Bavarian Nordic Gets $50 Million Milestone Payment
Published: Oct 08, 2007
WASHINGTON, D.C., October 9 /PRNewswire-FirstCall/ -- Bavarian Nordic, the Danish-based international biopharmaceutical company, has received permission from the Department of Health and Human Services (HHS) to invoice an advance payment of $50 million as allowed under the recent contract (RFP-3)* to manufacture and deliver 20 million doses of the company's, IMVAMUNE(R) smallpox vaccine.
HHS approved the advance payment because Bavarian Nordic fulfilled a number of significant contract milestones relating to the build-up of security systems, establishment of various procedures and training, validation of equipment and processes, and a Phase II study report for preparing the design of Phase III studies.
Anders Hedegaard, President & CEO of Bavarian Nordic, said: "We are very satisfied that we have already fulfilled several significant milestones as agreed with the Department of Health and Human Services. With the advance payment and the future milestone payments, we have created a solid financial base for our further development."
The advance payment income will be recognised as revenue in the company's financial statements as the vaccines are delivered. Delivery will start once an Emergency Use Authorization for IMVAMUNE(R) is granted. Payment is dependent on Bavarian Nordic's continued fulfilment of the conditions of the contract.
In addition to the advance payment of $50 million, Bavarian Nordic expects in 2007 to receive two additional milestone payments of $25 million each for fulfilling activities related to these milestones. The advance payment does not affect the previously announced guidance for the company's 2007 result.
IMVAMUNE smallpox vaccine contract
In June 2007, HHS awarded Bavarian Nordic a Bioshield contract to manufacture and deliver IMVAMUNE, a next-generation smallpox vaccine to the strategic national stockpile. The contract calls for the registration of IMVAMUNE as a safe and effective smallpox vaccine in healthy people, but in the event of a smallpox outbreak, the vaccine would be recommended to protect people who have weakened immune systems.(1)
The five-year contract is valued at more than $500 million, with options that if exercised, extend the value to $1.6 billion and the performance period of the contract. The contract options would allow the government to procure up to an additional 60 million doses of IMVAMUNE and support additional clinical studies for extending the license to include HIV-infected, pediatric, and geriatric populations.
Bavarian Nordic's contract is the first next-generation, or completely new product procured by HHS under the BioShield program. It is also is the first contract where HHS has utilized all of its existing and newly-acquired payment authorities (Advance Payment, Milestone Advance Payment, and Performance Based Payment) as granted under the Project Bioshield Act (2004), the Pandemic and All-Hazards Preparedness Act (2006), and the FAR subpart 32.10.
* This project has been funded in whole with Federal funds from the Office of the Assistant Secretary for Preparedness and Response, Biomedical Advanced Research and Development Authority, under Contract No. HHSO100200700034C.
About Bavarian Nordic
Bavarian Nordic, headquartered in Denmark, is a leading international biopharmaceutical company developing and producing innovative vaccines to prevent and treat infectious diseases and cancer.
In the U.S., Bavarian Nordic operates subsidiary companies, BN ImmunoTherapeutics, in Mountain View, California developing vaccines against cancers, and Bavarian Nordic Inc. in Washington, D.C. focused on business development, marketing, and government relations for the Bavarian Nordic Group. For more information on Bavarian Nordic visit: www.bavarian-nordic.com
"Safe Harbour" Statement under the Private Securities Litigation Reform Act of 1995":
Except for the historical information contained herein, this release contains "forward-looking statements" within the meaning of the Private Securities Reform Act of 1995. No "forward-looking statement" can be guaranteed, and actual results may differ materially from those projected. Bavarian Nordic undertakes no obligation to publicly update any "forward-looking statement", whether as a result of new information, future events, or otherwise. Additional information regarding risks and uncertainties is set forth in the current Annual Report and in Bavarian Nordic's periodic reports, if any, which we incorporate by reference.
CONTACT: Contact: Elizabeth Dempsey Becker, Bavarian Nordic, Inc.,