Ladies and gentlemen, thank you for standing by. And welcome to the Bavarian Nordic Annual Report 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, Friday, 12 of March, 2021. I would now like to hand the conference over to first speaker today, Rolf Sass. Thank you. Please go ahead.

Yes. Thank you, Operator. And good afternoon to some, and good morning to the others to this presentation of Bavarian Nordic's annual account 2020. With me in the room, I have Paul Chaplin, President and CEO; and Henrik Juuel, Executive Vice President and CFO. Before I hand over the presentation, I will read the following statements. This presentation includes forward-looking statements that involve risks, uncertainties and other factors, many of which are outside of our control that could cause actual results to differ from the results discussed. Forward-looking statements include statements regarding our short-term objectives and opportunities, financial expectations for the full year and financial preparedness as of year-end, as well as statements concerning our plans, objectives, goals, future events, performance 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. With this, I will hand the presentation over to you Paul.

Thanks, Rolf, and welcome, everyone to our annual accounts for 2020. If you turn to Slide 3, the very north, it's a fully integrated profitable vaccine company that aspires to be one of the largest pure play vaccine companies by '25. We've built up a fully integrated infrastructure so we have beginning to end commercial manufacturing, proven R&D capability and now commercial infrastructure supporting key markets in the U.S. and EU. 2020 was about the integration of our two new assets, which were vaccines against rabies and TBE, which combined create a portfolio of marketed products. And with that integration, we rapidly expanded as a company last year and grew by 40% with more than 700 employees. We have a really exciting pipeline with some late-stage assets. One is RSV, the other, as I'll talk more about is COVID-19, both of which have near-term triggers during 2021. On Slide 4, 2020, as I said, was a really important year. I think this is the beginning of our transition to become a commercial company. And I have to say that despite the headwinds of COVID, we had a near perfect execution of our plans to integrate our two new assets against rabies and TBE. And that is credit to all our employees at Bavarian Nordic. So we even managed to maintain our guidance and revenue, as you'll hear from Henrik later. Revenue was in line with expectations and our EBITDA and cash is even better than guided. And this is I said was despite the fact that COVID-19 had an impact on some of our sales. But this was actually offset by better than expected, JYNNEOS business as we received more than $200 million order from the U.S. government. But it wasn't all about smallpox and JYNNEOS, we actually were able to gain or maintain their market shares for rabies and TBEs, despite the difficult markets. And it really endorses our commercial strategy that we believe these assets with a key focus, we can actually grow these assets better with Bavarian Nordic than their predecessors. Our key drivers of activity in 2020, we finished the expansion of our commercial manufacturing and have now added a commercial full finished capability. And we're already beginning to transfer our first product JYNNEOS onto the line. And we licensed the COVID vaccine asset from AdaptVac, and now we've encouraging preclinical results, which I'll walk you through in the coming slides. We have decided to accelerate this program into phase 2, which I'll talk more about in the coming slides. So on Slide 5, actually strong support from new and existing shareholders, we were able to complete an offering this week, where we raised just over a DKK1 billion by issuing new shares. This investment will now allow us to kick-start our COVID program, and move that into a large Phase 2 study, which I'll talk about. The whole supply of vaccines, COVID vaccines has really shown that there are a number of bottlenecks in the manufacturing and supply of vaccines, because as I've said many times the production of vaccines is a difficult task. And we also want to use some of the proceeds to have the flexibility to potentially take advantage of opportunities, where we could utilize our manufacturing capabilities to produce the third-parties, and the rest of the proceeds is really to ensure that we can continue to execute on our strategy, which is expanding our commercial portfolio potentially through additional M&As and to strengthen our cash position. On Slide 6, one question I've had very recently, obviously, with the actions that we're moving forward with COVID is, aren't you a little late, and is there really a need for a new COVID vaccine, given that there are a number of vaccines already approved. Well, it's true that great advances have been made, and there are a number of vaccines approved and more to come. However, the durability of how long lasting that protection is, or the breadth of that protection that is supported by the current vaccines against the various circulating variants is unclear. It is, however, clearer by the day that COVID-19 is not going to be eradicated. And it is a disease that will remain with us and have to be managed through frequent vaccinations. And it's likely that regular boosters are going to be required to boost that protective immune response to protect the strong the ongoing disease. So, what we're hoping to do with our candidates, is actually to demonstrate that this vaccine candidate which has some excellent preclinical data, really showing that it's highly immunogenic can act as a universal booster to people previously vaccinated, increasing the durability of the response and providing a proven response against the various circulating variants that we see today. So, if we go to Slide7, just to remind you what the candidate is, it's a Capsid virus like particle platform, which was licensed in from AdaptVac, which is a technology that was born out of Copenhagen University. This is a highly flexible platform, where one component is not specific to the specific disease, or how the vaccine is designed. So, the actual capsid itself can be manufactured and used in any vaccines using this technology. The specific part of the platform is the protein, which is manufactured with a small linker, which binds to the capsid of very high densities. This high-density expression of the antigen of choice in this case, the surface protein, the SARS is expressed in exactly the same way to the immune system, as the immune system with seizure came across the virus. For that reason, viral-like particles are normally highly immunogenic, as we know from the HPV vaccines, one that we believe will be an excellent booster in the current environment, where the majority of the population is likely to be vaccinated against COVID-19. If we go to the next page, this is the exciting of some of the exciting preclinical data that we reported earlier this week. We did a non-human primate study where we looked at various different regimes of the vaccine, I'm only showing one for simplicity. But we looked at single vaccinations that were adjuvanted, or two shots non-adjuvanted. And here I'm showing you one group where after the second vaccination, you can see that there are very, very strong neutralizing antibodies on the left-hand side of the graph, which is about 50 times higher than the high human convalescent sera. Now, it's very difficult always to compare immune responses across studies and across different animal studies. However, if you remember many of the current vaccines that are currently licensed, two shots of for example, the RNA vaccines give you comparable titers to the convalescent sera. Not significantly higher titers, as we're seeing here. These strong titers translate into a very robust protection from SARS, when these animals are challenged. So, the graph on the right-hand side you're looking at the viral copies following the challenge, the gray are the controlled animals at day two, four and six post challenge. And you can see apart from two animals, there is complete 100% sterilizing protection in all the animals that are vaccinated with our viral-life particle. And these two animals that have a small amount of virus at day two are significantly lower than the controls, and completely eliminate the virus by day four. This is extremely strong efficacy data, again, superior to what has previously been published for other COVID-19 vaccines. Slide 9, our partner AdaptVac, together with an EU consortium has actually started the first Phase 1/2 study today, actually, I believe. And there, they'll be looking at the safety and immunogenicity of this vaccine candidate with or without adjuvant in just under 50 healthy adult volunteers. And the first date, we expect to be reported in Q2. In parallel, we have now decided to also push forward into Phase 2, where we plan to start the study in Germany already in April, where we will be boosting people who have previously been vaccinated, up to 200 volunteers. As I said, looking for how strong that booster response can be, how durable the response is and whether we can get broad neutralizing antibodies against the various circulating variants of SARS. And we will be ready to potentially start a Phase 3 after the summer. But for that, obviously, we continue to look for further funding to move the program into Phase 3. Slide 10, a little bit about our RSV program. So this year and in fact, we have started the Human Challenge study. This is where we will vaccinate volunteers with a highly promising RSV vaccine, and then challenge those individuals with RSV and look for hopefully, a reduction in the viral load in the blood following challenged the vaccinated individuals compared to placebo. This will be a pivotal key data that we'll be reporting in the second-half of this year that will hopefully encourage us beyond what we already believe that this is a highly efficacious candidate and support entering Phase 3 next year. Slide 11, we talk a little bit about the integration of our two new vaccines, Rabipur/RabAvert and Encepur. At the beginning of the year, many investors, rightly so, I guess, were concerned about the challenges that lie ahead. We're a company with no real commercial infrastructure or proven commercial capabilities, and we face an enormous task to build up a new infrastructure that was capable of taking over some of the key markets as rapidly as possible, while in parallel transferring the manufacturing process from our partner GSK. As I said, sitting here a year on, it's almost a perfect execution of the plan, I'd say almost, because I'm not a perfectionist. It probably was perfect execution of the plan. We now have a commercial infrastructure in place in our key markets in the U.S. and the EU. We've actually transferred to-date or I should say a few weeks ago up to 18 countries, which covers more than 90% of the projected revenues of these two products with partner Valneva, a vaccine company in selected EU markets and Canada. And we've initiated the tech transfer. To remind you that tech transfer is a lengthy process, unfortunately. It begins with taking over the packaging, which will happen already in this year. Then we will take over the fill and finish and finally the drug substance. To support that tech transfer, we've initiated the expansion of our bulk facility, which will be completed next year. This will not only support taking Rabipur and Encepur in-house, but will also increase our manufacturing capacity as we'll now be able to manufacture both products in parallel, greatly increasing our capacity. So a very strong performance in 2020, despite the challenges that we faced, the unexpected challenges we faced with a worldwide pandemic, I'm extremely proud of the management and the employees and the strong support that we've obviously received from our investors. So, thank you. And with that, I'll hand over the presentation.

Thank you, Paul. So this is Henrik Juuel, CFO speaking. So let's turn to a few slides talking about the commercial and our financial performance for 2020, and the fourth quarter. And we will start looking into the rabies markets, where you will remember that the rabies market for Bavarian Nordic is characterized by two very distinct markets. We had the U.S. market and the German markets that representing the bulk of our rabies business, and the U.S. market, which is an endemic market, both has the post exposure and pre-exposure segments, whereas the German market is pure travelers' market or pre-exposure market, as we call it. So if you look at the how the U.S. market performed during 2020, then obviously, the U.S. market was impacted by COVID-19 due to some of the lockdowns, but showed much more resilience compared to the European market. If you look to the right, you will see that the German market has also nearly been eroded the future of COVID-19, as people are not traveling and not needing any rabies vaccines. But as I said, I think the U.S. market if we compare just the fourth quarter of 2020 to the prior year went down by 38%, which is, of course, a massive drop, but still a much more resilient market than the European rabies markets. So, I think going forward, so I think we are really got to the German markets, we are not expecting that to recover until we see travel resuming again. And you will have seen in our guidance, I will come back to that in a few slides as well, that we are guiding with a range on revenue. And the other range of what we are guidance really assume that there will be some return to travel in the late third quarter and in the fourth quarter of this year. But in the U.S., I think here, I think that we did see a somewhat of a soft fourth quarter in the U.S. rabies market, simply due to I think more than half of the states were in quite severe lockdown. So if we turn to the next slide, markets relating to the other product that we acquired with tick-borne encephalitis market. I think here we are looking at Germany only, this is only relevant for Europe and Germany, I think is a good proxy for how the market is doing in Europe. If you compare the fourth quarter 2020 to '19, you will see that it's slightly down but close to the same level. We did see some good signs in the third quarter of 2020 that the market was recovering. But I think as we all know, having been in the fourth quarter many markets went into lockdowns again. And this has had somewhat negative impact also on the TBE market. I have to say, though, that the fourth quarter is typically a low season for the TBE business. So, I think for the TBE market, I think these are clear evidence that there is the underlying demand is still there, and it's all about the access to vaccinations. The access, you can say this relevant from two perspectives. First of all, there are some of the restrictions in some areas, people have simply not been able or allowed to go to their physicians. But we have also seen situations, where people basically self-imposed restrictions, they are afraid of going to the doctor until it's more safe out there. So with regards to 2021, I think we are of course opening for a very soon reopening of those key markets in Europe. Remember, the main vaccination season that kicks off very soon, typically in April, that's when we start to see the larger volumes of TBE vaccinations. So hopefully, we are having a gradual opening of these markets in front of us. So that was a little about how the markets have performed for these two products. Let's look at our specific performance. And again, first half with rabies business, if you look at the full year, it is 35% down compared to 2019 when GSK was managing this business, and that is of course a mix of basically the European market being nearly all gone, and the U.S. market being somewhat down. But with our significant market share gains in the U.S., we had to a very large extent compensated for that loss of market in the U.S. So, I think all-in-all, I think with a strong performance in U.S., we are really pleased with the rabies performance for 2020, where we managed to gain market share. For the fourth quarter, we did see a drop in market share from approximately 79% in the third quarter down to 70% in the fourth quarter. That was fully expected as the comparison came back after a stock out situation. I think the current market share level is still significantly above the market share that RabAvert in the U.S. had prior to the stock out situation. So, strong performance in the U.S., and now we just need to see again the reopening in the U.S. first of all to drive both the post and pre-exposure market. And then, of course, in Europe we need to see travel resume facts or something a little more normal. On the next slide, our performance. In terms of our performance into TBE markets, here we have seen for the full year, a drop compared to 2019 of 14% of the business all explained by the COVID-19 impact. And here, it's really not the demand as the sector has been impacted, but it is the access to vaccinations during the second and third quarter, actually lower the market size. I think what we are really pleased about the outperformance here is that we have managed to consolidate our position. Historically, in GSK this suffered market share loss to our key competitor in the market, but during 2020 this was our first year of commercialization. We managed to consolidate our position and keep our 30% share of the market. So now it's really all about driving further market share gains, and then of course, again, as I said, the upper end of our guidance scenario for revenue does reflect that we have seen a reopening of the markets soon so that people can get access to vaccinations. Next slide, I have a few slides now on the financial performance of 2020. These are not breaking news, thus we actually came out with and preannounced our financial results in the January. And I'm happy to say that there has been no changes to these figures, they are older amount and they are 100% in line with the numbers we preannounced in January. So, to take them from the top and down, the $1.852 million in revenue for the year against the guidance of $1.9 billion. Remember that was the guidance that we issued in February before anyone knew anything about the impact from COVID. So, we do regard this as meeting the guidance. If you look at the donut chart to the right, you'll see the breakdown of the full year revenue. Our highest revenue product was Rabipur/RabAvert, our rabies business $628 million [Indiscernible] revenue in 2020, despite the impact in particular under European part of the business. As number two, we have our smallpox business with JYNNEOS both BDS but also finished products to the U.S. government. And the third phase we have the Encepur product, DKK455 million. Remember, we also got a rise on payment from Janssen and Valneva before the vaccine was approved DKK67 million. And finally we have some contract work primarily sponsored by BARDA and related to our CMC work for our fill and finish facility, and support to the free Phase 3 trial. If you look further down to P&L, you will see that our R&D expenses for 2020 came in DKK341 million, so somewhat lower than in '19 and this is simply due to the phasing of our main pipeline asset RSV, where we spent more money in '19, and not so much in 2020. SG&A costs came in at DKK564 million significantly above the '19 level, and explained by of course the commercialization of our business. We also saw the progressive year now stepping and this was finally closed in January of 2020, and that brought us DKK628 million in additional cash and income. So right at the bottom you will see our EBITDA that ended at DKK740 million, above the latest guidance we issued where it was DKK725 million, and significantly above the DKK675 million, we originally guided in EBITDA in favor of 2020. Turning to the next page. Just a few words on our cash flow and balance sheet. Yes, basically on the cash flow we saw it was more or less neutral for year minus DKK5 million net cash flow. Cash flow from operating activities was positive, of course significantly positively impacted by the sale of Priority Review Voucher and some negative contribution from working capital where we during the year increased our inventories as we took over markets from GSK. Cash flow from investment activities include several movements, selling and buying securities, depending on the cash we have at hand. But if you look at the real tangible investments, it did include a little more than DKK200 million of investments in property, plant and equipment related to the finalization of often finished plant but also the initiation of the expansion of our board facility. And furthermore, the investment line also includes payment of Milestone to GSK amounting to nearly DKK400 million. Cash flow from financing activities, we saw positive contribution of approximately DKK1.3 billion, and that was the mix impact of the significant rights offering with this, in the beginning of 2020. And where we use some of that to pay back the bridge loan, we took in December '19 to pay GSK the upfront consideration for the acquisition. On the table to the right, I don't want to go too much into the details of that, but just highlight the securities, cash and cash equivalent. So, basically, our cash position, we ended nearly DKK1.7 billion and have guided DKK1.6 billion, so still quite well about the guided number, which gives us a good and solid position. But remember, we still have a deferred consideration to GSK of DKK2.8 billion. And we are going to continue investing in the expansion of all plants. And therefore, it makes a lot of sense now we are embarking on to advance our COVID-19 program further to go out and raise the cash for that which was never in our original plans. Next and final page from the presentation here. I'll talk a little about our guidance for '21. So, we are guiding at this time an internal revenue will be between DKK1.9 billion and DKK2.2 billion. The low end of this guidance here reflects a scenario where lockdown continues beyond the first quarter and into the second quarter, in particularly in key markets like the U.S. and Germany where we have the majority of our business. The higher end of the revenue but also the EBITDA guidance that reflects a scenario where we are going to see a gradual reopening now basically, and continuing into the second quarter, which will allow people access to vaccinations, but also which will eventually translate into traveling picking up with the third and fourth quarter of this year. We are not anticipating any impact on all smallpox business and our Ebola business as we speak today. The EBITDA guidance between DKK200 million and DKK250 million, and again reflects the same scenario, so, that's the revenue guidance. And we do expect to the end of the year with a cash position of between DKK1.4 billion and DKK1.6 billion, and this includes net proceeds of approximately DKK1.1 billion from the private placement we did earlier this week. R&D expense for '21 is expected to be at approximately DKK750 million, including up to DKK200 million to support Phase 2 and scale-up for our COVID-19 vaccine, and the latter we are expecting to capitalize and therefore, I think the amount that you will find by the end of the year in the P&L would be approximately DKK550 million in R&D. And in order to understand our cash position by the end of the year, we have added some notes below. We are continuing to invest in our facility expansions and also in the tech transfer from GSK that will amount to a total DKK650 million in '21. We also in as part of the old transfer from GSK, we will take over the remaining markets during the first-half of '21. And as we also start taking over the packaging, this will increase our inventories, therefore we expect working capital to increase by approximately DKK300 million. We will also continue to pay milestones to GSK during '21, probably at a level close to what we paid in 2020. But of course these milestone payments are closely linked to specific milestones in the whole integration project. Our cash position also assumes that we make a drawdown of €30 million, existing credit facility we have with the European Investment Bank. Yes, I think that's basically some of the important assumptions to fully understand the cash position by the end of the year. To the right, we have summarized what are some of the key activities and milestones that will keep us busy again in '21. And if you look at it within R&D, I think it is, of course to complete the Phase 2 humans challenged trials that we have initiated in RSV, where we expect actually readout in September, providing a secure and sound basis for deciding on the Phase 3, potential Phase 3 in '22. And the Phase 3 in '22, we are already this year preparing ourselves in terms of preparing the manufacturing basically the material that we need for that potential Phase 3. And to prepare that is to the human challenge trial and the preparation for the Phase 3 will be the second - although the most significant expense within our R&D budget for '21. The new thing here is of course, also, as we have announced, we are now going to kick-start the events of the development of the COVID-19 vaccine candidate. We have committed to invest up to DKK200 million into a regulatory Phase 1/2, they're starting and scale up of manufacturing to Phase 3 volume levels. We are continuing to seek funding even for those phases, but in order not to lose momentum and lose important time in this project we have decided to kick-start basically in development. We've also continued the work to watch the getting the free stride version of our smallpox product eventually approved. And we will continue working with intravenous administration of our new brachyury containing construct as well. On the commercial side, I think we have the full commercial infrastructure in place during 2020. I think we did extremely well and had a strong brand performance so we are in a good position to fall '21, so basically to drive profitable growth. For these products of course, we are very dependent on how COVID-19 develops. But definitely we have a good starting position. Key focus area will also be to take a lot of physical distribution for the remaining markets. As Paul alluded to earlier, we already took over 18 markets corresponding to more than 90% of their total revenue from these two products. And then of course, I think it's also all about improving the awareness of Bavarian Nordic as a key commercial payer in the markets, amongst the healthcare physicians. On the manufacturing side, this year will actually be exciting because we have completed the construction and qualification of our brand new fill and finish facility, and this year will be the first time that we are actually going to fill commercial products on the line. So quite an exciting milestone ahead of us. Then we also in 2020, we initiated the expansion of our bulk facility, and the plan is that we this year we will complete the construction of that. And of course, we will also progress the whole technology transfer often to acquire products, which is a longer project, so eventually ending we're taking over bulk in '24. So again, I think busy calendar ahead of us for '21, with some quite exciting milestones ahead of us. So with that, I think I will turn the call back to the operator and start ask for questions.

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] As your first question comes from the line of Michael Novod from Nordea. Your line is open. Please ask your question.

Thank you very much. It's Michael Novod from Nordea in Copenhagen. A range of questions. First to the ABNCoV2 COVID vaccine. Could you comment a bit on whether you can but the assay used for your vaccine when measuring neutralizing antibodies in non-human primates. And then secondly, also the route of challenge in the non-human primates and the dose, as well as whether you see CD-4 and CD-8 T-cell responses in these monkeys. That's for the COVID. And then secondly on Encepur and Rabipur/RabAvert, is there any chance you can try to at least in sort of ballpark frames, try to give us where you see those two products split-wise in 2021. Just so we have a feeling of how you see it.

Hi, Michael, this is Henrik. I'll take on the Encepur and Rabipur. And we feel that it's a little too early to start breaking down our revenue expectations for '21, simply given the uncertainty we are facing, the costs of reopening. And so I can only allude to what we have previously said about these two products here that we generally I think we expect that for Rabipur, the rabies business, this is a business that should normally grow low single digits, at least just the markets. And then on top of that would come off, you can say market share and business as well. But the Encepur business in normal circumstances should be growing at least high single digit numbers annually. But, of course, I think it is uncertain times and therefore, we prefer to wait a couple of months to become more specific on the exact breakdown of our guidance.

Okay.

On the COVID question. So the assay was against live virus in the T-cell finish facility, so very similar to how most people are looking at the need of optimization. The challenge, though, was one times than to the products [indiscernible], which is in line with others. I mean, the challenge dose and strain varies from various different companies. But it's been some have gone as low as 10 to the 4 and some have gone as high as 10 to the 6, so two times ten to the 6. So we are one times 10 to 5 [ph].

And CD-4 and CD-8.

T-cells, actually the interesting thing was the viral-like particle is at both in mice and in the primates. We really didn't see a very strong induction of T-cells at all. I mean, the challenge posed a challenge, one of the interesting things is the animals that we had a stronger protection or at least really significantly reduced the viral load stronger at a very low T-cell response, meaning that it really looked like it was the neutralizing antibodies for clearing the virus or [indiscernible]

Okay. Thanks a lot.

And as your next question comes from the line of Peter Welford from Jefferies. Your line is open. Please ask your question.

Hi, yes. First, I have a question, I got a few. Firstly, just to give COVID-19 for a minute, just so we can understand on this. Firstly on the German study that you're doing in the Phase 2. Am I right to understanding that a single dose and that's going to be, am I right understanding in volunteers who have either already been vaccinated, and it is that with any vaccine or alternatively prior infection? I guess just trying to understand, are you going to be doing antibody testing, pre-enrollment patients in that? Or what are the sort of enrollment criteria to determine that in terms of - and then we're presuming that you'll be measuring neutralizing antibody titers to your dose. Second question, just on the manufacturing of this vaccine. We've heard from a variety of different companies talking about the pros and cons of the different technologies in manufacturing. I guess from your perspective, could you talk a little bit about how you manufacture this vaccine? And the ease, particularly the protein part, the ease of which you can manufacture the various protein fragments that are needed for this? And then equally, do you have the option to use this technology beyond COVID-19 from AdaptVac? Or is it solely at the moment COVID-19 and anything beyond that would require a separate negotiation? And this is something a bit different than Bednarek. I may just be being really silly here and not understanding, but could you just run through just with regards to the cash investments, how this works? I'm a little bit confused as to what the DKK650 million does and does not include, because we have the milestones to GSK. I think you talked about roughly the same as last year. Does that also the investment in COVID-19, which could be up to DKK200 million of the CapEx in the facility, which I think you talk about in total could be DKK650 million over the years. Could you just - you've added these up, I guess more than DKK650. So, could you just explain to me exactly which numbers are included in the DKK650 million? And what we should be considering for the investment this year? Thank you.

Hi, Peter. I'll try and answer your COVID question. So yes, the Phase 2 that we plan to run will be in people that have already been vaccinated. And it will be a single shot non-adjuvanted. And we will be looking exactly to your point, how strong that boosts immune response is in terms of neutralizing antibodies, and everything, actually, but looking at whether you get a broader neutralizing response against the various variants. So, unlike the monkeys, where we only looked at SARS CoV2, we'll be looking at the other frequent circulating variants that are currently around. In terms of the inclusion criteria, we're still pulling together the protocol and actually still plan has those discussions. But we want to keep it as simple as possible. So, we can go as fast as possible. So, we will probably just need proof of vaccination. Not really on, obviously, they will have pre leads and titers done, that won't be part of the screening. Then on manufacturing, so as I tried to explain, there are two components, there's the bacterial capsid, which is currently produced in the CoV line. It's a relatively simple manufacturing process. Although nothing is important than manufacturing, but it is bioreactors very simple, very high yielding profits. So, you could produce very large quantities of that and have it stored. The recovered protein for this vaccine is currently produced in insect cells. But other manufacturing processes like yeast could be used. And again, the process is a relatively simple one. And then you combine the two products together and the purification is also relatively simple. So, although we're trying to see whether we can have a universal boost for giving broad responses. If that wasn't the case, and you really needed to make new vaccines against new circulating variants, I believe this platform is as fast as RNA. Particularly, if you've got quantities of the capsid already stored. Then you had a question about the license from AdaptVac is it only four SARS and that is exactly the case. It's the SARS-only, currently. If we wanted to expand, that's a new discussion with that. I think, I covered everything you asked.

No, thanks, Peter, this is Henrik. So to your question on investments, I think our total investments anticipated for '21 that amounts to DKK650 million, and approximately half of that relates to the expansion of our bulk facility. So let's just call that DKK325 million. But to finalize that within '22, that number happens to be DKK650 million. And I think that can create a little confusion, of course, because the full investment over the next two years to expand our bulk facility is expected to be DKK650 million. And for '21 total investments, this as well DKK650 million, half of that goes to the bulk facility DKK325 million, then another DKK150 million to DKK200 million is related to the tech transfer project ongoing. So, that's a mix of capitalized expenses and some equipment that is required for that. And then there is a chunk of all the investments, typical maintenance type of investments. So, I hope that clarified it. But I think these two times DKK650 million can confuse the picture a little.

So to be clear that when we consider overall then the cash flow, you've got the DKK650 million, but then on top of that, we need to consider the payment to GSK of roughly DKK394 million, if it's similar to this year, and on top of that, then the capitalized R&D for the COVID-19 vaccine?

Correct. And I think when we issued the guidance, we have laid that out under the cash position assumptions. But, you're right.

That's great. Thank you.

Thank you.

[Operator Instructions] And your next question comes from the line of is Alex Cogut from Kempen. Your line is open. Please ask your question.

Hi, thanks for taking my question. Hi, can you hear me?

Yes.

Yes.

So I was just wondering with respect to your COVID vaccine, how are you looking to fund the Phase 3? Is it more towards government contracts? Or do you expect some corporate partnerships? And then ultimately, what do you expect the demand to come from for your candidates?

Yes. Hi. So in terms of funding, I think there are a number of sources and we're not bound by any of them. To be honest, we are open to any sort of funding that we cannot achieve. So I think, last year the EU countries made a decision that they would not really fund the development of the vaccines, but would have advanced pre purchase orders. That I think, in my opinion, has backfired, because the EU is not as advance in the queue for the vaccines as other countries, who have actually invested in the development as well as in advance pre purchase orders. So I think that has caused a change in attitudes. So currently, we have seen a change in attitude, that there are a number of governments approaching us, interested in potentially funding the development of the next generation COVID vaccine. So it could be a government, it could be again a usual friends across the pond, the U.S. government and other. And having said that, it could also be a corporate sponsor, who is also interested in a universal booster. On the where will the demand be, if I and other people arrive in that COVID is not going to be eliminated, and that there will be new variants of persistent disease? That means there is going to be a need for persistent vaccinations and boosters. Some of the existing vaccines are already approved. There are articles out there, this is not really my own opinion. There are articles out there questioning whether for example, the adenoviral based vaccines can actually be used as frequent boosters. If that turns out to be the case, they can't because of veteran immunity, then the three main players that are currently supplying vaccines would be out. The other thing is, as I said, based on this data currently that we have, this is a very strong immunogenic candidate that we have, that we could really create a very strong boost response. What we're seeing currently with the first wave of COVID vaccines is that the highly effective which is fantastic, but they are actually inducing very low levels of neutralizing antibodies. And how durable those antibody responses are, we don't know. But if they wane off as quickly as some data is suggesting, you are going to need frequent boosters. So I think the demand really is for booster vaccine.

Understood. That's a very clear. Thank you. And with respect to your RSV program, how do you expect the human challenge data to still inform the design of the Phase 3? And then with respect to the Phase 3 trials, how big of a trial do you expect to need, considering potential behavioral changes that could lead to still lower RSV season in '22 and '23?

So to your point about the Phase 3 design, the reason we postponed the initiation of the Phase 3 this year is simply because of the rates of RSV extremely low, due to the social distancing and lockdowns last year. And we anticipated it may happen again this year. We are going to keep an eye on the RSV rates, obviously because we need to make a decision do we go next year or not. But to your point, we're looking at 12,000 to 14,000 subjects, I would say assumptions of efficacy and certain assumptions of attack rates. And obviously if the attack rate RSV remains very low, we probably can't be conducting the study, the same way we had to postpone. So it's all about keeping an eye on the rates of RSV this year, and making a judgment call, is it the right time to go or not. In terms of what we expect to see, and how could it affect the Phase 3 design? So, we're looking hopefully, for a significant reduction in the viral load in the blood post challenge compared to the placebo that would give us an indication of the level of efficacy that we could expect to see in the field. So without that indication, you are basically making an assumption in your statistical design for your Phase 3, whereas after the human challenge, if it's positive of course, which we anticipate we will get a stronger indication, are we looking at a 50% efficacy, are we looking at a 60% efficacy or something higher. And that can help design the study even making it smaller or larger, which is obviously one of the components is how good your vaccine is. So that's what we hope.

Great. Thank you for the color.

There are no further question at this time, please continue.

Okay. Well, thank you everyone, for your time and for the questions. And I hope you have a great weekend.

And that does conclude our conference for today. Thank you for participating. You may all disconnect. Speakers, please stand by.