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Bavarian Nordic Wins $228 Million U.S. Smallpox Vaccine Deal

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April 17 (Bloomberg) -- Bavarian Nordic A/S, Denmark’s largest vaccine maker, won a two-year, $228 million U.S. government contract for a smallpox vaccine that accounts for almost all the company’s revenue.

Bavarian Nordic relies on the vaccine for about 95 percent of its sales, Chief Executive Officer Anders Hedegaard said in a phone interview last year.

Hedegaard had warned that the Kvistgaard, Denmark-based company might fire hundreds of workers and shut a factory in Denmark if the Department of Health and Human Services didn’t order the work. The award means the jobs and factory aren’t at risk, he said yesterday.

“We were very confident something would materialize as time went on, and that’s what we’re seeing here,” Hedegaard said yesterday during a conference call with reporters and analysts. “We are moving on and are happy with it.”

Bavarian Nordic rose less than 1 percent to 70 kroner ($12.25) in Copenhagen trading today. It earlier touched 78 kroner, the highest intraday price since May 27, 2011.

Bavarian Nordic’s Imvamune vaccine is meant for people with atopic dermatitis and compromised immune systems. They are at risk of severe adverse reactions to the regular smallpox vaccine.

Emergency Stockpile

The company was awarded a $500 million contract from the health agency for Imvamune in 2007. The initial batch in the federal stockpile had begun to lose potency, the U.S. health agency said last year.

Bavarian Nordic had expected a new order in June 2012. The health agency said in August it was balancing the need to maintain a stockpile of emergency medicine with the development of new products during decreasing budgets.

Gretchen Michael, a spokeswoman for the health department’s Office of the Assistant Secretary for Preparedness and Response, said the order wasn’t delayed.

The new award will ensure the U.S. has a total of 20 million doses of Bavarian Nordic’s smallpox vaccine in stock in case of a public health emergency, the company said yesterday in a press release.

Bavarian Nordic is guaranteed to receive $110 million for 4 million doses of its Imvamune vaccine. The remaining $118 million, for another 4 million doses, hinges on the availability of U.S. funding next year, company officials said during the call.

To contact the reporter on this story: Kathleen Miller in Washington at Kmiller01@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

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