Thank you. Ladies and gentlemen, and thank you for standing by, and welcome to the Third Quarterly Report Q3 for the 9-Month Period Ended September 30, 2020 Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I must advice you that this conference is being recorded today, Wednesday, 11 of November, 2020. I would like to hand the conference over to your first speaker today, Rolf Sass. Thank you. Please go ahead.

Yes. Thank you, operator, and good afternoon and good morning to all of you, and welcome to our Q3 call. With me -- my name is Rolf Sorensen, Investor Relations, and with me in this conference room, I have President and CEO, Paul Chaplin; and EVP, CFO, Henrik Juuel. And before I hand over to the first speaker, Paul Chaplin, I will just quickly read through these cautionary statements. This presentation includes forward-looking statements that involve risks, uncertainties and other factors, many of which are outside of our control that cause actual results to differ 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 plans, objectives, goals, future events, performance and other 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 over to the first speaker, Paul Chaplin.

Thank you, Rolf, and welcome everyone to our Q3 update. If you turn to Slide 3, I just want to give you a strategic overview of where we believe we're going of Bavarian Nordic. So within the next 5 years we aspire to be one of the largest pure play vaccine companies. However, this year is very much a transitional year as we integrate our four commercial assets against rabies, tick-borne encephalitis, smallpox/monkeypox and Ebola. To do this, we've had a huge task ahead of us in building up a commercial infrastructure. And as I walk you through the future slides, you'll see that we've been extremely successful. We now are responsible for the distribution and sale of two assets of rabies and TBE in six markets, representing more than 80% of the projected revenues. And we've achieved that within the first 9 months, which is an outstanding record for any company. To do this, we've expanded the total number of employees to 650, which is a 30% increase in all our various sites where it's Denmark, Germany, Switzerland or in the U.S. So a true global force. We also to support our commercial journey, have to expand our manufacturing capabilities to really build a center of excellence for the production of live viral vaccines, which we have a proven track record for. Again, in the coming slides, you'll see that we've made huge progress, almost completing our ambition to build a commercial fill and finish facility where we're already transferring our first product. And earlier this year, we started the further expansion of our bulk facility, allowing us to take in Rabipur and Encepur by 24, really building up a true center of excellence. We're going to continue to build on our proven ability to develop vaccines and our pipeline. And we already have a late stage asset in terms of RSV in a blockbuster indication. And all of this is an activity to drive our continued profitable growth on our journey to become the pure -- the largest pure play vaccine company by '25. If you turn to the next slide, Slide 4. We've had an extremely strong first 9 months. When we finalize the acquisition of our two new assets, Rabipur, RabAvert and Encepur from GSK. A lot of the questions we got at the time, which were valid, was could Bavarian Nordic really integrate these two new assets in a company that had no proven track record of worldwide commercialization and no real commercial organization. Well, here we sit 9 months later and we've been extremely successful in that transition. We have built up a commercial organization. We've taken over six of the key markets already for those two products, representing more than 85% of the revenue in what I would say is a record time. And we're really seeing strong growth in the areas where we have full control. So we're either seeing a maintenance of our -- of the market in areas where historically we've lost market share, or as in the case of RabAvert in the U.S., we've actually seen an increase in the market share once we've taken control, which is in line with what we said was the attractiveness of these two assets. And that we believed we’ve a strong focus and a stronger desire, we could actually increase market share and increase growth for these two assets. So we've seen obviously all -- sales of TBA and rabies have been affected by the worldwide pandemic of COVID, as we've described in previous calls. However, in Q3 for TBA at least, we've started to see what we consider to be a rebound and that we've seen an increase in the market and revenue growth by 14%. And I'll come back more on that in the later slides. With rabies, it's really a tale of two stories. In Europe, rabies is all about a travel vaccine, which has been hit extremely hard, like all travel vaccines have. Whereas in the U.S., we've actually seen growth in a declining market, which is an outstanding opportunity for a company. That's in the early stages of its commercial journey. And again, together with smallpox business where we saw a larger than anticipated order early in the year, we maintain our top line of revenue or DKK1.9 billion, which again, is an outstanding result given that many other vaccine companies have had to downgrade their revenues due to COVID-19. Due to savings in the operations, as you'll hear from Henrik later, we're also upgrading EBITDA and cash positions by the end of the year. And this is primarily -- not completely, but primarily due to the decision to delay our entry into Phase 3 for RSV next year. I'll come back to the main reasons, but again, unfortunately that's primarily driven by COVID-19. However, we are going to be doing a human challenge study with first efficacy results already available next year. On our COVID-19 program, which we licensed from AdaptVac we’ve actually got some exciting new data -- preclinical data which supports the notion that this is a very strong platform and one which is ideally suited for pandemics, such as COVID-19. So if you go to the next slide, Slide 5 let's talk a little bit more about the integration. As I said, we had ambitions to build up the commercial infrastructure and take over distribution. As I said, we're well on our way in that journey with six markets that we've already completed and this will be completed in terms of all -- the distribution of all markets for Rabipur and Encepur by the end of next year. In terms of manufacturing, this is a three-stage process where we will initially take over the packaging, which is a bottleneck for the current -- for the products from GSK. Then we'll take over fill and finish either using our own new plants or contract manufacturers. And then finally by '24, we'll have completed the takeover of the bulk drug substance, taken over the complete manufacturing process for these two new products. This remains completely on course. It has been complete. It has not been affected by the other events that are occurring this year. And you know, as I said, this is a great credit to the management of Bavarian Nordic and our employees that we will remain on track on what many investors thought was a huge task ahead of this. The next slide, Slide 6. As I said, one of our key strengths over the last few years has been our proven ability to manufacture live viruses, live viral vaccines, such as JYNNEOS, where we've been highly successful and have produced more than 28 million doses uninterrupted. Based on this, we took a decision several years ago to expand our capabilities to bring fill and finish at a commercial scale in-house. That facility is essentially already now online and we've begun to transfer our first product to that line, which is our liquid frozen JYNNEOS, which is approved in the U.S., Canada and Europe. And that we will begin commercial manufacturing next year. And this is a facility where we will transfer next year, we'll begin the freeze-dried version of the smallpox vaccine and Rabipur/RabAvert. In addition, we wanted to expand our bulk manufacturing, which we initiated earlier this year. This will allow us to take in the bulk manufacturing for Rabipur, Encepur, but also when complete allows us to manufacture other products such as JYNNEOS or our Ebola vaccine in parallel, really increasing our capacity and flexibility and really creating a center of excellence for the production of live viral vaccines, which is a key strategic pillar in our ambition to be one of the largest pure play vaccine companies by '25. If we go to Slide 7, as we've indicated in several months leading up to this, we've been keeping our eye on the impact of COVID-19 on other respiratory diseases. And what we've seen and what has been reported by others is that due to the measures that have been taken worldwide to combat COVID-19, the rates of other infectious diseases, respiratory diseases, in particular, such as flu and RSV have declined greatly. Therefore we see it as two larger risk to start a Phase 3 next year, and measure the efficacy of our candidate vaccine over '21, '22 as we'd originally planned, because if COVID-19 and the restrictions continue, the rates of RSV could be so low that we wouldn't be unable to measure the efficacy of our vaccine. So I think prudently and probably correctly, we have decided to postpone initiation of that Phase 3 until '22, when hopefully the restrictions around COVID have been alleviated. In the meantime, we've relooked at the possibility of doing the human challenge against RSV. So those of you who follow Bavarian Nordic, we have a few years ago dismissed this as a way of really measuring the efficacy because our scientists believe that the model would not allow a true measure against the efficacy of a vaccine. However, sometimes you have to admit you're wrong and obviously J&J or Janssen have actually shown some really good data for their, I don’t know, Ad26 RSV vaccine candidate in the same human challenge. And therefore we believe by doing a human challenge, we can obviously generate efficacy data for a vaccine candidate before we go into Phase 3. It may allow us to also modify the current Phase 3 design, which is designed over two seasons, but it will give us some key data within the next 9 to 10 months that will allow us to evaluate wherever it's prudent to move forward with Phase 3. So while it's a setback, it's unfortunately something out of our control due to a worldwide pandemic. But at the time, we will be generating some pivotal key data during the next 12 months that will allow us to move this program forward. On the next slide, our COVID-19 program, which we licensed from AdaptVac. Just to remind you of the platform and why we were so excited. This is a viral like particle vaccine, which is made up of two components. One is a viral capsid, which is universal. Universal for any vaccine that we would develop using this platform. You then add an antigen or a protein from the disease that you're trying to target in this case, a form of the surface protein of SARSCoV-2, which forms a viral like particle. Therefore if the coronavirus, or SARS was to mutate as has been a hot topic lately, particularly in Denmark, we would be able to simply just change the surface protein. And if there was large constitutes of the capsid already produced, you could very rapidly produce new vaccines against mutated strains, whether that's flu, whether it's SARS or other infectious diseases. And that's one of the main reasons we were attracted to this platform. AdaptVac had already generated data, which has now been published, showing that a single vaccination was highly potent at inducing neutralizing antibodies. And if you look at the graph at the bottom of this current slide, you'll see that this is now monkey data that we've generated at BN. And what you're seeing is that wherever we use a higher or low dose as a single vaccination in primates, we get the same strong immune response with a single vaccination. And this single vaccination induces the same level of neutralizing antibodies as a convalescent sera from patients who have high titers who have recovered from CoV2. Now at a time when others are talking about clinical efficacy data with COVID vaccine, this may seem a bit stride, but this is some of the best nonhuman primate data that has currently been published. And this is with a single vaccination, really endorsing our belief in the platform and this concept that a single vaccination could be highly effective. And as I said, flexible enough to really be able to adapt to mutating strains. Now with that back, we'll move forward through the Horizon EU grants with a Phase 1 later this year with clinical data available during Q1, when we'll also be publishing the efficacy data from the ongoing nonhuman primates study. However, to move this program and to accelerate with the plans that we have, we are still looking for external funding or additional partnerships, whether they would be also with other companies as well. Moving to the next slide, let's talk a little bit about the in-market data for rabies. And as I said at the beginning, this is almost a tale of two stories. If you look at the graph on the right hand side, you can see the depressing story that we're seeing here in Germany. So rabies vaccines in Germany are purely used as a prophylactic vaccines or pre-exposure vaccine for people traveling to endemic areas. Now, obviously during COVID-19 as national travel has almost come to a halt and you can see the massive decline in sale of rabies vaccines for the whole market in Germany, which has declined compared to last year by 92%.And there is very little a new sales force can really do about this. And this is a situation that will exist until the restrictions on travel loosened as solutions to COVID-19 take an impact. If we look at the left-hand side of the graph, you can see that this is slightly more encouraging, which is the market conditions in the U.S. Now in the U.S., the market is split between travelers, which has obviously been impacted, but it's also mainly driven by pre-exposure -- post-exposure. So people who have been exposed to rabid animals, and you can see that market is still holding relatively strong with a much smaller decline in the overall market. And as I said, we've seen an actual growth in the total market and an increase in the market share. So again, tale of two stories. One that I believe we can do little about in terms of the travel, but in terms of the post-exposure, this is continuing to be a profitable market for us and one where we're increasing market share, which will drive a continuing revenue growth in the years to come. If we go to the next slide, TBE, again, this is a slightly different story. In that if you look, we saw a decline in the market for TBE in Q2 by 22% compared to the prior year, and this was due to a limited access to GPs during the lockdown procedures around the various parts of the globe, but people couldn't really get access. We anticipated that there may be some sort of a rebound already later this year as people who really wanted to be vaccinated against TBE, saw the GP. And you can see that in the first 2 months of the third quarter, we've seen basically a return to the same growth level as we saw last year. So really indications that the TBE market is recovering as people have access or better access, I should say to their GPs, which bodes well for the year to come where, although we are seeing local lockdowns and national lockdowns, but these are in most cases in stress that people still need to have access to their GPs, both for vaccinations and other illnesses. So we really believe this is an indication that maybe the TBE market for the next 12 months could be returning to something more like normal levels that we've seen in prior years. And as I said, for TBE, where we've taken over the market in Germany, we've seen a maintenance of our market share where historically we've seen that slip and drop with GSK, which is testament to our strategy that we’ve a new focus and a new desire that we can actually maintain and grow our market share in the areas that we have control. So with that, I would like to thank you for your attention and hand over the presentation to Henrik Juuel.

Thank you very much, Paul. So let's turn to Slide number 11, and let's have a look at how we have performed in under those market conditions that Paul just alluded to. So if we start with our rabies business where we have Rabipur and RabAvert, I think first of all, we can see on this slide here, that we saw a negative growth of 27% in Q3 compared to prior year. And as Paul said, this is really a tale of two stories. I think in Europe, obviously we have been hit extremely hard. The market went down by 92% and there is not much less of the market really and that is simply the case. And as a matter of fact, that we will have to accept until travel starts resuming back again. The other story to tell, I think that is regarding the U.S. market where, first of all, we do see a lower decline. It is a more resilient market. However, it is still declining by 14% in the third quarter compared to last year. A large chunk of that market is post-exposure and that's of course makes it more resilient. But in that declining markets, we actually managed to grow our revenue by more than 30% versus last year. And this was of course done by a significant market share gain. We basically, since the first quarter of '19, we have moved the value of share from 61% to 79% and really managed to more than offset the negative decline we saw in the third quarter here. So really a good start for commercial conversation in the U.S. absolutely. So with all of this combined together, we are also looking at a situation where today more than 80%, if we just look at September the current run rate of our business, more than 80% of our rabies business comes from the U.S. and given -- what we would have expected pre-COVID would probably be a more sort of 50-50 split between Europe and the U.S. But that's the situation right now. I think Paul said it very well, that I think in the areas where we have controlled, we are actually performing extremely well and delivering an extreme growth in the U.S that is even declining, slightly. So strong performance on RabAvert in the U.S. Let's turn to Encepur, our TBE business. Where we -- as Paul also alluded to, we are right now seeing some of the signs of the market coming back, as we had expected. We saw a minus 22% decline in Q2 versus prior year Q3. It was down to minus one. So a slight decline, which actually below those numbers, we saw actually positive marks growth in July, but across July and August, which are the numbers we have access to today, it was a slight decline. We have managed this situation to maintain our market share around the 30%, which [indiscernible] this is in contrast to the historical market share losses that Encepur has suffered in the past. So again, really good start for our business. And also a good promise for the future. I think we have all the time set that as long as the markets are not going back into social lockdowns, and as long as the patients can get access to physicians, this market should come back. The underlying demand in Europe is definitely there. And so we have good hopes for the TBE business next year. And you might ask how come that we can have a -- we can grow 14% in a declining market, slightly declining though, but with stable market share. And of course, that has to do with the fact that there is not a 100% correlation between our sales numbers with our ex-factory [ph] and the end market data that you see. There can be fluctuations between months and quarters due to inventory movements at wholesale levels. So let's turn to the next slide number 13, where we saw our full profit and loss. And as you will notice on this one here, we have actually redesigned our -- all our financial statements, allowing you can say more detailed discussions and presentations of the financial results, which we find relevant now that we are commercial states company. So if we start from the top focusing on the 9 months we deliver total revenue of DKK1,623 million. And to the right you can see the donut [ph] chart showing that right now we actually have three very solid revenue legs to stand on. Our rabies business being the largest with DKK548 million of revenue after 9 months, despite the hit in Europe. Then next is our smallpox vaccine, DKK480 million driven by the contract we secured earlier in this year for 2020 and '21. And then finally, the third leg is our Encepur business, delivering revenue of DKK406 million. And on top of that, we still have contract work most of that is today related to our BARDA relationship. And then we also earned a milestone in connection with the approval of our Ebola vaccine earlier this year. If we turn to our OpEx costs, you will see that the research and development costs reached a level of DKK226 million. So that is lower than the level last year, which was DKK288 million, primarily explained by the fact that we spent more costs on RSV next year, where we worked on the formulation of the RSV candidates. On R&D, that is also one of the areas where we expect to see savings this year compared to what we assumed in our earlier guidance. Likes the other lines here, it's impacted by COVID-19. So some savings related to that, but we also seeing a net saving due to the fact that we are postponing the Phase 3 to a start in '22 instead of '21. That will mean less cost this year, in terms of preparing for that Phase 3. If you look at the SG&A costs, DKK423 million significantly off from the '19 level, and obviously driven by the whole commercialization of the business. This amount beyond the cost to drive the commercial organization also includes significant fees to GSK for the various services they provide for us in the interim period, including for instance, cost of distribution until we take [indiscernible] distribution. Further down, the P&L you see and the positive EBITDA of DKK734 million, that includes the income from the sale of the priority review voucher of DKK628 million realized earlier this year and all the way to the bottom you see an EBITDA just with DKK1 million and also for DKK1 billion. So a very nice and attractive result for the first 9 months. Let's turn to next slide. I will elaborate a little on the cash flow for the first 9 months. First of all, we saw very positive contribution from the operating activities, DKK988 million. Of course, driven by the positive EBIT, including the sale of the priority review voucher. Cash flow from investment activities negative by approximately DKK2 billion. This includes a net investment in securities. As we have placed some of the money we caught from the rights offering, we have placed in Danish government bonds on sale. We actually need them. But that amount also includes investments in fixed assets, primarily related to the finalization of the fill and finish plan, but also the initiation of the expansion of the bulk facility is also included in the DKK2 million. Cash flow from financing activities, this is the net impact from the financing exercise we conducted earlier this year, where we raised approximately DKK2.8 billion and paid back a bridge loan we have from our banks. To the right we have some selective balance sheet figures. You see we have now a total asset base of approximately DKK9.5 billion intangible assets that has increased quite significantly. And that reflects the value of the acquired [ph] two vaccines that we carry on the balance sheet. Equity is up substantially from end of last year and it's now at DKK5.3 billion approximately and of course to a large extend driven by the proceeds from the right offering. Then we can look at the small table below the selected balance sheet figures, which basically shows our current cash position close to DKK2.6 billion is what we have in cash and invested in securities at the moment. So very strong financial position. We still have some debt close to DKK400 outstanding, which gives us a net cast of approximately DKK2.2 billion. And this number we have not included the deferred consideration to GSK. We [indiscernible] approximately DKK3.2 billion. We have not included an existing and committed unutilized credit facility of €50 million which is not included in that overview as well. But a very strong financial position with DKK2.5. Let's turn to the final slide, [indiscernible] toward the left, we have our current outlook. So as Paul alluded to earlier, we are actually maintaining our revenue guidance of DKK1.9 billion. This guidance we issued before we knew about COVID-19, but we are very happy that we were actually managed to maintain this outlook, despite the impact on certain pockets of our business. In particularly of course we are proud that we have managed to maintain and secure the TBE business, but also grow our business strong in the U.S. and then I think we are very happy that we actually got an order from our smallpox business that was larger than we had originally anticipated. So this [indiscernible] allows us to maintain the revenue guidance for this year of DKK1.9 billion EBITDA. We are increasing our guidance from the previous DKK675 million to DKK725 million simply due to expected savings or already realized savings. As I mentioned previously, I think we do see savings across the entire organization. Some of them are driven by COVID-19. We have less traveling. Certain activities are not going ahead, et cetera. Nothing that is delaying. You can say our [indiscernible] or anything, but still you can say measurable savings. And then on top of that, I think a net positive impact on our R&D spent due to the decision to defer the initiation of the RSV Phase 3 study. The cash position, we are also upgrading that from DKK1.5 billion to DKK1.6 billion, and that is simply due to the higher EBITDA guidance and some changes in the working capital assumptions. So you might now ask how we can go from? First of all, I have to say that the DKK1.6 billion, this actually includes the committed, but currently undrawn facilities that we have of €50 million. The reason that we have all the time included that in our guidance is that we have expectations to make it draw down on this before the end of the year. So it would become cash. Whether this will happen or not, we'll see during the fourth quarter. We have now upgraded our position so that it might mean that we will actually defer that draw down, of course to save the interest payments on an additional loan. But if you include those numbers, you will see that we will actually go from DKK2.6 billion in Cash to DKK1.6 billion including this. So a very significant expected Cash spend in the fourth quarter, and that is not a mistake. It is correct. We expect to spend a lot of money and a lot of cash during the fourth quarter. First of all, we have two milestones coming up to GSK and [indiscernible] representing €50 million or DKK375 million. We are expecting negative EBITDA contribution in the fourth quarter. If you look at our revenue guidance, that’s relatively compared to the other quarters, a little revenue left for the year, our two acquired products TBE, the Encepur and Rabipur/RabAvert, they’re seasonal products, in particular, TBE. So there will be less -- much less in the fourth quarter, and we have already delivered most of the revenue related to the contract with BARDA as well. So relatively little revenue in the fourth quarter. And therefore, in terms of cash, also a negative contribution from EBITDA. We are also going to continue investments in our manufacturing. We expect to invest between DKK130 million and DKK160 million during the fourth quarter. And that will be in the expansion of our bulk facilities and in the tech transfer projects. Finally, as we take over distribution, we also acquire inventories, local inventories of finished products from GSK. And as soon as that has been done future orders goes from GSK directly to our inventories. So we are starting to see a buildup of finished goods inventories, and we expect that to increase during the first quarter between DKK300 million and DKK350 million. You can expect to see working capital fluctuations between the quarters going forward. And in particularly as long as GSK are manufacturing for us. Typically their manufacturing will take place in campaigns, meaning that we will have large orders. And then we will, you can say, eat from those inventory levels and get new last orders again. So some fluctuations can be expected. So, all-in-all, an outlook that we are very pleased with and particularly under the circumstances with the COVID-19. To the right, we have our usual news flow for this year. I will not walk you through all of these, but just highlight the ones that are still outstanding. Within our strategic pillar, commercial, we have one that we haven't met yet, and that is to -- we had an objective to increase the awareness and establish new market for our monkeypox indication. We have to be honest and say that we have made very little progress here due to COVID-19. It is extremely hard to get attention when it comes to anything else than COVID-19 basically. Within R&D, we still have a -- we are coming out, showing the results from our ongoing Phase 3 -- sorry, Phase 2 trial in BN-Brachyury in chordoma. So we expect to come out and report the results in December. Finally on the manufacturing. I think we have nearly met all the objectives, just put a small bracket around qualification and validation of our fill and finish facility. This is ongoing. We are nearly done and we expect to be home safe on this one as well before year end. So all in all, I think, very well on track in terms of our plants and sockets and I think we are very pleased with the financial results for the quarter. So with that, I will hand the word back to the operator and ask for Q&As.

Terribly, sorry, on mute there. Thanks for taking my questions and congratulations on some significant progress during extremely challenging times. Paul, I did want to just drill down a little bit more on the change in strategy on RSV. I certainly appreciate prudence of not taking on an expensive trial when you're at risk of not getting a good answer from that trial for your investments. But as you mentioned, this was a challenge trial you previously thought wasn't worth doing. You mentioned that J&J has had some success in -- with this challenge study. And maybe you could comment on that a little more and that you may be able to help design or inform the Phase 3 with this. I just wondering if you could comment on what kind of information you might gain there? And then finally, and I appreciate most difficultly, but as best as you can. I know you'd like to ultimately attract a partner for this RSV program. Just wondering how the challenge study may help you there.

Yes. Thanks, Chad. So yes, so with the human challenge study, the primary readout is look for reduction in viral load in the blood post [ph] challenge. And as you said, historically when we looked at model we thought that the window of opportunity to really see a decline was too stringent for a vaccine and that you only have a few days post challenge to really see an effect over and above placebo treated volunteers. But again, as I said in the presentation, sometimes you have to put your hands up and say you're wrong because J&J came out and published results of their human challenge study at a Congress. I think it was last year where they show that they're at 26 candidate did significantly reduce the viral load in the blood. Another secondary measure is to measure the score of symptoms and there they also saw a significant impact. So I guess, all the other vaccines that have been tested before, it wasn't really the model that was at fault, it was the vaccine. And now we've seen a vaccine is actually been able to show an effect in that model. So I think it's a stringent test, I would say, because as I said, it's a very short window of opportunity to have an effect on the virus. But nonetheless, we can see that a competitive vaccine seem to have an effect. So I think we do anticipate to get hopefully similar or better results, which would help us really position our vaccine with regard to Janssen as a competitor. But also maybe to have a better assessment of what level of efficacy we believe we're looking for in the Phase 3 which at the moment we're simply, I wouldn't say guessing, but we're simply determining based on what we think is a commercially viable efficacy for RSV.

Okay, great. I appreciate that.

Sorry, Chad, do you have a part of your question I forgot. What could that do potentially for partnering?

Yes.

Obviously the more [indiscernible] you have, the easier it is to partner. I think that's the best way of saying it. And I mean, if you can, derisk the Phase 3 investment with some excellent efficacy data, it will help partner.

Yes. No, that makes sense. And maybe just a couple on the COVID-19 program. You mentioned you're looking for external funding potentially to run the Phase 3. Just wondering what you think the current environment for that is now? Obviously, a lot of money has been put out on vaccines. I don't know if you feel there's significantly more, I guess maybe for the right vaccine, if your Phase 1 data looks good. And then maybe just remind us, I know this is a single shot vaccine, which is an advantage over certain others. But what about its storage condition. So for example, one sort of detriment to the Pfizer vaccine is it's necessity to stay at minus 70. What -- what's the status with this [indiscernible] platform? Thanks.

Yes. So, the funding situation with COVID is one that's changing, I guess, as the whole COVID situation is changing. I think it's no surprise and I'm as relieved as everyone that Pfizer is reporting good data. And I think we as well as many of the funding bodies anticipated more recently that there would be one to three vaccines coming through early next year for approval. Again, I don't want to talk about the various candidates or whatever, but the first vaccines across the line might not necessarily be the best vaccines across the line. And there may be certain populations that need new improved vaccines. You've mentioned the storage conditions of some vaccines that make it quite difficult to distribute. Again, one of the reasons we like this platform, not only the flexibility in being able to address mutations, the one shot aspect which seems to be bearing out at least in preclinical studies. But the [indiscernible] storage is anticipated to be at 2 to 8 degrees Celsius for refrigerated conditions, which offers a huge benefit. In terms of the funding situation, I think let's be honest, I think by the time we close the license deal with AdaptVac, a lot of the funding opportunities had already closed. That was the case for the U.S where we have obviously close ties. They've gone and closed the Warp Speed project. So we'll see, as I said, what we're committed to do is support AdaptVac with their Phase 1, finalize the monkey efficacy, which I've today published some of the early results. I would also flag the way we are starting to get also interest from other companies. The production of certain live viruses as candidates is becoming clear is difficult for certain territories. So other companies are looking for simpler products to produce and distribute and sell. So there are still opportunities, but again, we'll have to see how the coming months develop as more candidate vaccines, hopefully cross the line and get approved.

All right. Great. Thanks. I'll get back in the queue. Congrats on progress. These are challenging times and you guys are moving a lot ahead.

Thanks.

Next question comes from the line of Michael Novod from Nordea. Your line is open. You may ask your question.

Yes. Thanks a lot. It's Michael Novod from Nordea Markets. First of all, on the recent ACIP meeting in late October, it was almost a full day dedicated discussing orthopox or monkeypox discussing TBE and also discussing rabies. There was also a conclusion that Pfizer would move forward, trying to get registration of their TBE vaccine in the U.S. It is not a market that's really existing now, but potentially could be a market longer term. So maybe you could give an update on what the ACIP meeting let you to sort of think about both regarding monkeypox and TBE going into 2021 and beyond? And then secondly, on the cost side for 2021. I know you haven't guided it, but obviously since you will not start your Phase 3 with -- within RSV, but on human challenge trial, maybe you could just help us sort of just conceptually think around how we should predict your cost side going into 2021. And then lastly, on the German rabies market, would you expect sooner sort of traveling resumes? I don't know, take 2022 that you just see a full recovery of that market, or do you fear that there could be changes to the overall market structure within rabies vaccination in countries that's been hard hit by the travel restrictions.

Okay. Yes. Thanks, Michael. Let me take a couple of those, and then I'll hand over the cost side, a more tricky question to Henrik. So on ACIP, yes, you're right. There was an ACIP meeting recently, which is almost dedicated entirely to all the different vaccines that we currently have in our commercial portfolio. The discussion around smallpox, monkeypox was directed at JYNNEOS, as obviously that has been approved. And typically just for everyone on who's listening, ACIP is typically a lengthy process where you normally have three different meetings with ACIP to discuss the various aspects of a vaccine. There's a working group set up from the CDC that looks into the details and they present to ACIP at least three times before recommendation on the last meeting is made. This is the first meeting for the smallpox and was really talking about what the requirements could be in a pre-event as they call it, which is before an outbreak of smallpox. And interestingly there they were talking about health care workers and the like. There was also a discussion about monkeypox, which was presented by CDC, the working group, which is more about the exposure of lab workers, which is their primary focus in this round. As I said, I hope that leads to some sort of recommendation next year to [technical difficulty] in a pre-event scenario. Regarding TBE, yes, there was a discussion about the need for TBE vaccination, particularly for DoD personnel being deployed in certain areas, such as Germany. Pfizer presented their vaccine. And of course, if there is an opportunity to gain licensure for TBE vaccine in the U.S., it's one that we will be exploring and potentially following. And on rabies, it was more about the discussion in a pre-event -- pre-exposure to reduce the number of vaccinations. And let's say, this was one of the early discussions where that goes, but we're following those discussions closely. The other question you mentioned was how do we see the German rabies market returning. I think, obviously, we need international travel to return. And I guess everyone has an opinion how fast that will return. I believe the rabies vaccination or the rabies market in Germany will follow the international travel recovery. And as I said, we can all debate where we believe that we'll be overnight, rapid or will be progressive over some time. And at the moment I would hate to speculate on that. I think we are probably unfortunately looking more at '22 than at an early '21 event. But I think it will go. I think -- I was to speculate and now I will. I think a lot of things was set up in restricted in their movements of what they can and can't do. And I think when the gates are open, I think people will look to take travel. And with travel, comes travel vaccination. So I hopefully that answered the two questions, and then I'll hand over to Henrik on the cost side.

Yes. Thanks for the question, Michael. I think the -- as you rightfully said, we have not guided for next year, but let me try to help you to understand the moving parts when it comes to RSV. If we compare our current outlook for our EBIT with our previous plans, then it will mean in terms of our R&D spent next year and net reduction, but it's relatively small. One would might think that it would be larger, but what is really happening is that we had a plan to go ahead next year. But that will be with the vaccination [indiscernible] autumn next year. So we will not have that many trial costs in '21. '22 would actually be a very expensive year because it would finalize season one and start a season two, but we are definitely moving those out of '21 that we had in. On the other hand, we have our human challenge started. It is not that expensive. It's a single million dollar amount we're going to pay for that, but of course it's still consumed some of the savings. And then finally, I think next year we need to manufacture the clinical material that we need for both seasons. We had expected a little of that this year, but that moves into next year. But to sum up, yes, there will be a net reduction in R&D spend on the RSV line in isolation, but it's not going to be a very significant one.

Great. Thanks. Understood.

Your next question comes from the line of Boris Peaker. Your line is open now. Q - Boris Peaker: Great. Two questions here. First on JYNNEOS. I believe you were planning to meet with U.S military to see if the liquid frozen could become the standard of care for soldier immunization. Just curious if you have any updates on that. And second question is on the Brachyury in chordoma. If you could just remind us how many patients were -- how many patients worth of data will we get and what do we really need to see in this data set to justify further development?

Yes. Thanks, Boris. So regarding JYNNEOS, so early this year we received an order from BARDA both on the bulk manufacturing, but also to manufacture 1.4 million liquid frozen doses, which we're currently partially manufacturing this year and we'll be completing next year on our new line. And that will be delivered to the SNS with the intention that it will be used for people in the U.S, whether it's the CDC laboratory workers or military. The process for military to switch over to a different vaccine, I am learning, it's quite a lengthy and difficult one. And I think that whole process to be frank, may have been delayed due to the ongoing COVID situation. But as I said, the doses have already been ordered and that will be being manufactured in the coming months and will be available to the SNS upon request. So that's one. And then I think the other question related to BN-Brachyury in chordoma, it's 29 patients that have been treated and we're looking for four objective responses, meaning that we're looking obviously at [indiscernible] responses where you see the shrinkage of the tumor according to the resist criteria. We've announced that the one patient, in fact, one of the very first patient's responded and we announced that because it triggered the expansion of the study. We haven't since announced anything else. The patients will complete the treatment course in the coming weeks, which will allow us to communicate that. So we are looking for four patients to respond at a 29, which we think would be an amazing result to move forward. So we'll see in the coming weeks where we are on that. Q - Boris Peaker: Great. Thank you for taking my questions.

Thank you.

Next question comes from the line of Lucy Codrington from Jefferies. Your line is open.

Just a couple less for me. Just regarding the R&D spend in the third quarter that was higher. Is that -- could you explain just why it was -- there was a big jump up in 3Q, and also whether the overall R&D spend to 2020 is still targeted to be DKK500 million, or are we expecting a reduction in that? Secondly, is the DKK100 million D&A run rate in 3Q a reasonable run rate to use 4Q, or were there some one-off impairments this quarter? And then finally on the COVID vaccine, is there a timeframe in which the funding needs to be secured, or is it open-ended? Thank you.

Thanks. Let me start with the question to the R&D. Yes, it was -- I think the R&D that's DKK102 million for the quarter basically is higher than last year. And I think the R&D spent, I think it's very sort of sensitive to when we actually manufacture clinical material, et cetera and when we do ask our production facilities to work on off-scaling etcetera. So there has been some activities in the third quarter, primarily driven by -- there has been some on the non-human primate study on COVID-19 as Paul alluded to, and then it has been the RSV project mainly that has been the big consumers here. So for the full year, I can't give any more precise guidance for the full year except that this is R&D, it's one of the lines to where we expect the savings enable us to deliver on the increased EBITDA guidance primarily due to the postponement of the Phase 3 study for RSV. And I think the other question was on SG&A, as I recall it. The run rate, I think the run rate that we have seen for Q3 is I think pretty much reflecting the current run rate and the workloads, the fees that we paid for GSK, et cetera for the third quarter. So I think that's probably the closest I can get to guide -- to guide you on this one here.

Sorry, I actually meant depreciation and amortization, I wasn't clear.

Oh, sorry. Depreciations and amortizations, we don't expect that to change significantly between the third and fourth quarter. I think it will -- it's mainly impacted by the amortization of the intangible rights related to products here. So it should be relatively stable between the quarters until we really start using the fill and finish facility, but that will be from early next year. Then we will start the depreciation on that one as well, but for the fourth quarter it will be relatively stable compared to Q3.

Yes. And then the -- if I take the last one, it was regarding the timing of funding and is that going to influence anything? So, yes, if there's a deadline and we stop talking about COVID at some point, obviously, as I mentioned before, the whole COVID situation is fluid. It's moving, it's changing daily. As I said, I'm very, very hopeful that the number of vaccines will come through during Q1 for approval, whether that's sufficient or not, time will tell. I would say, the biggest part of the discussions that we have right now are not really with the classic funding agencies that you may imagine. It's more on the commercial side with other companies who are looking for a COVID vaccine for their own territory or for combination with other vaccines. So that tends to be where most of that time is taken right now. So I wouldn't give it a deadline. What I would repeat is that we are supporting [technical difficulty] moving through Phase 1. We will have more data, both clinical and preclinical early next year. But we will not move it forward without funding.

Very clear. Thank you.

There are no further questions at this time. Please continue.

Okay. Well, thank you everyone for your time and for your questions, and have a great day and we'll talk soon. Thank you.

That does conclude our conference today. Thank you all for participating. You may all disconnect.