Good day. Thank you for standing by. Welcome to the Bavarian Nordic conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Rolf Sass. Please go ahead.
Thank you, operator, and welcome to everyone. Today's call is about the strategic acquisition about some travel vaccines. On today's call, we have, as usual, members of the executive management team, President and CEO, Paul Chaplin, and Executive member, CFO, Henrik Juuel. My name is Rolf Santen, Vice President, Investor Relations. Before we start the presentation, I just will run through the 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 materially from the results discussed. Forward-looking statements include statements regarding our short-term objectives, 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 the date made, except as required by law. With this, I will hand the presentation over to Paul, and you can afterwards find the presentation on a replay on our homepage. Go ahead, Paul.
Thanks, Rolf, welcome everyone to our call. Before I and Henrik go into more details about the acquisition that we announced today, I wanna spend a couple of slides really explaining our vision and our strategy around building up the company in the next few years. If we go to the next slide 3. Just talk a little bit about Bavarian Nordic at a glance. We're a company focused on developing and commercializing life-saving vaccines. We successfully built up a global commercial operations in key strategic markets. We've established end-to-end manufacturing in our facilities in Denmark, also through a network of contract manufacturers. We have a proven capability in R&D, taking products from the bench all the way through launch.
We have five commercial products that we've developed in-house, the rabies, TBE, smallpox, and mpox, or I should say acquired. Through licensing agreements, we distribute 3 other life-saving vaccines. Excitingly, we have 2 late-stage programs for both RSV and COVID-19, both in phase 3 that will read out this year, that could have a significant impact in meeting a high unmet medical need for both indications. If we go to the next slide 4. Our vision for 2025 is that we aspire to be 1 of the largest pure-play vaccine companies. To achieve this, we have a number of strategic objectives. Through R&D, we will continue the innovation to bring new life-saving vaccines from the bench through to launch. We will continue to look for synergistic license agreements to add to our commercial portfolio.
Likewise, we will continue to look at strategic and selective M&As, as we have announced today, that will add to the commercial portfolio and be synergistic with our infrastructure and our commercial setup. Through our commercial excellence, where we really try to provide a first-in-class service to healthcare professionals, we will be bringing life-saving vaccines through to the end customer, which is the patient. If we go to slide 5, what do we mean by becoming one of the largest pure-play vaccine companies? Well, we believe that that means for us to have revenues of at least or more than $1 billion, and that will lead to an EBITDA margin of 25% or higher.
This, we believe, will give us the ability to really continue to bring products like RSV from the bench all the way through to add to our commercial excellence and drive commercial growth. There are three strategic objectives to really meet this vision and the financial goals to have revenues of $1 billion and an EBITDA margin of 25% or higher. The first is to secure the profitable growth of the current business. I want to just spend a couple of minutes talking about that, because this is the basis of our business moving forward. For many, many years, Bavarian Nordic was built on a very, very strong partnership with the U.S. government on smallpox.
In 2019, when this vaccine, JYNNEOS, was approved by the FDA, we had a monkeypox indication which came to the forefront last year due to the unexpected and unprecedented outbreak of monkeypox. That indication was expanded to our approvals in Canada and Europe. Last year we sold and distributed just over 4 million doses and gave access to more than 70 countries in our response to help the public crisis with monkeypox. That has allowed us, and Henrik will talk more to that, when he talks about the guidance for this year, to secure significant orders for 2023. However, it should not be forgotten that we have orders way beyond 2023 worth approximately half a billion US dollars, and that's with just two customers, with the U.S. government and with Canada.
For the US government to materialize the order that they've had for a number of years for $300 million, they would have to buy more bulk vaccine to replace the bulk that they used to place the orders for monkeypox last year. That would bring the order book for smallpox, monkeypox up to around about $800 million in the coming years. That's without the US government increasing the requirement for JYNNEOS, and that is without any other government placing an order beyond 23, despite the fact that we are in constructive discussions with a number of governments and organizations to do exactly that.
We actually see a very, very strong future for smallpox and monkeypox way beyond 2023 as we transition to freeze-dried and increase the number of countries that are stockpiling the vaccine, not only against monkeypox but also smallpox. In 2020, we did our first acquisition of our two products, rabies and TBE, and at that time we believed these neglected products would be better suited in our hands, that once we build up our commercial infrastructure, we'd be able to drive profitable growth. Unfortunately, these two products hit the headwinds of COVID, which no one anticipated. I'm very pleased to say that last year we had a record year for rabies sales in the U.S., and that is a record year since it was approved.
That is testimony to our strategy that we can take over products that are neglected and with a keen focus on both production, supply and service, we can really drive profitable growth. With TBE, while we still haven't reached the pre-COVID levels, we're very confident that we will in the coming months and really show that in our hands these two assets will go from strength to strength. If we go to the next slide. The next part of the strategy is selective M&A. We say selective and strategic because we're really after assets that are complementary to our commercial portfolio and our commercial infrastructure.
What we've announced today is the purchase of two travel vaccines that fit perfectly into our portfolio, which, together with our development program, chikungunya, when approved, will also fit perfectly into the strategic direction together with our other travel vaccines and will in fact make Bavarian Nordic the leading travel vaccine company in the world. Lastly on the strategy, if you go to the next slide, is to advance our pipeline assets that will also give us optionality to bring products through and increase our commercial firepower. Here, as you know, we have two products in phase 3 for COVID and RSV that will be reading out later this year.
These truly have a tremendous potential not only to meet and address an unmet medical need, but significantly add to the top line and towards our strategy of becoming one of the largest pure play vaccine companies by 2025. If we go to slide 8, let's talk about the transaction and what we announced today. We have bought two assets or will buy two assets, commercial existing assets from Emergent BioSolutions for both for vaccines against cholera and typhoid, plus a phase 3 asset against chikungunya. As I said, this will really help increase our top line and our growth ambitions. Together with the assets, we're also buying a lot of know-how, both in terms of a manufacturing site in Switzerland, which is highly experienced in manufacturing the two commercial assets.
There's no tech transfer risk with this acquisition, but we'll be taking over a fully fledged operational manufacturing site, and together we'll also be taking over additional R&D employees in a site in the U.S., which will allow us to continue the focused development of chikungunya all the way up to launch in 2025. If we look at the deal structure, we're paying a potential total value of $380 million. $270 million up front. An additional $110 million milestone payments conditional on the successful development and readout of the chikungunya program, plus also some sales milestones. An extremely attractive deal for the assets that we will eventually acquire. If we go to slide 9, just to sum that up.
The typhoid vaccine is trademarked Vivotif, and I'll talk a little bit more about the products in the coming slides. Vaxchora is the cholera vaccine, which together with rabies and TBE, will really form a leading travel vaccine portfolio. The pipeline opportunity is a really attractive chikungunya vaccine candidate that is in phase 3. I'll talk more about that in the coming slides, but really have some very positive clinical data, and we're very excited about that asset moving forward. We're purchasing as part of this agreement, a manufacturing site in Bern that is experienced in manufacturing Vivotif and Vaxchora, and gives us a lot of optionality moving forward in terms of bringing other products that we currently outsource, potentially back in-house.
We're taking over some commercial resources which will allow us to expand our capabilities both in the U.S., but also expand our footprint in Europe, where we're currently not active. The revenues, which we will be growing over the coming years, will allow us to continue to move forward to our vision of becoming one of the largest pure play vaccine companies. Importantly, we're bringing a lot of know-how with an additional 280 employees, covering everything from quality, research, manufacturing, and commercial, that will really aid the integration of these products and capabilities. If you turn to slide 10, let's talk a little bit about the products and the indications. Typhoid, interestingly, is the second most recommended travel vaccine in the globe.
That is a very, very powerful vaccine to have in your portfolio, being the second most prescribed vaccine. It's estimated by others that the typhoid travel vaccine market will grow to $250 million by 2028, with a very attractive annual growth rate. There's a real opportunity here to really grow this market and the opportunity. Vivotif itself has been around for more than 35 years and is approved in more than 25 countries. It's a multi oral dose vaccine delivered via capsule, given 4-5 doses within a week. Offers very good protection up to five years. Many, many doses have been administered. More than 150 million doses have been administered since its approval. Emergent BioSolutions bought these vaccines in 2018.
They have basically suspended growth, their sales due to COVID. The sales in 2019 were at $34 million. However, we really believe that we can grow the sales of these vaccines with a keen focus on supply, to somewhere near or more $80 million within the coming years. Vaxchora is a vaccine against cholera. Cholera is in one of the top 4 travel vaccines that are prescribed. Again, the cholera market is estimated by others to reach $75 million by 2028, with also quite an attractive annual growth. Vaxchora has been approved since 2016, initially in the US, where it's the only approved cholera vaccine, but is now approved in 27 countries.
It's also an oral vaccine with a single dose, suitable for ages of 2 to 64, and provides protection from day 7, which is a significant advantage over the competition. In 2019, sales of $4 million were recorded. Again, we believe we can grow this business to $20 million annual US dollars within the coming years. A combined annual revenue between these two products of $100 million in the coming years. If we go to the next slide 11. Chikungunya is a disease that is spread by mosquitoes. It's been identified in more than 110 countries around the globe, in Africa, Asia, Europe and the Americas.
There are sporadic outbreaks of the disease, it can cause, its main symptom is severe pain in multiple joints, which can actually develop into a chronic condition in about 40% of all people who get these symptoms, which can last for years. There's currently no prophylactic vaccine or treatment for chikungunya, is clearly a huge unmet medical need, not only in the endemic regions, but also for travelers traveling to these regions. On slide 12, if we just look at the projected candidate for the chikungunya, it's a viral-like particle technology which is adjuvanted in alum. It's a single-shot injection, based on the phase 2 data that has been published, the majority of people, more than 90% of the people given a single shot, seroconverted to protective levels within a week.
Which again, is a very rapid onset of protection which we believe is a differentiating factor compared to the competition. It's currently in phase 3, will read out later this year with an estimated launch date of 2025. The market is estimated to be valued at around about $500 million, that's based on 100 million people traveling to these endemic regions. It's an extremely attractive market, a differentiated candidate. The competition is a live attenuated vaccine that has just been filed for approval from Valneva. We believe, as I said, that the differentiating factor with a faster onset of protection, which is extremely important as a travel vaccine, as most people only consider vaccination for travel last minute. Having a fast onset of protection, we believe is a real advantage.
If you go to slide 13, what will this mean both for our commercial portfolio and the pipeline? What you'll see, we'll end up with 7 vaccines or 7 indications for our commercial portfolio with monkey, smallpox, rabies, TBE, Ebola, and now also cholera and typhoid. As I said, typhoid is the second most prescribed travel vaccine around the globe and is a great addition, together with cholera. If you look at the pipeline, we now have or we will have 3 late-stage programs for RSV, COVID, but also chikungunya that will read out later this year. Some earlier programs, 1 funded by DOD and 1 in oncology. Really adding both to the pipeline but also the commercial portfolio. Slide 14. As I said, it's just not about assets. We're also bringing over a lot of capabilities in this deal.
There is an R&D site in San Diego with a lot of expertise, within research, process development, quality, together with the employees and know-how. There's a manufacturing facility in Bern, proven manufacturer for both VIVOTIF, Vaxchora, which really offers us a lot of optionality, moving forward in terms of expanding our manufacturing footprint for future products and also products that we are currently outsourcing. In terms of sales, everything is extremely synergistic. We're bringing more products, to the basket in the U.S. together with increased capabilities. With some of the capabilities we're bringing over, it will allow us to expand into territories that we're currently not active today, such as in certain parts of Europe. So completely synergistic to our set up and will really allow us to derive profitable growth and distribute, our life-saving vaccines.
On slide 15, we are quite experienced in these integration programs with what we did back in 2020 with the rabies and TBE. In this case, it's slightly different, we actually think it's a fairly low-risk takeover because we're taking over existing businesses that can plug into our systems. In terms of the development of the chikungunya vaccine candidate, we're bringing the expertise over from Emergent, we will leave that completely uninterrupted and drive that development out of San Diego with the existing employees. The manufacturing setup is almost plug and play as they currently already produce Vivotif and Vaxchora, we can look at expanding the manufacturing footprint over time. In terms of sales and marketing, obviously, we need to integrate from day one into our commercial setup.
In terms of distribution, we'll have support from Emergent for a period until we transfer distribution into our own network. Really, we already have a very solid transition plan in place, and we feel that we can really execute as we did with the rabies and TBE on bringing these products and integrating them and bringing chikungunya to a successful launch. With that, I will hand over to Henrik Juuel.
Thank you very much, Paul, and good afternoon, good morning to all the listeners. On the next slide 16, I just want to quickly sum up on the valuation that we see with this acquisition here. Paul already talked about the market opportunities for these three products that we're talking about. Typhoid, a very interesting market. The second most prescribed travel vaccine, which is predicted to have a market value of around $250 million by 2028. $7 million for the cholera market. Finally, the chikungunya vaccine market has been estimated to be worth approximately $500 million in annual revenue by 2032.
If we add these up, we're talking about a total market that we can address with this acquisition here of around $800 million. Quite significant addressable market that we will get access to with this acquisition here. As Paul also said, Vivotif and Vaxchora, the two commercial products, did suffer from COVID-19. In our own business, in particular in our rabies business, we have seen the significant impact of traveling resuming more and more back to normal levels. We do expect these products also to take off again. Vaxchora will need to be relaunched this year, but we see great opportunities, particularly as this is the only approved cholera vaccine in the U.S.
Combined, for Vivotif and Vaxchora, we do see a potential of these two products, alone being, having a peak sales potential of around $100 million, let's say four, maybe five years down the road, depending on how the travel market develops and of course, how fast we can relaunch Vaxchora in particular here. An interesting addition, very synergistic to our existing portfolio. Of course, we have the chikungunya products targeting a very interesting market with a significant unmet medical need, as there is no vaccine available against chikungunya today. On the next slide, I wanted to talk a little about our guidance for this year. We also announced that today, just prior to announcing the transaction here.
If we start on the left side, that is the pure Bavarian Nordic as is guidance for 2023, where we are guiding revenue of approximately DKK 6 billion and an EBITDA of approximately DKK 2.2 billion. Just to provide a little detail on mpox and smallpox revenue, approximately DKK 4.4 billion, and that corresponds to only confirmed orders, so we have not included any non-confirmed or expected orders to come. On Rapis and TBE business, we expect continued growth. We had a fantastic year last year with our Rapis business that grew to a level higher than ever in the US, and we also saw significant growth in Germany and in Europe in general.
TBE is still slightly behind the level prior to COVID. We do expect to see a rebound during this year. Significant growth expected from the commercial business as well this year. We have also included expected revenue from our partnership with Nuance Pharma on RSV that will be triggered by Nuance Pharma entering into phase one and later also phase three expected this year. In terms of our spend, we are assuming approximately DKK 1.9 billion in R&D, including DKK 300 million that will be capitalized as part of our APN CAH2, COVID-19 program. This is somewhat higher than we had previously anticipated and mainly explained by some of the costs anticipated last year has been pushed into 2023 due to the timing of the ongoing trials.
On networking capital, we are also expecting an increase in 2023 of approximately 1.5 billion DKK. This is explained by the increased revenue, also by a planned inventory buildup associated with the transfer of manufacturing from GSK, where we in an interim period more or less will be running with two independent supply chains. While buying product from GSK, we will also start building up inventories to do our own manufacturing of these products. All in all, I think record numbers guided for Bavarian Nordic alone. Last year was financially a record year, you will see that this guidance year, 2023, will be even better and another record-breaking year. If we turn to the right side of the slide, this is the expected impact from the acquisition.
This is of course very sensitive to the timing of the closing. It is pending closing. We have only signed the transaction so far. The timing will of course eventually determine exactly how much of the business we get access to in 2023. Here now we are expecting revenue impact of approximately DKK 200 million from Vivotif and Vaxchora together. We are expecting negative EBITDA of approximately DKK 400 million, that EBITDA includes a positive contribution from the commercial products amounting to approximately DKK 75 million. It includes investments in the chikungunya program of approximately DKK 300 million, we have included as well anticipated one-off integration costs of DKK 100 million. The latter is a conservative estimate.
We know we will need to spend money, implementing our own ERP systems, quality systems, integrating the organization into our organization, etc. It's so there will be money spent on the integration side, but we do believe that this is a conservative, good estimate. We have not added up these numbers simply because we haven't closed the transaction yet. As soon as we close, we will of course combine the two and provide an updated guidance for the combined company. On the next slide, this is a slide that we are extremely proud of. Paul talked about our strategy, and he also talked about the growth levers that we have put in play with our strategy. I think this slide here really demonstrate where we have come already.
It demonstrates significant revenue growth since 2018, and it also demonstrates profitability since the acquisition of the products from GSK back in 2020. 2023, with these guidance numbers here, DKK 6 billion and a very high profitability rate of 2.2, with DKK 2.2 billion in EBITDA. What are the next steps to complete this transaction here? I think first of all, the consideration we're going to pay for this transaction is up to $380 million, $270 million in upfront and $110 million in milestones linked to successful development of chikungunya and successful commercial performance of the, of Vivotif and Vaxch ora.
That will be funded as a combination of existing funds that we have. We do have a good and strong cash position at the moment, combined with an direct share issue we anticipated to execute here during the first half. We have also from our banks, Danske Bank and Nordea, secured an equity bridge should we need funding until we have conducted the accelerated book build. Of course, we are looking very much forward to closing the transaction. The only thing that is really pending are the typical customary closing conditions like antitrust approvals, et cetera. We can't say exactly how long it will take, but our best estimate is that it will probably take 2-3 months before we are ready to fully close the transaction.
On the next slide, just the transaction in summary. I will not go through all the details, here we're talking about two already established commercial vaccines in interesting markets with a very good fit with our portfolio and our strategy and late-stage pipeline candidates targeting a very attractive market with a significant unmet medical need. We are also getting a complete manufacturing site in Switzerland, we are getting, expanding also our R&D capabilities and competencies by taking over the San Diego sites and also gather 280 experienced people, which also is an extremely important thing in a market situation where recruitment is not the easiest in our business here. We are actually getting a lot of good talent on board.
On the strategy side, I think this acquisition here fits so well with our strategy, and it helps us basically accelerate it, moving us closer to our vision of becoming one of the largest pure-play vaccine companies. With this acquisition alone, we can already claim that we are now a leading travel vaccines provider in the world. Among the other things, I think I would just like to highlight here it has been a long wish, strategic wish from us to expand our presence and our business in the U.S. With our commercial organization today, we only have our rabies product in the U.S. Now we have two additional products, which is really a significant contribution and fits extremely well with our strategy.
I talked about the price already that we are paying for this, and I talked about the financing. I don't want to repeat this. I'll just end up by saying that this is a great transaction for Bavarian Nordic with a fantastic fit with our current strategy and vision. As we see it's a transaction with a very significant value upside as well. With that, I will turn the word back to the operator and ask for the questions.
Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Gil Blum from Needham & Company. Please go ahead. Your line is open.
Hey, good morning, everyone, and thank you for taking our questions. First off, is there any plan on moving production between the different facilities that you currently have?
Paul, did you get that?
Yeah, sorry. Just unmuting. Yeah, thanks for the question. No, there's no plans. The Bern facility is set up and geared for Vaxchora, beginning to end of production. you know, we have ClickGuard set up for our rabies, TBE, and smallpox. No, we won't be moving any of the products that we currently have established in-house.
Okay, excellent. Now maybe a more general question. What do you think you can do better than what EBS has done so far on the marketing side of their commercial vaccines?
You know, I, you know, I think Emergent were unfortunately hit with the impact of COVID. They were really not able to execute on any of their plans, I guess, because they suspended the production and the sale of the products. That's why we're talking about a relaunch. I think, you know, I guess it's not what we can do better than Emergent. It's really that we can execute on the plans for a relaunch and, you know, address the growth that we believe is there. You know, the one way I would also answer that is look what we've done with the rabies and TBE assets. Yes, we were hit by headwinds, we built up a global commercial organization, we are delivering.
As I said, the record year of sales for RabAvert in the U.S., just shows that we have the right strategic fit.
Right. Maybe a last one. I think it's an important clarification because I feel I may have missed this. The financing for this deal. You have cash and an equity bridge, but also the press release suggests that there will be some share-based financing. Could you elaborate on this a little?
What the plan is up until to finance this by using the 10% mandate equity issue mandate that we have from the annual general meeting. A 10% mandate cannot finalize or finance this full transaction, that's why we talk about a mix of current existing cash and then directed share issue to be conducted here during the first half of the year. The bridge financing is simply just to allow us to time the directed share issue in the best way to the market.
Excellent. That was very helpful. Thank you and congratulations on the acquisition.
Thank you, Gil.
Okay.
Thanks.
Thank you. We will take our next question. Our next question comes from the line of Peter Verdult from Citi. Please go ahead. Your line is open.
Yeah. Thank you. Two questions, I've also been asked to put a question to management from an investor. Peter Verdult, Citi. Paul, just over and above the onset of action that you described in your pre-prepared remarks, are there any other points of differentiation with respect to your chikungunya vaccine versus Valneva? If I could push you, I'm trying to translate your comments. Are you saying that you see this as a $250 million commercial opportunity at peak, or am I being too conservative there? Just some more, if I could push you a bit more on the pipeline candidate that you've acquired. Secondly, and a little bit cheaply, as I thought I would be far down on the queue, I was wondering if.
I know the call is primarily about EBS, but just given the recent competitive datasets and given the timeline delay, I would be interested to hear your latest thoughts and your expectations for Bavarian's COVID and RSV efforts and what constitutes a win. Just the question from an investor is of the DKK 300 million program spend for the chikngunya program, what is incremental versus what EBS was already spending? I-e, are you able to expand on the program, or are you doing anything differently, or are you simply just taking over the program as is? Thank you.
Thanks, Peter, for the question. Your first question related to differentiating factors of this candidate versus the competition. The onset we can talk about because that's already been established in the phase two data that's been published. It's clear. It's a clear differentiator. Obviously the phase three data for this candidate, the VLP, has, you know, we don't have the safety data yet, so we can't really talk about it. But the competition is a live attenuated virus, which typically has a slightly different safety profile to a viral-like particle. There could also be, and I caution it because we don't have the data yet, an improved safety profile with a VLP over a live attenuated vaccine. That could develop as to being another differentiating factor.
You asked about the value of the market, and, you know, some people are estimating it to be DKK 500, and, you know, what it ends up being and what our share is, I think we'll wait to comment on that. We'll let you speculate. But it will be a significant contribution to the top line, should we be successful in launching this product. I think the other question related to RSV and ABNCoV2 and what would be a win? Well, with RSV, you know, the bar has been set. You know, the efficacy data is there. We've had 3 readouts with relatively similar efficacy data on the face of it. That's the bar. Anything less than that is definitely not a win.
That's where the bar is set. The time is out on longevity. You know, Janssen has reported 2-year data from their phase 2 B, which looks pretty good. No one else has longevity data that could really be the key, I think, for RSV. Some companies are talking about an annual booster. I think most companies, us included, are actually thinking this is a multi-year protective vaccine and, but we all need to generate the data for that. On ABNCoV2, you know, you know, the primary endpoint is there. We need to demonstrate non-inferiority to the Pfizer vaccine that will fulfill the endpoint.
I think what is a win, we would need to show not only the non-inferiority endpoint, I believe the broad protection against many of the variants of, or the current variants of concern will be very important, I think, into convincing authorities that this is a vaccine that although it's not bivalent would have value in being approved. I can't remember. Was there a third question, Peter?
Just to remind you again, the question from the investor was about the chikungunya program, the DKK 300 million spend that Henrik called out in his pre-prepared remarks. The question is basically, is that incremental to what EBS was already spending? Are you just essentially taking over the program? Are you adding to the program or is it just taking over what was being planned to be spent by EBS?
Yeah. Peter, let me.
No.
Sorry.
Yeah, go ahead, Henrik. No, go ahead. That's fine.
I think what the way the deal works is that we at closing we are basically taking over the business, we're taking over the people behind the chikungunya program, and we will be carrying the remaining costs. The DKK 300 million that we anticipate for this year is basically the full cost associated with the chikungunya program in 2023. It's a very late-stage program, this year I think is really about finalizing the phase III and get the readout. There will be investments next year as well, and we anticipate a launch in 2025.
Thanks. I'll get back in the queue. I've got a couple more. No, thank you.
Thank you. We will take our next question. The question comes from the line of Boris Peaker from Cowen. Please go ahead. Your line is open.
Yes. Maybe initially, first I just wanna say congratulations on the deal. Certainly very interesting. For the two travel vaccines, what kind of an investment would you have to make in commercial infrastructure to reach your sales targets of DKK 80 million and DKK 20 million each? For the chikungunya program, from the efficacy perspective, what do you need to show in a phase III program to both get it approved as well as to make it commercially attractive?
Yeah. Let me take the chikungunya one first. The regulatory path for approval has already been set. The discussions with the European agency and with the FDA have been concluded, and it's based on an immunological endpoint, a certain antibody, utilizing antibody titer that is believed to be protective. The endpoints are set. The discussions with the regulators are set, and that's what we need to meet. According to the discussions with the regulators, there would be a need for a confirmatory efficacy study. As you know, that will depend, that will require an outbreak. There will be a follow-up efficacy study for, you know, for the subsequent approval.
In terms of the investment in commercial, you know, I, I think beyond what we currently have and what we're taking over, we don't foresee significant commercial investments to meet the sales targets.
Just a quick clarification. What exactly for the chikungunya, what is the actual, numerical endpoint that would need to hit on the, these titers?
Yeah, that. I don't think Emergent has revealed that. You know, that's, we've looked at that data, and we're extremely comfortable. When we talk about seroconversion by day seven to 10, that's based on the protective titer.
Great. Thank you very much for taking my question.
Thank you. We will take our next question. Our next question comes from the line of Peter Welford from Jefferies. Please go ahead. Your line is open.
Hi. Thanks for taking my question. Just firstly, just with regards to the relationship you have on the commercial side already with Valneva in a couple of markets for the rabies and TBE. Just curious, obviously now you've got another 2 products which are also approved in, or you will have, sorry, another 2 products which are also approved in Europe. Just how should we think of this? I mean, does this mean now that your European infrastructure, you know, is larger, so potentially, you know, that relationship is no longer valid? Or equally, you know, is this in fact are you likely to now to leverage that relationship then for these 2 products?
I guess you could just talk a little about how we should think about sort of the overlap between these, given obviously at the moment you're not, you're not doing all this marketing in-house. Secondly then, just with regards to the financing, the potentially accelerated bookbuild, I guess this perhaps relates to the RSV and ABNCoV2 as well, but is it reasonable to assume that this is likely to occur before either of those two sets of data are available? i.e., you know, is the plan to do the equity financing before we get the phase III results for any of these?
Just finally, just with regards to the RSV phase III, it looks as though, sort of reading the release, or maybe I'm trying to read too much into it, as though you have the data or you're near to having the right number of events, and it's just a case of the analysis. Is that reading too much into it, or are you still waiting for events to accrue at the moment to be able to do that, the analysis of the primary endpoint for RSV? Sorry, just finally, I may have missed this on the call, but it looks as though you've got DKK 75 million of EBITDA positive from the sales of the vaccines, DKK 300 million of R&D, DKK 1 million of integration costs, but minus DKK 400 million in total.
Is the remainder the sort of cost of the FTEs and the sort of the manufacturing of those sort of costs, or am I trying to do too much math and getting it wrong in terms of what the delta between those figures is? Thank you.
Thanks, Peter. Let me take the question regarding Valneva relationship and the RSV phase 3, and then Henrik, you can take the ABB timing and the questions, financial questions. First thing I'd like to say is the relationship we have with Valneva, which is reciprocated, they sell our products in certain territories, and we sell their products. It's very strong and has been really, really successful. Clearly, we need to sit down with Valneva as we now have some competing products. We're currently distributing Dukoral, which is a cholera vaccine, and we will be acquiring another cholera vaccine. There needs to be some adaptations to our partnership moving forward, and obviously with chikungunya, we will, in certain aspects, be competitors.
We need to sit down with Valneva, but, you know, as I said, I think I can almost speak for both companies that it's been a very, very successful relationship and one that we would hopefully find a way of securing that we could continue in some form. It would have to be modified due to the competing products. On the RSV phase 3, we certainly do not have the data. At the moment, we've recruited 20,000 subjects by year end, as we've planned. What we're doing now is we're waiting for so-called events based on the Lower Respiratory Tract Disease that need to be confirmed to be RSV related by PCR, and that is occurring. We know there's a certain number of events that we need to reach, which we have not divulged.
When we reach that number of events, we will be able to ask the committee to look at the data and tell us whether we've met the primary endpoint. We believe we will have enough events to make that readout later this year, as we've indicated in the release, but we definitely do not have sufficient events as we are talking right now. Henrik, do you wanna answer the other two points?
Sure. There was a question first on the ABV, when that could happen. I think we have not disclosed any specific timing on this. We only said that it will happen during the first half. It could happen before we read out the data on ABNCoV2 and RSV, as this is for those programs expected mid-year. We can't be more specific at this point in time other than expect it to happen during the first half. On the, on the financial impact from the target, very well spotted, Peter. If you take these numbers, they don't add up to DKK 400 million on EBITDA. We do write among others, the list is not complete there.
I think to make it complete, we would need to add some general G&A costs. There's also some, you can say, general R&D costs. These together make up the difference up to the DKK 400 million EBITDA impact. Hope that answers your questions.
Yeah, that's great. Sorry, just back to Paul, though. When you said you're waiting for events to be confirmed by PCR, just to be clear, as far as you're aware, the target number of events hasn't occurred rather than the number of events may have occurred, but you're still waiting to know if the number of those events are all confirmed by PCR to then be able to close the actual database log. What you know, you don't know whether the number of events or the number of PCR-confirmed events has yet occurred?
Yeah. I think I follow with what you're asking. well, as you know, the number of events are based on symptoms, right? Swabs are taken, and only some of those swabs turn out to be related to RSV 'cause, you know, it could be flu, it could be COVID, it could be whatever. We have a large number of events that we're going through a backlog of screening, but we do not have sufficient number of RSV confirmed LRTD cases currently.
That's great. Thank you.
Thank you. We will take our next question. The question comes from the line of Jesper Ilsøe from Carnegie. Please go ahead. Your line is open.
Thank you. Also congrats on the transaction from my side. I have a few questions. Firstly, on the margin, can you just explain how you see this attractive margin changing over time? What does that imply in actual EBIT or EBITDA margins on the two margined vaccines? Perhaps also explain how you expect the profitability to look from these margined vaccines in the coming years, all else equal. On the sales of these two margined vaccines, you say it's DKK 200 million or around DKK 200 million 2023. Is it fair to assume that that only covers around 6 months of sales?
All else equal, it would imply a DKK 400 million annualized revenue on which you potentially could extract sales increase, or is there a time lag or anything else to take into this kind of calculation? Lastly, I believe you are competing, I guess it's Sanofi on the two margined vaccines, implicitly you expect 30% market share in the coming years. Do you think that's large to small? How kind of conservative is that? Perhaps you can add some more business details on that. Thank you.
Perhaps I can start here. Thank you, Jesper, for the questions. I think on the margins and the profitability, I think is basically it's a little too early to say. We have been to do, of course, detailed due diligence. We have not closed the deal yet. We know that they are, you can say already profitable today, these products, but of course, the final profitability of these will really depend on the ramp up of revenue again, and on Vaxchora, I think we're talking about a relaunch. When we say attractive margins, we basically means margins similar to the current existing business that we have, but they will soon get to that level. The sales number we have included here, we have assumed 9 months.
9 months is a little unrealistic given the timing of signing right now. At least we should have a very fast closing, which is not happening. It was for illustration, it's approximately 9 months that is included here. I believe you had 1 more question. That was on the market share competing against Sanofi. I think it's also a little too early for us to talk about market share. We need to get our hands on this business here so we can make our really our own mind in terms of how to guide the market short and near term.
Okay. If I can just push you on the margin again. Can you perhaps explain what's the price difference in the vaccine to acquire compared to the GSK or the MR vaccines you already have? Just to get some feel for whether or not it's a higher or lower margin compared to that business.
I think prices we can't talk about yet on these products here. I think if you look at the margins that we're looking at for these products, they are actually better than the GSK acquisition. Remember the GSK, we were dependent on their manufacturing, and we will get to the good margins once we have taken over full manufacturing. Here in this case here, we are acquiring the manufacturing as well, and therefore we actually start off with higher margins than we have right now on our TBE and rabies business, everything else being equal. There can of course be price differences in the markets.
Okay. Thank you. Thanks so much.
Thank you. We will take our next question. The question comes from the line of Michael Novod from Nordea. Please go ahead. Your line is open.
Thank you very much. It's Michael Novod from Nordea. Just three quick questions. First of all, on the Vivotif and Vaxchora, can you try to explain the cadence you expect in terms of sales ramp towards these $100 million or something over three to four years? Is it a rather fast ramp or is it more sort of hockey stick like? The second thing on the monkeypox or mpox sales guidance for 2023, is it fair to call it a floor guidance given how you sort of frame it in the call?
Lastly, just following up the previous question around RSV, is it fair to assume that you're tracking RSV events and confirmed events to an extent that you can now say that you don't need or you don't see a risk for a second season, the risk of a second season, you're expanding the trials over a second season? Just so we know that you're actually tracking on a level of RSV confirmed events that you will complete it, a sort of 99% certainty this first half. Thank you.
Yeah. Thanks, Michael. Let me try and address those. You talked about the growth rate
Mm-hmm.
I think it's a bit too early to say how quick that growth will come. You know, we're constantly seeing growth those two products. As we've indicated, it's a relaunch for Vaxchora, so we really need to see how that goes. We are in that recovery phase from post-COVID. Again, it's a little bit like this time last year asking me how the rabies business was gonna go, and we were a little cautious, and it went better than we thought. Let's wait and see how it goes.
Based on what we see with the travel vaccine businesses in general, we think that, you know, these will recover at a similar sort of rate as we've seen with rabies and some other travel vaccines. On the guidance, I get your point, but, I mean, we are very consistent in terms of the smallpox and monkeypox guidance in that we are really including contracts that we have secured, and that's because it's, as you know yourself, it's quite an unusual business. There are, as I said, ongoing discussions with existing or new governments and organizations. There could be additional orders, but, you know, the timing of those orders and when those revenues will be seen is too uncertain for us to include them in the guidance for now. On RSV, I can't really say much more than what I've already said.
You know, as involved in the study, get symptoms that fulfill the criteria for a lower respiratory tract disease, swabs are taken, and they are later then confirmed to be RSV or there's a panel. Those that are confirmed as RSV go into the bucket that the committee will look at and confirm themselves whether they're truly RSV, lower respiratory tract disease indications. You know, we're confident based on the data that we're having right now, that we should be able to read out as we've indicated in the release this morning, read out the data later this year. We'll have to wait and see until we have all the events screened and tested.
Thank you. We will take our next question. The question comes from the line of Peter Verdult from Citi. Please go ahead, your line is open.
Yeah. Thank you. Thank you for letting me back on. Peter Verdult, Citi. Just a follow-up call on ABNCoV2. Look, I realize there's no... It's pure upside, given that the financing of this is done from the government. Just I wanna understand clearly, you know, if you do show non-inferiority versus Pfizer, you know, what, if any, sort of commercial opportunity are you thinking about for this asset obviously? I just wanna understand, you know, your ambitions and what you think is feasible to think with respect to commercial potential. Thank you.
Yeah. Thanks, Peter. You know, as I said in the first answer, yes, the primary endpoint is important, and that was set several months ago and agreed with the regulators. As I'm sure you're aware, the VRBPAC in the U.S. has recommended the FDA to consider only bivalent vaccines moving forward. I know similar considerations are being discussed in Europe. That is based on the current data generated by RNA vaccines, where there's a belief that the monovalent vaccines based on Wuhan are not giving sufficient cross-protection to some of the current circulating variants.
I think it will be important for our candidate, not only to meet the primary endpoint, which is a prerequisite, of course, but also to show as secondary endpoints as we planned, that we get good neutralizing and broad protection against the current variants of concern. We're going against the grain a little bit here in that the RNA vaccines have been shown to be insufficient, based on their monovalent approach, and they need to be bivalent.
We need data to show that our approach is actually superior to what the RNA vaccines have shown. If that is the case, I still believe the commercial opportunity could be quite strong because by definition, the authorities are saying RNA-based vaccines have to change their vaccine each and every year because the monovalent approach is insufficient.
Our approach, if we demonstrate it is sufficient, will be sufficient for the current circulating strains as well. As I said, I think before I get drawn on what is the commercial opportunity, I really wanna wait for us to read out on our phase 3 data, because the data in this case is truly key on what the commercial opportunity is gonna turn out to be.
Thanks. Thanks for the call. Thank you.
There are no further questions, so I would like to hand back for closing remarks.
Okay. Well, thank you everyone, for taking the time to join the call. I appreciate all the questions and, you know, it's another landmark day for Bavarian Nordic with some great news. Thank you for calling and, have a great day. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.