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 The Danish company said late on Wednesday it had won the order for
its freeze-dried smallpox vaccine worth potentially $539 million
from BARDA, a division of the U.S. Department of Health and Human
Services.
The deal was a boost for the Danish company, coming just weeks after
its prostate cancer drug candidate suffered a major setback.
"This should calm the market further with regards to the failed
Prostvac phase III-study," Sydbank analyst Soren Lontoft Hansen,
said referring to the cancer drug Prostvac disappointment. He has a
'buy' rating on the stock.
Bavarian's shares rose as much as 5 percent on Thursday, partly due
to a higher-than-expected vaccine dose price. They are still around
35 below their peak level before the news of the failed cancer drug
study.
"We are expecting that they (the U.S. Biomedical Advanced Research
and Development Authority (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," Chief Financial Officer
Ole Larsen told Reuters.
This is Bavarian's third such award to manufacture vaccine in bulk
and the two prior orders from BARDA totaled $233 million, which the
firm has already received.
The new contract will cover around 13 million doses at a price of
around $48 per dose, Larsen said, underlining that uncertainties
around price and volume still remained.
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The price is significantly higher than the $35 expected by some
analysts.
Bavarian Nordic will also invest in the construction of a
manufacturing line at its facility in Denmark with a possible
co-investment from BARDA to secure future production capacity.
The order would be for a new freeze dried formulation of the vaccine
with a shelf life of more than five years, which will replace the
liquid-frozen formulation with a three-year durability of Imvamune
currently stockpiled.
The U.S. government has a long-term strategy to provide sufficient
non-replicating smallpox vaccine to protect 66 million people,
representing 132 million doses of Imvamune, Bavarian said on its web
page.
(Reporting by Stine Jacobsen, editing by Terje Solsvik and Jane
Merriman)
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