Investment opportunity
The Danish vaccines manufacturer Bavarian Nordic is raising DKK 465 million (€62.4 million) in a rights issue to fund the manufacture of supplies of its smallpox vaccine Imvamune for the US government stockpile. Although the contract is yet to be awarded, Bavarian expects to win it following the announcement in November 2006 that the only other company under consideration, Acambis plc of Cambridge, UK had been ruled out.
The company’s management said it expects to be asked to supply 20 million doses of the vaccine, designed for people with weakened immune systems who cannot be vaccinated with the full-strength version, a contract worth DKK 3 billion.
The large volume of safety data generated in the clinical trials of Imvamune will allow Bavarian Nordic to utilise the underlying platform technology quickly and at relatively low costs in a number of other development projects.
Bavarian Nordic had cash of DKK 238 million at 31 December 2006, but if it does win the US contract will have a total financing requirement of DKK 750 million until the end of 2008. The rights issue will provide working capital to manufacture Imvamune until payments are received.
The rights issue comprises 1,275,236 new shares with a nominal value of DKK 10 each. Existing shareholders will be entitled to subscribe for one new share of DKK 10 for each 5 existing shares held.
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