Earnings call transcript: Bavarian Nordic’s Q1 2025 revenue surges 62%, stock jumps

Bavarian Nordic reported a robust start to 2025 with a 62% year-over-year increase in revenue for the first quarter, reaching 1,347 million Danish krona. Despite the absence of specific earnings forecasts, the company’s impressive performance was well-received by investors, as evidenced by a 9.83% rise in its stock price. This surge follows the company’s strategic advancements and strong market position, particularly in the vaccine sector. According to InvestingPro data, the company maintains a healthy market capitalization of $1.99 billion and trades at a P/E ratio of 13.2x, suggesting reasonable valuation levels relative to peers.

Key Takeaways

• Bavarian Nordic’s Q1 2025 revenue grew by 62% YoY.
• Stock price increased by 9.83% following the earnings announcement.
• Strong performance in the Public Preparedness and Travel Health segments.
• Successful launch of the Chikungunya vaccine in the US and approvals in Europe and the UK.
• Maintained full-year revenue and EBITDA margin guidance.

Company Performance

Bavarian Nordic demonstrated robust growth in Q1 2025, with a significant increase in revenue driven by its Public Preparedness and Travel Health segments. The company launched its Chikungunya vaccine, Vincunya, in the US, and received approvals in Europe and the UK, enhancing its competitive edge. The company’s strategic focus on expanding its product offerings and manufacturing capabilities appears to be paying off, as evidenced by its strong market performance.

Financial Highlights

• Revenue: 1,347 million Danish krona (+62% YoY)
• EBITDA Margin: 31%
• Gross Margin: 51%, improving by 2 percentage points from 2024
• Public Preparedness revenue: +83% YoY
• Travel Health revenue: +52% YoY

Market Reaction

Bavarian Nordic’s stock price rose by 15.3 points, or 9.83%, to 170.4, reflecting investor confidence in its strategic direction and financial health. The stock’s movement positions it closer to its 52-week high of 300, indicating strong market optimism. This surge is notable against broader market trends, underscoring the company’s positive outlook and performance.

Outlook & Guidance

The company reaffirmed its full-year revenue guidance of 5.7 to 6.0 billion Danish krona and an EBITDA margin of 26-30%. Bavarian Nordic is also preparing for the European launch of its Chikungunya vaccine and continues to negotiate significant contracts, such as the $144 million BARDA order. With a robust order backlog and ongoing product development, the company is well-positioned for future growth.

Executive Commentary

CEO Paul Chapin stated, "We’ve had a tremendously strong start to the year," highlighting the company’s solid performance and strategic achievements. CFO Henrik Jule added, "We are entering a period with more routine manufacturing," indicating confidence in operational efficiency and cost management.

Risks and Challenges

• Potential tariff impacts could affect cost structures and pricing strategies.
• The sale of the Priority Review Voucher remains pending, which could impact financial inflows.
• Unrecognized tax assets might influence the company’s financial strategies and flexibility.
• Supply chain disruptions could pose challenges to manufacturing and product delivery.
• Market saturation in certain vaccine segments could limit growth potential.

Q&A

During the earnings call, analysts inquired about potential regulatory changes and the impact of tariffs. Management expressed confidence in navigating these challenges, emphasizing their focus on growth in the travel health segment. The company also highlighted the availability of substantial unrecognized tax assets, which could provide future financial benefits.

Full transcript - Bavarian Nordic (BAVA) Q1 2025:

Conference Operator: Good day and thank you for standing by. Welcome to the Bavarian Nordic Q1 twenty twenty five Results Conference Call and Webcast. At this time, all participants will be in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, please press star one and one on your telephone.

You will then hear an automated message advising your hand is raised. Please note that today’s conference is being recorded. I would now like to hand the conference over to your speaker, Roel Sal Sorensen, Vice President, Investor Relations. Please go ahead.

Roel Sal Sorensen, Vice President, Investor Relations, Bavarian Nordic: Yes. Thank you, operator, and welcome, everyone, to this Q1 update from Verena Nordic on a lovely green day. My name is Ralf Sandsson from Investor Relations. And today in this conference call, we also have Paul Chapin, our CEO and Henry Yule, CFO to give the presentation and comments to all the questions you may have to the session we have as usual afterwards. As you may recall, last time we had some issues for some analysts investors having difficulties getting through with questions.

If you realize difficulties getting through, please give me a call or send me a text, so I can manage to get your questions to management if it’s not possible to get through. But before we start this presentation, please note that this announcement includes forward looking statements that involve risks, uncertainties and other factors, many of which are outside our control, but would cause actual results to differ materially from results discussed. Forward looking statements include statements concerning our plans, objectives, goals, future events, performance, and other information that is not historical information. We undertake no obligation to publicly update or revise forward looking statements to reflect subsequent events or circumstances after the date made except as required by law. So with this, I will hand it over to you Paul to start the Q1 presentation.

Paul Chapin, CEO, Bavarian Nordic: Thanks Rolf and welcome everyone to our Q1 earnings. If you turn to slide three, we’ve obviously had a tremendously strong start to the year. I’ll let Henrik talk about the numbers in a few slides time. But basically, we recorded almost 1,400,000,000.0 krona in revenue, representing a 62% growth compared to this time last year, and we’ve established an EBITDA margin of 31%. So as I said, extremely strong start to the year, and that’s due to all parts of the business.

So on travel health, we saw a strong start, which I’ll go into more details. And on public preparedness, we had originally said it would be a light quarter for our public preparedness due to the back end loaded nature of the existing orders. We were however able due to a strong manufacturing performance to bring some orders forward, allowing us to record these from numbers. And importantly, we’ve already announced a new order from the US government, which while helps the revenues this year is really securing a good solid revenues for ’26. In addition to the strong financial performance, we’ve also launched chikungunya vaccine, Bikungunya, where it’s been approved in The US, Europe, and also in The UK.

We turn to the next slide. As I said, the performance of the public preparedness was due to existing orders that we’ve already had in the books. But we were able, as I said, due to the excellent manufacturing performance to bring forward certain deliveries. We have, as I said, secured this order from BARDA for US144 million dollars That does allow us to secure or increase the existing contracts on the SEK2.5 billion to SEK2.65 billion. So a little bit short of the bottom end of the guidance for the public preparedness this year, but we’re still incredibly confident that we will be able to secure new contracts.

We are currently negotiating a new framework agreement with HERA, and we’re also in negotiations with a number of different governments around the world. We are continuing to manufacture at full scale, meaning that the timing of new orders will be fine in that we have inventory and stock on hand. In addition to the strong performance, we’ve also had the approval for our freeze dried version of JYNNEOS. That’s going to be incredibly important moving forward as the US government is only going to be stockpiling freeze dried. That’s helped secure the recent order we just announced.

But obviously we will in the coming months start negotiating for a new contract that will replace the existing contract. If we turn to the next slide, on travel health, we’ve really seen a strong performance. I will leave it to Henrik to talk really about the various different numbers, but we’ve seen strong performance for rabies, TBE, and our other vaccines such as typhoid. And even with Vincunia, we’ve recorded our first sales rapidly after the approval from the FDA and actually even before the recommendation from ACIP. What we’re seeing in terms of travel health is the market has grown.

We’ve seen strong brand performance in the various different areas where we’ve seen market share gains. This together with some stocking from wholesalers really tells the picture of a very strong performance in Q1. So if we go to the next slide, this is some data from some external data, which is predicting that vaccine sales will grow 6% year on year between now and 02/1930. The interesting thing is when you start looking at the different vaccine sales sectors, it’s the travel health that really shows the strongest growth of 20% CAGR over the coming years. And I’ll get into some of the reasons for that growth.

But basically in travel health, it’s more resistant to some of the vaccine skepticism that we see is on the rise. Mainly this is because people who are seeking vaccination for travel are already convinced about the need for vaccination. And it’s also due to a number of new vaccines that are thought or believed that will be introduced in the coming years, including chikungunya. So it’s an extremely exciting sector to be in and one that we actually identified way back in 2020 when we bought the original first couple of assets from GSK. Let’s go to the next slide, slide seven.

One of the areas that explain this growth in travel health is that for certain vaccines such as the tick borne encephalitis vaccine, Encepur, we see an expansion of the endemic regions. So what you’re seeing here is a graph of Germany. The red area are areas which are at high risk of the infected ticks. The orange areas are areas where ticks, infected ticks, are being found and are expected to become red or endemic in the years to come. And this is a picture that we also see in Sweden and in other areas of the Nordics and Baltics is that the endemic region is expanding.

Therefore, the growth that we’re seeing in TBE is expected to continue as the endemic regions continue to expand.

Conference Operator: If we

Paul Chapin, CEO, Bavarian Nordic: go to the next slide, another reason for strong growth in travel health will be the emergence of new vaccines addressing unmet medical needs. And one of these areas is chikungunya. Obviously, Vincunya, our chikungunya vaccine has now been approved by the FDA, but it’s also approved in Europe and by The UK, and we’ve made a filing application to Health Canada. We expect the approval next year. I already said in the beginning, we’ve seen some initial sales as we launched in The US very rapidly post the approval, almost a record industry, a record for the industry, I would say.

And we are gearing up for the launch in Europe in the coming weeks. With the approval comes some commitments to the regulators, and we will be initiating studies in children and also an efficacy study or a planned efficacy study later this year. And as I said, we are gearing up for launch very, very soon. If you go to the next slide, we really feel that Vincunya is well positioned to become the preferred choice for travelers who are potentially at risk of getting chikungunya. The reason for this is Vincunya is based on a viral like particle technology, which means that it cannot cause an infection.

And so it’s designed specifically to be safe, particularly for populations who may have a weakened immune system or the elderly. The data that’s been generated for the approval shows a very rapid onset of protection within one week. So these are very, very important in terms of the favorable safety profile, the rapid onset of protection, and the fact that it’s in a prefilled syringe makes it the preferred administration for healthcare professionals. As we launch and are launching the product, our focus is to ensure that we get solid recommendations from the authorities, drive awareness of the dangers of chikungunya, and also to try and promote the benefits of vincunia.

Henrik Jule, CFO, Bavarian Nordic: If we

Paul Chapin, CEO, Bavarian Nordic: go to the next slide, talk a little bit about the pipeline. We have a number of programs in our pipeline. One is for converting our manufacturing for MPOXX smallpox vaccine away from eggs into a proprietary cell line. This is something that is really innovative. And it’s going to improve yields, improve our capacity, ensuring that not only can we deal with future MPOXX outbreaks, but God forbid that if smallpox was ever reemerged, we would be able with partners to deal with a global pandemic.

We have agreed with the FDA a regulatory path. And part of this includes performing a clinical study to show that the product produced in the cell line is the same as the product produced in eggs. And this study will start later this year. On chikungunya, we do have some commitments as I mentioned, we’ll be initiating a pediatric and efficacy study later this year. We have a fully funded program from the US Department of Defense for equine encephalitis and our two new targets Lyme and its time bar virus are as planned gearing up to enter the clinic next year.

And with that, I will hand over the presentation to Henrik Jule.

Henrik Jule, CFO, Bavarian Nordic: Yeah, thank you very much Paul and on the next slide we will start with a breakdown of the commercial performance for the first quarter. So as already said, fantastic quarter with strong growth of 62% in total revenue versus prior year and basically driven by strong performance in both our business segments, public preparedness and our travel health business. Public preparedness, 83% up compared to prior year, by executing orders that we secured already last year. And as Paul also said, we had expected on public preparedness a somewhat more light quarter, but with a lot of efforts from our organization, we managed to pull some of these forward to secure earlier revenue. So very good performance there.

Travel health delivered 52% growth over prior year and mainly driven by our rabies and our TB businesses that showed extremely strong growth of 5362% respectively. The rabies business, was grown basically, again, the market continues to grow. We have gained market shares in key markets both in The US where we have gained five percentage points back to 77% of the market, and in Germany, we have seen significant growth when comparing to Q1 of twenty four where there was some supply constraints in some of the European markets. And on top of that significant market growth, we have also regained markets here in the German market, so that we today have 97% of that market. So very strong growth from the ape grave business.

On TBE, Paul already alluded to the endemic expansion, and we have really seen the impact of that with a market growth of 17% pure market growth and the comparison of apple to apple really because we had no supply constraints within this part of the business last year. So very nice market growth. And on top of that, we could add a two percentage point market share gain in our largest market Germany. So very strong growth there. In Germany, I have to say both our rabies and TB business was slightly impacted by some wholesalers stocking up.

Whether that is something that will have a negative impact going forward or not is still to be seen. Typically, wholesalers can also stock up on a more permanent level when they see there is an uptick in demand in the market. So very, very strong indications, very strong performance from these two products here. Vivo Tifraxcora remains to be in the relaunch phase. We’re very pleased that we saw the first Vincunya revenue on the list here in the first quarter in record time after we got the approval in The US and even ahead of the ACIP recommendation, we managed to supply into the market and record revenue of 5,000,000 Danish kroner here.

So altogether, 1,300,000,000.0 and 47,000,000 in revenue for the first quarter, up 62% compared to prior year. On the next slide, you will see a full profit and loss, and there I will start mentioning first of all our gross margin. We talked about the revenue already. Gross margin of 51%, that is two percentage point better than our full year performance last year, and basically it reflects a more smooth period within manufacturing where we have seen better yields, we have seen higher success rates, etcetera, which is obviously very good for the margins. R and D costs, slightly lower than last year and back end loaded this year.

As you will recall, we have guided to spend approximately 900,000,000 Danish kroner this year, so a relatively low first quarter. It’s back end loaded, and most of the project R and D costs will be spent on post licensure committed trials on chikungunya. SG and A costs went up from $2.9 to $2.5 and it’s really driven by the launch of chikungunya, but also the baronautic expanding into new markets, like The UK, Canada, France, and these markets really to support the launch of tikungunya, but also to support taking back products from our partnership with Maniva. So adding all of this together gives an EBITDA of DKK $420,000,000 or a margin of 31%. So very strong level of profitability in the quarter.

Next slide. Just want to use this slide to remind you about what we promised you at the Capital Markets Day last year with regards to the gross margin improvements. As you know, we are transferring our two products, the rabies and TBE vaccines from to Barragan Nordic, and in that process, we are expecting to improve the gross margins as we take full control, and we will no longer be paying a premium to GSK, and we can harvest some of the process benefits as well. So we are planning a 30% reduction in cost of goods sold on these two vaccines, which eventually will translate into a 15 to 20 percentage point improvement in gross margin. It will come stepwise.

We have completed the tick transfer of the rabies vaccine already, but we need to flush out the GSK based inventories before we start seeing a real impact from that. The TBE tech transfer is coming right behind, and we are planning to finalize that over the next few months here, and then the same goes for the TB vaccine. We need to flush out GSK inventory. So we will start to see some impact late this year from rabies, full impact rabies next year, then we’ll start to see impact from TBE, and from ’27 we should see a full year impact of this 15 to 20 percentage point improvement in gross margin. And remember, these two products last year together we had a revenue of 1,850,000,000 approximately.

So you can do your math and see what does 15 to 20 percentage point mean in terms of overall EBITDA levels. It’s a significant contribution to our future profitability as a company. Next slide. A few words on our cash flow and balance sheet for the period. We saw negative cash flow from operating activities.

We had a positive net profit, but that was more than offset by an increase in net working capital and net working capital primarily driven by a reduction in current liabilities as we paid a milestone to GSK that was recorded the previous quarter but not paid, so it ended up being a current liability. Cash flow from investment activities that is mainly consisting of a milestone payment to Emergent BioSolutions for OXD2 of a total of 50,000,000 US dollars related to the approvals in EMA and by FDA of our vimcunia vaccine. So you will see all of these milestone payments are going through the system as we speak right now. To the right, securities, cash and cash equivalent. You will see we have right now approximately 1,200,000,000.0 Danish kroner.

We still owe GSK the last milestones related to the finalization of the transfer of the TB vaccine, and in total, we owe them approximately $739,000,000 Danish kroner. We also have an amount still not paid included in current liabilities of 20,000,000 US dollars to Emergent BioSolutions, but as you will see on this page here, we have sufficient cash to honor those commitments that will take place over the next few months as we finalize the tech transfer. On the next slides, just want to remind you on that one that we are reiterating or confirming our full year guidance for the year. So we are still expecting revenue between 5.7 and 6,000,000,000 and expect to end the year with an EBITDA margin between 2630%. I will just slide here just highlight, and you can see here that now the level of secured orders in our public preparedness business now stands at 2,650,000,000, as there was 150,000,000 Danish kroner impact from the recently announced option that was exercised by BARDA.

So a contribution to ’25, but primarily securing the business for ’26 from that order. I would also like to highlight on this slide here as well, as you will have seen, the US dollar has depreciated in value against euro and Danish kroner over the last period here, and when we did the guidance, we assumed a level of 7 Danish kroner per US dollar. Right now, it’s around 6.6, so it has declined, but we have hedged all known exposure in US dollars, so therefore it should have no material impact on our guidance for this year. So with that, I’ll just end up saying great start of the year. We can confirm the guidance.

I think we have made some very important company announcements recently, particularly on our tichikungunya regulatory process, but also securing business with the U. S. Government, some for this year but also for next year. So with that, I will open up for Q and A. So operator, please open for Q and As.

Conference Operator: Thank you. We are now going to proceed with our first question. The questions come from the line of Thomas Bowers from SEB. Please ask your question.

Thomas Bowers, Analyst, SEB: Yes. Thank you very much. A couple of questions from my side here. So first of all, on EBITDA. So you delivered 31% for the quarter.

You have some R and D cost tailwinds, of course, but when adjusting for that, maybe 7% to 28 as far as I can calculate. But then you also have major product mix impact, of course, being impacted by the tech transfer. So what am I missing here in order to stay within your current 26% to 30% guidance range? And then second question, can you maybe just add a bit of color on TravelHealth’s growth outlook for the year? You keep the $2,500,000,000 target or some 10% year over year growth.

So you’re sort of implying a negative quarter over quarter growth going forward. Is there any constraints, supply constraints, anything we should be aware of? Any changes to seasonality maybe? We also saw that last year in with a very strong Q1 for TBE, but now even stronger, of course. So is anything also saying that we should be maybe a little more cautious about Q2 or maybe even potentially also for the fourth quarter in terms of seasonality?

And then just lastly, screening in just a question on Bemkinje. So any comments on this initial feedback and also primarily thinking on your competitor with the safety concerns out there? So we know that they had a quite large order to the French authorities, so is there anything here that potentially could lead you to take over that order maybe or anything upside to your 50,000,000 to €100,000,000 target for this year? Thank you.

Henrik Jule, CFO, Bavarian Nordic: Yeah, so thank you Thomas for the questions. Think first of all on EBITDA, we delivered 31%. We guided 26 to 30, so you can see the upper end of what we have guided is not far from what we’re showing this quarter actually. But it has been a very good quarter for us and in several aspects. I already talked about the gross margin.

We saw a smooth quarter. We are manufacturing biologics, remember, so there can be variations between quarters on actually what gross margin you can deliver and how successful you are in your manufacturing. We do believe we are entering a period with more routine manufacturing after very hectic ’24 with the two tick transfers and ramp up within manufacturing. So hopefully we can maintain that good trend. That will definitely help.

And then you mentioned it also the R and D is back end loaded. So I think the, I don’t think you’re missing anything really in your calculations. But we have, as you know, we have guided 26 to 30%. So what we deliver in the first quarter is close to the upper end of that. Maybe I can continue on travel health, the next question.

So I think you’re alluding a little to, we had a fantastic first quarter and we’re still sticking to 2,500,000,000.0 for the full year. I think I’ll take on that one is these vaccines are pretty seasonal, but the seasons, you know, they are not exactly the same every year. We saw that last year with a very TBE Q1 performance. So I think we are just taking a somewhat cautious approach. This time we want to see the next couple of months.

Hopefully they continue along the same trends. But to your questions, we do not see any supply constraints at the moment, and we have no concerns. It is simply just a cautious approach that we’re taking. We want to see a couple of months more before we revisit our expectations for the full year. Then you had a question on Vinconia, maybe that’s one for you, Colin.

Roel Sal Sorensen, Vice President, Investor Relations, Bavarian Nordic: Yeah. Yeah, so

Paul Chapin, CEO, Bavarian Nordic: you’re right. There’s been unfortunately some safety issues with the competitor product and that’s led to EMA suspending the use of that product in people 65 years and older. We have not currently launched Vincunia in Europe. So unfortunately, we were not in a position where we could supply product to the French authorities. We are of course in dialogue with the French authorities and as I said in the presentation, we’ll be launching in the coming weeks in Europe.

We’re certainly not thinking of changing the guidance that we have for this year, but of course outbreaks of chikungunya will only help, in the sales, and the other thing I would say of interest is that since there have been now two chikungunya vaccines available, the cases of chikungunya globally are increasing and sporadic more sporadic outbreaks have been reported. And I think that only just goes to show that the cases of chikungunya have been underrepresented historically, and there’s a lot more disease that people are now picking up. So I think it bodes extremely well for the launch of Vincunya, But for now, we’ll keep the guidance as it is and we’ll see how that launch goes in the coming weeks.

Thomas Bowers, Analyst, SEB: Sounds great. Thank you very much.

Conference Operator: Thank We are now going to proceed with our next question. The questions come from the line of Benjamin Jackson from Jefferies. Please ask your question.

Benjamin Jackson, Analyst, Jefferies: Hi team, thank you for this. It’s Ben Jackson at Jefferies. Just two quick questions, slightly higher level than those other three. I’m thinking more. So firstly, on obviously potential exposures to tariffs as you’re thinking around this changed with regards to the last time we spoke and caught up on that.

Is there any potential strategies you’re having to think about there to hedge that exposure? And then secondly, interesting to know if you have noticed any kind of change in dialogue or commentary with the discussions you’re having with regards to US organisations. Obviously, there have been a couple of changes in the FDA specifically focused around here vaccines and also commentary about how vaccine trials may change. So specifically I am looking and thinking have you had to change your strategy or thinking about one) the early stage R and D that you’re conducting and how you’re planning to conduct it And two, are there any changes in thinking about how you’re having to approach the post approval process in the R and D sense? Any ideas around that would be great.

Thank you.

Paul Chapin, CEO, Bavarian Nordic: Yeah, so I’ll answer it backwards. So I’ll take the first one. So in terms of our interactions with the US government, so if I just take BARDA first, really we’ve seen no impact of anything. It is business as usual. You saw that we’ve obviously secured the latest option or order for the freeze dried that actually occurred a little earlier than we’d originally planned and was flawless to be quite frank in terms of the execution.

So in terms of the public preparedness business, it seems to be business as usual from our side currently at least. In terms of FDA, I think it’s important to note that nothing has really changed. I mean, the head of CEVA has just been appointed, but in terms of policies and regulations, they haven’t changed. There is a lot of speculation and a lot of rumors that things may change, but nothing has currently changed. So the thing, if you look at our pipeline, we’re still at the very early stage going into, phase one.

So I don’t think any, even if any changes occur in terms of, placebo efficacy trials being required, That’s typically the standard anyway. I don’t think anything has really impacted to make us change in terms of the developments or anything like that. But as I said, we have to wait and see how things develop. And that actually is also the answer to the tariff question because how do you prepare for something that hasn’t occurred? And we don’t know whether it will occur or at what level it will occur.

I think if you look at our manufacturing setup, some of our manufacturing is already in The US. So I think the impact of tariffs in The US may not be as big an impact for BN as a lot of people are speculating. But again, I think at the end of the day, we have to wait and see what happens, and then we will obviously be able to deal with the situation. I don’t know, Henry, if you’ve got anything more on tariffs.

Henrik Jule, CFO, Bavarian Nordic: No, you’re absolutely right. Think we are sort of spending the waiting time, if you can call it that, preparing ourselves, analyzing scenarios, and have reached the conclusion that it will not that we do not expect this to be dramatic in any way for paranordic, and we have a list of potential mitigating actions and strategies we can take to mitigate a potential situation.

Benjamin Jackson, Analyst, Jefferies: Very clear. Thank you very much.

Conference Operator: Thank you. We are now going to proceed with our next question. The next questions come from the line of Jesper Islv from Carnegie. Please ask your question.

Jesper Islv, Analyst, Carnegie: Thank you so much. I have three. So first off, continuing on the topic of TravelHealth sales, very strong underlying momentum. Of course, there’s also been some easy comparisons, some wholesale stocking you pointed out, and I also understand some price increases. So my question is basically just perhaps you can split the very strong growth this quarter into the different components just to help us understand how we should extrapolate it and sort of if this is a new higher base or basically a new growth rate?

That’s the first question. Second question, you still have this priority review voucher. Just wanted to understand the process from here and update. So have you started a process reaching out to companies to sell it? And if not, what is basically holding you back?

And can you just also address whether you intend to send that cash from the TRV back to shareholders? And then last one is facing more household question on the topic of tax, but which may be a boring topic, but you still have this non recognized tax asset. Can you just remind us about the size of this tax asset and how you intend to use it because you still do not pay that high tax rates? Thanks so much.

Paul Chapin, CEO, Bavarian Nordic: Can I have a stab at the first and the last one? The tax I definitely think is you.

Henrik Jule, CFO, Bavarian Nordic: I thought that was one for you. Thanks Jesper. First of all on travel health, you said it was an easy comparison. I don’t think we see it as an easy comparison. Yes, there has been few price adjustments, but they not easy.

I think you implement them when you can and when competition allows it in the markets. And then there has been a little, I would say, stocking. But the thing with wholesaler stocking, it’s there’s not sort of a report you can pull out and say wholesaler stocking was at this level, X million euros. You can do some analysis that is not perfect. You can look at what are you selling into the market?

What is the market pulling out of the pharmacies and other channels, and see is there a mismatch between these, which can indicate some wholesaler stocking. And what does wholesaler stocking then means? I think if it’s a temporary phenomenon, it will hit you again in the coming months as they will not replenish the inventory. But if it’s really driven by an underlying strong demand, I think it is just the wholesalers reacting to that situation. They typically want to have X number of days of the projected demand on stocks.

I think it’s also too early to say whether destocking is temporary or permanent new level. I think what is important to see, I think that is the underlying growth that we see. Take TBE, Germany, seventeen percent growth driven by the endemic expansion, and as Paul alluded to previously also, we do see the whole travel health segment outperforming the general vaccine space and with some analysis suggesting even up to 20% growth over the next five years. So I think key messages on travel health for this quarter is continued growth on the rabies business, no supply constraints, that’s what you see the impact in this quarter here again, market share gains both in Germany and The US on the rabies business, and on TBE, strong underlying demand growth, and again also a market share gain of up to nearly two percentage points. So very strong growth.

And on the tax, it is correct that we have non recognized assets created as accumulated losses over the time. The numbers quoted in our annual report, don’t want to give you an approximate but you can find it in the annual report how much it is, which we can use going forward. There’s no expiry date on this, so it will help us. You cannot use it 100% every year. I believe you can use it up to 60% in a year to offset against your income.

But the specific number, rather than giving you some approximate number, would suggest you look it up in the annual report or I can send it to you afterwards, Jesper. And then the final thing on the PRV, yes, correct. We have not sold it yet. We are not in the rush to sell it. I’ve shown you the cash flow.

We don’t need it, so we want to make sure it’s sold at the right price. There is interest out there. We have had some inbound calls, but we haven’t sold it yet, and we will sell it at the right time when we find a buyer who’s willing to pay the right price.

Jesper Islv, Analyst, Carnegie: Okay. Thank you so much. Very clear. Thank you.

Conference Operator: Thank you. We have no further questions at this time. I will now hand back to you for closing remarks.

Paul Chapin, CEO, Bavarian Nordic: Thank you. Well, thanks to everyone for attending and for the questions, and have a great day. Goodbye.

Conference Operator: This concludes today’s conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a good day.

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