Yes. Thank you, operator, and good afternoon to some and good morning to the others to this presentation of Bavaria Nordic's Annual Account 2020. You. With me in the room, I have Paul Chaffin, President and CEO and Henry Jewell, Executive Vice President, CFO. Before I hand over the presentation, I will read the following statements.
This presentation includes forward looking statements that involve risks, uncertainties and other factors, many of which are outside our control that could cause actual results to differ from the results discussed. Forward looking statements include statements regarding our short term objectives and opportunities, financial expectations for the full year you and financial preparedness as of year end as well as statements concerning our plans, objectives, goals, future events, performance and all 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, accept as required by law. And with this, I will hand the presentation over to you, Paul.
Thanks, Rolf, and welcome, everyone, to our annual accounts for 2020. If you turn to Slide 3, the Veronorg a fully integrated profitable vaccine company that aspires to be one of the largest pure play vaccine companies by 25. We've built up a fully integrated infrastructure, so we have beginning to end commercial manufacturing, proven R and D capability And now our commercial infrastructure supporting key markets in the U. S. And EU.
2020 was about the integration of our 2 new assets, which were vaccines against rabies and TBE, Which combined creates a portfolio of market products of 4 products. And with that integration, we rapidly expanded as a company last year and grew by 40 with more than 700 employees. We have a really exciting pipeline with some late stage assets. 1 is RSV. The other, as I'll talk more about, is COVID-nineteen, both of which have near term triggers during 2021.
Go to Slide 4. 2020, as I said, was a really important year I do. This is the beginning of our transition to become a commercial company. And I have to say that despite the headwinds of COVID, We had a near perfect execution of our plans to integrate our 2 new assets against rabies and TBE. And that is credit to all our employees at Bavarian Nordic.
So we even managed to maintain our guidance revenue, as you'll hear from Anders from later, revenue was in line with expectations. And our EBITDA and cash is even better than guided. And this, as I said, was despite the fact that COVID-nineteen had an impact On some of our sales, but this was actually offset by better than expected Jynneos business As we received more than US200 $1,000,000 order from the U. S. Government.
But it wasn't all about smallpox and Jynneos. We actually were able to gain or maintain our market shares for rabies and TBEs despite the difficult markets. It really endorses our commercial strategy that we believe these assets were the key focus. We can actually grow these assets better at Bavarian Nordic than their predecessors. Other key drivers of activity in 2020, Tullu.
We finished the expansion of our commercial manufacturing and have now added a commercial fill finish capability, And we're already beginning to transfer our first product, Jynneos, onto the line. And we licensed the COVID Vaccine asset from ADAPTAC and now with encouraging preclinical results, which I'll walk you through in the coming slides, We have decided to accelerate this program and enter Phase II, which I'll talk more about in the coming slides. So on Slide 5, thanks to the strong support from new and existing shareholders, we were able to complete an offering this week where we raised just over DKK 1,000,000,000 by issuing new shares. This investment will now allow us to keep start our COVID program and move that into a large Phase II study, which I will talk about. The whole supply of vaccines, COVID vaccines, has really shown that there are number of bottlenecks in the manufacturing and supply of vaccines because as I've said many times, the production of vaccines is a difficult task.
And we also want to use some of the proceeds to have the flexibility to potentially take advantage of opportunities where We could utilize our manufacturing capabilities to produce for 3rd parties. And the rest of the proceeds is really to ensure We can continue to execute on our strategy, which is expanding our commercial portfolio potentially through additional M and As and to strengthen our cash position. On Slide 6, one question I've had very recently, obviously, with the announcement that we're moving forward with COVID, is aren't you a little late? And is there really a need for a new COVID vaccine Given that there are a number of vaccines already approved. Well, it's true that great advances have been made and there are a number of vaccines approved and more to However, the durability of how long lasting that protection is or the breadth of that protection That is reported by the current vaccines against the various circulating variants is unclear.
It is, however, clearer by the day COVID-nineteen is not going to be eradicated, and it is a disease that will remain with us and have to be managed through frequent vaccinations. It's likely that regular boosters are going to be required to boost that protective immune response to protect us from the ongoing disease. So what we're hoping to do with our candidates is actually to demonstrate This vaccine candidate, which has some excellent preclinical data, really showing that it's highly immunogenic and act as a universal booster people previously vaccinated, increasing the durability of the response and providing a broader response against the various Circulating variants that we see today. So if we go to Slide 7, just to remind you what Canada that is. It's a capsid viral life particle platform, which was licensed in from a DAPBAC, Which is a technology that was born out of Copenhagen University.
This is a highly flexible platform Well, one component is not specific for the specific disease or how the vaccine is designed. So the actual capsid itself can be manufactured and used in any vaccines using this technology. The specific part of the platform is the protein, Which is manufactured with a small linker, which binds to the capsid at very high densities. This high density Expression of the antigen of choice, in this case, the surface protein of SARS, is expressed in exactly the same way to the immune system as The immune system that came across the virus. For that reason, viral life particles are normally highly immunogenic as we know from the HPV vaccines you.
One that we believe will be an excellent booster in the current environment where the majority of the population is likely to be vaccinated Against COVID-nineteen. If you go to the next page, this is the exciting or some of the exciting preclinical data that we reported earlier this week, we did a non human primate study where we looked at various different regimes of the vaccine. Only showing one for simplicity, but we looked at single vaccinations that were adjuvanted or 2 shots Non adjuvanted. And here I'm showing you one group where after the second vaccination, You can see that there are very, very strong neutralizing antibodies on the left hand side of the graph, which is about 6 times higher And the high human convalescent serum. Now it's very difficult always to compare immune responses across studies and across different animal studies.
However, if you remember many of the current vaccines that are currently licensed, Two shots of, for example, the RNA vaccines gives you comparable titers to the convalescent serum, Not significantly higher titers as we're seeing here. These strong titers translate into a very robust protection From SARS, when these animals are challenged. So the graph on the right hand side, you're looking at the viral copies following the challenge. Gray are the control animals at day 2, 4 and 6 post challenge. And you can see apart from 2 animals, There is complete 100% sterilizing protection in all the animals that are vaccinated with our viral life particle.
And these two animals that have a small amount of virus at day 2 are significantly lower than the controls And completely eliminate the virus by day 4. This is extremely strong efficacy data, Again, superior to what has previously been published for other COVID-nineteen vaccines. Slide 9, our partner, Adaptac, together with an EU consortium has actually started the first Phase III study today, actually, I believe. And there, they'll be looking at the safety and immunogenicity This vaccine candidate with or without adjuvant in just under 50 healthy adult volunteers And the first data we expect to be reported in Q2. In parallel, we have now decided to also push forward Into Phase II, where we plan to start the study in Germany already in April, Where we will be boosting people who have previously been vaccinated up to 200 volunteers.
As I said, looking for How strong that booster response can be, how durable the response is and whether we can get broad neutralizing antibodies Against the various circulating variants of SARS. And we will be ready to potentially start a Phase 3 After the summer, but for that, obviously, we continue to look for further funding to move the program into Phase 3. Slide 10. A little bit about our RSV program. So this year, we're and in fact, we have started the human challenge study.
This is where we will vaccinate volunteers with a highly promising RSV vaccine And then challenge those individuals with RSV and look for hopefully a reduction in the viral load in the blood following challenge in the vaccinated individuals compared to placebo, this will be pivotal key data that we'll be reporting in the second half of this year That will hopefully encourage us beyond what we already believe that this is a highly efficacious candidate And support entering Phase III next year. Slide 11 talk a little bit about the integration of our 2 new vaccines, Rabipor, RAVAVERDA and ENSAPR. At the beginning of the year, Many investors, rightly so, I guess, were concerned about the challenges that lay ahead. We were a company with no real commercial infrastructure or prudent commercial capabilities, and we faced an enormous task to build up a new infrastructure That was capable of taking over some of the key markets as rapidly as possible, while in parallel transferring the manufacturing process From our partner GSK. As I said, sitting here year on, it's almost a perfect execution of the plan.
I'd say almost because I'm a perfectionist. It probably was perfect execution of the plan. We now have a commercial infrastructure in place In our key markets, in the U. S. And the EU, we've actually transferred to date, Well, I should say, a few weeks ago, up to 18 countries, which covers more than 90% of the projected revenues of these two products.
We're Carmen with Galniva, a no vaccine company in selected EU markets and Canada, And we've initiated the tech transfer. To remind you, the tech transfer is a lengthy process unfortunately. It begins with taking over the packaging, which will support that set transfer, we've initiated the expansion of our bulk facility, which will be completed next year. This will not only support taking in Rabipor and N2Por in house, but we'll also increase our manufacturing capacity As we'll now be able to manufacture both products in parallel, greatly increasing our capacity. So very strong performance in 2020 despite the challenges that we faced, the unexpected challenges we faced with the worldwide pandemic.
I'm extremely proud of the management and the employees and the strong support that we have obviously received from our investors. So thank you. And with that, I'll hand over the presentation. Thank you, Paul.
So this is Henrik Kuehl, CFO speaking. So let's turn to a few slides talking about the commercial and our financial performance for 2020 and the Q4. And we will start looking into the rabies markets, where you will remember that the rabies market for Bavaria Nordic is characterized by 2 very distinct markets. We have the U. S.
Market and the German markets representing the bulk of our rapids business. And the U. S. Market, which is an endemic market, both has the post exposure and pre exposure segments, whereas the German market is Pure travelers market or pre exposure market as we call it. So if you look at the how the U.
S. Market performed during 2020. Then obviously, the U. S. Market was impacted by COVID-nineteen due to some of the lockdowns, But showed much more resilience compared to the European market.
If you look to the right, you will see that the German market As those who have nearly been eroded due to COVID-nineteen, as people are not traveling and not needing any rabies vaccines. But as I said, I think the U. S. Market, if we compare just the Q4 of 2020 to the prior year, went down by 38%, which is, of course, a massive drop, but still a much more resilient market than the European rates market. So I think going forward, I think we are in regards to the German market, We are not expecting that to recover until we see travel resuming again.
And you will have seen in our guidance, I will back to that in a few slides as well that we are guiding with a range on the revenue and the upper range of what we are guiding, we'll assume that There will be some return to travel in the late Q3 and in the Q4 of this year. In the U. S, I think here, I think we did see somewhat of a soft 4th quarter in the U. S. Rabies market Simply due to, I think, more than half of the states were in quite severe lockdown.
So, if we turn to the next slide, the other markets relating to the other product that we acquired, the tick borne encephalitis Stuart. I think here we are looking at Germany only. This is only relevant for Europe. And Germany, I think, is a good proxy for How the market is doing in Europe. If you compare the Q4 2020 to 2019, you will see that it's slightly down, but close to the same level.
We did see some good signs in the Q3 of 2020 that the market was recovering. But I think as we all know, I think then in the Q4, many markets went into lockdowns again. This has had somewhat negative impact also on the TBE market. I have to say though that the Q4 is typically A low season for the TBE business. So I think for the TBE markets, I think these are Clear evidence that there is the underlying demand is still there, and it's all about the access to vaccinations.
The access, you can say, is relevant from 2 perspectives. First of all, there are some of the restrictions in some areas people have simply not been able Zulu. We're allowed to go to their physicians, but we have also seen situations where people basically self imposed restrictions and they are afraid of going to the doctor until it's more safe out there. So with regards to 2021, I think we are, of course, hoping Zulu. Very soon, reopening of those key markets in Europe.
Remember the main vaccination season that kicks off very soon, Typically in April, that's when we start to see the larger volumes of TB vaccinations. So hopefully, we are having a gradual opening of these markets in front of us. So that was a little about how the markets have performed for these two products. Let's look at our specific performance. And if we again, first half with the Radius business, if you look at the full year, it is 35% down compared Joe.
2019 when GSK was managing this business. And that is, of course, a mix of basically the European market being nearly all gone And the U. S. Market being somewhat down, but with our significant market share gains in the U. S, we have, to a very large extent compensated for that loss of market in the U.
S. So I think all in all, I think with a strong performance In U. S, we are really pleased with the Radius performance for 2020, where we managed to gain markets here. For the Q4, we did see a drop in market share from approximately 79 Zillow. In the Q3 down to 70% in the Q4.
That was fully expected as the competitor came back after a stock out situation. I think the current market share level is still significantly above the market share that the driver value in the U. S. Had prior to the stock up situation. So strong performance in the U.
S. Now we just need to see again the reopening in the U. S. First of all to drive Both the post and pre exposure market. And then, of course, in Europe, we need to see travel resume, in fact, to something a little more normal.
On the next slide, our performance, end of our performance in the TBE market. Here we have seen for the full year a drop compared to 2019 of 14%. This is all explained by the COVID-nineteen impact. And here, it's really not the demand. As I said, that has been impacted, but it is the access to vaccinations during the second and third quarter, actually, we lowered the market size.
I think what we are really pleased about with our performance here is that we have managed to consolidate our position. Historically, DSK did suffer market share loss to our key competitor in the market. With me during 2020, this was our 1st year of commercialization, we managed to consolidate our position and keep our 30% share of the market. So now it's really all about driving further market share gains. And then, of course, again, as I said, the operator for our guided scenario for revenue does reflect that we are seeing a reopening of the market soon so that people can get access to vaccinations.
Next slide. I have a few slides now on the financial performance of 2020. These are not breaking news As we actually came out with the and pre announced our financial results end of January. And I'm happy to say that there has been no changes to these figures. They are all listed now, and they are 100% in line with the numbers we pre announced in January.
So to take them from the top and down, dollars 1,852,000,000 in revenue for the year Against the guidance of 1,900,000,000. Remember that was the guidance that we issued in February before anyone knew anything about the impact from COVID. So we do regard this as meeting the guidance. If you look at the donut chart to the right, you will see the breakdown of the full year revenue. Our highest revenue product was Abipur Rabirat.
Our Radius business, dollars 628,000,000, Danish ton of revenue in 2020, Despite the impact in particularly on the European part of the business, as number 2, we have our smallpox business With Veneers, both BDS, but also Finnish products to the U. S. Government. And on the 3rd place, we have The end support product, DKK 455,000,000 Remember, we also got a milestone payment from Janssen when our The Ebola vaccine was approved, DKK67 1,000,000. And finally, we had some contract work primarily sponsored and related to our CMC work for our fill and finish facility and support to the FreeStripe Phase III trial.
If you look further down the P and L, you will see that our R and D expenses for 2020 came in €341,000,000 so somewhat lower than in 2019. This is simply due to the phasing of our main pipeline asset RSV, where we spent more money in 2019 And not so much in 2020. SG and A costs came in at $564,000,000 significantly above the 2019 level And explained by, of course, the commercialization of our business. We also sold a progressive review of Mauschamp in Zulu. And which was finally closed in January of 2020 and that brought us $628,000,000 in additional cash and income.
So right at the bottom, you will see our EBITDA that ended at DKK740,000,000 About the latest guidance we issued, that's of DKK 725,000,000 and significantly above the DKK 675,000,000 You have recently guided in EBITDA in February 2020. Turning to the next page. Just a few words on our cash flow and the balance sheet. Yes, basically, on the cash flow, we saw It was more or less neutral for the year, minus €5,000,000 net cash flow. Cash flow from operating activities was positive, Of course, significantly positively impacted by the sale of the priority review voucher and some negative from working capital where we during the year increased our inventories as we took over markets from GSK.
Cash flow from investment activities includes several movements, selling and buying securities Depending on the cash we have at hand. But if you look at the real tangible investments, it did include a little more than €200,000,000 investments in property plant and equipment related to the finalization of our fill and finish plant, but also the initiation of the expansion of our board facility. And furthermore, the investment line also includes payment of milestones to to GSK amounting to nearly DKK400 1,000,000. Cash flow from financing activities, We saw positive contribution of approximately DKK1.3 billion and that was the net impact of the significant rights offering we did In the beginning of 2020 and where we used some of that to pay back the bridge loan we took in December 2019 To page here, Katie, upfront consideration for the acquisition. On the table to the right, I don't want to go too much into the details That would just highlight the securities cash and cash equivalent.
So basically, our cash position, we ended at Nearly DKK1.7 billion and have guided DKK1.6 billion, so still quite well above the guided number, Which gives us a good and solid position. But remember, we still have a deferred consideration to GSK of DKK2.8 billion, and we are going to continue investing in the expansion of our plans. And therefore, it makes a lot of sense. Now we are embarking on the to advance our COVID-nineteen program further to go out and raise The cash for that which was never in our original plans. Next and final page in the presentation here.
I will talk a little about our guidance for 2021. So we are guiding at this time an interval Revenue will be between DKK 1,900,000,000 DKK 2,200,000,000. The low end of this the guidance here reflects a scenario where lockdown continues beyond the Q1 and into the Q2, and in particular in key markets like the U. S. In Germany, where we have the majority of our business, the higher end of the revenue, but also the EBITDA guidance, that reflects a scenario where we are Going to see a gradual reopening now basically and continuing into the Q2, which will allow people access to vaccinations, But also which will eventually translate into traveling picking up in the 3rd Q4 of this year.
We are not anticipating any impact on our smallpox business and our OIBORA business as we speak today. The EBITDA guidance is between DKK100 1,000,000 and DKK250 1,000,000 and again reflects the same scenario such as the revenue guidance. And we do expect to end the year with a cash position of between SEK 1,400,000,000 and SEK 1,600,000,000 and this includes net proceeds of SEK1.1 billion from the private placement we did 30th this week. R and D spend For 'twenty one, it's expected to be at approximately $750,000,000 including up to 200,000,000 to support Phase 2 and scale up for our COVID-nineteen vaccine. And the latter, we are expecting to capitalize.
Therefore, I think the amount that you will find by the end of the year in the P and L will be approximately $550,000,000 in R and D. And in order to understand our cash position by the end of the year, I mean, we have added some notes below. We are continuing to invest in our facility expansions and also in the tech transfer from GSK. That will amount to a total of DKK 650,000,000 in DKK 650,000,000 in DKK 650,000,000. We also in as part of the whole transfer from GSK, we will take over the remaining markets during the first half of twenty twenty one.
And as we also start taking over the packaging, this will increase our inventories. Therefore, we expect working capital to increase by approximately DKK 300,000,000. We will also continue pay milestones to GSK during 2021, probably at a level close to what we paid in 2020. But of course, these milestone payments are closely linked to the 2 specific milestones in the whole integration project. Our cash position also assumes that we make a drawdown of €30,000,000 existing credit facility we have with the European Investment Bank.
Yes. I think that's basically some of the important assumptions to understand to fully understand the cash position by the end of the year. Activities and milestones that will keep us busy again in 2021. And if you look at it within R and D, I think it is, of course, to complete the Phase II human challenge trial that we have initiated in RSV, where we expect actually readout in September, providing us a good and sound basis for Deciding on the Phase III, potential Phase III in 2022. And the Phase III in 2022, we already this year preparing ourselves In terms of preparing the manufacturing basically the material that we need for that potential Phase 3.
And together, these 2, the human challenge trial and the preparation for the Phase III will be the 2nd or the most Significant expense within our R and D budget for 2021. The new thing here is, of course, also as we have announced, we are now going To kick start the events of the development of the COVID-nineteen vaccine candidate, we have committed to invest Up to DKK 200,000,000 into a regulatory Phase III. We're starting a scale up of manufacturing to Phase 3 volume levels. We are continuing to seek funding even for those spaces. But in order not to lose momentum and lose important Time in this project, we have decided to kick start basically the development.
We've also continued the work towards the getting the freeze dried version of our smallpox product eventually approved. And we will continue working with intravenous administration of our new brachyury containing construct As well. On the commercial side, I think we have the full commercial infrastructure in place during 2020. I think we did Zulu. Extremely well and had a strong brand performance.
So we are in a good position for 2021 to basically drive profitable growth For these products, of course, we are very dependent on how COVID-nineteen develops. But definitely, we have a good starting position. Key focus, Harry, will also be to take over the physical distribution for the remaining markets. As Paul alluded to early, we already took over 18 markets corresponding to more than 90 Percent of the total revenue from these two products. And then, of course, I think it's also all about improving The awareness of Veranoik as a key commercial player in the markets amongst the health care physicians.
On the manufacturing side, This year will actually be exciting because we have completed the construction and qualification of our Brand new fill and finish facility. And this year will be the first time that we are actually going to fill commercial products on the line. So quite an exciting milestone ahead of us. Then we also in 2020, we initiated The expansion of our bulk facility and plan is that this year, we will complete the construction of that. And of course, we will also progress the whole technology transfer of the 2 acquired products, This is a longer project.
Eventually, I think we'll take it over bulk in 2024. So again, I think busy calendar ahead of us for 2021 with some quite exciting milestones ahead of us. So with that, I think I will turn the word back to the operator and start ask for questions.
Ladies and gentlemen, we will now begin the question and answer session. And your first question comes from the line of Michael Novart from your line is open. Please ask your question.
Thank you very much. It's Michael Novod from Nordea in Copenhagen. A range of questions. First to the ABN COV-two COVID vaccine. Could you comment a bit on I don't know whether you can, but the assay used for your vaccine when measuring neutralizing antibodies in non human primates.
And then secondly also the route of challenge in the non human primates and the dose As well as whether you see CD4 and CD8 T cell responses in these monkeys. That's for the COVID. And then secondly, on the Interpur and Rabib, Rabibur and Rapovert, Is there any chance you can try to at least in sort of ballpark frames try to give us where you see those two products split wise Zulu. In 2021, just so we have a feeling of how you see
Hi, Michael. This is Henrik. I think on the Ensepura, We feel that it's a little too early to start breaking down our revenue expectations for 2021 simply given the uncertainty we are facing the Newcastle reopening. So I can only allude to what we have previously said about these two products here that we Generally, I think we expect that for the Rabipur or the Radius business, this is a business that should normally grow Low single digits at least, just the market. And then on top of that would come our, You can say market share and business as well, whereas the end support business in normal circumstances should be growing at least high single digit numbers annually.
But of course, I think it is uncertain times and therefore, We prefer to wait a couple of months to become more specific on the exact breakdown of our guidance.
Okay. On the COVID question, so the assay was against live virus in the cell therapy facility. So very similar to how most people are looking at the nebulization. The challenge dose was 1x105 CCID50, which is in line with Others, I mean, the challenge dose and strain varies from various different companies, but it's been Some have gone as low as 1x10 to the 4 and some have gone as high as 10 to the 6 or 2x10 to the 6. So we're at one time.
Thanks for calling. T cells. Actually, the interesting thing with the viral life particle is that both in mice and in the primates, we really didn't see Very strong induction of T cells at all. And in the challenge, post challenge, one of the interesting things is the animals that We had a stronger protection or at least really significantly reduced the viral load stronger and a very low T cell response, I mean that it really looked like it was just the neutralizing antibodies that are clearing the virus for
Okay.
Thanks a lot.
And your next question comes from the line of Peter Welford from Jefferies. Your line is open. Please ask your question.
Hi. Yes. Thanks for taking my questions. I've got a few. Firstly, just sticking with COVID-nineteen for a minute.
Just so we can understand on this, Stuart. Firstly, on the German study that you're doing, the Phase 2. Am I right in understanding that's a single dose? And that's going to be am I right in the same in volunteers who have either already been vaccinated and is that with any vaccine Or alternatively, prior infection. I guess, just trying to understand, are you going to be doing antibody testing pre enrollment patients in that?
Or What are the sort of enrollment criteria to determine that in terms of and then would presumably then you'd be measuring neutralizing antibody titers to your dose. 2nd question then, just on the manufacturing of this vaccine. We've heard from a variety of different companies talking about the pros and cons of the different technologies and manufacturing. I guess from your perspective, could you talk a little bit about Joe. How you manufacture this vaccine and the ease, particularly the protein part, the ease of which you can manufacture The various protein fragments that are needed for this.
And then equally, do you have the option To use this technology beyond COVID-nineteen from a DAPVAC? Or is it solely at the moment COVID-nineteen and anything beyond that would require a separate negotiation? And then sorry, just on just doing a bit different than Benrick. I may just be really silly here and I'm not understanding, but could you just run through Just with regards to the cash investments, how this works for a minute. I'm a little bit confused as to what the €650,000,000 does and does not include Because we have the margins to GSK.
I think you talked about roughly the same as last year. There's then also the investment in COVID-nineteen, which could be up €200,000,000 The CapEx in the facility, which I think you talk about in total could be €650,000,000 over the years. You just if I add all these up, I get to more than €650,000,000 So could you just explain to me exactly which numbers are included in the €650,000,000 and what we should be considering for the investment this year? Thank you.
I'll try and answer your COVID question. So Yes. The Phase II that we plan to run will be in people that have already been vaccinated. And it will be a single shot non adjuvanted. And we will be looking exactly to your point how strong that boost Immune responses in terms of neutralizing antibodies and everything actually, but looking at whether you get a broader neutralizing response against the various variants.
So unlike the monkeys where we only looked at SARS CoV-two, we'll be looking at the other Frequent circulating variants that are currently around. In terms of the inclusion Joe. We're still pulling together the protocol and actually still plan to have those discussions. But We want to keep it as simple as possible so we can go as fast as possible. So we'll probably just need proof of vaccination, Not really on obviously, they will have prebleeds and tires done.
That won't be part of the Screening. Then on manufacturing, so that as you as I tried to explain, there are 2 There's the bacterial capsid, which is currently produced in E. Coli. It's a relatively simple manufacturing process, Although nothing is important manufacturing, but it is in bioreactors, very simple, very high yielding process. So you could produce very large quantities of that and have it stored.
The recovered protein for this vaccine is currently produced in insect cells, but other Manufacturing processes like yeast could be used. And again, the process is a relatively simple one. And then you combine the 2 products together. The purification is also relatively simple. So although we're trying to see whether we can have a universal boost to giving broad Joe.
Responses. If that wasn't the case, then you really needed to make new vaccines against new circulating variants. I believe this platform is as fast as RNA, particularly if you've got quantities of the capsid already stored. Then you had a question about the license from the DAPVAC. Is it only for SARS?
And that is exactly the case. It's for SARS only. Currently, if we wanted to expand that, obviously, that's a new discussion at the debt level.
I think I covered everything you asked. Yes. Thanks, Peter. This is Henry. So to your question on investments, I think the our total investments anticipated for 2021 amounts to DKK 650,000,000 And approximately half of that relates to the expansion of our bulk So let's just call that $325,000,000 then.
But to finalize that, which ends in 2022, That number happens to be $650,000,000 and I think that can create a little confusion, of course, because the full investment over the next 2 years expand our bulk facility is expected to be DKK 650,000,000. And for 2021, total investments is as well, €650,000,000 Half of that goes to the bulk facility, €325,000,000 Then another €150,000,000 to €200,000,000 is related to the Tech Transfer project ongoing. So that's a mix of capitalized expenses And some equipment that is required for that. And then there is a chunk of all the investments, typical maintenance type of investments. So I hope that's clarified it.
But I think these 2x 650, I don't know, can confuse the picture a little.
Joe. So to be clear, when we consider overall then the cash flow, you've got the €650,000,000 But then on top of that, we need to consider the payments to GSK of roughly 394, if it's similar to this year. And on top of that, Zulu. Then the capitalized R and D for the COVID-nineteen vaccine?
Correct. And I think when we issued the guidance, we had laid that Under the cash position assumptions, but you're right.
Yes. That's great. Thank you.
Thank you.
And your next question comes from the line Alex Kogut from Kempen. Your line is open, please, sir.
Hi. Thanks for taking my question. Hi. Can you hear me?
Yes. Yes.
All right.
So I
was just wondering with respect to your COVID vaccine, Zulu. How are you looking to fund the Phase 3? Is it more towards Government contracts or do you expect some corporate partnerships? And then ultimately, where do you expect the demand to come from for your
Julien. Yes. Hi. So in terms of funding, I think there are a number of sources and we're not bound by any of them, to be honest. We're open to any sort of funding that we cannot achieve.
So I think last year, the EU countries made a decision that they would Not really fund the development of the vaccines, but would have advanced prepurchase orders. That, I think, In my opinion, has backfired because the EU is not as advanced in the queue for the vaccines as other countries who have actually invested in the development as well as in the advanced prepurchase orders. So I think that has caused a change in attitudes. So currently, we have seen change in attitudes, There are a number of governments approaching us interested in potentially funding the development of the next generation COVID vaccine. So it could be a government.
It could be, again, our usual friends across the pond, the U. S. Government and BARDA. And having said that, it could also be a corporate sponsor Thiago. He was also interested in a universal booster.
On the where will the demand be, if I and other people are right in that COVID is not going to be eliminated and that there will be new variants of persistent disease. That means there is going to be a need for persistent vaccinations and boosters. Some of the existing vaccines are already approved. There are articles out there. So it's not really my own opinion.
There are articles out there questioning whether, for example, the adenoviral based vaccines Can actually be used as frequent boosters. If that turns out to be the case, they can't because of vector immunity. Then the 3 main players that are currently supplying vaccines would be out. The other thing is, as I said, this based on the data currently that we have, this is a very strong immunogenic candidate that we have that could really create a very strong boost response. What we're seeing currently with 1st wave COVID vaccines is that they're highly effective, which is fantastic, but they are actually inducing very low levels of neutralizing antibodies.
And how durable those antibody responses are, we don't know. But if they wane off as quickly As some data is suggesting, you are going to need frequent boosters. So I think the demand really is a booster vaccine.
You. Understood. That's very clear. And with respect to your RSV program, how do you expect the human challenge data to still inform the design of the Phase III. And then with respect to the Phase III trial design, how big of a trial do you expect to need Joe.
Considering potential behavioral changes that could lead to still a lower RSV season in 2022 and 2023.
Yes. So to your point about the Phase III design, the reason we postpone the initiation of the Phase III this year is simply because of the rates of RS3 are extremely low due to the social distancing and lockdowns Joe. Last year, and we anticipated it may happen again this year. Joe. We are going to keep an eye on the RSV rates, obviously, because we need to make a decision do we go next year or not.
To your point, we're looking at 12000 to 14000 subjects with certain assumptions of efficacy and certain assumptions of attack rates. And obviously, if the attack rate of BioTelemetry remains very low, we probably can't be conducting the study the same way we had to postpone. So it's all about keeping an eye on the rates of RSV this year and making adjustment call, is it the right time to go or not. In terms of what do we expect to see and how could it affect the Phase III design, so we're looking hopefully a significant reduction in the viral load in the blood post challenge compared to the placebo, that would give us an indication Of the level of efficacy that we could expect to see in the field. So without that indication, you are basically making an assumption In your statistical design for your Phase III, whereas after the human challenge, if it's positive, of course, which we anticipate, We will get a stronger indication.
Are we looking at a 50% efficacy? Are we looking at a 60% efficacy or something higher? And that can help design the study, even making it smaller or larger, which is obviously one of the components is how good your vaccine is. So that's what we hope.
Great. Thank you for the color.
There are no further questions at this time. Please continue.
Okay. Well, thank you everyone for your time and for the questions, and I hope you have a great weekend.