Bavarian Nordic | Interim Report Q2 2024
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(DKK 1,287 million as of December 31, 2023). The chikungunya
development asset consists of the initial calculated fair value of
DKK 876 million, including the net present value of probable future
development milestones, DKK 499 million.
activities and the sales milestone. Following the completion of the
transfer of the drug substance production process for Encepur in
June a milestone payment invoice of DKK 596 million was received
and offset against the deferred consideration.
Developed production processes
Deferred consideration to Emergent BioSolutions for purchase of
their travel health business amounted to DKK 537 million and
consists of milestone payments related to submission and approval
of Biologics License Application (BLA) to FDA and Marketing
Authorization Application to EMA.
Developed production processes relates to the technology transfer
from GSK to Bavarian Nordic of the manufacturing process for
Rabipur/RabAvert and Encepur and is recognized in the balance
sheet with DKK 362 million. The transfer project has been running
for the past 4 years in a staged process, starting with packaging
then filling and ending with the transfer of bulk manufacturing.
The Company has capitalized incurred costs related mainly to
internal labor and consultancy work on the technology transfer
process. The asset was finalized beginning of 2024 with an initial
value of DKK 375 million and will be amortized over 10 years. The
amortization costs will be included as part of the cost for future
manufactured vaccines.
All the above milestone payments are expected to be payable
within the following 12 months.
The Company retains a yet undrawn sustainability-linked loan (SLL)
of DKK 1 billion with Danske Bank and Nordea, which provides
additional financial flexibility, e.g., to absorb fluctuations in
working capital or to fulfil periodic significant milestone payments
related to previous acquisitions.
Securities, cash and cash equivalents
Securities, cash and cash equivalents were DKK 2,237 million as of
June 30, 2024 (DKK 1,867 million as of December 31, 2023).
Significant risks and uncertainties
Bavarian Nordic faces a number of risks and uncertainties, common
for the biotech/pharma industry. These relate to operations,
research and development, manufacturing, commercial and
financial activities. For further information about risks and
uncertainties which Bavarian Nordic faces, refer to page 37-39
“Risk Management” in the 2023 Annual Report.
Cash flow
Cash flow generated by operating activities was positive by DKK
1,066 million (DKK 228 million). Cash flow from working capital
increased by DKK 519 million (decreased by DKK 952 million),
primarily following a very high receivable position at year-end
2023. Compared to December 31, 2023, the receivable position was
brought down by DKK 706 million during first half of 2024. The
payable position also contributed with a positive cash impact of
DKK 165 million. As of December 31, 2023, the accounts payable
position included received milestone invoices from GSK and
AdaptVac in total of DKK 298 million. Both invoices were paid in
January. As of June 30, 2024, the accounts payable position
included a received milestone invoice from GSK of DKK 596 million.
The invoice was paid in July. The positive cash impact from
incoming customer payments and a higher payable position was
partly offset by cash spend on building up of higher inventory
position, DKK 349 million.
OUTLOOK FOR 2024
Bavarian Nordic confirms its new guidance for the full year at the
upper end of the range, with aggregated revenue of approximately
DKK 5,300 million and EBITDA of approximately DKK 1,350 million.
The expected revenue of approximately DKK 5,300 million consists
of approximately DKK 3,000 million from Public Preparedness, now
largely all secured by contracts, approximately DKK 2,100 million
from Travel Health and approximately DKK 200 million from
contract work.
Travel Health anticipates a 12% growth, driven by a mix of
continued market growth and market share gains.
Cash flow from investment activities amounted to DKK 1,696
million (DKK 702 million) and related to investment in short term
securities of DKK 1 billion and milestone payment to GSK following
the completion of the transfer of the drug substance production
process for Encepur, DKK 596 million.
Key assumptions
Research and development costs of approximately DKK 850 million
are expected, of which the chikungunya program represents nearly
half. Similarly, the chikungunya program will impact manufacturing
costs negatively by approximately DKK 240 million due to
manufacturing of drug substance batches as part of the
preparations for commercial launch in 2025. Pending approval of
the vaccine, it is expected that these costs will be reversed and
capitalized in 2025. Adjusting the implicit 2024 EBITDA margin for
this effect would give an EBITDA margin range of 27-30%.
The acquisition of subsidiaries and activities from Emergent
BioSolutions in May 2023 amounted to DKK 1.8 billion.
Cash flow from financing activities was negative by DKK 37 million
(positive by DKK 734 million), primarily related to purchase of
treasury shares, DKK 28 million.
The net cash flow for the first six months of 2024 was negative by
DKK 667 million compared to a positive cash contribution of DKK
260 million in first six months of 2023. Adjusted for the investment
in securities of DKK 1 billion, the net cash flow for the first six
months of 2024 was positive by DKK 364 million.
Net working capital is expected to increase by approximately DKK
900 million due to final inventory build-up before completion of
tech-transfer of rabies and TBE manufacturing.
Other tangible investments of approximately DKK 300 million are
expected.
Equity
The Group’s equity as of June 30, 2024, stood at DKK 10,437
million (DKK 10,340 million as of December 31, 2023).
Cash outflow in 2024 further includes milestone payments of
approximately DKK 2,000 million to GSK and Emergent
BioSolutions.
Deferred consideration
Deferred consideration to GSK for purchase of product rights
amounted to DKK 1,496 million and consists of likely milestone
payments to GSK dependent on operational steps in the ongoing
technology transfer of the Encepur and Rabipur related production
The outlook is based on the following assumptions on currency
exchange rates of DKK 6.90 per 1 USD and DKK 7.45 per 1 EUR.