Bavarian Nordic receives $25 million milestone payment from US Government

The Department of Health and Human Services (HHS) granted permission because the company has fulfilled a number of significant milestones in the contract. The income will be recognized as revenue in the company’s financial statements for 2007.

Bavarian Nordic’s contract is the first next-generation, or completely new product procured by HHS under the BioShield program that requires the registration of Imvamune as a safe and effective smallpox vaccine in healthy people. The five-year contract is valued at more than $500 million with an option that if exercised, increases the total value of the contract to $1.6 billion and extends the performance period. The option allows HHS to procure up to an additional 60 million doses of Imvamune and to support additional clinical studies for extending the product license to include the HIV-infected, pediatric, and geriatric populations.

Bavarian Nordic has already received an advance payment of $50 million and a milestone payment of $25 million. With this payment of $25 million, the company has received a total of $100 million in 2007 for fulfilling significant milestones in the RFP-3 contract. In 2008 Bavarian Nordic expects to receive another milestone payment of $25 million from the contract.

Anders Hedegaard, president and CEO of Bavarian Nordic, said: “We have fulfilled the ambitious goals set for 2007 in the contract with the Department of Health and Human Services. We find this very satisfactory and encouraging for our ongoing collaboration.”