Frankfurt Just a few months ago, Bavarian Nordic was one of the rather inconspicuous players on the European biotech scene who were almost unknown to the general public. But then the Danish vaccine manufacturer experienced a kind of biontech effect.
Similar to the Mainz biotech company two years earlier with its Covid vaccine, the Danish start-up is now suddenly in the limelight of a broader public – as the only manufacturer of an approved vaccine against monkeypox.
Since mid-May an unusual wave of infections with the monkeypox virus was registered in Europe and the USA, the company has experienced an unexpected surge in demand for its vaccine Imvanex and an equally unexpected surge in its shares.
Within a few months, company boss Paul Chaplin has revised the sales forecast for 2022 upwards six times, to now 2.7 to 2.9 billion Danish kroner, which corresponds to 360 to 390 million euros. Originally, Bavarian Nordic had expected proceeds of the equivalent of a maximum of 190 million euros.
While an operating loss before depreciation (Ebitda) of up to 190 million euros was forecast in March, Bavarian Nordic is now expecting an almost balanced result.
Stock market value more than doubled
The cash position should also look much better than originally expected with an expected EUR 230 million at the end of the year. The company’s share price and market capitalization have more than doubled since the beginning of May, to around 360 crowns per share and 25 billion crowns (around 3.4 billion euros) market value.
According to company boss Chaplin, various governments have now ordered a good nine million doses of Imvanex, some of which will not be delivered until next year.
Bavarian Nordic is far from the size of a Biontech, which together with Pfizer has now delivered more than 3.6 billion doses of Covid vaccine and will generate revenue of more than 30 billion euros within two years. But even in the case of the Danish biotech, a surprising infectious disease ultimately ensures an unexpected increase in earnings that will make it easier to push other research projects forward.
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According to data from the WHO and the American infection control agency CDC, more than 44,000 cases of monkeypox infection have now been registered worldwide, around a third of them in the USA. In the past, outbreaks had mostly been limited to a few countries in Africa and isolated cases in western countries where the disease had been brought in by travellers. The current global outbreak is considered unusual.
The monkeypox virus is related to the smallpox virus, but is considered not nearly as dangerous. The disease is associated with fever, headaches and skin rashes, is usually mild and has so far only resulted in death in very few exceptions. According to the Robert Koch Institute, close contact is required for transmission of the pathogen. According to current knowledge, the RKI assesses the risk to the health of the general population in Germany as low.
Public health emergency of international concern
The WHO had classified the outbreak at the end of July as a health emergency of international concern. The WHO as well as the USA and several other countries such as Germany, France, Spain and Great Britain recommend vaccination for all people who have had direct contact with infected people or are otherwise at increased risk of infection.
Imvanex was primarily developed as a smallpox vaccine. It is a so-called live vaccine based on a modified cowpox virus, the modified vaccinia Ankara virus (MVA). This is characterized by the fact that it can multiply in chicken embryos, but not in humans. It is therefore considered to be safer and better tolerated than older smallpox vaccines, which were used to largely eradicate smallpox in the 1950s and 1960s.
Imvanex has been approved as a smallpox vaccine in the EU since 2013 and as a vaccine against monkeypox since July of this year. In the USA, the vaccine has long been approved against both diseases under the names Jynneos and Imvamune.
>> Read about this: Increasing numbers, infected children, lack of vaccines: monkeypox – the underestimated threat
Bavarian Nordic emerged in the mid-1990s from the merger of German and Danish research companies and has been listed on the Copenhagen Stock Exchange since 1998. Today, 180 of around 760 employees worldwide still work in a research center in Martinsried near Munich. The original goal was the development of gene therapies and therapeutic vaccines against cancer. Over the years, however, the focus has increasingly shifted towards infectious diseases.
A longstanding alliance with the US Department of Defense for the development of a smallpox vaccine also contributed to this. As part of this cooperation, the US government has ordered larger quantities as an emergency reserve, some of which are still stored deep-frozen at Bavarian Nordic as raw vaccine. The Danish company has now used parts of this reserve to meet the unexpected additional demand. However, ongoing production was also increased.
In operational terms, the smallpox vaccine recently played only a minor role for the company. Imvanex accounted for almost 14 percent of total sales of 857 billion crowns (115 million euros) in the first half of 2022. Rather, the lion’s share of the proceeds came from vaccines against rabies, encephalitis and an Ebola vaccine developed by Bavarian Nordic, which is sold by the US company Johnson & Johnson.
Covid vaccine in development
The unexpected demand for the smallpox vaccine will temporarily but significantly shift the balance. For all of 2022, the smallpox vaccine is expected to provide more than half of sales. From Chaplin’s point of view, the monkeypox outbreak should also have a positive effect on business in the years to come. “There are a number of governments that are now thinking harder about being prepared for such cases. We see a certain change there.”
The longer-term prospects, however, are primarily shaped by other vaccine projects. Two development products in particular are in the foreground: Firstly, Bavarian Nordic is working on a vaccine against the respiratory syncytial virus (RSV). This vaccine, which is also based on the modified vaccinia Ankara virus, is now being tested in a phase 3 study involving around 20,000 people.
On the other hand, Bavarian Nordic wants to start a phase 3 study for its own protein-based Covid vaccine in August with financial support from the Danish government. It is now to be tested as a booster vaccine compared to the Covid vaccine from Biontech and Pfizer.
With both projects, Bavarian Nordic is addressing potential markets worth billions, which, however, are already characterized by strong competition. This applies not only to the Covid area, where mRNA specialists Biontech/Pfizer and Moderna dominate the field, but also to RSV. Pfizer and the British GSK, Johnson & Johnson and Moderna are working here on vaccines in advanced test phases. Pfizer recently presented positive phase 3 data for its RSV vaccine.
Irrespective of this, the company is demonstrating unbroken confidence in the projects and is underlining this with planned expenditure on research and development of around 270 million euros in the current year. “By 2025, we want to become one of the largest purebred vaccine companies,” says Chaplin, formulating the strategic goal. The boom in smallpox vaccines is a welcome boost.
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