Bavarian Nordic A/S - Interim Report for the period 1 January to 30 September 2008

In the first nine months of 2008 Bavarian Nordic generated revenue of
DKK 45 million and recorded a loss before tax of DKK 195 million. The
expectations for the financial result for the full year 2008 are
maintained at revenues in the level of DKK 180 million, and a pre-tax
loss in the level of DKK 225 million. The main part of the revenue
comprises of a milestone payment under the RFP-3 contract, which is
expected in the fourth quarter of 2008. As of 30 September 2008 the
Group's net free liquidity was DKK 782 million.

Significant progress was reported in Bavarian Nordic's pipeline
during the first 9 months of 2008. Two new projects have entered the
pipeline; Anthrax in preclinical development and PROSTVAC(TM) in late
Phase II development. With both the HIV multiantigen and the MVA-BN®
prostate cancer programme entering Phase I/II trials earlier this
year, the number of projects in clinical development has doubled
since the beginning of the year. Our most advanced new product,
PROSTVAC(TM) - a late stage prostate cancer vaccine candidate, was
acquired as part of a newly established partnership with the National
Cancer Institute. PROSTVAC(TM), which in clinical studies has shown
to extend lives with up to 8.5 months in patients with metastatic
prostate cancer, has potential to fulfil an unmet medical need and
offers a potential breakthrough and real hope for patients suffering
from advanced prostate cancer. Bavarian Nordic is now preparing for
Phase III studies with the vaccine, planned for first half 2010.

These recent events have bolstered the Company's strategy to
reinforce the cancer business area as announced earlier in 2008.

Key highlights from the period

*        In August, Bavarian Nordic announced a scientific
  partnership with National Cancer Institute in the US. As part of
  this collaboration, PROSTVAC(TM) - a candidate in late phase II
  clinical development was obtained.

*        More than 2,200 individuals have now been vaccinated with
  IMVAMUNE® - including more than 750 immune-compromised subjects.

Events after the period

*        In October, Bavarian Nordic announced positive Phase II
  results with PROSTVAC(TM). The results from the Phase II
  prospective randomized placebo-controlled study of 125 patients
  with advanced prostate cancer after 4 years of follow-up show that
  patients receiving PROSTVAC(TM) had a statistically significantly
  longer median overall survival by 8.5 months (p=0.015) compared to
  the control group. Currently the only approved treatment for
  advanced prostate cancer extends median overall survival by an
  average of approximately 2 months. In addition, PROSTVAC(TM) also
  had a favourable safety and tolerability profile.

Anders Hedegaard, CEO and President of Bavarian Nordic, commented on
the development: "We are successfully on track to complete our
primary objectives for 2008 that were established when we announced
our updated strategy earlier this year. Our recent acquisition of
PROSTVAC(TM) and the exciting Phase II results that were recently
reported have created an even stronger and well-balanced platform for
Bavarian Nordic's future development. Our pipeline is strengthened in
our strategic focus areas and we will now concentrate on taking our
most advanced projects, IMVAMUNE® and PROSTVAC(TM) into Phase III
within the next couple of years. This will take Bavarian Nordic to a
new level and it offers exciting opportunities to the company. The
company still expects to initiate delivery of the 20 million doses of
IMVAMUNE® under the RFP-3 contract in 2009."


Contact: Anders Hedegaard, President & CEO | +45 23 20 30 64

Webcast
In connection with the release of the interim report, a recorded
webcast presentation with CEO, Anders Hedegaard will be available on
the company' website from Tuesday, November 4th at 09:00 am. The
webcast can be accessed from www.bavarian-nordic.com/webcast