- Positive developments in the biodefence and cancer
business areas
- End of Phase II meeting lays down pathway for the
licensure of IMVAMUNE®
- Preparations for the delivery of IMVAMUNE® to the USA are
progressing according to plan
- PROSTVAC(TM) data have been accepted for an oral
presentation at the ASCO Annual Meeting
In the first quarter of 2009 Bavarian Nordic generated revenue of DKK
17 million and recorded a loss before tax of DKK 83 million. The
expectations for the financial result for the full year 2009 are
maintained at revenues in the region of DKK 375 million, and a
pre-tax loss in the region of DKK 225 million. As of 31 March 2009
the Group's net free liquidity was DKK 627 million.
Highlights from the period
* IMVAMUNE® - end-of-Phase II meeting held with the FDA
After concluding the Phase II development of IMVAMUNE®, Bavarian
Nordic held an end-of-Phase-II meeting with the US health authorities
(FDA) in the beginning of 2009 in order to discuss the Phase III
study design. Based on the meeting, Phase III studies are expected to
be initiated in 2010.
* PROSTVAC(TM) data presented at international cancer
symposium
In February 2009, data on PROSTVAC(TM) were presented at the
international cancer congress, 2009 Genitourinary Cancers Symposium
in Orlando, Florida. The data from three different studies once again
confirm the excellent safety and efficacy results previously
reported, and they support the further investigation of the vaccine
in patients suffering from advanced prostate cancer. The data also
indicates that PROSTVAC(TM) may be used in earlier disease settings
and thus in a larger patient group.
Important events after the period
* PROSTVAC(TM) data accepted for an oral presentation at
the ASCO Annual Meeting
Professor Philip Kantoff, MD, Dana-Farber Cancer Institute, Harvard
Medical School who is the principal investigator in the PROSTVAC(TM)
study will present the Phase II results at the 2009 American Society
of Clinical Oncology (ASCO) Annual Meeting in Orlando May 29 to June
2, 2009.
Anders Hedegaard, President & CEO of Bavarian Nordic said: "Bavarian
Nordic recorded strong progress in the first quarter of 2009. We
successfully held an end of Phase II meeting with the FDA on
IMVAMUNE® and have essentially agreed a pathway for the licensure of
the vaccine. Data from studies with our new prostate cancer vaccine,
PROSTVAC(TM) were presented at a major international cancer symposium
and we are pleased to see, that these data indicate that the vaccine
can be used in an earlier disease setting. This broadens the market
potential of the vaccine. We also got the acceptance from ASCO to
present PROSTVAC(TM) at this year's annual meeting in May and we see
this as a great recognition of the excellent potential of the
vaccine."
Contact
Anders Hedegaard, President & CEO. Phone +45 23 20 30 64
Management's review
Biodefence
IMVAMUNE®
More than 2.700 subjects have now been vaccinated with IMVAMUNE®.
Following the completion of the Phase II clinical development of
IMVAMUNE®, a third-generation smallpox vaccine, Bavarian Nordic has
held an end of Phase II meeting with the FDA in the beginning of 2009
to discuss the Phase III development. The meeting was a success and
there was an open and highly constructive discussion with the FDA.
This meeting represented the first ever formal discussions with the
agency to license a vaccine under the new legislation of the animal
rule - a new regulatory path which allows the efficacy of products
for indications like smallpox to be established in suitable animal
efficacy models. This marks a major regulatory milestone in the
successful development of IMVAMUNE®.
The animal efficacy models and phase III protocol have essentially
been agreed with the agency - outlining a clear path for licensure of
IMVAMUNE®. Once all protocols have been agreed with the FDA a
Vaccines Related Biological Product Advisory Committee (VRBPAC) will
be scheduled to ratify the license strategy. This exceptional review
path will likely push the initiation of the Phase III studies into
late 2010, leading to the submission of a BLA in 2013.
The outcome of the meeting has no impact on the delivery of vaccines
to the Strategic National Stockpile (SNS) under the RFP-3 contract
with the US government. The preparations for initiating delivery are
progressing according to plan. Bavarian Nordic expects to receive
confirmation from the US health authorities by mid-2009 that the
Phase II data package meets the conditions for using IMVAMUNE® in a
declared emergency situation, and subsequently the deliveries will be
initiated.
Cancer
PROSTVAC(TM)
In February 2009 PROSTVAC(TM) data were presented at the 2009
Genitourinary Cancers Symposium in Orlando, Florida.
The data, collected from three different studies confirm the
excellent safety and efficacy results previously reported, and they
support the further investigation in patients suffering from advanced
prostate cancer. Also, the data indicate that PROSTVAC(TM) can be
used in earlier disease settings and thus in a larger patient group.
MVA-BN®-HER2 - breast cancer
In February 2009, Bavarian Nordic reported data from its clinical
Phase I/II studies with its breast cancer vaccine, MVA-BN®-HER2, in
development as therapy of metastatic breast cancer patients, The
study met its primary endpoint with regards to safety and by showing
an immune response.
Additionally Bavarian Nordic has completed preclinical studies with
an improved version of the MVA-BN®-HER2 vaccine. In those studies,
the new vaccine induced up to 20-fold higher T-cell immune response
as compared to the original version. Furthermore, it proved to be
efficacious in additional tumour immunotherapy models in HER2
transgenic mice. The immunological situation regarding HER2 in those
mice strongly resembles the situation in humans.
Based on those encouraging data from both clinical and preclinical
studies Bavarian Nordic decided to advance the clinical development
of MVA-BN®-HER2 in further clinical studies with the new and improved
vaccine. Specifically, a new, single-site Phase I/II study in the US
will be initiated by 2009 and evaluate 24 patients in both metastatic
breast cancer as well as in an adjuvant therapy of breast cancer
setting.
Legal matters
Patent infringement suit against Oxford BioMedica
The patent infringement suit that Bavarian Nordic filed against
Oxford BioMedica will continue. In January 2009, Bavarian Nordic
filed a new complaint after the Judge for procedural reasons
dismissed the first complaint. If the court eventually should decide
to dismiss the suit this decision will bear no influence on the
substance of the patent case. It only influences the timing of the
start of the infringement case.
Organisational matters
Changes in management
On 27 March 2009 Steen Vangsgaard was appointed new Executive Vice
President, Commercial Affairs. Steen Vangsgaard holds an MBA from
London Business School and joins Bavarian Nordic from Actavis A/S,
where he previously held the position as Vice President Commercial
Operations. He succeeded Nicolai Buhl Andersen, who will leave the
company by 1 May 2009.
Warrants
The Board of Directors in Bavarian Nordic A/S has decided on 27 March
2009 to award warrants to a member of executive management and
employees in the Company and its subsidiaries. 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 25,000 warrants were awarded for subscription of up to
25,000 shares of a nominal value of DKK 10 at an exercise price of
DKK 124 per share. The exercise price has been established on the
basis of 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.
The warrants can be exercised wholly or partly in a period of 14 days
commencing from the day of publication of the Company's Annual Report
for 2011, from the day of publication of the Company's Half Yearly
Interim Results for 2012, from the day of publication of the
Company's Annual Report for 2012 and in a period of 14 days
commencing from the day of publication of the Company's Half Yearly
Interim Results for 2013.
Referring to the Danish Securities Act, Section 28a it is announced
that Steen Vangsgaard, who is a member of executive management and
obliged to notify the Company of transactions involving Bavarian
Nordic securities is awarded 5,000 warrants under the abovementioned
award of warrants.
The value of each warrant equals DKK 39 and is calculated on the
Black-Scholes model with a risk-free interest rate of 2.5 per cent
and on the historical volatility of the shares. The calculation is
based on a market value of the share of DKK 103 per share.
The award of warrants will incur consequential amendments to the
Articles of Association.
Outstanding warrants as of 31 March 2009
+-------------------------------------------------------------------+
| Programme | 2006 | 2007 | 2007 | 2008 | 2009 |
|-----------------+---------+---------+---------+---------+---------|
| Exercise price | 542 | 549 | 505 | 156 | 124 |
| (DKK) | | | | | |
|-----------------+---------+---------+---------+---------+---------|
| Exercise period | 2 weeks | 2 weeks | 2 weeks | 2 weeks | 2 weeks |
| | in | in | in | in | in Q2 |
| | Q4-2009 | Q4-2010 | Q4-2010 | Q3-2011 | 2012 |
| | and/or | and/or | and/or | and/or | and/or |
| | Q2-2010 | Q2-2011 | Q2-2011 | Q2 2012 | Q3 2012 |
| | | | | and/or | and/or |
| | | | | Q3 2012 | Q2 2013 |
| | | | | and/or | and/or |
| | | | | Q2 2013 | Q3 2013 |
|-----------------+---------+---------+---------+---------+---------|
| Number of | | | | | |
| warrants: | | | | | |
|-----------------+---------+---------+---------+---------+---------|
| Board of | 15,837 | 15,000 | - | 20,000 | 0 |
| Directors | | | | | |
|-----------------+---------+---------+---------+---------+---------|
| CEO & President | - | 30,000 | - | 20,000 | 0 |
|-----------------+---------+---------+---------+---------+---------|
| Group | 47,515 | 30,000 | 10,000 | 75,000 | 5,000 |
| Management | | | | | |
|-----------------+---------+---------+---------+---------+---------|
| Other Employees | 39,061 | 52.000 | - | 60,000 | 20,000 |
|-----------------+---------+---------+---------+---------+---------|
| Retired | 39,066 | 28,000 | - | 0 | 0 |
| Employees | | | | | |
|-----------------+---------+---------+---------+---------+---------|
| Total | 141,479 | 155,000 | 10,000 | 175.000 | 25.000 |
+-------------------------------------------------------------------+
Financial statement for the period (1 January - 31 March 2009,
un-audited)
The comparison figures for the same period 2008 are stated in
parenthesis.
The revenue totalled DKK 17 million (DKK 14 million) in the first
quarter. The revenue derives from sale under the RFP-2 contract with
the U.S. health authorities.
Production costs totalled DKK 41 million (DKK 32 million) in the
first quarter. The production costs are higher due to higher batch
production at the Kvistgaard facility.
The Group's research and development costs totalled DKK 36 million
(DKK 28 million) in the first quarter excluding development costs
from the RFP-3 contract of DKK 10 million, of which DKK 8 million are
capitalised as intangible assets under construction.
Sales costs totalled DKK 6 million (DKK 4 million) in the first
quarter. The increase primarily derived from increase in commercial
activities on IMVAMUNE®.
Administrative costs totalled DKK 23 million (DKK 17 million) in the
first quarter.
Income before tax is a deficit of DKK 83 million (deficit of DKK 62
million) in the first quarter.
Net result in the first quarter was a deficit of DKK 66 million
(deficit of DKK 50 million).
As of 31 March 2009 the Group's net free liquidity was DKK 627
million (DKK 971 million). Year to date cash flow from operations is
negative with DKK -132 million (DKK -67 million). Cash flow from
investment activities is DKK 33 million (DKK 127 million) and cash
flow from financing activities is DKK -4 million (DKK -4 million).
The net changes in cash and cash equivalents is negative with DKK
-169 million (DKK +57 million) year to date.
After the close of the first quarter, the company decided to reduce
the outstanding foreign exchange contracts. The remaining foreign
exchange contracts of USD 46 million cover the expected USD income
from the RFP-3 contract in 2009. The reduction in the outstanding
foreign exchange contracts has been executed in order to eliminate
the adverse effect on the liquidity a rise in USD will have.
The Group's equity as of 31 March 2009 was DKK 893 million (DKK 1,226
million.). The decrease flows from retained earnings.
Financial expectations
Bavarian Nordic maintains its expectations for the financial result
for 2009. Thus, the company expects revenue in the region of DKK 375
million, and a pre-tax loss in the region of DKK 225 million. Revenue
will primarily be generated from the delivery of IMVAMUNE® to the
United States under the RFP-3 contract and billing of the
continuation of the RFP-2 contract and contracts for smallpox
vaccines already entered with other countries.
Statement from the Board of Directors and Corporate Management
The Board of Directors and Corporate Management have, today reviewed
and approved Bavarian Nordic A/S' interim report for the period 1
January to 31 March 2009.
The interim report has been prepared in accordance with IAS 34"Presentation of interim reports" as adopted by the EU and additional
Danish disclosure requirements for interim reports of listed
companies, including those of NASDAQ OMX Copenhagen. The interim
report has not been audited or reviewed by the Company's auditors.
In our opinion, the interim report gives a true and fair view of the
group's assets and liabilities and financial position as of 31 March
2009 and the results of the group's activities and cash flows for the
period 1 January to 31 March 2009.
In our opinion, the management's review provides a true and fair
description of the development in the group's activities and
financial affair, the results for the period and the group's
financial position as a whole as well as a description of the most
important risks and uncertainty factors faced by the group.
Kvistgård, 27 April 2009
Corporate Management:
Anders Hedegaard
President and CEO
Board of Directors:
Asger Aamund
Chaiman of the Board
Claus Bræstrup Erling Johansen Gerard van Odijk
Flemming Pedersen
Bavarian Nordic A/S - Interim Report for the period 1 January to 31 March 2009
| Source: Bavarian Nordic A/S
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