US Government Awards Contract to Bavarian Nordic for the Development of Freeze-Dried IMVAMUNE(R) Smallpox Vaccine

KVISTGÅRD, Denmark, November 17 - Bavarian Nordic A/S (OMX: BAVA) announced today that BARDA (Biomedical
Advanced Research and Development Authority) has awarded a new contract to
Bavarian Nordic for the development of a freeze-dried version of its
IMVAMUNE(R) smallpox vaccine with a total prospective value of USD 40
million.

The contract provides funds to validate the new freeze-dried
manufacturing process and the associated pre-clinical and clinical studies to
support the advanced development of a freeze-dried version of IMVAMUNE(R).
The base year funding represents 33% of the total contract value, followed by
four additional years of optional funding, which are triggered by the
completion of pre-determined technical milestones. These freeze-dried
development activities will be performed in parallel to the licensure
activities of the current liquid-frozen IMVAMUNE(R) formulation under the
RFP-3 contract.

The contract does not affect the company's expectations for the 2009 full
year results.

With this contract, the US Government has to-date awarded contracts to
Bavarian Nordic for the development and procurement of IMVAMUNE(R) worth more
than USD 680 million. Under the ongoing RFP 3 contract, Bavarian Nordic will
deliver 20 million doses of IMVAMUNE(R) in the current liquid-frozen
formulation. Once the contract option for an additional 60 million doses is
expectedly exercised, these vaccines will be delivered in the liquid-frozen
formulation as well. Thus, the new contract will have no influence on the
ongoing contracts, but represents an additional business opportunity and will
expectedly constitute the gateway towards securing additional contracts for
this new freeze-dried version with the US Government and outside the US as
well.

A freeze-dried formulation of IMVAMUNE(R) offers various new advantages
in terms of a potential increased shelf-life compared to the current
liquid-frozen formulation. Additionally, this would help overcome the
challenges with the cold-chain logistics and storage.

Anders Hedegaard, President & CEO of Bavarian Nordic said: "We are
excited about receiving yet another contract from the US Government in
support for the development of an advanced freeze-dried version of our
IMVAMUNE(R) smallpox vaccine. It clearly demonstrates the continued
commitment from the US Government to support the development of advanced
medical countermeasures and it strengthens our confidence, that the option to
procure up to an additional 60 million doses of IMVAMUNE(R) under the ongoing
RFP-3 contract will be exercised."

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
pipeline is focused in the three areas; biodefence, cancer and infectious
diseases, and includes seven development programmes. Two programmes are ready
for Phase III: IMVAMUNE(R), a third-generation smallpox vaccine is being
developed under a contract with the US government, and PROSTVAC(TM), a
therapeutic vaccine for advanced prostate cancer is being developed under a
collaboration agreement with the National Cancer Institute.

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

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

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