be exercised wholly or partly in a period of 14 days commencing from the day of publication of the Company's Quarterly Report for the third quarter in 2012, from the day of publication of the Company's Quarterly Report for the first quarter in 2013, from the day of publication of the Company's Quarterly Report for the third quarter in 2013 and/or in a period of 14 days commencing from the day of publication of the Company's Quarterly Report for the first quarter in 2014.

Under this program the Board of Directors will receive a total of 25,000 warrants, CEO & President 20,000 warrants, members of executive management 75,000 warrants and certain employees in the Company and its subsidiaries a total of 150,000 warrants.

Referring to the Danish Securities Act, Section 28a it is announced that the following people, obliged to notify the Company of transactions involving Bavarian Nordic securities, are awarded warrants:  

Chairman of the Board Asger Aamund (5,000 warrants), other members of the Board of Directors Erling Johansen (5,000 warrants), Flemming Pedersen (5,000 warrants), Claus Bræstrup (5,000 warrants) and Gerard Van Odijk (5,000 warrants). CEO and President Anders Hedegaard (20,000 warrants), members of executive management Anders Gram (15,000 warrants), Morten Max Rasmussen (15,000 warrants), Steen Vangsgaard (15,000 warrants), Ole Larsen (15,000 warrants) and Paul Chaplin (15,000 warrants).

The value of each warrant equals DKK 48 and is calculated on the Black-Scholes model with a risk-free interest rate of 2.1 per cent and on the historical volatility of the shares. The calculation is based on a market value of the share of DKK 149 per share.

The award of warrants will incur consequential amendments to the Articles of Association.