Bavarian Nordic A/S

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.

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.

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.

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.

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.

Yes. Thank you.

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