COPENHAGEN, Denmark, November 7, 2019 – Bavarian Nordic A/S (OMX: BAVA, OTC: BVNRY) announced today its interim financial results in line with guidance for the first nine months of 2019 and business progress for the third quarter of 2019.
Paul Chaplin, President & Chief Executive Officer of Bavarian Nordic said: “We set out the year with a clear ambition and strategy to expand our commercial footprint, and with the recently announced acquisition of two commercial vaccines from GlaxoSmithKline (GSK), we turn to the next chapter for Bavarian Nordic to become an independent vaccine company with sustainable profitability. The company is fully focused on the integration of manufacturing of the two new vaccines and establishing the commercial operations to make this a great success. We will move ahead with our planned Phase 3 trial for RSV in 2021 that allows sufficient time to establish an improved commercial scale production and formulation to meet the demands of this blockbuster indication. The recent approval of JYNNEOS™ was also a tremendous milestone for the Company, offering exciting new business opportunities beyond our long-term partnership with the U.S. government to supply the national stockpile and offering clear synergies with the two acquired commercial vaccines.”
TRANSFORMATIVE ACQUISITION OF TWO COMMERCIAL VACCINES FROM GLAXOSMITHKLINE
Announced on October 21, the acquisition of Rabipur®/RabAvert® and Encepur® from GlaxoSmithKline (GSK) is a transformative transaction that will establish a leading infectious disease franchise and make Bavarian Nordic an independent and profitable vaccine company. Specifically, the transition:
Full details on the acquisition were published in company announcement no. 19/2019.
Closing of the acquisition is expected by December 31, 2019, conditional on antitrust approval as well as on approval of the rights issue by the Company’s shareholders. To resolve on the rights issue, an extraordinary general meeting has been convened on November 27, 2019. Details are available at www.bavarian-nordic.com/egm.
OPERATIONAL HIGHLIGHTS
Delivering our strategy
We set out for the year with a 5-year vision and four strategic imperatives that collectively build on our heritage in vaccine development and manufacturing, aiming to secure and reinforce a sustainable foundation, while also expanding the commercial opportunities. With the acquisition of two commercial vaccines from GSK, the recent approval of JYNNEOS™ and the advancement of several clinical programs during the year, we are on track to accomplish these targets:
Smallpox
Infectious diseases
Cancer immunotherapy
Commercial manufacturing
FINANCIALS AND OUTLOOK
Financial results for the first nine months in line with expectations
Danish kroner (DKK) is the Company’s reporting currency. The USD figures provided above are based upon an assumed exchange rate of DKK 6.86 per 1.00 USD, which was the exchange rate as of September 30, 2019.
Outlook for 2019 maintained
The majority of our 2019 revenues are related to the production and release of bulk smallpox vaccine for the U.S. Government, most of which will occur in the fourth quarter of 2019. Hence, we maintain our financial expectations for 2019 as announced on March 21, 2019 with revenues of approximately DKK 600 million/USD 92 million for the full year and a loss before interest and tax (EBIT) of approximately DKK 360 million/USD 55 million. The expected cash preparedness at year-end was revised in October from approximately DKK 1,600 million/USD 246 million to approximately DKK 1,000 million/USD 154 million as a result of the announced acquisition of two vaccines from GlaxoSmithKline.
A detailed guidance for 2020 will be provided in connection with the publication of the Company’s annual report for 2019. However, pending a successful closing of the transaction with GSK, the Company is able to confirm that it will be profitable on an EBITDA basis already in 2020, exclusive of the sale of the Priority Review Voucher, which was awarded the Company by FDA upon the approval of JYNNEOS™ in September.
The financial expectations are based on an exchange rate of DKK 6.50 per 1.00 USD. For further details regarding assumptions behind the guidance see the Annual Report 2018.
Financial calendar 2019/2020
The date for announcement of the 2019 annual report has been changed to February 20, 2020.
November 27, 2019 | Extraordinary General Meeting * |
February 20, 2020 | 2019 Annual Report |
April 21, 2020 | Annual General Meeting ** |
May 14, 2020 | First quarterly report (Q1) for the three-month period ended March 31, 2020 |
August 26, 2020 | Half-year report (Q2) for the six-month period ended 30 June 2020 |
November 11, 2020 | Third quarterly report (Q3) for the nine-month period ended 30 September 2020 |
* An extraordinary general meeting has been convened to seek shareholder approval to increase the Company’s share capital through a planned rights issue in the first half of 2020 with pre-emptive rights for the existing shareholders in order to obtain financing of costs associated with the acquisition of Rabipur/RabAvert and Encepur. See www.bavarian-nordic.com/egm for additional information.
** Pursuant to Article 12 of the Articles of Association, shareholders who wish to submit a request for proposals for consideration at the annual general meeting must lodge this with the Company no later than Wednesday, March 11, 2020.
OTHER DEVELOPMENTS
Incentive programs for employees and executive management in Bavarian Nordic
The board of directors has today decided to issue warrants to executive management and certain employees in the Bavarian Nordic Group. The decision is made in accordance with the shareholder authorization for the board of directors adopted as Article 5b of the Articles of Association and the Company’s guidelines regarding incentive programs.
The warrant program entails the issuance of 564,585 warrants in total which entitle the warrant holders to subscribe for up to 564,585 shares in total with a nominal value of DKK 10 each at an exercise price of DKK 185.4 per share. The warrants may be exercised wholly or partly during eight fixed subscription periods during 2023 and 2024.
The value of each warrant equals DKK 45.5 and is calculated on the Black-Scholes model with a risk-free interest rate of -0.69 per cent and on the historical volatility of the shares. The calculation is based on a share price of DKK 154.05.
Furthermore, the Company introduces a three-year incentive program in January 2020 for all employees in the Bavarian Nordic Group, with the exception of employees receiving warrants. The program is a cash bonus program based on the development in the Company’s share price. The incentive program will not have a dilutive effect on the shareholders.
Each employee participating in the program is awarded so-called phantom shares every month of employment until 31 December 2022. The exercise price is DKK 185.4. The phantom shares may be exercised in January 2023, only if the Company’s share price by then exceeds the exercise price by at least DKK 5. In that case, each phantom share will yield a cash bonus equivalent to DKK 1 per point the share price exceeds the exercise price.
Based on the current number of employees in the Group eligible for participating in the program, the program will comprise up to 72,288 phantom shares. The average value of each phantom share granted equals DKK 27.7 calculated on the basis of the Black-Scholes model with a risk-free interest rate of -0.69 per cent and on the historical volatility of the shares. The calculation is based on a share price of DKK 154.05.
Conference call and webcast
The management of Bavarian Nordic will host a conference call today at 2 pm CET (8 am ET) to present the interim results followed by a Q&A session. A listen-only version of the call can be accessed via http://www.bavarian-nordic.com/investor/events.aspx?event=5505. To join the Q&A session, use one of the following dial-in numbers: Denmark: +45 32 72 80 42, UK: +44 (0) 844 571 8892, USA: +1 631-510-7495. Participant code is 8772778.
Contacts
Rolf Sass Sørensen
Vice President Investor Relations (EU)
Tel: +45 61 77 47 43
Graham Morrell
Paddock Circle Advisors (US)
graham@paddockcircle.com
Tel: +1 781 686 9600
Company Announcement no. 21 / 2019
About Bavarian Nordic
Bavarian Nordic is a fully integrated biotechnology company focused on the development of innovative therapies against infectious diseases and cancer. Using our live virus vaccine platform technology, MVA-BN®, we have created a diverse portfolio of proprietary and partnered product candidates intended to unlock the power of the immune system to improve public health with a focus on high unmet medical needs. In addition to our long-standing collaboration with the U.S. government on the development and supply of medical countermeasures, including the only FDA-approved, non-replicating smallpox vaccine, our infectious disease pipeline comprises a proprietary RSV program as well as vaccine candidates for Ebola, HPV, HBV and HIV, which are developed through a strategic partnership with Janssen. Additionally, we have developed a portfolio of active cancer immunotherapies, designed to alter the disease course by eliciting a robust and broad anti-cancer immune response while maintaining a favorable benefit-risk profile. For more information visit www.bavarian-nordic.com or follow us on Twitter @bavariannordic.
Forward-looking statements
This announcement includes forward-looking statements that involve risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. Forward-looking statements include statements concerning our plans, objectives, goals, future events, performance and/or other information that is not historical information. All such forward-looking statements are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, except as required by law.
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