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September 28, 2017

Bavarian Nordic Wins Up-to-$539M BARDA Contract for Smallpox Vaccine

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    Bavarian Nordic won a contract from BARDA to supply its smallpox vaccine for the U.S. Strategic National Stockpile. [CDC]

    Bavarian Nordic has won an up-to-$539 million contract from the Biomedical Advanced Research and Development Authority (BARDA) to supply its freeze-dried Imvamune® smallpox vaccine for the U.S. Strategic National Stockpile.

    The contract consists of an initial $100 million base award toward manufacturing and storage of Imvamune vaccine bulk—the third bulk contract inked between the company and BARDA. The two earlier bulk contracts total a combined $233 million.

    “We are proud to be part of a long-standing and successful partnership with BARDA, and this latest contract starts a new chapter, as we supply an improved formulation of our vaccine as part of the U.S. government commitment to protect the nation from a smallpox outbreak,“ Bavarian Nordic president and CEO Paul Chaplin, Ph.D., said in a statement. “Our latest strategic investment that will expand our manufacturing capacities will add value, not only to our partnerships, but also to our proprietary pipeline.”

    In addition, the contract includes two initial options: Up to $299 million toward the filling and freeze-drying of Imvamune produced under the three bulk awards and up to $140 million toward clinical development, regulatory commitments, and portions of the establishment and validation of fill/finish activities.

    The $140 million portion includes up to $33 million toward process transfer and validation of the new manufacturing line. Bavarian Nordic has already committed up to $75 million toward construction of a fill/finish manufacturing line at its facility in Denmark.

    That investment, Bavarian Nordic stated, will allow the company “to recognize the full value chain of the manufacturing process, to maintain control of the product cycle throughout, and the potential to provide these services to third parties in the future.”

    The contract includes additional future options to acquire additional vaccine bulk and/or freeze-dried doses of Imvamune.

    Imvamune is a nonreplicating smallpox vaccine based on MVA-BN®, a strain of the modified vaccinia Ankara virus. It is injected like other modern vaccines rather than pricked into the skin with a bifurcated needle, and distributed in liquid-frozen formulation, designed for use in people for whom replicating smallpox vaccines are contraindicated, such as people with HIV and atopic dermatitis.

  • Expecting More Contracts

    Under the trade name Imvanex®, Imvamune is approved in Canada and in the European Union—where it is the only nonreplicating smallpox vaccine approved for use in the general adult population. In the U.S., however, Imvamune is in Phase III trials—though the vaccine is stockpiled by the U.S. government for emergency use in people for whom replicating smallpox vaccines are contraindicated

    “We are expecting that they [BARDA] have a desire to expand the emergency stock for the smallpox vaccine and therefore we also expect to see more contracts in the future,” Bavarian Nordic CFO Ole Larsen told Reuters.

    He added that the new contract will cover around 13 million doses at a price of around $48 per dose, though he added that price and volume remained uncertain.

    Bavarian Nordic has been awarded Contract No. HHSO100201700019C by BARDA, a division of the Office of the Assistant Secretary for Preparedness and Response within HHS.

    Bavarian Nordic said the BARDA contract will not change its 2017 guidance to investors. That guidance calls for $54 million in earnings before interest and taxes on $199 million in revenue

    Bavarian Nordic’s share price on the Copenhagen exchange fell 48%, to DKK 230 ($36.40), on September 15, the day after it acknowledged the failure of its prostate cancer vaccine candidate Prostvac® in the Phase III PROSPECT trial. The company said the trial was halted after its independent data monitoring committee determined, based on a preplanned interim analysis, that continuation would be futile. PROSPECT assessed Prostvac in patients with metastatic castration-resistant prostate cancer. 

    The latest BARDA contract “should calm the market further with regard to the failed Prostvac Phase III study,” Sydbank analyst Soren Lontoft Hansen, who has rated Bavarian Nordic stock a "buy," told Reuters.

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