Bavarian Nordic AS (BVNKF) (Q2 2026) Earnings Call Highlights: Strong H1 Growth and Upgraded ...

Q & A Highlights

Q: Can you provide more color on the travel health guidance, which implies a slowdown in the second half, and whether the strong gross margin performance is a structural improvement? Also, when will the new share buyback program be completed? A: Henrik Juuel (CFO) explained that travel health products are seasonal, and the timing of sales can shift between quarters. While the company is pleased with current performance and may exceed the DKK 3 billion guidance if trends continue, they are being prudent until Q3 data is available. Regarding gross margin, he noted it is too early to call it a structural improvement, as the strong performance was partly due to high success rates in TBE manufacturing, which may not be repeated when shifting to rabies production. The share buyback program is expected to take approximately six to seven months to complete, likely finishing before the next Annual General Meeting.

Q: What is driving the strong rabies growth, and how much is due to underlying market growth versus other factors? Also, how should we interpret the new share buyback in the context of M&A ambitions? A: Henrik Juuel (CFO) stated that while the US and German markets grew over 20%, other markets grew by nearly 100%, contributing to the 40% overall growth. He also noted that wholesalers building safety stock in response to high demand is amplifying the growth. On M&A, he said the DKK 750 million buyback strikes a balance between returning cash to shareholders and maintaining financial flexibility. The company has no debt and can easily raise capital for acquisitions, so the buyback does not hinder their M&A strategy.

Q: Can you provide an update on the CEO search process, and can the company execute a larger strategic transaction during this interim period? A: Paul Chaplin (CEO) stated that the CEO search is with the board and will take as long as needed to find the right candidate. He emphasized that the company's success is driven by the organization and management team, not just the CEO, and that the CEO transition will not impact the company's M&A appetite. If the right opportunity with a good commercial fit arises, the company will pursue it regardless of the leadership situation.

Q: Regarding the TBE market, you grew 17% while the German market only grew 3%. What other countries are driving this growth? Also, is the downgrade in Vimkunya guidance solely due to the delay in the ACIP recommendation? A: Henrik Juuel (CFO) explained that the company is gaining market share and that other markets beyond Germany are contributing to growth. He cautioned that market data is not perfect and lags behind revenue recognition, as revenue is booked when products are sold to wholesalers, not when dispensed to patients. Paul Chaplin (CEO) confirmed that the Vimkunya guidance reduction is primarily due to US headwinds from the delayed ACIP recommendation, while European launches are performing as expected or better.

Q: On Jynneos, you have secured DKK 800 million for 2027. Are you getting more confident in reaching the midpoint of the DKK 1.5-2 billion base business range? Also, how much revenue have you recovered from the terminated Valneva and Dynavax partnerships? A: Paul Chaplin (CEO) expressed growing confidence that the base business will be around DKK 2 billion moving forward, noting that orders come in at various times and the company has already increased guidance twice this year. Henrik Juuel (CFO) addressed the partner products, stating that while they lost approximately DKK 100 million from the Japanese encephalitis product, taking back their own products in certain markets has had a positive price impact and allowed them to grow the business beyond what partners achieved. This has also provided a platform to launch Vimkunya in new markets.

Q: Can you provide more detail on the Vimkunya launch, particularly regarding disease awareness efforts and the focus on educating physicians versus travelers? A: Paul Chaplin (CEO) explained that awareness efforts target both the general population and healthcare professionals. It is important to educate travelers about the risk of mosquito-borne diseases in destinations like the south of France, and equally important to educate healthcare professionals who guide patients on which travel vaccines to take, especially when they are out-of-pocket expenses. He noted that rabies is becoming a standard travel vaccine due to its severity, and similar education is needed for Vimkunya.

Q: Can you help bridge the difference between the strong rabies growth and the underlying market growth? How much is from volumes or geographic contributions, and is the growth sustainable? A: Henrik Juuel (CFO) noted that while US and German markets grew over 20%, the company's 40% growth is also driven by other markets growing nearly 100%. He believes the strong momentum will continue short-term due to high awareness of rabies risks, but also acknowledged that wholesalers building safety stock is amplifying the growth, which may normalize over time.

Q: Regarding the public preparedness business, you have secured DKK 2.3 billion in contracts for this year. Can you elaborate on the regulatory improvements and the importance of the EU approval for younger indications? A: Paul Chaplin (CEO) highlighted that the EU has approved MVA for children aged two years and above, which is crucial for Africa where children are the main targets and for future UNICEF orders. This approval expands the potential market and makes it harder for competition to emerge. Ongoing studies are looking at even younger children and breastfeeding women, which could support an indication for the entire population.

Q: Can you provide an update on the pipeline, particularly the Lyme disease vaccine candidate and the EBV program? A: Paul Chaplin (CEO) expressed excitement about the improved Lyme vaccine candidate, which uses a new self-assembling antigen particle (SAP) platform. Preclinical data shows it provides protective immunity after one dose, equivalent to three doses of a positive control vaccine, and complete protection against three strains in a mouse model. The company plans to move to clinical development in 2028. Additionally, the EBV program will initiate a Phase 1 study later this year, earlier than originally planned.

Q: Can you elaborate on the cash flow and capital allocation strategy, particularly the decision to launch another share buyback program? A: Henrik Juuel (CFO) explained that the negative operating cash flow in the first half was due to the final GSK milestone payment of EUR 70 million, while Q2 alone generated positive operating cash flow of EUR 351 million. The company has a strong cash position

For the complete transcript of the earnings call, please refer to the full earnings call transcript .