BioWorld International Correspondent

Danish vaccine development firm Bavarian Nordic A/S is looking to raise a maximum of DKK83 million in a rights issue of up to 1,185,115 new shares, which have been priced at DKK70 per share. Several existing shareholders have committed to taking up half of the equity on offer, representing DKK41.85 million.

The remaining stock is available to new investors and existing shareholders. The latter have pre-emption rights at a ratio of three to one - shareholders would be entitled to subscribe for one new share for every three shares they hold currently. Carnegie Bank A/S, of Copenhagen, Denmark, is advising Bavarian Nordic in connection with the offer, which runs June 7-17.

The move is intended to provide the Copenhagen-based company with sufficient working capital to survive the summer. "We don't really have an incentive to go for too much because the share price is too low," CEO Peter Wulff told BioWorld International. Revenues from a EUR17.6 million vaccine supply deal the company signed last month with Powderject Pharmaceuticals plc, of Oxford, UK, will flow in the autumn, apart from an up-front payment the company has received. It forecast sales of DKK300 million in the current year and profits of DKK50 million for the same period.

The fund raising takes place against a backdrop of consolidation among European vaccine firms. Last week, Berna Biotech Ltd., of Berne, Switzerland, unveiled a EUR279 million acquisition of Rhein Biotech NV, of Maastricht, the Netherlands. Last year, Powderject acquired the SBL Vaccin unit of Active Biotech AB, of Lund, Sweden. It gained a 5.6 percent stake in Bavarian Nordic as part of the recent supply agreement.

Does Bavarian Nordic intend to participate in the consolidation? "I think that as founders of the company, it's always most fun if you stay independent and grow and thrive," Wulff said. "Nobody is set on this earth to stay independent forever if it makes sense to merge," he added. The company is not looking to make any acquisitions itself, however. "We are not geared financially to take over other companies," he said.

Bavarian Nordic's sales are derived from government supply contracts involving its two unlicensed smallpox vaccines, MVA-BN and Elstree-BN. The company also has three HIV projects in development, one of which is in Phase I/II trials, plus a Dengue fever vaccine program. Data from a Phase I/II trial of a candidate metastatic malignant melanoma vaccine have not proved encouraging, however. "We have to look at the final report, but our feeling is the immune response on the molecular level is too low," Wulff said. "We are virologists, specializing in infectious disease. Probably, we should stay there."

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