Bavarian Nordic A S

Welcome everyone to today's presentation, which is an update on our results for last year, 2025. Today you'll hear from me, a few slides from myself, and then I'll hand over to Henrik Juul, the CFO. So if you turn to slide four, we reported very strong results last year, 6.2 billion in revenue with a 28% EBITDA margin. And this is the result of very strong performance of both arms of our commercial business on travel health, but also on public preparedness. On travel health, we saw a 30% growth last year, which is a very strong performance across the whole portfolio, but also related to the launch of our chikungunya vaccine. On public preparedness, In 25, we were at the back end of an outbreak of MPOCs, and we saw more than 3.1 billion in revenues, which is approximately a billion kroner above the upper end of our normal base business. So as I said, very strong performance from both parts of our commercial business in 25. In addition, we sold a product review voucher valued at 810 million kroner. And if we included this in the EBITDA, this would bring the EBITDA to a 41% margin. Some events that have happened since in this year, which are noteworthy, is we've announced two agreements, one with Europharma for the distribution of our chikungunya vaccine in Brazil. And earlier this week, we announced an extension or an expansion of our strategic partnership with the Institute of India to produce our chikungunya vaccine. And both of these are related to improving the access of vincunya in those regions. Today we also announced the second trance of our share buyback and I'm sure Henrik we're coming back to more of that in the future slides. And last week we announced that after a long tenure at Bavaria Nordic. Unfortunately, I think it's 27 years. I have decided for different reasons to step down later this year, but I've agreed with the board that I'll be staying until the end of the year or until a replacement has been found. The outlook for 26, Henrik will go into much more detail, but here we're guiding for total revenue of five to 5.2 billion with an EBITDA margin of 25%. This is made up of another strong year of growth for travel health of 3 billion and public preparedness of 1.8 to 2 billion, reflecting coming out of the public health crisis for MPOCs and reflecting a more normalized year for public preparedness. We turn to the next slide. Talk a little bit more about the travel health. As I said, last year we saw a 30% growth. This is primarily due to rabies and TB vaccines where we saw a 34 and a 20% growth respectively during the year. We see an outstanding performance of rabies and I'll come to some of the reasons for that in the next slide. But in the US, we saw a double-digit growth and an improvement in the market share up to 78%. In Germany, we saw a remarkable growth of 48% in the market, but also a 6% improvement in the market share to 97%. So strong performance in both of the two key markets for rabies. Similarly for TBE, we saw 20% growth and an improvement in the market share in Germany from 28 to 31%. So really a very strong performance, brand performance for both products, but also a strong market growth in both areas. And moving forward, we still stand by the projection of a 10 to 12% annual growth in travel health, but of course, starting from a much higher standpoint than we had originally reported at the Capital Markets Day. To go to the next slide, why are we seeing such strong growth in rabies? Well, in Europe, we've seen cases, fatal cases, unfortunately, of travelers returning from North Africa to the UK, France and Spain. And these have obviously hit the media and raised the profile of the dangers of rabies. In the US, we're seeing the CDC are tracking what looks like 15 likely outbreaks of rabies in 12 different regions of the US. And last year, we saw an increase in the number of deaths in the US, which is six deaths up until September of last year. So these outbreaks the unfortunate deaths, which are higher than typically seen, has really raised the profile of the importance of, or the dangers of rabies, both in the US but also in Europe, and this is one of the underlining reasons we're seeing a very strong growth in the market, and obviously we are the market leader benefiting most from this increase. So if you turn to slide seven, Last year, we saw the first approvals of vincunia, a vaccine against chikungunya, both in the US and in Europe. And that led to an outstanding launch performance in 25. We had launched in the US, I think, within four weeks of the approval, which is, I would say, a gold standard performance within the industry. And we launched in, I think, almost 14 countries by the end of the year. We exceeded the guidance in terms of revenues for the guidance of 75 million kroner. And in terms of volume, we saw a very successful launch, which is associated in terms of volume greater than some of the recent vaccine launches for travel vaccines. So very happy with the performance in 25. It is setting ourselves up for continued growth in 26, where we are guiding for 250 million kroner, which is a significant growth. We are seeing very strong demand in the markets that we've launched. And Vinconia, our Chikungunya vaccine, will be a key driver of future growth within the travel health franchise in the coming years. We turn to the next slide, slide eight. In public preparedness, as I said, in 25, we were coming from on the back end of the public health emergency that was declared by WHO and Africa's CDC for the outbreak of MPOCs in Africa. And we saw stronger demand or as we've often referred to it as spike demand over our base business, seeing more than 3.1 billion in revenues June 25. What we are anticipating in terms of 26 is a more normalized year guiding for 1.8 to 2 billion krona. And of that, we've already secured 1.4 billion krona of that revenue to various different contracts that we have in hand. So again, a very strong year is planned for 26. In addition to our activities, we also have a number of ongoing clinical studies which are supported in part by CEPI, both in children, in infants, and also in pregnant women. And hopefully these studies will enable the expansion of the label, which already includes adolescents and adults in certain territories, to also include infants and children. which essentially will hopefully lead to an expansion of the label for the entire population. We move to the next slide. So on public preparedness, we often refer to our base business of being 1.5 to 2 billion kroner, but we anticipate there will be spikes in that base business from time to time, either associated with outbreaks of MPOCs, or as we've seen historically, one-off larger orders from governments. And on slide nine, what we're showing you here is a map of the recent cases of MPOCs. And what we've seen is a 67% increase in the cases of MPOCs reported already in 26 in Europe. And if you just look at Spain, There are 53 cases in Spain since January 24, but almost 50% of that is in 26. And in France, similarly, 10 cases since 24, but six of those are already within this year. And this indicates that MPOX has not gone away. While it may not be part of the news flow for good reasons, There are still cases, and there does seem to be an uptake in the number of cases already this year. And of course, we are really the only supplier of an effective safe Mpox vaccine globally. If we go to the next slide, in terms of pipeline, we have a number of different trials ongoing for our chikungunya vaccine. These are trials related to commitments that we made to the regulators as part of the approval. So we have an efficacy study ongoing and a study in children. The pediatric study will hopefully lead to a broadening of the indication. We also have a study for MDA, our smallpox and mpox vaccine, where we are moving to making a change in our manufacturing away from eggs into a proprietary cell line. This is a phase two study that was initiated last year and will be completed or the top line data will be reported later this year. We have an ongoing phase two study for equine encephalitis, which is a vaccine fully funded by DOD. And we have preclinical assets, both for Lyme disease and Epstein-Barr virus, which for priority reasons, we now plan to move into the clinic next year. So a lot of ongoing activities in terms of the pipeline, many of which are associated with life cycle changes or supporting the commercial assets. And with that, I will hand over the presentation to Henrik Juul. Thank you very much, Paul.

So let's start with an overview of the commercial performance for the fourth quarter of 25 and full year 25. So we had a very strong finish of the year. with revenue, total revenue of close to 1.5 billion Danish kroner, comprised of nearly 800 million on public preparedness and more than 600 million from our travel health business. So worth noting here is really in particularly the travel health business within the fourth quarter last year delivered 61% growth. So looking at the full year, let's finish on public preparedness first, we deliver 3.1 billion Danish kroner, exactly what we had guided for in November when we refined our guidance to 3.1 billion. From that business, as Paul explained earlier, this is more than a billion about the upper end of our normal base business within public preparedness. Travel health ended close to 3 billion Danish kroner, 30% up on a full year basis compared to 24. and driven by very strong performance by Rabipur, RabiVert and Insipur. And Paul already talked about the reasons behind that, basically driven by both strong market growth, but also very strong brand performance for both products. So nearly 3 billion Danish kroner on travel health, which was above our latest guidance provided in November, where we said 2,850,000,000. So driven by this very strong finish of the year. it's also worth while mentioning vimkunia here we delivered 85 million Danish kroner and revenue for the full year against our latest guidance of 75 million so again somewhat about the latest guidance and a very good start in a launch year so 6.2 billion and 44 million Danish kroner total revenue for the full of So let's turn to the next page and look at the full P&L, again for the fourth quarter and full year of 2025. So if we focus on the full year basis, the 9% growth and the 6.2 billion in revenue we just talked about, production costs of nearly 3.2 billion, leaving us with a gross margin of 49%, somewhat lower than what we saw for the first nine months. driven by the low gross margin we saw in the fourth quarter, where we delivered 39%, and which I think demands a little explanation here. So what we did during the months of December, or Q4, we made a provision on our tick-borne encephalitis product, Insipur, based on the current discussions with the regulators. We got, on our own manufactured version of the vaccine, we were 12 months shelf life with the product we acquired from GSK and that was produced by GSK. We have the 36 months shelf life and of course we have an anticipation that we can increase this shelf life. We just need to provide the necessary documentation and data points to the authorities. So we've made a provision and assuming that we could get the shelf life up to 18 months from the current 12 months. And based on that, you can do a simple calculation to see, okay, some of these vaccines, if we stay within 18 months, we will simply not be able to sell before they run out of shelf life. So a significant provision was made from that in Q4, but we managed to contain it within our current guidance due to the generally very good performance within our manufacturing area for the full year of 2025. And I would say that if we manage to agree on a longer shelf life than 18 months, then obviously in 25, sorry, this year in 26, we will have an upside when we reverse the provisions. On the other hand, if we do not get to 18%, but end with something lower, there's a small downside. We find the downside very unlikely, and it's more likely that we will have an upside during 26 as we anticipate to agree with the regulators to get a longer shelf life approved. So 49% is where we ended the full year on gross margin. R&D cost ended at 780 million Danish kroner. Originally, when we guided 425 back in February last year, we said we anticipated to spend approximately 900 million Danish kroner, but we also late in last year alluded to there might be upsides that we could make some savings for different reasons, one of them being that we are waiting this efficacy trial on Vinconia to be run in an outbreak session, and that outbreak has not happened yet. So 780 million, so we spent less than what we had originally guided. SG&A had 1,275,000,000 Danish kroner spent last year. So quite a significant increase, over 24, driven by deliberate decisions. First of all, to put money behind the launch of Lincolnia, but also to expand our network of sales entities in the process of taking the business back from our partner in Europe, Vannevar. And then we also made a decision to expand our sales force in Germany to take advantage the market growth on tick-borne encephalitis. So with total operating cost of 2,055,000,000, we get to an EBIT of 1.8 billion. And that is when we include the income from the voucher. That's the 810 million Danish kroner net income from the sale of the priority review voucher. And then if we convert to EBITDA, which is the measure that we guide on, you will see at the bottom there, 2.5 billion Danish kroner in EBITDA. And if we exclude the voucher, we're talking about 1.7 billion in EBITDA. So very strong financial performance last year. And if we just quickly compare to our latest guidance, we said that we would land approximately at 6 billion Danish kroner. We are delivering more than 6.2. So delivering better than guided on top line. And on the EBITDA margin before the voucher, we got 26% and delivered 28%. And the difference here is really driven by the lower spend on R&D, but also on the very strong finish of the year delivering additional revenue. So very strong performance. And I think if we compare to the original guidance provided in February of last year, ending exactly in the midpoint of that guidance both on revenue but also on the EBITDA margin. If we then turn to the next slide quickly on our cash flow and on our balance sheet here, the strong cash flow obviously driven by the profit from the business and again with a good contribution from the sale of the priority review voucher, investments, activities, negatively impacted by the milestones we paid back to both the emergent buyer solutions, but also GSK from the acquisitions we did previously. Here we spent 1.1 billion Danish kroner, and the rest of the impact on investment activities really comes from placement of our cash into securities. Cash flow from financing activities was negative 114 million. And that was impacted by the first strands of the share buyback we did of 150 million Danish kroner, partly offset by a proceeds from a warned exercise that happened last year. On the right side of this slide here, you see a selected balance sheet items. And I will just here point to the all current cash balance. So cash and cash equivalents of 3.3 billion. By the end of December last year, at that time, we had not paid the last milestone to GSK, but that has happened here during Q1. So that means if everything else is equal after that payment, we have approximately $2.8 billion of cash available. We have also this morning announced the second tranche of our share buyback, this time $200 million that we anticipate to complete within the next one to two months. So again, strong financial position with a good cash position and obviously no debt at the moment. Let's turn to the last slide, elaborating on our outlook for 26. This outlook is unchanged compared to when we announced our preliminary 25 numbers and our outlook as well. So we are for this year guiding revenue between 5 and 5.2 billion Danish kroner. and an EBITDA margin of approximately 25%. So from travel health, we are anticipating approximately 3 billion. And on the surface, that looks very much like what we delivered in 25. But remember here that from 1st of January this year, we do no longer have the partnership with Geneva, meaning that we are not going to record any sale of the Japanese encephalitis vaccine. We are also getting out of the agreement with Dynavax hepatitis B vaccine, that agreement will end in April. So if you subtract the partner business that is no longer in place, then actually this guidance here corresponds to a 10% growth. And if you look at it in constant exchange rates, we're actually looking at a guidance that corresponds to 14% growth in 26. So a growth rate in our travel health business fully in line with the mid-term financial targets that we set at the capital market state back in 24. On public preparedness, as Paul said, right now, I think 26 looks to be the first normalized year in five years. We've had four years now impacted by various outbreaks, either in Africa, Europe, or U.S., and 26 right now looks to be more of a normalized year. And here we are guiding, I would say, at the upper end of that normalized year, 1.8 to 2 billion Danish kroner in revenue, and 1.4 billion of that has been secured already in contracts. So with that, I will give the word back to the operator and ask for questions. Thank you.

Thank you. If you would like to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, you can press star 1 and 1 again. Thank you. We will now take our first question. This is from Romeo Connor from Van Langshot Kempen. Please go ahead.