Magazine CELEBRATIONS CEO and President Anders Hedegaard looks back on a year with several landmark events for the company.

Transcription

1 A YEAR OF CELEBRATIONS CEO and President Anders Hedegaard looks back on a year with several landmark events for the company. PAGE04 Magazine 2013 Bavarian Nordic IMVAMUNE FIRST 20 MILLION DOSES NOW DELIVERED PAGE10 PROSTVAC Interim analysis The option to look early PAGE14 PAGE Approved! 08 Europe and Canada are the first regions to approve the company s smallpox vaccine

2 04 A year of celebrations CEO and President Anders Hedegaard looks back on a year that presented several landmark events for the company. 06 Our company A brief overview of our business areas. 10 First 20 million doses delivered The deliveries of smallpox vaccines to the U.S. Strategic National Stockpile continue with a new order after the completion of the base contract. 12 From biotech to business Bavarian Nordic s twenty years in retrospect. 08 approved The company s first product approval became reality as IMVANEX smallpox vaccine received marketing authorization in the European Union in August. Canada followed suit in November. 11 From California to Capitol Hill U.S. Congresswoman Anna Eshoo visited Bavarian Nordic s offices in California to talk about the importance of legislation that has supported the necessary government funding for the company s development programs. Design and graphic production: Meyer & Bukdahl as

3 13 The chairman disembarks Founding Chairman Asger Aamund leaves a company in great shape. 14 earlier results may take us through Interim analyses of the Phase 3 trial of PROSTVAC may accelerate time to data. 15 A hello from Frank 82 years and still going strong; Frank had an unusually good response from repeated vaccinations in clinical trials with PROSTVAC. Now, his case has been scientifically reviewed. 16 Same technology, new opportunities The company s CV-301 immunotherapy product candidate shares the positive features of PROSTVAC, but with an opportunity to target other cancers. 18 PROSTVAC - Next in production line The Danish manufacturing site is expanding to meet the future requirements for commercial production of PROSTVAC and other products. 20 Strong share price development The share price has enjoyed a good momentum in 2012 and 2013 driven by strong business performance and investor activities. 22 Outlook Major milestones were met in 2013 and even more to come in the years ahead.

4 04 A year of celebrations At the time of publication, the year has not yet come to an end. However it is with great satisfaction that I look back on what we have accomplished at Bavarian Nordic in 2013 a year that presented several landmark events for the company. year-end we have opened the trial in most of the planned countries and sites. In April, we announced that interim analyses of data would be performed during the trial to see if the outcome of the study could be determined sooner than anticipated was the year of our first product approval. In August, the IMVANEX smallpox vaccine received European marketing authorization for use in the general In August, the IMVANEX smallpox vaccine received European marketing authorization for use in the general population population and later also received approval in Canada for people with weakened immune systems for use in a public health emergency. PROSTVAC represents a unique opportunity for Bavarian Nordic, and we have focused our resources to ensure a successful completion of the Phase 3 trial. As part of the pre-launch activities for PROSTVAC, we decided to consolidate our manufacturing activities at our production facility in Denmark, where we are now constructing a new unit for the future commercial production of PROSTVAC. This gives us not only great flexibility and independency, but also allows for better utilization of our resources and expertise in manufacturing. In November, we completed the delivery of the first 20 million doses of smallpox vaccines to the U.S. Strategic National Stockpile. We will continue to make deliveries as the partnership with the U.S. was further strengthened in April through the award of a new delivery contract valued at up to USD 228 million. This was also the year where the PROSPECT study our Phase 3 trial of PROSTVAC went global and by 2013 is also the last teenage-year for Bavarian Nordic since we will celebrate our 20 th birthday in Although we are still considered young and dynamic - and we feel so too - I think we can say, that we have really grown up as a company and today we can present ourselves among key players in the biodefense industry with unlocked potential to also be a game changer in the cancer immunotherapy universe. Anders Hedegaard President & CEO

5 05 A LETTER FROM THE CEO

6 06 Our company Cancer immunotherapy Cancer immunotherapy treatments use the patient s own immune system to help fight cancer. The objective is to stimulate the body s immune response to attack the malignant tumor cells that are responsible for the disease. Targeted immunotherapy candidates for the treatment of cancer are part of a growing field in cancer research, which holds great promise by harnessing the natural power of the immune system to fight disease. By eliciting a strong immune response, immunotherapies may slow the progress of the disease and increase overall survival - all with an improved safety profile compared to many traditional chemotherapies. Learn more about cancer immunotherapy and our product candidates on KEY Facts Research and development center located in Mountain View, California, USA Employs approximately 80 people The lead program is PROSTVAC, a targeted immunotherapy candidate for advanced prostate cancer that is the subject of an ongoing pivotal global Phase 3 trial Pipeline» cancer immunotherapy Prostate cancer PROSTVAC Preclinical Phase 1 Phase 1/2 Phase 2 Phase 3 Market Colorectal cancer CV-301 colon Breast cancer CV-301 breast Prostate cancer MVA-BN PRO Breast cancer MVA-BN HER2

7 07 Infectious diseases KEY Facts Research and development center located in Martinsried, near Munich in Germany Commercial-scale manufacturing facility in Kvistgaard, Denmark More than 20 million smallpox vaccine doses produced and delivered to the U.S. Strategic National Stockpile by year-end 2013 Employs approximately 340 people Smallpox vaccine approved in EU and Canada Our development of vaccines against infectious diseases is primarily based on a portfolio of fully funded contracts with the U.S. government to develop and manufacture vaccines for biological threats to national security such as smallpox. To date, Bavarian Nordic has secured research and supply contracts for its biodefense programs totaling more than USD 1 billion. The majority of these funds have supported the development of a non-replicating smallpox vaccine which has been approved in EU (trade name IMVANEX) and Canada (trade name IMVAMUNE). Learn more about our programs on Pipeline» Smallpox biodefense IMVANEX / IMVAMUNE Preclinical Phase 1 Phase 1/2 Phase 2 Phase 3 Market Approved* Smallpox IMVAMUNE Supplied** Smallpox IMVAMUNE freeze-dried Anthrax MVA-BN Anthrax Filoviruses MVA-BN Filo Foot-and-mouth disease MVA-BN FMDV commercial RSV MVA-BN RSV * Approved in the EU under the trade name IMVANEX and in Canada under the trade name IMVAMUNE ** Sold to government stockpiles under national emergency rules.

8 08 IMVANEX APPROVAL

9 09 Approved In August 2013, the company received its first product approval when its smallpox vaccine was granted marketing authorization in the European Union. As Anders Hedegaard, President and CEO of Bavarian Nordic explains, "this marks a significant milestone for our company and our MVA-BN vaccine technology platform, which we have taken from early research through regulatory approval, and now serves as the foundation for multiple candidates in our development pipeline." IMVANEX was approved for active vaccination of adults, including those with weakened immune systems who are not recommended to receive traditional smallpox vaccines. The approval allows IMVANEX to be sold in any of the 28 European Union member states, as well as Iceland, Liechtenstein and Norway. Then in November, Canada followed suit, granting approval for IMVAMUNE (Canadian trade name) for active immunization against smallpox in a public health emergency for adults contraindicated to replicating smallpox vaccines. Important validation of MVA-BN IMVANEX is based on Bavarian Nordic s MVA-BN platform technology, developed in partnership with the U.S. Government. The approval of MVA-BN as a standalone product validates this platform and allows future vaccines based on MVA-BN to reference an established safety record, which could help streamline their development. Bavarian Nordic has now tested MVA-BN in over 7,000 individuals across a variety of populations. APPROVED Smallpox Vaccine IMVANEX

10 10 FIRST 20 Million Doses Delivered In November 2013, Bavarian Nordic completed the final delivery of 20 million doses of IMVAMUNE to the U.S. Strategic National Stockpile. IMVAMUNE NEW ORDER The completion was the result of a decade- long research and development partner ship with the U.S. government, success fully fulfilling the delivery part of the original contract awarded in 2007, valued at USD 549 million. Importantly, in April 2013, the U.S. government exercised an option on this contract for the production and delivery of additional up to 8 million doses valued at up to USD 228 million to be delivered in 2013 and 2014 in order to support the continued supply of IMVAMUNE and maintain the national stockpile. The first USD 110 million of the new order is secured, and the remaining portion will be secured based on availability of funds in IMVAMUNE Highlights for million doses delivered Additional USD 228 million order Approval in EU and Canada U.S. Phase 3 program underway

11 11 From California to Capitol Hill In February 2013, Bavarian Nordic hosted U.S. Congresswoman Anna Eshoo at its Mountain View, CA facility. The visit focused on the positive impact of federal legislation, as well as the benefits of innovative public-private partnerships in biodefense and cancer. Congresswoman Eshoo was a lead sponsor of important pieces of legislation, which help support the necessary government funding for the company s development programs. I know firsthand that stockpiling vaccines is critical to our public health. I recently visited a company in my district, Bavarian Nordic. It is a company which clearly demonstrates that technical expertise and investment in this area must be backed by the government s commitment to preparedness. - Congresswoman Eshoo in her speech to the U.S. House of Representatives in support of the Pandemic and All-Hazards Preparedness Reauthorization Act. Freeze-Dried Formulation: The Next Generation of the Smallpox Franchise Bavarian Nordic is currently supplying IMVAMUNE to the U.S. Strategic National Stockpile in liquid-frozen form. However, the company is also working with the U.S. government to develop an enhanced freeze dried version of IMVAMUNE, and initiated a Phase 2 study of this formulation in May of The advantages of a freeze dried formulation include improved storage lifetime, reduced storage costs, as well as less demanding handling requirements that greatly improve convenience.

12 12 From biotech to business Bavarian Nordic s twenty years in retrospect 1994 The company was established with Asger Aamund as founding chairman 2003 First research contract with the U.S. government to develop an MVA-BN-based smallpox vaccine 2005 Cancer research facility established in the U.S Listed on the Copenhagen Stock Exchange 2003 Acquired the manufacturing facility in Denmark 2007 Contract for the delivery of 20 million doses of IMVAMUNE smallpox vaccine awarded by the U.S. government

13 13 The chairman disembarks After serving as chairman of the board of Bavarian Nordic for almost 20 years, Asger Aamund announced in November 2013 that he will not seek re-election at the General Meeting in This marks the end of an era for the company which was founded and has been chaired by Mr. Aamund from its inception. Mr. Aamund, known as a sharp, knowledgeable and well-spoken character in the public debate, has pioneered the Danish biotech industry as the founder of several biotech companies, with Bavarian Nordic as one of the most successful to-date. The company has transformed into a fully-integrated, revenue-generating company that has achieved significant results over time and is well- positioned for future success. The board of directors intends, if reelected, to nominate Dr. Gerard van Odijk as the new chairman of the board. Dr. van Odijk has served as member of the board since Dr. van Odijk is a Dutch national, born in He is former President and CEO of Teva Pharmaceuticals Europe B.V. and has previously held various senior positions in GlaxoSmithKline. He currently serves as an independent advisor and board member for several international companies. He holds a medical degree from the State University of Utrecht In-licensing of rights to PROSTVAC cancer immunotherapy 2011 In-licensing of rights to CV-301 cancer immunotherapy 2013 The company s smallpox vaccine approved in the EU and Canada 2010 Delivery of first doses of IMVAMUNE to the U.S. after receiving approval for emergency use 2012 Award of the first larger contract for developing the MVA-BN technology for other purpose

14 14 Earlier results may take us through Interim analyses of the Phase 3 trial of PROSTVAC may accelerate time to data In April 2013, Bavarian Nordic reached an agreement with the FDA on an updated statistical analysis plan for the ongoing Phase 3 trial of PROSTVAC. The plan includes pre-specified interim analyses to determine if the overall survival of patients receiving PROSTVAC is significantly improved over the placebo arm. This would give the company the ability to end the trial early if the data achieve the criteria for success during an interim analysis. We are excited about the opportunity to get results from the trial along the way, says President & CEO Anders Hedegaard. Although it is far from certain that we will see significant results before the trial is completed, if positive results are achieved during an interim analysis we have the potential to shorten the development time of PROSTVAC and file for approval earlier than anticipated. Patients overall survival benefit determines the outcome The patients enrolling into the PROSTVAC trial all have non-symptomatic metastatic prostate cancer. They rely on treatments that can extend their lives. This is where PROSTVAC comes into play. An earlier randomized Phase 2 trial demonstrated a median overall survival of 25.1 months for patients receiving PROSTVAC, compared to 16.6 months for patients receiving placebo. These results demonstrated the most pronounced survival to date in advanced prostate cancer. In addition, PROSTVAC was generally well tolerated, whereby the most common observed side effects included injection site reactions, fever, fatigue and nausea.

15 15 A hello from Frank Frank, a prostate cancer survivor who successfully participated in two earlier clinical trials with PROSTVAC has now turned 82. He is still enjoying an active life playing golf and tennis in Florida. Since diagnosed with prostate cancer more than 20 years ago, Frank has regularly had his PSA levels checked. Although his PSA levels climbed during the early years after participating in the PROSTVAC trials, they did so at a lower rate than would normally be expected. In later years, his PSA level declined and recently has been at the same level as it was almost 15 years ago. Franks story in scientific review In June 2013, Frank s case was reviewed in the scientific journal Clinical Genitourinary Cancer. In conclusion, the article suggests that some patients may benefit from multiple courses of vaccination. Further studies are warranted to see if results can be duplicated. Rojan A, et al.: Dramatic and Prolonged PSA Response After Retreatment With a PSA Vaccine. Clin Genitourin Cancer

16 16 Same technology, new opportunities Bavarian Nordic is applying the same scientific approach behind PROSTVAC to develop treatments for other major cancers. The company s second cancer immunotherapy candidate, CV-301, supports the immune system to recognize, attack and kill tumor cells of breast and colorectal cancer, by using specific cancer antigens. Preliminary studies have supported advancement of CV-301 into later stage clinical trials and shown promise in a variety of possible cancer indications, requiring the company to determine how to best prioritize these opportunities. Fortunately, encouraging new data published in May 2013 from a Phase 2 study at Duke University helped make that decision easier. In that study, 74 colorectal cancer patients who had metastases surgically removed and received chemotherapy were then treated with CV-301. These patients experienced significantly longer survival when compared to a similar group of patients at the same center who received surgery and chemotherapy but not CV-301. Based on these promising findings, Bavarian Nordic has chosen colorectal cancer as the prioritized clinical development program for CV-301. Additional applications in breast, ovarian and lung cancer remain important future CV-301 development opportunities for the company, a partner or a collaborator such as the National Cancer Institute. Colorectal cancer (also known as bowel cancer), one of the four major cancers, is one of the most commonly diagnosed cancer types in both men and women. According to the most recent edition of the American Cancer Society s Global Cancer Facts & Figures (2008), there were 1.2 million new cases of colorectal cancer diagnosed and more than 600,000 deaths from the disease reported worldwide that year. These figures suggest an important unmet medical need and the impact a promising new therapy could have in this disease. Currently, treatment of colorectal cancer depends on the stage of the disease. Though highly treatable through surgery if discovered early, chemotherapy and radiation therapy are often used in combination with surgery if the cancer has spread to the surrounding area. However, when the disease progresses beyond these options, patients currently have few treatment alternatives. COLORECTAL CANCER

17 17 "With few treatment options available for patients with advanced colon cancer following complete surgical resection of metastases, there is a clear unmet medical need for better treatments. We believe that the encouraging data from this Phase 2 study support a late stage pivotal clinical trial of CV-301 in this patient population." - Michael Morse, MD, an oncologist with the Duke University Medical Center and lead author on the Phase 2 study

18 18 PROSTVAC Next in production line After years of large-scale production of smallpox vaccines, the company s manufacturing facility in Denmark is now expanding to meet the requirements for production of the company s next commercial product. The facility is turning into a multi-purpose facility, allowing the company a more flexible approach in the planning and execution of manufacturing campaigns in the future. It reduces dependence on subcontractors, thus providing the company greater control of pre-launch manufacturing activities for the prostate cancer immunotherapy candidate PROSTVAC. PROSTVAC is currently in pivotal Phase 3 trials and thus not ready yet for production. But the facility in Denmark has already assumed the role as a multi-purpose facility. During 2013, the company transferred its production of clinical trial material to the site. A lot has happened at the site since 2004, when we acquired the facility, says Anders Hedegaard, President & CEO. We have added an in-house process development lab, expanded our quality control labs and office space, and so the infrastructure is well geared for expanding the activities. Most importantly, we have succeeded in optimizing our processes significantly and, by consolidating our manufacturing activities here, we will utilize our resources even better which should enable us to further improve the profitability over time. The people at Bavarian Nordic know the drill Although the production team is still young, it has proven its skills and expertise. 20 million doses of the smallpox vaccine have been produced and delivered to the U.S. over the past three years and the next large smallpox vaccine order is already in production. The establishment of PROSTVAC production is a huge project. However, this doesn t scare off the skilled and experienced people at Bavarian Nordic. They have teamed up with engineering specialists for the design and construction of the new production unit that is expected to be finalized in 2014 after which the PROSTVAC production process will be transferred, validated and tested before actual production begins, which is anticipated in The preparations for commercial manufacturing of PROSTVAC at the facility will require initial investments at the level of DKK 75 million in total over three years. This cost will be offset by savings of the same level.

19 19 In June 2013, ground was broken for the new production unit in Kvistgaard, Denmark. Danish Minister for Trade and Investment Pia Olsen Dyhr joined Bavarian Nordic to turn the first sod.

20 20 Strong share price development Driven by investor activities 2013 has been a year of strong progress and operational achievements for Bavarian Nordic. Despite the European biotech market suffering from the remains of the financial and economic crisis, prompting investors to be very reluctant and cautious regarding risk investments, Bavarian Nordic s share price reached a turning point in the beginning of 2012 as important milestones were met. The stock regained positive momentum and provided a noticeable increase in the price, strongly outperforming the underlying indices in both 2012 and in Broadening the investor base Bavarian Nordic makes a comprehensive effort to present the company to institutional investors, financial analysts and media. The company has intensified its efforts towards the professional investor segment in the U.S. by the recent hiring of a local IR professional, based on the East Coast. Additionally, the company launched a sponsored Level 1 ADR program in 2013 to allow for U.S. investors to trade the Bavarian Nordic stock in local currency. This year the company hosted another educational satellite symposium during the American Society of Clinical Oncology s (ASCO) Annual Meeting in Chicago (largest U.S. cancer conference) where they provided an update on its cancer portfolio to the financial community. Similarly, the company takes part in a number of international banking and investor conferences, as well as frequent shareholder fairs and meetings for private investors. The key topics for investors during the year were the status of the PROSPECT trial, the new studies combining PROSTVAC with the recently approved hormone enzalutamide (Xtandi ) as well as new combinations with checkpoint inhibitors. Obviously the approval of IMVANEX the company s first product approval - was also driving interest, as well as the new large order of IMVAMUNE from the U.S. government. BAVARIAN NORDIC S SHARE

21 21 Share price development» 125% 100% % 50% 25% 0% jan feb mar apr may jun jul aug sep oct nov dec jan feb mar apr may jun jul aug sep oct nov Share information Number of shares 26,094,361 Shareholders Approx. 21,000 Registered capital 90% Large shareholders ATP, Denmark (> 10%) A.J. Aamund A/S, Denmark (> 5%) Distribution of share capital by shareholder category Geographic distribution of shareholders in percentage of registered share capital 10% Non-registered 13% Other countries 31% Private 59% Instutional 9% Great Britain 10% USA 68% Denmark

22 22 Outlook Bavarian Nordic s annual report for 2013, which is scheduled to be published on March 19, 2014, will provide a more detailed outlook for the company as well as financial expectations for the year Below are some of the most significant anticipated events in 2014 and beyond. Complete enrollment in the PROSPECT Phase 3 trial of PROSTVAC Enrollment of the PROSPECT Phase 3 trial remains a top priority for the company. By year-end 2013, practically all planned countries and sites have been opened and enrollment is expected to be completed in the first half of Continue deliveries of IMVAMUNE to the U.S. In November 2013, Bavarian Nordic completed the delivery of the 20 million doses of IMVAMUNE under the base contract awarded by the U.S. government. At the same time, deliveries began under the option that the U.S. government exercised in April 2013 to procure up to 8 million additional doses. Deliveries are expected to run through Initiate the final Phase 3 trial of IMVAMUNE The first Phase 3 trial of IMVAMUNE was initiated and enrollment of all 4,000 subjects was completed during Data from this trial is expected in A second Phase 3 trial of 440 subjects is planned for initiation in the fourth quarter Report data from other clinical trials of PROSTVAC PROSTVAC is currently the subject of four NCI-sponsored clinical studies in different settings, evaluating the targeted immunotherapy candidate in combination with other therapies. Two of these studies, both initiated in 2013, combine PROSTVAC with the recently approved hormone therapy Xtandi. Prepare the Kvistgaard facility for commercial manufacturing of PROSTVAC Construction of a new production unit began in the summer of The unit is planned to be completed during the summer of 2014 after which validation and commissioning will begin followed by test runs of PROSTVAC production. Selected events in 2014 January 13-16, 2014 JP Morgan Healthcare Conference, San Francisco March 19, Annual Report April 24, 2014 Annual General Meeting May 14, 2014 First quarterly report (Q1) August 28, 2014 Half-year report (Q2) November 13, 2014 Third quarterly report (Q3)

23 23 Financials Revenues from the delivery of IMVAMUNE smallpox vaccine to the U.S. that started in 2010 combined with improved manufacturing efficiency have contributed to a positive development in the financial results for the company over the past years, despite higher costs related to the Phase 3 trial of PROSTVAC. Development in revenues and result before tax DKK million figures are based on the financial expectations set forth in March E Financial expectations for 2013 Revenue Income before tax Cash preparedness at year-end DKK 1,100 million DKK 0 million DKK 600 million The above expectations are based on the assumption that the company will deliver and recognize the delivery of 7 million doses of IMVAMUNE to the U.S. Strategic National Stockpile. The Infectious Diseases division is expected to generate an EBIT of approximately DKK 360 million, which will be offset by total costs of DKK 325 million in the Cancer Immunotherapy division, primarily relating to the global Phase 3 study of PROSTVAC. The Group s cash preparedness at year-end is expected to be approximately DKK 600 million. Learn more Bavarian Nordic s annual reports, quarterly reports and CSR reports can be downloaded from the company s website:

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