Bavarian Nordic said today it will partner with the U.S. Department of Defense (DoD) to develop a prophylactic vaccine against the equine encephalitis virus, through a collaboration that could generate up to $36 million for the company.

Bavarian Nordic plans to apply its proprietary Modified Vaccinia Ankara-Bavarian Nordic (MVA-BN®) platform to develop a vaccine against various strains of the rare but potentially deadly mosquito-borne virus. No preventive vaccine treatment now exists for equine encephalitis virus.

The company said it already has an MVA-BN®-based candidate vaccine that has shown efficacy in preclinical models against three separate equine encephalitis viruses, including Eastern (EEEV), Venezuelan (VEEV), and Western (WEEV).

Under its multiyear collaboration with the DoD, Bavarian Nordic plans to carry out further preclinical studies to support clinical development, GMP production, and establishment of safety and immunogenicity of the vaccine in humans.

Should the vaccine generate positive clinical proof-of-concept data, the MVA-BN®-based candidate vaccine will see further development, with potential additional funding toward FDA licensure and production. The vaccine would be available to the DoD as needed to treat individuals who may be deployed in a region considered at high-risk for a particular illness, according to Bavarian Nordic.

“We are very proud of this alliance which represents yet another public/private engagement between Bavarian Nordic and the U.S. government, and provides the Department of Defense with the first in what could become a ‘library’ of safe, clinically validated vaccines that are readily accessible and can be deployed as needed,” Bavarian Nordic president and CEO Paul Chaplin, Ph.D., said in a statement. “This type of collaboration further validates our model for preparedness, which could prove useful in the years to come for this, and potentially other rare and tropical diseases.”

Bavarian Nordic added that the collaboration will be funded in whole or in part with federal funds under an Other Transaction Authority agreement with U.S. Army Contracting Command-New Jersey through the Medical CBRN Defense Consortium, contract MCDC-17-04-001/2018-315.

Bavarian Nordic said the DoD funding does not change its financial guidance for 2018.

In releasing its 2017 results on Monday, the company told investors that it expected to generate approximately DKK 500 million ($82.5 million), and DKK 385 million ($63.5 million) in losses before interest and taxes, as a result of R&D costs of DKK 510 million ($84.1 million), of which DKK 110 million ($18.1 million) will be recognized as production costs. The company is developing a fill-finish facility set to be ready in 2021.

MVA-BN is approved as a smallpox vaccine in Canada and the EU, under the respective the trade names Imvamune® and Imvanex®.

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