Ladies and gentlemen, thank you for standing by, and welcome to Half Year Report Q2 for the Six-Month Period Ended June 30, 2020 Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I must advice you that this conference is being recorded today, Wednesday, 26th of August, 2020. I would like to hand the conference over to your speaker today, Rolf Sass. Please go ahead, sir.

Yeah. Thank you, speaker. And welcome to this first half announcement call for Bavarian Nordics First Half. With me today, I have, our Secretary Vice President, Henrik Juuel, CFO and my name is Rolf Sørensen, VP, Investor Relations. Before we start our presentation, I will read the following disclaimer. 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 risks concerning our plans, objectives, goals, future events, performance and all information that is not historical information. All such 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. And with this, I will hand the presentation over to Henrik Juuel.

Thank you very much, Rolf, and a warm welcome to all of you, good morning and good afternoon and welcome again to this year Nordic half year 2020 earnings call. As you will have noticed unfortunately Paul couldn't be with us today. He is homesick and we’re expecting him back in the office very soon. I promised him to send his regards, but that's unfortunately the situation and today you’ll have to do with all fronts myself. So, to start, I think first half of 2020 has been a very, very busy period for the Nordic, however also a very, very successful period for the company. We have made significant progress basically on all our strategic initiatives and that is despite the COVID-19 situation. I think on this next slide, number – Slide number 3 in the deck, I would just listen -- list to some of the most important events and achievements. First of all, I think the whole commercial transition is moving extremely fast. It's on track. We have put the organization in place. We’re taking over key markets, et cetera, and we signed the agreement in June with [indiscernible]. I will come back in more details on what's happening on this commercial track. We also in July we finally got the Ebola vaccine approved in the EU in our corporation with Janssen and just prior to that we even got an order for new bulk of the Ebola vaccine valued to the tune of approximately $14 million. We also got a new contract in April in our smallpox business with $202 million over a two-year period and with a $106 million. As the first option and the majority of that actually having an impact already this year and we also got the announcement out this week that we have positive top line data on our phase 3 results for the freeze-dried version and I will come back to what that really means to us on one of the latest slides. Within the manufacturing I think we have spent a lot of resources really protecting our manufacturing sites to make sure that we can continue uninterrupted and that has been quite successful. We have seen no delays in manufacturing not in the projects that we are running to support the transition of the acquire products and the expansion of the facilities. The last bullet says that we also recently finally signed the agreement with AdaptVac on the COVID 19 vaccine which we are very pleased with. I will come back and talk a bit more about that project also on one of the subsequent in our slides and certainly despite we are impacted on our travel vaccines business we are in a position where we can maintain the guidance for the full year and even raise it for our cash position expected by the end of the year. So let's turn to the next slide. I think this next slide basically groups all the achievements that we have seen by our strategic pillars. So I will not repeat all of the details but just highlight that for instance within the commercial I think this is all about establishing a real full scale commercial operation enabling us to expand the business and drive future profitable growth. Within R&D our ambition is to expand and advance the portfolio our pipeline projects we got the Ebola vaccine approved we got a new order et cetera BARDA vaccine approved, we got a newer order et cetera underlying you can say the potential for future Ebola business as well. We also in June, announced the positive top line data from the Phase 1 equine encephalitis, this study sponsored by the Department of Health and we are now seeking further funding for our projects so that we can advance it further into the clinic. We have also started the testing new modes of administration with our – within our immuno-oncology business. We have two smaller studies with intravenous administration running at the moment. Turning to the manufacturing side, here I think we have three important tracks running. First of all, we have to fill and finish facility, which will really once that is up and running, enabling us to have a full end to end manufacturing capability. So right now I think the only thing remaining is really the qualification and we are expecting to have the first product on the line late this year, which will be the liquid frozen version of JYNNEOS, so that we can deliver up to the 1.4 million doses to BARDA under the contract we signed earlier this year. Second initiative within manufacturing that is to expand the bulk facility, so that we are - first of all, we can accommodate the manufacturing of the rabies and TBE vaccines, but also so that we can create more flexibility within our bulk facility and being able to produce different bulks in parallel. So that is also progressing well and we had over the summer, here we actually started the excavation of the ground and you will see later when we come back to our cash position. I think this is one of the reasons that we are going to have quite a high cash spend in the second half of the year as we have not spent most of the investment we have guided for this year yet. So that is to come in the second half year. Third initiative is in manufacturing that is to take transfer process of the two projects that is still in its early stages naturally, but it is progressing well and in accordance with the plans. The other items on this slide here I will deal with in the following slide in more detail. So next slide. Let's talk a little about the significant commercial transition that we are undergoing right now. With the acquisition of these two vaccines from GSK, we needed to put a commercial organization in place very, very quickly. And we are pleased and proud to say that we have basically the organization in place today. All the global position starting with ahead of the global sales J C May and his leadership team is now fully in place so are the teams in our two key markets, the US and Germany and even this week we have the filed force in Germany trained, ready to go into the market underwrote first of September when we take over the physical distribution and the market authorizations in Germany. So, very well on track in terms of the building of the commercial organization. Also, another very important step that is to take over the physical distribution and the market authorizations in the individual markets. So, we started this summer with Holland smaller market but important as it will be our future distribution hub for global distribution. 1st of July we basically took over distribution there meaning that GSK in the future will send the finished products distribution there meaning that GSK in the future will sent the finished products to the all location in Holland and we will distribute from there into the markets where we have taken over. 1st of August major achievement, we took over the physical distribution in the US and we are planning to do the same 1st of September in Germany. And this, I think, taking over physical distribution is a huge, huge task involving a lot of people in our organization. You need to have all the logistics in place, contracts in place with the logistics service providers, system integrations, you need contracts with your wholesalers, you – even in some markets like the US you need a lot of the contracts in place with the payers, et cetera. So a lot of work has taken place before we could actually transfer these markets all along. As you will see at the end of the slide below there you will see from the left the US from August, Holland July, Germany expected 1st of September, and then the other markets would follow after that. These markets are smaller markets and looking at our current plans that means that by the end of this year we will actually have transferred over 90% of the turnover will beyond our control in terms of physical distribution. Final thing is we also, during the first half year here, signed distribution and marketing agreement with the French vaccine company Valneva, meaning that Valneva will market and distribute our two products Rabipur, RabAvert and Encepur in selected European countries plus Canada, where we will then – on the other hand, we will market and distribute their two products IXIARO and DUKORAL in Germany and Switzerland. And the whole philosophy behind this deal is to explore synergies. Bavarian Nordic and Valneva are – you can see we have relatively modest in size when it comes to our presence in certain geographies and it simply doesn't make sense for Bavarian Nordic’s to establish the sales forces in some of the smaller European markets. Valneva is already there and some of the markets and we are building, you can say a strong presence in both Germany and Switzerland, so we will in this corporation we will basically explore synergies between the two companies so that we take the products where we are strong. They take all the products where they are strong. In terms of timing, we think that the first markets to be transferred to Valneva later this year and the rest next year the products that will be transferred to us will happen probably most likely second half of next year. So a significant transition we have gone through in the whole commercial area and will on track. On the next slide, this is one of the old slides as most of you know, I just wanted to, to put it here, to remind you all about the importance of the positive Phase 3 top line results we announced earlier this week. I think it was not a surprise to us, but of course it was a very, very important milestone that we could take off because it means that we can basically continue our plans on the freeze-dried version of JYNNEOS, which is to have the final results late this year from the starting so that we can file next year and expected, with an expected approval in 2022. And remember, I think, out there, the carrot is waiting for us, $299 million US dollar contract that we have already and which we can execute upon once we have an approved product and we have the fill and finish facility up and running. So, another thing I would just highlight here as well is again just to remind you about the contract that we have ordered earlier this year total of DKK 202 million in two options. First has been executed by BARDA already and that is an amount of $106 million whereas the majority of that will be revenue recognized this year and you can see we have also listed here that most of the revenue will actually come in Q2 and Q3, there will be some in Q4 as well. And then in Q2 we actually saw more than half of that contract being revenue recognized helping us to achieve the DKK 700 million total revenue for the second quarter. On the next slide, a few words about RSV. Again, this slide there's no change in our plans. We are still planning for initiating the Phase 3 study next year and the study as such the designer path is unchanged. It will be over two seasons with 12,000 to 14,000 sockets and it will cost this $9,210 million. However, we also at the moment in a period where we want to – we need to assess the feasibility of conducting such a study due to COVID-19. So, that is a feasibility assessment we will do over the next month or two. It is quite clear that if we assess that the prevalence of RSV is too low in the market next year then we will not risk a significant investment in a study like this and then we will change our plans accordingly. We haven’t made that position, so it’s still our plan and we’re still preparing also for the initiation of Phase 3 next year. On the next slide, an update on our COVID-19 vaccine program with AdaptVac. Again here, we're very pleased that we over the summer managed to finalize the agreement with AdaptVac and got it signed, giving us the global commercialization rights to the vaccine. So really right now, I think our job is to accelerate the development and the speed in this program. We right now have a timeline where we are targeting a Phase 1/2 study to be initiated late this year with the readouts beginning of next year and then targeting a – an approval by the end of 2021. And that is of course, you can say all pending funding that we are currently seeking. There is a funding within – achieved by AdaptVac to conduct a Phase 1 study that will take place later this year, but we are seeking funding, so that we can expand that to a Phase 1/2 and thereby accelerate the timelines. So this is really something that we are very excited about and we do believe that we have a vaccine candidate here that is unique, in certain sense, we do believe that it is one of the candidates that can meet some of the important criterias from the WHO, for instance being suitable for all ages, including the elderly and a vaccine candidate that has the ability to be used as a single-shot only. On the next slide, we move into the sales performance and the financial performance for the second quarter and first half year. And I will start off with the newly acquired products. So an Rabipur/RabAvert, our rabies business we saw total revenue for the second quarter of DKK 142 million, that was 44% below the same period last year. But in the markets that we assessed to have declined by 75% during the second quarter meaning that we actually outperformed the market during the second quarter. And how did we do that? I think basically that the key explanation to this is that we have a very, very strong position in the more resilient part of the rabies business which is the US business, which is less about travel. It is a primarily a post-exposure also pre-exposure. But for local endemic use, we have managed to increase our market share in the US markets since the first quarter of 2019 to the second quarter of this year from 64% to 85%. So we have you can say but that way we have managed to compensate for some of the market decline. It is clear though that the European market suffers from the – from COVID-19 and we have seen in some of the biggest European markets that the market has dropped by 80% to 90%. It's clear if people are not traveling there'll be very little use of the rabies vaccine in Europe. However that part of our business is the least profitable and we have a very strong position in the more resilient part of the business. If we look at the first six months performance DKK 360 million versus DKK 435 million If we look at the first six months performance DKK 360 million versus DKK 435 million for the same period last year. So that's 17% down. Our assessment is that the market in the same period has been reduced by around 40% and again it's the same explanations - it's the significant market share gain in the US. It is our strong position in the US and of course and it's also a little tailwind that we saw in the beginning of the year with our competitor being our stock impacting in particularly January and February. And looking a little forward I think we in the US we will be – we are quite optimistic on the US market and we are actually seeing some positive trends both on markets here but also that the market could return to a more normal situation in the US we see it as our several indicators that the outdoor activity is on the rise now in the US. And so we could actually look into an improving US market. In Europe I think we will have to wait and see when travel normalizes until then we should not expect much from the Rabipur business in Europe. On the next slide let’s have a look at the ENCEPUR sales for the second quarter it was DKK 193 million 10% down compared to same period previous year. That is actually also better than what we have seen in the market global market. I can only look at April-May here was down approximately 38%. And there could be some again like we saw in the first quarter there can be some time lags and inventory movements on the wholesale level between the quarters. And if we look at the first half year DKK 295 million against DKK 386 million so that's down by 24% which is pretty much in line with the market decline that we have seen over a six-month period. And I think on the business, I think we’re more comfortable that that this will return to normal sooner than the rabies business. The underlying demand of the TBE vaccine is unaffected by COVID-19 and the decline we have seen we believe it's really caused by the shutdown that we saw in several markets. If we look into the Q2 numbers, we can see already in June we saw a quite a good month even better than the prior year. So some of that catch up effect we had hoped for. I think another very, very important point here is that during this period here we managed to maintain market share of TBE, which is contrary to what we have seen historically in the last two years where Encepur has lost market share to competition. So we have during this period managed to stabilize the markets here basically. On the next slide, an overview of the financial results. Very, very positive results for the second quarter if I start there $700 million revenue of course significantly impacted by the smallpox revenue which is nearly half, $320 million out of the $700 million is from the BARDA order. But still $700 million had an EBITDA close to $200 million, so very, very good results. For the first six months we’re looking at total revenue of DKK 1.65 billion and we are looking at an EBITDA of DKK 839 million where of course the sale of Priority Review Voucher that we did in the first quarter also has the significant positive impact here. And on the EBITDA I think it’s important to understand that this is heavily front-loaded partly or to a large extent of course due to the PRV income where there’s no costs associated but also due to some of the seasonality that we see in – on the revenue side, as I said previously, we have included so far slightly more than half of the expected BARDA revenue this year. And on the other products we know that we are moving out of the seasons, there will still be more of course in the third quarter TB season typically ends around August, we will see this year if COVID-19 has changed that. And for the fourth quarter, I think, historically we haven't seen high revenues for user products on the rabies or the TBE product except in 2019 where we saw a significant rabies business due to a stock out situation from our competitor. And I think all of this together has enabled us to maintain our full year guidance and we have even chosen to upgrade our cash guidance from previously DKK 1.350 billion to now DKK 1.5 billion, so an increase by DKK 150 million, and that has – it’s a sum of many items put together but one of the key drivers of that has really been that the BARDA revenue comes in, a lot of it in the second quarter and third quarter enabling us to also get the cash impact of those before the year ends. A lot of it in the second and third quarter, enabling us to also get the cash impact of those before the year-end. Let’s turn to the next slide, so it’s an overview of our financial position. Again, as said, very, very strong cash position. We have in cash now nearly DKK 2.4 billion and on top of that, we have unutilized credit lines from our European Investment Bank Loan that is – that has not been drawn upon yet. Below those, we have just listed the bank and institutional debt overview and at the end, just to complete the big picture, we have included the deferred considerations of GSK. Remember, we still owe GSK up to €495 million. So this approximately DKK 3.2 billion, that is the net present value, so that's the book value of the deferred consideration, which is calculated as net present value on probability adjusted milestone payments. And you can of course then ask okay, how are you going from the DKK 2.4 billion to DKK 1.5 billion by the end of the year. Yes, we are going to consume quite a significant amount of cash in the second half of the year. Some of it would go into the continued investment in manufacturing. Remember, we guided previously that we would invest approximately DKK 300 million in the changes within manufacturing. We have first six months invested DKK 66 million and we only just started the excavation and we are going to buy some of the equipment as well that we need for the tech transfer of the two vaccines from GSK. So it is heavy back-end loaded, the investments going into the manufacturing. Second important item is that, as we take over physical distributions from GSK, we have an obligation to take over the local inventories of finished goods, so that will consume some cash. And on top of that, after we have taken all physical distribution that means also future manufacturing orders that we place with GSK will be shipped and deliver to our distribution hub, meaning that by the end of the year we will not only have the inventory we took over from GSK but we will also have new products that have been manufactured since we took over. And we are talking about products being manufactured in campaigns so we can actually see the inventory level that we will be carrying on our balance sheet can be jumping up and down between quarters due to these campaigns and as in particular TBE is a seasonal product of course, we need to make sure that by the end of this year we have sufficient inventory to be prepared for the year season next year. Final item to explain the significant cash consumption on milestone payments to GSK, we are expecting to pay approximately €50 million to GSK this year that are triggered by some of the important marketing authorizations that will shift hands during this period of time. But still after this significant cash consumption which is all in line with our plans, no change there at all. We will be leaving it this year with our cash position of approximately DKK 1.5 billion, so still in a very strong position. Turning to the final slide, which is basically our usual overview of key strategic activities and milestones this year. I will not repeat all of this, but just highlight a few that we have still to deal with this year. I think first of all on the commercial side we talked about most of it, physical distribution we put that in the bracket as we have started it, but after September, I think we have covered maybe 75% and we will continue that and by the end of the year as I said we have taken over physical distribution for corresponding to 80% to 90% of our turnover. The fourth bullet is within the commercial group that is you can say the task to increase awareness and establish new market for monkeypox. I think we have to be honest and admit that that is not having much traction at the moment due to COVID-19 over-shattering this, but it is still something that we of course are working on and will continue to be a task for us in the time ahead of us. We need to establish this at this market. Now we have the indication for monkeypox. On the – the next particular in our R&D area, we have talked about most. We haven't talked about chordoma, yes and there are I think we are awaiting the read-out from our BN-Brachyury starting chordoma later this year. So hopefully at the – by the end of the year we can take that button off with some positive outcome, but that is still to be seen and to come. And then of course what is not on this slide here yet as this is based on our target and strategy and plans when we entered into the year is of course the COVID-19 project which will receive a lot of attention from our side and which you will find on this list of key strategic activities going forward. Finally, we have the – all the activities within the manufacturing. We have talked about those. They’re all on track despite COVID-19, so we are very pleased with that. And then of course on top of all these achievements here we are extremely pleased that we have managed to maintain our guidance and even increase its forecast position. So all in all, very busy and exciting agenda here at Bavarian Nordic and a very significant transformation that we are undergoing. And halfway through this year, here we are very pleased with the progress so far. So thank you very much and then I will hand the ward back to the operator and ask you to open up for Q&As please.

Thank you sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Sir your first question comes from the line of Chad Messer from Needham Partners. Please go ahead. Your line is open.

Hi. Good morning and thank you for taking my questions. This is Gayle Boon [ph] on for Chad. So a few – earlier you spoke of kind of taking over the physical distribution from GSK, that the people that come along with the physical distribution are you basically just rehiring the same key distributors?

We are not taking over any people. I think basically the physical distribution when it's wherever the GSK it was handled also by third-party logistics service providers. So we’re basically moving it from one third-party logistics service provider to another. And in this case for Europe it’s – we’re using it a company Moveon it’s a very professional logistic service provider meaning that we have – we are not taking over any organization of course we have had to hire our own people and we need planners who can deal with GSK and the manufacturing until we have taken that over and making sure that we have – we are basing our orders on the right forecasts from our commercial team et cetera, but we are not taking over any people from distributors or from GSK in this respect.

Well, thank you for clarifying. Also, could you perhaps provide any color about the expected reductions in RSV rate? Is there other existing evidence that COVID-19 is reducing infection rates in RSV?

Yeah, I think there are some – I think in particular if you look at flu, we have seen that if you look at the prevalence rate in some markets and you look at the prevalence rates, January February this year there was a sudden drop in the prevalence rate when the COVID situation came in simply due to the social distancing using of masks et cetera. But of course what is not 100% clear is that because it's under registered or is it really a low prevalence. And that is why I think we as a company I think we need to make a very, very thorough and thoughtful consideration and our assessment about do we believe that the prevalence rate is really lower or not. That's not an easy answer to that. But there are some indications that some of these diseases you have seen a drop in prevalence due to social distancing and use of masks and other protective measures.

I guess wearing a mask is a positive thing at all times. Are there any expectations for backlog in the TBE market which would kind of change the normal seasonality that's seen in this market?

So what do you mean by bad luck normal seasonality that’s seen in this market? So what do you mean, backlog or…

Backlog.

Oh sorry. Yeah. Sorry, yeah, okay. Yeah. Well, that’s a very good question. I think normally even say the season would end towards the end of the summer here. But of course due to the interruption that COVID-19 created I think there's of course a chance to some of those people who did not get vaccinated will go to the doctor now and that could extend the season a little longer than we've seen in the normal years and of course that's what we hope for, but it's yet to be seen of course. But we are now sending our 1st of September, our reps will be on the ground in Germany and envelope of cost push for extending the season and running a campaign – I think people know that they do not need to wait until next year to get vaccinated.

Great. Thank you for taking my questions and congratulations on the recent positive readout.

Thank you very much. Thanks for the questions.

Sir, we got - your next question comes from the line of Michael Novod from Nordea. Please go ahead. Your line is open.

Okay. Thanks a lot. Yeah. It's Michael Novod from Nordea Bank. I have a range of questions. So first of all, if we just get a bit more granularity on the backlog on both on TBE potentially also on not on backlog, but more on the demand side on the rabies vaccines in the US, because if we look at Symphony/IMS data then we can see there's a significant rebound in July and on the rabies sales in the US, do see some of the same things going into August. We're now two months into the third quarter. So maybe if you could just give a bit more granularity because So maybe if you could just give a bit more granularity because normally we would see that around 60% of the full year sales would be in the first half of the year and we apply that to your first half sales in 2020 then we only get around DKK 1.1 billion in TBE plus rabies sales. So it would be great to get some more granularity on how you see the demand situation that was going into August. And then on – secondly on the dialogue you have regarding funding for your COVID-19 vaccine beyond Phase 1/2 how sort of the process can you give a bit more commentary on the structure of that process, do you actually get feedback on an ongoing basis or is it a complete black box regarding this. And then lastly on your Brachyury vaccine in chordoma how should we sort of interpret the outcome because we know from other trials in chordoma that it's, it’s a bit of a strange disease in terms of for using the RECIST 1.1 criteria. So, do you have some interactions with the FDA regarding sort of how to measure the response when you look at the data whether it's going to be RECIST 1.1, but there could be other measures to include.

Okay. Thank you, Michael. I think first of all on the two vaccines I think the – on the TBE and that potential backlog, I think again, I think that's a very good question. Of course we hope to see that the season will be longer than we have seen usefully. As I said in my presentation we saw a very, very strong June numbers indicating some catch up and some of the backlog being rectified. And of course we are with our field force in place, so think we are going to push for an extended season, whether we will manage or not, we will see there might be some who will say, okay managed or not you’ll see there might be some who will say, okay, I didn’t make it due to COVID-19 and the shutdowns, I'll get vaccinated next year. But I'm sure there will also be some who are just queuing up and they’ll get vaccinated. Yes, I do expect to see some impacts of the backlog being ended. On the rabies, I can't comment in detail on the Q3 numbers. But again, I can say that we have – we are seeing some good numbers in the US. And there is a trend in the US to want to be more outdoor activities actually some of it driven by COVID-19. We are seeing the national parks opening up again, but we are seeing other measures indicating a much more outdoor activity levels that could push for some market growth again within rabies in the US. Yeah. So, I think the – we have good hopes for TBE. I can't see unless we get a shutdown again, I can't see why the TBE market shouldn't return to normal basically. And then we feel we will be in a good position we have stabilized the market share. We have our field force in place for the next season and on the rabies side US, there are definitely opportunities there. Also on the pre-exposure part with more outdoor activities you don't have to wait until you have been in contact with the rabies animal so we can go improve small for the pre-exposure market domestically in the US. So the – I think the only tricky thing of course is the rabies business in Europe where we simply just have to face the music and say until the travel resumes more to normal this market will be significantly underwater. On the next one the funding – sorry did that answer that first one Michael?

Yeah, it was perfect. Thanks a lot. It was perfect.

On the funding side, I think that’s another good question. I think of course we are seeking funding through all the channels that we know about. These processes vary very much from very formalized processes where you submit, you apply for funding together with a lot of us and with our strict timelines and feedback periods et cetera. And then some other channels where it's much more informal discussions talking about opportunities et cetera. And of course we are seeking funding from all parts basically. On the brachyury study…

Can I just ask a follow-up to the funding?

Sure.

Yeah. I was just wondering whether you have any sort of contact to sort of local government, i.e. the Danish government because we see sort of the German government being extremely active on Curevac. I mean you've seen the US government being extremely active on some of their assets whereas in Denmark, we may have seen politicians complain about selling an old vaccine facility five years ago. So is there any kind of interactions with the Danish government as they should be aware or do you have a significant vaccine capacity, I don't know 30 miles north of the capsule?

Part of, that's right. Yes. There are contacts with the Danish government as well. But this is something we are pushing hard at the moment. So that there are even better contacts. But there are contacts and ongoing meetings with people representing the government.

Okay. Thanks.

And on the – I just have to – just to mention here to make sure that it’s clear to everyone and in terms of the funding of this study here. There is funding already for the Phase 1 study. We want to expand that study in order to accelerate the timelines to a larger Phase 1/2 that we do not have funding for today. So, there is funding for the Phase 1 study that, that can go ahead but with the larger expanded Phase 1/2 is part of the funding that we are seeking.

And larger expanding – expansion is that, also kind of sort of – is that sort of the initial plans also for the Q4 start or how should we think about that?

That is to plan for the Q4 start, yes.

Okay. Yeah.

Yes.

Okay. Good. And on the Brachyury, and I think as you know it has – so which has been designed that we should miss the outcome using resist and we can’t change that of course but you can argue well was that the right message to use. I think we do see some interesting data when you look at all the ways of measuring the shrinkage of the tumor, et cetera. But in terms of using that the data from just study to move forward I think we have to stick to the study designs, but of course we can still try to apply other measures to the study, all the ways of measuring this to read, get some different readings out of it.

Okay. Thanks a lot.

[Operator Instructions] And sir, we got another question comes from the line of Thomas Bowers from Danske Bank. Please go ahead. Your line is open.

Yeah. Thank you. Thomas from Danske. Just to kick off here with a sort of a follow up to the COVID-19 vaccine and funding here. So, from CV the last update here from CV here on Monday, they are announcing that they're evaluating nine additional candidates on top of that, that the nine they have already packed and supportive. So I'm just wondering is there any dialogue with So I'm just wondering is there any dialogue with CAV and do you have any kind of indications what they looking at here. Are they considering other large clinical programs or are you may be the only candidate that are seeking funding for Phase 3 and then other parties may be looking to get some evidence [indiscernible] funding. And then my second question just on the ASIP recommendation. So is there any new updates on this issue still need the last meeting and maybe add some color to that on the possibility to get these DoD orders would this be a remotely an event coming in the wake of this conclusion. So most of all the timing of news from ASIP.

Okay. Thank you, Thomas. First on the COVID-19 funding, yeah I think of course we are in the race with that and I think what are they funding I think to start with I think they have chosen us as many of [indiscernible] to fund the ones that are ahead of the pack, but I think they have also realized that these might not necessarily be the best vaccines ultimately. So therefore they are in the second round which they extended to a lot of applications. I think they are looking at the later states which means maybe only like six months behind to leaders looking at different technologies. That is definitely our hope because that's where we can differentiate us. Coming up with a different technology where we can take more of the boxes in terms of what WHO are asking for. But it's a process where basically you submit and I think they’re working hard internally and there’s not a lot of insight into how they actually make the decisions. So we can only I think keep pushing for a positive outcome of what the process. But we are definitely in the race with CEPI and with others as well. In terms of the ACIP recommendation that there's no news and as we talked about I think this is expected to be a slow moving process when ACIP are changing their recommendations and but we do believe of course that the – up to 1.4 million doses that we are going to deliver to - via BARDA. We’ll not be sitting idle in the stockpile, but we’ll be used that we believe by DUT and by the first line responders as well. And so of course we hope to see an update on the ACIP recommendation within perhaps the next year or so. But it's a little unclear how long that can take.

Thank you very much.

Sir, we got another question comes from the line of the Peter Welford from Jefferies. Please go ahead. Your line is open.

First of all, do you guys talk about the guidance for a minute just with regards to the revenue outlook and I guess I was wondering you can sort of talk a little bit about how we should be thinking about this, given the sort of stroke you've given us for Rabipur, Encepur and how we should think about that. I think you've been very clear wrong on the trajectory for that this year and you've also outlined New JYNNEOS booking of the US government $106 million which I think together then with represents the majority of the outlook you've got of DKK 1.9 billion. Then on top of that, I think we've also got the $10 million milestone on the Ebola from Janssen. I think there's also maybe – it is a $25 million funding from the government for the freeze-dried Phase 3 which obviously is now broadly finished. So I guess if we put all this together I guess you have to think about what it is we're missing in terms of how quite a bit conservative still to keep the DKK 1.9 billion revenue outlook. And then I've got another question – follow-up question in the pipeline, but maybe do that one first.

Yeah. No. Thanks, Peter. Thanks for the questions. No, I think you are touching upon all the right components. So, I think let's take them one at a time. I think first of all the TBE business, I think we have not in our guidance assumed that the season will be longer. We have assumed some catch-up that we have seen already in June and a little in August, but we are not assuming that the season extends beyond what we have seen historically. So, that means you will see relatively little revenue from the TBE business in the period going from September to December and under rabies business I think we noted last year we had a very abnormal December before we took over the business due to the stock out situation, but basically what we have assumed in our guidance is first of all taking the seasonality into perspective and then of course we have not expected much from the European rabies business basically, we are not expecting any change in the travel patterns this year. And on the side I think we have a first half year we have included, I think, close to 60% of the revenue we expect from that part of the business. And then on top of that, you're right, and we have the milestone of $10 million. And that takes us – if we add all that together that takes us to close to the DKK 1.9 billion. But of course it's all a question of the outlook for the Encepur and Rabipur. And there are of course scenarios where those can play all better. Longer season on Encepur and that you can say pickup of the market in the US beyond what we are expecting right now, so there are these two upsides to the top line.

And do you envisage the majority, if not all, of the $106 million government contract to smallpox will that almost all be booked during the course of 2020?

The majority, not all of the $106 million. It will be lower than $100 million for the full year. As I said, we have – year-to-date we have revenue recognized close to 60% of full year, then you can more or less do the math. So what we have said all the time is it’s the majority of the $106 million but it’s not all of the $106 million, I think the – remember the $106 million that is first of all a delivery of bulk batches but it’s also $1.4 million liquid frozen doses where many of these will be delivered into next year.

Understood. And then…

And…

Sorry, carry on.

Go ahead please.

No, and then I’ll just -- with regards to the pipeline. But you get a little attention these days in the sense obviously understandably the focus has shifted very much towards infectious diseases. Curious beyond brachyury on the other oncology vaccine perhaps of the biggest pipeline in the platform. Just with regard to bigger thinking what is the strategy here in terms of – is there still a significant amount of internal resources allocated to these sorts of programs [indiscernible] the developments, is it something where there is potentially a strategic review of that business or is it perhaps a business where you could consider doing either broad collaboration or some sort of other deal to perhaps I guess complete your transition if you like and make it less of the drain I guess on Bavarian Nordic?

Yeah. No, good question, Peter. I think on the immuno-oncology, you can see right now our strategy that is to test some of our candidates using new administration methods basically so that is intravenous and intratumoral. And we already now testing in two smaller trials in intravenous. But I think what you have noticed is that we have started to communicate on these immuno-oncology projects differently. We used to highlight each and every small trial. And the situation with the immuno-oncology is that we need a lot of attempts. But they are small relatively inexpensive studies. So we don't want to push them too hard. That's also why we have not lifted up these two smaller studies we're running now with intravenous. But those are one is with brachyury. The other one those are – one is with the other one is with a new platform that we are testing in intravenous as well. So I think at some point and not the too far at a distant future I think we will provide a more fresh update on the whole immuno-oncology area.

Sir, we got a follow-up question, comes from the line of Michael Novod from Nordea. Please go ahead. Your line is open.

Yeah. Thanks a lot. Just a sort of a housekeeping question when you start to actually sell IXIARO and DUKORAL will it show in specific products in the P&L or what would that sort of be booked under? Thanks.

I think we are planning to show them specifically just like we do today we highlight the revenue by the products I think the set up will be actually buying the products at a certain agreed transfer price, and then we sell them just like we sell Rabipur, Encepur, etcetera.

Sir, we don't have any question at this moment. Please continue.

Thank you very much for you all for listening in and showing interest in Bavarian Nordic. Very pleased to have you here today. And again, I should send my remarks from Paul to all of you. Thanks. Have a good day.

That concludes our conference for today. Thank you for participating. You may now all disconnect. Speakers please standby.