The Board of Directors of Bavarian Nordic A/S approved the Company's interim
report for the period of 1 January to 31 March 2007, at an ordinary board
meeting held today.
During the period 1 January - 31 March 2007 Bavarian Nordic realised revenues
of DKK 28.8 million (as of 31 March 2006: DKK 35.8 million) and a loss before
tax of DKK 51.7 million (as of 31 March 2006: loss of DKK 60.9 million). The
company's expectations for the full year 2007 result are maintained at revenues
of around DKK 130 million and a loss before tax of around DKK 350 million. The
U.S. Government has notified Bavarian Nordic of intent to acquire 20 million
doses of IMVAMUNE® smallpox vaccine.
KEY HIGHLIGHTS
• In March 2007 the company succesfully completed a rights issue increasing the
equity and cash preparedness with DKK 443 million. The rights issue added
1,275,236 new shares, each with a nominal value of DKK 10, to the share
capital.
• As part of the preparations for the delivery of smallpox vaccines for among
others USA, Bavarian Nordic has initiated commercial scale production of
IMVAMUNE® on the Kvistgård facility in the first quarter of 2007. During this
period 5 batches were produced, including 3 validation batches.
• In Bavarian Nordic's patent infringement action against Acambis at the U.S.
International Trade Commission (ITC), the ITC issued on 21 February 2007 an
order vacating the initial determination, including its assessment of patent
invalidity. The entire investigation will be heard again before the
Administrative Law Judge with a new target completion date of 19 October 2007.
• In February 2007, Bavarian Nordic A/S announced that it agreed with
GlaxoSmithKline not to pursue a collaboration for the production and marketing
of IMVAMUNE®, as contemplated in a Memorandum of Understanding signed by the
two companies in 2004 at a time where Bavarian Nordic's own production facility
was not established. Now Bavarian Nordic has the capacity to produce the
forthcoming RFP-3 order.
DEVELOPMENTS AFTER THE CLOSE OF THE FISCAL PERIOD (1 APRIL - 26 APRIL 2007)
U.S. Government notifies Bavarian Nordic of intent to acquire 20 million doses
of IMVAMUNE®
Following a competitive RFP process, Bavarian Nordic has received notification
from the U.S. Department of Health and Human Services (HHS) that it intends to
procure 20 million doses of the company's third-generation IMVAMUNE® smallpox
vaccine for the strategic national stockpile. Under the framework of the
contract Bavarian Nordic must register IMVAMUNE® for healthy people and extend
the license to people who are immune-compromised.
While the principal terms of the agreement have been reached, the contract is
currently being finalized. It is expected to be the first HHS procurement
contract under the BioShield program since enactment of the Pandemic and
All-Hazards Preparedness Act in December 2006.
The HHS notification continues the long-standing collaboration between Bavarian
Nordic and the U.S. Government on the development and production of MVA as a
safe smallpox vaccine. The decision to award the RFP-3 contract to Bavarian
Nordic is a conclusive recognition of the company's substantial achievements in
developing the MVA platform technology which has many applications for future
vaccines. Bavarian Nordic now enters its industrial phase which marks an
important milestone in the strategic development of the company.
Canadian government issues RFP for the acquisition of an MVA-based smallpox
vaccine
The Department of National Defence (DND) in Canada has issued a request for
proposal for the acquisition of MVA based smallpox vaccines for the protection
of 10,000 people and an option for protecting another 10,000 people. A
prerequisite for the order is that the supplier must register the vaccine for
the Canadian market.
This request for proposal is important as it illustrates that MVA based
smallpox vaccines are gradually being accepted as the preferred choice for
protecting first-line responders and for replacing and expanding national
stockpiles for the general population in the event of a smallpox outbreak.
Bavarian Nordic is preparing its proposal for the Canadian government.
Anders Hedegaard appointed new CEO of Bavarian Nordic. Peter Wulff stays on in
Corporate Management.
After 13 years as President and CEO of Bavarian Nordic Peter Wulff has wished
to step down. Anders Hedegaard is appointed new President and CEO and will take
up his position November 1 or before.
Anders Hedegaard comes from a position as member of ALK-Abelló's Corporate
Management in charge of Business Operations. Anders Hedegaard holds a M.Sc.
degree in chemical engineering specialising in molecular biology. Anders
Hedegaard's management career includes executive positions with Aga, Foss and
Novo Nordisk.
Peter Wulff takes over a new position in Corporate Management as Head of
Business Development including existing and new scientific commercial
activities and projects.
Warrants
During the period from 18 April 2007 until 2 May 2007 warrants awarded the
Board, Management and other employees can be exercised, cf. Articles 5c, 5d og
5e of the Articles of Association. Upon full subscribtion of the new shares
issued based on the program (up to 185,812 new shares of a nominal value of DKK
10) the company will receive gross proceeds of approximately DKK 50 million.
Outstanding warrants as per 31 March 2007
Programme Exercise Price (DKK) Exercise Period Board of Directors
(Warrants) Corporate Management (Warrants) Other management and employees
(warrants) Terminated employees/board members (warrants) Total
2004 283 18.4.-2.5.07 17,097 17,100 86,639 53,007 173,843
2004 437 18.4.-2.5.07 8,549 8,549
2004 590 18.4.-2.5.07 3,420 3,420
Total 2004 programme 17,097 17,100 98,608 53,007 185,812
2006 542 2 weeks in Q4-2009 and/or Q2-2010 21,116 15,838 145,703 2,111 184,768
Total 38,213 32,938 244,311 55,118 370,580
REPORT FOR THE PERIOD (1 JANUARY - 31 MARCH, 2007, UN-AUDITED)
Financial review
Revenue for the first quarter of 2007 was DKK 28.8 million (as of 31 March
2006: DKK 35.8 million). Revenue was derived from the ongoing contracts with
the U.S. Government health authorities (the RFP-I and RFP-II contracts).
Revenue is lower than estimated, which is due to postponement of a few clinical
trials under the RFP-2 contract. These trials will be adapted to the upcoming
RFP-3 contract in collaboration with the U.S. health authorities.
Result before tax was a loss of DKK 51.7 million (as of 31 March 2006: loss of
DKK 60.9 million) which is at level with the same period 2006.
Research and development costs totalled DKK 43.3 million (as of 31 March 2006:
DKK 34.7 million), which was slightly higher than the same period 2006, due to
more activity in this area.
Sales costs and administrative expenses decreased to DKK 18.6 million (as of
31/03/06: DKK 30.4 million) . The decrease is attributed to lower legal fees in
connection with ongoing lawsuits and patents.
The company completed a rights issue increasing the equity and cash
preparedness with DKK 443 million. The share capital was increased with a
nominal value of DKK 12,752,360 (1,275,236 new shares, each DKK 10 nominal
value). The new shares were offered with pre-emption rights to the existing
shareholders at the ratio of 5:1 with a subscription price of DKK 365 per share
of DKK 10.
The net proceeds from the rights issue has resulted in net liquidity for the
group of DKK 600 million as of 31 March 2007. The net liquidity will be further
strengthened by DKK 50 million due to exercise of a warrants programme which
will be completed on 2 May 2007.
The group's cash burn rate is currently approximately DKK 300 million per year.
With the expected payment schedule from the RFP-3 contract, the company has
ensured sufficient treasury to advance its research and development programmes
and for fulfilling the RFP-3 contract.
Financial guidance for the full year 2007 remain unchanged with expected
revenues of around DKK 130 million and a loss before tax of around DKK 350
million. Potential effect from the upcoming RFP-3 order has not been included
in these expectations.
RESEARCH AND DEVELOPMENT
IMVAMUNE® - third generation smallpox vaccine
In February Bavarian Nordic reported the first safety and immunogenicity data
of an MVA based smallpox vaccine in HIV infected subjects. The data represented
a land mark in the development of IMVAMUNE® as the trial in 151 people
demonstrated that IMVAMUNE® was not only well tolerated, but was as immunogenic
in HIV infected subjects as healthy people.
Ongoing Phase II studies
Three Phase II trials, which are pivotal not only for an application of
Emergency Use Authorization in the USA, but also registration of IMVAMUNE®, are
currently on-going:
• The initial immune data from the Phase II trial in 745 healthy subjects has
been completed and is currently being un-blinded to be incorporated into the
final study report. Submission of report to the FDA will trigger further
discussions with the US authorities on the clinical requirements for licensure
of IMVAMUNE®.
• In a multi-center study in the USA, all HIV-infected subjects are expected to
be enrolled and vaccinated by the end of 2007.
• A multi-center study has been initiated in Mexico and the USA investigating
the safety and immunogenicity of IMVAMUNE® in people diagnosed with atopic
dermatitis.
HIV vaccines
MVA nef
Promising efficacy data from the Phase II trial with MVA HIV nef was presented
at the Conference on Retroviruses and Opportunistic Infections (CROI) in Los
Angeles on 27 February 2007. Among the 37 subjects that interrupted HAART there
was a clear dose dependent related trend that those subjects vaccinated with
MVA HIV nef had a lower HIV count compared to the subjects vaccinated with
IMVAMUNE®, used in the control group. The analysis of the immune response is
continuing and expected August 2007. Based on these positive results, it is the
plan to investigate the efficacy of MVA HIV nef in a large-scale clinical
trial.
MVA-BN® HIV polytope
The first Phase I study for the MVA-BN® HIV polytope is investigating the
safety and immunogenicity of two different doses of the vaccine in 36 healthy
subjects. All subjects have been vaccinated and the immune data are expected by
the end of the year.
The second study is a Phase I/II trial in HIV infected subjects and currently 7
people have been vaccinated. Enrolment of all 30 subjects is still expected to
be completed by July 2007.
An additional Phase I study in healthy subjects is expected to be initiated in
the USA in the spring 2007. The study which is sponsored by the National
Institutes of Health (NIH), is designed to investigate MVA-BN® HIV polytope in
conjunction with a DNA vaccine. Bavarian Nordic is working with Pharmexa on the
programme.
Cancer Immunotherapy
Bavarian Nordic's subsidiary, BN ImmunoTherapeutics is currently preparing the
upcoming Phase I/II studies with the MVA-BN®-HER2 vaccine against breast
cancer. The first study is expected to be initiated in the first half of 2007.
The programme for a prostate vaccine is proceeding according to schedule and
clinical trials are expected to be initiated in the second half of 2007.
Childhood vaccines
Respiratory Syncytial Virus (RSV)
In the RSV program safety studies have been implemented that will support the
Phase I clinical trial planned for 2008. Moreover, to complement in-house
efficacy studies, Bavarian Nordic has entered into a collaboration with one of
the leading academic groups working with RSV at Imperial College London.
Measles
A dossier to support a Phase I trial for the measles vaccine candidate has been
filed in South Africa and the trial is expected to be initiated in July 2007.
PRODUCTION
Kvistgård: Commercial scale production initiated. New production technologies
under evaluation
As part of the preparations for the delivery of smallpox vaccines for among
others USA, Bavarian Nordic has initiated commercial scale production of
IMVAMUNE® on the Kvistgård facility in the first quarter of 2007. During this
period 5 batches were produced, including 3 validation batches. Extensive work
analysing the batches, which is necessary for releasing them for use in people,
has begun. The first batches are expected to be released in August 2007.
The production process has shown to be highly effective. Thus Bavarian Nordic
does not expect to hire a significant number of new employees for the
production.
As part of the company's efforts to improve and optimize its vaccine production
technology, Bavarian Nordic has entered into a collaboration with among others
the French company Vivalis to explore the possibility for growing the MVA-BN®
virus and recombinant vaccines derived from MVA-BN® in permanent cell lines.
Furthermore Bavarian Nordic has initiated the development of new techniques for
purification of MVA-BN® and recombinant vaccines.
Bavarian Nordic's pilot maufacturing plant in Berlin has produced yet another
batch of the MVA-BN® HER-2 breast cancer vaccine candidate for clinical trials.
Furthermore batches of prostate cancer, RSV and MVA-BN® HIV multiantigen
vaccines have been releases for preclinical trials.
LEGAL MATTERS
New MVA patent
In March 2007, the United States Patent and Trademark Office (USPTO) issued a
new patent on MVA to the company, thereby finally approving the patent
application for which a notice of allowance was issued to the Bavarian Nordic
in December 2006. For more information see stock exchange announcement no.
26-06, dated 18 December 2006.
ITC
In Bavarian Nordic's patent infringement action against Acambis at the U.S.
International Trade Commission (ITC), the ITC issued on 21 February 2007 an
order vacating the initial determination, including its assessment of patent
invalidity. The entire investigation will be heard again before the
Administrative Law Judge with a new target completion date of 19 October 2007.
Delaware
The substantive preparations are progressing for the forthcoming hearing in the
case pending at the U.S. District Court for the District of Delaware. A
pre-trial conference will take place on 8 May 2007, and the jury trial is
scheduled for 7 June 2007.
Statement from the Board of Directors and Corporate Management
The Board of Directors and Corporate Management have, as of today, reviewed and
approved Bavarian Nordic A/S' third quarterly report for the period 1 January -
31 March, 2007.
The interim report, which is un-audited, is prepared in accordance with the
provisions on recognition and agreement set aside in the International Finance
Reporting Standards (IFRS) as approved by the EU, and the additional Danish
requirements for submission of interim reports for companies listed on the
Copenhagen Stock Exchange.
We consider that the chosen accounting policies applied are appropriate. It is
our opinion, that the interim report gives a true and fair view of the group's
assets, liabilities, financial position, results, and cash flow.
Kvistgård, 26 April 2007
Corporate Management
Peter S. Wulff
President and CEO
Board of Directors:
Asger Aamund Eigil Bjerl Nielsen Erling Johansen Flemming Pedersen
Chairman
Contacts: Peter Wulff, President & CEO
Telephone: +45 33 26 83 83
Media: United Kingdom Media: United States of America
Mary Clark, Capital MS&L Elizabeth Dempsey Becker, Bavarian Nordic Inc.
Telephone: +44 207 307 5330 Telephone: +1 202 536-1576
About Bavarian Nordic A/S:
Bavarian Nordic (CSE: BAVA) is a leading international biopharmaceutical
company developing and producing inno¬vative vaccines to prevent and treat
infectious diseases and cancer. With operations in Denmark, Germany, the USA,
and Singapore, Bavarian Nordic employs over 200 people. Bavarian Nordic's
patented technology, MVA-BN®, is as been demonstrated in clinicial studies, one
of the world's safest, multivalent vac¬cine vectors for the development of
vaccines against various infectious diseases such as smallpox, HIV/AIDS, as
well as against breast and prostate cancer. Several MVA-BN®-based HIV and
smallpox vaccines are in clinical Phase I and Phase II trials. Bavarian Nordic
has ongoing development contracts with the US government to develop IMVAMUNE®
as a safe third-generation smallpox vaccine. Bavarian Nordic has supplied
several other governments with smallpox vaccines.
For more information please visit www.bavarian-nordic.com
“Safe Harbour" Statement Under the Private Securities Litigation Reform Act of
1995:
Except for the historical information contained herein, this release contains
"forward-looking state¬ments" within the meaning of the Private Securities
Reform Act of 1995. No "forward-looking state¬ment" can be guaranteed, and
actual results may differ materially from those projected. Bavarian Nor¬¬dic
undertakes no obligation to publicly update any "forward-looking statement",
whether as a re¬sult of new information, future events, or otherwise.
Additional information regarding risks and unce¬rtainties is set forth in the
current Annual Report, which we incorporate by reference.
Stockwise Resumé
Bavarian Nordic A/S - Interim Report as of 31 March 2007
Main and key figures (un-audited)
All figures are for the Bavarian Nordic Group.
Accounting policies
This interim report, which is unaudited, has been prepared in accordance with
the recognition and measument policies in the International Financial Reporting
Standards (IFRS/IAS) as adopted by the EU and additional Danish disclosure
requirement for interims report for listed companies. The interim report does
not include interim report for the parent company.
The accounting policies used in the interim report are consistent with those
used in the Annual Report 2006. Please refer to the annual report for a
detailed description of the accouting policies applied including defintion of
the listed key figures defined and calculated in accordance with
"Recommendations and Financial ratios 2005" issued by the the Danish
Association of Financial Analysts.
Income Statements
DKK million 1/1-31/3 2007 1/1-31/3 2006 1/1-31/12 2006
Revenue 28.8 35.3 175.3
Production costs 18.0 26.8 136.3
Gross profit 10.8 8.5 39.0
Research and Development costs 43.3 34.7 118.4
Sales and Administrative costs 18.6 30.4 124.4
Total operating costs 61.9 65.1 242.8
Income before interests and tax (51.1) (56.6) (203.8)
Financial income 3.4 1.2 15.0
Financial expenses (4.0) (5.5) (16.0)
Income before company tax (51.7) (60.9) (204.8)
Tax 11.1 14.8 43.9
Net profit (40.6) (46.1) (160.9)
Balance sheets
DKK million 31/3 2007 31/3 2006 31/12 2006
Assets
Fixed assets 417.8 377.1 421.2
Deferred tax assets 159.3 123.0 147.0
Inventories 11.9 14.2 12.9
Receivables 40.8 36.8 40.6
Total cash and cash equivalents 679.4 534.5 332.7
Assets 1,309.2 1,085.6 954.4
Equity and liabilities
Shareholders´ equity 1,094.4 814.9 691.4
Non-current liabilities 123.9 217.3 150.6
Current liabilities 90.9 53.4 112.4
Total liabilities and shareholders´ equity 1,309.2 1,085.6 954.4
Cash Flow statements
DKK million 1/1-31/3 2007 1/1-31/3 2006 1/1-31/12 2006
Cash flow from operating activities (57.6) (20.9) (194.1)
Cash flow from investments activities (97.2) (407.0) (177.2)
Cash flow from financing activities 400.7 204.3 203.7
Net changes in cash and cash equivalents of period 245.9 (223.6) (167.6)
Net liquidity as of 1 January 101.4 269.0 269.0
Net liquidity as of 31 March 347.3 45.4 101.4
Bank and cash funds 347.3 45.4 101.4
Securities - highly liquid bonds 332.1 489.1 231.3
Cash and cash equivalents as of 31 March 679.4 534.5 332.7
- Bank overdraft - - -
Trusted/pledged funds (80.0) (115.0) (115.0)
Credit lines 20.0 45.0 20.0
Cash preparedness 619.4 464.5 237.7
Group Key Figures
3 months 3 months Full year
31/3 2007 31/3 2006 31/12 2006
Earnings per share (5.5) (7.9) (25.8)
PE, price/earnings ratio 143.0 127.8 108.4
Share price/Net assets value per share 3.6 3.5 5.4
Shareholders equity share 84% 75% 72%
Number of full-time employees at the end of the period 228 242 233
Shareholders equity
Reserves for Share Retained exchange rate Equity Equity Equity
2007 capital earnings adjustments Group Minority Total
Shareholders equity January 1, 2007 63.8 624.2 (1.2) 686.8 4.6 691.4
Exchange rate adjustments regarding
foreign companies (0.4) (0.4) (0.4)
Transactions recorded on equity (0.4) (0.4) (0.4)
Net profit (39.8) (39.8) (0.8) (40.6)
Net income (39.8) (0,4) (40.2) (0.8) (41.0)
Revenue from issues of new shares 12.8 452.7 465.5 465.5
Expenses from issues of new shares (22.1) (22.1) (22.1)
Share-based payment 0.6 0.6 0.6
Other transactions 12.8 431.2 444.0 444.0
Shareholders equity 31 March 2007 76.6 1,015.6 (1.6) 1,090.6 3.8
1,094.4
Reserves for Share Retained exchange rate Equity Equity Equity
2006 capital earnings adjustments Group Minority Total
Shareholders equity January 1, 2006 58.0 570.4 (0.2) 628.2 1.9 630.1
Exchange rate adjustments regarding
foreign companies (0.3) (0.3) (0.3)
Transactions recorded on equity (0.3) (0.3) (0.3)
Net profit (45.4) (45.4) (0.7) (46.1)
Net income (45.4) (0.3) (45.7) (0.7) (46.4)
Revenue from issues of new shares 5.8 231.6 237.4 237.4
Expenses from issues of new shares (6.2) (6.2) (6.2)
Other transactions 5.8 225.4 231.2 231.2
Shareholders equity 31 March 2006 63.8 750.4 (0.5) 813.7 1.2 814.9
