Ladies and gentlemen, thank you for standing by. Welcome to the Bavarian Nordic 2022 Annual Report Conference Call. At this time, all participants are on listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automatic message advising your hand is raised. Please note that today's conference may be recorded. I will now hand the conference over to your speaker host. Rolf Sass Sørensen, please go ahead.
Thank you, operator, good afternoon and good morning to the rest of you. Welcome to this small short recap of our annual report 2022. Again, we've had a very busy, especially last quarter, where we just want to go through recent events. Before we start, just want to go through the disclaimer. This presentation includes forward-looking statements that involve risks or uncertainty factors, many of which are outside our control that could cause actual results to differ materially from the results discussed. Forward-looking statements includes statements regarding our short-term objectives and opportunities, financial expectations for the full year, as well as statements concerning our plans, objectives, goals, future events, performance, and 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 they are made, except as required by law. With us today, we have, as usual, CEO President, Paul Chaplin, and Executive Vice President and CFO, Henrik Juuel. I will hand the presentation over to you, Paul.
Yeah. Thanks, Rolf, and welcome everyone to the call. If you go to slide two of the presentation. Before I walk through the highlights of last year and some of the recent events, I just wanna talk a little bit about the vision and the strategy of Bavarian Nordic. By 2025, we aspire to be one of the largest pure play vaccine companies. By that, we refer to revenues of more than $1 billion, a profitable company with EBITDA margins of at least 25%. The reason we've set that goal is because our mission is really to develop, distribute, and sell life-saving vaccines to improve people's lives. To achieve this goal, we have a number of strategic objectives.
One is to bring life-saving vaccines through development through our pipeline, as we're doing with RSV, which I'll come back to in the coming slides. Last year and this year, we're looking at investing approximately DKK 2 billion in R&D, demonstrating our commitment to this space. As we've set up a commercial infrastructure, particularly in key markets such as the U.S. and Germany, we're also looking to market and license other people's vaccines as we do currently for Valneva and Dynavax. Key part of the strategy moving forward is also to be on the lookout for strategic and selective M&A opportunities, like we've just accomplished with the travel vaccine franchise from Emergent. That will expand our commercial portfolio. By providing the best-in-class service to healthcare professionals, we wanna bring these vaccines, life-saving vaccines to improve and save people's lives.
If you go to the next slide, we'll talk a little bit about 2022. At the beginning of last year, we had an extremely hectic year planned. We had two products going into phase III, our RSV vaccine and our COVID-19 booster vaccine. We had a number of products that we're currently transferring, our rabies, TBE, and our freeze-dried smallpox vaccine. We had an incredibly busy year ahead with a lot of challenging tasks. However, 2022 will only be remembered for the mpox outbreak. In May, when the first cases started to emerge, we essentially sold our entire small stock of JYNNEOS that we had, and then we quickly realized this was an unprecedented outbreak that we've never seen before. At that point, we had to completely change all our plans.
We had to go into a different gear in terms of manufacturing and double our filling capacity. We had to change all our manufacturing ideas to move only to JYNNEOS and Imvanex. We're extremely proud of what we achieved because we actually distributed more than 4 million doses last year, gave access to more than 70 countries around the world, there is no doubt that the use of our vaccine around the globe has played a significant role in controlling the monkeypox outbreak. You'll see in the coming slides that we have a relatively full order book for this year and beyond.
You know, this outbreak of monkeypox last year, I think, certainly going into it, we had two main customers, the U.S. and Canada. I think coming out of the monkeypox outbreak, we'll end up with many more customers who are now seeing the logic in stockpiling our vaccine, not only to protect against future monkeypox outbreaks, but also smallpox. On RSV, we did indeed start the phase III trial, and we completed the enrollment at the end of the year of the 20,000 subjects. We have FDA breakthrough and EMA PRIME status, and we completed a license agreement with Nuance Pharma for China and certain Asian markets. And they will be initiating a phase I and phase III in the coming months. On the COVID-19, we also initiated, despite the change in regulatory environment, the phase III study.
Enrollment is still ongoing, but we expect to have readout of both of those phase III trials, RSV and COVID-19, later this year. On the financials, I'll leave mainly that for Henrik later. Obviously last year was a fantastic opportunity. We were originally guiding for a significant loss. Due to all our efforts in supplying the demand for mpox, we were able to turn that around to a profit. This year we're guiding for even higher profit and revenues. An extremely challenging year last year, but one that everyone at Bavarian Nordic will look back with great pride. We've increased the profile of Bavarian Nordic. Most importantly, we saved an awful lot of lives by the distribution of our vaccine. Go to the next slide four.
Earlier this year, we announced an acquisition of the travel franchise from Emergent BioSolutions, and this deal is still going through the mandatory closing conditions. This is obviously a no-brainer for our standpoint because the products that we're buying fit beautifully into the portfolio that we already have, and that was Vivotif and Vaxchora. These are two excellent travel vaccines. Vivotif is a vaccine against typhoid fever. It's the second most common travel vaccine that is prescribed. It's a great addition to the portfolio. Vaxchora is an oral vaccine against cholera, which is very fast-acting and is the only cholera vaccine approved in the U.S. Immediately, these two products will expand the number of products that we sell in the U.S. significantly. It also comes with phase III assets against chikungunya.
Chikungunya is a mosquito-transmitted disease that can cause severe joint pain. That is, quite a large percentage of people that are infected can become chronic. There's currently no treatment, we believe that this candidate could really go on to be the best-in-class chikungunya vaccine. It wasn't only assets that we've taken over. We're actually expanding our capabilities, both in terms of manufacturing and in R&D and in sales, through the acquisition both of facilities but also 280 skilled employees that will be coming over together as part of this transaction. The R&D facility in San Diego in the U.S. will continue to be primarily focused on the development of the chikungunya vaccine. The manufacturing facility in Bern has historically been extremely successful in producing Vivotif and Vaxchora, they will continue to do so.
It gives BN a lot more optionality in terms of manufacturing capacity, to look at maybe potentially bringing other products that we currently outsource back in-house. In terms of the sales force that will be coming over, this will allow us to expand our operations in the U.S., which is the largest vaccine market in the world. It'll also allow us to look at other territories in Europe where we're currently not active to expand. An absolute fantastic opportunity, and one that we're really looking forward to closing in the coming months. If you go to the next slide, on slide five. What is the opportunity? It's estimated by others that the typhoid vaccine market could grow to $250 million by 2028, with an annual growth of about 9%.
Likewise, with cholera, this will grow to $75 million, again, with an annual growth rate of around about 8%. The chikungunya market is estimated by others to be in the region of $500 million. Altogether, this is a significant market opportunity with the assets that we're purchasing. Due to COVID, Emergent basically closed down the sales of Vivotif and Vaxchora, and Vivotif was relaunched last year as we're coming through the COVID headwinds. Vaxchora, as I said, is the only approved vaccine in the U.S. Together, we believe we can grow these two assets to more than $100 million annually in the coming years. With the CHIKV VLP, the phase II data is exceptional. It really has a fast onset of protection, much faster than the competition.
Has a very good safety profile. We believe with readout later this year for phase III, this could become the best-in-class chikungunya vaccine in the coming years. Go to slide six. As with every acquisition, it's all about integration and taking over the assets. The way we look at this is very different to the tasks that we were faced when we bought the assets for rabies and TBE from GSK in 2020. The main reason for that is there's no major tech transfer activities. There's no risk in production. We're taking over the skilled staff and the facility, so that will be completely uninterrupted in terms of the manufacturing, and we'll take over manufacturing from day one. To ensure the momentum of the tick program continues, we will be running that program as a standalone project from the new employees coming over from San Diego.
In terms of sales and marketing, that will be integrated from day one with the sales force that will be joining us. We really see that this is gonna be a relatively straightforward integration project. Still a lot of work, but in terms of the risks of manufacturing commercialization, I think they're significantly de-risked with the purchase of the facility and the skilled staff. On slide seven, I'll talk a little bit about the pipeline and the coming news flow. Before I do that, I just wanna talk a little bit about JYNNEOS and the future. Obviously, last year and this year, we're booking significant revenues for our monkeypox, smallpox vaccine due to the outbreak of monkeypox last year.
However, I just want to remind everyone that's on the call, we have $500 million of future sales beyond this year to just two customers, the U.S. and Canada. These are options, but they're in the books, and we anticipate those orders will materialize. For the U.S. order of $300 million for freeze-dried to materialize, the U.S. will also have to buy additional bulk vaccine to replace the bulk that they used for the monkeypox order. That brings the future order book beyond this year to more like $900 million, and that's just talking about two customers. That doesn't talk about additional customers that we're in active dialogue with for further orders or stockpiling. We see an extremely bright future ahead for our JYNNEOS franchise. Likewise, with rabies, we saw a rebound last year.
We're back to pre-COVID levels. We anticipate future growth moving forward, and we expect Encepur tick-borne encephalitis vaccine sales to recover. We talk about the pipeline. RSV is gonna be a very exciting 2023. Our RSV vaccine, which has shown great efficacy in the human challenge study, great immune responses in phase II, that will read out later this year. Despite the fact that there are already three positive readouts and most likely three approved vaccines, this is an extremely large market, estimated to be more than $5 billion by 2025. We think it will be a very exciting opportunity for us moving forward. The COVID vaccine, ABNCoV2, will also read out later this year, and we have a new program for equine encephalitis we received funding for from DoD last year.
An exciting year ahead in terms of our pipeline development, but also in terms of our commercial sale and takeover of the travel franchise from Emergent. An exciting year again for 2023. With that, I'll hand over the presentation to Henrik Juuel.
Thank you very much, Paul, and good morning, good afternoon to all the listeners here. Let's turn to the finances for 2022. Here I think there are absolutely no surprises. We are today coming out with numbers in line with the preliminary numbers that we announced on January 16th. A top line of DKK 3.151 billion, strongly supported by our smallpox, mpox business that brought in approximately DKK 1.7 billion, with more than 4 million doses delivered last year. We also saw the rabies business perform extremely well, and I'll come back to that in one of the next slides, delivering nearly DKK 900 million in revenue. Encepur doing not as good as the rabies business.
I'll come back to that as well for some reasons, but it was close to DKK 300 million contribution from Encepur. Production costs of close to DKK 1.5 billion, giving us a gross profit of DKK 1.7 billion. A good gross margin, north of the 50%, driven by a very favorable product mix in 2022. If you look further down the P&L, research and development cost of close to DKK 1.2 billion. This is excluding the cost capitalized to ABNCoV2, which is nearly DKK 600 million. Here we are talking about approximately DKK 1.8 billion invested in R&D.
A significant increase compared to 2021, and obviously driven by the expensive phase III trials that we initiated in 2022. The SG&A costs also went up from 2021, driven by the significant increase in activity level. Some of that directly related to distribution costs driven by the higher revenue, but also generally speaking, a much higher activity level driven by the top line, but also by [BB-2] phase III trials. That gives a total operating cost of close to DKK 1.8 billion, up approximately DKK 1 billion compared to 2021. If we look further down the P&L, we see net financial items, a minus of DKK 261 million, which includes unfortunately approximately DKK 190 million of unrealized losses in security papers, given the financial turmoil that we were facing in 2022.
On the tax side, we are last year paying DKK 60 million in tax. That is in our subsidiaries in Germany and in the U.S. If we turn to the EBITDA, which is the level of profitability that we guide on, we deliver DKK 328 million, so significantly better than our original guidance that predicted more than DKK 1 billion in loss. Finally, in terms of our cash position, by the end of 2022, we had a cash and cash equivalent position of approximately DKK 1.7 billion. This was even without any bank debt, as we paid back the remaining debt we had to the European Investment Bank during the fourth quarter. Again, significant over performance.
Originally, we guided a cash position of around DKK 1 billion by the end of 2022, including DKK 600 million in debt. I think it's very clear that the whole mpox situation has significantly improved our cash position and has been a key reason that we have actually been able to execute the transaction from buying the travel vaccine grants from Emergent BioSolutions. If we turn to the next slide, let's spend a little more time looping into the rabies business. If we start to the right, we can see how our most important markets have developed during 2022. If we start with Germany, we can see very, very significant market growth. The German market was of course heavily impacted by the COVID-19 pandemic, as it is a pure travelers vaccine in Germany.
We saw in the fourth quarter close to 190% growth. For the full year, it was actually close to 300% growth. Of course, coming from an extremely low level, but a growth that has an impact even in our numbers, given the high market share we have in the German market of around 95%. The US market also performed extremely well. It was significantly more resilient to the COVID-19 pandemic, and therefore, did not reach the same low level as in Europe. Even with that, I think we saw a market growing by 30% in the fourth quarter and by more than 30% looking at the full year of 2022.
That actually meant that we ended 2022 with a market size that is even higher than the pre-COVID level, which we partly subscribe to our leadership position in the U.S. and our team that have really helped drive the awareness of rabies and vaccines available to protect you against rabies. Our own sales on the rabies business, because of the significant market growth and our performance in the market, we managed to deliver 74% growth in revenue for the full year, 38% for the quarter. Very, very significant growth rate from the rabies business, delivering close to DKK 900 million in revenue for 2022. Next slide, we're looking at the tick-borne encephalitis business, where we are competing with Encepur.
On the market side, we always look at Germany as the proxy for how the European market is doing. We have seen a positive growth for the full year in 2022 of 9%, but it has not been a consistent growth quarter by quarter. For instance, we see that the fourth quarter here, we actually see a small dip of 1% compared to same quarter of 2021. Some signs of a recovery, but it has not been a consistent performance. Our sales, unfortunately despite the annual growth rate, we saw a decline of 18%, primarily explained by a temporary stock up situation we faced during the second half of the year, and which has now been resolved.
We do expect the TBE market to return back to the level we saw pre-COVID, but we are not there yet. Expect that that is happening within this or next year. The next slide. What's ahead of us for 2023? I think one thing that is clear is that we had a very exciting year 2022. We delivered on a lot of significant objectives, and we delivered record high financial numbers. It's also clear that 2023 is going to be another exciting year for Bavarian Nordic. On the mpox side, Paul already talked about the significant order book we have secured for 2023. We have in our guidance for 2023, we have included DKK 4.4 billion in already confirmed orders. We have not included any speculated in any additional orders that will come on top of the current guidance.
We also hope that we will come out during the year and announce outcome of our continued dialogue with governments around additional orders and stockpiling. Of course, we have on the clinical front, we have significant milestones ahead of us. First of all, RSV, where we finished the recruitment into the phase III trial end of last year, and we are now expecting the top-line results mid of this year. We are also expecting our partner for China and other selected Asian markets to progress the development in China into phase I relatively soon and later this year into phase III, which will trigger combined milestones of around DKK 195 million. That's included in our current guidance. On COVID, we are very close to finalizing the recruitment.
After that, we expect to have results from the phase III trials mid of this year as well. We also do expect to have 12 months durability data from our phase II study available around the same time. With the acquisition of the travel health brands from Emergent, we also now have the chikungunya running in phase III and are expecting top-line results in the second half of this year. That is, of course, still pending the final closing, but that is only awaiting some customary typical antitrust approvals. Another very exciting year has started for Bavarian Nordic. To the right you see our guidance. As we have already announced previously, we expect revenue of approximately DKK 6 billion.
Just want to make sure everyone understands under the monkeypox smallpox side, we have only included already secured orders amounting to approximately DKK 4.4 billion. We expect an EBITDA of approximately DKK 2.2 billion. To the right, we have shown the expected financial impact of the acquisition from Emergent BioSolutions. Depending, of course, on exactly when we close and how many months of this year that we will own the business, we will expect to have additional revenue of approximately DKK 200 million. We are expecting to have a loss on EBITDA of approximately DKK 400 million, primarily caused by the continued investment in the chikungunya development. Finally, very exciting year ahead of us still. With that, I will turn the word back to the operator and open for questions.
Thank you. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Please stand by while we compile the Q&A roster. Our first question coming from the line of Boris Peaker with Cowen. Your line is open.
Hi, this is Nick on for Boris Peaker. Thanks for taking our questions. Just on JYNNEOS, I know in 2022, in like the second half of 2022, you mentioned that you were able to produce about 2 batches per week. Has this increased to the four batches that you guys were guiding for the end of 2022? If so, is that enough to meet the current contracts for JYNNEOS in 2023 and still have additional capacity for 2023 additional contracts?
Yeah. Hi, thanks for the question. Last year on the bulk, we were producing two batches a week, and we're now currently at four batches a week, which is what we plan to do for the rest of the year. There is spare capacity, or I should say there is excess capacity with that scale of four batches a week, but not much. There is room for additional orders, should we receive them. Again, there are two types of orders that we'll likely receive from the U.S. government we could just receive bulk orders. From other customers, it's most likely finished product. It's the finished product that's a bit tight because obviously it needs more time to produce the bulk and fill and release.
There is additional capacity this year for both bulk and final product orders.
Great. For those, is that just for JYNNEOS? Like with the deal with EBS, if this does end up going through, you'll also be acquiring the Bern, Switzerland facility, which is where they primarily developed Vaxchora and Vivotif. Will you be planning to only do both of those there or will you move like rabies or TBE there as well? I know that's where they mentioned before that that was their primary travel vaccine location.
There's no plans on moving rabies and TBE. I mean, we've just invested EUR 100 million in expanding the facility in Denmark to produce those two products. They will most certainly remain in Denmark. I think, however, if we go back to last year when the monkeypox situation arose, we were really scrambling for capacity, and we outsourced our RSV vaccine manufacturing to free up capacity this year. I think with the acquisition of Bern, it gives us more flexibility to look at internal solutions.
I just mentioned RSV, we could potentially be looking to bring that back at some point. Now whether that's in Denmark or in Bern, needs to remain to be decided, but it certainly gives us more flexibility and capacity moving forward.
Great. Thank you very much. It's very helpful.
Thank you. Our next question coming from the line of Gil Blum with Needham & Company. Your line is now open.
Hi. Good afternoon and good morning. Maybe a quick one on the advisory committees that we had the last couple of days for the RSV vaccine. Particularly the kind of questions that came in around safety that were posed to Pfizer. How do you view the Bavarian's efforts in RSV as differentiated? Thank you.
Thanks, Gil. I mean, the safety issue that was discussed about Pfizer was a rare autoimmune disease. We would already know if there were cases of that because that would be a serious adverse event. Currently, we don't have any of those cases. I mean, that in itself looks good. I mean, while there's a lot of discussion on the rare events, there was also a discussion on the reactogenicity profile also of GSK's vaccine, particularly in combination with flu. We know both vaccines are quite reactogenic. You know, we have to wait until all our data's in and everyone else's data is fully in, but there could be a differentiating factor in terms of the safety profile of our vaccine.
Thank you. That's very helpful. Another question on the two new acquired travel vaccines. You're getting the entire production facility as well as the sales people. Do you plan on investing in sales for those vaccines or kind of go in with what you currently have? Thank you.
Yeah. Thanks again. I mean, there may be some small investments, integration costs and the like, but, you know, that's not huge investments.
All right. Thank you for taking our questions.
Again, as a reminder, if you'd like to ask a question, please press star one one. Give it a moment. I am showing no further questions at this time. I will now turn the call back over to Mr. Sørensen for any closing remarks.
Okay. Thank you, everyone, and thank you for your time and participation in today's call. Welcome back to next time. Thank you.
Ladies and gentlemen, that does end our conference for today. Thank you for your participation. You may now disconnect.