Good afternoon. My name is Peter Welford. I'm one of the European pharma and biotech analysts at Jefferies in London. It's my pleasure to be hosting the next Fireside Chat with Bavarian Nordic. We have with us today the CFO, Henrik Juuel. I appreciate it's lunchtime, so we've done well to fill the room. It's pretty impressive. And no one's eating either. So with that, we'll kick off. If anyone does have any questions, please do raise their hand. We can always take some questions from the audience if anyone has them. But with that, we'll kick off. Perhaps, I don't know, do you want to say just a few words about the recent, I guess, period? You know, you haven't reported third quarter until next week, but, so no, not next week, sorry, till later this week, rather. Sorry. No, definitely. Do you want to say just a few brief words, and then we'll kick start, and we'll go over the key points? I can do that, definitely. First of all, thanks for the introduction, Peter. My name is Henrik Juuel. I'm the Chief Financial Officer of Bavarian Nordic. Good to see a very good attendance here, today. Good to see you all. Yeah, so basically, I think, where are we today as a company, Bavarian Nordic? Five years back, we changed the direction of the company. We wanted to commercialize the business. We kicked off the process by acquiring two vaccines from, from GSK. We have lately shown, that we've been extremely successful with these products, delivered the highest, number of doses sold in any single quarter for both our rabies and TBE vaccine. And we have then lately added to the portfolio with the acquisition we did from Emergent BioSolutions, so that we can today claim we are the world's largest travel vaccine company. Now with six commercialized vaccines, three in-licensed vaccines, and a very exciting also Chikungunya vaccine that just passed the phase III development successfully. So with that, Peter, I think we should jump into the fireside. That's great. So maybe we should start off where you started in terms of the mpox outbreak, obviously last year, and that catalyzed a significant amount of orders for the vaccine, such that, you know, you were at sort of limits of your manufacturing. Can you talk about the current order book at the moment for the mpox JYNNEOS or IMVAMUNE vaccine and how you think about sort of future manufacturing, both investment and plans for expansion? Sure. I think first of all, you're right. We saw the outbreak that started April-May time, 2022, and we got a lot of orders, being the only company with a vaccine approved against mpox. We're still executing upon that order book and delivering record numbers this year. As some of you know, we have guided DKK 6.9 billion in revenue. Of course, a large part of that comes from this order book that we are executing upon. Beyond this year, we have our long-standing cooperation with the U.S. government, where we have a freeze-dried program running. We have an order of $299 million that we can start executing upon very soon. We have a 10-year order with the Canadian government. We announced that last year, valued more than $500 million. Obviously, we're taking some of that already this year, but there's more to come next year. Again, we recently announced a new client, rescEU, which is a body within the European Union ensuring preparedness for different kinds of catastrophes. They are also now buying our products. We got two orders, total value of EUR 21 million. And then besides this, we also have continued dialogue with other governments. We have publicly named France. They have been out putting their vision forward. They want to basically replenish their inventory of the older generation smallpox vaccines, so we have a good dialogue there. You know how it works when it's the government, etc., takes some time, but there's a good dialogue. There's a good willingness to pursue the vision over time. We've also previously mentioned that we have dialogues with China. Originally, China claimed that they had no mpox in China. Now they have admitted there is mpox in China, and there is an outbreak at the moment. So there we also have a good dialogue, and then we have more dialogues. I think what the mpox outbreak meant is, first of all, it created a new business opportunity fighting mpox itself, but it also opened the door to many more dialogues regarding stockpiling by governments. I think now that we talk about mpox, smallpox, we should also mention that ACIP in the U.S. recommended recently routine vaccination against mpox for people in the risk group identified, and JYNNEOS is the recommended vaccine. It's the only vaccine currently approved against mpox in the U.S., and that just opens a new type of business for Bavarian Nordic. We are planning to launch our product, JYNNEOS, into the open, the private market during first half of next year. Sorry, Peter. No, sorry. I was just going to say, do people want to maybe just come down the middle and go over to the side, up the other side there? Sorry, I'm conscious we're blocking the door, and this is getting a bit, I don't know, it might be better if we go down the side. Sorry, carry on. Apologies. I'm just a bit worried. I can see the door opening and closing. Right. So, I think with this recommendation from the U.S. government just opens a new, total new business for Bavarian Nordic. We have previously been operating in a relatively narrow business with our rabies vaccine in the U.S., focusing on more on the out-of-pocket segments. Now we are moving into what's called managed care in the U.S., and we have also, since the acquisition, added two more vaccines to our U.S. business, typhoid and a cholera vaccine. So an expansion of our U.S. footprint also giving us good opportunities going forward. Can you just talk a little bit about what's the importance of securing freeze-dried? I mean, is that sort of still an important aspect to consider, and is it very much applicable to the U.S. government or how widely is that? I think the whole reason that we started the development of the freeze-dried version was to develop a version with a longer shelf life, which is, of course, suitable. If you stop finding your vaccine, you want to make sure that it has a long shelf life. So with the freeze-dried, we have an objective to get up to a 10-year shelf life. So that's the whole idea. But our liquid frozen version can get up to eight years, but there are still, I think, even the two more years of shelf life is worth it. And then, can we just talk a little bit about the one you mentioned, but the decision to acquire the travel vaccines, Vivotif and Vaxchora, from Emergent. Can you talk a little about, you know, the decision behind that, and what is it, I guess, that led to the decision to really sort of change the direction of Bavarian Nordic? Yeah. I think first to your last question, why did we change direction of the company? I think in the past, Bavarian Nordic was a biotech company. We were blessed with having you as a customer, but our revenue was very, very lumpy. As we had one customer, we had one product, so we wanted to create a steady revenue stream, commercialize the business and keeping it that way. So then we back to the Emergent deal recently. I think Emergent, I don't think it's any secret, has been struggling, and they wanted to get rid of part of their business and came to us, asked if we could be interested. And these products, you know, we have Vivotif and Vaxchora, typhoid and cholera vaccine, fit perfectly into our business. And then we also get the Chikungunya in the, in phase III development. So we are simply, with this acquisition, we are building on, on the commercial infrastructure that we already have established. We often say it's plug and play, our commercial business don't like us saying that. It's a little more plug and play, but that is an extremely good fit with our current organization. And with that, we can actually now claim that we are the world's largest travel vaccine company, with the broadest travel vaccine portfolio. And then you also gained, and I can never say this correctly, but a Chikungunya vaccine, which obviously you reported phase III data. It was positive. Can you talk a little bit about how that you think could be differentiated? Because obviously, I think very recently, your, your competitor, Valneva, secured approval for its vaccine and a priority review voucher. So, you know, obviously now a competitive market. So how do you think about your vaccine versus theirs and, and the opportunity for that? Yeah, good, good question. I think if we look at our vaccine versus competition, then we do see some distinct advantages with our vaccine. I think number one is the speed of onset. We have in our trials shown that, actually, after 2 weeks, 97% of the population has seroconverted and are protected, and even at 7 days, it's more than half. I know competition is claiming the same, but we are the only company who actually have documented these in larger phase III trials. So that we believe is an important advantage when you're selling a travel vaccine. People tend to not plan well in advance, so speed of onset is important for travel vaccine. Number two, that's on safety. We have a VLP platform, which is known to be quite safe and tolerable platform. Competition has a live attenuated vaccine. We have seen some of the data coming out of the competition's programs they've been running, and there have been examples of people who get Chikungunya-like symptoms. I believe 1%-2% of the population in those trials. There have also been raised some concerns about vaccinating pregnant women. So we believe that on the safety side, I think we have some advantages. And the third one I would just like to highlight, that is the administration of the vaccine, where we have a prefilled syringe, which is, of course, very convenient for the doctor when vaccinating. So some key distinct advantages that we see. Can you talk a little bit about moving on from that as well? You also have, at the moment in the market, Rabipur for rabies and Encepur for TBE, tick-borne encephalitis. I guess, can you talk a little about the opportunities to grow both those franchises, both in the U.S., I guess one, but also Europe then for the other as well? Yeah. I think if we start with the rabies business, then we have seen that the rabies markets increase significantly post-COVID. And the market size, both in the U.S. and Germany, on the rabies side, they're actually now larger than what we saw pre-COVID. I do believe that the growth of these markets will probably migrate towards what we saw pre-COVID, so 5% annual growth, perhaps in this market. It's quite a mature market, but we like to take some credit for the market growth ourselves. We are the clear market leader, both in the U.S. and Europe, and I think we have done a good job in raising the awareness and also unlocking new pockets of business, particularly in the U.S. On the TBE side, I think that's a different situation here. We are actually seeing that the whole endemic area in Europe is expanding, probably caused to some extent by the global warming that we're seeing. Recent example we saw back in Denmark this summer was that it's spreading in Denmark, and suddenly the government they ran out of stock, basically, of the vaccine. So there will be probably more than a normal growth to be seen in the TBE business. And in terms of our brand performance in the U.S. and in Europe as well, we are the market leader, so here it's all about doing what we can do to drive the market, continued market growth, and hold on to our positions. We are up against Sanofi in the U.S. We have 70% of the market, so hold on to that. the market size and unlock new businesses. That's the same in Europe, where we actually have 95% of the market in the biggest country, Germany. On the TBE side, on the other hand, we are the small player. After Pfizer, we have a little less than 30% of the market, suffering still a little from a short out-of-stock situation that we saw last year, but we are gaining it back now. So here the battle is all about market share. Expanding over time, our footprint in Germany, getting new products from the acquisition from Emergent enables us also to do that kind of expansion and then gradually gain market share back from the partner. Any thoughts at all on potentially considering to enter the U.S. market for tick-borne encephalitis, or is that either too costly or too big a challenge? At the moment, it's not endemic in the US, TBE. Our competitor, Pfizer, has an approved vaccine there, but I think that's on the agenda to the Department of Defense. It's so far not endemic in the US. And then if we think about the sort of aims you set out, a few years back now, where you talked about 2025, potentially over $1 billion of revenue and EBITDA margins over 25%. Can you talk a little about... I mean, obviously, since then, a lot's happened and, you know, we can talk, but nevertheless, putting together those moments, I mean, can you talk about how you are on the path to achieving those aims, you think, or at least, you know, where we could get there? Absolutely. I think the $1 billion in revenue was sort of an ambition we set ourselves because we had, we had ambition to become one of the largest, what we call, pure play vaccine companies, and we had to translate that into something measurable. So therefore, we said ambition to reach $1 billion in revenue by 2025. Obviously, we had, we had counted to some extent on RSV to support us. That was the year of launch for the anticipated RSV. And so, what's now that we don't have RSV now? I think that's a good question, and I think. But if you look at our performance right now, we are actually meeting that target this year already. DKK 6.9 billion, that's exactly a $1 billion, depending on the exact exchange rate and what day you measure it. But we're actually delivering this year, so why should we give up on that goal in 2025 now? We have high hopes for continued governmental contracts on our smallpox business. We are seeing markets opening up, private markets on Mpox as well. So why shouldn't we still believe in that ambition for 2025? Secondly, we still do have an M&A strategy, and not that you should be scared that we're running out tomorrow and announcing a new big deal, but it's still part of our growth strategy. We're busy right now. We have our hands full with the integration of the assets we acquired from Emergent BioSolutions, but it still remains part of our strategy and could also eventually be a source that would help us in 2025. At this point now, talking about business development, I mean, is the focus for Bavarian now more acquiring those, if you like, sort of niche, market, sort of commercial stage vaccines, much like the, even the chikungunya, which is a late-stage sort of product? Or are you, are you also interested in, in potentially going early stage and, and perhaps rebuilding a sort of pipeline? I think right now, our focus is primarily on commercial or late-stage assets, and basically to boost the top line so that we can, on a continuous basis, afford also investing in R&D. And then thinking about some of the internal programs, in particular, there's an Equine encephalitis vaccine, I think, which has been funded by the U.S. government to some extent today. Can you talk a little bit about the status of that and whether or not you see a future for that potentially in the U.S. market? Yeah. Yeah, so right now, we are funded by the U.S. Department of Defense. The recent funding we got was around $85 million, which will take us through a phase II trial now, and then doing all the preparatory work for a potential phase III trial. So I think it's a fantastic opportunity for Bavarian Nordic, as it is fully funded by the U.S. Department of Defense. It's not like there is a huge market waiting out there. There has been occasional outbreaks, in particular in the U.S. on the East Coast, so there could be a public market available for this. But other than that, I think it's more for stockpiling by the U.S. Department of Defense. And if we think then strategically for a minute, is the focus now very much on infectious diseases? And obviously, you still have a legacy cancer vaccine business. I mean, I think there's still an asset that is still in clinical trials, the tech. Is that... are you shifting very much now away from that once that trial is concluded, or is there still potentially work going on within Bavarian Nordic, in that avenue? I think our focus has for a while been clearly on infectious diseases. And, and you're right, we have one program running within immune oncology. Not spending a lot on that, and it has been running for some years, and our plan is to take it to proof of concept and then evaluate what to do with it at that point in time. And then if we think about R&D spend, therefore, with everything you've just said, obviously, you're now winding down this year, the RSV and the COVID studies. So how should we think about R&D for Bavarian Nordic sort of evolving over the next few years? Yeah. No, I think first of all, R&D is there to stay. We have had the after RSV, the RSV disappointment. We sometimes get the question, "Why do you invest in R&D?" But we, we as a fully integrated vaccine or pharma-spec company, you need to position to continue to, to use your platform to provide more products for future revenues. But obviously, at some point, we were running 3 phase III trials in parallel, extremely expensive. So probably this year we're ending up spending around DKK 2 billion on RSV, COVID-19, chikungunya, all these together. That will obviously come down as we will, we now only have our chikungunya in phase III. We will invest the next few years on post-approval committed studies on Chikungunya, but after that, I think you will, you will see our R&D spend most likely trend towards the more historical level that you've seen, DKK 500 million-DKK 600 million after some years out. Of course, if we have phase III trials at some point, we have none in the near term here, then of course, it could look different. If we think about the COVID vaccine from an interest in terms of the obviously funded by the Danish government extensively, do you think there's any? Is there any desire from the government despite, you know, the sort of challenges obviously getting it commercially over the line? Is there any support from the Danish government to preserve the local, I guess, you know, capacity potentially for a future pandemic? We've seen, you know, for example, in Japan and in other parts where they have done that. Is that something that do you think there is a willingness to, or should we forget about that program? I think we should, for now, forget about that program. I think the whole thing with the COVID is that we, we actually had a very successful phase III, where our positivity, we proved that our vaccine was just as effective as that of Comirnaty against the original Wuhan strain and the closely related variants. Unfortunately, the virus has mutated further out right now, and it's no longer effective against these, and we cannot adapt our vaccine as quickly as the authorities are anticipating. We like the flu model, where every year we're being told what strains to target, and then 3, 4 months later, the product will not be on the shelf. Unfortunately, our platform cannot be adapted with that speed. I think that's probably where the program ends, but we have a dialogue now with the Danish Minister of Health, around how do we leverage everything that has been learned during this process here, and how could that be used in a future, pandemic or endemic situation? Where exactly that will end, time will show. Then if we think about vaccines manufacturing capacity more broadly, I mean, at the moment, you know, do you have any excess capacity at all, either in fill finish or in terms of the production? And equally, you know, if not, is there any potential from your side to still look out for the ability to have more capacity on both the fill finish and the active ingredient side? Yeah, I think first, if we first take our site in Hvidovre, Copenhagen, I think we showed last year that we had capacity enough to deal with an mpox outbreak. Should there be a real smallpox outbreak at some point, I think our capacity is far from enough. So on that front, we are working on new manufacturing technologies that eventually will help us being able to produce at much higher volumes. On the filling side, during mpox, in order to create more flexibility, we teamed up with Grand River in the U.S., so that we can now for the U.S. and Canadian market, we can now build smallpox, mpox vaccines, both in Hvidovre and on our home side and in the U.S. with Grand River. And then recently, I think with the acquisition from Emergent, we also got a fully-fledged vaccine plant in Bern, Switzerland, which is underutilized at the moment. It's manufacturing Vaxchora that we acquired, but there are options to expand if we need more capacity at the site in Bern. I'm conscious. Sorry, I've been taking... Does anyone in the audience have any questions they want to ask? I can carry on. No? Oh, we do have one at the back. Sorry. Yeah. Go on. So you said your COVID vaccine was adaptable for various constraints. Is that because of the threshold or so? Because I can't complete the VLP in about- Yeah, yeah. It's not the VLP that's the constraint. It's actually the way that the spike protein is created in an old platform. Inside the platform. Yeah, exactly. Exactly. That's it. I guess then, more broadly, would you be keen to pursue further biodefense opportunities? I mean, obviously, the history to some extent, or a lot of the company's been built, historically by contracts from the U.S. government and to some extent, others. You know, is that a business you're keen to continue pursuing? Or, you know, on the whole, are you keen to move away from that and move more towards the commercial, whether it be travel vaccine or similar, if you can? Well, we have one product in that segment, right? But it's not like we regard this as a, as a business that we are going to address with more products. Can't rule it out, of, of course, but it's, it's not sort of the, the perspective we take when we look at the business and, and further expansions. We want to leverage, of course, our biodefense experience and our good contracts with the government, but, no immediate plans to expand to other products in that field. Finally, from my side, understanding profitability is obviously. It's kind of the always the challenge of companies when they become profitable. You could never lose it. From your perspective, you know, do you run the business from the perspective of you always now trying to, you know, achieve a certain EBITDA margin, maintain profitability? Or is it to some extent, you is but very Nordic, still run from the purpose of, you know, if there are assets to invest in on the R&D side, you're, you know, you're willing to make the investment? I think first of all, we regard ourselves as a profitable company, so it's not something that came and then went again. We are profitable, profitable company, and our plan is to remain profitable. We said as, as part of our ambition for 2025, we said we want to deliver an EBITDA margin of at least 25%. That is still valid, irrespective of the RSV or not. That's, that's really what we are doing. That's great. Thank you very much, Henrik, and thank you all very much for attending. With that, we'll close the session. The next session will start in a few minutes time. Thank you.