Bavarian Nordic: Recent Deals Have Provided For A Healthy Cash Position
Edison | Apr 16, 2015 08:14AM ET
Shipshape and Bristol fashion
The BMS and J&J deals, and continued Imvamune related income have provided Bavarian Nordic with validation of its vaccine technologies and manufacturing expertise, in addition to cash to now focus on expanding the pipeline. The BMS Prostvac deal provides opportunities to maximize value from this asset, while the J&J Ebola deal has bridged the Imvamune gap ahead of the likely transition to a freeze-dried formulation in 2016; there is also scope for future Ebola contract extensions. Our valuation is upgraded to $1,786m with inclusion of the BMS deal.
BMS pounces on Prostvac with $975m option deal
BMS has paid $60m for an option to license exclusive rights to Prostvac and could pay a further $915m in milestones. Importantly, in our view the deal significantly expands Prostvac’s potential, with BMS’ marketing strength, immuno-oncology expertise and the potential to combine Prostvac with a pipeline of opportunities.
Prepping the pipeline
The slew of recent deals has provided Bavarian Nordic (COP:BAVA) with a healthy cash position to advance key pipeline opportunities. The development plans for CV-301 have now been refined and will focus on lung cancer in order to exploit the potential combination with PD-1 checkpoint inhibitors. Bavarian Nordic also plans to start a Phase I trial with MVA-BN RSV in H115, which could be a significant opportunity.
2020 vision underpinned by five main drivers
Bavarian Nordic’s ‘Vision 2020’ is underpinned by five main value drivers: (1) Prostvac, where data are expected during 2016; (2) Imvamune remains key with the expected transition to freeze-dried product in 2016; (3) the J&J Ebola deal will be a significant contributor to revenues this year and there is the potential for future contract extensions; (4) pipeline opportunities; and (5) government collaborations with the NCI including for MVA-BN Brachyury, where a Phase I trial is ongoing.
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