Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's FDA approval of JYNNEOS 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 one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today, Wednesday, the 25th of September, 2019. I would like now to hand the conference over to your speaker today, Henrik Juul. Please go ahead, sir.
Good morning and good afternoon to all listeners out there. This is Henrik Juul, the CFO, and I have with me here our CEO, Paul Chaplin. We have the pleasure today to have this podcast to talk about the approval of our smallpox and monkeypox vaccine, JYNNEOS. Before I hand over the word to Paul, I would like to just take you through the forward-looking statement slide on slide number two, which says, "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 in the forward-looking statements.
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, and/or information that is not historical information. All such forward-looking statements are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking 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. By this, I would like to hand over the word to Paul Chaplin.
Thanks, Henrik, and welcome everyone to what is obviously a major milestone in the history of Bavarian Nordic. Yesterday, we received our first U.S. FDA approval of our smallpox and monkeypox vaccine called JYNNEOS. It's the only FDA-approved, non-replicating smallpox vaccine, and it's the only approved vaccine for a monkeypox indication. With this approval also came a priority review voucher, which I'll talk a little bit more about in the coming slides. However, I just want to take this opportunity to thank all our past and current employees for what has been a huge effort, both in the development, the production, and obviously also during the recent submission and approval process. On slide four, I want to talk a little bit about the name. Hopefully after this, you'll be able to pronounce it.
Edward Jenner was the father of smallpox vaccines and in fact, was the father of vaccination. He first discovered in 1798 that if you took a related virus called cowpox and inoculated people, you could protect them from the serious threat of smallpox. Neos is the Greek word for new. Obviously combining the history of Jenner and Neos, we ended up with JYNNEOS, the new smallpox vaccine. On slide five, just to remind you of our vision, within the next five years, we want to become a leading and profitable biotech company. That through harnessing the power of the immune system, we'll develop, manufacture, but also commercialize products for both infectious disease and cancer. Clearly, with today's announcements, we've made great strides in two of our main goals to reach this ambition.
We have certainly strengthened our leadership and our ability to supply smallpox vaccines, and we will be securing broader sales through this approval, which I'll come to in the later slides. Obviously, with the monkeypox indication, it will broaden the commercial opportunities and move us from beyond just simply stockpiling to other commercial opportunities that will allow us, on the back of our core strength, which is manufacturing, to build up a commercial infrastructure. On slide six, just to remind you, for those who have been following the company for a long time, the approval is a result of a 15-year partnership with the U.S. government. It all started with a call from the NIH, who wanted a safer alternative smallpox vaccine, and the program transitioned to BARDA, where we supplied 28 million doses to the national stockpile for emergency use.
Over this period, we have seen a very strong commitment from the U.S. government in the form of $1.8 billion, both in the development contracts and acquisition contracts. Here again, I think we should applaud the U.S. government not only for their vision, but their strong commitments in the past and in the future to developing and stockpiling biological countermeasures, such as smallpox. During this period, we have conducted 22 clinical studies, safely vaccinated just under 8,000 subjects, including those that are highly immune-compromised, including people with AIDS. The product is also approved under different trade names in the EU and Canada, and the commitment from the U.S. government continues in that we have a 10-year umbrella contract currently for the supply of the freeze-dried version, which is still an investigational vaccine.
This approval and these contracts will unlock the profitability in the years ahead. On the next slide, I just talk a little bit about the key efficacy results that allowed for the approval to go ahead. One of the clinical studies, which we've already reported, was comparing the neutralizing antibody titers induced by the two vaccines, JYNNEOS and the current licensed vaccine based on a replicating virus, ACAM2000. The neutralizing antibodies are believed to be the correlates, i.e., associated with the protection against smallpox. If you see on the left-hand side, you can see that the peak response after two vaccinations with JYNNEOS is non-inferior to the peak response induced by a single vaccination with ACAM.
In fact, as you'll see by that graph, the response is significantly higher, and in fact, we could show statistically superior immune responses induced by JYNNEOS. Importantly, on the right-hand side, you see that the immune responses to this correlate of efficacy is actually non-inferior at a time when ACAM2000 is believed to be protective, and that it's induced a take, a vaccination take. This is after a single vaccination with JYNNEOS. This key efficacy data strongly supports the use of JYNNEOS in a pre-emergency setting as a two-shot regime, but in an emergency setting, one could consider that a single vaccination is just as efficacious as ACAM2000.
On slide eight, the U.S. government has had a long-standing commitment to develop two vaccines and two antivirals against smallpox, which indicates how significant the threat is believed to be. Obviously, with the approval of JYNNEOS, the U.S. government has now fulfilled its requirements for the entire population. JYNNEOS is approved broadly for the adult population, including populations that are not recommended to receive traditional replicating smallpox vaccines, and they include people with weakened immune responses or people with eczema or skin allergies. On slide nine, up till this approval, the key market for JYNNEOS has been the stockpiling to be used in a declared emergency, and that's where we've already delivered 28 million doses to create that initial stockpile of 20 million doses, which have currently all expired.
The U.S. government has said, post-approval, their desire is to protect up to 66 million Americans, which on a two-shot regime, would be 132 million doses. There is a strong commercial opportunity in the continuation of building up this required stockpile. However, now there is an approved vaccine suitable for the general adult population, and that could open up other opportunities beyond stockpiling. Currently, 50,000 military recruits are currently vaccinated against smallpox. If the DoD decides to switch over to our product, that's obviously a new opportunity. If they decided to expand the number of recruits currently vaccinated, that could be an additional opportunity.
There is actually already, a guidance from CDC from 2002, that states the desire to vaccinate anywhere between half a million up to 10 million healthcare workers and potentially also other civilians who wish to be vaccinated. With this approval, there are new commercial opportunities beyond the traditional stockpiling that you've seen over the last few years for the smallpox indication. On slide 10, we've been fortunate that this approval has come with a priority review voucher under the Material Threat Medical Countermeasure program. Obviously, these are transferable and allow other parties to reduce the review time by the FDA for other drug applications. We've made it pretty clear leading up to this approval, that our intent is to sell this voucher.
Obviously, the sale of any voucher has not been included in our 2019 guidance. On slide 11, what about monkeypox? Well, monkeypox belongs to the same family of viruses as smallpox, something known as an orthopoxvirus. It causes serious smallpox-like illnesses in people and has a mortality rate of up to 10%, which is a pretty serious disease. Since the eradication of smallpox in 1980, monkeypox is now considered the most important orthopoxvirus infection in humans. If you remember, over the last 12 months, there have actually been a number of cases of travelers coming out of Nigeria, where there is a current outbreak, in the U.K., Israel, and Singapore, highlighting that the current outbreak in Africa could spread.
Indeed, in the U.K., unfortunately, one healthcare worker was infected in the hospital, treating an infected individual, which shows how serious this current outbreak can be. The epidemiology is evolving, and it's believed that the primary transmission comes from animals, although no animal reservoir has ever been found to contain monkeypox. We do know that secondary human-to-human transmission is possible, and that's clearly highlighted on slide 12, where we highlight some of the outcomes from a recent paper in The Lancet Infectious Diseases, which talks about the current outbreak in Nigeria, where 160 confirmed cases have been reported.
If you look at the risk factors associated with this outbreak, it appears to be associated in young adult males, who are involved in high-risk sexual behavior, indicating that the secondary transmission from humans and human could actually be a sexually transmitted disease. On slide 13, the approval for the monkeypox is for any person over 18 who's determined to be at a high risk from contracting monkeypox. The approval is based on animal efficacy data that was generated, and historically it was known that smallpox vaccination was highly effective in preventing monkeypox and indeed other members of the orthopox family. Monkeypox indication requires two doses of JYNNEOS, four weeks apart. The commercial opportunity for monkeypox is actually quite interesting and opens up a new market potential for us with JYNNEOS.
It's potentially on slide 14, any people living in those endemic areas in Africa, people traveling to those endemic areas, and there are over 2 million inbound travelers to Nigeria alone, and an estimated more than 5 million people traveling to the other infected countries in that area. There's also multinational companies in oil and gas presence. We've had both a large local but also expatriate presence in these areas, and obviously, we could be looking for travelers which are essentially privately paid for the vaccine doses. On slide 15, we haven't actually decided on the final pricing for the monkeypox indication, but it will be following the trend for other travelers' vaccines. On slide 15, you'll see the pricing of current travelers' vaccines.
The one thing I would point out here is that the case fatality rate for monkeypox is actually 10%, which would represent one of the more severe diseases associated for travelers. On slide 16, the next steps for us is to shape this new market. We need to create market awareness about monkeypox, the dangers of monkeypox, and the seriousness of the disease to ensure proper market access. As I've said, we will be pricing the vaccine along the line of other travelers' vaccines, and we estimate peak sales to be around $65 million annually.
Other factors that could actually further increase this, which are not based on our assumptions, is travelers outside of the U.S., multinational companies operating outside of Nigeria, certain WHO recommendations that could strengthen the case for better preparedness against monkeypox, and obviously, local use, in the U.S. and also in the EU. It's a massive achievement, the approval of JYNNEOS. It goes a long way to fulfilling our desire to return to profitability. It's gonna allow us to build up a commercial infrastructure. We're extremely excited about this new opportunity with monkeypox, and we think it's gonna return the company to profitability in the short term. With that, I can hand over the call to Q&A and hand the call back to the operator.
Thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question, press star one on your telephone and wait for your name to be announced. Once again, it's star one if you wish to ask a question. The first question comes from the line of Chad Messer from Needham. Please ask your question.
Great, thanks. You know, first of all, congratulations on this important milestone. I just wanted to make sure I'm clear on this. You know, right now you're currently, you know, producing the freeze-dried version for the stockpiling contract that you have. I presume, since you now have approval of the liquid-frozen, the shorter half-life version, that that's what you would have to sell if you're, if you pursue any of these commercial activities. Just want to know if, you know, that's something you have in inventory or if you kinda gotta switch back and start making it in. Obviously, you've made millions of doses, you know how to do that.
Also, if you're gonna go after this, travelers market, does that represent any kind of significant expansion of sort of what your, you know, commercial staff looks like? Thanks.
Thanks, Chad. You're absolutely right in your assumption. The approval is for the liquid-frozen formulation, which has a three-year shelf life. Obviously, anything that we sell, based on the approval of JYNNEOS is the liquid-frozen. Again, I think what we're talking about there is limited stockpiling, obviously, by the U.S. government with the liquid-frozen, as we have a contract for freeze-dried, approximately 13 million doses, but for purchases of the vaccine for use, so military, first-line responders, and obviously then for the monkeypox indication. I think it's clear to say that today we have very limited commercial infrastructure in place. Obviously, we've been selling directly to governments, and obviously it would mean an expansion of our capabilities in the commercial arena.
Okay, great. Thanks, and congrats again.
Thanks.
Thank you. The next question comes from the line of Michael Novod from Nordea. Please ask your question.
Thank you very much. It's Michael from Nordea, congratulations on the approval. Just to understand now on the monkeypox side, this is approved by the FDA, but obviously, a lot of, say, inbound travels to certain areas in Africa, where monkeypox is more prevalent. It also comes from countries outside the U.S. How should we think about the approval in the U.S. versus also use in other countries of Imvamune as a monkeypox vaccination?
Secondly, on the more broader use, potentially in healthcare workers and military personnel, how far are you, or can you say anything about how close we are to potentially the U.S., let's say, reopening or revoking this legislation back from 2002? How far are you already now in potential discussions with appropriate agencies in the U.S. government about, say, restarting these types of vaccination now, when there's a safe third-generation smallpox vaccine available, approved in the U.S.?
Thanks, Michael. Let's take the last question first. Where are we in terms of discussions? You know, the typical agencies that are gonna be extremely important in those decisions, obviously, DoD, which has numerous organizations within it, and also the CDC, which obviously represents the ACIP. I would say that there is dialogue and has been dialogue for quite some time because this approval has been anticipated, not only by us, but obviously by a lot of the different government agencies. You know, however, you know, it's the government agencies, things will take time for policies to be changed, and maybe the ACIP recommendation to be updated. These things generally take a little bit of time.
Your first question related to the other approvals that we have in Canada and the EU, and what impact could that have now that we have the monkeypox indication in the U.S. Well, as you know, we don't have that indication in those approvals in Canada and the EU. So currently, any use for monkeypox would have to be used off-label, which was the case recently, last year, in the U.K., when the healthcare worker unfortunately got infected. It was the U.K. government who reached out to us for Imvanex, as it's trade named in Europe, for vaccinations. However, we are looking at broadening those indications in those approved areas as well, as we now obviously believe that monkeypox actually is a very attractive new commercial opportunity.
Maybe just to follow up on the monkeypox side. Do we have any? Now, you mentioned that $65 million seems to be the, say, the peak sales potential on this, say, any other revenue streams come online. When do you expect that we should, say, foresee the first commercial sale of monkeypox vaccinations? Are we looking at 2020, or does it take a longer time to build the awareness and the market? Just to get a feeling of when we should start to implement this as a potential source of revenue in the model.
Yeah. I mean, we haven't updated our guidance for this year, so we're not anticipating sales to already occur this year. To be honest with you, we don't know how long it will take to prepare the market, as it is a brand-new market that we need to prepare and engage in. However, I think it's gonna take a year, probably, before we start seeing sales, so late 2020 or 2021.
Okay. Super. Thanks a lot.
Thank you. The next question comes from the line of Peter Welford from Jefferies. Please ask your question.
Oh, hi. I've got two questions. First, apologies if you covered this already, I was on the side of the call. With regards to the priority review voucher, just curious, have you already entered into discussions in anticipation of being awarded this? Should we anticipate this to be, you know, essentially just closing a deal, or will discussions with potential parties only start now that you have the voucher in hand? Secondly, just with regards to the monkeypox travel opportunity, just curious, are there any other travel vaccines that are supplied on the basis of being a liquid-frozen formulation?
I guess just curious there from the point of view of the practicality of administering this as a travel vaccine, what can you perhaps just outline, which of the travel vaccines require, you know, two administrations, four weeks apart? Which other vaccines are, potentially also, shipped on a, on a liquid-frozen basis? Thank you.
Thanks, Peter. Firstly, on the priority review voucher, I, you know, I would say there has been inquiries coming in from different companies. There have been some discussions, but of course, until you actually have a priority review voucher, those discussions are a little casual. Let's put it that way. You know, we have a strong cash position. We're in no rush to sell. We have no need to rush to sell, obviously, we have an intention to sell. If we get the right offer, we'll sell. In terms of the liquid frozen formulation and the travelers vaccines, actually, I don't see a lot of challenges in that personally. You know, we have shipped 28 million doses as a liquid frozen formulation across the Atlantic and not lost a single batch.
We know how to do shipments. It has a three-year shelf life, and it can actually, you know. It has a long shelf life, typical of other travelers' vaccines. Many of the travelers' vaccines that is on one of the earlier slides, on slide 15, are also multiple shots. I don't know off the top of my head how many of them are liquid frozen, but certainly a few. I, you know, and of course, there is no competition right now. We are the only player globally with a monkeypox vaccine.
Thank you. We have no further question at this time, so you can continue.
Okay. Well, thank you, everyone, for joining what has been a major day and a major announcement for Bavarian Nordic. Thank you all for your support, and, as I said, thanks for joining. Thank you.
Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.