Bavarian Nordic Publishes its Annual Results 2008

KVISTGAARD, Denmark - Today Bavarian Nordic published the company’s Annual Report 2008. The
report is available on the company’s website: www.bavarian-nordid.com.

Bavarian Nordic’s revenue for the year 2008 was DKK 209 million with a
loss before tax of DKK 183 million, which was in line with the Company’s
latest guidance. At year-end 2008, net free cash and cash equivalents stood
at DKK 796 million. For 2009, Bavarian Nordic 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.

For 2009, the Company will make extraordinarily large drawings on cash as
a result of increased costs for scaling up production, the continuing
build-up of stockpiles of vaccine, preparation of the Phase III study of
PROSTVAC(TM) and increased costs of Phase II and the preparation of Phase III
studies of IMVAMUNE(R). It is expected that drawings on cash in the current
year will be at the level of DKK 400 million. Accordingly, the Company’s net
free liquidity is expected to be at the level of DKK 400 million at the end
of the year. The expectations regarding the liquidity are based on a dollar
exchange rate of approx. 6 DKK/USD. Bavarian Nordic expects to strengthen its
net free liquidity in 2010 and in the years ahead via the delivery of already
entered IMVAMUNE(R) contracts. Thus, at the end of 2012, Bavarian Nordic’s
net free liquidity is expected to be in level with 2008.

2008 highlights

- Strong progress in the pipeline with two new programmes added and two
other programmes entered clinical trials:

- PROSTVAC(TM), a late-stage vaccine candidate for the treatment of
advanced prostate cancer, was acquired as part of the partnership
that was entered with the National Cancer Institute. Very promising
data were reported, showing prolonged survival combined with a
favourable safety profile. Phase III studies expected to be initiated
in 2010.

- MVA-BN(R) Anthrax, a new preclinical programme for an anthrax vaccine,
is expected to enter clinical trials in 2010.

- MVA-BN(R) HIV multiantigen, in development as prophylactic and
therapeutic vaccine against HIV, initiated clinical Phase I/II trials.

- The company’s MVA-BN(R) based prostate cancer vaccine also entered
clinical Phase I/II trials.

- A milestone payment of USD 25 million was received after submission of
important IMVAMUNE(R) data.

- The data that were generated from a larger Phase II study with
IMVAMUNE(R) was submitted to the US health authorities for evaluation
whether they can potentially support the use of IMVAMUNE(R) in a
declared emergency.

- More than 2,400 subjects have now been vaccinated with IMVAMUNE(R)

- The first IMVAMUNE(R) contracts outside USA were signed with Canada and
an Asian country.

Anders Hedegaard, President & CEO of Bavarian Nordic, said: “2008 was a
successful year for Bavarian Nordic where all our primary goals were
achieved. We implemented a new strategy, and this has already borne fruit.
Our increased focus on cancer therapies which through to the partnership with
the NCI led to the acquisition of PROSTVAC(TM) has strengthened our pipeline
and we feel very optimistic about our cancer vaccines in the future. At the
end of the year, we submitted the important safety data for IMVAMUNE(R) to
the US health authorities and are now awaiting just one approval in order to
initiate the delivery of the 20 million doses under the RFP-3 contract. In
2009 we will have a continued strong focus on fulfilling this contract as
well as a strong focus on preparing for the Phase III studies that we expect
to initiate with both IMVAMUNE(R) and PROSTVAC(TM) in 2010.”

Strong foundation for future growth and earnings

Despite the financial crisis and an economic slowdown, Bavarian Nordic
recorded a positive development in 2008, and has laid a strong foundation for
further value creation in 2009 and the years ahead. The expected positive
development is based on the following elements:

- Two vaccines moving into Phase III trials

- Strong financial position

- Profitable ongoing development and procurement contracts with a value
of more than DKK 3.5 billion

- Expectations to the US government’s exercise of the contract option for
additional development and procurement, worth more than DKK 6 billion

- Ongoing contracts with countries outside USA

- Partnership with the NCI, a world leading cancer research organisation

- Strong patent portfolio

- Pipeline with promising results

- Future licensing agreement for PROSTVAC(TM)

- The world’s only manufacturing facility dedicated to the
commercial-scale production of MVA based vaccines

Important events after the balance sheet date

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. The meeting
was a success and there was an open and highly constructive discussion with
the FDA. Based on the meeting, Phase III studies are expected to be initiated
in 2010.

The outcome of the meeting has no impact on the delivery of vaccines to
the Strategic National Stockpile (SNS) under the RFP-3 contract with the US
government, which is still expected to be initiated in 2009.

PROSTVAC(TM) - further data presented

In February 2009, the first detailed 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 confirms 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 a larger
patient group.

MVA-BN(R)-HER2 - data from ongoing studies reported. New studies to be
initiated.

In February 2009, Bavarian Nordic reported data from its Phase I/II
studies with the therapeutic breast cancer vaccine candidate, MVA-BN(R)-HER2.
The data showed that the study met its primary endpoint with regards to
safety and by showing an immune response.

Oxford BioMedica - patent infringement suit continues

The patent infringement suit that was filed against Oxford BioMedica in
2008 continues. In January 2009, Bavarian Nordic filed a new complaint after
that the Judge, for procedural reasons, dismissed the first complaint. If the
court eventually should decide to dismiss the suit this decision will bear no
influence on the substance of the patent case. It only influences the timing
of the start of the infringement case.

Changes in management

Executive Vice President, Commercial Affairs, Nicolai Buhl Andersen has
chosen to resign from his position in Bavarian Nordic as of 1 May 2009 to
work at Coloplast where he also worked previously. Steen Vangsgaard has been
appointed as his successor as from 27 March 2009. Steen Vangsgaard holds an
MBA from London Business School. He previously held the position as Vice
President Commercial Operations in Actavis A/S.

Bavarian Nordic awards warrants

The Board of Directors in Bavarian Nordic A/S has today decided to award
warrants to a member of executive management and employees in the Company and
its subsidiaries. The Board decision is made in accordance with the
shareholder authorisation for the Board of Directors adopted as Article 5f of
the Articles of Association and the Company’s guidelines regarding incentive
programs. The award is made by the Board of Directors and exercise is limited
by and governed by the Danish Act on Options for Employees (the Stock Option
Act/aktieoptionsloven) regarding termination of employment prior to exercise
of warrants.

A total of 25,000 warrants are awarded for subscription of up to 25,000
shares of a nominal value of DKK 10 at an exercise price of DKK 124 per
share. The exercise price has been established on the basis of the average
share price (”closing price”) for the Company’s share in a period of 15
business days prior to this day added a 15 % premium. However, the exercise
price must at least be equal to the Company’s average exchange-listed price
today. In the event that the average exchange-listed price on the Company’s
shares today exceeds DKK 124 the exercise price shall be increased
accordingly. If this becomes relevant the Company will make a separate
announcement to NASDAQ OMX.

The warrants can be exercised wholly or partly in a period of 14 days
commencing from the day of publication of the Company’s Annual Report for
2011, from the day of publication of the Company’s Half Yearly Interim
Results for 2012, from the day of publication of the Company’s Annual Report
for 2012 and in a period of 14 days commencing from the day of publication of
the Company’s Half Yearly Interim Results for 2013.

Referring to the Danish Securities Act, Section 28a it is announced that
Steen Vangsgaard, who is a member of executive management and obliged to
notify the Company of transactions involving Bavarian Nordic securities is
awarded 5,000 warrants under the abovementioned award of warrants.

The value of each warrant equals DKK 39 and is calculated on the
Black-Scholes model with a risk-free interest rate of 2.5 per cent and on the
historical volatility of the shares. The calculation is based on a market
value of the share of DKK 103 per share.

The award of warrants will incur consequential amendments to the Articles
of Association.

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