August 25, 2017 / 11:16 AM / a year ago

Bavarian Nordic says first milestone payment under J&J deal could be in 2019

COPENHAGEN (Reuters) - Danish biotech company Bavarian Nordic expects to get its first milestone payment under a deal with Janssen Pharmaceuticals in 2019, if clinical trials for vaccines targeting hepatitis B and HIV-1 get underway next year, a company executive said.

A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake

Bavarian Nordic last month signed a deal with Janssen, a unit of Johnson & Johnson, with a potential value of up to $879 million including upfront, equity investment and milestone payments.

The company will produce clinical material for HIV and hepatitis within the next six to nine months, and Janssen aims to begin clinical trials during 2018.

“I think that if the studies get underway next year, the first milestone payment could happen in 2019,” Bavarian’s Chief Financial Officer Ole Larsen told Reuters on Friday.

The company in June posted positive data from a phase 2 study of a universal vaccine against respiratory syncytial virus (RSV) - a common cause of bronchiolitis and pneumonia.

Larsen said that with the potential for such a vaccine the company would need to find a commercial partner for that as well.

Still, depending on how the rest of the pipeline develops, Bavarian may begin to develop its own sales force for respiratory diseases in certain smaller regions such as the Nordic countries, Larsen said.

The company expects to begin phase 3 clinical trials for RSV in the autumn of 2019, he said.

The company’s shares have risen about 65 percent this year.

The next big trigger could be results of a phase 3 trial for prostate cancer drug Prostvac, which according to Larsen are expected in November or December.

The company earlier posted second quarter revenue of 397.3 million Danish crowns and maintained its financial expectations for the year.

Reporting by Jacob Gronholt-Pedersen, editing by David Evans and Elaine Hardcastle

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