Bavarian Nordic Announces its Interim Report for the Period 1 January to 31 March 2009

KVISTGAARD, Denmark - Yesterday Bavarian Nordic Announced its Interim Results for the First Quarter of 2009

- Positive Developments in the Biodefence and Cancer Business Areas

- End of Phase II Meeting Lays Down Pathway for the Licensure of IMVAMUNE(R)

- Preparations for the Delivery of IMVAMUNE(R) to the USA are Progressing According to Plan

- PROSTVAC(TM) Data Have Been Accepted for an Oral Presentation at the ASCO Annual Meeting

In the first quarter of 2009 Bavarian Nordic generated revenue of DKK 17 million and recorded a loss before tax of DKK 83 million. The expectations for the financial result for the full year 2009 are maintained at revenues in the region of DKK 375 million, and a pre-tax loss in the region of DKK 225 million. As of 31 March 2009 the Group’s net free liquidity was DKK 627 million.

Highlights from the period

IMVAMUNE(R) - end-of-Phase II meeting held with the FDA

After concluding the Phase II development of IMVAMUNE(R), Bavarian Nordic held an end-of-Phase-II meeting with the US health authorities (FDA) in the beginning of 2009 in order to discuss the Phase III study design. Based on the meeting, Phase III studies are expected to be initiated in 2010.

PROSTVAC(TM) data presented at international cancer symposium

In February 2009, data on PROSTVAC(TM) were presented at the international cancer congress, 2009 Genitourinary Cancers Symposium in Orlando, Florida. The data from three different studies once again confirm the excellent safety and efficacy results previously reported, and they support the further investigation of the vaccine in patients suffering from advanced prostate cancer. The data also indicates that PROSTVAC(TM) may be used in earlier disease settings and thus in a larger patient group.

Important events after the period

PROSTVAC(TM) data accepted for an oral presentation at the ASCO Annual Meeting

Professor Philip Kantoff, MD, Dana-Farber Cancer Institute, Harvard Medical School who is the principal investigator in the PROSTVAC(TM) study will present the Phase II results at the 2009 American Society of Clinical Oncology (ASCO) Annual Meeting in Orlando May 29 to June 2, 2009.

Anders Hedegaard, President & CEO of Bavarian Nordic said: “Bavarian Nordic recorded strong progress in the first quarter of 2009. We successfully held an end of Phase II meeting with the FDA on IMVAMUNE(R) and have essentially agreed a pathway for the licensure of the vaccine. Data from studies with our new prostate cancer vaccine, PROSTVAC(TM) were presented at a major international cancer symposium and we are pleased to see, that these data indicate that the vaccine can be used in an earlier disease setting. This broadens the market potential of the vaccine. We also got the acceptance from ASCO to present PROSTVAC(TM) at this year’s annual meeting in May and we see this as a great recognition of the excellent potential of the vaccine.”

Financial statement for the period (1 January - 31 March 2009, un-audited)

The comparison figures for the same period 2008 are stated in parenthesis.

The revenue totalled DKK 17 million (DKK 14 million). The revenue derives from sale under the RFP-2 contract with the US health authorities.

Production costs totalled DKK 41 million (DKK 32 million). The production costs are higher due to higher batch production at the Kvistgaard facility.

The Group’s research and development costs totalled DKK 36 million (DKK 28 million) excluding development costs from the RFP-3 contract of DKK 10 million, of which DKK 8 million are capitalised as intangible assets under construction.

Sales costs totalled DKK 6 million (DKK 4 million). The increase primarily derived from increase in commercial activities on IMVAMUNE(R).

Administrative costs totalled DKK 23 million (DKK 17 million).

Income before tax was a deficit of DKK 83 million (deficit of DKK 62 million).

Net result was a deficit of DKK 66 million (deficit of DKK 50 million).

As of 31 March 2009 the Group’s net free liquidity was DKK 627 million (DKK 971 million). Year to date cash flow from operations is negative with DKK -132 million (DKK -67 million). Cash flow from investment activities is DKK 33 million (DKK 127 million) and cash flow from financing activities is DKK -4 million (DKK -4 million). The net changes in cash and cash equivalents is negative with DKK -169 million (DKK +57 million) year to date.

After the close of the first quarter, the company decided to reduce the outstanding foreign exchange contracts. The remaining foreign exchange contracts of USD 46 million cover the expected USD income from the RFP-3 contract in 2009. The reduction in the outstanding foreign exchange contracts has been executed in order to eliminate the adverse effect on the liquidity a rise in USD will have.

The Group’s equity as of 31 March 2009 was DKK 893 million (DKK 1,226 million.). The decrease flows from retained earnings.

Financial expectations

Bavarian Nordic maintains its expectations for the financial result for 2009. Thus, the company expects revenue in the region of DKK 375 million, and a pre-tax loss in the region of DKK 225 million. Revenue will primarily be generated from the delivery of IMVAMUNE(R) to the United States under the RFP-3 contract and billing of the continuation of the RFP-2 contract and contracts for smallpox vaccines already entered with other countries.

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. 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.

About Bavarian Nordic

Bavarian Nordic A/S is a leading industrial biotechnology company developing and producing novel vaccines for the treatment and prevention of life-threatening diseases with a large unmet medical need. The company’s business strategy is focused in three areas: biodefence, cancer and infectious diseases. Bavarian Nordic’s proprietary and patented technology MVA-BN(R) is one of the world’s safest, multivalent vaccine vectors. Bavarian Nordic has ongoing contracts with the US government for the late-stage development and procurement of the company’s third-generation smallpox vaccine, IMVAMUNE(R).

Bavarian Nordic is listed on NASDAQ OMX Copenhagen under the symbol BAVA.

For more information please visit www.bavarian-nordic.com

Source: Bavarian Nordic A/S

Contact (media only): Anders Hedegaard, President & CEO, Bavarian Nordic, +45-23-20-30-64