Ladies and gentlemen, thank you for standing by, and welcome to the annual report 2019 conference call. [Operator Instructions]. I must advise you that this conference is being recorded today, Thursday, 20th of February 2020. I would now like to hand the conference over to your first speaker today, Rolf Sørensen. Thank you. Please go ahead. Rolf Sørensen: Thank you. My name is Rolf Sørensen, Investor Relations. And with me today here, I have the CFO, Henrik Juuel as well as President and CEO, Paul Chaplin. Before we begin the presentation, I will read the following statements. This presentation includes forward-looking statements that involve risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed. Forward-looking statements include statements regarding our short-term objectives and opportunities, financial expectations for the full year and financial preparedness as of year-end as well as statements concerning our plans, objectives, goals, future events, performance that is not historical information. Forward-looking statements are expressly qualified by these cautionary statements. 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. With this, I will hand the line over to President and CEO, Paul Chaplin.

Thank you, Rolf, and welcome, everyone, to our annual results call. 2019, if you go to actually the first slide, Slide 3, 2019 was a highly successful year, but will always be remembered as the year we took the decision to transform the company and add a commercial arm on top of our manufacturing and R&D expertise. So I'll walk through some of the key events of last year. One of the major events was the approval of JYNNEOS, a long-standing partnership with the U.S. government that was finally approved last year by the FDA not only for smallpox in the general adult population, but also for monkeypox, which is a serious emerging disease and opens up a whole new commercial opportunity for Bavarian Nordic in the years to come. However, of course, 2019 will be remembered for the bold decision to acquire two assets -- two established commercial assets from GSK, Rabipur, a vaccine against rabies and Encepur, a vaccine to protect against tick-borne encephalitis. Our fill/finish facility was finalized in terms of the construction and this year we'll be qualifying the facility and start already production at year-end, where we will be manufacturing not only JYNNEOS, but we'll be transferring, in the years to come, Rabipur in that facility. We strengthened our executive management with 2 appointments, a Chief Commercial Officer and a Chief Medical Officer, who will help in the years ahead in the integration of our 2 new assets and in the marketing of our niche commercial assets. Our Ebola vaccine in partnership with Janssen is being deployed in Central Africa to contain the current outbreak. And importantly, we filed together with our partner for approval in Europe. Our RSV vaccine, which is a very exciting asset that will be entering Phase III next year, we finalized the design with the FDA. And as I said, this year, we're in preparation to start study in 2021. And finally, through a DoD collaboration, we entered into a Phase I study for equine encephalitis, which again is another deadly emerging disease and could offer a very exciting new commercial opportunity in the years to come. So truly a highly successful year with a lot of exciting events. But if you go to the next slide. So where are we going? In the next 5 years, we aspire to be 1 of the largest pure play vaccine companies improving and saving lives by excelling in R&D innovation, manufacturing and commercialization. Maybe a lofty ambition, but it's 1 we truly believe that we can create and we'll do that through 3 strategic pillars: one is building a company driven by commercial excellence; the second is to continue to develop innovative life-saving vaccines; and lastly, build a company with the best-in-class vaccine manufacturer. So if you go to the next slide, Slide 5, our commercial strategy to establish a full-scale commercial operation to expand the business and drive profitable growth. The long-term goals here is to secure a profitable growth of our commercial business. You'll hear later from Henrik Juuel on our guidance already for this year. We want to establish JYNNEOS as a global leader, not only in the prevention of smallpox, but also in monkeypox. And we want to become a preferred partner for the health care professionals for all our commercial assets. And lastly, we're not done here. We want to expand our commercial assets either through the natural organic growth of our exciting pipeline or when the timing is right for future acquisitions of interesting synergistic assets. Slide 6 talks about R&D strategy, which is to expand and advance our portfolio of pipeline projects. You can see to the right of the slide, our existing pipeline. In the years to come, we'll secure the approval of 3 further vaccines. One will be the freeze-dried version of our smallpox vaccine. And as you will remember, we have an existing order which will -- which once the approval is in place, this will unlock another USD 300 million in the existing order for freeze-dried. The RSV vaccine, which we'll be starting next year, we will launch together with a partner. And with Janssen, we've already filed for approval in Europe for our Ebola vaccine, which you'll hear, comes with a $10 million milestone payment already this year. We want to secure proof-of-concept in the next 5 years of our immunotherapy approaches. Already this year, we're anticipating a readout of our BN-Brachyury vaccine in chordoma, and we'll be starting some of our new exciting approaches in immunotherapy. And lastly, we want to introduce at least 1 more infectious disease program to our pipeline, which will be coming out of our R&D facility in Munich. Turning to Page -- Slide 7, on manufacturing. We have established ourselves as a world-leading vaccine manufacturer, and it's 1 of those reasons that we were able to successfully acquire the 2 commercial assets from GSK. So in the future, we want to expand our manufacturing expertise and capacity. To do this, we need to finish the facility for fill and finish to allow us to fill both liquid and freeze-dried. And as I said, that's going extremely well. The facility is currently being qualified as I speak, and will start manufacturing by year-end. In addition, we want to expand our current bulk manufacturing facility to allow us to produce more than 1 product in parallel, and we are currently in the conceptual design, working with engineering -- engineering firms. And lastly, obviously, in the next 5 years, we have to successfully transfer the production of Rabipur and Encepur from GSK to ensure that we get the thorough synergy that we believe are embedded in the investment case that we made for these 2 assets. So as I said, extremely successful 2019 and then a very exciting future lies ahead of us. And with that, I'll hand over the call to Henrik Juuel.

Thank you, Paul, and welcome to everyone on the call here. And as Paul said, it has truly been a successful year in 2019 for the company. And that goes as well on the financial metrics. We basically met or exceeded the guidance for 2019. And on the financial slide at Slide #11 in the presentation, you will see that we delivered total revenue for the full year of DKK662 million, which was DKK62 million higher than what we guided previously, driven primarily by contract work, more specifically from higher revenue related to the qualification and the CMC work related to the fill and finish facility that's supported by the U.S. government. On an EBIT level, we delivered a loss of DKK328 million, which is DKK32 million better than guided previously, and again, primarily driven by the higher revenue, but also to some extent, lower-than-anticipated costs. We ended the year with a cash preparedness of DKK716 million against the latest guidance of DKK700 million. Remember that the guided test preparedness was adjusted in December to reflect the acquisition and the bridge loan we took with Citi and Nordea in order to pay the upfront payment of the acquisition of 2 products from GSK. On the next slide, I don't want to spend much time on that, but just -- simply just the usual breakdown of our cash preparedness. So DKK716 million by the end of the year, broken down by DKK472 million in cash and cash equivalents and then an unutilized credit line with EIB of EUR 30 million, so DKK244 million. On the lower part of the table here you will see a breakout of the total debt, where you will find the bridge loan, EUR 185 million, that we took out with Citi and Nordea, as I said, to pay the upfront payment to GSK. On the next slide, before we go to the guidance for 2020, just want to tie the story back to what we communicated originally for the 2 acquired product Rabipur/RabAvert and Encepur that you will find on the left-hand side of the graph. I think when we did the acquisition and announced it, we communicated that we estimate a total combined revenue of these 2 products of EUR 175 million, and we also communicated our expected future growth rates and even the EBITDA margins below. 2019 ended better than the EUR 175 million, it ended at EUR 200 million, all explained by better performance of the Rabipur/RabAvert primarily in the U.S., but also to some extent in Germany. These additional sales of the rabies product was driven by a stock up situation by the competitor in the market in U.S., but also to some extent, replenishment of inventory -- low inventory levels due to stock outs from GSK prior periods. So all in all, we do not anticipate the additional revenue as a sustainable market-driven revenue, but more as one-off impact in the fourth quarter. And for that reason, when we guide for 2020, we based the growth rate to expect on the EUR 175 million markets or product revenue side in 2019. However, with that said, we do take it as a very positive confirmation that these kind of stock outs, they basically signal that there is the opportunity that we have highlighted when we did the acquisition, once we are able to provide a safe and secure supply to the market, there is additional market shares to go for. On the next slide, we are sharing the guidance for 2020. Here, we are guiding revenue of DKK1.9 billion, and that consists of combined sales of the 2 new acquired vaccines expected to grow low to mid single-digit growth rates from the 2019 level, which is the EUR 175 million, as just explained, then it also includes income from our smallpox business. Here, it includes a continuation of the Phase III study and the FnF validation work that is funded and supported by BARDA. But it also includes expected, but not yet committed by contract, additional revenue from either bulk or liquid-frozen freeze-dried doses through the U.S. government as well. It also includes an expected milestone payment from Janssen related to expected approval of the Ebola vaccine in Europe of USD 10 million. We are guiding an EBITDA of DKK675 million, and included here is the net proceeds from the sale of the Priority Review Voucher, a transaction that was closed finally in January, and the money was received in January as well. And net proceeds was DKK620 million [indiscernible] expenses related to this and that will be recognized in the P&L as other operating income, meaning that it's not included in the revenue guidance of DKK1.9 billion. What we have also included in the EBITDA number is expected nonrecurring transition cost of approximately DKK75 million related to the acquisition and primarily reflecting nonrecurring expenses. When we build up the organization, preparing to take over more and more tasks from GSK, there will be a period of time where we will run, you can say, our investments in organization in parallel with the supply of services from GSK. Finally, we are guiding that we -- by the end of 2020, we will have a cash and cash equivalent position of approximately DKK1.35 billion, and the assumptions behind this is, of course, the cash expected to be generated by operations. It's also assuming a rights issue to be conducted in the first half year of this year, targeting net proceeds of approximately DKK2.6 billion. It assumes an immediate repayment of the bridge loan, the EUR 185 million, and it assumes payment of approximately -- milestones worth approximately EUR 50 million to GSK that are related to taking over the marketing authorizations in key markets expected to happen second half of this year. And finally, the cash position by the end of the year also assumes investments to the magnitude of approximately DKK300 million in 2020, whereof more than half of this is directly related to the necessary adaptation of the manufacturing facilities and the expansion of the -- the start of the expansion work that we are embarking on to create more flexibility and more capacity within manufacturing. So all in all, an outlook for 2020 when comparing to 2019, I think very clearly demonstrates the significant impact of this -- the acquisition and the transformation that we're going through as a company. On the next slide, just want to quickly take you through some of the priorities. So our key priorities for 2020, they are all structured in line with the strategy that Paul introduced you to. We have a strategy that is carried by the 3 strategic pillars. We start with the first one, addressing the commercial part of the organization. We have already now assumed responsibility for sales and marketing for Rabipur/RabAvert and Encepur that we've acquired from GSK, which means that we are already now extremely busy and focused on establishing full commercial organization to support continued growth from these products, but also to take advantage of the recent JYNNEOS approval in the U.S. and the additional indication, monkeypox that we got. Focus within the commercial part of it this year will also be to take over physical distribution for the acquired vaccines. This is expected to happen for a few key markets late this year. And finally, I think 1 of the key focus areas for the commercial organization will also be to build up the awareness and really establish the market for the monkeypox indication. Within our R&D part of the organization, here, the focus is about continued preparing us for the initiation of the Phase III study next year. We will continue and advance the Phase III trial of the smallpox freeze-dried formulation. We expect that together with Janssen, we will get an approval of the Ebola vaccine in Europe [indiscernible] USD 10 million milestone payment. And we hope that we'll read out from our Phase II chordoma study that we laid out this year will have established proof of concept. And finally, we are already now initiating exploring new administration routes intratumoral/intravenous within immunotherapy. When it comes to manufacturing, I think here the focus areas will really be to complete the qualification and validation of the newly built fill and finish facility so that we can commence manufacturing already late this year, but it will also be on initiating the investment and the expansion of the bulk manufacturing and the -- you can say the adaptation of that so that it in the future can accommodate the acquired vaccines. And then we will already this year also start working on the technology transfer from GSK to us. That is a process that will take several years, but it starts already now. Finally, but not directly linked to the strategic pillars, we are embarking on a rights issue, targeting net proceeds of approximately DKK2.6 billion, and that is planned to be conducted during the first half of this year. So to conclude on this, very successful 2019 with some events that have truly transformed the company and some very exciting plans and activities going to happen in 2020. So with that, I will just hand the word back to Paul.

Thank you. And I think now we'll open up the session for Q&A. So I'll hand the call back to the operator.

[Operator Instructions]. Your first question comes from the line of Chad Messer.

Congrats on an extremely productive year in 2019. I wanted to start with RSV. You say that you've now kind of worked out with regulators the plan for the Phase III, and that will start in 2021. Can you go through any of the details of that. I believe that's an advancement from when we checked in with you last quarter, when you were still discussing things with regulators. What are sort of the highlights. I know you had some idea what the trial would be like. Just wondering how things got finalized?

Yes. Thanks, Chad. So yes, so the Phase III will be a two seasonal study, starting recruitment in 2021. We will in season 1 enroll 6,000 subjects. So these are obviously elderly subjects, 60 years old -- 60 years and older. After season 1, we'll have an initial readout in 2022, where we'll be looking for efficacy signals and/or power adjustments. So if some of our assumptions, such as the incidence of RSV is lower than anticipated, we have a way of adjusting the design to then eventually enroll even another 6,000 or up to 8,000 subjects in season 2. The futility analysis after season 1 is pretty stringent. And if we pass that futility analysis and enter season two, we would have 70% or greater chance of a successful readout of that trial. So it's a two season study, first readout in '22 and the final readout, if we proceed, in '23.

Great. That sounds good. I also wanted to check in on a couple of the cancer vaccine programs. In your slides, you talk about a proof-of-concept for chordoma. Just wondering, I know, in the past, we thought that if you could get basically 4 responses or a 14% response rate that, that might be sufficient for a regulatory submission. Just wondering if that's still your thinking.

Yes. So in the chordoma trial, we enrolled an initial 10 subjects last year. And to proceed, we were looking for 1 objective response, which we saw that triggered the enrollment of the second part of the study, which is an additional 19 subjects. So now we have obviously 29 subjects. And you're correct, the overall success of that study would be if we were to see at least 4 objective responses. Due to the treatment of radiation, it's a 1-year follow-up from when they're enrolled. So we will have a readout from that study, positive or negative, later this year. There has been dialogue with the regulators on what they may or may not want to see. However, of course, the final decision that really depends on the data, could be that we need to do a confirmatory trial. But again, as I said, it really does depend on the actual data that we see.

Your next question comes from the line of Michael Novod from Nordea.

It's Michael from Nordea. A range of questions, starting with -- maybe if you could describe sort of the initial traction after taking over the -- at least the booking of sales, et cetera for the GSK vaccines. Just to get a feeling for how traction is going, whether there's been any interruptions in the process, et cetera, that would be nice to know about that. Secondly, on the long-term margin comment/commitment you make in your report around having a margin on par with relevant vaccine peers. Could you try to elaborate a bit on how you define these vaccine peers because when we're looking at Sanofi and GSK, we can see the vaccine businesses are generating EBIT margins around the 40% level. And then lastly, your comment on whether you have anything included on the monkeypox vaccine sales for 2020 or whether that's not until 2021?

Okay. So I'll try to cover those, and then I'll let Henrik talk about the margins. So the first one was related to how is it going with GSK in the transition. It's early days, obviously. But I would say from our perspective, it's going extremely well. We're making great progress on all fronts. To be honest, both on the tech transfer mapping out and planning to taking over distribution, which we'll already start this year. So I would say, it's going well, and we're on course to deliver along the plans that we've outlined since the announcement. In terms of 2020 and monkeypox, we actually don't have any monkeypox revenue in 2020. We are planning to develop that market, raise awareness this year. And hopefully, you will be seeing revenues being incorporated in '21 and onwards. And then, Henrik?

Yes, sure. Let me try to answer the question regarding the margin. And Michael, it's a good question. I think what we want to make clear with the statement is that we want to regard ourselves as a profitable company on a sustainable basis. And therefore, we have put in the senses to make that here. Secondly, that is going to happen from 2025, not only at a sustainable level, but also at a competitive level, and then you can rightfully ask what is that peer group that we want to compare us to. We do have a vision where we want to be one of the largest or the largest pure play vaccine company. And if you go that way, there's not that many to compare us against, of course. But I'm probably -- it's not appropriate to compare us to the big pharma who have vaccine business as well. So I can't be much more specific, but I would suggest that if -- no matter which peer group you make, it's all north of 25%. So I think 25% to 30%, 40% is not unlikely, but we are not putting any specific number to that.

Your next question comes from the line of [indiscernible] from Jefferies.

Just a couple of quick questions on your 2020 guidance. Firstly, could you provide a little bit more clarity on how much you're expecting the distribution and marketing cost to be for Rabipur and Encepur in 2020? And how we might expect these to evolve in the midterm as you transition these in-house? And then to follow-up, could you clarify what you expect the depreciation and amortization to be this year. I know you've guided for that you're going to be doing the GSK assets over 20 years in a straight line, but is there anything else we should be aware of?

Okay. Thanks for the question. The first one was related to -- what was the question?

Markets and costs.

Yes. We are not guiding on those specific costs yet for a good reason. That is that we are building the organization right now, and we are considering couple of different options in a couple of markets, but you can say a part of the additional nonrecurring costs that we are guiding for this year, the EUR 75 million is directly related to the sales and marketing organization where we will need to build up our -- [indiscernible] paid for the GSK. So I think it's a little too early to be more specific on our sales and marketing cost. The next question was related to depreciation. I think what you can expect for 2020 is that we have the usual depreciations we have seen for '19. And on top of that, we are going to depreciate the intangible assets created by the acquisition over 20 years, which will mean approximately DKK290 million per year, we can add on top. And then once the fill and finish plant is up and running, but that's not until later this year. So that means into next year, you will see depreciation going slightly up again due to the -- that we take the manufacturing into play. However, that mainly hit the cost of goods sold. So DKK290 million comes on top of current depreciations from the amortization of the intangible assets from the acquisition.

Your next question comes from the line of Boris Peaker from Cowen.

This is John Scott on for Boris. Can you comment a little bit on what percentage of the fill/finish facility you anticipate is going to be utilized by JYNNEOS and Rabipur, especially given the uptake you're expecting from monkeypox. And then if there is extra capacity, how are you thinking about additional business development activity to try and increase the operating leverage there?

Yes. Thanks, John. So I think I'll answer that by just telling you what the capacity -- the potential capacity of the new facility is. So when up and running, we would have the capacity to fill 8 million freeze-dried doses based on the JYNNEOS process, and we would have up to a capacity of 40 million liquid fill vaccine files. So the facility that we have certainly has sufficient capacity for the current commercial assets that we have. We've already announced that we would be potentially interested in filling up excess capacity for other customers, and we're currently exploring that as we speak.

[Operator Instructions]. There are no further questions at this time, please continue.

Okay. Well, thank you, everyone, for your time and for the questions, and wish you all a great day. Thank you.