Bavarian Nordic Receives USD 25 Million Milestone Payment from the U.S. Government for Fulfilling Contract Milestones

Bavarian Nordic has invoiced the U.S. authorities another milestone
payment of USD 25 million as allowed under the RFP-3 contract to
manufacture and deliver 20 million doses of the company's IMVAMUNE®
smallpox vaccine. Thus the company has fulfilled a number of
significant milestones in the contract.

The income will be recognised as revenue in the financial statements
for 2007.

As announced previously this year, Bavarian Nordic has already
received an advance payment of USD 50 million and a milestone payment
of USD 25 million. Thus the company has received USD 100 million in
total this year for the fulfilment of significant milestones in the
RFP-3 contract. In 2008 the company expects to receive yet another
milestone payment of USD 25 million. All these payments have been
covered by forward rate agreements.

The milestone payment does not affect the previously announced
guidance for the company's 2007 result.

Anders Hedegaard, President & CEO of Bavarian Nordic, said:"Receiving
another milestone payment from the RFP-3 contract concludes a
successful year for Bavarian Nordic. We have fulfilled the ambitious
goals set for 2007 in the contract with the U.S. Department of Health
and Human Services and we find this very satisfactory and encouraging
for our ongoing collaboration. "




Asger Aamund
Chairman



Contacts:

Anders Hedegaard, President & CEO
Telephone: +45 33 26 83 83

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