Thank you, operator, and good morning to someone. Good morning. Good afternoon to the rest. Before we start the presentation that will be conducted by President and CEO, Paul Jafflin and Executive Vice President and CFO, Henrik Gull. I would like to read the following statements in our disclaimer.
This presentation includes forward looking statements that involve risks, uncertainties and other factors, many of which are outside 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 petitions for the full year and financial preparedness as of year end as well as statements concerning plans, objectives, stores, future events, performance and or 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 it over to you, Paul.
Yes. Thank you, Rolf, and welcome, everyone, to our Q1 update. So if you go to Slide 3, Bavarian Nordic is a fully integrated vaccine company. And the beginning of last year, we set ourselves A new vision to become one of the largest pure play vaccine companies by 25. And within just 1 year, we have really made huge progress towards that vision and in the execution of our strategy.
So we've greatly expanded with a number of employees to more than 700 currently, and that's to help produce, distribute and sell our commercial portfolio of vaccines where we have currently 4 products around the world. We have built up a commercial infrastructure in key markets, which allows us to sell and distribute these products. And importantly, we are continuing to expand And build on our expertise of commercial manufacturing here in Denmark. Added to that, we have a rather exciting R and D pipeline with 2 near term assets. We have an RSV late stage program that's currently in the human challenge study with data coming later this year.
And we have a COVID-nineteen vaccine, which we're developing as a universal booster vaccine, Hopefully, providing a more durable and broader protection for the current first wave of vaccines. So really some exciting times and data points coming in the next few months. And added with all of that, we have our strong ambition to remain a profitable company And using those profits to develop more products in the pipeline, which will add later to our commercial portfolio. So if you turn to Slide 4. As I've just said, we have a vision to become one of the largest pure play vaccine companies, but we also recognize the importance of protecting and taking care of the world around us and to act in a responsible way in all matters.
Being a vaccine company, however, we're ideally positioned to play an important role in ESG. Vaccines have become extremely topical in the last few months due to COVID-nineteen with rollout and it's clear that vaccines are the really only hope we have of the world coming out of lockdowns and getting back to normal. However, vaccines have played an important role for more than the last 200 years and have really improved the world's health. As you can see from the quote from Gavi, 14 of the 17 strategic goals can be achieved through vaccines. So as I said, we are very well positioned to play an important role.
And obviously, our investors and stakeholders Hopefully, you will join us in that journey. If you'd like more information on our work on ESG, you can see that in the CSR report that's available on our website. Turning to Slide 5. We've had an extremely busy and productive Q1. While we still face some rather strong headwinds for our rabies franchise due to COVID and the travel restrictions, and I'm sure Henry will come to that in the coming slides.
We are seeing some signs of stability on tick borne encephalitis despite COVID. Similar to last year, smallpox contracts, both in with the U. S. But also with the New orders from EU countries have allowed us to record larger revenues in Q1. And that leaves us with the confidence that we maintain our full year guidance that we set a few weeks ago.
You have heard the news this morning and I'll come back to that in the coming slides that we're expanding our portfolio of And I'll come back to that in the later slides. But that is a very exciting development considering that we've only set up our commercial enterprise in Germany 9 months ago. If we look at some of the orders, as I said, It's interesting that we're starting to see an expansion of orders outside of the U. S. For Jynneos, that smallpox vaccine, both in Europe and also in Canada.
And as I've said, that's allowed us to record slightly higher revenues in Q1 and Canada will probably be revenue recognized next year. The U. S. Government continues to honor its options of the order that was placed a few years ago with another $12,000,000 exercise of an option. And on Ebola, we've seen some exciting news, where together with our partner, Janssen, we're going to manufacture additional doses, which will help be distributed and help with the current outbreak in Central and Western Africa.
And we've also announced the news that our vaccine is WHO prequalified, which will allow an easier distribution of these vaccines in areas that are desperately needing and Ebola vaccine in the current outbreak. On R and D, and I'll come back to this in the coming slides, we've probably seen the best preclinical data of any COVID-nineteen vaccine candidates, and I'll walk you through that. The Phase I data from our partners with Adapt Vaccine Expression and the EU Consortium is confirming the early data is confirming that very strong preclinical data. And we're about to initiate a Phase 2 study, which I'll come back to. And on RSV, as I said, We're halfway through a human challenge study, where we'll be reporting data from that exciting study later, this year.
So if we turn to Slide 6, as I said this morning, we made an important announcement that we've come to an agreement Dynavax, where we will market and distribute the highly innovative 2 dose vaccine against hepatitis B, at this lab B, and that will be launched in Germany later this year. This will break the current EU monopoly, which is currently valued at about $27,000,000 annually. And as you see on the right part of that slide, This next year will add to a very strong portfolio of commercial assets that we'll have in the largest EU market. And as I said, if you just go back 9 months, we had no commercial presence in Germany. And within that 9 month period, we're very proud to announce that Dynavax has approached Veranoortic As the ideal company to distribute market their innovative vaccine, which has an advantage over the current vaccine And that is a 2 shot vaccine providing very strong efficacy within 4 months within 1 month, sorry.
So actually, it's a 3 shot regime that's currently been around for a number of years that takes 6 months to complete. And as I said, this will add to a very strong portfolio we already in the largest EU market. Turning to Slide 7. So COVID-nineteen and one of the questions I often get is, aren't you a little late? And why are you developing a COVID vaccine when most of the world, particularly in Europe and the U.
S, is already vaccinated or will be shortly? Well, there's a couple of issues with the first wave vaccines. Thank God they're here and we can all get protected from COVID-nineteen. However, the durability and the breadth of protection that they provide is a little unclear. So we don't know how long they last or whether they truly protect against some of the more serious variants that are emerging, and I'll come back to that in the coming slides.
It is unlikely or most people in the community believe that COVID-nineteen can be eliminated through vaccination. And it's likely just like other infectious diseases that we'll have to manage the burden of disease through vaccination and frequent or additional boosters are going to be required. Obviously, the bottlenecks that we've experienced in the last 6 months have highlighted the need that more vaccines are More vaccine manufacturers are required to meet the current demand. And lastly, the first wave of vaccines, there's a lot of question marks whether they are really truly suitable as booster vaccines. So 2 of the first wave vaccines are based on an adenoviral vaccine platform.
It is known from the literature that they suffer from a pre existing immunity generated to the viral vector itself, Which may make frequent boosting difficult or impossible or certainly reduce their efficacy. And with RNA, There is now growing concerns that there are quite some Grade 3 systemic adverse reactions that are in theory with additional boosters. So some data that Moderna have published, the Grade 3 AEs or adverse reactions, systemic adverse reactions were at 2.7% in the first vaccination, Going up to 9.7% after the second. And in their booster study, which they've reported, it's almost 15%, Clearly increasing after shot after shot after shot and that raises questions, is this platform really the ideal platform for regular boosters. So from our position, with everything I've just said, there is room and a need for improved vaccines, both from the safety perspective, the durability perspective and the breadth of protection, respectively.
We go to Slide 8. As I said, we've probably published some of the strongest preclinical data for any COVID-nineteen vaccine, and I will go through that in the next slide. Our platform, which is based on a VLP or viral like particle platform, It's relatively easy to produce and or adapt. Should there be a need to adapt the vaccine for new variants? Should could be further mutations beyond what we're already seeing.
And as I said, we're our partners and the EU consortium are already in Phase 1, where we're beginning to see some data confirming the preclinical data. And within a matter of weeks, we'll be starting a Phase 2 study, While we're also in parallel gearing up production to potentially start Phase III should we be able to secure funding in the coming weeks months. So if we turn to Slide 9, I keep talking about the best preclinical data, So let's talk about it. On the left hand side is the neutralizing titers that are induced in primates following 2 shots of a non adjuvanted ADN COF2, which is our COVID-nineteen vaccine candidate. Now it's known from the literature that the level of neutralizing antibodies is predictive of the final efficacy that you may see in the clinic, And that is by comparing to convalescent human serum.
And many publications are saying that your clinical efficacy should be greater than 80% If you have a ratio of 1 or greater to the human convalescent serum, you can see in primates, we have a 50 fold higher Neutralizing titers with our vaccination compared to the high convalescent sera, which bodes well to predicting a high efficacy in the clinic, which, of course, still needs to be tested. In these animals, There was complete protection following a challenge with SARS CoV-two, which again bodes well for strong efficacy in the clinic. On the right hand side is some additional neutralizing data where we've looked at the serum from the primates and their ability to neutralize new variants or some of them are quite old variants. So Wuhan is the main strain that obviously emerged from China and is equivalent to the data on the left hand side of the graph. The middle is the British variant, which as you know was shown to be more infectious in the U.
K. And on the far last column is a South African variant, which is causing issues around the world. And what we see is that we see exactly the same neutralizing tires, 50 times higher than human convalescent sera and no difference between the variance and the Wuhan strain. This is not the same data that others have published for current proved vaccines. For example, in a publication, The Pfizer BioNTech data shows that there's almost a 3 fold lower neutralizing titer against the South African variant.
The Janssen vaccine actually reported 74%, if I'm correct, efficacy in the U. S, which is primarily at that time Wuhan and only a 57% efficacy in South Africa. So again, a reduced efficacy probably associated with a lower neutralizing titer. So these data really bode well that our vaccine by generating such High neutralizing titers is going to give a broader protection against the current circulating variance than the existing group activities. Slide 10.
So as I said, we have Phase I trial ongoing sponsored by our partners and the EU consortium. They've already reported preliminary data showing that the vaccine is extremely well tolerated, particularly in its non adjuvanted form And induce these high levels of neutralizing antibodies, again supporting the preclinical data that I've just shown you. In June, Just a few weeks away, we'll be initiating a Phase II study, which is shown in the bottom half of this slide. It will be essentially 2 groups. One group will be seronegative, I.
E, not previously vaccinated or infected, And they will be receiving a primary vaccination regime of 2 vaccinations 4 weeks apart. And Group 2 will all be seropositive, so previously vaccinated, and these will receive a single booster with our ABN COV-two candidates, which is how we believe we'll be developing the vaccine primarily in Europe and the U. S. And these days, this will lead to data that we will be reporting mid of this year. So changing tracks a little bit, moving to Slide 11, talking a little bit about RFP.
As you are all probably aware, we announced at the end of last year, we were delayed in the initiation of our Phase III Due to the low infection rates of RSV caused by the shutdowns and the social distancing and all the other measures associated with COVID-nineteen. We are, however, doing a human challenge, which is currently being conducted, And we will be able to report the data from this study later this year. That will hopefully give us added confidence that we are truly looking at a highly efficacious vaccine, and that will hopefully allow us to initiate the Phase III study next year. So on Slide 12, we've been investing quite heavily in our manufacturing plant, adding a fill finish capability, state of the art fill finish manufacturing, Which is now complete. We are actually in the process of transferring a number of products to the line.
The liquid frozen formulation of Jynneos It's very advanced, and we should be validating that process in the coming weeks. We've already initiated the first engineering runs also for The freeze dried version of Jynneos. And I'm pleased to announce that we've also initiated the first engineering runs for Rabipur, Really indicating that our tech transfer activities from GSK remain completely on track. In addition to that, we're expanding our bulk facility to allow us to produce the bulk for both, Rabipore and Ensu Por. That is going extremely well, on track, on budget.
And later this year, we will be shutting down at BOLT facility. As we start to reconnect both the expansion part that is ongoing right with the existing Building 1, as we call it, where we've currently been manufacturing a smallpox vaccine. So as planned, there will be a shutdown of the bulk manufacturing. But as I said, that's all part of the plans. And when we've finished all this work, we truly believe we're creating a center of excellence of vaccine manufacturing based on set cells.
So as I said, highly productive. Q1, a lot happening, There'll be a lot more news flow coming in the coming months. But with that, I will hand over the presentation to Henry.
Thank you very much, Paul. So on Slide 13, we will start the presentation of the financial results. But before we move into the Our core financial numbers, let's have a look at the performance and the market development for our 2 vaccines, the rabies, our
We have
Farbickel, Abavere and our TBE vaccine in support in these markets. And on Slide 13, it's all about our Radius business. As we have preached many times now, I think when we look at the previous markets, I think we have to distinguish between the U. S. Market and the German markets as they are very different markets.
And if we start with the German market, which is at the bottom of the slide To the left, you will see that the German market has since Q1 2020 declined by more than 90%. This is due to the fact that the German market is nearly 100% a pre exposure market, meaning a traveler's market. Rabus is not endemic in Germany. So the market here is really a traveler's market where people vaccinate when they go to all the relevant countries. So the situation is that there is nearly nothing left in the German market at the moment.
And we are of course awaiting Travel patterns returning to normality and then we expect the market to come back full force again. And I think what's worth mentioning here is that when we are comparing to the Q1 2020, we are comparing to a period just before The COVID-nineteen situation really started last year. So 91% down The German market and which is a good proxy for all the European Radius markets unfortunately. If you look at the U. S.
Market, this is a very different Sorry, as the U. S. Market consists of post exposure and the pre exposure market as rabies is endemic in the U. S. Market, Which makes it a much more resilient market to the COVID-nineteen situation.
However, that said, we are still seeing a decline in the U. S. With the market being down 21% Q1 of this year compared to prior year. So how have we performed under these conditions? We can see that to the right side of the slide here, We delivered total revenue of DKK80 1,000,000 for the Q1 against DKK280 1,000,000 last year, so a decline of 63%, Explained primarily by the COVID-nineteen impacts, but also by the fact that last year, the Q1, Before COVID broke out, we had an extremely strong first quarter as we also faced a situation with our competitors being out of stock and adding to that also wholesalers stocking up to ensure that we could safely deliver into the market.
So we are comparing against a very strong first quarter, but we also feeling the impact of the pre exposure segment, both U. S. And Europe, they're being significantly down. I think the good key message to take away here is that our market share is still performing well. We have in the U.
S. Today approximately 73% of the market. We did lose some percentage points as our competitor came back in the Q4 of last year, but that was fully expected naturally. But we are happy to say today that even today we have 5% to 6 percentage point higher than the average share in 2019 before we took over the responsibility of this Radius business. So a strong position and we are well positioned to grab the market when it comes back and travel resumes again.
On Slide 14, let's have a look at the TB tick borne encephalitis market, This is a pure European business. And here we have shown the German market as an example for how things are looking in Europe, we do not yet have the full consolidated market data for all of Europe. The indications we get that the total market in Europe is down in the Q1 compared to last year due to COVID, But actually with Germany being the exception, we have seen in the Q1 of 2021 an 8% nearly an 8% growth compared to the same quarter last year, which is a good sign that things are returning to some more Normal situations in the German market. The TBE demand for TBE vaccines as such Should not at all be impacted by the COVID-nineteen situation. But of course, the access to your physicians, etcetera, Pat, you're going to impact the social market.
But with an 8% growth right now, I think that is a good sign for the current vaccination season. If you look to the right, you will see our numbers. We delivered revenue of DKK 98,000,000 Danish kroner for the Q1 against DKK103 1,000,000 last year, so 5% down. This is caused by the total combined European market being somewhat down, the Germany being the exception of course. And then it is also due to some inventory movements at the wholesalers.
And again, key good takeaway here is that We have actually since we took over gained market share with our TVE business. In Germany, I think we have gained year to date this year 0.3 percentage point markets here. So again, very well positioned to grab the market when it comes back in Europe. And hopefully, I think what we are seeing in the Q1 is just Germany leading the way. Next Slide 15 shows our profit and loss for the Q1 where we delivered a strong Top line with DKK535 1,000,000 of revenue driven by strong smallpox revenue, $336,000,000 was actually coming out of the smallpox business as you can see the donut chart to the right.
$246,000,000 of that was revenue for products BDS pads has delivered to BARDA as part of the $202,000,000 order we got last year. And the other part, DKK 90,000,000 It's related to the 3 European countries to whom we had supplied smallpox vaccines as well. This is a little more than the €11,000,000 that we announced previously and simply due to somewhat better pricing terms. You can see the 2 products we already talked about, Insukur coming in the 98,000,000 Danish kroner in revenue and Arbicur 80,000,000 Danish kroner revenue and finally a small piece of contract work coming from BARDA funding of our Phase 3 study and qualification of some of the work going on with our fill and finish facility. Production costs came in at DKK377 million, which gave us gross profit of DKK 158 million.
R and D added up to DKK122 1,000,000 nearly twice as high as the level we saw in Q1 of 2020 And driven by RSV in the Q1 here, we have during the Q1 manufactured all the materials that we will need for A planned Phase 3 trial for RSV and we have also started the human challenge trial. So quite A lot of money has actually been spent on the RSV projects. This RSV manufacturing has actually also impacted our production cost for the Q1 as we are using our commercial facilities also to produce clinical material. And Of course, we allocate costs to those R and D projects and a lot of that has gone into the R and D line. But we are not allocating this on a 100% basis, meaning there is some infrastructure costs, etcetera, which is not being absorbed Hi, commercial products when you manufacture for R and D, so there is also a negative impact on production cost for the Q1 due to the manufacturing of the RSV material.
SG and A costs came in at DKK124 1,000,000 more or less at the same level as we saw in the Q1 of 2020, But with several moving parts underneath that, we have seen, for instance, on distribution a significant saving
As we
have moved away from the GSK distribution network and now it's started at home. On the other hand, we also had particularly on admin relatively low level of admin costs in Q1 of 2020 as we were only starting up or ramping up the integration project for the and support our products integrations. Well, all in all, adding that together, SG and A costs slightly below the level we saw in prior year. All of this together gives us an EBIT for the Q1 of the minus DKK88 1,000,000 And deducting depreciation and amortization or adding these back gives us an EBITDA for the quarter of DKK1 million. And I think with this situation, again, strong revenue driven by our small part business this time.
We have gross profit and OpEx impacted by the RSV, the manufacturing of Phase 3 material in Switzerland. We still have a positive EBITDA. And with this, I think we are in a position where we can maintain our revenue and EBITDA guidance. Turning to Slide 16, Quick update on our cash flow and balance sheet. If you look at the cash flow, stable to the left, then we delivered Net cash flow for the period of minus $43,000,000 this was of course driven by a negative net profit for the period And all was strongly supported by the proceeds from the private placements that we did, raising approximately DKK 1.1 DKK1 billion.
And then cash flow from investment activities reduced Our cash flow for the period by nearly $1,100,000,000 most of that was really related to placing of the liquidity In securities, but also some of it approximately DKK100 1,000,000 was related to the continued investments in our property and Continued investments in our tech transfer plans. To the right, just a few selected balance sheet figures. I would just mention the equity here. We have seen an increase to now nearly DKK6 1,000,000,000 And of course positively impacted by the recent private placement we did. And then I think after the quarter and after this private placement, We have a very, very strong cash position of nearly DKK 2,600,000,000 allowing us the flexibility to move ahead with our strategy and on our obligations to GSK during the next periods.
So with this numbers on this slide here, happy to say again that we can also maintain our cash guidance for the full year. On the next slide, to the left, we have an overview of our 2021 financial outlook and guidance. And as I said, we are maintaining this guidance on all aspects, both on the top line where we are guiding A level of DKK1.9 billion to DKK2.2 billion and EBITDA of DKK100 million to DKK250 million and a cash position of Between $1,400,000,000 $1,600,000,000 paying stronger. We are still seeing some uncertainties in the market and we haven't seen The reopening as we had hoped for earlier this year, so therefore, we still stick to this way of guiding with using insulins. But of course, we do hope that we get some more clarity on the market situation for the rest of this year during the next quarter here, so that we can come out with Hopefully, a more precise guidance in connection with our Q2 report later.
And as we have said previously, I think, of course, The lower end of the guidance really reflects a delayed reopening, whereas the upper end really reflects that we should see The reopening happening now basically and with an effect that could mean already some traveling starting to occur later this year. We've also previously said that the smallpox and Ebola business are not expected to be impacted by COVID-nineteen. That's still the case. Well, as you will have seen, we did announce the addition on Ebola of $28,000,000 recently. We announced that and we stated that there would be no impact on our guidance from this as we had to agree with all the customers to defer delivery of some of their products into next year.
Finally, On the right hand side of this slide here, just a brief overview of what are the key activities and priorities for the remaining part of 2021. Within R and D, I think it is, of course, We had some very exciting period ahead of us in terms of the human challenge trial, where we expect to have readouts in September. We will continue to prepare ourselves for an initiation of the Phase 3 trial next year on RSV, But of course also continue to be monitoring the market to see what is the prevalence of RSV, how feasible do we assess that it is to conduct So Phase 3 given the COVID situation. And then of course also a lot of resources are put behind Our COVID-nineteen vaccine candidate, which we are as Paul said, we are accelerating into Phase 2 within a couple of weeks. In parallel, so that we are working to scale up manufacturing so that we can produce volumes at Phase III levels.
And then I think finally on R and D, I can mention also that we are continuing to work with our new Construct take back, intravenous administration of Brachyury will continue throughout this year. And then on the commercial side, of course, this is still to continue to drive the profitable growth and the key activity will be to take over the remaining countries in terms of marketing authorizations and distribution. We are nearly there and actually expect that by the end of June, We have taken over all markets. One activity that we can now add to the list on commercial is, of course, Now we know we have HEPLISOL on board from Dynavax and a key activity will be to launch Had a successful launch for this product in the Q4 of this year. On the manufacturing side, the Phil and Viennese facility It's up and running.
Construction complete, qualification nearly complete. This year, we will pass a very important milestone as we will Still the first commercial box underlying. And of course, in manufacturing, I think it's all about Staying on the right path and complete the construction that we need, the amendments we need to the board facility to transfer manufacturing of the rabies and CBD products and then of course continue to stay on plan on the tech of these products as well. So with that, I will give the word back to the operator for question and answers, please.
Thank you, sir. Sir, your first question comes from the line of Michael Novod from Nordea of the Equities. Please go ahead. Your line is open.
Thank you very much. It's Michael from Nordea and Copenhagen. So three questions, please. First of all, the preliminary data you've seen out of the first phase, Phase 1 trial with ABN CV2. Can you probably detail a bit more on that?
Is it for the low dose cohorts? I would assume it is. And then just maybe try to explain what you're actually seeing in terms of neutralizing antibodies. And then secondly, I know it's very difficult to comment on these sort of funding discussions, but is it still the belief that the Most likely funding should come from government funding? Or do you also still pursue other avenues regarding funding for ABN CV2?
And then lastly, on the manufacturing temporary shutdown, you're doing according to plan. Maybe you could just talk a bit about Sort of the sort of the structure of this, whether it will have any implications, whether you are sort of manufacturing in advance to meet demand, etcetera, just to get a bit more light on the potential impact from this.
Yes. Thanks, Michael. So yes, the preliminary data from the Phase I is using the lower doses. So and if you remember, our partners are looking at both non adjuvanted adjuvanted vaccine. The main conclusions from the study, apart from the fact that it's well tolerated, Is that the tolerability is better with non adjuvanted, which is exactly what you'd expect.
Not that It's bad with the adjuvant, but it is improved without the adjuvant. And lastly, in terms of the immune response, It's kind of in line with what we're seeing from preclinical. So we're seeing superior tired as compared to human convalescent sera even at the very low doses. And the dose that we're going to move forward with is much higher. So they're now moving to the slightly higher doses in that trial.
So really, really encouraging. I mean, it looks pretty good. In terms of funding, I think at this stage, it's safe to say that We are following a number of different tracks still. So of course, there is what's out there in the Public in terms of the open discussions that we're having apparently with the Danish government. That's public, so I can mention that.
We're also looking at other funding, CEPI and whatever, but That's more early stages. So I think nothing's really changed since the last time we talked. We're talking to governments, and we're looking for funding from the usual sources. And in terms of manufacturing, our main Goal right now is to scale up and manufacture to supply Phase 3. We are, however, beginning to prepare for commercial production.
But again, as we've said before, the commercial production piece Really requires additional funding, also for the Phase III. So of course, we're not sitting on their hands, doing nothing until we get funding, but the bulk of that activity really means to wait for funding.
Yes. And then Michael, I think you had a question on the announced manufacturing shutdown as well. Maybe I can take that one. This is a planned shutdown, but something we wanted to highlight here as well because of course it has implications. But as it is long planned, I think we have also planned the manufacturing schedules around it.
For instance, we now Manufactured all the Ebola batches that we need to deliver on with the latest order to Janssen. We managed to get all the RSV materials, Phase 3 material manufactured before we do this plant shutdown. So it's simply a necessary thing to do to connect the 2 new buildings or the new building to the old one once the new one has been constructed. But of course, it is something that you don't want to drag on for too long. It does impact your flexibility to manufacture bulk in this facility And it does impact your financials when you're not manufacturing commercial products in this facility.
But as I said, it's all planned and it's factored into our guidance for this year. So there's no additional impact, but and I think one thing that will help us offset a negative impact of having sort of higher capacity In some quarters, it will be that we are actually for the first time this year, we are going to use our fill and finish facility for commercial manufacturing. So you can see there we start having the opposite situation for the first time actually using one of our facilities for commercial use. Okay. Thanks a lot.
Sir, your next question comes from the line of Boris Peaker from Cowen. Please go ahead. Your line is open.
Great. My first question is on the COVID vaccine. What's the development timeline from today until approval. I'm just curious what data do you need to see in order to decide to make a Phase III investment?
Yes. So as I said, Phase 3 started in a few weeks initial data readout in August. Again, if we just ignore the whole funding piece we've been talking about, we would be in a position to start Phase III towards the end of this year. And again, if the regulators are still supporting accelerated reviews. We could see an approval mid of next year.
Got you. And maybe my second question is on the RSV.
I'm just curious if we
could set expectations for the human challenge study, specifically in terms of data that you need to see in order to move forward. And also you outlined a timeline Starting an RSV study in 2022, I'm just curious with probably a lot of people still working from home and wearing masks.
I mean, what do you need
to see socially from social interaction to decide that 2022 It's a good year to do an RSV study.
Yes. So first of all, the challenge component. So in the challenge study, we're obviously treating or Vaccinating subjects either with our vaccine or with placebo, and then they will be challenged with RSV. And there will be tracks for a number of for a period post challenge. And we're really looking for a Significant reduction in the viral load in the blood.
As you know, these are healthy individuals. And even in the placebo group, they will eventually clear the RSV. So you're really looking for a delta or a difference between the vaccinated arm and placebo arm. We haven't publicly said what the threshold is that we're looking for. But no, I have publicly said before, if we don't see an effect, then The program is not going to move forward.
In terms of the trigger to start of Phase III. It's a very good question. We are tracking the incident rates of RSV, and they remain Extremely low. I don't know whether you saw GSK has announced they're initiating the Phase III, They updated their protocol from 18,000 subjects. I think it was to 25,000 subjects just last week.
My speculation on that is probably that's due to the low rates of RSV. So I think our decision not to move ahead this year has been endorsed as being far too risky, But we are monitoring it. But it's a bit like exactly the same situation last year. We were monitoring it. And at some point, we had to make a decision, are we going or not going?
But we certainly need to see the rates of RSV raise to more normal levels that we saw before the pandemic.
Got you. Okay. Thanks for taking my question.
So your next question comes from the line of Peter Welford from Jefferies. Please go ahead. Your line is open.
Hi. Thanks for taking the questions. I've got a few. Firstly, just sticking on COVID-nineteen, I'm curious there when you say for the Phase II study that you're planning That's the roughly, I think, part of them was seronegative and part of them was sero positive. Are the seronegative subjects, subjects who have had a vaccine or an infection and test negative at a certain time post that event.
And therefore, due to an underlying condition, I guess, or due to time? Or are they actually patients who have not yet been infected or not yet been And then also if you could just outline what the endpoint is, please, for the Phase II study that you're looking at. Secondly then, just with regards to Japanese encephalitis and cholera. I appreciate you've yet to transfer them into you, but I wonder if you could give us Some idea of what you see the German market opportunity is currently for those that pays from Van Vlneever. And then finally just on J and J, just curious there if you can give us any updates at all on the status of any of the J and J collaboration vaccines, whether or not there's any news we can expect on those or any other progress you can report.
Thank
you. Yes. Thanks, Peter. So on the COVID Phase 2, The seronegative arm currently is planned to be truly seronegative, so previously not vaccinated or infected. So that's the group we're going for.
And on the seropositive, obviously, people with a proven vaccination and the fact that they actually have antibodies. And clearly, timing is important here. I kind of get the question. That's why we're starting in a few weeks. And we'll be conducting that study in both the Netherlands and Germany.
And we believe it is doable to identify those subjects.
Sorry, just
to be clear, will you presumably you'll test Some
of these patients for antibodies at the start because obviously there's some potentially asymptomatic. And I guess I'm just thinking it's becoming increasingly difficult to necessarily know as well who's had a prior infection.
They will be screened and tested, yes. But I guess it's only those people who had a Non symptomatic infection, they wouldn't know that they're being infected. But there are quite actually a few of those. So Yes. They will be screened, and they need to be negative serologically for SARS-twelve Okay.
Great. Thank you.
Sorry, the endpoint?
Yes. Sorry. So obviously, safety is an important endpoint always, but the other endpoint is really looking for a significant increase in the neutralizing antibody titers.
That's great. Thanks. And then, yes, Japanese encephalitis, cholera and J and J, please?
I'll take J and J first. So on J and J, unfortunately, the other collaborative programs that we have, They have been impacted by COVID. So the trials are either put on hold all have been delayed in the initiation simply because it's just too difficult to recruit right now. So on the other programs, we're not expecting any news flow in the near term.
Yes. And on the 2 other products, Japanese encephalitis and the cholera product, I think We haven't guided any specific things relating to our expectations for these products. But I think what we can say is that we are taking all of these products in our markets 1st January, 2022. And obviously, I think they are to the last extend travelers vaccine. So that means they are Negatively impacted as we speak here.
So hopefully, you can say we can put COVID-nineteen behind us and the market It's back from next year when we actually take over to marketing and distribution responsibility in Germany of these products. But as we get closer to that, I think we will come back and make sure that you're better equipped for We'll look at fixations on these products as well.
Thanks. And sorry, is it reasonable to assume presumably should we think of these products in HEPLISAV as largely being a way to cover the cost of your sales force rather than perhaps look at them as being a profit generator, so to speak, if that makes sense.
No, I think definitely. I think we're adding these 3 products now to our existing infrastructure. We're really leveraging the investment we have done there. So it's not something that will turn our P and L upside down, clearly not, but it is going to help us to cover that cost And it will also make positive contributions to our bottom line for these products. So I think it's The way of leveraging, you can say some untapped synergies that we are sitting on with a full commercial infrastructure and only 2 products in the back so far in Germany.
That's great. Thank
And we got another question comes from the line of Jasper Ilsop from
A question on the COVID-nineteen vaccine development as well. So you have Phase III and Phase II data coming up. So besides safety data, what will you look at when you Can you hear me?
Yes, we can hear you.
Okay. There was some disturbances on the line. So what will you look at in the Phase III data as Into your own Phase II data, also considering that you would do Phase II with a higher dose versus the Phase III And the limitation you see in that Phase III study. And how certain is it that your vaccine can be a one shot, Also considering the much better neutralizing antibody titers preclinically with 2 shots versus 1 shot. And then tied to that, What is the most important factor in the data sets when thinking about Phase III funding discussions possibilities, I.
What are these, say, organizations, governments really looking at to make your vaccine stand out? And perhaps you can also touch upon the data you saw from Medicarco and GSK as a read across interim vaccine and how you see the VLP based competition in COVID-nineteen? Thank you.
Yes. Let me see if I remember all those questions. There's a few there. So the ongoing Phase III study is important because our collaborators are really looking at A range of doses starting low, which is the data I've indicated that we have now, but they're also looking at to Adjuvant is a non adjuvant. Based on the preclinical data, it really looked as if we didn't need an adjuvant.
And that's kind of the assumption that we have made already to go into Phase II. The encouraging thing is that already with the low dose data that we have now seen, The two things that we're looking for is safety. Are there any signals that would be of a concern? And so far, albeit with a low number of subjects, It looks very promising from a tolerability point of view. And the other thing we really wanted to confirm was Do we need an adjuvant or not?
Adapt back in most of the data that they have generated pre clinically have always used an adjuvant. So we had little data to suggest to support our assumption that we didn't need it. So the initial data that we've seen has clearly shown that the adjuvant isn't really adding anything in terms of immunogenicity of our ABN COF-two. So actually, as I sit here now, I think I already have the data I need to proceed into Phase II, which is exactly what we're going to do. As I said, what we're looking for in Phase II is a confirmation in large number of subjects of safety, But we also want to make sure, to your point, that the single shot booster in people previously vaccinated is sufficient to generate this strong, broad immune response.
We are encouraged by the preclinical data where the second shot Really makes a big difference in animals that are already primed. So we believe that in people previously vaccinated, primed either with the denoviral platform or the RNA platform or any other platform that we will be able to boost those responses very strong with this candidate because it is clearly Highly immunogenic and really generating strong immune responses. Just trying to remember some of your other questions. The Medicar data, yes. Obviously, always encouraged to see positive data coming out.
It's a VLP technology, but interestingly, it is adjuvanted. So the data that they're seeing requires an adjuvant. And again, I think what that points to me at least is that the platform we have, yes, it's a VLP, but it's a superior VLP in My view, because we have a much denser expression or array of the RBD on the VLP, And we don't need an adjuvant. And as I've said, that's confirmed now in Phase I, but also in preclinical. So not having adjuvant We'll reduce the COGS, reduce the reactogenicity that you'll see when you get vaccinated and make our platform extremely competitive.
But again, it's really encouraging to see that our BLP platform is generating very positive data.
Perfect. Thank you so much. Perhaps you can also touch upon what the most important Factors are when taking discussions with, say, Sapient and the like when they see your data. So what's the most important factors there make your vaccine stand out versus the competition?
Yes. So on that, CETI specifically has got a number of applications out there. One is specifically our new candidate vaccines generating a broader protection. And as I said, I keep saying it, I think we have the best preclinical data that anyone has. No one has shown the same neutralizing targets, particularly against the South African variant as ourselves.
So that is putting us in a pretty strong position. The other application that CEPI is looking at is really for new candidate vaccines that can address the developing world. And again, I think there was the ease of production. We feel confident that we can even address that Maybe through partnerships with others, but we can address that as well. I think when it comes to government or governments, It's really about hedging their bets.
The EU has done a big deal, obviously, on the RNA vaccines. There's a lot of people raising concerns that maybe are we putting all our eggs into one bucket? And as I said, there is now Data coming through where there is quite some alarming adverse reactions, systemic adverse reactions on repeated vaccinations. It is also known in the RNA platform that you're really not getting the same sort of strong protection or immunity, I should say, against the different variants. So I think we're well positioned in our discussions that on the data that we have, and it's growing day by day, that we have a rather unique candidate that is addressing a lot of the concerns that exists right now, both from funding agencies like CEPI, but also governments around the world.
Thank you so much,
you everyone for attending the call and for your questions. So have a great day and we'll catch up next time.