Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to today's 2018 Annual Report conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question- and- answer session, at which time, if you wish to ask a question, you will need to press star and 1 on your telephone. I must also advise you that this conference is being recorded today, Thursday, the 21st of March, 2019. I would now like to hand the conference over to your speaker today, Rolf Sass Sørensen. Please go ahead.
Yeah, thank you. My name is Rolf Sass Sørensen, VP, Investor Relations. With me today, I have Paul Chaplin, President and CEO, as well as Executive Vice President, CFO, Henrik Juuel. Before we start the presentation, I would like to read the following statement. 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. 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 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 Paul.
Thanks, Rolf, welcome everyone to our annual accounts for 2018. Last year was a highly productive year, through our continued investments in R&D, we made significant progress in developing our pipeline assets. In our investment in our fill-finish facility, which was initiated last year, we're nearer to securing higher revenues in the years to come. We reported key positive clinical data that confirmed our position as a global leader, as a developer of both smallpox and RSV vaccines. We filed the BLA for our smallpox vaccine. That was accepted with priority review in December, we anticipate an approval in September this year, with an award of a priority review voucher, which is our intention to sell. We initiated construction of the fill-finish facility.
This will expand our manufacturing capabilities, as I said, and I'll get into more details, it will help secure higher future revenues from our existing order. This investment has been partially offset through an award of a contract from the US government for $44 million, which will fund some of the soft work in terms of the tech transfer and the validation of the process. We've made very significant progress on our immunotherapy assets and have initiated four proof-of-concept phase II studies for both CV301 and BN-Brachyury. As I'll get into, we anticipate and are quite excited to see data readout later this year from some of those studies.
Wanting to remain at the forefront of development of vaccines, we announced new innovative approaches for immunotherapy to treat cancer patients, and some of these studies are expected to start already later this year. The vaccine platform, MVA, was again recognized by the US government as a useful vaccine platform with the award of a $36 million contract from the Department of Defense to develop a vaccine against equine encephalitis, which is yet again another biological threat, and again, shows the confidence in the US government in the utility of our vaccine platform.
We also made significant progress with our Janssen partnership, which goes from strength to strength, and they initiated a phase I/II-A clinical study earlier this year for a therapeutic HPV vaccine, and the IIa component of that study will trigger one of our first clinical milestone payments of $12.5 million, which we anticipate will happen later this year. Moving to slide 4, I want to talk a little bit about the vision and our strategy. Our vision by 2023 is to be a leading and profitable biotech company, and through harnessing the power of the immune system, we want to continue to develop, manufacture, but also commercialize products for infectious diseases and cancer. Given our healthy cash position, we have a long runway where we believe we can execute on our strategy, which is defined by four main goals or pillars.
The first is to maintain our global leadership as a smallpox vaccine. The second is to expand and rapidly advance our infectious disease pipeline. The third is to establish a deep and broad cancer immunotherapy portfolio, the last, to expand our commercial footprint and capabilities. In the slides ahead, I'll walk you through some of the key activities that we that we managed in 2018, also our future plans on how we will execute on these strategies and return to a profitale company in the years ahead. Moving to slide 5. We have, over the last few years, really cemented ourselves as the global leader in supplying smallpox vaccines. The reason why we are the global leader is that we're the only company capable of delivering a vaccine that is suitable for the general population.
Other approved smallpox vaccines have certain safety concerns, which limit their use currently. There are a number of people that are currently contraindicated for those vaccines, namely people with HIV, or skin allergies, or anyone who's in close contact. Our vaccine, as we reported last year, and over the last 10 years, has a different safety profile and is actually safe for these at-risk populations. In addition to having a unique vaccine suitable for the general population, we've also successfully built up an infrastructure with a dedicated manufacturing facility, which we're now expanding with a fill- finish, which, as I keep saying, will help us secure these higher revenues in the years to come. This has allowed us to already deliver 28 million doses.
As I'll get to in the future slides, we believe there's a lot of opportunities, not only in the stockpiling, but in other opportunities post-approval. In the gray box at the bottom of slide 5, just highlights some of the key findings from the phase III we reported last year. The reason we highlight this, is that not only could we show that our two-shot regime was as efficacious as a licensed vaccine, but we actually showed that a single vaccination of MVA was equally as efficacious as a licensed vaccine, which I really believe will open up future opportunities post-approval of the liquid frozen, which we anticipate already in September of this year.
Turning to slide six, this is a mixture of looking at what the current requirement from the US government for a safer smallpox vaccine is, together with the progress of where we are, both from a liquid frozen formulation and the new improved freeze-dried formulation. In the middle, you can see that pre-approval under an Emergency Use Authorization, or EUA, US government wants to protect up to 10 million at-risk people, and that led to the acquisition of 28 million doses to protect those 10 million people. Post-approval, they currently have a requirement to protect up to 66 million citizens, which would be 132 million doses. On the liquid frozen, we delivered the doses. Unfortunately, due to the short shelf life, all those doses have expired. We've completed phase III. We filed the BLA, which is under review.
We anticipate licensure in September, which will come with a priority review voucher, which I keep saying we intend to sell. On freeze-dried, 2017, we were awarded the single largest acquisition or order of our MVA smallpox vaccine, at the tune of $539 million. This is basically to manufacture and deliver approximately 13 million doses. Money has also been received to initiate a phase III study, which we plan to do later this year. This will lead to, hopefully, adding a supplement to the approval for liquid frozen, leading to the approval of both formulations by 2022. Turning to slide 7. Last year, there were a number of cases of monkeypox. Now, monkeypox belongs to the same virus family as variola, which causes smallpox.
It's not as lethal, but the cases of monkeypox in the UK and Israel really highlighted the need for better preparedness. There were a number of cases. One of these was actually a nurse that became infected after changing the sheets of an infected patient, which really goes to show that you can stockpile as many vaccines as you want, but if you really wanna be best prepared against emerging diseases or tragedy like smallpox, you need to vaccinate your healthcare workers beforehand. Post-approval of liquid frozen, we actually see a number of opportunities beyond the classical stockpiling, which we've been supporting the US government in the last few years. Currently, there are military that are currently vaccinated with the licensed vaccine, ACAM2000. There's obviously an opportunity to swap over the vaccine with our more safe vaccine.
The U.S. could actually vaccinate all military recruits. At the moment, the vaccination is restricted to only certain soldiers being deployed to certain areas. There is an existing guideline from the CDC that actually, since 2002, which is still active, which recommends anywhere between half a million to 10 million healthcare workers or other civilians who wish to be, should be vaccinated against smallpox. This is actually a dormant policy, as obviously the current approval-approved vaccine is considered too unsafe. We actually see a good deal of opportunity beyond stockpiling once IMVAMUNE or MVA is approved. Moving to slide 8, this is always a complicated slide to try and walk you through. Here we're trying to show under the existing contract, where the different options will kick in.
Under our previous contract, we have already manufactured and received money of bulk for $233 million in 2016 and 2017. The initial order under the new freeze-dried award also included $100 million worth of bulk, half of which we've already manufactured and received in 2018. The remaining half we will be guiding as part of our revenues in 2019. In addition, while making this bulk, we're investing $75 million in a fill- finish facility. This comes online in 2020, meaning that that will trigger the option under the existing award of $299 million, which will be used to convert all the bulk of $333 million into approximately 13 million doses.
In addition to the vaccine acquisition part, $36 million have been awarded to support the phase III, which we'll be initiating this year, and $44 million to support the tech transfer and validation of the process, both of which most of the revenues will be received and recognized in 2019 and 2020. In addition to this 1 order, it's important to stress that this is a 10-year umbrella contract, where we have already negotiated pricing for different numbers of doses of either liquid frozen, of freeze-dried, formulations, or vaccine bulk. We fully anticipate additional orders under this contract, 1, to build up the stockpile beyond this initial order, but 2, as I've already highlighted, to create what you could call a living stockpile, where they'll purchase vaccines to actually vaccinate healthcare and first-line responders.
On Slide 9, we move into the infectious disease and our collaboration with Janssen. As you all know, this began with a license for Ebola. The clinical data, which is shown on the right-hand side of the slide, really showed that if you combine our two vaccine technologies, you get a much better immune response, which is highly durable, and in animal models, is also shown to be highly efficacious. Of course, this great data then led to an expansion of the collaboration and partnership with 3 additional licenses for potential blockbuster indications for HPV, for HIV, and HBV therapeutic approaches, and the phase I/II-A study for HPV started this year.
It's been a highly successful collaboration, but it's worth pointing out there's still roughly more than $1 billion of additional milestone payments and future royalties should these vaccines reach to approval. On Slide 10, we talk about RSV. Now, in RSV, there's a belief that it's extremely risky and very difficult to develop an RSV vaccine simply because of the failed attempts beforehand. The first failed attempt was actually back in the 1960s, using a very old concept of inactivating the whole virus, and this actually led to enhanced disease.
There have been over the last few years and very recently, some more high-profile failures, all of which were following the same approach, trying to generate high neutralizing antibody titers in the blood, to neutralize RSV. Most of these approaches were using one of the surface proteins of RSV called F or the fusion protein. These approaches have failed with or without adjuvant and, to be honest, when you look at the literature, there's good reason why that would may be the case. The actual fact, there is no correlation of neutralizing antibody titers in the blood and protection, both from human challenge models, but also from epidemiological data. The factors that seem to be more associated with a good protection is mucosal immunity and also T cells.
There are explanations for the recent failed attempts in that the approach that they were using actually wasn't supported by the literature that's been generated by others. On Slide 11, fortunately, we have a completely differentiated and novel approach in that we're actually got a vaccine targeting 5 proteins of RSV, which you can see on the right-hand side of the slide. In this, our concept is to try and generate a broad immune response that includes both antibodies, which are still important, but also T cells against multiple targets, and hopefully also stimulating mucosal immunity. In this, we're trying to mimic the immune response that you see after a natural infection of RSV, which from epidemiological data, is believed to protect us all for at least 1 year.
Fortunately, in the phase II data that we have reported previously, that's exactly what we're seeing. We see that a single booster of our vaccine in the elderly generates very broad immune responses, both antibodies, T cells. We do see mucosal immunity. This is a durable response that lasts in the majority of the subjects for at least a year, which we can rapidly boost again with another annual vaccination. We have really, probably the most exciting RSV data that anyone has ever generated in the clinic, with a completely novel, new approach that's never been tested before. Of course, the big question on everyone's lips is really, well, you've got great data, but is it efficacious? Is it good enough? On Slide 12, the only answer to address that, unfortunately, is a phase III efficacy study.
As you all know, we've started the dialogue last year with the FDA on endpoint, statistical plans, and the like. We believe that a phase III study will be in the range of 12,000-18,000 elderly subjects, and that will be at a cost of roughly $80 million-$120 million. The good news, from our perspective, is that the trial size and cost is dramatically lower or less than the many people have been predicting, and it's certainly within the range of something that we could consider ourselves. We will continue the dialogue with the FDA and finalize the trial design, hopefully by the mid of the year, where we will be providing clarity both on the design and the path forward, whether we're doing this with a partner or we're going alone.
One of the important considerations that we're looking at is actually to split the study over two seasons. That's for two main reasons. One, to overcome any fluctuations in infection rates from season to season, so that we don't fall into the trap of others, and all our efficacy assumptions will be wrong. The second would mean that we would also be able to do a futility analysis after season one, where we could dramatically reduce the risk of entering into season two, demonstrating that we are actually got an efficacious vaccine, and that, of course, would put us in the box seat if we do go alone, to partner on very good terms in the future. Going to slide 13, I wanna change strategy and talk about our cancer immunotherapy.
The image on this slide is basically illustrating the various steps that we need to address if we want to stimulate T cells to recognize and kill tumors. The steps that are highlighted in red are basically the steps that we're trying to attempt to influence with our current strategy with CV301 and BN-Brachyury, and that is to stimulate the immune system of cancer patients to recognize tumor antigens. Those T cells would then be enhanced by combination with either radiation or checkpoint inhibition. What have we done to change our strategy since PROSTVAC and our previous constructs? Well, as you all know, we've reengineered our constructs to now utilize our MVA-BN platform.
We now prime with an MVA-BN and follow up with Fowlpox boosters, but those Fowlpox boosters are now continued throughout the whole standard of care, so for much longer. The priming doses are actually given in each limb, so 4 vaccinations, which is repeated 4 weeks apart. We're giving a lot more vaccine, a lot more virus, hopefully a lot more stimulation to the immune system, and then followed up with Fowlpox boosters for 1 year or longer.
What we've already seen from data coming out from the NCI, from the reported phase I study, is that both CV301 and BN-Brachyury, following this new priming and boosting concept, we see that the majority of the patients actually have T cells against the encoded antigens, and we believe by coupling this vaccination with checkpoint inhibitors, will make these T cell responses much more effective. As I've said, we're quite excited that already this year, we should be seeing data which will hopefully prove that we're along, we're going on the long path, on the right path. On slide 14, we talk about Brachyury. Brachyury is a tumor-associated antigen, which is also a transcription factor involved in the process of how tumors actually metastasize or spread.
It's expressed in the majority of solid tumors that have obviously metastasized and spread around the body, and is often associated with tumors that are difficult to treat. Together with the NCI, we've already shown in phase I that an MVA-based Brachyury vaccine could stimulate T cells in cancer patients, and we've now moved on to initiate a proof of concept study, phase II study in chordoma, which has an Orphan Drug status from the FDA. Slide 15 talks a little bit more about the chordoma study. Chordoma is an ultra-rare cancer of the base of the skull and the spine. It universally expresses Brachyury at all stages of its growth. Post-surgery, if it recurs, there's very few treatment options. The current standard of care is radiation therapy, less than 5% of patients actually respond.
In this study, we have a two-stage study design. In stage one, we've already enrolled 10 patients ahead of schedule. They receive their priming vaccination prior to radiation, and then have a follow-up Fowlpox boosters for that follow-up year. We will actually have objective response rate data already this year, and if we see at least one objective response, that will trigger moving into stage two, where we will enroll another 19 patients, where we're looking for four objective responses in total, which we think would be a very meaningful result in this difficult-to-treat indication and could lead to a breakthrough designation. On slide 16, we initiated last year, three proof of concept phase II studies for CV301, in combination with three different checkpoint inhibitors in three different indications.
This is part of a broad collaboration with both Pharma, BMS, Roche, AstraZeneca, but also the NCI and other academic institutions. The bladder study is enrolling as planned, and we anticipate to see the initial objective response rate data from the Stage 1 design of this study, which is the first 27 patients. Again, if we see the objective responses we expect, it will trigger moving into Stage 2, which will be enrolling up to a maximum of 68 patients. Again, by the end of this year, we will have some exciting data readouts for both BN-Brachyury and CV301. On slide 17, we're back to this image of the, of the wheel, of how you can influence T-cells to recognize and kill tumor cells.
Now you see that with the new concepts that we have developed in our research laboratories in Munich, you can see that with the new concepts of intratumoral or intravenous vaccination, we're now actually targeting all steps of this wheel, so that we're really hitting the tumors pretty hard in the sense that we're stimulating, we hope, based on the animal data, much stronger T-cell responses. We're inflaming the tumor, allowing T-cells to get into the tumor, changing that tumor microenvironment, and aiding the killing of the tumor cells itself. On slide 18, the reason why we're particularly excited about these two concepts is just a snippet of some of the data that we have generated over the last few years. That on the left-hand panel, you can see that the T-cell responses are much higher when we deliver our vaccines intravenously.
We also activate natural killer cells, which gives us another way of attacking and killing tumors, and potentially coupling the treatment with other standards of care. On the right-hand side is some mouse data, also showing that with intratumoral administration, we can really control tumor growth in a variety of difficult-to-treat animal models. Both these concepts are entering phase I during this year, while we continue to work on optimal constructs, which hopefully will be going into the clinic next year. Our final leg or arm of our strategy is to build up our commercial capabilities. In one of those, it's related to our fill-finish facility. Our fill-finish facility will eventually have a capacity to manufacture up to 8 million freeze-dried doses and 40 million liquid frozen doses. It's a large commercial scale manufacturing facility.
It will, as I keep saying, really allow us to secure these higher revenues in the years to come with the current order, but also, as I've shown you, the US government is supporting this investment with a view of future supply. The other thing that I think it really does, it expands our capability to do many things. One, it would allow us to manufacture and launch our own products, like RSV. The other thing that's important to note is that in all our license agreements to date, it was important that we had the ability to manufacture, as there are very few people who can actually manufacture live viruses. Our ability to also add fill-finish should improve our ability to license some of our pipeline assets. Of course, it opens up the door to also offer manufacturing services to other partners and collaborators.
This is really something that I think could change our abilities, it will add to our strengths, and it will add to our commercial capabilities to increase the top-line revenuesh in the years to come. We've had a great year. We've really made progress on the strategy. I hope I've laid out the path that we want to take. With that, I'll hand over to Henrik to give you the financial update.
Thank you very much, Paul. Now to the financial results for 2018. For the full year of 2018, we delivered revenue of DKK 501 million, fully in line with what we had guided previously. On the chart to the right, you will see the breakdown of that revenue. We had DKK 361 million from smallpox sales in the U.S., plus the rest of world sales. From the US government, it was the $50 million recognized from the 20 batches of bulk that we supplied in 2018. The remaining parts, up to the 361, or DKK 38 million, sold to countries outside of the U.S.
DKK 140 million of R&D contracts generating revenue was mainly related to the Janssen agreements. Also some BARDA support of the ongoing phase III preparations was included there. On the EBIT level, we delivered a loss of DKK 354 million, against the guided amount of loss of DKK 385 million. Better than guided, due to lower expenses and really driven by more efficient, you can say, operations. These savings have not led to any delays in any of our programs. On the cash preparedness, we as well ended better than guided. We ended with a cash preparedness of DKK 2.3 billion by the end of the year, against the guided amount of DKK 2.1 billion.
This better performance was driven by the better EBIT outcome than guided, but also that we invested less than we had prepared for, again, without any material delays in our projects. All in all, results fully in line with guidance and expectations, and slightly better on EBIT and cash preparedness. If you turn to the next slide, we will have an overview of our outlook for 2019. Here we are guiding a revenue level of DKK 600 million, a loss of DKK 360 million on the EBIT level, and a cash preparedness of DKK 1.6 billion by the end of 2019.
If we elaborate a little on the revenue breakdown for 2019, you will see DKK 320 million exactly corresponds to the $50 million revenue that we will get from another 20 batches of smallpox bulk to BARDA. You will also notice that the R&D contract revenue part is exactly twice as high as we realized in 2018. This is explained by the further support we are getting from the US government now, both for the phase III that we are initiating on smallpox, but also on the CMC activities where we were awarded $44 million, communicated previously.
It also includes a significant amount from our contract with the Department of Defense, where we together are developing a vaccine against equine encephalitis. Again, like in 2018, this part also includes income from Janssen, however, lower than we saw in 2018. I think we are very pleased to see that that part of the business, what we call the R&D contracts, is actually, we have more elements to play on here. That is actually explaining the increase from 2018 to 2019 in terms of revenue.
On the, to talk a little about the costs, you will have noticed that the EBIT loss is we are guiding very close to the level we saw in 2018, despite a higher level of revenue for 2019, and that is primarily explained by the level of investments that we are conducting in 2019 into our pipeline. In total, we are planning to invest DKK 570 million in R&D, but a large chunk of that is actually revenue generating and will therefore be posted as cost of goods sold, necessary to generate the revenue. We are continuing to invest in the fill-finish facility that Paul talked about earlier, and actually 2019 will be the peak year, where we are going to invest DKK 270 million.
In 2018, we invested approximately DKK 200 million. That also means that in terms of investments, by the end of 2019, we are getting to the end. There will be some investments in 2020, but far from the levels we have seen in 2019 and 2018. Therefore, we can already now say that the cash flow for 2020 will be much better than what we are guiding for in 2019. By the end of the year, with all of these investments, both DKK 570 million in R&D and investments in our fill-finish facility of DKK 270 million, we will still be sitting with a cash preparedness of DKK 1.6 billion. Here we have not included any potential income from the sale of our priority review voucher.
We feel we are in a very good position to continue the execution of our strategy. With that, let's turn to the next slide, where we have highlighted some of our priorities and goals for 2019. Here we have grouped them under the individual strategic pillars that Paul walked you through earlier in the presentation here. If we start with our global leadership position in our smallpox vaccine business, then of course, the key thing here is to secure the approval of the liquid frozen version of our smallpox vaccine, which is expected in September this year, and which will trigger the award of the priority review voucher, which we intend to sell.
We are also, during the year, initiating the phase III study on our freeze-dried version, which is funded by BARDA and will also generate revenue throughout the year. If we move to the right, our next strategic pillar is about expanding and advancing the pipeline of other infectious disease programs. Here, of course, the big item here, that is really the RSV plan, where we have communicated that around mid this year, we will go out and communicate the status of our discussions with FDA on trial design and what our strategy is for moving forwards. We are going to start a phase I dose-finding study on our equine encephalitis virus program, is being supported by the Department of Defense, and again, this is a revenue-generating activity.
The investments into this one will generate revenue for 2019. For Janssen, we are anticipating that they will initiate a phase I/II-A study of HIV vaccine. I think with the Janssen programs, these are not 100% in our control, but this is what we anticipate. We also anticipate, but it's not on the list here, as we have communicated already, that is on the HPV trial that is running already in phase I/II-A, that we will see the fifth patient being enrolled into the program, which will trigger $12.5 million , the milestone payment. The third strategic pillar is about establishing a broad and deep cancer, IO, portfolio.
Here, I think if we start from the bottom, we have these 4 proof of concept, phase II studies running, and we are expecting early readout data from 2 of them during 2019. One being the bladder cancer study with CV301, and the other one being our BN-Brachyury study in chordoma. Very exciting data that will give us the first signals about efficacy of our current candidates. The 2 items on the top indicates our plans to expand into new concepts within our cancer program....
Here we are going to initiate a phase I study of intratumoral use of our CV301 candidate in solid tumors, and we are going to initiate another phase I study using the BN-Brachyury candidate into intravenous administration. The final fourth strategic pillar here is really demonstrating our ambition to expand the commercial footprint and capabilities. This is one of the one that perhaps looks a little further ahead than 2019, but we still have a very important activity falling under this one here, and that is to finalize our construction of the fill and finish facility, which will open a lot of new doors for us, not only with within smallpox, but also within manufacturing of other vaccines.
Again, 2019 from the start, it definitely looks like it's going to be another exciting year for Bavarian Nordic. With that, I will turn back to Paul.
Yep. That's the end of the presentation, and we'll hand over for Q&A. Please.
Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. This will only take a few moments, and if you wish to cancel your request, you can press the hash key. We do have some questions already. Your first question comes from the line of Chad Messer from Needham. Please ask your question. Your line is open.
Great. Thanks for taking my question. For smallpox, as we look forward past just getting revenues for stockpiling and potentially see some orders to immunize, you know, military and other persons, presumably there's other players involved than the ones you're currently dealing with at the Department of Defense. Can you kinda talk about what that process looks like? You know, who some of the players involved that you need to talk to, and maybe comment a little bit on what conversations you've already had with some of them?
Thanks, Chad. That's an interesting question. One obviously is DoD, Department of Defense. They contract vaccines in 2 ways. 1, they do it directly with the companies themselves for a number of the different vaccines that they're vaccinating the military with. For smallpox, currently, they take ACAM out of the Strategic National Stockpile, which is already being purchased by BARDA or CDC. If there's already an existing stockpile, the military seems to have a precedent to take it out of the SNS. We have had discussions with the military, it's not 1 organization, it's many, which is quite complicated, we have had very fruitful discussions with these organizations. We're in discussions directly also with BARDA, obviously.
You know, I've indicated before that if you want a new order, you don't wait until the year you want the order. It's a 2-year or even longer process. We have ongoing discussions with BARDA. It's a little unclear to me right now whether the purchase for healthcare workers and first line responders will come through BARDA or whether it will go directly to the DoD and maybe other institutions. At the moment, we're having discussions on all fronts.
Okay, thanks for your help with Do you think you have good prospects anywhere outside of the US government for customers?
You know, we've been reasonably successful in Canada. There are very good signs that things could still happen in Canada as they continue to build. You know, as we've discussed previously, the way it often starts in other territories, it starts with military orders, and then it moves over to the public health sector. That's what's happened in Canada, and the orders that we've been receiving over the last 2 years has been with public health. In Europe, you know, I have to just say again, it's a slow, long process. I still believe the biggest market by far is going to be the U.S.
All right, thanks. Very helpful. Maybe just one on RSV and the size of the trial, you know, looking more manageable than maybe we had thought. Were people just being too pessimistic about what a trial had to look like, or was there precedent for a larger trial? Why do you think, why do you think this ended up easier than people expected?
Well, if I was to speculate, you know, I think one of the things is failure of others. When someone fails in a phase III, a lot of people just come to the conclusion that maybe it was underpowered and there wasn't sufficient people enrolled. Whereas in most cases, it's because the vaccine just simply didn't work. I think that's one. The other one that the reason why we're ending at much lower numbers is I would say that the FDA is showing an incredible degree of flexibility in terms of the statistical endpoints that they're willing to look at, acknowledging that lower tract infections, for example, are relatively rare events. I would say.
The flexibility of the agency has led to it, but I think the predictions from some, I think, is more related to the failures of others.
Yeah, [hard to empower] , for zero efficacy. Thanks for taking my question.
Yeah. Thanks.
Thank you. Your next question comes from the line of Thomas Bowers from Danske Bank. Please ask your question. Your line is open.
Yes, thank you very much. A couple of questions from me. First of all, just some clarification. On the DKK 299 million part of the IMVAMUNE contract, you list this as a potentially beginning of 2021 revenue. I'm just wondering, how does the timing with the freeze dry licensure impact this? I mean, expected approval in 2022, but we expect to start the actual fill- finish work as soon as the factory is actually operational. Second question, just on the voucher that you are likely to get here in the fall.
Can you just confirm that you're already really in dialogue with some parties and how do you see interest among big pharmas, given that we have seen price levels decline somewhat lately, to around the $80 million level? What you're feeling here on the, have the prices stabilized or what should we expect here going forward? Just on the CapEx, you sort of, well, you ended up a little bit lower than I expected. And you also said that was, it was not related to any material delays. I'm just wondering if anything here in the fill- finish plant that has been somewhat delayed.
Again, it was a quite big saving here for 18 in my world. Does this also reflect any actual budget savings compared to what you actually expected to spend on the facility here in 18? Just my last question, I don't see any comments on Brachyury and the CD40 ligands in triple negative breast cancer in the report here. I think you mentioned it in the Q3 report. I'm just wondering if there's been any changes and also maybe changes in the landscape following the KEYTRUDA approval recently. I think that was it. Thank you.
Thanks, Thomas. That's a lot of questions. Let's take the first one. When does the facility come online? I mean, when do we start seeing revenues? I think that was the crux of the question. The facility comes online in late 2020, and this is all about terminology here. Before we can, you know, when you start manufacturing a product in a new facility, you have to validate that manufacturing process. That process will actually start late 2020. If the validation is successful, material that you have produced is still, you can still sell that product, officially, you start so-called commercial production once your process is validated, which will happen in 2021. The majority of those, approximately 13 million doses will actually be produced in 2022.
When you start talking about when are we gonna revenue recognize, that all depends on approvals of the facility, approvals of the validation process, and the like. We are being a little unclear exactly when we're gonna see those revenues, 'cause it's not all of it's in our control. The majority of those 13 million doses will be manufactured in 2022, when we believe, anticipate that the approvals are in place. The other question was related to the priority review voucher and are we in dialogue? The answer there is yes. There is actually a lot of interest in that. You mentioned the decreasing value. I'll point you to a sale last week from GW, I think it was, that sold theirs for $105.
So actual fact, the sale of the last couple have actually been higher than 80. In actual fact, I think that may be a reflection. You know, a lot of people are talking about how many priority review vouchers are out there, but most of them aren't on the market. If they're in the hands of big pharma, big pharma aren't selling them. There are very few priority review vouchers actually out there for sale, which probably indicates the level of interest that we're already receiving before we've received one. Again, I'll underline, it is our definite intent to sell it. The third question was CapEx and the savings that we made last year.
You know, one thing I'll say is we're not behind in terms of the fill and finish project. It's a very complex project, but we remain completely on track, including the budget. Obviously, when you start such a big project, you have a contingency because things always go wrong, which we haven't, we've underutilized that contingency. Some of them are, I wouldn't call it delays, but delays in some of the activities that we've done because we've realized we didn't need to do them as fast. They're not material delays. We remain on track. Everything is looking good in terms of timing and budget for the fill and finish.
The other question, I think, related to the CD40 ligand, as you rightly point out, that's the more optimal construct that we need. We see a much better immune response when we vaccinate intravenously when the vaccine encodes CD40 ligand. We've presented data before that, you know, one indication could be breast cancer. We haven't made any decision on what that, our optimal indication could be. With what we hope to be a highly immunogenic, efficacious approach, there are many indications that we could go for. As you know, we also want to combine intravenous vaccination with standard of care of antibodies targeting a solid tumor that would also allow us to enhance the NK activity. We haven't made a decision on which indication, but hopefully we'll come with more clarity later this year.
Great, very clear. Thank you very much.
Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please ask your question. Your line is open.
Hi, yeah, thanks. A couple questions left. I guess, first of all, just sticking with RSV, just with regards to the discussions with the FDA, is the aim to secure an SPA before the phase III trial is initiated? If so, I guess, when you talk about the mid-year timing, is that included within that, or would that likely be a second half target? Secondly, just with regards to the fill- finish, and that obviously is the end of 2020, is there any implication with the work you're doing there with regards to manufacture of RSV doses, or will the RSV vaccine manufacture and fill- finish be independent of any internal CapEx and capabilities that you're building out there?
Just going on to then the BARDA, the BARDA contract, sorry, for freeze-dried, the $37 million that you got for clinical. Has that actually been received yet as cash? Or I guess I didn't see any mention of it as a prepayment, but also, I guess just trying to think about when that could potentially hit and whether that's included in the cash balance already. Also then on brachyury, any sort of timeline you can give us on when we could get that Stage One response rate in those 10 patients, obviously fully enrolled at the start of this year in January. Should we anticipate therefore, towards the end of this year, or will we likely see responses earlier than that? Thank you.
Thanks, Peter. The first question related to RSV, would we get an SPA in place? Our current thought, based on discussions with the FDA, is that most likely we won't need an SPA simply because the endpoints are going to be pretty clear. An SPA is often very important in cancer, where, you know, things can change a lot in the indication. Our current thought is that we won't go for an SPA because we'll have an agreement on a relatively clear-cut endpoints with the FDA, which we anticipate to be clarified by mid-year. Another question related to the $37 million that was awarded for phase III. That, we have not received that money.
We invoice the government on a monthly basis, depending on costs incurred, and that is certainly part, as Henrik alluded to, part of the revenue that is part of 2019's guidance. The majority of that revenue we will be seeing this year in 2019 and 2020, obviously, as we start enrollment and the like. Brachyury, you were asking timing of data readout. To give you some color on that, as I said, we prime prior to radiation and then radiation treatment, and patients with the standard of care are followed up for 12 months, once radiation has been initiated. We are looking at a 12-month from when radiation starts to the end of the treatment. Now, of course, if it's the first patient that responds that we enrolled last year, we'll know earlier.
If it's the very last patient, it's gonna be probably end of the year, going into next year. We do anticipate, most likely, it's gonna be in Q4. By Q4, we'll have a very good idea of where the data is. There was a question related to RSV fill, I think, and would there be additional CapEx investments? The answer to that is no. The way we have designed and built the facility is that we can fill all sorts of products on, in the facility, as long as obviously they're in a glass vial. Obviously, we don't have syringe capability or anything like that, but if it's a glass vial filling or freeze drying, we can manufacture just about anything on the line.
That's great. Thank you very much.
Thanks.
Thank you. Your next question comes from the line of Jacob Lademann from Carnegie. Please ask your question. Your line is open.
Yes, thank you. Could you maybe talk a little bit more about the upcoming phase III study for IMVAMUNE liquid frozen, sorry, freeze- dried? How is that going to look? When you only, and what are the timelines, and will you only need to investigate safety in order to get an approval? Also, could you maybe share some thoughts on what that means for the commercial potential for IMVAMUNE? Yeah, thanks.
Yep. The phase III for freeze-dried is a lot consistency study. The primary endpoint is obviously to test three different lots. And to show that they're consistent in the sense of stimulating an immune response. It's a similar study that we also did for liquid. It's a standard requirement for the FDA that you do a lot consistency study. Of course, safety will be measured, as in every study. It's a relatively straightforward study. Now, we've already shown freeze-dried and liquid have the same properties in terms of safety and immunogenicity, so we anticipate no hiccups in the sense of that study. We plan to enroll everyone this year.
It's, you know, it's gonna be a relatively fast study that will finish towards the end of 2020. In terms of the commercial capabilities or, you know, the way I see it is twofold, really, as I tried to indicate in the talk. Once liquid is approved, there's now an approved, safer alternative that gives the US government and other governments the ability to look at vaccinating people in preparedness. That currently isn't available with ACAM2000. That's why the military are currently restricted to quite a few military personnel. There is gonna be a new option. For freeze-dried, I think freeze-dried is a really important formulation for governments that want to stockpile. I see the so-called living stockpile, where people are purchasing and using, will be liquid.
If people want to actually create a larger stockpile for the general population, that they hopefully will never use, I think I see that as being freeze-dried because of the longer shelf life. That's clear. Thank you.
Thank you. We don't have any further question at this point. Please continue.
Okay. Well, thank you everyone for your attention and for the questions. Have a great day. Thanks, everyone.
That does conclude your conference for today. Thank you for participating. You may now disconnect. Speakers, please stand by.