The US Federal Funding Path How We Tap Into US Government Funding to Help Finance Our Future

The US Federal Funding Path How We Tap into US Government Funding To Help Finance Our Future

2013 Swiss Pharma Licensing Group Meeting Jürgen Langhärig, VP Business Development

Flims, January 2013

1 Agenda

• Introduction to Bavarian Nordic • Technology Platforms • Clinical Development Pipeline • Our Funding Path (Stock Market & Revenues) • Business Models & Commercial Objectives • US Government-Partners & Government Contracts • What does the USD 793 m from the USG Cover?

2 Vaccines for cancer and infectious diseases

Founded in 1994 International Presence A Fully Integrated Company IMVAMUNE among Top Selling Vaccines 8 Clinical Development Programs Listed on NASDAQ OMX Market cap: USD 230m

3 Financial Highlights

2011 E2012 Revenue USD 93m USD 175m Result (loss) before tax USD -53m USD -9m Cash preparedness at USD 126m USD 95m year-end

Assumptions IMVAMUNE® - deliver 4m doses >8m doses

USD/DKK = 5.70 4 Bavarian Nordic’s Viral Vaccine Platforms

• Target antigen • Modified vaccinia Ankara (MVA-BN®) • Epitope • Vaccinia Virus (PROSTVAC-V) • Poly-epitope • Fowlpox Virus (PROSTVAC-F) • Costimulatory molecules (PROSTVAC)

Plasmid DNA Pox Virus

Off-the-shelf vaccines for: • Cancer • Anthrax • RSV • Filoviruses • Measles • HIV • Further indications Our Two Vaccine Divisions

Cancer Infectious Diseases

• PROSTVAC started in Phase 3 • Profitable division with ongoing development Dec. 2011, based deliveries to the US and other on very encouraging survival Governments results in Phase 2 • Blue-stamped MVA-BN • As a result of of our broadly technology platform with applicable technology platform, opportunity for further project we have a Pipeline in major funding from the USG cancers • IMVAMUNE approvals pending in Canada and EU

6 Pipeline

Cancer Vaccines PC Ph1 Ph 1/2 Ph 2 Ph 3 US Government Support 7 PROSTVAC® Prostate cancer CRADA with NCI (2008)

CV-301 breast Breast cancer CRADA with NCI (2011)

CV-301 lung Lung cancer CRADA with NCI (2011)

CV-301 ovarian Ovarian cancer CRADA with NCI (2011) MVA-BN® PRO Prostate cancer MVA-BN® HER2 Breast cancer

Infectious Diseases PC Ph1 Ph 1/2 Ph 2 Ph 3 Market US Government Support

IMVAMUNE® Smallpox BARDA Contracts IMVAMUNE® freez-dried Smallpox BARDA Contracts

MVA-BN® Anthrax Anthrax Data* MVA-BN® RSV RSV

Sold under national emergency rules Data* Positive preclinical data could support funding of clinical trials of the anthrax vaccine from the U.S. Government 7 How We Funded our Pipeline (1998-2012)

TOTAL (Received) Stock Market USD 545m Government Funding USD 582m (Revenues)

8 Funding and Revenues* from Time of the IPO Million USD 200

180

160

140

120

100

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 E2012

*) Supply contracts and Contract work Constant exchange rate applied (Jan 2013) Our Two Business Models

Business-to-Business Business-to-Government

• We search for license- and • IDD*: Profitable division with co-promotion partner(s) ongoing deliveries to the U.S. and other Governments • Our Own Manufacturing • Long-term, successful relations to US Government Agencies

• Our Own Manufacturing

*) IDD Infectious Disease Division 10 US Government Partners

• NIH • BARDA • NCI What did the US Government Pay For

Research & Development CRADAs Grants Contract Research

Bavarian Manufacturing & Infrastructure Nordic Contracts

Vaccines Procurement Contracts

12 Why IMVAMUNE Was Funded

Currently stockpiled vaccines are based on a replicating vaccinia virus which have severe side effects

25% of the population cannot receive current smallpox vaccines

13 U.S. Government Contracts & Scope

Year Contracts with the U.S. Government Value 2003- Early clinical and technical development of IMVAMUNE® USD 130m 2004 500,000 doses of IMVAMUNE® delivered Clinical studies to support Emergency Use Contract expansion in 2007 2007 20 million doses of IMVAMUNE® USD 549m Licensing for at-risk individuals Development for immune compromised Contract expansions in 2011 and 2012 2009 Development of freeze-dried version of IMVAMUNE® USD 95m Validation of production process Preclinical and clinical studies to support advanced development Contract expansion in 2011 2012 Marburg vaccine USD 18m Advanced development of an MVA-BN®-based vaccine against Marburg virus 2012 Foot-and-mouth disease USD 1m Development of a veterinary vaccine against foot-and-mouth disease virus Total value of contracts awarded to-date USD 793m

14 USG Contract Continuum

Product improvement Platform expansion

RFP Freeze Dried RFP Freeze Dried MVA-BN® MVA-BN® MVA-BN® IMVAMUNE® Expansion Ebola/Marburg Marburg Foot-and- Smallpox Vaccine Early research Vaccine mouth disease US$ 40m US$ 54m US$ 18m US$ 1m

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

RFP-1 RFP-2 RFP-3 RFP-2 Expansion RFP-3 Expansions IMVAMUNE® IMVAMUNE® IMVAMUNE® IMVAMUNE® IMVAMUNE® Smallpox Vaccine Smallpox Vaccine Smallpox Vaccine Smallpox Vaccine Smallpox Vaccine US$ 29m US$ 100m US$ 500m US$ 15m US$ 49m

RFP-3 Option IMVAMUNE® Smallpox Vaccine Platform and vaccine development, > US$ 1,100m vaccine production and supply

15 MVA Platform Advantages

Validated • Approved for stockpiling in the US Technology • FDA inspected facility

• Used to vaccinate more than 3,600 subjects, including >950 Strong safety immunocompromised patients • Does not replicate in human cells

• High rate of infectivity 1 Broad Efficacy • Generates inflammatory response 2 • Can express several transgenes 3

Significant • Exclusive owner of more than 600 MVA patents • About 300 patents pending worldwide Patent Position • Patents upheld after oppositions in US and Europe

• Industrialised manufacturing of IMVAMUNE® and recombinant MVAs Scalable • Investment in safety and know-how Ï lead time • Opportunity for gross margin enhancement

Source: 1 Vollmar J, Arndtz N, Eckl KM, Thomsen T, Petzold B, Mateo L, Schlereth B, Handley A, King L, Hülsemann V, Tzatzaris M, Merkl K, Wulff N, Chaplin P. Vaccine. 2006 Mar 15;24(12):2065-70. Epub 2005 Nov 28. Safety and immunogenicity of IMVAMUNE, a promising candidate as a third generation smallpox vaccine 2 Delaloye J, Roger T, Steiner-Tardivel Q-G, Le Roy D, Knaup Reymond M, et al. (2009) Innate Immune Sensing of Modified Vaccinia Virus Ankara (MVA) Is Mediated by TLR2-TLR6, MDA-5 and the NALP3 Inflammasome. PLoS Pathog 5(6): e1000480. doi:10.1371/journal.ppat.1000480 3 García-Arriaza J, Nájera JL, Gómez CE, Sorzano CO, Esteban M. PLoS One. 2010 Aug 24;5(8):e12395

16 Product Improvement & Platform Expansion

Cost Effective Storage Freeze-Dried Formulation ($53M USD Investment – BARDA) Platform Expansion Enhanced Immunogenicity ($18M USD Investment – NIAID) Animal Vaccine Development ($1M USD Investment – DHS)

17 Success Requires Understanding:

• The Federal Acquisition Regulations (FAR). The FAR ensures uniform policies and procedures for acquisition. The FAR is cumbersome especially for smaller companies or those without government contracting experience. • Where to look for opportunities www.fbo.gov • The types of solicitations and contracts, Broad Agency Announcements, Request for Proposals, Cost Plus, fixed Fee, SBIR, CRADA

…. And Patience

18 Cooperative Research & Development Agreements (CRADAs)

Agreement between a Private Company and a Government Agency

• Provides incentives that help speed the commercialization of federally-developed technology • Has a Duration: Periods of 5 years • Permits partner to retain exclusive rights to a patent or patent license

19 Broadly Applicable Technology Platform

PROSTVAC® CV-301

• Prostate cancer • Breast, Lung, Colorectal, Ovarian, Gastric, Bladder, Liver Esophageal and Renal cancer

PSA CEA MUC-1

TRICOM TRIad of CO-stimulatory Molecules LFA-3 ICAM-1 B7.1 VF Prime-boost: Vaccinia + Fowlpox

GM-CSF can be used as adjuvant in both PROSTVAC® and CV-301

20 Our Relationship & the Goal of CRADA

• BN in-licensed PROSTVAC & CV-301 from the NCI • Cooperative Research and Development Agreement (CRADA) with the NCI • Preclinical and clinical research performed in collaboration with the NCI aiming at: • Developing new improved pox virus based cancer vaccines • Clinical studies with PROSTVAC & CV-301 in additional indications • Development of new technologies, IP and products

21 What do the Partners contribute?

NCI Bavarian Nordic

•Cutting edge •Industrial Partner Academic •Operational Competencies Excellence •Funding of selected •Manufacturing trials Infrastructure

22 What makes Bavarian Nordic such a Good Partner?

We Co-operate

We Co-ordinate

We Collaborate

We Perform

23 For further information: www.bavarian-nordic.com 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 in the forward-looking statements. Forward-looking statements include statements concerning our plans, objectives, goals, future events, performance and/or other information that is not historical information. 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.