U.S. Department of Health and Human Services awards an

Today the U.S. Department of Health and Human Services (HHS) has
awarded a contract to Bavarian Nordic for the manufacture and
delivery of 20 million doses of the company's MVA based smallpox
vaccine, IMVAMUNE®, for the protection of persons considered to be at
risk for smallpox.

* Total contract value: USD 1.6 billion
The total value of the deal, including contractual options, is USD
1.6 billion, of which the base contract amounts to USD 500 million.
In addition to the delivery of 20 million doses of IMVAMUNE®, the
base contract will support additional research and development of
the product to fulfil the requirements for the potential use of
IMVAMUNE® during an emergency. In addition, contract support will
be used to fund non-clinical and clinical studies necessary for
Bavarian Nordic to register IMVAMUNE® as a safe and effective
smallpox vaccine in healthy people with the U.S. Food and Drug
Administration.

* Advanced and and milestone payments: USD 150 million
Advanced and milestone payments in the contract amount to USD 150
million of which USD 125 million are paid in 2007 and 2008. This is
the first time a company has received any advanced payments as part
of a contract under the BioShield programme.

* Contractual options worth USD 1.1 billion
The optional part of the contract, with a value of USD 1.1 billion,
includes further clinical studies to extend the licence to include
people infected with HIV, children and the elderly, as well as
procurement of up to an additional 60 million doses of IMVAMUNE®.

* Contribution margin from the base contract is approx. DKK
1.5 billion.

* The delivery of the 20 million doses of IMVAMUNE®
The delivery of the 20 million doses to the Strategic National
Stockpile (SNS) will occur in stages once Bavarian Nordic has
fulfilled the requirements for the potential use of IMVAMUNE®
during an emergency.

* 2007 Financial guidance raised
Based on milestone payments in 2007 Bavarian Nordic raises its
financial guidance for the full year results from revenue of DKK
130 million to DKK 380 million and result before tax from a loss of
DKK 350 million to a loss of DKK 50 million.

Peter Wulff, President & CEO of Bavarian Nordic said:"We are proud and delighted that we now can deliver the world's first
safe and effective smallpox vaccine for the protection of U.S.
citizens against bioterrorism using smallpox virus. From the very
first presentation of IMVAMUNE® for the U.S. government in 2001, we
have had a constructive and trusting collaboration with the U.S.
authorities. Therefore we do not consider this contract to be a
single transaction, but rather the beginning of a long-term
partnership with the U.S government.

It is encouraging that the U.S. authorities through the
recently-established Biomedical Advanced Research and Development
Authority (BARDA), has enabled larger milestone payments in among
others contracts like ours. This ensures a positive cash flow in the
contract throughout the executing period."

Kvistgård, 4 June 2007

Asger Aamund
Chairman

Contacts:

Peter Wulff, President & CEO
Telephone: +45 33 26 83 83

Paul Chaplin, Executive Vice President & CSO
Telephone: +49 173 3791 737

Media: United Kingdom
Mary Clark, Capital MS&L
Telephone: +44 207 307 5330

Media: United States of America
Elizabeth Dempsey Becker, Bavarian Nordic Inc.
Telephone: +1 202 536-1576

Conference call
A conference call will be held Wednesday, June 6th 2007 at 9.30 a.m
(CET).

UK dial-in: +44 (0)20 7162 0025
US dial-in: +1 334 323 6201

For additional countries, please visit the company's website:
http://www.bavarian-nordic.com/conferencecall

U.S. Department of Health and Human Services awards an exclusive contract to Bavarian Nordic for the delivery of 20 million doses of IMVAMUNE®. Financial guidance for 2007 is raised with DKK 300 million.

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