Bavarian Nordic Aktie

Good day, and thank you for standing by. Welcome to the Bavarian Nordic first quarterly report, Q1, for the 3-month period ended 31st of March 2026 conference call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, CEO, Paul Chaplin. Please go ahead.

Thank you, operator, and welcome, everyone, to Bavarian Nordic's Q1 results for 2026. Together with me is Henrik Juuel, and I will walk through some of the key highlights and activities for the first quarter and then hand over to Henrik, who will go through some of the more detailed financial results.

So if you all turn to Slide 4, we've had a solid start to '26. Revenues just over DKK 1 billion with a 16% EBITDA margin. And as I said, I'll leave it to Henrik to walk through some of the details of the financials.

However, before I go into some of the practicalities, I just need to remind everyone that on Travel Health, it's a very seasonal business. So sometimes our quarterly results don't really reflect the business that we're expecting over the entire year. And typically, for Travel Health, Q1 is more of a light quarter with Q2 being a heavier quarter.

And on Public Preparedness, really quarterly results, it's driven all by government contracts and the delivery schedules according to those contracts. So we can either have a light or a low quarter depending on those contracts. And some of that explains -- and Henrik will get into it, when you look at Q1 in '26 and compare to '25, last year's Q1 for different reasons, for stocking and all the rest of it was slightly higher.

Having said all that, we have had a great fantastic start to the year, a 14% growth in our Travel Health business, and I'll come back to that, but it's driven by rabies, the continued rollout of our Vimkunya vaccine for chikungunya, and TBE. Vinunya, as I said, the rollout continues of the launch. We have recently got the approval in Switzerland, and we've launched in -- we continue to launch in new countries such as Belgium and Netherlands. And we're seeing good demand in some of the countries that we launched in last year.

On Public Preparedness, we recently, after Q1, this Monday, announced a new order from the U.S. government, and I'll come back to that in more detail. But that has led to an increase in the '26 guidance, increasing the Public Preparedness up to potentially DKK 2.5 billion from the DKK 1.8 billion to DKK 2 billion and an increase in the EBITDA margin up to 28%. As I said, I'll come back to more of the details on Public Preparedness. So really a strong start for the year, already a hike in guidance based on the Public Preparedness, the new contract and strong continued demand in Travel Health.

If we go to the next slide, talk a little bit about the Travel Health, as I said, a 14% increase in Q1. On rabies, we're really seeing strong demand, continued strong demand in the 2 key markets in the U.S. and Germany with a 23% and 29% growth in Q1. And really, this strong growth that we're seeing with rabies is really due to, unfortunately, an increase in the number of deaths last year in the U.S. and a number of different cases of travelers coming back infected and again, unfortunately, succumbing to the infection. And I would say rabies is really getting into the category now of a standard travel vaccine. And what I mean by that is there are a number of vaccines for travel that are considered pretty standard when people turn up at their GP or travel clinic.

On TBE, we saw a 12% growth in the overall market. And although there was a decline compared to last year, as I said, this is more related to a stocking situation by wholesalers in '25, which we didn't see in this year. But we are completely on track in a normalized year for TBE. And as I said, we typically see stronger growth or stronger demand in Q2.

Another thing to mention that's not on the slide is Vivotif, which is our vaccine against typhoid, which we acquired back in '23. Unfortunately, the typhoid market, we really have not seen a rebound of that market since post-COVID as we have in other travel sectors. And one of the reasons we saw for that -- for Vivotif was that we weren't really addressing one of the markets -- previous markets, which were GPs, which prescribed the vaccine in the U.S. So last year, we took action and had a contracted sales force really targeting that sector. And this year -- this quarter, I should say, we've seen a 12% growth in Vivotif, and that's really showing signs that the actions that we're taking is really beginning to show signs or shoots of growth.

So if we go to the next slide and talk a little bit more about Vimkunya, really, we are on track with our launch. And if anything, I would say our original plan last year, post approval, has been accelerated. So we've now launched, I believe, in 14 countries, U.S., throughout Europe and also the U.K. and as I said, recently added Belgium and the Netherlands. In Germany, we're seeing strong demand. And hopefully, we will begin to see that strong demand in the other territories that we're rolling out. Of course, part of the launch is to raise awareness of chikungunya. So it will take time, but we are beginning to, as I say, see a very successful rollout.

One area which is not going as well as we would like is in the U.S. And unfortunately, this is related to some headwinds related to the recommendation. While the recommendation was achieved last April, this is still not being published by the CDC. And unfortunately, some wholesalers are not buying the product and stocking until this publication. So that is slowing the demand that we were expecting in the U.S. But as I said, in other areas such as Germany and elsewhere, such as the U.K., we are seeing nice demand.

As I said, in Switzerland, we've got recently -- we got the recent approval, and we plan to launch in Q2. And we're also expecting an approval from Health Canada in the first half of this year. So again, continued regulatory approvals and continuing on the planned launch for Vimkunya, and we stand by our projected guidance for this vaccine in '26.

If you go to the next slide, often, we're getting a lot of questions lately around our Travel Health portfolio and the -- with the current geopolitical situation, whether there's an impact on travel. What this slide is showing is that travel in most areas of the world continues to grow, albeit at a slower rate than we've seen post-COVID. So you could -- there is an argument to say that, that growth is slowing down. We, however, have not seen any impact regarding our travel health portfolio in terms of geopolitical situation. But of course, it's obvious that there could be impacts if the situation continues, airfares and all the rest of it increase. But as I said, right now, we've seen no impacts. We're seeing solid growth. And as I said, right now, travel is still growing, albeit at a slower rate.

If we go to the next slide. On Public Preparedness, I want to talk a little bit about the recent order from the U.S. government. So this is under our -- what we refer to our freeze-dried contract that was awarded in 2017. If you look at the graph, the red graph at the bottom to the left of this slide, this came with an original order for 11.5 million doses of our freeze-dried version. At that point in time, we had not developed the freeze-dried. So there was also of that almost USD 540 million, there was about $140 million to perform clinical study, to do a tech transfer from a contract manufacturer. There was $300 million to fill the bulk, and there were some bulk orders in that $540 million.

With the latest order that was announced on Monday, the $97 million, BARDA are now completing the order for the 11.5 million doses, really showing their long-term commitment over what is almost 10 years to develop, to tech transfer and to acquire 11.5 million doses of the freeze-dried version. It's a great example of a private -- of a public-private partnership because BN also invested in our own manufacturing line here in Denmark, and it's a great success story.

What it also shows is that under this contract, the U.S. government has ordered additional bulk and additional doses to address the mpox outbreak of '22. And we've received orders of greater than $1.2 billion since 2017 under this contract, which again really demonstrates the strong partnership between Bavarian Nordic and the U.S. government.

Of that $97 million order that we received on Monday, the majority is for additional bulk to replace bulk that was used for the mpox order, and that will be revenue recognized this year. And that led to the increase in guidance that I've already stated, and I'm sure Henrik will walk through.

So within that increased guidance to up to DKK 2.5 billion, we now have secured contracts for DKK 2 billion, and that really represents the upper range of what we call a normalized year, but we still expect additional orders between DKK 300 million to DKK 500 million in the remainder of the year, again demonstrating that our Public Preparedness is a steady base business moving forward.

If we go to the next slide, a few words quickly on the pipeline. In terms of R&D, the majority of our R&D spend this year is really on what we refer to as life cycle management activities, primarily chikungunya. We have a number of post-market commitments which have been initiated, a pediatric study to expand the label to include children, a booster study looking at the longevity of the immune response and also an efficacy study. We're also in the midst of a Phase II study, which will support the transition from an egg-based production to a proprietary cell line that we've developed. And that initial data or interim data will read out later this year. We also have a program fully funded by the DoD for equine encephalitis. And indeed, there is a public request for information regarding future Phase III studies for such an indication, which we have responded to. And we also have some early-stage programs for Lyme and EBV that will be coming through in the years to come.

So with that, I will hand over to Henrik, who can walk through the more details on the financials.

Yes. Thank you, Paul. So we are now on Slide 10, talking about the commercial performance for the first quarter. So we delivered total revenue for the first quarter of DKK 1.058 billion, comprised of DKK 294 million from our Public Preparedness business and DKK 721 million from our Travel Health business.

The Public Preparedness business, Paul already alluded to it. We can have strong quarters, we can have less strong quarters. It really depends on the supply schedules linked to the individual contracts that we have with governments. When we compare to last year, we have to remember again, the comparison quarter-to-quarter is not that meaningful. Secondly, '25 was a year where we were impacted positively by an ongoing outbreak, and we saw revenue in Q1 '25, including sales to UNICEF, RescEU, BARDA, et cetera.

So that is the reason that we see a lower revenue of the Public Preparedness business this quarter this year, but it is exactly as expected. And as Paul alluded to, we already -- given the order we got from BARDA announced recently, we have upgraded our guidance for the full year and our expectations to this part of the business.

If you look at the Travel Health business, DKK 721 million. 6% up compared to last year, if you just look at the numbers as they are here, but 14% growth in -- when we exclude the discontinued partner revenue. And if you look on some of the individual product lines here, it's clearly driven by continued strong demand for our rabies vaccines. U.S. grew by 23%, the market. The German market grew by 29% and us being the market leaders in both U.S. and Europe, we will also see growth rates beyond the 20%.

On Encepur, DKK 171 million. That is when you look at the numbers here, 16% down compared to prior year, but this is really explained by inventory fluctuations at wholesaler levels. If we look into the market data, then we can see that Germany actually grew by 12%, and we gained 1% market share during the period, which means that we are selling more in the market than we did same quarter last year.

First quarter '25 on TBE was impacted by very early order patterns from the wholesalers, and we actually saw a 60% increase in the first quarter last year, whereas this year is, to some extent, impacted by the low shelf life we entered the quarter with from the regulators and which has caused us to be a little hesitant in supplying short shelf-life products into the market, which at the end, drives down inventory levels at the wholesaler level. So nothing to be concerned about. It is not reflecting the performance in the market and Encepur is still expected to be one of the growth drivers for our business on a full year basis.

Vimkunya, we delivered DKK 41 million, obviously, against close to nothing first quarter last year when we only just launched. So we continue to be on track. Paul already alluded to where we are doing better than anticipated and where we are still facing some challenges, but we are holding on to our expectations for the full year of DKK 250 million in revenue.

Vivotif, we are starting to see positive growth, and we are seeing the impact of some of the investments we have done to reestablish this business here. So that is quite a positive message.

So all in all, DKK 1.058 billion in revenue, which is fully in line with our expectations and fully in line with our ambitions for the full year as well.

On Slide 11, let's have a look at the full profit and loss. We talked about revenue. Gross profit (sic) [ gross margin ] ended at 45%, which is impacted by several factors. I think, first of all, as you will recall, we have said previously, in the first months of the year, January, we typically have a shutdown of our manufacturing site for maintenance, which will mean that we are absorbing less of that cost to inventory, and it will mean idle costs going into production costs.

Then we have also previously talked about the provision we did last year on our tick-borne encephalitis, Encepur, due to the short shelf life during the first quarter as we got even more convinced that we would be able to increase the shelf life, we reversed some of that provision valued at DKK 29 million. So that was a positive impact on our gross profit for the quarter. We have also in our report this time mentioned that now we got the 24-month shelf life, and therefore, we could release more of this provision, which will happen in Q2 with an amount similar to what we saw in the first quarter.

Finally, I think the underlying production is going extremely well. We have to say, we are seeing very good performance on our sites, good success rates and good yield outcomes of manufacturing, which is really reflecting the fact that we are getting more and more into routine manufacturing of these products here. So 45% is quite as expected for the first quarter, and we are obviously talking a higher level for the full year.

If we look further down, R&D cost, DKK 175 million, very much in line with the first quarter of last year. The big items in this spend here is really the chikungunya trials that we are conducting at the moment, and it is the -- our cell line development -- MVA cell line development that is going on as well. SG&A costs up compared to last year and explained by the continued investment behind the launch of Vimkunya, but also the impact that we see from expanding into more markets that has happened over the last 12 months.

Bottom line, DKK 165 million, corresponding to an EBITDA margin of 16%, so fully in line with our expectations. We knew and we also did communicate that Q1 would be a light quarter due to the seasonality of our Travel Health vaccine and the simple timing of the Public Preparedness orders. So right now, with -- after the upgrade, we are targeting 28% EBITDA for the full year.

On the next slide, cash flow and balance sheet. I would just mention a couple of highlights here. Cash flow from operating activities, negative by DKK 752 million. This is impacted by the fact that we -- during the first quarter, we paid the final milestone to GSK, which lowered the accounts payable and therefore, impacted cash flow from operating activities. So we paid more than DKK 500 million to GSK, and we have now paid all the milestones to both GSK and Emergent BioSolutions.

If we look a little further down, then we see cash flow from financing activities that is mainly explained by the share buyback that is ongoing. We have a few days ago, we could -- announced that we completed the second tranche of the DKK 500 million share buyback. So to date, we have bought back approximately DKK 350 million of shares.

And to the right, I will just highlight our current cash balance, approximately DKK 2.3 billion in cash. That was by the end of the first quarter. At that time, we still had approximately DKK 100 million of the share buyback still to be done. So approximately DKK 2.2 billion post the share buyback is what we have in terms of our cash position.

Let me turn to the final slide and just remind you of our outlook for 2026. So right now, after the order we got from BARDA, we have lifted our expectations to the top line. We are now expecting revenue between DKK 5.5 billion and DKK 5.7 billion and an EBITDA margin that we have increased from 25% to approximately 28%. Travel Health remains unchanged in the assumptions here. It's really the Public Preparedness business, which we have increased by DKK 500 million. So now expecting between DKK 2.3 billion to DKK 2.5 billion. And out of this, we have already secured DKK 2 billion in revenue.

So we knew we entered into this year with an assumption that from a Public Preparedness perspective, it would be what we call a normalized year. I think we can still say it's a normalized year from the view that it's not impacted by mpox outbreaks. But the continued interest from governments in buying our vaccines for stockpiling has actually taken our revenue beyond the revenue level we normally associate with a normalized business, which is DKK 1.5 billion to DKK 2 billion. So again, with the current outlook, which we are fully on track to deliver against, this looks to be another good year for Bavarian Nordic.

And with that, I will give the word back to the operator, so we can open up for questions and answers.

[Operator Instructions] Our first question comes from the line of Thomas Bowers from SEB.

A couple of questions from my side here. So maybe just to kick off with Encepur. So can you give us any color on whether to expect growth even maybe above the underlying market growth for the rest of the year now with the shelf life extended to 24 months? So basically, meaning should we be looking at wholesalers to maybe normalize inventory levels already here starting Q2, Q3? Or will that maybe be something that we should expect closer to the season start next year?

And then a question on Vimkunya. So assuming this publication, MMWR publication will take, let's say, another 3 or 6 months or maybe going into '27. Will that have any impact on your ability to reach those DKK 250 million for the year? Or will a publication here in the rather near term even maybe be a potential upside scenario for -- given the current guidance?

And then lastly, just on Public Preparedness. So with the BARDA options now fully utilized, how should we think about sort of visibility, timing, cadence of potential new contracts or frameworks with the U.S. government? And also maybe how should we think the new cell line opportunity into this mix, of course, assuming the positive readout of the Phase II.

Yes. Maybe I can start here, Thomas. Thanks for the question. So on Encepur, I think everything else equal, yes, you would -- you should see wholesalers stocking back into the market. But of course, end of the day, it's really a matter of the demand. As you will read in our report, we have actually have gained 1 percentage point market share and the market grew by 12%. So ideally, we should see that wholesalers stocking back. But we also have to be very well aware of the fact that this is very much a quarter 2 business. So that the question is, well, how much inventory do they want to sit with after the season.

So let's see. I think it is still our -- very much our ambition is to gain market share in this business here. So that means we should follow the market growth, which was 12% right now, and we should also gain -- slowly but surely gain market share back from Pfizer. So we should be growing eventually stronger than the market that we're seeing right now. And on the Vimkunya?

Vimkunya. Should I take that one? So there's a number of headwinds or there are two main headwinds in the U.S. for chikungunya or Vimkunya. One is the publication of the recommendation in MMWR. The other is that the recommendation in the U.S. is really only for people traveling to areas with current outbreak. And there, again, the issue there is that the CDC website is not being updated with the current outbreaks. So these are two things that need to be addressed, and we're working on them.

I would say that a publication of the recommendation can take anywhere from 12 to 18 months. So while we're stating that it hasn't been published and having an impact, it's still not late, so to speak. So our assumptions of the publication that it would be made during this year. So I think the DKK 250 million that we've been guiding is with an assumption that the publication would happen during '26, which obviously could still happen. So as I said, we still stand by that guidance.

And then as I said, on the flip side, we're seeing stronger-than-anticipated demand in certain territories in Europe, such as the U.K., which I know is not Europe, but not -- the U.K. and Germany. So I think while it's a mixed bag of some headwinds and some positivity, I think overall, we stand by the guidance for the year.

Then on BARDA, you were referencing timing and visibility of new contracts. The sole source notification has been addressed and published. So we're awaiting an RFP to be issued, and in that, obviously, it will give some visibility on what the U.S. government is thinking. The current contract expires next year in September. So I think we're still on track to see an RFP being published and a new contract. With quail, as we've talked about before, our cell line, it could open up a new business opportunity in that with a higher yield and output, it's really designed to incentivize governments to increase their stockpiles and to increase their order volumes. But I mean, these are the discussions that we're having with the U.S. government. So let's see.

Our next question comes from the line of Romy O'Connor from Kempen.

Two questions from me. The first on Public Preparedness. So is the year-on-year decline that we see for the Public Preparedness business only driven by the phasing of contracts? Or have you seen any contributions from the private market? And also, if you can comment there what -- to what extent is the private market contribution?

And on Travel Health, are you able to give a little bit more background on what your expectations are for general dynamics there for the remainder of the year, also seeing that the guidance has not moved. Is this assuming everything remains as normal per se?

Yes. Let me take a stab at those. Travel Health, yes, we haven't changed our guidance. In the presentation, we're flagging obviously what may or may not occur with the geopolitical risks. Right now, we see no impact. We're seeing growth in the Travel Health portfolio. And our assumption is that we will continue to seek that growth throughout the year and deliver on the guidance.

Just a couple of things on the Travel Health portfolio as well. Rabies isn't all about travel. There's a post-exposure market that will not -- presumably not be impacted by the geopolitical situation. And Encepur as well is really while we group it as a travel vaccine, it's really vaccine for the endemic regions, which is going to be presumably also isolated from any downturn in travel.

And then on Public Preparedness, the -- it really -- as I think both Henrik and I stated, Public Preparedness is all about the contracts that we currently have and the delivery schedule. So quarterly comparisons or yearly comparisons don't make a lot of sense. So really, we're on track to deliver the guidance as we've just upgraded. We have contracts for secured for the DKK 2 billion, and we do anticipate another DKK 300 million to DKK 500 million in contracts throughout the year. And again, the timing just depends on that delivery schedule.

Our next question comes from the line of Rune Dahl from DNB Carnegie.

A few questions from my side as well, please. On the BARDA contract, the DKK 500 million that you're upgrading the guidance with in 2026 was clearly not expected and the exercised options could therefore have been done in '27. Will this have any implication on the '27 guidance? And put it another way, can you still reach a normalized year in Public Preparedness in '27 without the order from U.S.?

And then the second question on the pipeline progression. So you delayed both the Lyme disease and the EBV vaccines because you want to reach a 25% EBITDA margin. Now you're guiding 28%. Why have you not progressed the pipeline?

And then thirdly, given that you, with the contract, get more cash, what would it take to increase the share buyback program given that you only have DKK 150 million left of the current program?

Yes. Let me take at least two of those. So let's talk about the contract. So your question relates to yes, the BARDA order, was it all anticipated for this year or something to next year? And then what -- does it have an impact on '27?

So it's a mixed bag. So for '27, obviously, we were expecting the option to complete the 11.5 million dose order. So we knew part of the option that was exercised actually last year, we wouldn't be able to complete it this year. So we're only manufacturing a certain number of doses this year. So that option last year, together with the filling option of the new order would have been revenue for '27. Now to complete that filling, we always knew we were going to need more or additional drug substance. And there, it's fair to say that maybe that drug substance order has come earlier than we anticipated. So -- but that would have been on top of what we were anticipating already for '27.

So your question is, does it impact the '27 revenues? And can we still believe that we'll have a normalized year? One, it's far too early for me to answer that with any great confidence. As you know, it depends on the contract. But we say our standard year is DKK 1.5 billion to DKK 2 billion based on the broader number of customers that we currently have. So we're in a situation where we're not just relying on BARDA and Canada as we were before '22, we have a broader customer base. So as we sit here today, I would say that our anticipation is that we will still have a normalized year for '27.

Then EBV and Lyme, yes. So why haven't we progressed as we've increased our EBITDA guidance. Well, R&D and programs moving into the clinic, unfortunately, take time. So even if we could move those programs forward because we're increasing our EBITDA margin this year, there would obviously be increased costs running into next year. And without the visibility of where we are next year, it's a little bit too risky to initiate those clinical studies, which, as I said, would incur costs over the next 2 to 3 years. And then, Henrik, do you want to...

Yes. Thanks for the questions, Rune. Let me answer the one regarding the cash and the impact from the order that we got. You're right that this order we got from BARDA was not anticipated in our guidance for the full year, clearly not, and it will provide us with additional cash by the year-end.

Some media has accused me today for not prioritizing the shareholders, which I don't think is fully fair. We are in the middle of a share buyback program as we speak, and it cannot run faster than it does as we only allowed on the safe harbor rules to buy at a certain pace compared to the general trading in this year. Will this mean more share buybacks? Again, on the -- our capital allocation policy, we are making it very clear that we are not a bank. We do, however, have an M&A strategy. And if we, during the year, can identify an attractive target that we believe will be able to provide a very competitive return to the shareholders, we will go after that. If we don't, then we will do more share buybacks. Obviously, we will not be sitting on the cash.

And just getting more cash, you can ask yourself, has the likelihood of additional share buybacks increase with this? Yes, it has, everything else equal. Of course, more cash, the higher likelihood is that there will be more share buybacks. But this is something that we will evaluate during the autumn, see where is the business heading, what are our M&A opportunities. We would like to do a transaction this year, but we do not have very mature leads. So if that doesn't happen, then of course, we will return more money to the shareholders as well. I hope that answered the question.

[Operator Instructions] And our next question comes from the line of Tobias Nissen from Danske Bank.

I just want to touch on Thomas' question on Vimkunya and the guidance again. Do you believe that the stronger-than-anticipated growth you are seeing in Germany is enough to like say, offset a potential delay to the publication in MMWR into next year?

And then just on Encepur and the timing and the shelf life, what have you seen at the underlying wholesaler level since you got the extension to the 24 months? And do you believe that this will be a tailwind for the remaining of the year? And continuing on Encepur, you did this inventory provision in Q4 and then did DKK 29 million here in the first quarter and guiding for a similar level in Q2. Do you see further upside to this as you go through the year? And could it also -- what is the tailwind here to the EBITDA guidance?

And then lastly, on the phasing of this Public Preparedness, also considering the new order from BARDA, how do you see this phasing over the year?

Yes. Let me take a stab at some of those. Vimkunya, yes, so as I said, I think where we sit here right now, we're still confident on the guidance for the overall year. We've been very transparent and clear there are some headwinds in the U.S., but we're seeing a higher demand. We are also rolling out into new countries during the year, and we rolled out late last year into other countries. So it's a bit early to really see what that demand signal is. But if some of those come through with the same demand that we're seeing in the U.K. and Germany, then as I said, we're still confident that we can meet the overall guidance.

On Public Preparedness and the new order, I think we said that the majority of that, that $97 million refers to bulk that is being used to replace what was used for mpox. I think we're seeing that will be spread over for the remainder of the year, but primarily Q2, Q3. And then I think, Henrik, do you want to...

Yes. And on Encepur, at the moment, and I think that we already talked a little about the inventory levels at wholesalers of our Encepur vaccine is low. So everything else equal, once we start supplying fresh products into the market, we should move beyond the market growth as wholesalers will stock up. It is, however, not in our control, of course, exactly what inventory level they will hold, but that could be -- definitely be a scenario.

And then on the provision we did last year, we have -- or we are planning to release another DKK 29 million approximately in the second quarter. Could there be more? Potentially, yes. But I think the -- we have said previously that we approximately accrued for DKK 100 million provided for that last year. But the remaining parts, whether that will be released really depends on the demand end of the day. Still with 24-month shelf life, some of these batches will expire early '27. So it really also depends on the demand, how much we sell and then how much the wholesalers will buy. But potentially, if there's a strong demand and if wholesalers are stocking up again to normal levels, there could be a little more of the provision released in Q3 or Q4. So I hope that answered your questions, Tobias.

There are no further questions at this time. So I'll hand the call back to Paul for closing remarks.

Yes. Thank you. Thanks, everyone, for joining and for the questions, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

Good day, and thank you for standing by. Welcome to the Bavarian Nordic 2025 Annual Report. [Operator Instructions] Please be advised today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, CEO, Paul Chaplin. Please go ahead.

Thank you, and welcome, everyone, to today's presentation, which is an update on our results for last year, 2025. Today, you'll hear from me a few slides from myself, and then I will hand over to Henrik Juuel, the CFO. So if you turn to Slide 4, we reported very strong results last year, DKK 6.2 billion in revenue with a 28% EBITDA margin. And this is the result of very strong performance of both arms of our commercial business on Travel Health, but also on public preparedness. On Travel Health, we saw a 30% growth last year, which is a very strong performance across the whole portfolio, but also related to the launch of our Chikungunya vaccine. On public preparedness, in '25, we were at the back end of an outbreak of mpox and we saw more than DKK 3.1 billion in revenues, which is approximately DKK 1 billion above the upper end of our normal base business.

So as I said, very strong performance from both parts of our commercial business in '25. In addition, we sold the Priority Review Voucher valued at DKK 810 million. And if we included this in the EBITDA, this would bring the EBITDA to a 41% margin. Some events that have happened since -- in this year, which are of noteworthy is we've announced 2 agreements, one with Eurofarma for the distribution of our Chikungunya vaccine in Brazil. And earlier this week, we announced an extension or an expansion of our strategic partnership with the Serum Institute of India to produce our Chikungunya vaccine.

And both of these are related to improving the access of Vimkunya in those regions. Today, we also announced the second tranche of our share buyback, and I'm sure Henrik will coming back to more of that in the future slides. And last week, we announced that after a long tenure at Bavarian Nordic, unfortunately, I think it's 27 years, I have decided for different reasons to step down later this year, but have agreed with the Board that I'll be staying until the end of the year or until a replacement has been found. The outlook for '26, Henrik will go into much more detail. But here, we're guiding for total revenue of DKK 5 billion to DKK 5.2 billion with an EBITDA margin of 25%. This is made up of another strong year of growth for Travel Health of DKK 3 billion and public preparedness of DKK 1.8 billion to DKK 2 billion, reflecting coming out of the public health crisis for mpox and reflecting a more normalized year for public preparedness.

We turn to the next slide, talk a little bit more about the Travel Health. As I said, last year, we saw a 30% growth. This is primarily due to our rabies and TBE vaccines, where we saw a 34% and a 20% growth, respectively, during the year. We see an outstanding performance of rabies, and I'll come to some of the reasons for that in the next slide. But in the U.S., we saw a double-digit growth and an improvement in the market share up to 78%. In Germany, we saw a remarkable growth of 48% in the market, but also a 6% improvement in the market share to 97%. So strong performance in both of the 2 key markets for rabies. Similarly, for TBE, we saw 20% growth and an improvement in the market share in Germany from 28% to 31%. So really a very strong performance, brand performance for both products, but also a strong market growth in both areas.

And moving forward, we still stand by the projection of a 10% to 12% annual growth in Travel Health, but of course, starting from a much higher standpoint than we had originally reported at the Capital Markets Day. If we go to the next slide, why are we seeing such strong growth in rabies? Well, in Europe, we've seen cases, fatal cases, unfortunately, of travelers returning from North Africa to the U.K., France and Spain. And these have obviously hit the media and raised the profile of the dangers of rabies. In the U.S., we're seeing -- or the CDC are tracking what looks like 15 likely outbreaks of rabies in 12 different regions of the U.S. And last year, we saw an increase in the number of deaths in the U.S., which is 6 deaths up until September of last year. So these outbreaks, the unfortunate deaths, which are higher than typically seen has really raised the profile of the importance of or the dangers of rabies, both in the U.S. but also in Europe.

And this is one of the underlying reasons we're seeing a very strong growth in the market. And obviously, we are the market leader benefiting most from this increase. So if you turn to Slide 7, last year, we saw the first approvals of Vimkunya, our vaccine against chikungunya, both in the U.S. and in Europe. And that led to an outstanding launch performance in '25. We had launched in the U.S., I think, within 4 weeks of the approval, which is, I would say, a gold standard performance within the industry. And we launched in, I think, almost 14 countries by the end of the year. We exceeded the guidance in terms of revenues for the guidance of DKK 75 million. And in terms of volume, we saw a very successful launch, which is associated in terms of volume greater than some of the recent vaccine launches for travel vaccines. So very happy with the performance in '25. It is setting ourselves up for continued growth in '26, where we are guiding for DKK 250 million, which is a significant growth.

We are seeing very strong demand in the markets that we've launched. And Vimkunya, our chikungunya vaccine will be a key driver of future growth within the Travel Health franchise in the coming years. If we turn to the next slide, Slide 8. In public preparedness, as I said, in '25, we were coming on the back end of the public health emergency that was declared by WHO and Africa CDC for the outbreak of mpox in Africa, and we saw stronger demand or as we've often referred to it as spike demand over our base business, seeing more than DKK 3.1 billion in revenues during '25. What we are anticipating in terms of '26 is a more normalized year, guiding for DKK 1.8 billion to DKK 2 billion. And of that, we've already secured DKK 1.4 billion of that revenue to various different contracts that we have in hand. So again, a very strong year is planned for '26. In addition to our activities, we also have a number of ongoing clinical studies which are supported in part by CEPI, both in children, in infants and also in pregnant women.

And hopefully, these studies will enable the expansion of the label, which already includes adolescents and adults in certain territories to also include infants and children, which essentially will hopefully lead to an expansion of the label for the entire population. We move to the next slide. So on public preparedness, we often refer to our base business of being DKK 1.5 billion to DKK 2 billion, but we anticipate there will be spikes in that base business from time to time, either associated with outbreaks of mpox or as we've seen historically, one-off larger orders from governments. And on Slide 9, what we're showing you here is a map of the recent cases of mpox. And what we've seen is a 67% increase in the cases of mpox reported already in '26 in Europe. And if you just look at Spain, there are 53 cases in Spain since January '24, but almost 50% of that is in '26.

So -- and in France, similarly, 10 cases since '24, but 6 of those are already within this year. And this indicates that mpox has not gone away, while it may not be part of the news flow for good reasons. there are still cases, and there does seem to be an uptake in the number of cases already this year. And of course, we are really the only supplier of an effective safe mpox vaccine globally. If we go to the next slide. In terms of pipeline, we have a number of different trials ongoing for our chikungunya vaccine. These are trials related to commitments that we made to the regulators as part of the approval. So we have an efficacy study ongoing and a study in children. The pediatric study will hopefully lead to a broadening of the indication.

We also have a study for MDA, our smallpox, mpox vaccine, where we are moving to making a change in our manufacturing away from eggs into a proprietary cell line. This is a Phase II study that was initiated last year and will be completed or the top line data will be reported later this year. We have an ongoing Phase II study for equine encephalitis, which is a vaccine fully funded by DoD. And we have preclinical assets, both for Lyme disease and Epstein-Barr Virus, which for priority reasons, we now plan to move into the clinic next year. So a lot of ongoing activities in terms of the pipeline, many of which are associated with life cycle changes or supporting the commercial assets. And with that, I will hand over the presentation to Henrik Juuel.

Thank you very much, Paul. So let's start with an overview of the commercial performance for the fourth quarter of '25 and full year '25. So we had a very strong finish of the year with revenue -- total revenue of close to DKK 1.5 billion, comprised of nearly DKK 800 million on public preparedness and more than DKK 600 million from our Travel Health business. So worth noting here is really in particularly the Travel Health business which in the fourth quarter of last year delivered 61% growth. So looking at the full year, let's finish on public preparedness first. We delivered DKK 3.1 billion, exactly what we had guided for in November when we refined our guidance to DKK 3.1 billion. From that business, as Paul explained earlier, this is more than DKK 1 billion above the upper end of our normal base business within public preparedness.

Travel Health ended close to DKK 3 billion, 30% up on a full year basis compared to '24 and driven by very strong performance by Rabipur, RabAvert and Encepur. And Paul already talked about the reasons behind that, basically driven by both strong market growth, but also very strong brand performance for both products. So nearly DKK 3 billion on Travel Health, which was above our latest guidance provided in November, where we said DKK 2.85 billion so driven by this very strong finish of the year. It's also worthwhile mentioning Vimkunya here. We delivered DKK 85 million in revenue for the full year against our latest guidance of DKK 75 million. So again, somewhat above the latest guidance and a very good start in a launch year. So DKK 6.2 billion and DKK 44 million total revenue for the full of '25. So let's turn to the next page and look at the full P&L again for the fourth quarter and full year of '25.

So if we focus on the full year basis, the 9% growth and the DKK 6.2 billion in revenue we just talked about, production cost of nearly DKK 3.2 billion, leaving us with a gross margin of 49%, somewhat lower than what we saw for the first 9 months, driven by the low gross margin we saw in the fourth quarter, where we delivered 39% and which I think demands a little explanation here. So what we did during the month of December or Q4, we made a provision on our tick-borne encephalitis product Encepur based on the current discussions with the regulators, we got on our own manufactured version of the vaccine, we were -- got 12 months shelf life. With the product we acquired from GSK and that was produced by GSK, we have 36 months shelf life. And of course, we have an anticipation that we can increase the shelf life. We just need to provide the necessary documentation and data points to the authorities.

So we've made a provision assuming that we could get the shelf life up to 18 months from the current 12 months. And based on that, you can do a simple calculation and see, okay, some of these vaccines, if we stay with 18 months, we will simply not be able to sell before they run out of shelf life. So a significant provision was made from that in Q4, but we managed to contain it within our current guidance due to the generally very good performance within our manufacturing area for the full year '25. And I would say with that, the -- if we manage to agree on a longer shelf life than 18 months, then obviously, in '25 -- sorry, this year in '26, we will have an upside when we reverse the provisions. On the other hand, if we do not get to 18%, but end with something lower, there's a small downside. We find the downside very unlikely, and it's more likely that we will have an upside during '26 as we anticipate to agree with the regulators to get a longer shelf life approved.

So 49% is where we ended the full year on gross margin. R&D costs ended at DKK 780 million. Originally, when we guided for '25 back in February last year, we said we anticipated to spend approximately DKK 900 million. But we also late in last year, alluded to there might be upsides that we could make some savings for different reasons, one of them being that we are awaiting this efficacy trial on Vimkunya to be run in an outbreak session and that outbreak has not happened yet. So DKK 780 million, so we spent less than what we had originally guided. SG&A at DKK 1.275 billion spent last year. So quite a significant increase over '24, driven by deliberate decisions, first of all, to put money behind the launch of Vimkunya, but also to expand our network of sales entities in the process of taking the business back from our partner in Europe, Valneva. And then we also made a decision to expand our sales force in Germany to take advantage of the market growth on tick-borne encephalitis.

So with total operating cost of DKK 2.55 billion, we get to an EBIT of DKK 1.8 billion. And that is when we include the income from the voucher, that's the DKK 810 million net income from the sale of the Priority Review Voucher. And then if we convert to EBITDA, which is the measure that we guide on, you will see at the bottom there, DKK 2.5 billion in EBITDA. And if we exclude the voucher, we're talking about DKK 1.7 billion in EBITDA. So very strong financial performance last year. And if we just quickly compare to our latest guidance, we said that we would land approximately at DKK 6 billion. We are delivering more than DKK 6.2 billion. So delivering better than guided on top line. And on the EBITDA margin before the voucher, we guided 26% and delivered 28%. And the difference here is really driven by the lower spend on R&D, but also on the very strong finish of the year, delivering additional revenue. So very strong performance.

And I think it's -- if we compare to the original guidance provided in February of last year, we're ending exactly in the midpoint of that guidance, both on revenue but also on the EBITDA margin. If we then turn to the next slide, quickly on our cash flow and on our balance sheet here, strong cash flow, obviously driven by the profit from the business and again, with a good contribution from the sale of the Priority Review Voucher. Investment activities negatively impacted by the milestones we paid back to both Emergent BioSolutions, but also GSK from the acquisitions we did previously. Here, we spent DKK 1.1 billion, and the rest of the impact on investment activities really comes from placement of our cash into securities. Cash flow from financing activities was negative DKK 114 million, and that was impacted by the first tranche of the share buyback we did of DKK 150 million, partly offset by proceeds from a warrant exercise that happened last year.

On the right side of this slide here, you see selected balance sheet items. And I would just point to the current cash balance. So cash and cash equivalents of DKK 3.3 billion by the end of December last year. At that time, we had not paid the last milestone to GSK, but that has happened here during Q1. So that means if you -- everything else equal, after that payment, we have approximately DKK 2.8 billion of cash available. We have also this morning announced the second tranche of our share buyback this time, DKK 200 million that we anticipate to complete within the next 1 to 2 months. So again, strong financial position with a good cash position and obviously no debt at the moment.

Let's turn to the last slide, elaborating on our outlook for '26. This outlook is unchanged compared to when we announced our preliminary '25 numbers and our outlook as well. So we are for this year guiding revenue between DKK 5 billion and DKK 5.2 billion and an EBITDA margin of approximately 25%. So from Travel Health, we are anticipating approximately DKK 3 billion. And on the surface, that looks very much like what we delivered in '25. But remember here that from 1st of January this year, we do no longer have the partnership with Valneva, meaning that we are not going to record any sale of the Japanese encephalitis vaccine. We are also getting out of the agreement with Dynavax on the hepatitis B vaccine. That agreement will end in April. So if you subtract the partner business that is no longer in place, then actually this guidance here corresponds to a 10% growth.

And if you look at it in constant exchange rates, we're actually looking at a guidance that corresponds to 14% growth in '26. So a growth rate in our Travel Health business fully in line with the midterm financial targets that we set at the Capital Markets Day back in '24. On public preparedness, as Paul says, right now, I think '26 looks to be the first normalized year in 5 years. We've had 4 years now impacted by various outbreaks, either in Africa, Europe or U.S. and '26 right now looks to be more of a normalized year. And here, we are guiding, you can, I would say, at the upper end of that normalized year, DKK 1.8 billion to DKK 2 billion in revenue and DKK 1.4 billion of that has been secured already in contracts. So with that, I will give the word back to the operator and ask for questions.

[Operator Instructions] We will now take our first question. This is from Romy O'Connor from Van Lanschot Kempen.

I have 2 questions. The first, maybe more of a clarifying question on the public preparedness outlook. So the base business is now guided for DKK 1.5 billion to DKK 2 billion until 2027. So I just want to know, especially with the increase in reported cases, can we really expect this normalization to happen, especially what we have seen since, I don't know, 2023? And then the second question is, in the annual report, you mentioned strong focus now on organic growth for the year. I just want to understand your capabilities for M&A for the next few months and what your current bandwidth is?

Yes. Thank you for the questions. So your first question related to public preparedness. I think in our guidance, which we have DKK 1.8 billion to DKK 2 billion, it reflects obviously contracts that we've already secured either last year or actually since we've announced the guidance of DKK 1.4 billion and contracts or opportunities that we are working on that we believe will come through, obviously, this year. It obviously doesn't include any so-called spike business that we may see if indeed some of the early indications point to that there may be something brewing in Europe or other territories. It does not include anything of that. So this is a more normalized business, although it's at the upper end of our normalized business, but it does not take into account if there is any additional outbreaks of mpox or if there is a larger order that we're not aware of coming in the next 12 months.

The other question related to, I guess, our bandwidth and our appetite maybe on M&A. Our strategy, as you know, is on growth, obviously, to grow both parts of the commercial business, our Travel Health portfolio, but also public preparedness. But it also includes M&A as we obviously have a very successful track record of acquiring assets and turning them around. I would say that part of the strategy is still very much a focus for the management and the Board, and we are searching and looking for assets that we could acquire.

We'll now take our next question. And this is from Thomas Bowers from SEB.

A couple of questions here. So first, just in regards to the shelf life related provision you have. So how should we think about the potential impact or tailwind for '26? Or is this more potential for '27, given that you may have to take a little bit longer to get to that 36 months of shelf life? And maybe also, can you just remind me where are you currently with Rabipur on shelf life compared to the former Glaxo-produced material? And then on Vimkunya. Firstly, what is the exact FDA deadline for initiation of the outbreak trial in Thailand? And assuming that we don't see any outbreaks, what's the, you would say, the waived deadline or for the FDA here?

And is the study definitely waived by the FDA if the outbreak happens? And then maybe just quickly also on Vimkunya, maybe the margin focus. So in order to improve margins, so of course, economies of scale here is important. But is there anything in the current setup also with the contract fill/finish that you're using that Vimkunya sort of in the mid to -- or near to midterm will actually be starting to become accretive for your current EBITDA margin level? Or do you need to make decisions, for example, with the fill/finish in order to improve margins significantly above the current level?

Thanks, Thomas. Let me take a stab at these answers and Henrik, please, you can jump in if I don't address it all. So your first question was on the shelf life. So let me take a step back. So in the tech transfer for Encepur, obviously, we had to transfer both the drug substance, the bulk manufacturing, but also the fill/finish. And in that plan, we knew that by the time we filed with the authorities, we would have limited shelf life. And obviously, everything to do with the tech transfer is demonstrating comparability to the product that you're transferring from so to the GSK material. So when we discussed with the authorities late last year, we had limited stability data of the products that we had manufactured at the end. And that led to this limited shelf life recommendation.

But obviously, since then and every month, we get more and more data, more batches being manufactured. And we anticipate that, that shelf life will be extended as and when we get more data. Now that doesn't mean to get the 3-year shelf life, we need 3-year data, but because you can do projections. But to do projections, you need more robust number of data points. So we anticipate on the positive side that we will see shelf life extensions during this year and maybe we'll be back to the 36 months maybe in early next year, but that all depends on data. In terms of -- you also asked on Rabipur, there, we have the same shelf life for the BM material as the GSK material, and that just relates to how much data we had at the time when we filed. So I hope that answers those questions.

Then on Chikungunya, you asked about the efficacy trial. This is a trial design that was agreed with the regulators as part of the approval process. And here, we have to enroll a number of subjects in a region that may have an outbreak. So it's a design where we enroll subjects in the anticipation that there will be an outbreak in that region. If there is no outbreak in that region, once we've enrolled all the subjects and collected the data, we'll end up with no efficacy data. That's just the way the trial is designed. And in that case, we would then have to open the dialogue again with the regulators on what is then the requirement with the regulators and some of that discussion is already ongoing. Whether that's an additional efficacy study or an effectiveness study, there are different possibilities and dialogues that we're having with the regulators. Then the other question related to margin improvement on Vimkunya. You're right, a big part of how we'll improve the margin on Vimkunya is related to volume.

And obviously, when you launch a product and you know you're in this phase where you're raising awareness and all the rest of it, of course, it is an expensive vaccine to produce. So volume will cause a reduction in the margin in the years to come. In addition to that, we are making improvements to the process. We've already made improvements to the process, which we filed with the regulators, which we're hoping for approvals of later this year within the first half of this year. And we continue to look at making further improvements also in both the bulk manufacturing, but also the drug product manufacturing. And they will have margin improvements in the years to come. So Henrik, do you want to add anything?

No, I think that was a good summary. And I think it's continuous work on improving the COGS on Vimkunya. And it's quite normal that you start with a quite immature manufacturing process that more or less comes directly out of the laboratories and then you start working on process improvements. And as the filling part is done with the CMO, it's quite expensive in low volume. So we will drive better margins on Vimkunya through process improvements and volume benefits.

[Operator Instructions] We have a question coming through. And a question from Thomas Bowers, SEB.

That was quick for the follow-up. And I just wanted to talk a little bit about the governance. So what sort of profiles and competencies are you sort of prioritizing when you are looking to expand the Board? And maybe it's not a question for you, but maybe if you can give some color on the thoughts there.

Yes. I think you've answered your own question there, Thomas. I think that's a question maybe for the Board. There is a process ongoing right now to identify some new Board members. And I believe the plan is that those successful candidates will be announced as part of the announcement related to the general assembly.

Okay. Then a question that I hope you can answer then. So just in regards to the ACIP recommendation, which you got almost a year ago. So is there any news on the MMWR publication? And then secondly, just in terms of your prioritization on Lyme and EBV. So should we expect a material step-up in R&D spending from '27, given that you have postponed those into first half -- sorry, into '27? And is there sort of a reason beyond cost saving that you actually are delaying the projects?

Yes. I can answer these questions. So on the ACIP recommendation, there really isn't any news on the publication or the status of the MMWR. And therefore, we are continuing to talk to various different distributors on how to move forward. I think there is a recognition that the world is changing and that we can't simply just wait around for the MMWR. As you know, some suppliers really want to see that publication before they will start buying the vaccine. I think we're seeing movement now that people are recognizing that this may take longer than normal. So we have no real news on where that will be in terms of the publication.

In terms of the pipeline assets, you're right, there's a balance here in prioritization and ensuring that we're delivering the EBITDA margins that we have stood by, the minimum 25%. We obviously, right now, have an R&D budget that is securing the activities, the regulatory requirements for chikungunya, but also the trial related to moving away from eggs to our proprietary cell line for MVA. As and when those activities come to an end, it will free up funds that we can then focus our activities into other R&D activities, whether that's Lyme, EBV, but we'll look at it.

So really, what I'm trying to say is we are prioritizing our finances based on the promises that we've made to the market in terms of the EBITDA margin, and that will dictate when and how we can move some of the assets into the clinic. I would also say that while we've paused the clinical start of both Lyme and EBV, it does allow us to perform additional preclinical studies in both those areas that may be beneficial when we do decide to move into the clinic.

We will now take the next question. A question from Romy O'Connor, Van Lanschot Kempen.

I'm still here. Just one final question on Vimkunya. So guidance surpassed what we expected for 2025. I just want to maybe get some more color on what we can expect this year. Do we expect the DKK 250 million guidance as purely a base, especially in the light of competitor withdrawals from the market?

Yes. Maybe I can take that one. So yes, we are guiding a significant increase from last year where we ended with DKK 85 million, and now we're guiding DKK 250 million. And that is, of course, it's primarily coming from the countries where we already launched, where we expect to see a continued strong momentum and basically market growth where we are the only player more or less in most markets. But then we're also anticipating launching in more countries. We are awaiting approval in Switzerland. We are waiting an approval in Canada, and we still -- there are still a couple of countries in Europe where we do not have launched yet. So I think this is, as we see it, a typical launch sales profile when you launch into a market that is nonexisting, you will see quite a steep uptick in the beginning. And we are seeing a good demand in the market than DKK 250 million, I think we believe is doable, but also, of course, a very significant growth that we need to deliver upon.

And there are no further questions at this time. So I will now hand back to Paul Chaplin for closing remarks. Thank you.

Thanks, everyone, for joining and your interest and all the questions. Have a great day. Thank you.

Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect. Speakers, please stand by.

Good day, and thank you for standing by. Welcome to the Bavarian Nordic Third Quarterly Report for the 9-month period ended 30th of September 2025 Conference Call on Webcast. [Operator Instructions] Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Mr. Paul Chaplin, CEO. Please go ahead.

Thank you, and hello, and welcome, everyone, to Bavarian Nordic's Q3 results. Before I start, I just want to make sure you've seen our forward-looking statements on Slide 2. On Slide 3, on today's call, you have myself, Paul Chaplin, and I will walk through the key highlights of the first 9 months and talk a little bit about the excellent progress that we've been -- that we've made. And then I'll hand over to Henrik Juuel, the CFO, who will walk you through the commercial performance and the financials.

So if you go to Slide 4, it really has been a fantastic first 9 months of the year. We've recorded close to DKK 4.8 billion in total revenues, which is a 32% increase compared to this time last year, which is a fantastic result and one that is really due to a strong performance across the whole portfolio, both Travel Health and Public Preparedness, and that has resulted in an EBITDA margin of 31%. We've had probably the strongest quarter for our Travel Health business, which is an endorsement of our strategy. And as I'm sure we have many new investors on today's call, I want to just take a few minutes walking you through the graph on the bottom right-hand corner of Slide 4. This shows the financial performance over the last 5 years. And before 2020, Bavarian Nordic was really an R&D-focused company. We had our government business, which we now call public preparedness, and I'll talk more about that. But essentially, we were a loss-making company coming to our shareholders frequently for capital raises.

In 2020, we took the bold step on our growth journey to commercialize the business, and we bought 2 assets our rabies and tick-borne encephalitis vaccines, which started our commercial journey. And despite COVID, which obviously had an impact on travel, on travel vaccines, we were able to grow that business. And in '22, we sold more doses of rabies and TBE than any other previous owner. And that's exactly the strategy that we implemented. We thought that we could purchase what I call unloved assets that weren't performing well in previous owners' hands. And with our dedication and focus, we could turn them around. And that's exactly what we've done with rabies and TBE, and that actually are the golden jewels that are really driving the performance for travel health that we have today.

In '23, we also added 3 more assets from another company, which complemented our Travel Health portfolio. And one of those was a chikungunya vaccine in Phase III, which is now approved as Vimkunya, which we're launching this year and is also adding not only to the performance in the first 9 months of this year, but is a key driver for the future growth. On top of this, we also had our Public Preparedness business, and I'll talk more about that in the coming slides. But basically, what we've seen over the last 5 years is a complete transformation of Bavarian Nordic from a loss-making R&D-focused company to a profitable vaccine company that is having a huge impact on the global stage in terms of public health.

Before I move on, I also want to take note, and I'll leave more of the details in terms of the guidance to Henrik later. But we have refined our guidance today. And I just want to address one comment that I've already read that this is a lowering of our guidance. This is actually not the fact because at the beginning of the year, when we provided the guidance, we had a range for both revenue and EBITDA. This is related to our public preparedness business. And I'll come back to why there's a range, but essentially, this is government contract business where you either get a contract or you don't.

And therefore, we had a range. We refined that range during the year. And today, we are recognizing that with 1.5 months left, we have secured -- we have the business that we've secured, which is DKK 3.1 billion which means together with Travel Health and other income, we're at the DKK 6 billion range. While that's at the lower end of the guidance, it is still within guidance. And I would say DKK 3.1 billion in terms of Public Preparedness, I have to remind you, is DKK 1 billion above our annual -- normal annual base business of DKK 1.5 billion to DKK 2 billion. So it's an exceptional year in terms of Public Preparedness, and we are still standing by our revised and high increased guidance for Travel Health of DKK 2.75 billion. So a very strong first 9 months, and I want to actually take this opportunity to thank all the employees for a tremendous effort. It's really down to their focus and dedication that time and time again, I'm allowed to talk on a quarterly basis of our strong financial performance.

If we go to Slide 5. On Travel Health, as I said, it's probably the strongest quarter since we've built up this portfolio. We've seen a 23% increase in sales compared to this time last year. And our 2 flagships, rabies and TBE, as I said, these were purchased back in 2020. We've really turned them around. Rabies has gone from strength to strength. We've seen both an improvement in the growth in the market, but also in terms of market share. In the U.S., we've seen a 4% improvement in market share compared to this time last year. And in Germany, we're really seeing a strong growth, a 53% growth in the first 9 months of this year compared to last, which is an outstanding performance.

On TBE, again, we have stopped the decline in market share in key markets like Germany since we bought these assets, and we're actually beginning to now see an improvement in market share, particularly in Germany. So we're incredibly happy with the performance that we're seeing in terms of Travel Health, and we believe there is future growth in the months and years to come.

If you go to Slide 6. Within our portfolio of Travel Health, we have a vaccine against chikungunya. And chikungunya is a mosquito-transmitted disease. And until very recently, there were no vaccines or treatments available. The vaccine -- our vaccine was part of an acquisition that we acquired in '23 and was approved earlier this year. And subsequently, we've launched our chikungunya vaccine Vimkunya in 10 different countries. So we have had an aggressive launch plan, and we've stuck to that schedule. And we're beginning to see an uptake in the sales of the vaccine, which is great to see. And we're on target to meet the DKK 75 million in the first launch year, which is a very strong performance in our first launch year.

We filed for further approvals in Canada and with Swissmedic in Switzerland, and we expect those approvals to be coming next year. And we've already begun some of the post-marketing commitments for expanding the label, and we have a pediatric study and an efficacy study all in progress, which, as I said, are commitments that we've made to the different regulators in the U.S. and Europe. So chikungunya or Vimkunya really represents a future growth potential. Yes, we have to educate and prepare the market, but we believe that this market has the potential to grow to $500 million annually within the next few years, and that's for travel alone. So a great future business opportunity.

We turn to the next slide on Public Preparedness. And I want to spend a little bit of time talking about Public Preparedness and what it actually is and why it is different to Travel Health. And the best way of walking you through that is to talk about the revenue graph that's again on the bottom right-hand corner of this slide. And Public Preparedness is actually one vaccine. It's based on a vaccine against smallpox. Smallpox is a disease that has been eradicated. But unfortunately, there is concerns by many governments that smallpox could either reemerge through deliberate release in a bioterrorism attack. It is also closely related to another emerging disease called mpox, formerly known as monkeypox. And we've had a long-standing collaboration with the U.S. government in the development of our vaccine, which is now approved in many countries around the world.

And if you look at the graph at the bottom right-hand corner, in 2020, we really had 2 customers, one major customer, which is the U.S. government, where we've secured more than DKK 2 billion in both development and acquisitions over the number -- over the years and Canada. So we had 2 customers. This changed in '22 when there was the first outbreak of mpox. And here, we really saw, and you can see a spike in activity in '22 and '23, where we supplied more than 15 million doses of our smallpox mpox vaccine. And coming through that first outbreak, we were left with more customers. So we now have the EU, both HERA, which is a new organization, but also other funding mechanisms in the EU, such as rescEU. We had other EU nations like France. So going from 2 customers to a handful of customers. At that point, we said our base business moving forward would be DKK 1.5 billion to DKK 2 billion annually, but we would see these spikes from time to time in revenue due to either future outbreaks of mpox or one-off large orders from different governments.

Then in '24, we also had another outbreak or a larger sustained outbreak of mpox in Africa, and that also led to a continued spike, which has flowed over into '25. So in this year, we are guiding to secure DKK 3.1 billion in revenue, which is, as I said, about DKK 1 billion higher than our base business of DKK 1.5 billion to DKK 2 billion. So with Public Preparedness, it is not as easy to guide accurately in terms of growth or the future revenues simply because it's all down to government contracts. Some government contracts can take many years to negotiate. And unfortunately, I've been involved in government contracts, which we thought were coming through that fell down at the very last minute. So it is a little bit more unpredictable than a traditional vaccine sales like with Travel Health. But as I've said, we have since '22, been guiding with a base business of DKK 1.5 billion to DKK 2 billion. But obviously, since '22, we've been recording revenues much higher due to the 2 spikes that I've explained.

In terms of where we are, we are obviously secured contracts of DKK 3.1 billion already this year. We're well on our road to securing. In terms of the first 9 months this year, we've exceeded the DKK 2 billion already in the first 9 months, and we're well on track to secure the guidance for the rest of the year. We have secured contracts for next year for a total of DKK 1.1 billion. So we're well on our way to securing our base business of DKK 1.5 billion to DKK 2 billion moving forward. We have ongoing clinical studies that are funded through a collaboration with CEPI, both in a pediatric study, which will hopefully support a label extension to include children in addition to the adolescents and adults that we already have.

So if we move on to Slide 8, just to talk a little bit about the pipeline. One area is what we call MVA cell line. This is actually a trial that was initiated a few weeks ago, and this is moving away from the egg-based production that we currently have to a proprietary cell line that we've developed. The trial that has started is comparing the safety and immunogenicity of the vaccine produced in the different processes. And this is really an initiative that we've taken, which will greatly improve our manufacturing capacity so that not only can we deal with an mpox outbreak as we have since '22, but we would, with partnerships, also be able to deal with a much larger global outbreak either of mpox, [indiscernible], even smallpox. And it also makes us much more robust for any competition that may come later down the road.

Other activities in the pipeline relate to chikungunya. These are post-marketing commitments that we have with the regulators, pediatric study, expanding the label and also an efficacy study and other activities are either funded through DoD or early stage such as Lyme and EBV, which is still preclinical.

And with that, I will hand over the presentation to Henrik Juuel.

Thank you very much, Paul. So on Slide #9, just a few more words on the commercial performance for the period. So we delivered for the 3 quarters in Q3 here, we delivered close to DKK 1.8 billion, and that corresponded to an overall revenue growth of 32%. So very significant growth, supported by both our business mix, 50% growth on our Public Preparedness business and 22% on our Travel Health business.

If we take the Public Preparedness business, Paul already alluded in detail to this one here. And so that has really been about, first of all, securing orders and executing on these orders this year. So targeting the DKK 3.1 billion for the full year. So strong growth on that front for first 9 months as well compared to prior year. On Travel Health, it is really our Rabies and our TBE business that has been driving the strong growth we have seen both for the quarter but also for 9 months, 22% overall growth, 23% from our Rabies business, 18% from Encepur And I think for both products, I think we can say here, it's driven by both strong market growth, but also strong brand performance and actually market share gains for both products. So very strong performance.

Vimkunya, our new vaccine against chikungunya as we launched earlier this year. We are so far very pleased with the performance. We have in a very short time managed to launch in 10 countries, after the Q3 in the Nordic countries, Italy and Spain as well. So we have in record time, I would say, we have actually made quite a wide launch possible. From the start of the year, we guided on Vimkunya DKK 50 million to DKK 100 million, and we are now refining that to the midpoint. That's DKK 75 million, and we have so far delivered DKK 42 million after 9 months. So going very well and in accordance with our expectations.

Vivotif, our typhoid vaccine, we are -- on a 9-month basis, we are seeing a positive growth. We have been struggling somewhat with this product, but we are finally starting to see positive growth, and it's being driven by initiatives taken to gain market share. Unfortunately, the typhoid market has been down by approximately 7% these 9 months compared to prior year, but we have actually year-to-date managed to compensate for that market decline by gaining market shares. Third-party products at the end, these are the main driver of that one is our Japanese Encephalitis product that we have a partnership with Valneva that comes to an end by the end of this year and our partnership on hepatitis B vaccine, HEPLISAV-B with Dynavax comes to an end as agreed April next year. So all in all, very strong growth on both parts of our business, 32% for the quarter and actually the same for the full 9 months. So performance that we are very pleased with.

On the next slide, we are looking at the full P&L, where we start with the revenue we just talked about DKK 1.8 billion for the quarter. We have a gross margin of 50%, which is significantly up compared to the same quarter last year. This is driven by volume, obviously, the higher volume, the more busy we are in the production area, the more efficient we can be and the easier it is to absorb all the costs to the products being manufactured. But it's also explained by what we call other production costs, which is typically cost -- it could be cost of idle capacity. It could be cost of scrap. It could be caused by less efficient yield coming out of manufacturing. So we have been successful in all these parameters. And therefore, we are seeing a gross margin of the 50% versus 43% last year.

R&D cost varies a little from quarter-to-quarter. You will see that we are actually spending less than last year, both for the quarter and for the 9 months. This is mainly due to timing of some of the committed studies we have on chikungunya that is progressing.

And on SG&A, you see quite a substantial increase. It's mainly or very largely explained by the launch efforts we are putting behind Vimkunya, the chikungunya vaccine and also by Bavarian Nordic entering into new markets. We have, during the last 12 months, established ourselves a commercial presence in a number of countries, including Canada, it's U.K. and it's France, which, of course, will give us further opportunities to drive growth going forward.

If you look further down the P&L, that gives an EBIT of DKK 1.2 billion nearly. Then we have included in that one other operating income of DKK 810 million, which comes from the sale of the priority review voucher that was recognized in the third quarter. Further below, you can see the EBITDA margin, excluding the other operating income, that is DKK 515 million, which corresponds to an EBITDA margin before special items of 29%. So on a 9-month basis, that takes us to an EBITDA, excluding other operating income of nearly DKK 1.5 billion or an EBITDA margin of 31%. So again, strong performance, all in line with what we have communicated previously and in line with our expectations.

On the next slide, a quick overview of the cash flow and balance sheet. We saw positive cash flow from operating activities for the 9 months, driven, of course, by the positive profit that the business delivered, but also impacted by the proceeds or the income we earned from the sale of the priority review voucher. Cash flow from investment activities, here, we recognized actually the last milestones that we paid to Emergent BioSolutions and GSK for the acquisitions we did previously. They were recognized here, not all of them paid yet, though.

And then finally, cash flow from financing activities is the sum of the share buyback we did previously in the year and then employee warrant exercise that was executed as well. So all in all, a net positive cash flow for the period of DKK 500 million approximately which obviously improves our cash position, which you can see on the table to the right. We do today have a cash position of close to DKK 3 billion. I have to say here, though, that our accounts payable are somewhat inflated at the moment as we still owe DKK 70 million to GSK, and we also owe royalties on the voucher we sold to NIH and taxes to be incurred in connection with the voucher. But a strong cash position of close to DKK 3 billion.

Then one slide on our outlook here. As we talked about already, we have refined our outlook. We have confirmed the outlook within the range that was previously communicated. So right now, we are looking at a guidance without an interval as we are so close to the year-end. We do not operate in an interval for the Public Preparedness business any longer, but are expecting DKK 3.1 billion. We confirm the upgraded guidance that we issued in connection with Q2 for the Travel Health business. So that is now DKK 2.750 billion. And then we have some other income adding up to a total of DKK 6 billion. So a confirmation of all previous guidance, but a refinement now being so close to year-end.

We are anticipating an EBITDA margin for the full year, excluding the impact from the voucher of 26% and including the voucher, it will be approximately 40%. The 26% is sensitive to how the last 2 months here pans out when it comes to the R&D projects running at the moment. And depending on how they end, there is an upside here that it could be closer to the 27%. But given the current plans, I think we are guiding 26%, and that's most likely where we will end. We have not guided for '26, obviously, but what we have stated here is that we have previously announced an order to BARDA of USD 143 million. Most of that goes into '26. We also announced recently the HERA framework agreement where there is a commitment of 1.1 million doses, where of 750,000 is impacting next year. So if we add the commitments we have so far, we right now have an order book worth DKK 1.1 billion for '26. And we will, of course, keep communicating to the market when there are material orders being added to this order book.

The next slide is simply just a slide we brought to sort of round off the process that we have just been through. I don't want to read out every word here, but basically, it has been a longer process with the takeover attempt on Bavarian Nordic. And we just feel it's important to understand that the company was not for sale. We were approached with an offer, which the Board of Directors rejected to start with later in the process, there was an offer where the Board basically judged that now it is at a level where we have to ask the shareholders -- the shareholders has voted. The offer did not succeed. So that is the situation. And we, of course, we acknowledge that and we respect that decision by the shareholders, and we remain an independent listed company, and we continue to execute on the growth strategy that was in place even before this process started.

I think we are very pleased to be today to be able to report these numbers here, and we are very grateful to our organization who have actually demonstrated that they have maintained a focus on the business while this process has been running. That has been extremely important to us. We have even seen in our engagement surveys that the company or the employees have really stayed engaged in the company. So thanks to the organization for that. Without that, we wouldn't have been able to deliver these fantastic results that we're seeing here today.

And in order to -- to make sure that the market is well informed about the strategy that we talk about, we have called for -- and we call it an investor information meeting on December 11 during the morning. More details will be announced. It will be in Copenhagen. There will be a possibility to attend in person, but it will also be live streamed and recorded. And yes, basically, the agenda will be about give an update on the business and a recap of our growth strategy. But as I said, more details will follow. We will issue a press release once we have the details in place.

So with that, I will give the word back to the operator and open up for Q&A.

[Operator Instructions] we are now going to proceed with our first question. The questions come from the line of Romy O'Connor from VLK.

I have 2, if I may. The first being on your thinking about reaching the DKK 75 million for Vimkunya. I'm just wondering what steps you're now taking given that there's only 1.5 months left in the year? And also maybe a bit on the launch steps of into Canada? And then secondly, just maybe a little bit of color on the bid outcome. I was just wondering what your thinking is by future business development or M&A? And yes, what's your thinking now in terms of focus on value creation into the coming months?

Yes. Thank you for the questions. The first one related to Vimkunya and the projections of DKK 75 million. It's true there's only 1.5 months left for the year, but we only reported to the first 9 months. So we haven't reported some of the months that we've already gone. So we have launched according to plan. We are seeing good traction in a number of countries, slower in others due to some of the national recommendations, but we are confident that with the launches that we've made and the traction that we're seeing that we will be able to meet that target.

I think your second question related to the bid outcome and our future growth strategy. I think it's clear, it's important to stress again that our strategy that we put in place back in 2020 was a growth strategy. It was to grow the portfolio of the assets that we purchased over a number of years to grow public preparedness, but it also included additional M&A. I think in my introduction to the presentation today, I tried to highlight the successful history that we've had of not only acquiring assets, but turning these, what I call unloved assets around and also bringing in manufacturing. It's a capability that very few others have demonstrated, and I think it's a key strength. And I think what we want to do is when the opportunity arises is to continue that M&A journey and bring more commercial assets on board. And that's a strategy that we've had in place since 2020. We've been successful at it, and we will continue to execute on it.

We are now going to proceed with our next question. And the questions come from the line of Thomas Bowers from SEB.

A couple of questions. So firstly, just on shareholder returns. Can you give us any color on the current plans for any share buybacks now that we are out of this M&A process? So I think that you were talking a little bit about share buyback of excess cash. So anything that could sort of reflect the PRV sale you did here in the summer?

And then second question, just on JYNNEOS. So just wondering the delta between the previous guidance range, so looking at that DKK 3.7 billion at the high end of the range. So we have around DKK 600 million delta compared to the DKK 3.1 billion guidance. So I'm just curious, normally, you only guide for something that you are sort of where you are in negotiations with governments or potential customers. So those DKK 600 million, is that something that we should expect could simply or likely move into 2026 and of course, not part of that DKK 1.1 billion? Or is there something else that we need to be aware of in terms of those -- of that delta?

And then maybe just a question on Travel Health, super, super strong momentum, surprises me every time. And now looking at your guidance for '25, so you're sticking to that DKK 2.75 billion. Of course, there as you hit up with some of the [ typhoid ] vaccines. But you are now DKK 400 million short of reaching that DKK 2.75 billion. And looking at the numbers, so you're sort of implying that [indiscernible] should be flat or even slightly decreasing for the remainder of the year. So is there anything here that I'm sort of not seeing? Or are you just maybe a little bit conservative given it's normally a weak quarter, of course?

And then maybe if I can squeeze in number 4 here, just on the R&D phasing, can you provide any color on the scenarios from Vimkunya? So we know that this outbreak in Thailand is pending or potentially ongoing. So is there any think that indicate that this should shift into '26? And what could be the R&D spend cost reduction range, so to say, for the '25. So you're guiding still for DKK 900 million. So I'm just understanding whether it's going to save you DKK 100 million or where we are here. Yes, I'll stick to that. I can repeat if...

Some of them. But let me take the JYNNEOS guidance. And then maybe, Henrik, I'll let you take the other one. So on JYNNEOS guidance, a few years ago, we would only really guide on Public Preparedness on contracts that we had in hand. And that reflected the fact that we had very few customers. So we didn't have the confidence a few years ago to guide broader I would say that has changed over the last number of years that we're guiding, obviously, with contracts that we know we have in hand, plus what we also think that we can secure within the next 12 months. So it's not actually only things that we're negotiating, it's things that we believe that we can secure.

I mentioned in the presentation that sometimes, unfortunately, part of the unpredictability of the part of this business is that it's with governments, right? And even though you can be very -- one day, you're incredibly confident that you're going to secure a contract, there may be a change in a political leader or the government may change, and it completely stops overnight. So it is unpredictable. What I would say is where we guided is where we thought the range would be. That's why we gave a range.

Already in Q2, we stressed that DKK 3.1 billion was secure, but that we thought we could secure more. You've seen that we have announced an agreement with HERA. That could have come earlier in the year potentially that could have led to more revenues this year, but it's now pushed into next year. Obviously, that doesn't account for the whole DKK 600 million that you're referring to. But I would say what the guidance reflects is that some contracts came later than we anticipated and some contracts were still unsure whether we can secure. I hope that answers that question. And then Henrik, maybe.

Yes. Let me try the other 3, Thomas. I think, first of all, on the share buyback thing, I think what we have communicated previously is that our capital allocation policy, priority #1 there is to pay back the milestone payments to GSK and Emergent. That's soon behind us. It is not yet though. We still owe EUR 70 million to GSK, which we expect to be paid early Q1. Number 2 priority, of course, is to invest in the business, and that means R&D, it also means sales and marketing to grow the top line. And then I think third priority would be to look into our M&A strategy and eventually consider returning money to the shareholders. It's very clear we are not a bank, and we are constantly evaluating that situation. So what is the current need? What do we have on the balance sheet? Is that appropriate for the plans we have? If not, then we will return money to the shareholders. At this point in time, so that as this is a continuous evaluation, I cannot give you any more update right now. But of course, we evaluate the situation constantly.

On Travel Health for the fourth quarter and our outlook, we are still guiding the DKK 2.750 billion. And here, I think you need to remember that some of our travel vaccines are seasonal vaccines. We sell in all quarters, but some quarters are better than others. So typically, the fourth quarter is not the strongest quarter. So we are still targeting DKK 2.750 billion for the full year. And on the R&D phasing, we are still targeting the DKK 900 million in R&D for the full year to a large extent driven by the Vimkunya committed trials that we have to do. I'm just alluding to that, there could be some of it phased into next year. And typically with the clinical trials, I think a lot of the steps you go through there, the timing can change. So some of it could slip into next year of the R&D spend. If that happens, then, of course, it could impact our EBITDA margin positively this year. But let's see, the plan is still DKK 900 million. And we're only raising this as it's a little out of control with the exactly at what pace these trials they run.

[Operator Instructions] we are now going to proceed with our next question. And the questions come from the line of Lucy Codrington from Jefferies.

Just regarding chikungunya then. In terms of the U.S. launch, I was wondering how important is the MMRW publication when it comes to launching in the U.S.? And then maybe a bit niche, but in similar lines, have you thought about the potential substitute that the New England Journal of Medicine and Public Health Group have talked about replacing the MMRW? And any thoughts on that at all?

Yes. Thank you. Yes. So this is a tricky one. So yes, in the U.S., post approval from the FDA, you need an ACIP recommendation, which we're very fortunate that we have for chikungunya. And that recommendation, as you then say, is then published in the MMWR, which is a publication from CDC. And many of the distributors actually want to see the publication, even though it's recommended and it's posted on the website before they will start to purchase. And obviously, the situation where we're in is the MMWR has not been published. And it has, as we said, has slowed down the traction, I would say.

The one thing I would also give as another example is that when we launched JYNNEOS in the private market in the U.S., the same situation. We had a recommendation from ACIP, but actual fact, the MMWR was only published earlier this year. And what we did in that situation was that we were able to convince the distributors that they could start to acquire the product before the publication, and that was successful. And I would say we're in that phase right now. We've convinced some already to go ahead with chikungunya, and we're still convincing others. So it has certainly slowed down the traction, but it's something that we've already had experience of with JYNNEOS.

And again, one of the main arguments for that is there's always been sometimes a lengthy delay between the recommendation and the publication. And right now, it's very uncertain with ACIP and CDC what would the time will be. And as you say, that is leading to many others talking about alternatives and whatever, but we'll have to just see how that develops.

[Operator Instructions] We are now going to proceed with our next question. And the questions come from the line of Thomas Bowers from SEB.

Just a quick follow-up here for me. Just on the sales and marketing cost spike you can say here in the third quarter related to mostly Vimkunya, of course. But should we see this as sort of a new baseline going forward? Or is there some one-off expenses in that Q3 S&M number that we should be aware of just to sort of have an indication on how we should model at least going forward?

I think that there's certainly an element of one-off in there because typically when you launch a new product, you will be in a launch phase that will require promotional costs for a period of time. So it's for a period of time, but such a launch can easily stretch over like, let's say, 2 years perhaps. And then you will see at least the promotional spend part of it to normalize again. But right now, I think we are spending money establishing the awareness of chikungunya and Vimkunya in particular, in the markets. It's a nonexisting market in most places we go into. So therefore, there is a need to build the awareness. But it will normalize after a couple of years where you can no longer argue you're in a launch phase.

That does conclude the question-and-answer session. I will now hand back to Mr. Paul Chaplin for closing remarks.

Thank you, and thanks, everyone, for joining the call and for your interest and the questions. Thanks, and have a great day and a good weekend.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a good day.

Good day, and thank you for standing by. Welcome to the Bavarian Nordic Half Year Report Q2 for the 6 months period ended 30th of June 2025 conference call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Rolf Sass Sørensen, Head of Investor Relations. Please go ahead.

Thank you, operator, and welcome, everyone, to this -- our Q2 update from Bavarian Nordic. Yes, my name is Rolf Sørensen from Investor Relations. And in today's conference call, we have, as usual, our CEO, Paul Chaplin; and our CFO, Henrik Juuel, will give the presentation and comments. And after that, we have the Q&A session. And at the end, we will also provide a brief walk-through of the offer and the process we are looking into.

Before we start the presentation, please note that this announcement includes forward-looking statements that involve risks and uncertainties and other factors, many of which are outside of our control, but could cause actual results to differ materially from the results discussed. Forward-looking statements include statements concerning our plans, objectives, goals, future events, performance and 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.

And with this, I will hand it over to you, Paul, to start the presentation.

Thanks, Rolf, and welcome, everyone, to our Q2 report for 2025. The focus of today's presentation and talk is really on our first half year results. And while Henrik will give an update at the end on the offer process and the process move forward, as I said, the focus really is on our financial performance.

So if you turn to Slide 3, we've had a very strong performance in the first 6 months of this year. We've seen a 33% improvement in revenues compared to this time last year, resulting in an EBITDA margin of 32%. And that's really a result of selling actually 5 million doses of our vaccines across the portfolio, and that's 5 million lives that we've saved in the first half of this year through the sale of our vaccines. We see a balanced growth across the portfolio. On Travel Health, we've seen a 24% improvement compared to last year. And that's mainly driven by our sales of rabies and TBE and I'll come back to that more in the next slide. Vimkunya has been approved, obviously, in the U.S., Europe and U.K., and we are launching according to plan and currently have launched in the U.S., Germany and France, and are now on track to meet the guidance for this year.

For Public Preparedness, we've already secured DKK 3.1 billion of contracts. And what that means is that represents at least our base business that we've communicated previously is DKK 1.5 billion to DKK 2 billion. So this is exceeding our base business, and we're on track to deliver that by year-end.

And with that, and Henrik will go into more details later, we are refining our guidance in terms of the revenue spread but maintaining our EBITDA margin of 26% to 30%. Also, during the course of this year, we have sold our Priority Review Voucher resulting in net income of DKK 810 million. And when you take that into consideration, that would improve our EBITDA margin by year-end to 42%. So a really, really strong 6 months balanced growth across the portfolio and an exceptional performance by the company.

If you go to the next slide. So as I mentioned, Travel Health has grown by 24% compared to this time last year. And as you know, we've seen strong growth in this sector quarter-on-quarter. I want to take a step back and I know I keep reminding everyone, but I do want to take a step back and remind you of the strategy in that 5 years ago, we decided to commercialize the business by acquiring assets that didn't have probably the right focus with the previous ownership due to other priorities. And we believe that with a renewed focus from Bavarian Nordic we would be able to turn these assets around. And here we are again today on reporting very strong growth, primarily driven by rabies and TBE demonstrating that this strategy that we created 5 years ago is really coming to life and has created a platform that will allow us as it has already to acquire other assets.

So on rabies, it's a mixture of 2 different things, either a gain in market share or a growth in the market depending on the different territories we look at. In the U.S., we've seen a moderate growth in the rabies market of 5%, but we also saw a 7% improvement in our market share. In Germany, we have a very high market share of 97% but we actually saw a remarkable growth in the first half of this year of 93%. And this growth is due to a number of different things that I'm sure many of you have seen, there are a number of cases being reported in the media of deaths of travelers, which has really raised the profile of the need for a rabies vaccine. And in fact, the demand for rabies is really -- and TBE is going from strength to strength. We have already decided to start increasing the manufacturing output for both those vaccines. This is part of our consolidation plan that we had post tech transfer that we are accelerating this now due to the high demand that we're seeing for both vaccines.

On TBE, we have seen a growth in the first half compared to last year. That was primarily due to a strong growth in Q1 which has cooled off a little bit in Q2 due to presumably stocking in Q1, but still a 14% growth overall in the first half of the year. And importantly, we have seen a market share improvement of 2 percentage points to 30%. I should also mention that the tech transfer of TBE from GSK is now complete. It's been completed on time, on budget. We're just awaiting the regulatory -- normal regulatory approvals, which we expect to receive by year-end. So a real success story in terms of our travel health franchise.

If you go to the next slide, what we've added to our Travel Health portfolio is a vaccine against Chikungunya. As I said, it's approved in the EU, U.S. and the U.K., and we have launched now in addition to the U.S., Germany and France with additional launches planned for later this year. We have applied for an approval with Health Canada. We've initiated one of the post-marketing commitments that we have to initiate a pediatric study and as I mentioned already, we've sold the Priority Review Voucher. Public recommendations are in place in the U.S. and in Germany and the U.K. And that's for travelers going to areas where there is a current outbreak or high risk of outbreaks in the future. And we really believe that we're on progress to meet the guidance. The launch plan is going according to plan. We are seeing some uptake and interest in the vaccine. And we believe Chikungunya will be a key asset to our Travel Health portfolio in the coming years.

If you go to the next slide, this slide almost demonstrates the issue that we have in that it's a very complicated picture of where Chikungunya outbreaks have been seen whether there's historical outbreaks, current outbreaks, there's differences between the CDC's recognition of outbreaks to the WHO. But the one picture that this says is it's now becoming relatively clear that Chikungunya is misunderstood, is not well understood and is misdiagnosed and underrepresented. It's probably not by coincidence that since vaccines have become available the number of cases and outbreaks of Chikungunya are on the increase.

And if you go to the next slide, that's also true in Europe. And this is a warning, I think, for all health authorities that now in Europe, we're seeing locally transmitted not for the first case, but probably record number of cases of locally transmitted Chikungunya from people, travelers coming back infected and through mosquitoes infecting others. There are close to 30 clusters or outbreaks and more than 120 cases in France and Italy. And as I said, this should be a warning because with global -- the mosquitoes that can transmit Chikungunya are already in Europe and other parts of the world. They're just waiting for the right conditions for the virus to spread. And we're already beginning to see that spread and global warming is probably only going to increase that threat.

If you go to the next slide on Public Preparedness. We've seen a strong performance in the first half of the year due to sales to numerous governments but also the supplemental payments from the U.S. government for the freeze-dried doses that we'd already manufactured and will manufacture moving forward. As I said, we've already secured DKK 3.1 billion in contracts and that will mean even if we stay at that level, we will outperform our base business quite significantly. We do still see strong demand for our Public Preparedness business. And we have a number of ongoing studies, either in pediatrics, which we'll be reading out in the coming months, which will allow us, hopefully, to expand our label to include the entire population.

Go to the next one, a little bit on the pipeline. So the first program here on our pipeline slide is what we're calling an MVA-BN cell line. This is based on years of work where we've developed a proprietary cell line that would allow us to change the manufacturing process from eggs to a more robust modern process using cell lines, bioreactors and standard techniques. That process has been developed. We have been in dialogue with the regulators, and we'll be initiating very soon a Phase II clinical study, which will show the comparability from a safety, immunogenicity point of view of our mpox vaccine produced in the cell line to the traditional way of producing it in eggs. And this is really going to increase our capacity and flexibility to manufacture in the future. We currently have a process and capabilities with partnerships and our own capabilities to address an mpox outbreak as we have over the last couple of years. The cell line will allow us to -- and I hope this never happens, but will allow us to address a smallpox outbreak globally.

We have other programs I mentioned on Chikungunya, sorry, I should use the right word, Chikungunya vaccine. We have a number of post-market commitments. One we've already initiated with the pediatric study, a second is to demonstrate efficacy. But there while we're doing all the preparation work, we have to wait for an outbreak in a certain therapy before we can perform. And we have a number of other programs in early stage for Lyme and Epstein–Barr virus, which we will be moving into the clinic next year.

And with that, I will hand over the presentation to Henrik Juuel.

Yes. Thank you very much, Paul. So on the next slide, that is Slide 10, let's have a quick look at the commercial performance for the first 6 months of the year. For the first quarter, for the second quarter, we delivered 16% growth comprised of 35% growth from our Public Preparedness business and 5% from our Travel Health business. If we start with the Public Preparedness business, that corresponded to DKK 917 million in revenue for the quarter and approximately DKK 1.5 billion and a little more DKK 1 billion in revenue for the first 6 months more or less precisely half of the order book that we have already secured for this year. And you can say, at the level of the low end of the annual base business that we have communicated to the market within our Public Preparedness business. So a good year for our Public Preparedness business, where we are executing on the order book that we have created so far.

If we then look at the Travel Health business, so 5% growth for the quarter. That is driven to a large extent by our rabies vaccines, Rabipur/RabAvert that continued the very strong growth we have seen in the last quarters. This quarter, it was 26% and actually taking us to 37% growth for the first 6 months. Paul already alluded to some of the key drivers behind this strong growth, modest growth in the U.S. market growth, but a 7 percentage point market share increase if we compare year-over-year.

Encepur, our TBE vaccine delivered negative growth of 16%, which was, to a large extent, anticipated after a very strong first quarter, where we have indications that there were inventory buildup at wholesaler levels. So if we look at the first 6 months, that has sort of evened out, and we are actually delivering a 14% growth from Encepur first 6 months compared to last year. And key growth drivers here is really strong market growth in Germany, reflecting the endemic expansion, 15% growth. I will focus on year-to-date DKK 96 million versus DKK 98 million last year, so close to last year's level, but not fully there. We are not too happy with the performance of this product and we have taken measures to drive stronger performance in the market. And actually, over the last few months, we have achieved to win a couple of percentage point market share.

However, unfortunately, in a declining market, the typhoid market in the U.S. has been declining the last few months. And as we are approximately a 20% market shareholder, it's not within our reach to drive the market. We are fighting for market share and the measures we have taken so far seems to work. So we are definitely hoping to bring this product back to where it should be. Vaxchora, down compared to last year where we, last year, had the opportunity to participate in an outbreak and supply our product there. So not 100% fair comparison this time. Vimkunya, DKK 13 million after 6 months. Paul talked to where we have launched U.S., France, Germany, where we have launched recently. So we are still in the launch phase, but we are confirming our expectations to the full year of between DKK 50 million and DKK 100 million. And we can see that actually the overall awareness in the market of the criticality of Chikungunya viruses is increasing. So we are very confident that we will deliver on our targets that we will -- with Vimkunya have a great opportunity and a good growth driver for the years to come.

Other revenue which is driven by the contract work that we do for various governments. I think this time mainly this is the equine encephalitis program, sponsored by the U.S. Department of Defense. So that fluctuates a bit between quarters. And this time, it ended at DKK 66 million for the first 6 months. So altogether, close to DKK 3 billion in revenue to 33% up compared to prior year.

Before I turn to the next slide, just a reminder that we are going to phase out the partnership with Valneva, where we have a Japanese encephalitis and a cholera vaccine which will come to an end by year-end this year. But also our agreement with Dynavax on the hepatitis B vaccine is coming to an end by April next year. All handled in good cooperation with our partners, but just to remind you that these products will leave our portfolio with these deadlines here.

On the next slide, full P&L where we talk to the revenue. So I will start here with the gross margin, 55%, which is a significant improvement over the 44% order to compare them quarter-by-quarter. It's 50% last year, and that is really due to a continued trend from the first quarter. We saw manufacturing getting into more routine manufacturing, improving both the success rates on the batches produced, but also improving the yields. So a good quarter, not a good quarter from a manufacturing point of view.

R&D costs very much driven by the committed trials. Paul alluded to on Chikungunya also to a little extent, our initiatives on Lyme and EBV, but these are still early stages and not that expensive yet. On a 6-months basis, we have spent on R&D DKK 465 million, which is approximately corresponding to the DKK 900 million we have indicated for the full year. SG&A costs, DKK 250 million close to that for the second quarter. Our focus here is very much on the launch of Vimkunya, our Chikungunya vaccine. And if you look at the first 6 months, we have spent nearly DKK 500 million. So it's up approximately DKK 50 million compared to same period last year. That number is going to be higher for the second half year as we are ramping up the spend behind the launch of Vimkunya. In the U.S., we are still awaiting the publication of the MMR ACIP recommendation, but gearing up the investments behind the launch, and we are going to launch in more countries in the second half of the year, which will require investments as well.

So if we look further down the P&L, the quarter delivered an EBITDA margin of 33% and for the first 6 months, 32% to strong EBITDA margin again, driven by a good manufacturing period, but also explained to some extent by back-end loaded sales and marketing costs that we will see in the second half of the year. So strong financial performance for the quarter and for the first 6 months.

Let's turn to the next slide here, where we look at the cash flow and the balance sheet for the period. What we saw in the first half year was positive cash flow from operating activities, obviously driven by positive net profit to some extent, offset by a negative development in working capital, as we have seen so far this year an increase in inventory, which we expect to be reduced in the second half of the year.

Cash flow from investment activities mainly driven by the milestone payments we have recognized to both emergent USD 50 million. These have been paid as well, but also the recognition of the final milestones to GSK of EUR 100 million. The milestones to GSK, they have been recognized has achieved, but they have not been paid out yet and will be so in Q3 for EUR 30 million of EUR 100 million, and the remaining part, the EUR 70 million will be paid in the beginning of '26.

So if we look at the balance sheet, I will only highlight our cash position there. So close to DKK 1.7 billion what we hold in cash and cash equivalents. As I said, we still own USD 100 million to GSK, but we also have the net proceeds from the sale of the PRV of DKK 810 million, which has already been arrived at our bank account here in July. So continued very solid financial position as well.

Next slide, our outlook for '25. Based on the strong continued performance from the Travel Health business and more visibility on Public Preparedness business, we have decided to refine our guidance and basically narrow the revenue interval that we guide. Previous guidance set revenue between DKK 6 billion and -- sorry, DKK 5.7 billion to DKK 6.7 billion, and we are now refining that to between DKK 6 billion and DKK 6.6 billion, so increasing the lower end but also narrowing the window.

The EBITDA margin, excluding the voucher, remains unchanged. It will be between 26% and 30% for the full year. And when we include the proceeds from the voucher of DKK 810 million, this EBITDA margin will change from 40% to 42%. And below on the slide here, you can see how the guidance on revenue stacks up between the different business areas here. So Travel Health, we are increasing our expectations from DKK 2.5 billion to DKK 2.750 billion, basically driven by the strong performance by both our rabies but also our TBE vaccine. Public Preparedness, given the more -- the higher degree of visibility we now have, we are narrowing the window to between DKK 3.1 billion and DKK 3.7 billion. And remember here, that the low end of this guidance has already been secured by contracts. So a refinement of our guidance within the already existing one.

Final slide from my side. As Paul mentioned in the beginning of the meeting, the focus of this call here is really on our results and our progress year-to-date in the business. But of course, we can't have this call without just mentioning and giving you an update on the takeover offer. So I'll just spend 2 minutes only on this. I assume you're all aware of the content of the offer. The consortium Innosera based on consisting of Premier and Nordic Capital will make an all-cash offer on Bavarian Nordic of DKK 233 per share. This is coming out of a very intense process involving negotiations and due diligence, et cetera, and ended up being a recommended offer.

So what can we expect now in the next following weeks here? We are anticipating that the consortium next week when the 4 weeks review by the Danish Financial Supervisory Board is over that they will announce comprehensive offer documents laying out the detail of the offer. And with that, our Board will have an obligation to announce a Board statement -- comprehensive board statement basically reflecting on the offer and the process behind it. So a lot of the questions that we have been faced with at the moment, I think, will be answered by these documents that we are expecting to be announced at the latest Tuesday next week. So I think that is what we were planning to say about the offer today.

So I will give the word back to the operator and ask for Q&A.

[Operator Instructions] We will now take the first question from the line of Thomas Bowers from SEB.

A couple of questions from my side. So first of all, what's the reason why we've not communicated any payout -- dividend payout, share buybacks with excess capital, you now have following the PRV sale. I don't think it sort of fully fluctuate with previous communication. I understand the current M&A process. But is there another underlying reason for this?

And then just on the margin guidance for the year. You speak to 26%, 30% adjusted EBITDA, you are now at 32% for H1, which sort of implies an EBITDA for second half below 25%, just to get to the sort of midpoint level here. Immediately P&L, I think the product mix looks very balanced between travel and JYNNEOS for H1 and H2, you live the low end by some DKK 300 million on revenue and also R&D seems quite nice split between the 2 halves. So any color here to make me understand why you're still at 26% at the low end would be appreciated.

And then my last question, just on the R&D cost outlook. Can you maybe just try to break down the approximate cost related to this pending Chikungunya outbreak study just for me just to get a better understanding on the potential impact to R&D cost guidance of DKK 900 million for the year. which could be phased into 2026, depending on whether you're able to start that study in H2.

Okay. Thank you, Thomas. This is Henrik. Let me try to answer these questions. First of all, I think what we have communicated previously with regards to potential payout is that we, first of all, we need to pay back to GSK and Emergent BioSolutions. And then we would, in the autumn come back to the market and on the back of these payments, consider potential share buybacks. So that is, in principle, still the case. But of course, right now, we have a process ongoing which means that we cannot go out and do share buybacks until that has been resolved.

Next question to margin guidance. You're absolutely right. And I think what explains how can we go from 32% year-to-date to 26% to 30% by year-end. The main explanations for that, as I tried to explain when I showed the P&L is that we have had first 6 months with very good success in manufacturing. So second quarter, 55% gross margin. Can we continue that? I think then that is an upside to our EBITDA margin, but there's no guarantee. We are working with biological manufacturing. And then as I also explained, our sales and marketing costs are very back-end loaded, both in the U.S. where we have already launched but also in the other markets where we are about to launch. So therefore, we are still sticking to our margin expectations of 26% to 30% for the full year.

On R&D, we do not normally comment on cost of specific studies. We haven't done that in the past for Chikungunya here. So I can't really say that, but it's still our expectation that our full year R&D spend will be around DKK 900 million.

[Operator Instructions] Your next question comes from the line of Romy O'Connor from an Van Lanschot Kempen.

Two questions, please. The first on your Public Preparedness business. So I see that the big part of the revenue guidance for 2025 is based on contributions from here. But I'd like to ask if you see any risk for further reduction of contracts given that we see a revenue decrease in this half of the year and what risks do you see here? And I also want to discuss maybe your thoughts on the recent Chikungunya outbreaks and whether you can comment on revenue splits that we see in the relevant geographies given that the launch now is in Germany and France.

I'm not sure we got the first question. That was regarding Public Preparedness business where you talked about a decline in loss of contracts? Or could you please repeat?

Yes. I was wondering if you see any risk for further reduction of Public Preparedness contracts in the next half of the year.

Yes. Could you elaborate on further, please?

So yes, maybe loss of contracts U.S., things like this. Just any color. Also on the narrowing of the guidance perhaps.

Yes. Okay. First of all, we haven't lost any contracts. When we guided in the beginning of the year, we guided DKK 3 billion to DKK 4 billion in a situation where we have an outbreak in Africa. And I think we were anticipating probably more orders for Africa, to be honest. We have got 1 million dose order to Africa that we are executing upon. But we haven't since then received any more orders. Fortunately, we have a good mix of different customers. So we already have an order book of DKK 3.1 billion. So we are into that interval between DKK 3 billion to DKK 4 billion. And there are still dialogues and further upsides but we also have to realize that we are 8 months into the year. So therefore, I think we believe it's prudent to say that we have an interval now of DKK 3.1 billion to DKK 3.7 billion.

And then to your second question was regarding the country split between Chikungunya. I think that is really too early to say. I think we are just at the beginning of the launch in these countries. And the revenue that we see is mainly supplying into the whole supply chain to start with. So it's very early days. But I think we can add so that we are actually seeing an increasing awareness probably beyond what we could have dreamt of when we developed this product here. No one knew about Chikungunya, now we see outbreaks in a number of countries. We see the media picking up these stories. So there is an increased awareness, which we believe will translate into more business opportunities in all these markets.

There are no more questions on the phone. I would like now to turn the conference back to Paul Chaplin for closing remarks. My apologies, there is another question, should we take it?

Yes. Let's take the next question.

The next question comes from the line of Thomas Bowers from SEB.

Just as a quick follow-up here. So when we look at Rabipur right now it, of course, seems like going somewhat more or better than previously expected growth rate. So can you maybe just update us when should we sort of expect you to have used the GSK produced inventory? Are we still going to be sort of see a gradual 15, 20 basis point improvement to gross margins over a 1- to 2-year time frame? Or is this maybe going to speed up a bit here?

That's a good point, Thomas. And I think the situation right now is that we are manufacturing at the rabies product end-to-end at Bavarian Nordic and that has all been approved by the regulators. But we are still sort of phasing the GSK products out of the system, but actually starting to ship our own manufacturing products. So we should be selling our own products towards the end of this year or into next year, so that as we have guided the market previously, full year impact from 1st of January '26, at least where we will see the improved margins from the rabies business.

Okay. Got it. And then maybe another follow-up just on Encepur. So of course, that's overly surprising maybe that you see decline here in Q2 compared to the very strong Q1. So is there anything -- I know there's a lot of noise with inventory stocking. So are we sort of going forward? Should we expect Q1 to be the stronger quarter going forward? Or was there something sort of special item at play here in first half that made that Q1 so strong.

Maybe I can take that one. Thomas, so well, I guess the short answer is we don't know. Typically, as you just indicated, Q2 is the strongest because that's the peak of the season for the vaccination. Sometimes the season can start earlier, which is why you see these fluctuations moving. But I think what we believe happened in Q1 this year is that there was some stocking by the wholesalers because there was a price improvement -- price increase that we put in place. So most likely, we will return to what we've typically seen is a ramp-up in Q1 and Q2 being the peak.

There are no further questions. I would like to hand back over to Paul Chaplin for closing remarks.

Thank you. Thanks, everyone, for joining the call and for the questions. Have a great weekend. Thank you. Bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.