Bavarian Nordic

Annual Report (ESEF) • Mar 5, 2025

BAVA - 2024 Bavarian Nordic A/SPhillip Heymans Alle3DK-2900Hellerupwww.bavarian-nordic.com162711872138006JCDVYIN6INP512024-01-012024-12-312023-01-012023-12-31Regnskabsklasse DHellerup2024-03-06Årsrapport16271187Bavarian Nordic A/SPhilip Heymans Alle 32900 HellerupxWizard version 1.1.1329.0, by EasyX Aps. www.easyx.euRevisionspåtegningGrundlag for 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Annual Report 2024 Bavarian Nordic A/S Philip Heymans Alle 3, DK-2900 Hellerup, Denmark CVR no: 16 27 11 87 Contents Management's review Financial statements Introduction Sustainability statements Financial statements 3 Letter from the Chair and the CEO 41 General disclosures 113 Financial statements – Group 6 Our purpose and strategy Bavarian Nordic at a glance Partnering for global health Strong regulatory progress in 2024 Our first 30 years 120 Notes 60 61 68 71 Environmental 8 170 Financial statements – Parent Company 175 Notes Climate change 10 11 12 Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Statements 72 75 190 Statement by the Board of Directors and Executive Management on the Annual Report Performance 194 Independent auditor’s report 13 14 16 19 20 2024 highlights 79 80 90 94 Social 2024 performance Financial review Key figures Own workforce 198 Forward-looking statement Workers in the value chain Consumers and end-users Outlook 2025 100 Governance Strategic priorities 101 Business conduct 21 22 23 Travel Health Public Preparedness Innovation 103 Appendix Corporate information 26 28 32 36 Shareholder information Risk management Read our → Remuneration Report 2024 Corporate Governance Report 2024 Governance Management of Bavarian Nordic Bavarian Nordic Annual Report 2024 2 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Letter from the Chair and the CEO In 2024, we delivered above expectations by driving not only further growth in our Travel Health business but also making significant contributions to improving public health as we joined the global fight against another mpox outbreak. Our Travel Health business grew by 22%, significantly above our expectations for the year. This was driven by strong performance across the entire portfolio as a result of organic growth and strong brand perfor- mance. Rabipur/RabAvert and Encepur continued to outperform, and the addition of Vivotif and Vaxchora in 2023 came into full effect in 2024. The latter two have untapped potential that we continue to explore by expanding our market into new countries and driving increased awareness as part of our efforts to relaunch the products upon our acquisition in 2023. This strong performance has positioned us well above our trajectory to meet an average annual growth of 10-12% in Travel Health as outlined in our strategic ambitions for 2024-2027. This growth is not only ascribed to an increase in global travel but also driven by a rise of diseases like tick-borne encephalitis (TBE) and chikungunya due to factors like climate change. This trend will continue, and vaccines will remain an important tool to mitigate this risk in the future, not only for travelers, but also as part of domestic public health measures. Bavarian Nordic Annual Report 2024 3 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years New product launch in 2025 more reach and impact than TBE. Furthermore, we are also developing a vaccine candidate against Epstein- Barr virus, which causes infectious mononucleosis, but is also known to cause certain cancers. Both diseases represent large unmet medical needs as there are currently no vaccines available. We are excited to launch these programs, which based on pre-clinical data have the potential to become best in class, adding further value to our pipeline as we progress towards clinical trials in 2026. mpox as a public health emergency, the first vaccines arrived early September in the DRC, representing donations from Bavarian Nordic, the EU Commission and the US government as a first response to the outbreak. Since then more countries followed along, and we entered supply agreements with Gavi and UNICEF, ensuring the combined availability of nearly 3 million doses of our mpox vaccine through dona- tions and agreements. We also entered a license- and manufacturing agreement with Serum Institute of India, the world’s largest vaccine manufacturer by volume, and we continue to explore further options to expand capacity to lower- and middle-income countries to ensure continued equitable access. This includes the opportunity to increase our output by introducing a new cell line in our manufacturing, which would allow us to scale our capacity to meet demand from even larger outbreaks, including smallpox. areas were just some of the major roadblocks that needed to be cleared. Another issue was that the vaccine had not yet been approved by local regulatory authorities. These challenges demonstrated the need for a continued concerted effort and funding from both local, regional and global societies. We will further grow the portfolio with the anticipated launch of the chikungunya vaccine in the first half of 2025. We are excited by this opportunity, which represents our first full-scale commercial launch of a product, leveraging our commercial strengths and capabilities. VIMKUNYA was approved in the US and EU in February 2025 as the first chikungunya vaccine approved for persons as young as 12 years. The vaccine is well positioned to become the preferred choice for travelers at risk going to destinations in Asia, Africa, and the Americas, where chikungunya has emerged over the past decades. Our vaccine remains an important tool in governing public health security, and we are pleased to support an increasing number of governments and organiza- tions to build resilience towards current and future outbreaks. This has driven higher revenue in our Public Preparedness business over the past years, exceeding our base projections. We will continue our efforts to expand the base, also via private markets, which we launched in 2024 in Germany and the US, where our mpox vaccine is now available for at-risk populations. Strong partnerships increase access to mpox vaccines The world faced another public health crisis in 2024. As a more severe strain of mpox continued to spread beyond its epicenter in the Democratic Republic of Congo (DRC) to neighboring countries and beyond, the African health authorities called upon the global society to assist. Concerted efforts were needed to curb the outbreak, which caused more than 70,000 suspected cases and nearly 1,300 deaths in Africa in 2024. Growth through innovation We continue to explore opportunities to further grow the portfolio, both organically and through acquisition. While revenue from Travel Health has gone from zero to more than DKK 2 billion annually in just five years, we seek to further solidify this business, strengthening our resilience to market challenges and comple- menting our Public Preparedness business. Our responsibility beyond tomorrow We also partnered with CEPI who has provided impor- tant support that enabled us to expand the indication for mpox vaccine to adolescents, who are dispropor- tionally affected by the outbreak. Additional activities are ongoing to expand the use further to include children under the age of 12. Improving access to vaccines is one of the core pillars of our strategy to help build a sustainable future. Vaccines remain one of the most efficient health interventions and we recognize our responsibility to ensure equitable access to our products around the globe, which we seek to accomplish through part- nerships with governments and organizations. Most recently, we entered a partnership with Biological E Limited in India in order to facilitate future supply of our chikungunya vaccine for lower- and middle-in- To succeed, we will continue to invest in our business to supplement the portfolio. This year, we are bringing two new programs from our own research into the pipeline. We are developing a vaccine candidate against Lyme disease, another tick-borne disease, which is found in many parts of the world, with far At the time, we were already manufacturing at scale to supply existing customers, following the global mpox outbreak in 2022. However, we changed gears and responded timely to meet the urgent demand and facilitate an immediate response together with the Africa CDC. Only a few weeks after the declaration of While vaccines inarguably are the remedy needed to fight the outbreak, lack of funding, poor infrastructure in the health system, and civil war in highly impacted Bavarian Nordic Annual Report 2024 4 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years come countries in endemic regions. While we see this as our most important contribution to creating a positive impact, we leave other footprints that we carefully monitor and act on. That is why we have committed to reducing our emissions in alignment with the Paris Agreement, while also taking responsi- bility for the people and the environment around us. This report marks our first integrated report based on the Corporate Sustainability Reporting Directive (CSRD), a new framework aimed to improve transparency around companies’ impact, risks and opportunities. Well aware that our impact grows as we expand our business, we are pleased to report a 13% reduction in emissions from our own operations in 2024, a result which largely can be ascribed to our transition to renewable energy sources at our Danish manufac- turing site. turing footprint by increasing capacity and capabilities at our main facility in Denmark, acquiring an addi- tional facility in Switzerland, and establishing a global network of manufacturing partners. In addition, we have also established and significantly expanded our commercial presence in Europe and North America. These achievements are a testament to our bold strategy launched only five years ago to transform the company, but equally to our heritage and the pioneering spirit that has been a main characteristic for Bavarian Nordic and our people since 1994. Our success is dependent on these people who put their skills and expertise to work every day to discover, manufacture and deliver life-saving vaccines to people around the world, and we would like to thank them for their significant contributions to another successful year for Bavarian Nordic, where we also had the pleasure of celebrating our 30 years anniversary. Like- wise, we would like to thank our shareholders whose trust and support are strong catalysts for our ability to drive continued growth for the company. A pioneering force in vaccines In 2025, we will have completed our commercial transformation from a research and development company selling to governments to a company with multiple products addressing patient needs in travel health and other areas. The last milestone payments associated with our acquisitions over the last years will be paid, and we are taking the final steps in our five-year journey to complete the tech transfer of core products to our own manufacturing. During these years, we have significantly expanded our manufac- Luc Debruyne Chair of the Paul Chaplin President and CEO Board of Directors Bavarian Nordic Annual Report 2024 5 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Upstream Bavarian Nordic Downstream Our purpose and strategy Own operation A pioneering force in vaccines — expanding our reach and impact through life-changing solutions Market and patient insights Employees Raw materials Protecting lives every day is an essential part of Bavarian Nordic’s DNA, and we aspire to develop and manufacture vaccines that address unmet medical needs for the greater good of the global society, while also helping to mitigate the adverse effects of climate change on human health. Natural resources End-users In-house Licensing development Research and development Our business model spans the full value chain from early research and development, over production to commercialization and distribution, and rests on the ability to innovate and commercialize new vaccines. Through collaboration with local partners and insti- tutions, we aim to expand our commercial footprint while improving access to vaccines. The business model covers partnership business, complex govern- mental sales and direct sales. Contract Research Organizations Regulatory agencies External Manufacturing Manufacturing External Manufacturing Customers • • Partners Direct sales, wholesalers, pharmacies, HCPs • Governments, Organizations Sales and marketing Distribution Bavarian Nordic Annual Report 2024 6 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Strategy As a focused and profitable pure play vaccine company, we are favorably positioned to leverage our strong global commercial presence in key markets. Our commitment to developing a sustainable busi- ness is key to lasting success in global markets. With our vaccines, we aim to improve health and protect lives and communities. By preventing the spread of infectious diseases, vaccines contribute to healthier populations, reducing the burden on healthcare systems and promoting resilience in the face of environmental challenges. Our goals are driven by actions within the ESG framework, and these priori- ties are integrated in our business strategy. Deliver continued growth Bring innovative solutions Committed to sustainability • Drive growth in Travel Health • Improve competitiveness of existing product portfolio through life-cycle management • Improve access to vaccines • Expand base business within Public Preparedness • Transition plan for climate change mitigation • Secure reliable supply • Strong focus on organic growth supported by selective and synergistic M&A • Ensure responsible supply • Develop new pipeline programs and platforms Bavarian Nordic Annual Report 2024 7 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Bavarian Nordic at a glance Our 2024 numbers: Revenue Building on three decades of excellence in vaccine research, development, and manufacturing , we have successfully transformed from a research and development focused company into one of the largest pure-play vaccine companies through strategic product acquisitions and expansion of our organization to include a full, global commercial infrastructure, serving more than 30 countries. 5,716 mDKK EBITDA 1,603 mDKK EBITDA margin 28% Employees ● Our markets Today, we have a leading commercialized portfolio of travel vaccines, and we continue to strengthen ● Our offices our position as a preferred supplier of mpox and smallpox vaccines to governments for public health preparedness. 1,653 USA Germany Research and develop- ment, sales and commer- cial functions 301 employees Switzerland Denmark Other countries We are also working with global organizations like WHO, PAHO, Africa CDC, UNICEF, Gavi and CEPI to expand access to life-saving vaccines during emer- gencies, such as the mpox outbreaks in 2022 and 2024, which has helped to ensure availability to our vaccines in more than 70 countries worldwide. Clinical development, regulatory and commercial functions Manufacturing, global marketing and sales functions Headquarters and manu- facturing Commercial and admin- istrative functions in: Belgium, Canada, France, Italy, Portugal, Spain, Sweden and United Kingdom 979 employees 123 employees 215 employees 35 employees Bavarian Nordic Annual Report 2024 8 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Our vaccines We are a preferred supplier of mpox and smallpox vaccines to governments to enhance public health preparedness and have a leading portfolio of travel vaccines. In addition to our own products in Travel Health, we market and distribute vaccines for third parties in selected European markets. Public Preparedness Travel Health JYNNEOS®, IMVAMUNE®, IMVANEX® Rabipur®, RabAvert® Encepur® Vivotif®, Typhoral® Vaxchora® Vimkunya™ Mpox / Smallpox Rabies Tick-borne encephalitis (TBE) Typhoid fever Cholera Chikungunya JYNNEOS®/IMVAMUNE®/IMVANEX® is an mpox vaccine, also indi- cated for smallpox. The vaccine is primarily sold to governments for stockpiling and outbreaks but has also been commercialized in key markets (US and Germany) for at-risk populations. Rabipur®/RabAvert® is a rabies vaccine for both pre-exposure use for travelers to endemic regions and for post-exposure use by persons in endemic countries potentially at risk after being bitten or scratched by animals known to carry the disease. Encepur® is a vaccine against tick- borne encephalitis (TBE), a virus prevalent in Central, Eastern and Northern Europe. The geographic range of the virus appears to have expanded to new areas, likely due to a complex combination of changes in diagnosis and surveillance, human activities and socioeconomic factors, and ecology and climate. Vivotif®/Typhoral® is an oral vaccine for immunization against typhoid fever, a potentially life-threatening disease caused by a specific type of bacteria (Salmonella typhi), which is commonly found in Southeast Asia, Africa, the Caribbean, and Central and South America. Vaxchora® is an oral vaccine for immunization against cholera, a potentially life-threatening disease caused by the bacteria Vibrio chol- erae serogroup O1, which is regularly found in South and Southeast Asia and Africa. Vimkunya™ is a vaccine for immuniza- tion against chikungunya, a mosqui- to-borne disease, which has emerged across several regions in Asia, Africa, and the Americas, including many popular travel destinations. It is the first virus-like particle (VLP)- based chikungunya vaccine for persons aged 12 and older, which has been approved in the US and Europe in 2025. We acquired the vaccine in 2023 and are still relaunching it in key markets, after discontinuation of marketing by the previous owner during the COVID-19 pandemic. Our focus is on US and European markets. It is the only mpox vaccine that has obtained prequalification by WHO. The vaccine is market-leading in Western markets and more than 80% of its revenue is from US and Germany. We acquired the vaccine in 2023 and are still relaunching it in key markets, after discontinuation of marketing by the previous owner during the COVID-19 pandemic. Our focus is primarily on the US market, which represents around 60% of the product’s total revenue. The vaccine is marketed in European countries only with Germany being the largest market, representing approximately 80% of the product’s total revenue. Revenue 2024 To be launched in 2025 in US and Europe. 3,206 mDKK Share of total revenue: 56% 1,352 mDKK Share of total revenue: 24% 497 mDKK Share of total revenue: 9% 179 mDKK Share of total revenue: 3% 64 mDKK Share of total revenue: 1% Bavarian Nordic Annual Report 2024 9 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Partnering for global health Public-private partnerships have been an integral part of our business model since our inception. We have turned small research collaborations into long- term relations, that helped bringing novel vaccines to the market to fight existing and emerging diseases around the globe. Partner Disease Progress in 2024 US government (BARDA) Mpox We continued our decade-long partnership with BARDA, entering multi-year contracts worth more than USD 220 million for the manufacturing of additional bulk vaccine as well as final mpox vaccines. EU (HERA) EU (rescEU) CEPI Mpox The European Health Emergency Preparedness and Response Authority (HERA) ordered more than 175,000 doses, which we complemented with 40,000 doses for donation to Africa. Smallpox Mpox We entered our third contract to supply smallpox vaccines to rescEU, the EU’s strategic stockpile of medical countermeasures for its member states. We entered into a new partnership with CEPI, the Coalition for Epidemic Preparedness Innovations, to advance the development of our mpox vaccine for children in Africa. Along the way, we have also established industry partnerships, some which also were pivotal for changing the public health landscape. CEPI has supported our study of the vaccine in adults and children aged 2-12 years and furthermore supported other studies to support use of the vaccine in risk populations, including children under the age of 2 and pregnant women. As a manufacturer we can only do so much to ensure the availability of our vaccines and thus rely on global partners to help bring the vaccines to the populations who need it most. That is why, in recent years, we have increased our focus on establishing partnerships with organiza- tions with the necessary strength and capabilities to drive global health initiatives. GAVI Mpox Mpox Mpox We signed an Advance Purchase Agreement with Gavi, the Vaccine Alliance, which secured funding for the first 500,000 doses under the UNICEF tender. UNICEF Africa CDC We won an emergency tender, issued by UNICEF in response to the mpox outbreak in Africa, leading to a contract for 1 million doses of our vaccine. We have collaborated with the Africa Centres for Disease Control and Prevention (Africa CDC) to explore options for local manufacturing of our vaccine to improve availability and ensure equitable access. In 2024, we continued to strengthen our collaboration with existing partners, while also establishing significant new partnerships that were pivotal for increasing access to vaccines for more people, particularly those impacted by the ongoing mpox outbreak in Africa. SII Mpox We entered an agreement with Serum Institute of India (SII), providing them a license to our mpox vaccine for the Indian market, while also potentially expanding our manufacturing capacity with SII as contract manufacturer for additional markets. Bavarian Nordic Annual Report 2024 10 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Strong regulatory progress in 2024 Regulatory body Disease Progress in 2024 Significant regulatory progress was made during 2024 as we worked diligently to support new regulatory approvals and label extensions, particularly in support of our mpox vaccine in response to the outbreak. EMA EMA WHO Mpox The marketing authorization for our mpox vaccine was extended to include adolescents 12 to 17 years of age, supported by data from a clinical study, demonstrating non-inferiority of the immune responses, as well as a similar safety profile, between adolescents and adults after vaccination with two doses of the vaccine. Mpox Mpox Real-world effectiveness data from the use of the vaccine during the global 2022 mpox outbreak was adopted in the EU marketing authorization. These data demonstrated vaccine effectiveness against mpox of up to 90% after two MVA-BN doses and a significant reduction of the risk of mpox-related hospitalizations. The World Health Organization (WHO) prequalified our vaccine as the only mpox vaccine to receive this approval to-date. A prequalification enables organizations like Gavi and UNICEF to procure the vaccine for countries in Africa. Other FDA Mpox Our vaccine received a full approval in Singapore and Mexico and a provisional approval in New Zealand. Mpox/Smallpox We submitted a supplemental Biologics License Application (sBLA) to the U.S. Food and Drug Administration (FDA) for a freeze-dried formulation of our mpox and smallpox vaccine, potentially supporting approval of this version in 2025. FDA Chikungunya Chikungunya We submitted our Biologics License Application for the chikungunya vaccine to the FDA, which was approved in February 2025, following Priority Review. EMA We submitted a Marketing Authorization Application (MAA) to the European Medicines Agency, which was granted accelerated assessment. The vaccine was approved by the European Commission in February 2025 upon recommendation by the Committee for Medicinal Products for Human Use (CHMP). Other Rabies Completing the multi-year tech transfer of the production of the rabies vaccine, which we acquired from GSK in 2020, we received regulatory approval of the bulk manufacturing process as the final step. Bavarian Nordic Annual Report 2024 11 Introduction Performance Strategic priorities Corporate information Bavarian Nordic at a glance Letter from the Chair and the CEO Our purpose and strategy Partnering for global health Strong regulatory progress in 2024 Our first 30 years Our first 30 years In 2024, we celebrated the 30th anniversary of Bavarian Nordic. The first 30 years with numerous successes have shaped our company from an R&D focused company to one of the largest pure play vaccine companies with a leading commercialized portfolio of travel vaccines in addition to our vaccines against mpox, smallpox and Ebola that have contributed to managing several public health emergencies over the past decade. 1994 Founded 1998 Listed on the Copenhagen Stock Exchange 2003 First development contract with the US government 2022 2020 2019 2014 2013 2004 Supported the first global mpox outbreak Began commercial transformation through acquisition of travel vaccine assets US FDA approval of mpox vaccine Partnership with Janssen1 in response to Ebola outbreak First product approval in EU and Canada for smallpox vaccine Establishment of commercial-scale manufacturing Bavarian Nordic has been driven by a pioneering spirit and a commitment to groundbreaking tech- nology since 1994. Securing our very first smallpox vaccine contract with the US government in 2003 marked a turning point in our growth journey, allowing us to further expand and establish our own manufacturing capabilities, which have been a significant catalyst for growth ever since. Driven by bold decisions, we have made a number of strategic acquisitions, transforming Bavarian Nordic from an R&D focused company to a commercial company and successfully established ourselves as a focused and profitable vaccine specialty company with a leading travel health portfolio. Today, with global presence and +1,600 employees, we celebrate the number of successes along the 30 years of vaccine development for the purpose of improving and saving lives. 2023 2024 Second acquisition of travel vaccine assets and another manufacturing facility Supported the second mpox outbreak and advanced chikungunya vaccine in preparations for launch in 2025 1 Now Johnson & Johnson Innovation Bavarian Nordic Annual Report 2024 12 Introduction Performance Strategic priorities Corporate information Key figures 2024 highlights 2024 performance Financial review Outlook 2025 2024 highlights In 2024, we made good progress on our strategic focus areas. While driving further growth in our Travel Health business, we also made significant contributions to improving public health in collaboration with other global stakeholders in the fight against mpox. Deliver continued growth Bring innovative solutions Committed to sustainability • Drive growth in Travel Health • Improve competitiveness of existing product portfolio through life-cycle management • Improve access to vaccines Strategic focus areas • Expand base business within Public Preparedness • Transition plan for climate change mitigation • Ensure responsible supply • Secure reliable supply • Strong focus on organic growth supported by selective and synergistic M&A • Develop new pipeline programs and platforms • Completion of tech transfer for rabies on time and on budget. • Strong progress in integration of acquired assets. • Successful regulartory submissions for chikungunya vaccine in the US and Europe. • New regulatory approvals for smallpox/mpox vaccine including an EMA approval of our mpox vaccine for adoles- cents, and prequalification by WHO, expanding availability for African countries. • New partnerships entered for expanding equitable access to mpox vaccine. • Commitment to Science Based Targets initiative (SBTi) as of 2024. 2024 progress • Private market launch of mpox vaccine in the US and Germany. • Significant regulatory progress leading to approval of chikun- gunya vaccine by FDA in February 2025. • Advancement of new pipeline programs. • As part of transition to renewable energy sourcing, a power purchasing agreement (PPA) signed for manufacturing site in Denmark. • Share of scoped suppliers and business partners that have undergone an audit in accordance with Pharmaceutical Supply Chain Initiative (PSCI) of 12.6% (2024 target: 12.5%). Bavarian Nordic Annual Report 2024 13 Introduction Performance Strategic priorities Corporate information Key figures 2024 highlights 2024 performance Financial review Outlook 2025 2024 performance Strong continued performance across Public Preparedness and Travel Health in 2024. Bavarian Nordic reported DKK 5,716 million (DKK 7,062 million) in revenue in 2024, within the range of the latest guidance of DKK 5,400-5,800 million. The revenue was in line with market expectations, driven by mpox/smallpox vaccine sales during a global outbreak, and continued strong performance in Travel Health. EBITDA amounted to DKK 1,603 million (DKK 2,615 million) in 2024, compared to the latest guidance of DKK 1,450-1,700 million. The lower EBITDA compared to 2023 was followed by the lower revenue and gross profit for the year as 2023 was positively impacted by high mpox vaccine sales resulting from the 2022 outbreak. Actual results compared to guidance mDKK Original guidance 2024 Latest guidance 2024 Actuals¹ 2024 Feb 21, 2024 Sept 26, 2024 Revenue 5,000-5,300 5,400-5,800 5,716 EBITDA 1,100-1,350 1,450-1,700 1,603 1 The actual and audited results were in line with the preliminary results reported on February 3, 2025. Bavarian Nordic Annual Report 2024 14 Introduction Performance Strategic priorities Corporate information 2024 highlights 2024 performance Financial review Key figures Outlook 2025 Travel Health Encepur mid-May 2023 from the time when the acquisition of the vaccine was completed. JYNNEOS/IMVAMUNE/IMVANEX Revenue from the Travel Health business increased by 22% over previous year to DKK 2,287 million (DKK 1,877 million), driven by organic growth, strong brand performance and expansion of the portfolio through the acquired assets from Emergent BioSolu- tions in 2023. All products contributed to the growth in the Travel Health portfolio, however with main contributions driven by strong Rabipur/RabAvert and Encepur sales. Revenue from Encepur increased by 19% to DKK 497 million (DKK 417 million), largely driven by the German market, where we maintained a market share² of 28% in 2024. Revenue from the sale of JYNNEOS/IMVAMUNE/ IMVANEX amounted to DKK 3,206 million (DKK 5,027 million), driven by contracts with the US govern- ment as well as contracts entered with various other governments and organizations. Additionally, the 2024 public health emergency drove strong sales in the private market in the US after the launch in early 2024. The lower revenue compared to the previous year was explained by the 2023 revenue impact from the 2022 mpox outbreak. Third-party products Revenue from the sale of third-party products (DUKORAL and IXIARO and HEPLISAV-B) increased by 24% to DKK 194 million (DKK 157 million), mainly driven by very strong market demand for IXIARO. Vivotif/Typhoral Still in relaunch phase, revenue from sale of Vivotif amounted to DKK 179 million (DKK 119 million). The 2023 figure includes revenue only from mid-May 2023 from the time when the acquisition of the vaccine was completed. Public Preparedness Revenue from Public Preparedness amounted to DKK 3,206 million (DKK 5,027 million), fully in line with expectations. The lower revenue compared to 2023 was explained by the 2023 revenue impact from the 2022 mpox outbreak. Rabipur/RabAvert Revenue from Rabipur/RabAvert increased by 16% to DKK 1,352 million (DKK 1,161 million), driven by continued strong demand from key markets in the US and Germany. Our market position remained strong, with the US and Germany market shares² reaching 75% and 91%, respectively, in 2024. Other revenue Vaxchora Other revenue amounted to DKK 223 million (DKK 158 million), mainly related to ongoing contracts with the US government, including the contract to develop an MVA-BN-based vaccine against equine encephalitis virus. Still in relaunch phase, revenue from sale of Vaxchora amounted to DKK 64 million (DKK 24 million). The 2023 figure includes revenue only from Performance by business area Travel Health Revenue, mDKK Public Preparedness Revenue, mDKK Total revenue Revenue, mDKK EBITDA Revenue, mDKK 7,062 5,716 2,615 5,027 2,287 1,877 3,206 1,603 3,151 1,287 1,083 869 1,852 2020 1,898 2021 1,730 740 994 541 75 328 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2022 2023 2024 2020 2021 2022 2023 2024 2 Market shares are measured by value. Bavarian Nordic Annual Report 2024 15 Introduction Performance Strategic priorities Corporate information Key figures 2024 highlights 2024 performance Financial review Outlook 2025 Financial review The financial review is based on the Group’s consolidated financial information for the year ended December 31, 2024, with comparative 2023 figures for the Group in brackets. There are no significant differences between the development of the Group and the Parent Company, except where specifically noted below. turing. The Kvistgaard site was impacted by a water damage early in the year and by idle capacity due to switching of campaigns necessary for the ongoing tech transfer program. rations for the planned launch of the chikungunya vaccine in 2025. Research and development costs The total research and development spending was DKK 863 million (DKK 2,228 million). The amount excludes R&D costs of DKK 152 million (DKK 127 million) recognized as production costs. The restruc- turing of the R&D function, announced in December 2024, resulted in a provision amounting to DKK 80 million, including severance pay, asset write downs, and accruals for future lease expenses. The regulatory approval of the chikungunya vaccine was obtained by FDA in February 2025, and management therefore assesses the drug substance produced in 2024 to be commercially viable, hence the provisional write down was reversed in 2024. Income statement which cost of goods sold totaled DKK 1,580 million (DKK 1,608 million). Revenue Revenue for the year was DKK 5,716 million (DKK 7,062 million). Other production costs amounted to DKK 847 million (DKK 426 million) and consist of unallocated costs, including the cost of idle manufacturing capacity and cost of unsuccessful production runs, plus write- downs. The product rights to Rabipur/RabAvert and Encepur are amortized with DKK 279 million (DKK 273 million). The product rights for Vivotif and Vaxchora are amortized DKK 39 million (DKK 25 million). Amortization of product rights are recognized as production costs. Further described in note 15. In the Parent Company revenue was DKK 32 million (DKK 130 million) lower than in the Group as the sale of RabAvert in the US and Rabipur and Encepur in Switzerland is handled by the subsidiaries which is also the case for part of the sale of Vivotif and Vaxchora. The internal sale from the Parent Company to the subsidiaries follow a commission- aire transfer pricing setup. The variance in revenue between Group and Parent Company is influenced by phasing of both external and internal sales. During 2023, the main costs were related to recog- nition of impairment loss of ABNCoV2 development program, DKK 558 million, and the Phase 3 study for RSV, approximately DKK 875 million. The increase in other production costs over 2023 is primarily explained by higher write-downs due to MVA-BN batches failing final tests and the cost of idle capacity at the Bern and Kvistgaard manufac- turing sites. Net write-downs of inventory amounted to DKK 141 million compared to DKK 75 million in 2023. Further details on write-downs can be found in note 18 Sales and distribution costs Administrative costs The sales and distribution costs amounted to DKK 500 million (DKK 332 million) split between costs for distribution of products of DKK 64 million (DKK 59 million) and costs for running the commercial organization and activities of DKK 436 million (DKK 273 million). The increase in running costs for the commercial organization is mainly related to the acquired business from Emergent BioSolutions, establishment of new legal sales entities and prepa- Administrative costs totaled DKK 516 million (DKK 541 million). Transaction costs related to the acquisi- tion from Emergent BioSolutions were expensed by DKK 64 million in 2023. Excluding these expenses, the underlying increase in administrative costs compared to 2023 mainly relates to an increase in headcounts and costs within administrative func- tions following the acquired activities from Emer- gent BioSolutions. Furthermore, integration costs were also incurred in both periods. Production costs Production costs amounted to DKK 2,897 million (DKK 2,459 million). Costs related directly to revenue amounted to DKK 1,733 million (DKK 1,735 million) of The Bern site saw increased idle capacity costs, driven by the full-year effect of idle capacity in the Vivotif and Vaxchora manufacturing as well as later than expected ramp-up for chikungunya manufac- Bavarian Nordic Annual Report 2024 16 Introduction Performance Strategic priorities Corporate information Key figures 2024 highlights 2024 performance Financial review Outlook 2025 EBIT/EBITDA Emergent BioSolutions transaction and cost for establishing the revolving credit facility. a taxable income of DKK 0 million after depreciation of tax assets and use of tax losses carried forward. Cash flows Income before interest and tax (EBIT) was an income of DKK 940 million (income of DKK 1,503 million). Cash flow from operating activities totaled a net contribution of DKK 1,950 million (net contribution of DKK 1,119 million) following the positive EBITDA of DKK 1,603 million (DKK 2,615 million). Net change in working capital was positive by DKK 177 million (negative by DKK 1,551 million). The net value adjustment of deferred consideration was an expense of DKK 105 million (DKK 86 million), consisting of three components: Unwindingof the discount related to deferred consideration, adjust- ment of deferred consideration due to change in estimated timing, and currency adjustments. Despite the positive result for 2024, management still assess that the remaining deferred tax asset should remain at DKK 0 million on the balance sheet. EBITDA was an income of DKK 1,603 million (income of DKK 2,615 million). Amortization of product rights and developed production processes amounted to DKK 349 million (DKK 298 million) whereas depre- ciation on other fixed assets amounted to DKK 286 million (DKK 256 million). Impairment losses related to the San Diego site amounted to DKK 38 million in 2024, and losses related to ABNCoV2 development program amounted to DKK 558 million in 2023. Following the tax position in the Parent company the effective tax rate for the Group was negative by 1.7% (positive by 0.5%). The Company retains the right to use the tax losses carried forward that was written down in prior years. Investment activities totaled DKK 1,871 million (DKK 946 million). Milestone payments to GSK and AdaptVac amounted to DKK 1,587 million (DKK 298 million). Investments in property, plant and equip- ment totaled DKK 83 million (DKK 143 million). The net investment in securities contributed positively with DKK 153 million (net divestment of DKK 1,902 million). In 2023 cash used for acquisition of busi- ness and product rights from Emergent BioSolutions amounted to DKK 1,832 and investment in ABNCoV2 development asset amounted to DKK 390 million. For further details on financial income and expenses see note 11 and 12. In the Parent financial statements, the financial income was DKK 150 million (DKK 160 million) and included interests on receivables from subsidiaries of DKK 4 million (DKK 49 million). The financial expenses were DKK 139 million (DKK 141 million) and included interest expense on payables to subsidiaries of DKK 22 million (DKK 10 million). Financial income and financial expenses Financial income was DKK 150 million (DKK 113 million) and consisted primarily of income from bank and deposit contracts, DKK 48 million (DKK 40 million), income from securities, DKK 35 million (DKK 45 million) and net foreign exchange gains, DKK 67 million (loss of DKK 15 million). Net profit The Group reported a net profit for the year of DKK 988 million (net profit of DKK 1,475 million). Liquidity and capital resources As of December 31, 2024, the Company had cash and cash equivalents of DKK 1,623 million (DKK 1,477 million) and held investments in securities of DKK 552 million (DKK 390 million). The net securities and cash position amounted to DKK 2,175 million (DKK 1,867 million). Cash flow from financing activities was a contribu- tion of DKK 56 million (DKK 736 million), exercise of warrants contributed with DKK 127 million (DKK 46 million). In 2023 a capital increase contributed with a net proceed of DKK 1,599 million, funding received from the Danish Ministry of Health amounted to DKK 240 million, both partly offset by repayment of repo position of DKK 1,104 million. Income before company tax was an income of DKK 971 million (income of DKK 1,483 million). Financial expenses were DKK 118 million (DKK 132 million) and consisted of interest expenses on debt, DKK 5 million (DKK 4 million), net value adjustment of deferred consideration, DKK 105 million (DKK 102 million), other financial expenses DKK 9 million (DKK 11 million) and net foreign exchange losses DKK 0 million (DKK 15 million). Other financial expenses related mainly to commitment fee for the revolving credit facility. In 2023, other financial expenses covered cost for obtaining a bridge loan for the Tax on income for the year Tax on the income for the year was an income of DKK 17 million (expense of DKK 8 million) and related primarily to taxes paid in Bavarian Nordic GmbH offset by adjustment to deferred tax in Bavarian Nordic Berna GmbH. The Company has obtained a revolving credit facility (RCF) agreement of DKK 1,000 million, the size of the agreement is as per the Company’s request. The facility was undrawn as per December 31, 2024. The net cash flow for 2024 was positive by DKK 135 million (positive by DKK 909 million). The Parent company had a net profit for the year of DKK 965 million (net profit of DKK 1,441 million), but Bavarian Nordic Annual Report 2024 17 Introduction Performance Strategic priorities Corporate information Key figures 2024 highlights 2024 performance Financial review Outlook 2025 Balance sheet and Encepur and stood at DKK 344 million (DKK 0 million). The transfer project has been running for the past 4 years in a staged process, starting with packaging then filling and ending with the transfer of bulk manufacturing. The Company has capital- ized incurred costs related mainly to internal labor and consultancy work on the technology transfer process. The asset was finalized beginning of 2024 with an initial value of DKK 375 million and will be amortized over 10 years. The amortization costs will be included as part of the cost for future manufac- tured vaccines. As of December 31, 2024, cash and securities stood at DKK 2,175 million (DKK 1,867 million). The Purchase and Sale Agreement also includes an earnout payment valued up to USD 30 million. The earnout payment relates to sale of Vivotif and Vaxchora. As per December 31, 2024, Management does not judge the sales milestone to be probable and therefore the earnout payment has not been recognized as deferred consideration. The balance sheet total was DKK 14,406 million as of December 31, 2024 (DKK 14,353 million). Cash and cash equivalents are primarily invested in deposit accounts with highly rated banks and in short-term Danish government and mortgage bonds. Assets Intangible assets stood at DKK 6,331 million (DKK 6,482 million) with the main asset being the product rights to Rabipur/RabAvert, Encepur, Vivotif and Vaxchora of DKK 4,660 million (DKK 4,791 million). Product rights are amortized on a straight-line basis over their expected useful lives of 10-20 years. In June 2024, based on higher-than-expected sales of Rabipur and Encepur during the second quarter of 2024, Management assessed it likely that Bavarian Nordic would reach the trigger for the sales mile- stone included in the Asset Purchase Agreement concluded in 2019 and this was finally confirmed by end of July 2024. The sales milestone of DKK 186 million has been recognized as an addition to the product rights. Equity Retirement benefit obligations After the transfer of the result for the year, equity stood at DKK 11,409 million (DKK 10,340 million). In the Swiss subsidiary Bavarian Nordic Berna GmbH, the Group has recognized a retirement benefit obligation of DKK 114 million (DKK 81 million). The pension plan is part of a collective foundation in which other plans of non-related employers also participate, and the different plans all participate in the various risks relating to the foundation. Deferred consideration Property, plant and equipment stood at DKK 2,161 million (DKK 2,328 million). Deferred consideration to GSK for purchase of product rights amounted to DKK 732 million (DKK 1,873 million). As of December 31, 2024, only one operational milestone and the completion milestone are outstanding, both which are expected to be paid in first half of 2025. During 2024, the Company paid EUR 185 million in milestones payments to GSK including the sales-based milestone. Inventories stood at DKK 2,327 million (DKK 1,644 million), of which the inventory of Rabipur/RabAvert and Encepur products amounted to DKK 1,625 million (DKK 948 million), smallpox/mpox vaccines amounted to DKK 303 million (DKK 287 million), Vivotif and Vaxchora products amounted to DKK 94 million (DKK 67 million) and chikungunya products amounted to DKK 68 million (DKK 0 million), as per December 31, 2024. The increase in the obligation mostly relates to transfer of the Bavarian Nordic Switzerland AG employees to the Berna legal entity as of August 2024. The prior pension scheme in Bavarian Nordic Switzerland AG was recognized as a contribution benefit plan and therefore no pension obligation was recognized. Acquired rights and development in progress only consist of the acquired chikungunya Phase 3 study and stood at DKK 1,287 million (DKK 1,287 million). The chikungunya development asset consists of the initial calculated fair value of DKK 1,287 million, including the net present value of probable future development milestones, DKK 499 million. Deferred consideration to Emergent BioSolutions for purchase of their travel health business amounted to DKK 350 million (DKK 504 million) and consists of milestone payments related to approval of the chikungunya vaccine by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA). The outstanding milestones are expected to be achieved in first half of 2025. During 2024, the Company paid USD 30 million to Emer- gent BioSolutions for the two milestones related to submissions to FDA and EMA. Receivables stood at DKK 1,285 million (DKK 1,892 million), of which trade receivables amounted to DKK 1,176 million (DKK 1,778 million). The decrease in trade receivables compared to year-end 2023 relates to high sale of smallpox/mpox vaccines end of 2023. Developed production processes relates to the technology transfer from GSK to Bavarian Nordic of the manufacturing process for Rabipur/RabAvert Bavarian Nordic Annual Report 2024 18 Introduction Performance Strategic priorities Corporate information 2024 highlights 2024 performance Financial review Key figures Outlook 2025 Key figures DKK million 2024 2023 2022 2021 2020 DKK million 2024 2023 2022 2021 2020 Income statement Key ratios1 Revenue 5,716 7,062 2,459 332 3,151 1,450 213 1,898 1,328 192 1,852 1,195 286 341 EBITDA 1,603 12.6 144.7 190 2,615 19.2 132.4 177 328 (4.9) 101.1 213 75 (7.4) 104.7 269 740 5.1 Production costs 2,897 500 863 516 940 32 Earnings (basic) per share of DKK 10 Net asset value per share Share price at year-end Share price/Net asset value per share Sales and distribution costs Research and development costs Administrative costs 83.7 187 2.2 2,228 541 1,183 376 399 293 278 1.3 1.3 2.1 2.6 Income before interest and tax (EBIT) Financial items, net 1,503 (20) (71) (314) (141) (454) (465) 380 (98) 282 Number of outstanding shares at year-end (thousand units) 78,855 79% 78,098 72% 70,735 58% 70,468 61% 58,450 56% (261) (332) (347) Equity share Income before company tax Net result for the year 971 988 1,483 1,475 Number of employees, converted to full-time, at year-end 278 1,611 1,379 975 759 690 Balance sheet Total non-current assets Total current assets Total assets Reconciliation of EBITDA Income before interest and tax (EBIT) Depreciation and amortization (note 9) Impairment losses (note 9) EBITDA 8,619 5,787 14,406 11,409 200 8,950 5,403 7,907 4,485 12,391 7,150 7,336 4,754 12,089 7,375 6,378 2,381 8,759 4,894 2,912 952 940 625 1,503 554 (71) 399 - (314) 388 1 380 344 16 14,353 10,340 1,225 38 558 Equity 1,603 2,615 328 75 740 Non-current liabilities Current liabilities 2,954 2,287 2,806 1,909 1 Earnings per share (EPS) is calculated in accordance with IAS 33 "Earning per share". Other financial ratios have been calculated in accordance with the guidelines from the Danish Society of Financial Analysts. 2,797 2,788 Cash flow statement Securities, cash and cash equivalents Cash flow from operating activities Cash flow from investment activities - Investment in intangible assets - Investment in property, plant and equipment - Acquisition of businesses 2,175 1,950 (1,871) (1,605) (83) 1,867 1,119 (946) (835) (143) (1,832) 1,902 736 2,845 220 3,717 (359) (2,877) (575) (483) - 1,670 572 (877) (1,020) (361) - (1,912) (484) (223) - - - Net investment in securities (153) 56 674 (1,779) 3,536 (1,202) 1,335 Cash flow from financing activities 636 Bavarian Nordic Annual Report 2024 19 Introduction Performance Strategic priorities Corporate information 2024 highlights 2024 performance Financial review Key figures Outlook 2025 Outlook 2025 For 2025, Bavarian Nordic expects revenue of DKK 5,700 – 6,700 million and an EBITDA margin of 26-30%. the growing commercial portfolio, as well as the advancement of early-stage pipeline assets in Lyme disease and Epstein-Barr Virus. CAPEX is expected at approximately DKK 250 million whereas inventory levels are anticipated to be relatively unchanged. 2025 outlook in line with the 2024-2027 ambitions With 22% growth in Travel Health in 2024 and the additional growth expected in 2025 for Travel Health combined with the current order book for Public Preparedness of DKK 2,500 million, we are currently ahead of these ambitions. Travel Health In Travel Health, an average annual growth of 10-12% is expected between 2023-2027. 10-12% CAGR 2023A-2027E The expected revenue is comprised of DKK 3,000 – 4,000 million from Public Preparedness vaccines, of which DKK 2,500 million have already been secured by contracts. Furthermore, approximately DKK 2,500 million from Travel Health vaccines, and approximately DKK 200 million from contract work are expected. The outlook is based on currency exchange rates of DKK 7.00 per 1 USD and DKK 7.45 per 1 EUR. 213 410 1,877 Travel Health revenue includes DKK 50 - 100 million from the sale of chikungunya vaccines, which is expected to be launched in the US and key European markets later in 2025. Revenue 2023A 2024A 2025E 2026-27E 2027E Public Preparedness 5,700 – 6,700 mDKK In Public Preparedness, an annual base business of DKK 1,500 – 2,000 million is expected. Outbreaks in 2022 and 2024 have caused a surge in demand, driving temporary higher revenues. The normal seasonality of the Travel Health business and the timing of revenue recognition of orders from Public Preparedness will cause variability in revenue and EBITDA throughout the year, with the first quarter of 2025 being light. 3,000- 5,027 4,000 3,206 EBITDA margin Key assumptions 1,730 Base Research and development costs of approximately DKK 900 million are expected, which include post-approval committed studies for chikungunya, and other costs for life-cycle management of business of DKK 1,500-2,000 million 734 541 324 26% – 30% 2019A 2020A 2021A 2022A 2023A 2024A 2025E Bavarian Nordic Annual Report 2024 20 Introduction Performance Strategic priorities Innovation Corporate information Travel Health Public Preparedness Travel Health Our focus on selective and synergistic acquisitions in recent years has driven significant growth, and we are favorably positioned to further leverage our strong commercial presence across markets. chikungunya in 2025 will help drive further growth in Travel Health, consolidating our leading position in the field. First year sales are projected to be in the range of DKK 50-100 million, which reflects uncertainties around timing of launch and uptake, which will highly depend on awareness and demand arising from outbreaks. Once fully matured, the total annual market size is estimated at USD 500 million. Our focus is to drive further awareness and leverage our increased presence in existing key markets as well as new markets for both rabies and TBE. Chikungunya In 2024, we finalized the technology transfer for the rabies vaccine to our own manufacturing facility, and in 2025, we will finalize the technology transfer for the TBE vaccine, thus completing the five-year process since acquiring the vaccines from GSK. This will not only help us ensure reliable supply to markets, but also improve margins for the product, starting in 2026 with full effect from 2027. With the approval of VIMKUNYA by the U.S. Food and Drug Administration (FDA) and the European Commission in February 2025, we are on track to launch the chikungunya vaccine in key markets during the first half of 2025 after which we will gradually phase in other markets. Rabies and tick-borne encephalitis (TBE) We are market leaders in rabies vaccines, which represents our largest product in the Travel Health portfolio. While post-exposure vaccination in endemic markets, particularly in the US, has consist- ently grown over the past years, the uptake of rabies vaccines for pre-exposure use by travelers to endemic regions, e.g. Asia, remains low and represents a good opportunity to further expand the market. Our travel vaccine portfolio has seen significant growth over the past years (2023: 49% and 2024: 22%) driven by organic growth, strong brand performance and expansion of the portfolio through acquisitions. The market was significantly down during the COVID-19 pandemic, but has gradually improved, and in 2024, global tourism fully recov- ered with certain regions even exceeding pre-pan- demic levels1. Market growth seems to stabilize at normal rates in the years to come. VIMKUNYA is the first chikungunya vaccine approved for persons as young as 12 years. The vaccine is well positioned to become the preferred choice for trave- lers at risk going to destinations in Asia, Africa, and the Americas, where chikungunya has emerged over the past decades and where outbreaks frequently occur. Typhoid and cholera 2024 represented our first full year of sales of the oral typhoid and cholera vaccines, which we acquired in 2023. We remain focused on relaunching both vaccines via our existing commercial platform. TBE is our second-largest product in the Travel Health portfolio, primarily sold in Germany. TBE is prevalent in central, eastern and northern Europe and the geographic range of the virus appears to have expanded to new areas, providing additional market opportunities. Our portfolio has a certain resilience towards travel trends as several of our vaccines address endemic diseases like rabies and tick-borne encephalitis (TBE), which are prevalent in our major markets. Disease awareness among travelers remains low, and the first chikungunya vaccine was only launched in 2024, so uptake has been limited thus far. As part of our launch preparations, we have a solid focus on driving continued awareness building and branding and we will leverage our strong posi- tion in the market to increase uptake. The continued organic market growth combined with our efforts to build and expand the markets, including our launch of a new vaccine against 1 UN Tourism: International tourism recovers pre-pandemic levels in 2024, January 20, 2025. https://www.unwto.org/news/international-tourism-recovers-pre-pandemic-levels-in-2024 Bavarian Nordic Annual Report 2024 21 Introduction Travel Health Performance Strategic priorities Innovation Corporate information Public Preparedness Public Preparedness Smallpox/mpox In addition to governments and organizations, For more than a decade, we have been a trusted partner to governments on their smallpox prepar- edness with USA and Canada as key customers. Building on the recent mpox outbreaks, we continue to expand our partnerships to enable that nations remain prepared in the future against both smallpox and mpox. we have pursued the opportunity to expand the sales of our mpox vaccine into the private market. In April 2024, we launched the vaccine in the US following a recommendation by the U.S. CDC Advi- sory Committee on Immunization Practices (ACIP) for the routine use of JYNNEOS® in adults at risk of mpox infection. Similarly, the vaccine is available for private customers in Germany. The surge in demand for our mpox vaccine over the past three years has largely been driven by outbreaks, requiring immediate public health responses, not only in Africa, but also in other countries. The unpredictable nature of outbreaks will likely continue; however, we have increased our share of recurring customers, who have procured vaccines for stockpiling, resulting in a higher base level of revenue from this business. This base is currently at DKK 1,500-2,000 million annually, which we will exceed again in 2025, as we have secured orders for a total of DKK 2,500 million for delivery in 2025. Bavarian Nordic Annual Report 2024 22 Introduction Travel Health Performance Strategic priorities Innovation Corporate information Public Preparedness Innovation Our portfolio has grown significantly, and we are operating in commercial markets where compet- itive edge is becoming increasingly important for success. By continuous improvement and differenti- ation of our products, we retain the ability to defend and increase our market shares. Hence, significant research and development resources are dedicated to life-cycle management of the products. For our chikungunya vaccine, we have certain post-approval study commitments agreed with the U.S. Food and Drug Administration and we are also conducting a Phase 3 study, which was initiated in 2023 to evaluate the long-term safety and immu- nogenicity of the vaccine as well as responses to a booster vaccination up to five years after the initial vaccination. development of new platforms and vaccine candi- dates. We also work in partnerships to advance the pipeline through fully funded development programs. and we have completed a Phase 1 first-in-human trial, that showed the vaccine to be well tolerated and immunogenic across all dose groups with neutralizing antibody responses against all three viruses increasing at higher vaccine doses. The responses peaked 2 weeks after the second vacci- nation and were durable throughout the 6-month follow up period. Equine encephalitis Funded by the U.S. government, we are developing MVA-BN® WEV, a vaccine candidate against western, eastern and Venezuelan encephalitis viruses, which can cause a rare, but potentially deadly mosqui- to-borne illness in humans. The vaccine candidate is based on our proprietary MVA-BN platform tech- nology, which is also used in our mpox and smallpox vaccine. In 2025, we are forecasting total research and devel- opment costs of DKK 900 million, of which approxi- mately 73% are allocated to life-cycle management. This includes label extensions, new presentation formats, geographical expansion of approvals, process improvements in manufacturing to increase yield and lower cost of goods sold (COGS) and main- tenance of registration in various territories. A Phase 2 clinical trial is planned for initiation in 2025. Pipeline We have a strong heritage in the discovery and development of novel vaccines, leading to the successful commercialization of vaccines for mpox, smallpox and Ebola1 – all representing major health threats. As we advance our science, we apply a disciplined approach to the discovery and early Preclinical studies performed under the contract have demonstrated protective efficacy in animals Product pipeline Preclinical Phase 1 Phase 2 Phase 3 Registration/Phase 4 Chikungunya 2025 Equine encephalitis Lyme disease 2025 2026 2026 Epstein-Barr (EBV) 1 Licensed and commercialized by Johnson & Johnson. Bavarian Nordic Annual Report 2024 23 Introduction Travel Health Performance Strategic priorities Innovation Corporate information Public Preparedness infection with a characteristic red, well-defined skin rash around the bite site that spreads. Our approach Lyme disease We have developed a recombinant protein-based Lyme vaccine candidate, based on novel technology which incorporates self-assembling protein particles. It has clear differentiation to other Lyme vaccine candidates in development. We are planning to initiate a phase 1 clinical trial in 2026. Like tick-borne encephalitis (TBE), Lyme disease is also transmitted via infected ticks. However, in contrast to TBE, Lyme disease also exists outside of Europe and is in fact the most common vector-borne disease in Europe and the US. Lyme is caused by a bacterial infection of Borrelia that is transmitted to people through the bite of blacklegged ticks, commonly found in forested areas. The Lyme vaccine will, when fully developed and approved, be a good strategic fit and a perfect match to the existing Travel Health vaccine portfolio as there is a large customer overlap to the existing products. In the second stage, the infection can spread from the bite site to other organs. Typical symptoms include fever, headache, fatigue, and a characteristic skin rash. If left untreated, the infection can spread to joints, the heart, and the nervous system. There are other more rare and long-lasting disease courses of the second stage of the Lyme disease, such as joint inflammation and characteristic skin rashes. Market potential Although Lyme disease has been known for half a century, no vaccines exist against the disease, thus representing a large unmet medical need. While the true incidence of the Lyme disease is unknown, it is estimated to annually affect approximately 476,000 people in the US and more than 200,000 people in Europe2 with several hundred million people living in endemic regions. The incidence of the disease is increasing. Lyme disease presents a significant global morbidity burden, which spans acute, chronic, and systemic impacts, significantly reducing quality of life espe- cially in endemic regions. Lyme disease or Lyme borreliosis can cause different symptoms. The first stage of the disease appears within weeks after 2 https://wwwnc.cdc.gov/eid/article/27/8/20-4763_article Bavarian Nordic Annual Report 2024 24 Introduction Travel Health Performance Strategic priorities Innovation Corporate information Public Preparedness Market potential Our approach Epstein-Barr Virus (EBV) Prevalent worldwide, it is estimated that approx- imately 90% of adults become antibody-positive before the age of 303. In the US, primary EBV infection causes around 125,000 cases of IM annu- ally4. The risk of developing IM upon EBV infection increases with age from childhood to adult life. Using our MVA technology as the backbone, we have developed a promising vaccine candidate against IM. It induces a broad and multi-layered immune response against EBV. With our novel self-assembling antigen particle technology incorpo- rated into the MVA platform, EBV targeting anti- bodies can be significantly boosted. We are planning for the first clinical trial to start in 2026, dependent on regulatory approvals. Epstein-Barr virus (EBV) is a member of the human herpes virus family. It spreads through bodily fluids, mostly saliva, and can induce infectious mononu- cleosis (IM) mostly in adolescents and young adults aged 12-20 years of age. Typical symptoms include severe sore throat, swollen lymph nodes, extreme exhaustion, fever and enlarged spleen. The fatigue can persist for weeks or months. IM also increases the risk of EBV-associated multiple sclerosis (MS) and certain types of immune cell tumors. EBV is responsible for approximately 1-2% of all human cancers1, estimated to cause more than 350,000 new cases and more than 200,000 deaths worldwide in 20202. There is currently no treatment or vaccine available against IM. Recent insights into the association of IM with an increased risk for autoimmune diseases, such as MS5, and certain tumors are increasing the medical need of EBV vaccine development programs. EBV vaccination could significantly reduce cancer burden and save billions in treatment costs. 1 2 https://bmccancer.biomedcentral.com/articles/10.1186/s12885-020-07013-x. Wong Y et al. Estimating the global burden of Epstein–Barr virus related cancers. J Cancer Res Clin Oncol 2022 Jan;148(1):31-46. doi: 10.1007/ s00432-021-03824-y. 3 4 5 Dunmire, S.K., Hogquist, K.A., Balfour, H.H. (2015). Infectious Mononucleosis. In: Münz, C. (eds) Epstein Barr Virus Volume 1. Current Topics in Microbiology and Immunology, vol 390. Springer, Cham. https://doi.org/10.1007/978-3-319-22822-8_9. Kempkes B, Robertson ES. Epstein-Barr virus latency: current and future perspectives. Curr Opin Virol. 2015 Oct;14:138-44. doi: 10.1016/j. coviro.2015.09.007. PMID: 26453799; PMCID: PMC5868753. Bjornevik K, Münz C, Cohen JI, Ascherio A. Epstein-Barr virus as a leading cause of multiple sclerosis: mechanisms and implications. Nat Rev Neurol. 2023 Mar;19(3):160-171. doi: 10.1038/s41582-023-00775-5. Epub 2023 Feb 9. PMID: 36759741. Bavarian Nordic Annual Report 2024 25 Introduction Performance Strategic priorities Risk management Corporate information Governance Management of Bavarian Nordic Shareholder information Shareholder information Bavarian Nordic has been listed on the Nasdaq Copenhagen exchange since 1998 under the symbol BAVA. We are listed on the OMXC25 index and the OMXC Large Cap index. Share capital DKK 155.80 and 261,538 shares at DKK 206.82 were issued as a result of employee warrant exercise, raising proceeds of DKK 120.8 million. In addition, in November 2024, 21,875 new shares were issued as a result of employee warrant exercise, raising proceeds of DKK 3.2 million. to subscribe for 4,635,905 shares of DKK 10 each. Thus, the fully diluted share capital amounted to DKK 834,907,620 at year end, comprising 83,490,762 shares. For further information about outstanding warrants, see note 14 in the consolidated financial statements. The share capital was DKK 788,548,570 by year-end 2024, comprising 78,854,857 shares with a nominal value of DKK 10 each. Each share carries one vote. For US investors, we have established a sponsored Level 1 American depositary receipt (ADR) program with Deutsche Bank Trust Company Americas acting as the depositary bank. One ordinary Bavarian Nordic share represents three Bavarian Nordic ADRs, and the ADR ticker symbol is BVNRY. Additional information about the ADR program is available on our investor relations website. In May 2024, 18,702 new shares were issued as a result of employee warrant exercise, raising proceeds of DKK 2.7 million. In September 2024, 447,869 new shares at DKK 146.60, 7,039 shares at By December 31, 2024, there were 4,635,905 outstanding warrants, which entitle warrant holders Share price development 2024 Share price performance 280 260 240 220 200 180 160 140 Bavarian Nordic share closed the year at DKK 189.35, delivering a 7% return for the year, while OMXC25 and the Nasdaq Biotechnology (NBI) index closed the year at -2% and -1%, respectively. The year-low for the Bavarian Nordic share was DKK 144.15 on April 25, 2024, and the year-high was DKK 283.50 on August 16, 2024, based on the daily closing prices of the Bavarian Nordic share. At year end, Bavarian Nordic had a market capitalization of DKK 14.9 billion. Jan ‘24 Feb ‘24 Mar ‘24 Apr ‘24 May ‘24 Jun ‘24 Jul ‘24 Aug ‘24 Sep ‘24 Oct ‘24 Nov ‘24 Dec ‘24 ● Bavarian Nordic OMX Copenhagen C25 NASDAQ BIOTECH Bavarian Nordic Annual Report 2024 26 Introduction Performance Strategic priorities Risk management Corporate information Governance Management of Bavarian Nordic Shareholder information Geographic distribution of share capital Financial calendar 2025 expect to improve our financial flexibility through increasing cash flow generation which we intend to use to invest in growing the current business and pipeline while prioritizing synergistic M&A as well as returning excess cash to our shareholders. In December 2024, we announced our intent to launch a share buy-back program of up to DKK 150 million, which was executed in January 2025. 8% 61% Denmark April 9, 2025 Annual General Meeting Non-registered May 9, 2025 Three-month interim report (Q1) 20% Europe August 22, 2025 Half-year interim report (Q2) 11% North America Investor relations We maintain an active dialogue with shareholders, sell-side analysts, prospective investors and other stakeholders by providing relevant, reliable and transparent information about relevant strategic, economic, financial, operational and scientific affairs in an open and timely manner. This work is carried out by Management and Investor Relations through frequent interactions with existing and potential shareholders via participation in investor confer- ences, roadshows, meetings and conference calls. November 14, 2025 Nine-month interim report (Q3) Ownership and major shareholders Share information Stock exchange Ticker symbol Nasdaq Copenhagen BAVA At the end of 2024, we had approximately 115,000 registered shareholders owning 93% of the share capital. The remaining 7% were held by non-regis- tered shareholders. Bavarian Nordic held 284,235 shares, corresponding to 0.36% of the share capital, as treasury shares, which have been repurchased to meet obligations arising from the share-based incentive programs for the Board of Directors and Executive Management. See note 29 in the consoli- dated financial statements. Share capital DKK 788,548,570 78,854,857 In connection with the publication of financial reports, Management will host a conference call for investors and analysts to present the results followed by a Q&A session. These events are being webcast live and they can be accessed via the investor relations website, where they will also be available for on-demand viewing for up to one year. Number of shares Number of treasury shares 284,235 Registered share of total share capital 93% Share classes One class Through our online shareholder portal, registered shareholders can request admission cards and/or vote by proxy for the Annual General Meetings. The shareholder portal can be accessed via our investor relations website, along with financial reports, company announcements, investor presentations, and more. To register shares by name, shareholders must contact their custodian bank. Nominal denomination Voting rights DKK 10 One share carries one vote DKK 189.35 Share price, year-end Additional information about the Annual General Meeting will become available on our website no later than three weeks before the event. Share- holders who have subscribed to news will receive a notification via e-mail. At the end of 2024, the following shareholder owned five percent or more of the shares according to their publicly disclosed shareholder notification: Capital allocation and return policy In the short-term, our main priority to use the cash generated is to pay back the significant milestones from acquisitions to GSK and Emergent BioSolu- tions by mid-2025. In the mid- to long-term, we ATP Group, Hillerød, Denmark, 10.17% as of December 31, 2024 Visit our investor relations website → Annual General Meeting → Bavarian Nordic Annual Report 2024 27 Introduction Performance Strategic priorities Corporate information Governance Management of Bavarian Nordic Shareholder information Risk management Risk management Bavarian Nordic’s business model spans the full value chain from research and development, over production to commercialization and rests on the ability to innovate and commercialize new vaccines. The business model covers partnership business, complex governmental sales and direct sales. By the nature of our business, we are exposed to a variety of risks along our value chain. Our approach to risk management the likelihood of occurrence or the potential impact. Bavarian Nordic is driving the risk management and risk mitigation processes through a struc- tured Enterprise Risk Management (ERM) process, whereby risks are managed through identification, monitoring and mitigation. The process is an inte- grated part of our operational procedures and the management processes. The Finance, Risk and Audit Committee (FRAC) oversees the process and is closely monitoring the risks on a quarterly basis. The Board of Directors receives regular risk updates from FRAC which are taken into consideration in the Board’s overall strategic considerations and deci- sions. Residual risk, after agreed mitigating actions, is further mitigated by insurance where this is relevant and possible. All risks have assigned risk owners, normally at the executive level, and assigned risk-responsible employees who monitors and miti- gates the risks closely. The first integrated Annual Report 2024 is deliv- ered in compliance with the ESRS requirements; as such additional risks associated with ESG (Environ- mental, Social and Governance) topics are further described under each ESG topical area, specifically mentioning individual risk under Impact, Risk and Opportunities per reporting area. These risks span both reporting risks, compliance risks and material risks which could impact Bavarian Nordic including the surrounding environment and stakeholders. The same risks are not mentioned in the risk descrip- tions below. The formal process ensures both bottom-up and top-down identification and handling of risks. In this process, key risks are first identified through a bottom-up process including description of the risks and mitigating actions taken to reduce either Bavarian Nordic Annual Report 2024 28 Introduction Performance Strategic priorities Corporate information Governance Management of Bavarian Nordic Shareholder information Risk management Key risks The key risks identified are summarized in the table below, including a description of the risk and impact, and mitigating actions. Risk area Description and impact Mitigating actions Risk area Description and impact Mitigating actions Manufacturing and quality of supply Disruptions to Bavarian Nordic’s supply chain caused by manufacturing issues, internal systems, or supply chain issues, could have a significant impact on the ability to supply products at the right time and could impact both customer relations and financial performance. Bavarian Nordic utilizes subcontractors and CMOs as part of the supply chain; any disruptions to the planning and execution at CMOs or subcontractors could impact Bavarian Nordic’s ability to supply products timely. • • Update and maintain risk assessment for equipment and implement preventive main- tenance where necessary. Internal quality audits, including mock inspections. Cyber security Disruptions, including hacking, • • Internal procedures for security monitoring and vulnerability assessment. Constantly having continuity plans updated, including having updated internal processes for data recovery. Plans for micro-segmentation to reduce the impact of attacks. Training and awareness campaigns both inside the IT department and within the business. Externally performed maturity assessments test, including gap analysis and gap closure plan identification. Involvement of third-party cybersecurity specialist to ensure a constant overview of threats and preventative measures available. Perform annual security penetration tests and audits by a third party. malware, or other external attempts to disrupt our ability to operate, could have a significant impact on our IT infrastructure and systems, from inability to perform operationally to inability to perform commercial sales or perform R&D. The impact could influ- ence revenue and/or costs. • • • Dual sourcing strategies. • • Adequate safety inventory for core products. Close supply chain control and direct moni- toring of key vendors. Constantly updated disaster recovery plans. Updated and adequate factory IT. Systematic and integrated Sales and Opera- tions Planning model. • • • • • Systems and processes As we expand our presence and global supply coverage, potentially ineffi- cient processes or systems, including Enterprise Resource Planning (ERP), could restrict our ability to scale up and deliver on the growth potential across products and markets. • Investments and efforts to secure that Bavarian Nordic uses a structured ERP system and has a broadly covering BI system. Constant standardization of processes and quality systems. • • • • Investments in strengthening the infrastruc- ture and security. Employee training. Bavarian Nordic Annual Report 2024 29 Introduction Performance Strategic priorities Corporate information Governance Management of Bavarian Nordic Shareholder information Risk management Risk area Description and impact Mitigating actions Risk area Description and impact Mitigating actions Research and development We are progressing studies and projects through the R&D pipeline, including life-cycle management activities for the current portfolio of products. • • • Close dialogue with authorities (e.g., FDA and EMA) to secure optimal path to approval and compliance with GMP, etc. Strong quality system in place to ensure compliance with standards agreed with and required by authorities. Communication with experts and regulators, to discuss regulatory strategy and develop- ment of recommendation. Shelf-life extension initiatives for products in the current portfolio. Commercial- ization and competition We compete in markets where prices may be determined by the local supply/ demand, including products from • • Ensure product availability through meticulous sales and operations planning. Secure an engaged and competent sales, marketing and medical affairs organization, e.g. through continuous training. Look for and leverage differentiation. Further develop products in the market (life- cycle management). Build strong relations through dedication and focus to achieve preferred supplier status. competitors that are significantly larger than us. Pressure from local healthcare politics to reduce costs may impact Bavarian Nordic’s pricing or volume. Geopolitical or macroeconomic changes or health crises, e.g., pandemics, could impact demand, pricing and access to vaccinations. Competitors might develop product candidates with higher potential which could reduce the value of our pipeline and products. Any research and development activi- ties can be delayed or even abandoned. The product approval phase can be delayed or even fail. • • • • • All clinical material and production facil- ities require regulatory approval; such approvals can be delayed or even fail. Develop early-stage pipeline of vaccines, or new platforms, to stay competitive. Delays, failures or paused projects could have an impact on our future pipeline and hence future profitability. Partnerships Partnering with other companies and government bodies in the industry is a central element of our strategy. Loss of partnerships, e.g., due to collaboration issues, failed projects or similar, could have a significant impact on our reputa- tion and future performance. • • Frequent interactions with partners to build and maintain common understanding. Processes in place to resolve potential issues. Laws, regulations and Not complying with laws, incl. anti-cor- ruption laws, regulations or any other compliance requirements could damage our reputation, result in significant fines and impede our ability to operate. • • • • • • Follow and monitor the established internal compliance structure and governance. Internal and external legal resources avail- able. Continuous training of the organization in relevant laws, regulations and policies. Monitor development in relevant laws and regulations. Allocation of internal resources to secure adaptation of new rules and regulations. Monitoring by the Business Ethics Compliance Committee. compliance Talent attraction and retention We depend on the ability to attract and retain talents for many functions. In times of high competition for the right talents or adverse impact on our image, it could impact our ability to perform at high standards and compete against other companies. • • • • Perform employer branding. Provide training and development. Offer competitive remuneration package. Identify and develop key talents, including talent programs. Bavarian Nordic Annual Report 2024 30 Introduction Performance Strategic priorities Corporate information Governance Management of Bavarian Nordic Shareholder information Risk management Risk area Description and impact Mitigating actions Safety and incidents We are fully committed to the safety and well-being of employees. Incidents or accidents can occur on our sites, and we maintain high standards and strong controls to prevent this from happening. • • • • Structured approach by the EHS organization to all workplace assessments. Training employees in appropriate safety procedures to perform the job. Adequately maintaining and communicating safety instructions. Ensuring processes and equipment is fit for the purpose. • • Permit to work systems for relevant jobs. High focus on, and procedures in place, where biosafety and biosecurity events could occur. Intellectual property rights The validity of patents is crucial for the Company to secure future revenues and return on the investments made in development. Patents might be chal- lenged by competitors. It is also crucial for the Company to avoid costly and lengthy litigation actions on IP launched by third parties. • Dedicated and experienced resources involved in the filing of patent applications to minimize vulnerability to future invalidity actions, and with ability to defend patents if such actions are filed. Appropriate resources are therefore spent on navigating the patent landscape to avoid third party patents. Currency and tax exposure to risks Significant fluctuations in the DKK/USD and other currencies which Bavarian Nordic could be exposed to, could impact financial positions. Potential disputes with tax authorities could result in additional tax payments. • • Material net USD exposure is hedged using FX contracts or options. Frequent monitoring of planned cash flows in other currencies allows for hedging when the risk is identified. Taxes are paid where we operate. Inter-com- pany transactions are governed by agree- ments in compliance with OECD’s transfer pricing guidelines. External and internal tax expertise is engaged whenever Bavarian Nordic is exposed to new tax risks to avoid lack of compliance or negative surprises. • • Currency risks and additional financial risks are further explained in note 23 in the consolidated financial statements. Bavarian Nordic Annual Report 2024 31 Introduction Performance Strategic priorities Corporate information Management of Bavarian Nordic Shareholder information Risk management Governance Governance pertaining to their respective fields that are due to be considered at board meetings. More information about the committees, including the terms of refer- ence which specify the tasks and responsibilities for each of the committees are available on the Compa- ny’s website: For an overview of the specific competencies identi- fied for each of the Board members, see page 38. The Board of Directors Board of Directors Chair: Luc Debruyne Deputy Chair: Anders Gersel Pedersen Bavarian Nordic is managed in a two-tier structure composed of the Board of Directors (“the Board”) and the Executive Management. The Board is responsible for the overall strategic management and the financial and managerial supervision of Bavarian Nordic, as well as for regular evaluation of the work of the Executive Management. In addition, the Board supervises the Company in a general sense and ensures that it is managed in an adequate manner and in accordance with applicable law and the Company’s articles of association. An overview of the composition of the board is found on page 33. Finance, Risk and Audit Committee Chair: Anne Louise Eberhard Changes to the board during 2024 Board committees → At the annual general meeting in April 2024, Ms. Montse Montaner Picart was elected as new member of the board, replacing Mr. Peter Kürstein, who had served as member of the Board since 2012. Nomination and Compensation Committee Composition of the board Chair: Luc Debruyne The Board consists of eleven non-executive members: seven external members and four employee representatives. The external members are elected by the shareholders at the annual general meeting for terms of one year; retiring members are eligible for re-election. The Board elects a chair from among its members. The employee representatives are elected by the employees for a four-year term; the current four- year term expires in 2025. Science, Technology and Investment Committee Chair: Heidi Hunter The Board discharges its duties in accordance with the rules of procedure of the Board, which are reviewed and updated by all members of the Board. Executive Management Board committees To support the Board in its duties, the Board has established and appointed three subcommittees: a Finance, Risk and Audit Committee, a Nomination and Compensation Committee and a Science, Tech- nology and Investment Committee. The committees, which comprise only shareholder-elected members of the Board, are charged with reviewing issues The composition of the Board should reflect a diversity of backgrounds, experiences and expertise relevant to the Company considering the industry and markets it is operating within and that collec- tively enable the Board to oversee the strategy and development of the Company at any time. Bavarian Nordic Annual Report 2024 32 Introduction Performance Strategic priorities Corporate information Management of Bavarian Nordic Shareholder information Risk management Governance Meeting attendance In 2024, the Board performed its annual evaluation with the assistance of an external advisor. The 2024 evaluation was based on the input from 11 board members and six executives. It was based on in-depth personal interviews, a customized online questionnaire, a mapping of the board composition, and board composition benchmarking. As part of the evaluation, each shareholder-elected board member was given feedback on their contribution and how they add value to the Board, and the Chair subsequently conducted individual meetings with all shareholder-elected board members to discuss their feedback and contribution. The overall attendance for the Board at meetings in 2024, including meetings in the subcommittees was 97 %. Number of meetings attended by each board member out of the total number of meetings within the member’s term. Board of Directors Finance, Risk, and Audit Committee Nomination and Science, Technology, and Investment Committee Compensation Committee Luc Debruyne ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Anders Gersel Pedersen Frank Verwiel ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Anne Louise Eberhard Heidi Hunter ● ● ● ● ● ● ● ● ● ● Johan van Hoof Montse Montaner1 Peter Kürstein2 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● The result of the general board evaluation was discussed at a board meeting in December, with clear conclusions and topics for further develop- ment. Linette M. Andersen Thomas A. Bennekov Anja Gjøl ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Karen M. Jensen 1 2 Montse Montaner was elected as new member of the Board in April 2024. Peter Kürstein retired from the Board in April 2024. Executive Management The registered Executive Management is appointed by the Board, which lays down their terms and conditions of employment and the framework for their duties. The Executive Management is respon- sible for the day-to-day management of Bavarian Nordic in compliance with the guidelines and direc- tions issued by the Board. The day-to-day operations do not include transactions of an unusual nature or of material importance to the affairs of Bavarian Nordic. Meeting attended ● Meeting not attended Evaluation of the Board external consultants, evaluates topics such as Board dynamics, Board agenda, quality of the material that is submitted to the Board, discussions at the Board meetings, the chair’s leadership of the Board, strategy, Board composition and Board competen- cies. Typically, the process is facilitated by each Board member filling out a detailed questionnaire, and the Board members are asked to score to which extent they agree to the individual questions. The results of the questionnaire are then discussed at a subsequent Board meeting, and the individual comments submitted are used in the planning and handling of future Board meetings. Each year, the Board and its subcommittees conduct an evaluation of the Board's and subcommittee’s work, accomplishments and composition. The chair heads the annual evaluation, which is conducted at least every third year with external assistance. The process, whether it is facilitated internally or by As of December 31, 2024, the registered Executive Management consisted of Paul Chaplin, President Bavarian Nordic Annual Report 2024 33 Introduction Performance Strategic priorities Corporate information Management of Bavarian Nordic Shareholder information Risk management Governance and CEO and Henrik Juuel, Executive Vice President and CFO, both registered with the Danish Business Authority, assisted by three Executive Vice Presi- dents who together with the registered Executive Management are responsible for the day-to-day operations of the Company (collectively the “Execu- tive Management”). Board and management gender diversity As of December 31, 2024, the Board had a guidelines from the Danish Business Authority and is therefore not required to set a gender target figure2. We wish to: • Have a balanced gender distribution in all mana- gerial positions and at all levels in the organiza- tion. representation of three female and four male members elected by the shareholders. The Exec- utive Management consisted of four male and one female member. The other management1 in Bavarian Nordic had a representation of 11 female and 12 male managers. Hence, we had an equal gender distribution in both the Board and in other management levels as in accordance with the We always strive to attract and engage a highly qualified and diverse group of employees and aim to eliminate biases and create an inclusive atmos- phere. In order to achieve these ambitions, Bavarian Nordic outlined the below specified ambitions and objectives for the work with diversity and inclusion. • Seek an age-diverse workforce that brings new perspectives, knowledge and experiences. Executive Vice President and Chief People & Sustain- ability Officer, Anu Kerns resigned in January 2025. • Develop a workplace that embraces the diverse backgrounds and perspectives stemming from an increasingly global and specialized organization. Table • Ensure that the compositions of the Board and Executive Management is diverse in terms of experience, competencies and gender. Members of the Board, Executive Management and Other Management, total and by under-represented gender. The percentages in the table indicate the ratio of the under-represented gender in each category. 2024 2023 Remuneration policy and report Number Percent Number Percent The remuneration of the Board and the registered Executive Management is governed by the remu- neration policy which is approved by the annual general meeting. Board of Directors, total 11 7 45% 43% 20% 48% 11 7 45% 29% 33% 48% Board of Directors, shareholder-elected Executive Management 5 6 Other Management 23 21 In accordance with section 139b in the Danish Companies Act, Bavarian Nordic has prepared a report on the remuneration of the individual members of the Board and the registered Executive Management in 2024. Remuneration Policy → Remuneration Report → 1 Members of Executive Management employed by Bavarian Nordic A/S along with their direct reports with leadership responsibility, also employed by Bavarian Nordic A/S and direct reports with leadership responsibility that are employed by Bavarian Nordic A/S and are reporting to a member of Executive Management not employed by Bavarian Nordic A/S. 2 Cf. the Danish Companies Act, Section 139(c) Bavarian Nordic Annual Report 2024 34 Introduction Performance Strategic priorities Corporate information Management of Bavarian Nordic Shareholder information Risk management Governance Business ethics 3. We require an appropriate level of data ethics for processing activities carried out by third parties for god Selskabsledelse) for companies listed on the Nasdaq Copenhagen exchange. We have established the Global Business Ethics Compliance Committee, which is represented by Executive Management and relevant business functions, to meet quarterly and oversee the Global Business Ethics Compliance Program. The Chief Compliance Officer has been appointed responsible for the Global Business Ethics Compliance Program and regularly reports on its status to the Finance, Risk, and Audit Committee. The Company has estab- lished a North America Compliance Committee and appointed a US Compliance Officer. 4. We ensure that the processing activities carried out provide value to the data subjects, and are transparent and secure Management believes that Bavarian Nordic is oper- ated in compliance with guidelines and recommen- dations that support our business model and can create value for our stakeholders. Regularly and at least once a year, Management monitors adherence to the recommendations on corporate governance in order to ensure the best possible utilization of and compliance with the recommendations and legislation. 5. We train our employees and monitor processing activities 6. We maintain an Ethics Hotline, where violations of data protection laws can be reported by internal and external stakeholders All employees, Executive Management, and the Board of Directors are trained on our Code of Conduct, Anti-Corruption Policy, and Speak-Up Policy. The Code of Conduct and Speak-Up Policy are accessible from our website. In accordance with Section 107 b of the Danish Financial Statements Act, we have published a statutory report on Corporate Governance for the financial year 2024. The report provides a detailed account of the two-tier management structure of Bavarian Nordic, including an overview of the Board and its committees and a review of their activi- ties over the year. The statement also describes key elements of our internal control and risk management systems related to financial reporting processes. The report is available on our website. 7. We identify and monitor the use of new technolo- gies for processing of data 8. We carry out internal controls Code of Conduct → Ethics Hotline → In 2024, we carried out initiatives to support the data ethics principles. We have carried out train- ings and an awareness campaign and continued to implement enhancements to our policies and procedures to support the handling and processing of personal data, including the use of AI. Data ethics policy Our Data Privacy Policy includes the Data Ethics Policy based on eight principles to ensure strong data ethics: www.bavarian-nordic.com/corporategovernance.→ See all our policies on www.bavarian-nordic.com → 1. Our Executive Management is dedicated to ensuring and maintaining a high standard of data ethics Corporate governance We remain focused on good corporate governance, having implemented the recommendations from the Committee of Corporate Governance (Komitéen 2. We ensure accountability for data processing Bavarian Nordic Annual Report 2024 35 Introduction Performance Strategic priorities Corporate information Shareholder information Risk management Governance Management of Bavarian Nordic Board of Directors Anders Gersel Pedersen MD, PhD Deputy chair of the Board of Directors. Frank Verwiel, MD, MBA Member of the Nomina- tion and Compensation Committee. Anne Louise Eberhard LL.M, Graduate Diploma BA Chair of the Finance, Risk and Audit Committee. Heidi Hunter MBA Chair of the Science, Tech- nology and Investment Committee. Johan van Hoof MD Member of the Finance, Risk and Audit Committee. Montse Montaner Member of the Finance, Risk and Audit Committee Luc Debruyne Chair of the Board of Directors. Member of the Nomina- tion and Compensation Committee. Chair of the Nomination and Compensation Committee. Member of the Science, Technology and Investment Committee. Member of the Science Technology and Investment Committee. Member of the Finance, Risk and Audit Committee. Member of the Nomina- tion and Compensation Committee. Member of Science, Tech- nology and Investment Committee. Member of the Science, Technology and Investment Committee. Other positions Member of the board of Vicore Pharma Holding AB, IO Biotech, Inc., and Sutro BioPharma, Inc. Other positions Other positions Other positions Member of the Board of the Children’s Tumor Foundation, Ellab A/S. Scientific advisor of Nordic Capital. Member of the Executive Board of Montaner & Associates GmbH Other positions Chair of the board of Intellia Therapeutics, Inc. Chair of the board of Finan- siel Stabilitet SOV. Member of the board of FLSmidth & Co. A/S, Den Danske Unicef Fond, and VL 52 ApS. Member of the executive board of EA Advice ApS. Advisory Board Member of a Danish ESG initiative by EY and Erhvervslivets Tænketank, and Faculty Member at Copenhagen Business School, Board Educations. Independent advisor for the biotech/vaccine industry and for not-for-profit organiza- tions/academia. Other positions Chairman of the board of Fund Plus. Member of the board of University Hospi- tals UZ Leuven and Zorg KU Leuven. Member of the Insti- tutional Advisory Board at VIB, the Life Sciences Board at Greenlight Biosciences Inc., and the Global Listening Project. Senior Advisor to the CEO at CEPI, the Coalition for Epidemic Preparedness Innovations. Other positions Member of the board of Genmab A/S, Hansa Biop- harma AB. Chair of the board of Aelis Farma. Dr. Pedersen is also the CEO in his private holding company Gerselcon- sult ApS. Bavarian Nordic Annual Report 2024 36 Introduction Performance Strategic priorities Corporate information Management of Bavarian Nordic Shareholder information Risk management Governance Board overview First elected Term expires Year of birth Independent Gender Nationality Luc Debruyne 2023 2010 2016 2019 2023 2023 2024 2021 2021 2021 2021 2025 2025 2025 2025 2025 2025 2025 2025 2025 2025 2025 Yes No1 Yes Male Male Belgian Danish Dutch 1963 1951 1962 1963 1958 1957 1968 1974 1968 1980 1959 Anders Gersel Pedersen Frank Verwiel Male Anne Louise Eberhard Heidi Hunter Yes Female Female Male Danish American Belgian Spanish Danish Danish Danish Danish Yes Linette Munksgaard Thomas Alex Bennekov Johan van Hoof Yes Andersen Employee representative. Montse Montaner Linette M. Andersen Thomas A. Bennekov Anja Gjøl Yes Female Female Male Employee representative. No 2 No 2 No 2 No 2 Position Position Head of Global Distribution & Logistics Sr. App. and Integration Analyst Female Female Karen M. Jensen 55% of the board members are considered independent. 1 2 Anders Gersel Pedersen is not considered independent under the Danish corporate governance recommendations due to being a member of the board for more than 12 years. Employee representatives are not considered independent under the Danish corporate governance recommendations. Anja Gjøl Karen Merete Jensen Employee representative. Employee representative. For full leadership biographies, visit our website: Board of Directors → Position Scientist. Position Senior QA Specialist & Coordinator. Bavarian Nordic Annual Report 2024 37 Introduction Performance Strategic priorities Corporate information Management of Bavarian Nordic Shareholder information Risk management Governance The Board has identified the core competencies which collectively should be possessed by the shareholder-elected members to perform their duties in supporting Bavarian Nordic’s strategy and development. Based on their self-assessment, each of the shareholder-elected members’ primary competencies are shown in the table below. The members may also have knowledge or experience in areas other than their primary competencies. Employee representatives are not part of the competency self-assessment. Board competencies The shareholder-elected members of the Board generally possess extensive leadership experience as well as board experience from public or private companies and organizations. In addition, each member brings different experience and skills relevant to their representation on the Board and its subcommittees, which collectively enable the Board to fulfill its responsibilities. Competency overview Commercial Product Strategy, M&A and Business Development Corporate Leadership Life Sciences Public health Development and Finance, Capital and Risk Management Technology and Digitalization Supply People and Culture ESG Luc Debruyne ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Anders Gersel Pedersen Frank Verwiel ● ● Anne Louise Eberhard Heidi Hunter ● ● ● ● ● ● ● ● ● Johan van Hoof ● ● Montse Montaner Linette M. Andersen Thomas A. Bennekov Anja Gjøl ● ● ● Employee representative Employee representative Employee representative Employee representative Karen M. Jensen 1 2 Anders Gersel Pedersen is not considered independent under the Danish corporate governance recommendations due to being a member of the board for more than 12 years. Employee representatives are not considered independent under the Danish corporate governance recommendations. Bavarian Nordic Annual Report 2024 38 Introduction Performance Strategic priorities Corporate information Management of Bavarian Nordic Shareholder information Risk management Governance Executive Management Paul Chaplin PhD Henrik Juuel MSc Jean-Christophe May PharmD, MBA Russell Thirsk MSc President and Chief Executive Officer Executive Vice President, Chief Financial Officer Executive Vice President, Chief Commercial Officer Executive Vice President, Chief Operating Officer Executive management overview Joined Nationality Gender Year of birth Paul Chaplin 19991 2018 2020 2022 British Danish French British Male Male Male Male 1967 1965 1967 1968 Henrik Juuel Jean-Christophe May Russell Thirsk 1 Joined in 1999, appointed President and Chief Executive Officer in 2014. For full leadership biographies, visit our website: Our leadership team → Bavarian Nordic Annual Report 2024 39 Sustainability statements Contents 41 60 79 General disclosures Environmental Social 100 Governance 103 Appendix Bavarian Nordic Annual Report 2024 40 General disclosures Environmental Social Governance Appendix Introduction This section forms a new part of our Annual Report and marks our first year of implementing sustaina- bility statements in alignment with the EU Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). The material impacts, risks and opportunities (IROs) identified in the DMA results make up the founda- tion for our reporting, which in 2024 include disclo- sures on the following ESRS standards: The general disclosures include information on our business model, strategy and governance, especially related to sustainability and material IROs. Here, you can also read about our DMA process and get an overview of the sustainability matters deemed material. In these sustainability statements, we use acronyms and terms that have either been introduced by the CSRD and the ESRS, or are in other ways not commonly used outside our sector. We have therefore included an index with key terms and acronyms which can be found in the appendix to these sustainability statements. • ESRS 2 - General disclosures • E1 - Climate change • E2 - Pollution • E4 - Biodiversity and ecosystems • E5 - Resource use and circular economy • S1 - Own workforce • S2 - Workers in the value chain • S4 - Consumers and end-users • G1 - Business conduct This report concludes a significant effort over the past years to implement the directive, involving several departments, teams, and individuals throughout our organization. In the topical standards you will be presented with an elaboration of our material impacts, risks and opportunities (IROs) and information on how we manage these through policies, processes and actions. Furthermore, when deemed relevant, we disclose our ambitions and progress through targets and metrics. The foundation of our statements are based on a double materiality assessment (DMA), where we have investigated, researched, and evaluated impacts, risks, and opportunities within our opera- tions and value chain. Bavarian Nordic Annual Report 2024 41 General disclosures Environmental Social Governance Appendix Basis for preparation Our sustainability statements have been prepared on the same consolidated basis as the 2024 annual financial statement, applying the time horizons advised by the CSRD, unless otherwise stated. Specifically, these refer to short-term as up to one year, medium-term as one to five years, and long- term as more than five years. chain data is also included in relevant environ- mental, social and governance metrics. Changes in presentation of Incorporation by reference sustainability information In the sustainability statements, ESRS disclosure requirements incorporated by reference to other sections of the Annual Report are as follows: For 2024, we have transitioned our sustainability reporting to align with the Corporate Sustainability Reporting Directive (CSRD) requirements as well as the associated European Sustainability Reporting Standards (ESRS). Omission of information Information related to intellectual property, know-how, or the results of innovation has been omitted from the sustainability statements in compliance with ESRS 2 BP-1 5d and the princi- ples outlined in ESRS1 section 7.7. The omitted information pertains to the material opportunity, E5-Resource use and circular economy, involving changes to certain manufacturing practices aimed at reducing resource use while increasing productivity. These changes are currently under exploration as part of our efforts to optimize production processes and are as such considered company sensitive information. • GOV-1: information related to the composition and diversity of administrative, management, and supervisory bodies (21a, b, c, d, e). See the Management review. Value chain coverage Previously, we published a stand-alone sustaina- bility report in compliance with the Non-Financial Reporting Directive (NFRD). With these sustainability statements, we have established 2024 as the base- line year, except for metrics related to our scope 1, 2 and 3, which baseline year is 2023 in line with our Science Based Target initiative (SBTi) commitment. The sustainability statements cover our own oper- ations and captures certain elements of our value chain. The instances in which disclosures within the sustainability statements are not limited to our own operations can be found in the following sections: "Climate Change", "Workers in the value chain", "Biodiversity and ecosystems", and in "Consumers and end-users." • GOV-4: statement on due diligence. See the Appendix of these sustainability statements. • SBM-1: elements of our strategy that relate to or impact sustainability matters, our business model, and our value chain. See the Management review. The double materiality assessment process provides a description of the scope we use to identify and assess material impacts, risks and opportunities (IROs) in our upstream and downstream value chain, as prescribed by the European Sustainability Reporting Standards (ESRS). Where relevant, poli- cies, actions and targets to manage material IROs, extend to applicable parts of the value chain. Value Aligned with our double materiality assessment, we only report on the data points identified as mate- rial, along with those mandated under the ESRS. In doing so, we have applied the phase-in provisions outlined in Appendix C of ESRS1 and are adhering to the recommended one- or three-year phase-in periods, as applicable. • IRO-2 (56): list of disclosure requirements complied with in preparing the sustainability statement and list of datapoints that derive from other EU legislation. See the Appendix of these sustainability statements. Bavarian Nordic Annual Report 2024 42 General disclosures Environmental Social Governance Appendix The role of the Board and Executive Management Management and oversight Oversight of sustainability reporting is placed with our Finance Risk and Audit Committee (FRAC), while oversight of sustainability strategy is placed with the Board of Directors, which is reflected in their respective terms of reference. These sustainability statements mark our first year of compliance with the Corporate Sustainability Reporting Directive (CSRD), the target-setting process relating to our 2024 material IROs has not been aligned with our overall company-wide target setting processes, which we may consider to align in future sustainability statements. ated trade-offs are not systematically evaluated in alignment with the ESRS. of sustainability matters Our Executive Management oversees the governance processes, controls and procedures used to monitor, manage and oversee IROs through delegated responsibilities of members of the Executive Management. We have incorporated sustainability as a recurring item on the agenda for all Finance Risk and Audit Committee (FRAC) meetings. Depending on the need and the sustainability reporting cycle, various topics are presented by the ESG Finance and Corpo- rate Sustainability departments to inform and/ or request a decision from the committee on the following topics: These governance processes, controls and proce- dures related to sustainability strategy and sustain- ability reporting were established in 2023 and will be continuously developed to monitor, manage and oversee IROs on an annual basis at minimum. This includes the possibility of integrating new processes with existing internal functions. Our Corporate Sustainability department is respon- sible for the sustainability strategy development, including the identification and management of material risks, impacts and opportunities through a double materiality assessment process. The day-to-day management related to this area is anchored with the Executive Vice President and Chief People & Sustainability Officer. The day-to-day management of the ESG reporting is anchored with the Vice President Group Finance and Chief Financial Officer. The responsibility of implementing strategic initiatives lies with the lines of business under the respective Executive Vice President. We have therefore not adopted targets on all iden- tified impacts, risks and opportunities. However, the effectiveness of the policies and actions in place is tracked by the departments responsible for implementing these. The overall responsibility for tracking and ensuring the effectiveness and progress at corporate level is anchored with the Executive Management. • Sustainability reporting, including progress, controls and risks • Methodology and outcome of the double materi- ality assessment and material IROs Target setting and tracking effectiveness Executive Management is responsible for moni- toring progress of the sustainability-related targets related to incentive schemes as described in Sustainability-related performance in incentive schemes. Targets disclosed in the topical European Sustainability Reporting Standards (ESRS) are set and monitored by the Executive Management. The goal setting linked to incentives are facilitated by the Executive Vice President and Chief People & Sustainability Officer, based on dialogue and input from various departments. The Board of Directors approve the strategic company goals and targets as proposed by our Executive Management. Sustainability matters addressed The Chief Financial Officer and Chief People & Sustainability Officer are present at the FRAC meet- ings together with supporting staff when deemed relevant. The Board of Directors and FRAC meet when deemed necessary, at least four times a year each, respectively. In 2024, FRAC held an extraordi- nary meeting where the sole focus was on imple- mentation of CSRD reporting and the outcome of the 2024 double materiality assessment. The Board of Directors is responsible for setting strategic direction and overseeing strategic environ- mental, social and governance matters. Executive Management is responsible for the day-to-day management of this area. The Board and Executive Management consider material impacts, risks, and opportunities when overseeing strategy, major transactions, and risk management processes. However, as this is our first report using the CSRD framework, these considerations are not formalized in a structured framework, and the potential associ- The members of the Executive Management are responsible for determining whether the appro- priate skills related to our material IROs are avail- able within their respective organizations and to decide on the need for training and external support. The Chief People & Sustainability Officer holds the overall strategic responsibility of the management of sustainability matters. As we expect to further strengthen governance in the sustainability strategy and reporting area, the Bavarian Nordic Annual Report 2024 43 General disclosures Environmental Social Governance Appendix frequency of Board and FRAC meetings in which these areas will be discussed can be adjusted Sustainability goals for 2024 cover the following: Sustainability-related performance in incentive schemes accordingly to ensure an appropriate information flow. This can include extending the contents of these meetings to include information on the implementation of due diligence and the results and effectiveness of policies, actions, metrics and targets related to our material IROs. Reduction of our environmental footprint • Implement energy-saving solutions designed to reduce future CO2e emissions All members of the Executive Management are entitled to an annual remuneration in accordance with the Remuneration Policy which may consist of fixed and variable remuneration components. The Executive Management have short-term and long-term incentives that also include sustainability targets. The remuneration principles for the Board and Executive Management are governed by the Remuneration Policy, which has been approved by the shareholders of Bavarian Nordic. Maintain a healthy and engaging workplace • Deliver employee turnover ≤ than global industry standards • Increase the number of near-miss-reports with the aim to reduce absence due to work-related accidents The following key sustainability matters were addressed by Executive Management during 2024: • GHG emissions contributing to climate change: Addressed with an official commitment to the Science Based Target initiative (SBTi). Animal welfare • Submit a rationale for an in vitro potency assay for the rabies vaccine to regulatory authorities The proportion of remuneration deriving from short-term and long-term incentives dependent on sustainability-related targets in 2024 amount to 10% of the total incentive remuneration of Executive Management. • Reliance on energy sources stemming from use of fossil fuels: Addressed with our establishment of a Power Purchase Agreement (PPA). Climate-related considerations in remuneration We did not in 2024 assess performance against absolute GHG emission reductions targets (goals). However climate related considerations are factored into the remuneration of the Executive Management in terms of our target to implementing ener- gy-saving solutions to reduce future CO2e emissions. With this goal, 3.33% of the total remuneration derive from climate-related considerations. The targets, referred to as goals below, were defined before the final adoption of the CSRD and the ESRS and is as such not aligned with the defi- nition of targets to address material IROs, but they address key sustainability elements. Each of the three goals have equal weight. • Access to medicine strategy in Low-Income Coun- tries (LICs) and Lower-Middle-Income Countries (LMICs): Addressed with the introduction of our Access strategy. Bavarian Nordic Annual Report 2024 44 General disclosures Environmental Social Governance Appendix Interests and views of stakeholders Risk management and internal controls over sustainability reporting In 2024, we established an ESG Finance department to lead the task of sustainability reporting. Working with the Corporate Sustainability department, ESG Finance collects and controls sustainability data from relevant business areas, including, but not limited to Environment, Health and Safety (EHS), and People, Organization, and Sustainability (PO&S). These departments are responsible for the accuracy and completeness of the data which feeds into how we report on sustainability matters. • The sustainability reporting process is supported by our governance framework. This framework includes management reviews of the sustaina- bility reporting process and contents, including information on reporting risks during meetings with the Finance, Risk and Audit Committee. A final approval of the full annual report from the Board of Directors occurs on an annual basis. We have regular engagements with key stake- holders either through the double materiality assessment process and/or through interactions with lines of business as illustrated in the stake- holder overview table. consumers and end-users inform the strategy and business model in a variety of ways. Interests and views of our own workforce We strive to integrate the rights, interests, and perspectives of our workforce into our strategy and business model, including respecting and upholding human rights. Our approach is designed to identify, address, and manage material impacts related to our operations, including those affecting workforce health, safety, and well-being. By embedding these considerations into our decision-making processes, we aim to foster a positive and sustainable impact on our employees while proactively mitigating any adverse effects, ensuring that the workforce remains a key contributor to sustainable value chain creation. Our engagements are integrated into our business model via dialogue directly with stakeholders several times yearly and through their represent- atives to enable an understanding of stakeholder concerns, expectations and viewpoints. These inter- actions have informed our due diligence and double materiality assessment processes. • Additionally, the external auditor provides limited assurance on our compliance with the CSRD and the ESRS disclosures, including evaluations of the information presented in the sustainability statements. Further details can be found in the independent auditor's assurance report. Key risks associated with sustainability reporting include potential inaccuracies, inconsistencies, or misstatements due to human error, incomplete data, or fraud. These risks are amplified by our growth in recent years. To address these risks, we have estab- lished various controls and procedures: In addition to our ongoing stakeholder engagement, we have organized formalized sessions as part of our double materiality assessment process to engage both directly with stakeholders and through proxy representatives. To enhance our understanding of reporting risks, the ESG Finance department conducted a comprehen- sive, metric-level risk assessment. This assessment pinpointed selected areas in quantitative data needing stronger controls, directly informing the development of our ESG Accounting Handbook. The handbook provides clear definitions, scope, method- ologies, and data quality standards, all aligned with ESRS requirements. The handbook acts as a guide for reporting sustainability information into the software, enabling us to standardize the sustaina- bility reporting process and reduce human error and material misstatement. • We have implemented a single, consolidated system where all sustainability data is gathered via a dedicated ESG software platform which informs our risk assessment approach. The plat- form is equipped with access controls and input validation mechanisms to ensure transparency, quality assurance, and data traceability. In addi- tion, sustainability data is aligned with the ESRS accounting policy requirements which further reduces the risk of material misstatement. We recognize that our strategy and business model, including the intensive nature of certain operational activities, might create health and safety concerns and negatively impact the health and safety of our own workforce. To mitigate the negative impact that may come to exist, we have established an Employee health & safety organization that supports regular monitoring, reporting, and implementation of preventative measures. These sessions have aimed to identify and assess relevant topics as well as capturing the interests and views of our stakeholders in our due diligence and double materiality assessment process, as further detailed in the double materiality process. The outcome of our engagement related to the interests, views and rights of people in our own workforce, our value chain workers and our Bavarian Nordic Annual Report 2024 45 General disclosures Environmental Social Governance Appendix Through engagement surveys, forums, and open communication channels, opportunities to enhance work-life balance for our employees have been revealed. Following this, we have established policies that support flexible working arrangements, and programs that enhance employee well-being to address these concerns. Through dialogue with this stakeholder group, they continuously provide input to our strategy and business model, ensuring that the workforce remains a key contributor to sustain- able value chain creation. Interests and views of advancing our mission to address global health challenges effectively. Informing administrative and consumers and end-users supervisory bodies As a provider of critical healthcare solutions, our strategy and business model is designed to deliver a positive impact on our consumers and end-users. As a pioneering force in vaccines, our core purpose is to expand access to life-changing solutions. This aligns directly with our commitment to prevent the spread of infectious diseases and provide vaccines to endemic countries, contributing to improved public health outcomes globally and mitigating the risks associated with infectious disease outbreaks. On an annual basis, stakeholder views and inter- ests are communicated to the Board and Executive Management during our goal-setting processes, where individual and departmental goals are aligned with overall corporate objectives. Further- more, the Board, relevant committees and Executive Management are informed about our sustainability related impacts on an ad hoc basis throughout the year. This specifically relates to potential negative risks and impacts, that requires assessment within a timely matter. Our quality and safety processes and procedures support the continuous collection, evaluation, and management of safety data and quality control. These systems are supported by procedures for reporting adverse events, reactions, and product quality complaints, enabling us to respond promptly and transparently. Amendments to strategy and/ or business model Interests and views of workers in the value chain To ensure these impacts are meaningful and As we engage regularly with our stakeholders and incorporate their views and interests, we continu- ously assess and amend our strategy and business model to ensure alignment with their expectations. Our commitment remains focused on fostering sustainable growth and delivering innovative, life- saving vaccine solutions that expand our reach and impact. This strategic foundation is informed by the collective interests and perspectives of our diverse stakeholder base. While stakeholder engagement is an integral part of our approach, we currently do not have initiatives specifically designed to address the requirements of the CSRD to integrate stakeholder views directly into our overall business model and strategy. We strive to actively collaborate with suppliers and partners to respect human rights and labor prac- tices throughout the value chain. Through ongoing supplier and business partner engagement, directly via the responsible lines of business or indirectly via credible proxies, we monitor and identify impacts and risks in relation to respecting the rights of affected workers in our value chain. The insights gained through engagements inform our decision-making in relation to selection of suppliers and setting forth strategic initiatives, including the further development of our Responsible Value Chain Program (see Workers in the value chain). sustainable, we actively engage with stakeholders directly or through credible proxies in various initi- atives, including advisory boards, Medical Science Liason visits to HCPs, participation in congresses, and medical events. These ongoing engagement initiatives allow us to understand the needs, expectations, and concerns of our stakeholders. This insight is critical in enabling us to adapt our strategy and business model to better address these needs, ensuring our solutions remain relevant and impactful. By maintaining a close dialogue with our stakeholders, we are continuously informed and equipped to refine our approach, supporting posi- tive outcomes for consumers and end-users while To strengthen the integration of stakeholder perspectives into decision-making going forward, we expect the double materiality assessment (DMA) process to serve as a systematic, annual initiative to ensure the Board and Executive Management are consistently informed about stakeholder priorities and concerns. Bavarian Nordic Annual Report 2024 46 General disclosures Environmental Social Governance Appendix Stakeholder overview ESRS 2 - table 1 Stakeholders Employees How engagement is organized Purpose of engagement Outcomes of engagement • Inclusion of employee perspectives through representation by employee-elected board members • • • Encourage employees to actively participate in shaping and influencing an inclusive workplace and working environment • • • • • • Increased engagement and employee influence Local agreements on changes and improvements Including engagement as a regular topic on team meetings Actions that support individual development Reduced employee turnover • • Employee relations and occupational health and safety Fostering a culture where employees feel valued, heard, and motivated to contribute Frequent and ongoing dialogue with worker councils in relevant countries several times yearly Gathering EHS (Environment, Health, Safety) feedback to ensure continuous improvement of workplace • • Employee engagement surveys at least annually Safe and inclusive workplace for both off-site and on-site workers Development dialogues between employee & manager at least twice yearly • Dialogue forums with employees, e.g. 1 to 1, team meetings, and town halls Workers in the value chain • • Industry collaborations membership in the Pharmaceutical Supply Chain Initiative (PSCI) • • To gather an understanding of the working conditions provided • • Desired long-term outcome: safe workplace for both off-site and on-site workers in our value chain Collect knowledge to build on our responsible value chain program, and capture the needs of the stakeholder group Engaging with own workforce as proxy advisors for the workers in the value chain Building our responsible value chain program Consumers & end-users • • Advisory boards • Collecting insights and feedback to inform our research agenda and communication needs • • Research developed in function of needs of the public health community and HCPs MSL (Medical Science Liaison) visits to HCPs (Health Care Profes- sional), and reporting of insights Communication adapted towards the needs of HCPs • Participation congresses, and reporting of insights Suppliers & Business Partners • • Business partner due diligence • • • To meet the demands of the market • Continuously implement sustainability clauses into contracts at relevant suppliers & business partners Implementing ESG into contract at CMO (Contract Manufacturing Organization) To alleviate internal production capacity • • • Aligning on mutual sustainability actions and ambitions Business continuation plans Assess and manage business ethics risks of third-party interme- diaries • • • • Member of the Pharmaceutical Supply Chain Initiative (PSCI) Supplier due diligence/code of conduct Industry collaborators Aligning business ethics requirements with third-party interme- diaries Regular supplier relationship management Bavarian Nordic Annual Report 2024 47 General disclosures Environmental Social Governance Appendix Stakeholders How engagement is organized Purpose of engagement Outcomes of engagement Investors, analysts & media • • • • • • • Investor/sell-side meetings • Provide relevant, timely, and accurate information about stra- tegic, economic, financial, operational, and scientific affairs of the company • • • • • Supporting fair valuation of Bavarian Nordic shares Improved transparency and disclosure of information Maintained existing shareholder relations Investor roadshows & conferences Stock exchange announcements Conference calls Continued attraction of potential shareholders Identified improvements in ESG targets Capital Market Days Annual General Meetings ESG questionnaires and ratings Industry bodies & regulators • • Direct dialogue with policymakers • • Sharing data analysis, reviews, studying data • • Provide information for policy makers to make a decision on product use Regulatory advice on manufacturing development plans, non-clinical and clinical studies Gain the regulators alignment on processes related to nonclinical studies, clinical trials, and manufacturing processes Implementation of latest regulations, ensuring compliance to good practice guidelines (GxP) in product development • • • External ethical committees for clinical and animal studies Submission of marketing approval of a product with regulators • Compliance with international ethical standards for human research and animal welfare • • Safe and ethical practices for patients and animals • • To obtain a marketing license for a product Compliance with regulatory Good Practice (GxP) standards so consumer safety and product quality standards are met Submission of new product information or changes to product information for request for dialogue with regulatory agencies on product information To discuss and align on product information contained within the label to maintain compliance and accuracy • Aligned product information agreed on with the regulatory agencies which is used to inform HCP’s about the product Animals for testing (silent stakeholder) • Direct communication between Bavarian Nordic appointed animal welfare officer and internal animal welfare committee • • Optical treatment to and prevent any pain to animals • • • Continuous improvement of animal housing conditions Continuous improvement of animal (mouse) handling Provide a forum for discussions on concrete measures to opti- mize animal welfare Upholding the 3R principles: reduction, refinement, and replace- ment • Timely identification of potential problems • • Constant refinement of animal monitoring criteria Improving processes and inclusion of employee perceptions in animal testing procedures Bavarian Nordic Annual Report 2024 48 General disclosures Environmental Social Governance Appendix The double materiality assessment process The 2024 DMA was conducted in accordance with the ESRS requirements and constitutes the first of its kind. The DMA process was led by the Corporate Sustainability department and supported by an external sustainability consultancy. The assessment identified and evaluated our actual and potential positive and negative impacts, risks and opportu- nities (IROs) as well as the connections between these. This evaluation determined the materiality of sustainability matters, considering the sub-topics and sub-sub-topics in the ESRS. The steps performed in the 2024 DMA process included: Mobilization and hypothesis: identifying sustainability matters Stakeholder engagement Validation session Finalization and documentation The assessment reviewed the sustain- ability matters outlined in the ESRS in the context of our own activities, business relationships, key activities and actors within the value chain, as detailed in ESRS 1 AR16. The process included an evaluation of material IROs among industry peers to provide a sector-specific perspective and to identify potential topics relevant to us, especially those that may give rise to heightened risks of adverse impacts. Subject matter expert insights were gathered to identify IROs through open interviews and by reviewing relevant documents. These interviews were prepared following a review of internal documents identified beforehand. Each interview was structured around sustainability matters and subtopics specific to the internal or external stakeholder in question. Sustainability matters were discussed on an individual basis, with a focus on pinpointing the most significant IROs. Once potentially high-scoring IROs were identified, the interview proceeded to the next sustainability matter. We held one internal validation session with Executive Management to help determine the final decisions regarding the materiality of each sustainability matter. The session evaluated whether the materiality thresholds were appro- priately set and whether the outcomes of both material and non-material sustainability matters provided a fair and accurate representation of our material IROs related to people and the environment. Following the validation sessions, IROs were finalized with a pres- entation summarizing the method, process and results of the DMA. The completed list of IROs was presented to the Danish Bavarian Nordic Workers Council, reviewed and signed off by our Executive Management and approved by the Board of Directors based on recommendation for approval by the Finance, Risk and Audit Committee (FRAC). The process and methodology of the 2024 DMA included the establishment of thresholds, and a scoring system based on the principles laid out in ESRS 1. Internal subject matter experts were selected to participate in a series of workshops based on their in-depth knowledge of affected stakeholders and users of the sustainability state- ments. The internal subject matter experts repre- sented external stakeholders such as suppliers, investors and employees. After the interviews, the identified IROs were compiled and sent back to the respective subject matter experts for validation of scoring, with particular emphasis on assessing IROs at a gross level. Any newly identified documents or stakeholders uncovered during the interviews were considered for addi- tional engagement. Bavarian Nordic Annual Report 2024 49 General disclosures Environmental Social Governance Appendix Scoring thresholds and methodology Decision-making and internal Key assumptions or stakeholders, this was mitigated by reviewing material IROs against industry peers. The thresholds and time horizons used for scoring IROs were inspired by our Enterprise Risk Manage- ment (ERM) methods to the greatest extent possible, however, this was adjusted where not possible. Internal subject matter experts were tasked control procedures • Point-in-time assessment. Sustainability issues evolve over time, influencing their impact, risk, and significance for us or affected stakeholders. The DMA conducted in mid-2024 provides a snap- shot of material IROs at that specific point in time. Key decisions during the process pertained to identifying internal subject matter experts and IROs, scoring sustainability matters, assessing their mate- riality, and conducting a final review and sign-off of the DMA processes. Additional internal documents and data as well as external sources such as scientific articles, reports and regulatory information were used as proxies to identify and assess material IROs. with scoring the IROs, which were then sent and reviewed by senior management. Actual impacts were assessed on a gross basis, i.e., there was no distinction between inherent and residual impacts, while potential impacts and risks were assessed for severity/size of financial effect on a gross basis and assessed for likelihood on an inherent basis. • Anticipated financial effects. The financial effects of sustainability matters were assessed quali- tatively. Given the early stage of understanding these impacts, risks, and opportunities, quanti- fying them was deemed premature at this stage. The Corporate Sustainability department identified internal subject matter experts with consultation from an external consultancy team. Regular "sense checks" were conducted throughout the process to verify that no IROs were overlooked or insufficiently considered. Future steps: integration, monitoring and review Currently, there is no formalized process to integrate the DMA results of impacts, risks and opportunities into our Enterprise Risk Management (ERM) process, although both processes influence and inspire one another. • Best available knowledge. Evaluations of potential impacts, outcomes, and effects were performed by individuals with industry expertise, using the best information available. However, research and comprehension of sustainability matters vary depending on the topic. The scoring parameters used throughout the process were based on the ESRS: IRO scoring was systematically tracked using an IRO workbook to maintain consistent application of the methodology. Each IRO score was accompanied by a rationale, including the possible interconnections between impacts and financial risks and opportu- nities. Double materiality assessments of the IROs were made based on predetermined criteria, with input from all participants, and were approved during workshop and validation sessions. The 2024 DMA forms the baseline for future DMAs conducted under the CSRD. We will conduct an annual review of the DMA and its findings to account for evolving trends, shifting assumptions, changing contexts, and new regulatory develop- ments. When deemed necessary, an evaluation of the DMA process will be carried out to ensure it continues to accurately reflect our material IROs. • Impact materiality: Scale, scope, irremediability, likelihood (based on if an impact is positive/nega- tive and actual/potential). For potential negative human rights impacts, severity (assessed based on scale, scope and irremediability) took precedence over the likelihood of the impact when scoring. For positive impacts, materiality was determined according to scale, scope and (for potential positive impacts), likelihood. These adjustments are made in alignment with ESRS 1, 45. • Use of internal stakeholders as proxies. Internal stakeholders (also referred to as subject matter experts) acted as representatives for external parties such as suppliers, investors, and employees. The subject matter experts were selected for their insights and acted as proxies in the absence of direct external engagement. The validation sessions focused on sustainability matters where scoring was close to the threshold of materiality so that borderline cases could be resolved. The sessions were rooted in the initial scoring made by internal subject matter experts, which was subsequently complemented by the collective knowledge of Executive Management. The IRO-2 disclosures include the index of ESRS disclosure requirements and the list of data points that derive from other EU legislation. • Financial materiality: Financial magnitude of risk/ opportunity, likelihood, and the nature of the financial effect. • Identification of relevant stakeholders and impacts. Our subject matter experts identified relevant stakeholders and potential impacts using their expertise and the best available knowledge. While there is a risk of missing certain impacts Bavarian Nordic Annual Report 2024 50 General disclosures Environmental Social Governance Appendix Climate change DMA process This process evaluated energy efficiency initiatives, such as the implementation of LED lighting and heat pumps to reduce operational emissions. We also explored the purchase of renewable energy certifi- cates and measures to decarbonize our value chain, such as engaging suppliers through responsible sourcing standards. Near-term (present-2040), where initial impacts like increasing heatwave frequency and water scarcity are expected to begin affecting operations; Energy usage and technology assumptions: The transition scenarios evaluated the expected shift towards clean energy sources and the adoption of low-carbon technologies like heat pumps and electrification of vehicles. These assumptions were critical in assessing how quickly our facilities and supply chains could adapt to future regulations and market changes. Our DMA is the foundation upon which we assess and determine material IROs. Climate-related IROs are a fundamental part of that assessment. Addi- tionally, our assessments based on the TCFD recom- mendations also inform this process to identify and assess material climate-related IROs. Medium-term (2040-2060), where the severity of extreme weather events is anticipated to increase further. To integrate the identification and management of climate hazards and/or the risks posed by the transition to a low-carbon economy into our existing systems and processes, we have integrated climate assessments into our Enterprise Risk Management (ERM) process. The ERM process is coordinated by the Finance department with responsibility for over- seeing our ERM program and reports to the Finance Risk and Audit Committee. Each risk has a defined risk mitigation plan directed by relevant members of the senior leadership team. We assessed climate-related physical and transi- tion risks and opportunities against two physical and two transition scenarios under different time periods. This analysis covered our own operations and our upstream and downstream value chain. These time horizons were selected based on the expected lifetime of our assets, strategic planning horizons, and the evolving capital allocation plans for infrastructure upgrades. Macroeconomic trends: The analysis considered trends like rising carbon prices and the introduction of emissions trading schemes, which could increase operational costs and affect our competitiveness. For the transition risk assessment, the Net Zero Emissions by 2050 Scenario and the Stated Poli- cies Scenario from the 2022 World Energy Outlook report, published by International Energy Agency were selected. These scenarios represent a ‘worst case’ and a ‘favorable case’ respectively, enabling a stress test of our resilience to the transition to a low-carbon economy. These scenarios were consid- ered over three-time frames: short-term (present- 2025), medium-term (2025-2030) and long term (2030–2040). Scenario analysis The transition risk assessment covered both tran- sition risks and opportunities. For each risk and opportunity, the scenario analysis assessed different points in time and the potential impact on our business was classed between very low to very high based on predefined materiality criteria, including financial and reputational thresholds. The outcomes of the scenario analysis reflect the anticipated level of risk at those future points in time, rather than aggregated risks over that period. For the purposes of considering the physical risks that climate change may pose to us by mid-century, the Intergovernmental Panel on Climate Change's Shared Socioeconomic Pathway (SSP) 5-8.5 and 2-4.5 were used. Assessing against these scenarios helps us identify climate-related hazards and how our assets and business activities are exposed to such hazards. In 2024, we reviewed our 2022 TCFD assessment. The review considered updated information, including the acquisition of two new sites, a refreshed governance structure, as well as new additions to our vaccine portfolio. The former is a ‘worst case-high emissions’ scenario that assumes ‘business-as-usual’, while the latter is considered a ‘middle of the road’ approach to mitigation and adaptation, with a reduction in GHG emissions and lower warming threshold than SSP5- 8.5. The timeframes for our physical risk scenario analysis are split into: The key drivers considered in these scenarios include: The process to identify transition risks and oppor- tunities included our assets and business activities that may be deemed incompatible with or need significant efforts to be compatible with a transition to a climate-neutral economy in that it included scope 1 and 2 emissions, which allows us to track and identify high-emission assets or activities. The 2022 TCFD assessment involved a screening exercise across our facilities in Denmark to iden- tify sources of GHG emissions, primarily focusing on scope 1 and 2 emissions. Actual and potential impacts on climate change were assessed with specific emission data reported for heating, elec- tricity generation and transport emissions. Policy assumptions: For example, carbon pricing and increasing energy efficiency standards are central in both scenarios. Bavarian Nordic Annual Report 2024 51 General disclosures Environmental Social Governance Appendix The climate scenarios used in our analysis have related to biodiversity have been included in the assessment at this stage. Business conduct DMA process The identification of IROs in relation to business conduct matters involved a mapping of key activ- ities and locations within our value chain with elevated potential impacts or risks associated with corruption and bribery risks, and human rights violations. been evaluated in the context of our financial plan- ning and assumptions to ensure consistency. Specif- ically, the financial thresholds used in the scenario analysis, as well as the DMA, are consistent with the financial materiality thresholds of our Enterprise Risk Management system. To further investigate potential impacts, we initiated a long-term biodiversity monitoring project, which involves daily data collection on insect species diversity and abundance at our Kvistgaard and Bern production sites. The results will be compared to reference sensors and can guide potential future mitigation efforts. We have not consulted with affected communities or performed other commu- nity involvement regarding shared biological resources or ecosystems. DMA process for remaining environmental topics During the DMA process, interviews with internal subject matter experts were used to identify and assess pollution-related, water-related, biodiver- sity-related and resource use-related actual and potential impacts, risks and opportunities relating to our business activities. In our assessment of biodi- versity and ecosystems, we identified dependencies in our upstream value chain, specifically our reliance on horseshoe crab blood for endotoxin testing. Addi- tionally, site-specific biodiversity assessments were conducted for our production sites in Kvistgaard, Denmark, and Bern, Switzerland, using external sources as proxies. These assessments indicated a physical risk score of 2.5 (Low) for Bern and 3.5 (Medium) for Kvistgaard. At the Kvistgaard site, a pond classified as a protected area under the Danish Protection of Nature Act §3 was identified. The pond serves as a rainwater retention tank for us and two neighboring companies. This highlights a depend- ency on ecosystem services, which we continue to monitor. However, no transition or systemic risks In relation to biodiversity-sensitive areas, the pond at our Kvistgaard site, classified as protected, is under external expert investigation to determine its habitats and associated species. As these investiga- tions have yet to be concluded, it is unclear whether biodiversity mitigation measures will be neces- sary. This ongoing analysis will guide any required actions to minimize potential impacts and ensure compliance with biodiversity-related obligations. Our assessments and actions reflect a commitment to understanding and addressing biodiversity and ecosystem-related dependencies and impacts. Monitoring and further evaluations will support our decisions on potential mitigation initiatives. Bavarian Nordic Annual Report 2024 52 General disclosures Environmental Social Governance Appendix Material impacts, risks and opportunities The table on the following pages summarizes impacts, risks and opportunities (IROs) deemed material following our double materiality assess- ment. Similarly, as this is the first year of reporting in through our operations, resulting in minimal impact and negligible financial or reputational risk in these areas. accordance with the CSRD and the ESRS, we have, with regards to identified impacts, risks and oppor- tunities (IROs), not yet fully formalized processes to assess resilience in the context of the expectations laid out by the CSRD and the ESRS. General resil- ience considerations related to the identified mate- rial impacts, risks and opportunities were however captured on a qualitative basis through discussions with subject matter experts as part of the double materiality assessment process. This included the application of the same time horizons assessed in the double materiality assessment process. Determination of material information To determine the material information disclosed in our sustainability statements, we conducted an assessment of our material impacts, risks, and opportunities. This effort was carried out through close collaboration between the Corporate Sustaina- bility department and the ESG Finance department, ensuring an integrated approach across functions. The process was designed to align the disclosed information with the outcome of the DMA with the priorities of our key stakeholders while supporting our business strategy. See the section The double materiality assessment process for the full descrip- tion of this process, including the use of thresholds and the implementation of criteria related to mate- rial matters and materiality of information. The majority of the identified IROs across the environmental, social and governance topics are in our own operations, closely tied to the manufac- turing of vaccines. For IROs in our downstream value chain, these are generally related to consumers and end-users of our vaccines. The identified material impacts originate from activities closely related to our business model and are deemed to affect people and the environment to varying degrees, depending on our ability to manage these matters accordingly. There are no significant current finan- cial effects of our material risks and opportunities. Further descriptions of each IRO are found in the respective topical ESRS. Disclosure requirements covered in the sustainability statements Double materiality assessment for other topics As these sustainability statements mark our first year of compliance with the CSRD and the ESRS, our material IROs have not been identified, or presented in this manner, in previous sustainability reports. Our 2024 DMA therefore also forms the baseline for future DMAs conducted, and all IROs identified in the 2024 DMA are covered by ESRS disclosure requirements. The identified impacts, risks, and opportunities related to Water and Marine Resources and Affected communities were not deemed material because they did not meet the materiality thresholds estab- lished during the double materiality assessment. Our operations, which primarily involve the produc- tion of vaccines, are not heavily water-dependent and do not materially affect any communities Bavarian Nordic Annual Report 2024 53 General disclosures Environmental Social Governance Appendix List of material impacts, risks and opportunities (IRO) ESRS 2 - table 2 Location in our value chain Expected time horizon Applicable ESRS sub-topic/sub-sub-topic Name of IRO Description Type E1 – Climate change Climate change adaptation Extreme weather events in supply chain Cases of extreme weather events events, without existing mitigating actions, could have potential impacts on production and transportation, specifically in relation to shortages and delayed deliveries from Contract Manufacturing Organizations and supply of raw materials. Risk Risk ● ● ● Climate change adaptation Extreme weather events at production sites Due to weather related effects of climate change, without existing mitigating actions, there could be an increased frequency and intensity of extreme weather events, such as storms and floods. These extreme weather events could disrupt manufacturing operations. ● Climate change mitigation GHG emissions contributing to climate change We emit greenhouse gasses as part of activities related to research, development, manufacturing and distribution of vaccines, processes which are dependent on various energy sources and use of fossil fuels, both in our own operations (Scope 1 and 2) and throughout our value chain (Scope 3). Actual negative impact ● ● ● ● ● Climate change mitigation Energy Systems controlling refrigerants A potential failure of systems controlling refrigerants which would result in a release of CO2 equivalents into the atmosphere. Potential negative impact ● ● ● ● ● ● ● ● Reliance on energy sources stem- ming from use of fossil fuels Our manufacturing processes partly rely on energy sources dependent on fossil fuels, which emit green- house gases and contribute to climate change. Actual negative impact E2 – Pollution Substances of concern Use of substances of concern A part of our processes in Research and Manufacturing makes use of substances classified as substances of concern which could be harmful to the environment and/or for people handling the substances. Actual negative impact ● ● ● ● ● ● ● ● Substances of very high concern Use of substances of very high concern A part of our processes in Research and Manufacturing makes use of substances classified as substances of very high concern which could be harmful to the environment and/or for people handling the substances. Actual negative impact Substances of very high concern Further restriction on the use of substances of very high concern We could face a risk in case of further regulatory restrictions on using SVHC's in our operations. Regulations banning the use of such substances could have a consequence on the manufacturing process and would require us to reformulate vaccines. Risk ● ● Bavarian Nordic Annual Report 2024 54 General disclosures Environmental Social Governance Appendix List of material impacts, risks and opportunities (IRO) - continued ESRS 2 - table 2 Location in our value chain Expected time horizon Applicable ESRS sub-topic/sub-sub-topic Name of IRO Description Type E4 – Biodiversity and ecosystems Impacts on the state of species Reliance on horseshoe crabs for endotoxin testing Impact on horseshoe crabs (a species listed on the IUCN Red List) stems from our dependency on Limulus Amebocyte Lysate, (LAL). which is derived from horseshoe crab blood. The substance is used for endotoxin (safety) testing and is currently a part of our regulatory compliance with quality assurance processes for testing, and product release to ensuring safety of our vaccines. Actual negative impact ● ● ● ● ● ● Impacts on the state of species Continued regulation on horseshoe crab reliance The use of substances derived from horseshoe crabs, could pose a financial risk if various regulatory bodies, in geographies where we are present, do not align or adopt similar medium- to long-term phase-out provisions on the use of current testing methods, which would not allow us to harmonize any eventual phase-out. Risk E5 – Resource use and circular economy Resource inflows, including resource use Change of certain manufacturing practices can reduce resource use We are exploring opportunities to optimize production process which could potentially decrease resource inflow and at the same time increase productivity, amounts of certain vaccines produced per batch, improve COGS, and other benefits. Opportunity ● ● ● ● Further details are considered company sensitive as disclosed in General disclosures. Waste Waste from operations We generate waste from our research and manufacturing facilities, and non-recyclable waste is sent to either incineration and/or landfill, both of which negatively impacts the natural environment. Actual negative impact ● ● Bavarian Nordic Annual Report 2024 55 General disclosures Environmental Social Governance Appendix List of material impacts, risks and opportunities (IRO) - continued ESRS 2 - table 2 Location in our value chain Expected time horizon Applicable sub/ sub-sub-topic Name of IRO Description Type S1 – Own workforce Equal treatment and opportunities for all Equal treatment and opportunities Given our global presence and reliance on a highly skilled workforce, we may risk our ability to attract and retain talent if we do not keep momentum in current efforts and continuously develop initiatives to ensure that we maintain an inclusive and diverse workforce. Risk ● ● ● ● ● ● Health and safety own workers Health and safety of our workforce Some processes in our manufacturing facilities and research facilities could result in a negative impact on a person’s physical health. Actual negative impact ● ● ● ● ● ● ● ● ● ● Health and safety own workers Health and safety of non-employees Some processes in our manufacturing facilities and research facilities could result in a negative impact on a person’s physical health. This also applies to non-employees carrying out activities and services on behalf of us. Potential negative impact Working conditions Working conditions Work-life balance As an employer, we play a crucial role in shaping the work-life balance of its employees, ultimately impacting their overall well-being and job satisfaction. Potential negative impact Attraction and retention of talent and employees We are dependent on the ability to attract and retain talents for many functions. In situations of intense competition for skilled individuals, or other events leading to adverse impact on our image, this could impact our ability to perform. Risk S2 – Workers in the value chain Working conditions Health & safety of off-premise workers in the value chain Suppliers and partners in our value chain manage and handle chemicals, which can potentially have a direct impact on the health and safety of workers in the value chain. Potential negative impact ● ● ● ● ● ● ● Working conditions Health & safety of on-premise workers in the value chain We make use of external companies and individuals who carry out various services at our production sites, some of whom may be exposed to processes that could result in a negative impact on a person's physical health. Potential negative impact ● Bavarian Nordic Annual Report 2024 56 General disclosures Environmental Social Governance Appendix List of material impacts, risks and opportunities (IRO) - continued ESRS 2 - table 2 Location in our value chain Expected time horizon Applicable sub/ sub-sub-topic Name of IRO Description Type S4 – Consumers and end-users Personal safety of consumers and or end-users Potential adverse effects on patients enrolled in clinical trials During clinical trials, participants' health could be adversely affected from unexpected adverse reactions / events to a vaccine candidate in any stage of clinical trials. Potential negative impact ● ● ● ● ● ● ● ● ● ● Personal safety of consumers and or end-users Adverse effects due to vaccines administration Adverse events due to vaccine administration can happen and could negatively impact patient health. Potential negative impact Personal safety of consumers and or end-users Potential adverse effects on patients enrolled in clinical trials During clinical trials, adverse events linked to the drug substance represents significant risk as it could stop or pause the development of a vaccine candidate. Risk Risk Personal safety of consumers and or end-users Adverse events as a result of vaccine administration Adverse events as a result of vaccine administration can occur, and if not handled properly, could result in lawsuits and/or regulatory enforcement. ● ● ● ● ● ● Social inclusion of consumers and end users Prevention of spread of infectious diseases People who have been vaccinated with a vaccine for which we hold the market authorization, can through increased coverage contribute to the prevention of the spread of infectious diseases. Actual positive impact ● ● ● ● Social inclusion of consumers and end users Expanding access to vaccines in endemic countries We have an opportunity to distribute vaccines, in our current portfolio, to endemic low- and lower-mid- dle-income countries reaching markets currently not served. This could have a positive impact on under- served communities by reducing the spread of preventable infectious diseases. Potential positive impact Social inclusion of consumers and end users Vaccines can prevent the spread of infectious diseases due to climate change We have an opportunity to provide vaccines which can prevent the spread of infectious diseases which can be correlated to the effects of climate change. Therefore, through our Public Preparedness and Travel Health portfolio, we can have a positive impact on human adaptation to certain effects of climate change. Actual positive impact ● ● ● ● Bavarian Nordic Annual Report 2024 57 General disclosures Environmental Social Governance Appendix List of material impacts, risks and opportunities (IRO) - continued ESRS 2 - table 2 Location in our value chain Expected time horizon Applicable sub/ sub-sub-topic Name of IRO Description Type Social inclusion of consumers and end users Potential to breach responsible marketing standards For companies in the pharmaceutical industry, there are strict rules and regulations in place regarding the marketing to customers. These regulations vary across countries; however, violating these regulations or industry codes could lead to misinformation of health care workers, legal & financial penalties, fines, and damage to a company's reputation. Risk ● ● ● ● ● ● Social inclusion of consumers and end users Potential to further expanding vaccine portfolio We have an opportunity to develop or acquire new vaccines to our portfolio which could serve new disease areas and prevent the spread of infectious diseases. Opportunity Risk Social inclusion of consumers and end users Access barriers Distributing vaccines to a global market, we may face situations where access barriers can prevent or slow our ability to deliver vaccines to persons in need. Such barriers may be linked to local regulatory processes, lack of cold-chain transportation, affordability, etc., and could impact our ability to do business, and deliver vaccines, to certain markets. Social inclusion of consumers and end users Opportunity to prevent the spread of infectious diseases related to climate change With our current portfolio of vaccines, we have a growing opportunity to distribute vaccines that can prevent the spread of certain infectious diseases, whose increasing prevalence can be attributed to the impact of climate change on natural habitats. Opportunity ● ● ● Bavarian Nordic Annual Report 2024 58 General disclosures Environmental Social Governance Appendix List of material impacts, risks and opportunities (IRO) - continued ESRS 2 - table 2 Location in our value chain Expected time horizon Applicable sub/ sub-sub-topic Name of IRO Description Type G1 – Business conduct Animal welfare Use of mice in in-vivo studies To fulfill regulatory requirements in preclinical studies and, as part of certain batch-release protocols, we perform safety and efficacy tests through in-vivo studies (testing on mice). This negatively impacts the mice as studies can cause various levels of pain and/or distress, and we are required to euthanize the mice at the end of the study. Actual negative impact ● ● ● ● ● Animal welfare Potential for in-vitro studies in batch-release testing We have an opportunity to move away from in-vivo studies in batch release testing (testing in mice) to in-vitro studies which would not require the testing on mice in conjunction with batch releases. This would represent a reduction in the number of mice needed for testing, and a financial opportunity to save on costs compared to in-vivo testing. Opportunity ● ● Corporate culture Challenges in maintaining the corporate culture As we undergo high growth of onboarding new employees, and as a fast-developing company, we may negatively impact employees if we do not manage to maintain a healthy and sound corporate culture on how we best work together. Potential negative impact ● ● ● ● Corruption and bribery Breach of bribery and corruption laws We operate in an industry where interactions with government officials and health care professionals is a prerequisite of doing business, and breach of these requirements risk severe legal and financial penalties. Risk ● Bavarian Nordic Annual Report 2024 59 General disclosures Environmental Social Governance Appendix Environmental Bavarian Nordic Annual Report 2024 60 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Transition plan for climate change mitigation Climate change We recognize the need to address climate change and align with the goals of the Paris Agreement. In response to assessing material impacts, risks and opportunities, we undertook a review of our green- house gas emissions and decarbonization strategies. A transition plan has been developed and it outlines the steps we will take in advancing our commitment to reducing our GHG footprint. The analysis included a qualitative assessment of E1 potential locked-in GHG emissions from Scope 1 and 2 sources. This assessment focused on identifying emissions associated with long-term, energy-inten- sive assets that may hinder future reductions if not managed proactively. By analyzing these assets, we were able to pinpoint areas where emissions might persist due to operational dependencies on fossil fuels or legacy systems. This insight has informed the decarbonization strategy, allowing us to prior- itize interventions that mitigate transition risks and align more closely with a 1.5°C reduction pathway. In 2024, we initiated a feasibility analysis to assess the compatibility of our GHG emission reduction targets with a 1.5°C pathway. Recognizing the importance of adhering to the Paris Agreement, we align with the Science-Based Targets initiative (SBTi), aiming to secure third-party validation for our emissions trajectory, thereby reinforcing the integrity and transparency of our commitments. Bavarian Nordic is not excluded from the EU Paris- aligned benchmarks. The feasibility analysis forms the starting point in our efforts in relation to climate change mitigation. Approved by Executive Management, the analysis, targets and transition plan reinforce our commit- ment to mitigating material climate change-related impacts and risks and subsequently constitute an alignment with our overall business strategy and financial planning. Bavarian Nordic Annual Report 2024 61 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Our decarbonization strategy has identified specific levers for reducing Scope 1, 2, and 3 emissions. The approach included four steps: target determina- tion, identifying decarbonization levers, modelling emissions reduction pathways, and selecting the most feasible path forward. Key actions and targets include the following, which are elaborated on the following pages: we have in the fourth quarter of 2024 signed a 5-year power purchase agreement (PPA) for our Danish manufacturing site, shifting our reliance on energy sources stemming from fossil fuels, to energy from solar and wind power. We have not reported any economic activities that are covered by delegated regulations on climate adaptation or miti- gation under the Taxonomy regulation, and as such none of the CapEx, CapEx plans, or OpEx currently aligns with the criteria established in Commission Delegated Regulation 2021/2139. mizing energy systems across sites, transitioning to renewable energy and electrifying key operational systems to reduce dependence on fossil fuels. Material impacts and risks The double materiality assessment (DMA) described in General disclosures determined the following impact and risks associated with climate change. No opportunities were found in the assessment. IRO Systems controlling refrigerants The potential failure of systems controlling refrig- erants could, without existing mitigating efforts potentially cause, a release of CO₂ equivalents. Refrigerants have a high global warming potential, and any malfunction of the containment systems could lead to a release of GHG emissions. Scope 1 & 2 In 2022, we performed a climate scenario analysis, as described in General disclosures. This analysis provided input for the DMA, while the results informed the identification and description of the following climate-related impacts and risks. A 42% reduction in Scope 1 and 2 emissions by 2030 from a 2023 base year, guided by an absolute reduction trajectory aligned with a 1.5°C pathway. This reduction will be achieved through optimizing energy systems across global sites, transitioning to renewable energy through power purchasing agreements (PPAs) and electrifying key operational systems to reduce dependence on fossil fuels. This potential impact originates directly from our reliance on temperature-sensitive operations, particularly in the manufacturing, storage, and distribution of biopharmaceutical products. The use of refrigerant systems is essential to maintain the stability and efficacy of temperature-sensitive products. IRO GHG emissions Our operations generate greenhouse gas (GHG) emissions, which arise from our business model; research, development, manufacturing, and distri- bution of vaccines, which are reliant on energy sources that include fossil fuels. These activities produce Scope 1 and Scope 2 emissions from our own operations, as well as Scope 3 emissions throughout our value chain. Scope 3 For Scope 3 emissions, we developed a supplier engagement overview to assess target maturity and alignment across our top-spend suppliers. This overview illustrates the maturity level of key suppliers and how they align with our ambition levels in relation to climate change mitigation. This first step of establishing a supply chain mapping allows us to make informed decisions supported by data, ensuring realistic targets. We have not set an absolute reduction target for Scope 3 emissions. To mitigate this risk, all refrigeration units are inspected and serviced annually according to legislation in Denmark and the EU. We have service agreements for inspection & maintenance of all units every year which includes leak testing for refrigerants. Some units are inspected four times per year, over and above requirements because of cold storage of production critical materials and final products. This short-, medium-, and long-term impact contrib- utes to climate change, impacting the environment by intensifying global warming and associated risks. We mitigate this impact by actioning several scope 1 and 2 decarbonization levers which include opti- The transition plan was approved in late 2024 and serves as a first step in our progress. Additionally Bavarian Nordic Annual Report 2024 62 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy IRO floods, storms, or heatwaves, have the potential to delay or disrupt supplier deliveries. Currently, we work with minimum inventory levels, and have business continuity plans in place, and we are further assessing what can be done in case of such events. ciency and reduce future emissions. By enhancing energy systems within production facilities and office buildings, we aim to further reduce overall energy consumption impact on Scope 1 and 2 emis- sions while also delivering operational cost savings. Reliance on energy sources stemming from use of fossil fuels Our manufacturing processes rely partly on energy sources that originate from fossil fuels. This reliance creates leads to release of GHG emissions associated with fossil fuel combustion, contributing directly to climate change. This could have a cascading effect on our busi- ness model, leading to increased costs and delays although our current financial position has not been affected. To mitigate the potential risk further, we use dual sourcing and work with minimum inven- tory levels. Policies In 2024, we secured a Power Purchasing Agreement for our Danish manufacturing site, covering our Danish manufacturing with renewable electricity and reducing Scope 2 market-based emissions significantly in the coming years. Our internal governance documents drive the management of climate change-related Impacts and Risks, however we currently do not have policies related to climate change mitigation, adaptation, energy efficiency or renewable energy deployment. A climate-related policy has not been drafted as we have focused on and allocated resources to estab- lishing SBTi targets, including an evaluation of the most efficient decarbonization levers to reduce GHG emissions. As part of an effort to mitigate this impact, we have signed a Power Purchase Agreement for our Danish manufacturing site to source a portion of our energy from renewable sources, which is a key step toward reducing fossil fuel dependency. This effort is one of the decarbonization levers helping advance our near-term targets and contributes to a significant decrease of our market-based scope 2 emissions. IRO Extreme weather events at production sites We have addressed our Scope 3 emissions by devel- oping a supplier engagement dashboard to evaluate and track the climate target maturity of our top suppliers. This program prioritizes suppliers within Purchased goods, Services, Capital goods, and Upstream transportation and distribution. By 2029, we have an ambition that 70% of our suppliers, by spend in Purchased goods and services, and 90% by spend in Upstream transportation, will have committed to setting science-based targets. This initiative supports our broader climate strategy by ensuring that key partners align with our values and reduction targets. Without current mitigation efforts, production sites could face a physical risk from extreme weather events, such as flooding, which could disrupt manufacturing operations at our production sites. The increased frequency and intensity of storms and floods, driven by climate change, could impact facility integrity and production continuity in the medium-term. This risk could lead to increased oper- ational costs, repair cost, operational downtime, and preventive infrastructure investments. Our strategy and business model demonstrate increased resilience in addressing this material impact through the signing of a Power Purchase Agreement for our manufacturing site in Denmark, signaling a commitment to sourcing renewable energy. Actions In 2024, we focused on a series of strategic actions to align with our climate commitments and science- based target ambitions. To drive meaningful progress toward our emission reduction goals, we concentrated on three primary initiatives: optimizing energy systems, transitioning to renewable energy, and developing a near-term and long-term net-zero climate target. Flooding at production sites could have effects on our business model by causing production delays and increased costs. In the medium-term, we may face the need to allocate additional resources to flood prevention measures or rapid response systems to ensure operational continuity. IRO With 2023 serving as a baseline year, we will contin- uously monitor the progress of these actions against our climate targets. Initial results have yielded a 12.6% reduction in GHG emissions in total scope 1 and 2 (market-based) emissions. As renewable energy projects and supplier engagement efforts Extreme weather events in supply chain Without current mitigation efforts, we could face a risk associated with extreme weather conditions, which could potentially disrupt our supply chain in the medium-term. Extreme weather events, such as During the reporting year, we actioned an energy optimization program across sites, with a primary focus on our Danish operations. This initiative has been central to our effort to increase energy effi- Bavarian Nordic Annual Report 2024 63 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy expand, further reductions are expected to meet our Scope 1, 2, and 3 targets over time. This steady approach reflects our dedication to achieving our climate objectives in a way that is transparent, financially sustainable, and aligned with our long- term business strategy. working with suppliers to align their practices with our climate goals. pendent processes is anticipated to reduce Scope 1 emissions. The target is for 70% of suppliers, by spend, covering purchased goods and services and capital goods, and 90% of suppliers by spend covering upstream transportation and distribution, to estab- lish science-based targets by 2029. These efforts are expected to significantly reduce Scope 3 emissions by covering key value chain emissions. • Scope 3 supplier engagement: Engaging suppliers to set science-based targets is a major lever for reducing Scope 3 emissions. This initiative focuses on high-emission categories such as purchased goods and upstream transportation. By covering 70-90% of key supplier emissions by 2029, this action will align our supply chain with our climate goals. We have in 2024 not allocated significant mone- tary amounts, in relation to CapEx and OpEx, to implement actions taken or planned, in neither line items or notes in the financial statements, nor key performance indicators required under Commission Delegated Regulation (EU) 2021/2178. Our targets are science-based and align with the global 1.5°C trajectory. These targets follow a sectoral decarbonization pathway using a climate scenario model aligned with the Paris Agreement. The SBT feasibility analysis incorporated future factors such as shifts in customer demand, regula- tory developments, and technology advancements, which are expected to influence both emissions levels and reduction potential. • Our commitment to carbon reduction, through energy efficiency optimizations, is integrated into our company goals linked to sustainability-related performance in incentive schemes. Targets From 2024 we are committed to science-based targets to reduce GHG emissions in line with a 1.5°C global warming pathway. This commitment is grounded in clear, quantitative goals across Scope 1, 2, and 3 emissions, with targets aligned to support both near-term (2030) and long-term (2050) objec- tives. To achieve our GHG reduction targets, we have identified key decarbonization levers across our operations: The current targets for Scope 1 and 2 emissions involve a 42% absolute reduction by 2030, using 2023 as the base year. These are gross targets, with no reliance on GHG removals, carbon credits, or avoided emissions. • Renewable energy transition: We have committed to renewable energy sourcing, including a PPA for our Danish manufacturing site. This transition is expected to achieve a minimum of 30% reduction in Scope 2 market-based emissions by 2026. For Scope 3 emissions, we have not set a quan- titative target. However, we have committed to • Electrification of key systems: Electrifying core operational systems to replace fossil fuel-de- Bavarian Nordic Annual Report 2024 64 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Scope 1 and 2 reduction target 2024 E1 – table 1 Energy consumption and mix E1 – table 2 2023 2024 2024 (Actual) % (Actual/ Base year) in tonnes of CO2e (Base year) (Target) in megawatt hours (MWh) 2024 Gross Scope 1 GHG emissions 4,364 6,318 4,111 Fuel consumption from coal and coal products - 8,027 9,724 - Gross market-based Scope 2 GHG emissions Total Scope 1 and Scope 2 GHG emission 5,222 9,333 Fuel consumption from crude oil and petroleum products Fuel consumption from natural gas 10,682 10,233 -12.6% Fuel consumption from other fossil sources Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources Total fossil energy consumption 14,660 32,411 94% - Scope 1 and 2 GHG emission reduction targets and progress Scope 1 and 2 reduction targets (from a 2023 baseline): Share of fossil sources in total energy consumption Consumption from nuclear sources ● Total Scope 1 and 2 GHG emissions Target projection • Minimum 4.2% annually (until 2027) of total Scope 1 and 2 GHG emissions • 42% reduction of total Scope 1 and 2 GHG emissions by 2030 Share of consumption from nuclear sources in total energy consumption - Fuel consumption from renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) - Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources – 12.6% • Net-zero by latest 2050 2,201 - The consumption of self-generated non-fuel renewable energy Total renewable energy consumption 10,682 tCO2e – 16.8% 2,201 6% Share of renewable sources in total energy consumption Total energy consumption 9,333 tCO2e 34,612 6.1 Energy intensity per net revenue (MWh/mDKK) – 42.0% GHG intensity based on net revenue E1 - table 3 in tonnes of CO2e/million DKK 2024 Total GHG emissions (location-based) per net revenue Total GHG emissions (market-based) per net revenue 8.9 9.5 2023 2024 2027 2030 2050 Bavarian Nordic Annual Report 2024 65 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Gross scopes 1, 2, 3 and total GHG emissions E1 - table 4 Our Scope 1 emissions remained relatively stable compared to 2023. They are primarily driven by the usage of natural gas and diesel oil for heating, which is highly dependent on weather conditions. expenses on the late-stage studies related to our newest vaccine against chikungunya. 2023 2024 (Base year) Reduction of our GHG emissions category 2 is a result of extraordinarily high CapEx last year related to the acquisition of our travel vaccines portfolio from Emergent BioSolutions in 2023. in tonnes of CO2e % change Category Scope 1 GHG Emissions We achieved a substantial reduction in our Scope 2 market-based emissions in 2024, which can primarily be attributed to our new Power Purchase Agreement (PPA) for the Kvistgaard site, effective from November 2024, which enabled us to reduce 750 tonnes of CO2e through the use of the renew- able electricity source. This will result in further reductions of emissions in 2025 since the PPA will have effect for the full twelve months. Gross Scope 1 GHG emissions 4,111 - 4,364 - -6% - Percentage of Scope 1 GHG emissions from regulated emission trading schemes Yearly development of emissions in category 5 is a result of incomplete waste inventory used in our estimates in 2023. Last year we did not include wastewater generated by our manufacturing site in Kvistgaard, This year we improved our internal review of data for Scope 3 calculations and we ensured the wastewater is included. This waste stream itself contributed with 4.2 thousand tonnes of CO2e in our indirect GHG emissions in 2024. Scope 2 GHG Emissions Gross location-based Scope 2 GHG emissions Gross market-based Scope 2 GHG emissions Significant scope 3 GHG emissions Total Gross indirect (Scope 3) GHG emissions Purchased goods and services 1,715 5,222 3,038 6,318 -44% -17% 45,032 26,111 5,399 87,0241 40,3901 37,8121 -48% -35% -86% 1 2 3 Capital goods Our Scope 2 location-based emissions reduction, comparing to 2023, mainly derived from a 55% decrease of the location-based emission factor for electricity production in Denmark, which reflects an increased share of renewable sources used in the country where the majority of our Scope 2 emissions is generated. Fuel and energy-related activities (not included in Scope 1 or Scope 2) 1,620 4,503 4,430 1,286 1,683 0.4 1,7331 4,1391 2121 1,1481 1,5821 81 -7% 9% 4 Upstream transportation and distribution Waste generated in operations Business traveling In line with the GHG Protocol Scope 2 Guidance, we have applied both the location- and market-based methods to calculate our Scope 2 GHG emissions. For the market-based method, we utilized the following bundled instruments to cover a portion of our purchased energy consumption: Purchase Power Agreement covering 8% of our purchased energy and a Guarantee of Origin covering 5% of our purchased energy. We did not use any unbundled instruments during the reporting period. 5 1,990% 12% 6 7 Employee commuting 6% 12 End-of-life treatment of sold products -95% Our Scope 3 emissions also decreased comparing to 2023 and these developments can be mainly attributed to GHG emissions yearly reduction in categories 1 and 2. Total GHG emissions (location-based) Total GHG emissions (market-based) 50,858 54,365 94,426 97,706 -46% -44% 1 Not audited Decreased GHG emissions in category 1 reflect lower operational spendings this year, primarily on research activities. In 2023 we noted significant The methodologies, significant assumptions and emissions factors used to calculate or measure GHG emissions are provided in the accounting policies. Bavarian Nordic Annual Report 2024 66 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Accounting policies Energy consumption and mix Scope 2 rials sourced from our suppliers and products deliv- ered to our customers, provided the transportation is a service purchased by Bavarian Nordic, • • • Category 13 (Downstream lease assets) as we do not act as a lessor, Energy volumes data are based on meter readings and suppliers' statements. Energy is considered to be derived from renewable sources if the origin of the purchased energy is clearly defined in the contractual arrangements with its suppliers. This includes renew- able power purchase agreements and market instru- ments such as Guarantees of Origin from renewable sources. Otherwise, it is reported under energy from fossil sources. Scope 2 emissions are reported based on the GHG Protocol and include indirect GHG emissions from the generation of electricity and heat purchased and consumed by us. When calculating emissions in Scope 2, both the location-based method and the market- based method are utilized, as recommended by the GHG Protocol. Location-based emissions are based on national average emission factors for the respective locations. Market-based emissions are based on either supplier specific emission factors (for the electricity associated with contractual instruments such as Power Purchase Agreements or Guarantees of Origin) or on residual mix emission factors. Category 14 (Franchises) as we do not use franchises in our business model, • • • • Category 5 (Waste generated in operations) based on actual waste data multiplied by relevant emission factors, Category 15 (Investments) as we do not have any significant investments which are not already captured under other categories. Category 6 (Business travel) based on spend data multiplied by relevant spend-category-specific emis- sion factors, We have set operational control as the organiza- tional boundaries which means that areas where the company has the authority to introduce and implement operating policies, are captured under Scope 1. Energy intensity based on net revenue This metric is relevant for companies operating in high climate impact sectors only which covers all of our activities (biotechnology and pharmaceuticals – NACE code C21). Energy intensity has been calculated as total energy consumption from all our activities divided by reported total net revenue in mDKK. Since we operate in high climate impact sectors only, we have applied our total net revenue for the intensity calculation. See note 3 in our financial statement for net revenue used for the metric. Category 7 (Employee commuting) based on the employees’ survey used to estimate the distance travelled and travel type (e.g. car or train), Scope 3 In calculating CO2e emissions, specific emission factors based on calculation method and emissions type are used. Applied emission factors are based on the data provided by third parties, such as DEFRA, Exiobase and Ecoinvent. Category 5 emissions for Danish sites were pre-calculated by the external waste handling supplier. Scope 3 emissions are calculated based on activity data and reported in line with the GHG Protocol, where the scope 3 inventory is split into 15 subcategories. In 2024, our scope 3 inventory included the following: Category 12 (End-of-life treatment of sold prod- ucts) based on the material composition of a single product multiplied by the number of the doses sold. The following categories are not relevant for Bavarian Nordic: • • • • Category 1 (Purchased goods and services) based on spend data multiplied by relevant spend-catego- ry-specific emission factors, Percentage of GHG scope 3 calculated using primary data As of 2024 majority of Scope 3 emissions calculation is estimated based on spend data. Emissions calculated using primary data from suppliers or other value chain partners account for 13% of our total Scope 3 emissions. Scope 1 • • Category 8 (Upstream leased assets) as we do not have any leased assets which are not in our control, Scope 1 emissions are reported based on the Green- house Gas (GHG) Protocol and cover all direct emissions of greenhouse gases generated by us. They include GHG emissions from fuels combustion and fugitive emissions from refrigerants. Category 2 (Capital goods) based on spend data (CapEx) multiplied by relevant spend-category-spe- cific emission factors, Category 9 (Downstream transportation and distri- bution) as our outbound logistics is included in Cate- gory 4 as a purchased service, Category 3 (Fuel- and energy-related activities) based on actual fuel consumption multiplied by rele- vant emission factors, GHG intensity In calculating CO2e emissions, specific emission factors relevant for the emissions type are used. Applied emission factors are based on the most recent data provided by third parties, such as the Department for Environment, Food & Rural Affairs (DEFRA) or refrigerant suppliers. • • Category 10 (Processing of sold products) as our vaccines are the final products and they do not undergo any additional processing. GHG intensity based on net revenue has been calcu- lated as total gross scope 1, scope 2 location-based/ market-based, and gross scope 3 emissions divided by total reported net revenue in mDKK. See note 3 in our financial statements for net revenue used for the metric. Category 4 (Upstream transportation and distribu- tion) based on spend data multiplied by relevant spend-category-specific emission factors. It includes fuel for transportation and distribution of both mate- Category 11 (Use of sold products) as there are no significant emissions associated with administration of our vaccines to the patients, Bavarian Nordic Annual Report 2024 67 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Material impacts and risks Pollution Our commitment to sustainability is integral to our mission of improving public health through research, development, manufacturing, and distri- bution of vaccines in our portfolio. While the general Pollution topic is not material to our operations, we have deemed Substances of Concern (SoC) and Substances of Very High Concern (SVHC) to be material, as the use of such chemicals is part of our vaccine research and manufacturing process. which is costly. This risk is deemed to be present in the medium-term and does not imply current financial effects. E2 We use SoC and SVHC within our operations in research, development, and manufacturing. These substances play a critical role in our manufac- turing processes, ensuring that our vaccines meet the highest standards of quality and safety. We have appropriate authorizations in place for use of regulated substances. We do not engage in the production, distribution, commercialization, or import/export of these substances. Our focus remains on ensuring safe and compliant use within our facilities, adhering to all relevant regulations and policies. IRO SoC and SVHC Using SoC and SVHC can be harmful to the environ- ment and/or for people handling the substances. The processes in which we use these substances are related to our business model and strategy, as research and manufacturing are crucial parts of our ability to research, develop, and manufacture vaccines. We use SoC and SVHC in research and manufacturing in-house as well as through business relationships with CROs and CMOs. The need to use these substances is evaluated as part of the daily and strategic decision-making performed by the Environmental, Health, and Safety (EHS) depart- ment. As the current use of SoC and SVHC are crucial parts of our operations, there is a financial risk related to potentially having to switch out the use of these. In the case of authorities applying restric- tions that would impact our ability to use these substances, we would have to reformulate vaccines, Policies Our commitment to sustainability and safety is reflected in our comprehensive policies designed to manage and mitigate the impacts and risks associated with SoC and SVHC. Each of our locations using such substances, both production and research facilities (except from the site in Martinsried), have policies on handling and storage of such substances to minimize the risk of negative impacts associated to the usage of these chemicals. These policies include management's and employees' responsi- bilities in regards to the management of hazardous substances and guidelines on safety measures, Bavarian Nordic Annual Report 2024 68 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy both in terms of protective equipment and chem- icals storage requirements. The polices apply to all employees involved in chemicals storage and handling within our own operations. Heads of the sites are accountable for implementation of those policies. the use of SVHC. The purpose of the policy is to ensure that we seek safer alternatives to reduce our dependency on high-risk substances and prepare us for potential future restrictions. The policy applies to all employees at our Danish sites who introduce, order or buy chemicals. Head of site Kvistgaard is accountable for implementation of this policy. All the policies are accessible to affected stakeholders through our internal document repository, which is available to all employees. cals, ensuring compliance with regulations and enhancing our ability to respond to any issues promptly. relying less on SVHC. With this investigation, we aim to identify options that could reduce the impact to the business of regulatory changes, ensuring the continuity of our manufacturing processes and reducing the need for costly vaccine reformulations. SVHC pose serious hazards to people and the envi- ronment if not handled and managed safely. There is also the risk of further restrictions on the use of SVHC. For these reasons, we are investigating poten- tial alternatives for these critical substances. This proactive measure aims to identify viable alterna- tives that would allow us to continue our operations At this time, our focus has been on further defining our policies and actions, and we have not yet formalized targets. We also have a policy on monitoring changes in environmental laws and compliance which is described in our EHS Rules and Regulation. The purpose of the policy is to define the responsibil- ities for tracking changes in the legislation and to establish a procedure for evaluation of compliance which takes place at least once a year. Application of this policy secures our compliance with legisla- tion which helps increasing the safety of chemicals handling and limits the risk of health or environ- mental hazards associated with usage of these substances. The policy applies to specifically listed groups of employees at our Danish sites having EHS responsibilities within our own operations. Head of site Kvistgaard is accountable for implementation of this policy. Actions & targets Substances of concern used during the production E2 - table 1 In 2024, we initiated a project to better understand all the potential SoC used in Bavarian Nordic. In 2025, we will continue to evaluate SoC and create action plans for particular SoC used in our opera- tions. The purpose of the plans are to ensure safe handling procedures, minimize risk and potentially reduce the use of SoC. The expected outcome is a reduction in the use of some harmful substances, aligning with our sustainability policies and targets. The scope of this action encompasses our own activities. This includes all geographical locations where we operate, ensuring a consistent approach to reducing substance consumption. in tonnes 2024 Hazard class Health hazard 6 1 Environmental hazard Health & Environmental hazard Total 604 611 Substances of very high concern used during the production E2 - table 2 Additionally, our EHS Assessment – Chemicals/ Products policy addresses the risk associated with the use of SVHC in relation to environmental permits and new regulations. This framework defines employees' responsibilities both in terms of internal communication and contact with the authorities regarding the approval of chemicals consumption. It requires us to continuously work on evaluating lower risk alternatives and, if possible, reducing in tonnes 2024 Another initiative planned for 2025 is implemen- tation of a global chemicals register across all our locations. This solution is expected to streamline and unify our chemicals management and reporting processes. By having a centralized system, we can better track and control the use of chemi- Hazard class Health hazard 2 0 0 2 Environmental hazard Health & Environmental hazard Total Bavarian Nordic Annual Report 2024 69 General disclosures Environmental Social Governance Appendix Climate change Pollution Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Accounting policies Substances of concern and substances of very high concern Environmental hazard, which include the substances of at least once of the following characteristics: Volumes of the substances used in the production are extracted directly from the local ERP systems where consumption of materials is registered upon their transfer from a warehouse to production. The volume units are determined upon the registration of the substance being delivered to our production sites. As liquids are typically measured in liters, their volumes have been converted to kilograms. We performed the conversion with a substance-specific factor where possible, otherwise we assumed a uniform density of one kilogram per liter. Only substances of concern and substances of very high concern consumed at the manufacturing sites are considered in the disclosure. Substances used at the research and development facilities are assessed immaterial for sustainability reporting purposes. • • endocrine disruption for the environment; chronic hazard to the aquatic environment categories 1 to 4; • hazardous to the ozone layer; The following three hazard classes have been defined as the main hazard classes for Bavarian Nordic: Health and environmental hazard, for substances associated with hazards from both hazard classes described above (health and environmental). Health hazard, which include the substances of at least one of the following characteristics: We have not identified any substances of concern or very high concern leaving our facilities as emissions, products or part of our products. Substances classified to any of the hazard classes listed above are considered substances of concern. • • • • • carcinogenicity categories 1 and 2; germ cell mutagenicity categories 1 and 2; reproductive toxicity categories 1 and 2; endocrine disruption for human health; Substances listed in any of the following lists are considered substances of very high concern: • • • Substances restricted in Annex XVII to REACH Authorisation List in Annex XIV of REACH Persistent, Mobile and Toxic or Very Persistent, Very Mobile properties; Candidate List of substances of very high concern for Authorisation • Persistent, Bioaccumulative and Toxic or Very Persis- tent, Very Bioaccumulative properties; • • • respiratory sensitisation category 1; skin sensitisation category 1; Substances of very high concern are disclosed similarly to the substances of concern, using the hazard classes described above. specific target organ toxicity, repeated exposure categories 1 and 2; Relevant substances to be reported by Bavarian Nordic are identified based on the mapping from our internal chemicals’ management systems. • specific target organ toxicity, single exposure catego- ries 1 and 2; or Bavarian Nordic Annual Report 2024 70 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Material impacts and risks Biodiversity and IRO Actions & targets substance derived from horseshoe crab's blood, and result in increased costs, requiring transition to manage both the environmental and financial impacts. To address these concerns and reduce reliance on the horseshoe crab, we are in the early stages of exploring the feasibility of alternative methods for endotoxin testing that could be implemented in our production process. Due to varying regulations between countries, products tested with alternative methods can only be supplied to those countries where such methods have been approved. At this time, we have not implemented further actions or targets, as we are working to increase our under- standing of the impact and risk to be able to appro- priately address this matter. Reliance on horseshoe crabs for endotoxin testing ecosystems Our impact on a vulnerable species stems from our dependency on Limulus Amebocyte Lysate (LAL), which is derived from horseshoe crab blood. The substance is used for endotoxin (safety) testing and is currently a part of our regulatory compliance with quality assurance processes for testing, and product release, to ensuring safety of our vaccines. E4 We recognize that our biodiversity and ecosystem impacts, dependencies, risks, and opportunities originate from our operations and value chain activ- ities. Currently, we are working to better understand and specify these impacts and dependencies and exploring options for how we can transition away from reliance and use of this substance. Through this effort we aim to gain the necessary insights to reduce our biodiversity dependency and impact and ensure alignment with product safety standards and regulations. The substance on which we rely stems from the North American horseshoe crab which is currently a species listed as "Vulnerable" on the IUCN Red List. After the blood harvesting process is completed, the horseshoe crabs are released back into their natural habitat in the wild. No biodiversity offsets, mitigation measures, or incorporation of local knowledge and nature-based solutions have been undertaken at this time. Policies The LAL is sourced from an external supplier who, is a member of the Pharmaceutical Supply Chain Initiative (PSCI) and committed to following its established guidelines regarding this matter. Our efforts are focused on understanding our material impact and risks. We have not imple- mented policies corresponding to the requirements in the European Sustainability Reporting Standards (ESRS). Consequently, we have not yet developed dedicated policies to address biodiversity. We have not adopted biodiversity and ecosystem protec- tions policies or policies related to deforestation, or sustainable land and ocean practices. Additionally, reliance on this biological resource poses medium-term financial risks due to potential regulatory changes or restrictions of the testing method stemming from the species' Vulnerable status and the existence of an alternative synthetic method. Such restrictions could limit access to the Bavarian Nordic Annual Report 2024 71 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Material impacts and risks Resource use and We recognize the importance of sustainable resource management and the principles of a circular economy. As part of our resource outflow, we generate both general waste and hazardous waste, some of which could pose significant envi- ronmental risks, and as such we recognize our responsibility to properly manage such waste. Waste materials circular economy Given the nature of our business and industry, we inherently generate hazardous waste in our manu- facturing and research activities, including chemicals and biological materials. E5 The waste generated from operations includes a variety of materials, with single-use plastics playing a significant role due to their usage in equipment, connections, hoses, and bags for media or buffer solutions. Discarded plastic items and vials may contain product residues, including viruses, which are a clinical risk and are discarded and inciner- ated as biomedical waste. Waste also comprises empty raw material packaging in plastic, glass, and cardboard. Chemical waste emerges from both laboratory and production processes, encompassing residues from analytical processes expired mate- rials, and substances like ethanol. We have impact from the waste generated at our research and manufacturing facilities. Non-recy- clable waste is sent to either incineration or landfill, both of which negatively impact the natural envi- ronment. The waste is primarily generated from our activities in manufacturing sites located in Denmark and Swit- zerland, as well as research facilities in Denmark, the United States and Germany. This impact is as such concentrated in our own operations and is connected to our business model in manufacturing and research. The management of this impact is a part of our daily and strategic decision-making, which will be enhanced as a mean of strengthening the capacity of the Environmental, Health and Safety (EHS) functions globally and locally. There are no significant financial effects related to this impact. Waste streams Wastewater is our primary waste stream, accounting for over 70% of our overall waste by weight. While the majority of our wastewater is composed of water, it also includes organic matters, inactivated virus, media solutions and antibiotics. It is discarded and captured in a holding tank as hazardous waste due to the antibiotic content. The wastewater we generate is collected by a specialized waste management service provider, who is respon- Bavarian Nordic Annual Report 2024 72 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Total waste diverted from disposal breakdown by the recovery operation types E5 – table 2 sible for its further treatment. Our wastewater is combined with waste from other companies and incinerated to ensure that any hazardous substances are destroyed. All the policies are accessible to affected stake- holders through our internal document repository, which is available to all employees. in tonnes Recovery operation type 2024 Actions & targets 1) Preparation for reuse Policies Hazardous waste 0 5 In 2024, we initiated an expansion of our Global EHS department. This will enable us to reassign current responsibilities and allocate new, improvement-fo- cused tasks to our employees, in addition to their regular operational activities. We anticipate that the new structure and enhanced capacity of the depart- ment will further our understanding and manage- ment of our waste streams and the development of initiatives aimed at increasing the rate of recycled waste from our manufacturing and research facili- ties. Our commitment to sustainability is reflected in our policies designed to manage and mitigate the negative impact associated with waste generated. Each of production and research facilities have a local policy on handling the residual waste. Those policies are implemented to ensure that the waste is properly classified, segregated, transported, and destroyed by the proper disposal companies and disposal methods in order to protect the environ- ment and human health. Their scope includes all employees involved in managing production and laboratory waste within our own operations. Heads of the sites are accountable for implementation of those policies. Non-hazardous waste 2) Recycling Hazardous waste Non-hazardous waste 3 146 3) Other recovery operations Hazardous waste 1 Non-hazardous waste 108 Total waste directed to disposal by waste treatment types E5 – table 3 At this time our focus has been on further defining our actions, and we have not yet formalized targets. in tonnes Treatment type 2024 1) Incineration Hazardous waste Non-hazardous waste 1,808 281 Total amount of waste generated E5 - table 1 2) Landfill in tonnes Waste type 2024 Hazardous waste Non-hazardous waste 0 72 Hazardous waste Non-hazardous waste Radioactive waste Total waste 1,817 612 3) Other disposal operations Hazardous waste 5 0 0 Non-hazardous waste 2,429 Bavarian Nordic Annual Report 2024 73 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Total non-recycled waste E5 – table 4 in tonnes Non-recycled waste 2024 Amount 2,166 89% Percentage Accounting policies Waste Our office facilities are excluded from the metrics as the waste generated there is considered not material for sustainability reporting purposes. Only waste gener- ated at manufacturing sites and research facilities is considered in the disclosure. All waste generated across our sites is managed by local waste handling companies, who collect disposals directly from our facilities. For our manufacturing sites and for our research and development facilities in Hørsholm (Denmark) and San Diego (USA), we main- tain direct contracts with the suppliers, allowing us to obtain precise waste data, including waste type, amounts, and treatment methods. All waste subcategories are split between hazardous and non-hazardous waste, defined in accordance with the EU’s Waste Framework Directive. For our research site in Martinsried, Germany, which is located in a shared commercial building, waste management and contracts with waste collectors are managed by both the landlord and ourselves. This arrangement results in certain data limitations. Consequently, for this site, we have applied estimates based on interviews with the landlord, who confirmed the capacity of containers and the frequency of waste collection by the external service supplier. We have not identified any radioactive waste in our operations. Non-recycled waste Total amount of non-recycled waste is calculated as a sum of waste directed to disposal (incineration, landfill and other disposal operations). The percentage rate is calculated as a total amount of non-recycled waste divided by a total amount of waste generated. Bavarian Nordic Annual Report 2024 74 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy Accounting policies Turnover Total Turnover consists of total revenue from sale of goods and services, as defined under IFRS. The Turn- over KPI is defined as Taxonomy-eligible Turnover divided by total turnover. EU Taxonomy any of the following: (a) related to assets or processes that are associated with Taxonomy-aligned economic activities; (b) part of a CapEx plan to expand Taxon- omy-aligned economic activities; (c) related to the purchase of output from Taxonomy-aligned economic activities. In respect of (a), we assess intangible assets, which have successfully finalized stage 3 clinical studies, to be associated with our Taxonomy-aligned (eligible) economic activities. The CapEx KPI is defined as Taxonomy-eligible CapEx divided by total CapEx. The EU Taxonomy is a European sustainability classification framework. It enables corporations to communicate to stakeholders which of their busi- ness activities have the potential to be considered sustainable (i.e. are Taxonomy-eligible) and which activities will be reported as EU Taxonomy-aligned (i.e. fulfil EU requirements to be considered sustain- able). For each relevant business activity, we have to disclose how much of its Turnover, Operating Expenditures (OpEx) and Capital Expenditures (CapEx) can be considered eligible and aligned, respectively. Taxonomy disclosures. Initially, we screened the economic activities outlined in the EU Taxonomy to identify those relevant, considering our busi- ness model. Based on our review, we identified one economic activity to report on in 2024: ‘PPC 1.2 Manufacture of medicinal products’ under the environmental objective of ‘Pollution Prevention and Control’. The screening was performed across revenue generation, costs, and investments, consid- ering materiality. OpEx The denominator consists of direct non-capitalized costs that relate to research and development, building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment by the undertaking or third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets. OpEx does not include amortizations and impairments. The numerator equals to the part of the operating expenditure included in the denominator that is any of the following: (a) related to assets or processes that are associated with Taxonomy-aligned economic activities; (b) part of a CapEx plan to expand Taxonomy-aligned economic activities; (c) related to the purchase of output from Taxonomy-aligned economic activities. The OpEx KPI is defined as Taxonomy-eligible OpEx divided by total OpEx. Contextual information about the KPIs We perceive the principal part of Bavarian Nordic’s revenue related to manufacture of medicinal products, cf. note 3 to the Consolidated financial statements. As Taxonomy-eligible, we only include CapEx directly asso- ciated with the manufacturing processes. Eligible CapEx for 2024 mainly relates product rights and investments in plant and machinery. Eligible OpEx relates to research and development directly associated with manufac- turing processes, cf. note 4 to the Consolidated financial statements. The narrow EU Taxonomy OpEx definition is the main reason for a reported low eligibility. Manufacture of medicinal products is our primary economic activity which drives the high eligibility percentage for turnover. In 2024 we identified eligible economic activities based on the six published environmental objec- tives. Each of the economic activities was assessed on its percentage of Taxonomy-eligibility. As a result, we report 96%, 61% and 100% Taxonomy-eli- gible Turnover, OpEx and CapEx in 2024, respectively. The identified eligible CapEx consists of additions in 2024 related to Intangible assets, PPE and Right- of-use assets in note 15, 16 and 17 of the Annual Report 2024. When allocating CapEx and OpEx to economic activi- ties, we prioritize those that directly contribute to our primary economic activity first. Secondly, we allocate to other environmental objectives for which specific tech- nical screening criteria are set. This is how we avoid double counting where activities contribute to multiple environmental objectives. We are adjusting the R&D cost for amortizations to not double count these costs, as the amortization would also have been part of CapEx in prior years. CapEx Eligibility and alignment We are still assessing our production process against the technical screening criteria pertaining to the manufacture of medicines to work towards align- ment. The denominator consists of additions to tangible assets, intangible assets, and right-of-use assets during the financial year considered before depreciation, amortization, and any re-measurements, including those resulting from revaluations and impairments, for the relevant financial year, excluding any fair value changes. The numerator equals to the part of the capital expenditure included in the denominator that is We continuously assess our business and economic activities and the environmental impact hereof. We utilized a two-step approach in formulating our Bavarian Nordic Annual Report 2024 75 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy EU Taxonomy Turnover Financial year - 2024 2024 Sustainable contribution criteria DNSH criteria ("Does Not Significantly Harm") Economic activities (1) DKK thousand Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T EL EL EL EL EL EL A. Taxonomy-eligible activities A.1. Environmentally sustainable activities (taxonomy-aligned) None N/A N/A N/A N/A N/A N/A N N N N N N N 0 % T Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0 0% N N N N N N N 0 % Of which is enabling N N N N N N N N N N N N N N E Of which is transitional T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of medicinal products PPC 1.2 5,487,285 96 % N/EL N/EL N/EL EL N/EL N/EL 98% Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 5,487,285 96 % 5,487,285 96 % 100 % 98% A. Turnover of Taxonomy-eligible activities (A.1+A.2) % B. Taxonomy-non-eligible activities Turnover of Taxonomy-non-eligible activities Total 228,921 4 % 5,716,206 100 % Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective N/EL – Not eligible, Taxonomy-non-eligible activity with the relevant environmental objective Bavarian Nordic Annual Report 2024 76 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy EU Taxonomy OpEx Financial year - 2024 2024 Sustainable contribution criteria DNSH criteria ("Does Not Significantly Harm") Economic activities (1) DKK thousand Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T EL EL EL EL EL EL A. Taxonomy-eligible activities A.1. Environmentally sustainable activities (taxonomy-aligned) None N/A N/A N/A N/A N/A N/A N N N N N N N 0 % T OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0 0% N N N N N N N 0 % Of which is enabling N N N N N N N N N N N N N N E Of which is transitional T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of medicinal products PPC 1.2 490,481 61 % N/EL N/EL N/EL EL N/EL N/EL 18 % OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 490,481 61 % 100 % 18 % A. OpEx of Taxonomy-eligible activities (A.1+A.2) 490,481 61 % % B. Taxonomy-non-eligible activities OpEx of Taxonomy-non-eligible activities Total 313,126 39 % 803,607 100 % Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective N/EL – Not eligible, Taxonomy-non-eligible activity with the relevant environmental objective Bavarian Nordic Annual Report 2024 77 General disclosures Climate change Pollution Environmental Social Governance Appendix Biodiversity and ecosystems Resource use and circular economy EU Taxonomy EU Taxonomy CapEx Financial year - 2024 2024 Sustainable contribution criteria DNSH criteria ("Does Not Significantly Harm") Economic activities (1) DKK thousand Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ Y; N; N/ % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T EL EL EL EL EL EL A. Taxonomy-eligible activities A.1. Environmentally sustainable activities (taxonomy-aligned) None N/A N/A N/A N/A N/A N/A N N N N N N N 0 % T CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0 0% N N N N N N N 0 % Of which is enabling N N N N N N N N N N N N N N E Of which is transitional T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of medicinal products PPC 1.2 309,388 100 % N/EL N/EL N/EL EL N/EL N/EL 87% CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 309,388 100 % 100% 87 % A. CapEx of Taxonomy-eligible activities (A.1+A.2) 309,388 100 % 100% B. Taxonomy-non-eligible activities CapEx of Taxonomy-non-eligible activities Total 0 0 % 309,388 100 % Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective N/EL – Not eligible, Taxonomy-non-eligible activity with the relevant environmental objective Bavarian Nordic Annual Report 2024 78 General disclosures Environmental Social Governance Appendix Social Bavarian Nordic Annual Report 2024 79 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Own workforce S1 Our employees are a key group of stakeholders, playing a crucial role in driving our strategic ambitions. They are at the core of our mission of protecting lives by creating access to vaccines. As a knowledge-based company, our success relies on the expertise, skills, and dedication of our people. The identified impacts and risks listed are disclosed individually except from the two impacts related to health and safety, which are disclosed at an aggregate level. The related disclosures on poli- cies, processes, actions, targets, and metrics are presented alongside the respective material impacts and risks. Disclosures stated in General policies and processes apply to all material impacts and risks related to our own workforce. The identified material impacts and risks are concentrated on our own operations, as these only relate to our own workforce, including the health and safety of both employees and non-employees. Non-employees cover individuals working under a contract of employment with a contract end. This group can be either self-employed or third-party employed and are compensated through invoice payments, and not processed via our payroll system. Non-employees are registered with a Bavarian Nordic email in our HR system. The health and safety impact related to non-employees described below applies only to groups of non-employees handling similar tasks to those of our own work- force, on-site in research and/or manufacturing. Attracting and retaining top talent is essential to maintaining our competitive edge and advancing our innovative agenda. As such, our impact on employees remains a key focus for us, ensuring we continue to foster an environment that supports, develops, and retains the highly capable people, that our business is built upon. With our skilled employees in mind, we have identi- fied the following material impacts and risks related to our own workforce: • Talent attraction and retention • Work-life balance • Equal opportunities • Health and safety of own employees • Health and safety of non-employees All people in our workforce who could be materially impacted are included in the scope of our disclosure. The material impacts and risks have been identified Bavarian Nordic Annual Report 2024 80 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users General policies and processes taking into consideration particular activities and contexts in which people in our workforce perform their tasks. As such, the identified impacts related to health and safety apply to research and manufac- turing functions only, as these employees are more exposed to potential harmful situations as opposed to workers in an office setting. model and strategy, as the current mitigating The following apply to all impacts and risks related to our own workforce. We adhere to the principles of freedom of associ- ation, the right to collective bargaining, and the elimination of discrimination, forced labor, and child labor as well as minimizing the adverse impacts from suppliers related to labor. Our policy does not explicitly address trafficking in human beings, however our commitment to this is reflected in our commitment to respect internationally recognized human rights instruments and upholding applicable employment laws . actions described below this section are deemed sufficient to prevent or reduce the associated impacts. Policies Human rights policy We are guided by our commitment to providing a sustainable impact on society, patients, and employees. This commitment is reflected through our Human Rights Policy, which ensures that our workplace practices uphold the highest standards of fairness, respect, and inclusivity. By embedding these principles into our operations, we aim to empower our employees and ensure a positive and sustainable working environment that aligns with our values and long-term vision. We have not identified any risks of child labor or forced labor in our operations. Though dependencies between our business model and our own workforce exist, none of the identified material impacts were deemed to trigger a risk considering the financial threshold applied in the double materiality assess- ment. Nonetheless, when considering the identified impacts related to our own workforce, these could collectively result in risks related to attraction and retention of employees, and equal opportunities as described further in sections below. Our commitment extends to the human rights of any individual who may be impacted by our activities, including employees, patients, and business part- ners with a focus on fair employment conditions, patient data privacy, and responsible sourcing in collaboration with suppliers and partners. We follow internationally recognized human rights, as defined by the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights (ICCPR), the International Covenant on Economic, Social and Cultural Rights (ICESCR), and the ILO Core Labor Standards. Guided by author- itative global frameworks, such as the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises, we identify and address potential adverse impacts arising from our operations or business relation- ships. The Human Rights Policy Statement was adopted by the Board of Directors in December 2023, and Execu- tive Management is accountable for the implemen- tation of the policy. It is publicly accessible through our website to all stakeholders. There are no current financial effects related to the identified risks. Depending on criticality, the Board and Executive Management evaluate the need for mitigating actions related to the identified impacts, risks and opportunities when and if they materi- alize. The identified impacts and risks related to our own workforce do not require changes to our business Bavarian Nordic Annual Report 2024 81 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Engaging with our workforce health & well-being, diversity and inclusion, and Serving as a platform for dialogue, the council enables management to communicate key informa- tion while ensuring that employee representatives are consulted on significant matters. This engage- ment promotes transparency, cooperation, and alignment, contributing to the continuous enhance- ment of our workplace environment and organiza- tional unity. We strive to maintain a collaborative and trans- parent approach to workforce engagement and incorporate the perspectives of own workforce into decision-making and operational activities by conducting anonymous employee engagement surveys and continuous dialogue with workers coun- cils in Denmark and Germany. transformation and change. All employees - across sites, functions, and organizational levels - are eligible to participate. Employees are informed about the surveys and encouraged to participate through email reminders, intranet announcements, Teams notifications, and other internal communica- tion channels. Feedback is collected anonymously, where aggregated results are shared in each team, and presented into actionable insights for managers and leaders, providing a holistic view of organiza- tional health while identifying areas for targeted improvement at local level. Our approach includes assessing how and when engagement efforts occur, the roles and respon- sibilities involved, and the mechanisms in place to ensure effective outcomes. The Chief People & Sustainability Officer is the most senior person accountable for the employee engagement survey. The Executive Team is collectively responsible for driving engagement across Bavarian Nordic. Processes for remediation We encourage all employees to raise concerns with their manager and/or our HR department, and we strive to address and resolve any issues that are raised in the line of business. The employee engagement survey aims to foster immediate engagement while establishing a long-term foundation for enhanced health, well- being, and job satisfaction. In 2024, three surveys were conducted, enabling consistent monitoring of employee perspectives and adaptability to emerging organizational needs. Surveys are tailored to address evolving priorities, supporting continuous alignment with organizational goals. Additionally, employees have access to formal reporting channels including our Ethics Hotline, which allows for confidential and anonymous reporting of misconduct or ethical concerns. Read more about our Ethics Hotline in the Business Conduct section of these sustainability statements. Employee engagement survey Conducting employee engagement surveys facili- tates transparent communication and collaboration, cultivating a supportive and engaging work envi- ronment and addressing factors impacting work-life balance, job satisfaction, and overall employee well-being. As part of our annual people processes we conduct regular engagement surveys to ensure employee feedback is transparently integrated into decision-making and local team dialogues. The engagement surveys involve different stages: survey planning, information gathering, and review phases of responses generated. Through the engagement survey, employees provide feedback on matters essential to workplace culture including Workers councils The workers councils ("Betriebsrat" in Germany and "Arbejdsmiljøorganisation" in Denmark) func- tion as a formal channels to incorporate employee perspectives into organizational decision-making. It addresses the principles governing local working conditions, welfare arrangements, and the overar- ching personnel policies in Denmark and Germany. Bavarian Nordic Annual Report 2024 82 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Number of employees by gender S1 – table 1 Rate and number of employees leaving the company S1 – table 4 in headcounts 2024 in headcounts 2024 Male 766 887 Rate of employee turnover 17.4% 255 Female Number of employees who left the company Total employees 1,653 to employees employed on an indefinite contract, Accounting policies Number of employees by country S1 – table 2 either full-time or part-time, subject to local terms and conditions of employment. Temporary employees refer to employees hired for a specific duration, either full- time or part-time, to fulfill short-term needs such as apprenticeships, backfilling, or covering parental leave. Temporary contracts end at a predefined date or upon project completion. Number of employees breakdown by gender and country in headcounts 2024 Employees refer to individuals working part-time or full-time under a contractual agreement with Bavarian Nordic. This definition encompasses employees under local terms and conditions of employment, such as enti- tlements, payment of social security contributions, and other applicable obligations. The number of employees (head counts) by gender and country are recognized based on records from the HR system at the end of the reporting period. Denmark 979 301 Germany Switzerland 215 Turnover rate United States of America Other 123 The employee turnover rate, expressed as a percentage, reflects the proportion of employees who left the organization within a calendar year either voluntarily or due to dismissal, retirement or death in service. The turnover rate is determined by dividing the number of employees (measured by headcount) who left during the reporting period by the average number of employees (headcount) for the same period and multiplying it by one hundred. 35 Total employees 1,653 * Countries with less than 50 employees are reported aggregated as other. Number of employees by employment classification The number of employees is disaggregated by employ- ment classification, including permanent, temporary, and non-guaranteed hours employees, and is reported in number of headcounts. Permanent employees refers Number of employees by employment characteristics S1 – table 3 in headcounts 2024 Female 856 31 Male 749 17 Total 1,605 48 Number of permanent employees Number of temporary employees Number of non-guaranteed hours employees Total employees 0 0 0 887 766 1,653 Bavarian Nordic Annual Report 2024 83 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users IRO Material impacts and risks IRO Policies & processes Leadership development and alignment on deliverables and development plans, it contributes to achieving long-term organi- zational objectives. Attraction and retention of talent and work-life balance Remote working policy LeadPioneers is our Leadership development program that provides a structured approach to leadership, setting clear expectations and fostering a shared understanding of effective leadership practices. Through this program, we equip leaders with the skills they need to lead their people and organization in line with present and future demands. LeadPioneers offers two distinct learning tracks: Leading Others, tailored for leaders managing individual contributors, and Leading Leaders designed to educate leaders of other managers. Our remote working policy defines the governing framework for employees performing working hours outside the organization's premises. The policy applies universally to all employees and is intended to enhance operational efficiency, employee engagement and organizational alignment through structured and flexible working arrangement. The policy reflects our commitment to flexible workplace practices, prioritizing well-being and adaptability to modern work requirements. Our ability to attract and retain a workforce with the necessary skills and experience is fundamental to our success and relates to other identified impacts, including work-life balance. In a competitive labour market, as well as under potential reputational pressures, difficulties in attracting or retaining employees could negatively impact our performance and strategic objectives. The identified risk arises from the dependencies on our own workforce, particularly those working in locations and function where there is a high demand within pharmaceu- tical research, development, manufacturing and commercial. The risk has been identified through our Enterprise Risk Management (ERM) process. Integrated into annual HR processes, the perfor- mance management system ensures ongoing value through structured discussions and actionable outcomes. Expected benefits include improved performance tracking, focused development efforts, and enhanced alignment with organizational prior- ities. Targets The New Ways of Working initiative Managed by the HR Development Team, LeadPio- neers trains leaders in cohorts throughout 2025, with an objective for all leaders with at least three direct reports to complete the program by third quarter of 2026. Expected outcomes include consistently enhancing leadership capabilities, establishing a culture prioritizing accountability, and a resilient leadership framework aligned with our strategic objectives. With the aim to increase flexibility and enhance work-life balance, we introduced our New Ways of Working initiative in 2021. Through this, we actively encourage employees to work collaboratively and adopt flexible working arrangements. By fostering a culture of flexibility, and improved work spaces at our offices, we provide a framework for work practices, which support employees in achieving improved work-life balance, also in peak periods. Our people are the key to our success and although we have not formalized targets, we continuously monitor our performance in relation to talent attraction and retention, including work-life balance. This is done through various processes, including tracking turnover rates, employee engagement surveys, performance and development talks, lead- ership development program, one-on-one dialogue with managers, and exit-interviews. The vaccine sector can be subject to fluctuating market demands, due to external factors such as urgent responses to disease outbreaks. As an employer, we are responsible for shaping working conditions and work-life balance for our employees, impacting their overall well-being and job satisfac- tion, which ultimately affects our ability to retain talent. Peak periods can affect people working in various departments and sites throughout the organization, as they could lead to additional work- load. Performance management system Our Performance Management system is a manage- ment tool to align expectations between employees and managers. It facilitates collaboration, dialogue, and follow-up on individual performance and devel- opment goals. By supporting continuous engagement Actions In 2024, we initiated a series of initiatives aimed at strengthening our ability to attract and retain talent, with efforts focused on the below key actions: Bavarian Nordic Annual Report 2024 84 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users IRO Processes for remediation Actions Executive Management is accountable for the imple- Equal treatment and mentation of the diversity and inclusion policy. We are committed to maintaining a safe, inclusive, and respectful workplace where all employees are treated with dignity. We encourage employees to address concerns at the local level whenever possible. Employees who experience or witness inappropriate behavior should first attempt to resolve the issue by speaking with the individuals involved, their immediate manager, or a trusted colleague. If further support is needed, employees are urged to contact their HR Business Partner, who will facilitate resolution in line with company guidelines. In cases where local resolution is not possible, or if the concern involves a direct manager, employees may escalate the issue to a higher-level manager, a union or Workers Council representative or the Health and Safety Representative. In 2024, we conducted two online programs as part of our ongoing commitment to educate employees on the importance of inclusion and unconscious bias. opportunities for all Given our global presence and reliance on a highly skilled workforce, we may risk our ability to attract and retain talent if we do not keep momentum in current efforts and continuously develop initiatives to ensure that we maintain an inclusive and diverse workforce. This risk is linked to our dependency on human resources and our ability to attract and retain talent, including risk considerations related to our reputation, legal sanctions, and/or labour disputes. Global policy on sexual harassment and global policy on bullying and harassment at work We do not accept any kinds of bullying and harass- ment. Our policies stress the importance of respect and dignity while providing guidance on preventing and remediating inappropriate behaviors. Addition- ally, they emphasize the collective for cultivating a workplace where every individual feels safe, valued, and empowered to contribute fully. The sessions were focused on two key topics. 1. Inclusive Colleagueship - emphasizing the importance of inclusion, belonging, and allyship through practical, everyday actions; and 2. Unconscious Bias - exploring the impact of unconscious bias and impact on the workplace, providing strategies to mitigate bias. Maintaining a respectful workplace is a shared responsibility. All employees, including manage- ment, are accountable for adhering to the principles outlined in the policies. Members of the Executive Management are the most senior level account- able for the implementation of these policies. The policies are accessible for all employees via our intranet. Policies Diversity and inclusion policy The sessions offered actionable insights on how employees contribute to an inclusive work environ- ment, emphasizing personal and collective respon- sibility in fostering an inclusive work environment. Our Diversity and inclusion policy outlines our approach to ensuring equal treatment and oppor- tunities for all employees, which is a key compo- nent of our sustainability efforts. The policy aims to create a work environment where everyone feels respected and valued in support of a diverse workplace. The policy covers the following grounds for discrimination, but not limited to: gender, age, educational background, ethnicity, physical impair- ment, religion, or sexual orientation. We uphold a strict non-retaliation policy to protect employees who report concerns in good faith and continuously review our processes to ensure they remain effective, accessible, and aligned with regu- latory and ethical standards. Targets We do not currently have specific policy commit- ments related to positive action for people from groups at particular risk of vulnerability Our people are the key to our success and although we have not formalized targets, we continuously monitor our performance in relation to equal opportunities and treatment. This is done through awareness trainings, salary benchmarks checks, and employee engagement surveys. The policy addresses material impacts such as elim- inating biases in selection and promotion processes and preventing discriminatory behavior. Bavarian Nordic Annual Report 2024 85 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Gender distribution in Top management S1 – table 5 Accounting policies Gender diversity at Top management level in headcounts 2024 Top management is defined as positions at the Vice President level and above. Gender distribution is shown as headcounts and share distributed between male and female. The gender breakdown of employees at the Top management level is based on records from the HR system at the end of the reporting period. Number 11 Share 46 % Female Male 13 54 % Total employees 24 100 % Age distribution The age breakdown of employees is based on records from the HR system at the end of the reporting period. Age distribution in own workforce S1 – table 6 Gender pay gap in headcounts 2024 Gender pay gap is defined as the difference of average pay levels between female and male employees, expressed as percentage of the average pay level of male employees. The metric is calculated based on total annual remuneration which includes both fixed and variable components. Under 30 years old 30-50 years old 228 963 Over 50 years old Total employees 462 1,653 CEO remuneration ratio The CEO remuneration ratio reflects the annual ratio between the total remuneration of the CEO (the highest paid individual) and the average remuneration of all employees (measured in FTEs) within the company, excluding executive management. The calculation of the ratio is consistent with the calculation of CEO pay ratio disclosed in our Remuneration Report. Remuneration metrics S1 – table 7 2024 -1,6% 29 Gender pay gap1 CEO remuneration ratio 1 Negative gender pay gap reflects a pay gap in favor of males Bavarian Nordic Annual Report 2024 86 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users IRO through open dialogue on EHS matters. The EHS specifically activities directly involving the handling or production of hazardous biological materials. of the strategy. The site heads have the overall responsibility, which is a legal requirement in most countries. Health and safety Management System, overseen by governance arrangements involving all company levels, ensures that performance is monitored and regularly reviewed to meet high standards and provide value to stakeholders. We have processes in our manufacturing and research facilities that could pose a risk of nega- tive impact on a person’s physical health. This also applies to non-employees carrying out activities and services on our behalf. The negative impacts relate to individual incidents only for the part of our workforce that work in the context of our vaccines research and manufacturing. As this is an inherent part of our business model (end-to-end develop- ment and manufacturing of vaccines) decreasing the risk of negative impacts related to health and safety remains a priority on all our manufacturing and research facilities. The potential impacts described inform daily and strategic decision-making. Engaging with our workforce Our Global EHS Operations team has been estab- lished at the operational level, working in collabo- ration with EHS Management to handle and partici- pate in risk prevention activities. These groups play a role in addressing unsustainable EHS matters, either by resolving them directly or escalating them to the EHS Committee. The EHS Committee act as a liaison between employees and the work environ- ment organization, ensuring effective communica- tion and collaboration. They are also responsible for providing comprehensive training and instruction to all employees, ensuring that everyone is well-in- formed about safety protocols and best practices. We prioritize the health and safety of our employees through structured engagement processes with our workforce and their representatives. Our EHS Committee operates at the strategic level, collab- orating closely with Site Heads and the ESG repre- sentatives to plan, lead, and coordinate our efforts in protecting employee health and safety, the surrounding environment, and risk prevention. This committee ensures that strategic decisions align with our commitment to maintaining a safe and healthy workplace. Site heads are responsible for implementing the policy and ensuring that it is effective. The content was revised during 2024, and the updated policy was published in the beginning of 2025. Employee vaccination program The policy aims to ensure health and safety of employees operating in environments with poten- tial exposure to infectious agents. It establishes protocols for vaccination for employees working in high-risk environments with live viruses. Engagement with our workforce occurs directly and through workers' representatives. This engage- ment is integral to our decision-making processes, ensuring that the perspectives of our workforce are incorporated into managing actual and potential impacts. Engagement occurs at multiple stages, including planning, implementation, and review phases of health and safety initiatives. The types of engagement include regular meetings, surveys, and feedback sessions, conducted frequently to ensure continuous dialogue and improvement. Policies Where relevant, we incorporate specific considera- tions to vulnerable employees, including pregnant women. We have an internal policy that outlines specific tasks pregnant women should avoid to prevent any risk to their health and safety. This policy helps protect both the expectant mother and her unborn child by minimizing workplace hazards. The policy stipulates that specific individual risk assessments must be carried out for each pregnant worker. Where a potential risk is identified and cannot be eliminated, we will find alternative work arrangement, which will not impact the expectant or breastfeeding mother or unborn child. By Global Environmental, Health & Safety Policy Our Global Environmental, Health and Safety (EHS) Policy covers all our business areas and locations. Objectives include protecting employees from health risks associated with exposure to infectious agents, implementing stringent access control to high-risk areas, aligning with global health and biosafety standards, thereby minimizing potential adverse impacts on physical health. The policy emphasizes high standards of EHS performance, ensuring compliance with applicable EHS laws, managing EHS risks, and continuously seeking opportunities to reduce risks and improve performance. The policy applies to all employees engaged in activities involving potential exposure to virus, including employees in production, quality control, environmental monitoring, and support roles operating in designated high-risk areas. The policy primarily addresses operations within our facilities, It highlights the importance of educating and enabling employees and key stakeholders inter- nally and externally to work safely and responsibly, fostering positive interactions and work practices The Global EHS Director holds the overall respon- sibility for setting the strategic direction for EHS, aligning with each global function, while ensuring workforce engagement and feedback is the core providing clear guidelines and adjusting work duties Bavarian Nordic Annual Report 2024 87 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Targets as needed, we aim to create a supportive and safe environment for pregnant employees. collaborate closely with our HR department on Our target is to further reduce health hazards in our operating sites by expanding our current portfolio of risk assessments in each of our locations and addressing 90% of identified mitigating actions. Risk assessments are an integral part of how we operate, and opportunity assessments are underway to expand on the work previously undertaken by each location. The baseline will be finalized by the end of quarter one in 2025, and tracking will be conducted by EHS on a quarterly basis thereafter. Target perfor- mance will be assessed by the end of the year. health-related concerns and reporting of these to authorities. All processes adhere to applicable local legal requirements, ensuring full compliance. Our sustainability-related company goals for 2025 include a target relating to the health and safety of workers on-premise, regardless of their type of employment. The target is supporting the objectives of our Global EHS Policy and Global EHS Strategy. The EHS department and Executive Management have been involved in the target setting process. Target performance will be assessed by the end of the year. Processes for remediation We apply established processes to address and remediate negative impacts on employees within own workforce, and to provide accessible chan- nels for raising concerns. Employees are provided multiple options for reporting, including health and safety management system, health and safety representatives, or their direct managers. Employees are encouraged to report incidents, near- misses, or unsafe conditions to help maintain a safe and compliant working environment. The health and safety management system enables structured reporting and documentation facilitating the anal- ysis and resolution of reported issues in alignment with regulatory requirements. Actions We have developed a new Global EHS strategy with the purpose of further defining our roadmap and focus areas. We have started implementation and are planning to fill several key full-time positions in our EHS department with the purpose of driving our strategic ambitions, including areas related to the identified potential negative impact. This includes building governance, leadership, standards and capabilities on a global and local level across all EHS topics. Health and safety metrics related to own employees S1 – table 8 in numbers 2024 Percentage of workforce covered under health & safety management system Fatalities as a result of work-related injuries & ill health Recordable work-related accidents 100% By hiring additional dedicated roles in the EHS area, we are better equipped to identify and mitigate risks, provide comprehensive training, and ensure a safe and supportive work environment for all our employees. 0 6 The objective is to implement a health and safety management system globally to standardize system management across all locations. Currently, we are in the process of identifying global internal stand- ards to ensure that we drive continuous improve- ment in addition to legislative compliance. Each site has their individual health and safety management system. For countries or sites where the health and safety management system are not yet in place, local processes, manuals, procedures, and systems are in effect. EHS representatives responsible for time-tracking tools and regulatory documentation, manage the local EHS Management systems and Rate of recordable work-related accidents 2.3 Total number of incidents, complaints and severe human rights impacts S1 – table 9 As part of our strategy, we have introduced the updated Global EHS Policy with the purpose of addressing health and safety impacts related to our own workforce as well as on- and off-premise workers. in numbers 2024 Incidents of discrimination, including harassment 0 0 0 0 0 Complaints filed through channels for people to raise concerns Fines, penalties, and compensation for damages resulting from discrimination (in DKK) Severe human rights incidents Fines, penalties and compensation for damages resulting from severe human rights incidents (in DKK) Bavarian Nordic Annual Report 2024 88 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Accounting policies The percentage of employees covered by health and safety management system Incidents, complaints and severe human rights impacts The metric is determined through information gathered from the health and safety responsible person in each of our locations. The percentage coverage is calculated as the number of employees (headcounts) covered by health and safety management systems divided by all employees (headcounts). The metrics represent the number of discrimination incidents, complaints and severe human rights cases reported to the Ethics Hotline or to our Legal & Compli- ance team in the reporting period. The number of fatalities as a result of work-related injuries and work-related ill health The number of fatalities is determined based on records from our HR system. It refers to death of employees resulting from work-related accidents and work-related ill health. All types of employees are considered for the metric. The number and rate of recordable work-related accidents A recordable work-related accident is registered if the accident results in the employee being unable to perform their usual work for one day or more, excluding the day of the injury. The rate of work-related accidents represents the number of cases per one million hours worked. It is calculated by dividing the total number of work-re- lated accidents by the total hours worked by our own employees, and multiplying the result by one million. The number of hours worked by our employees is estimated based on standard full-time equivalent (FTE) hours, taking into account entitlements to leave periods, including vacation and public holidays. The calculation excludes individually registered vacation days. Bavarian Nordic Annual Report 2024 89 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Workers in the value chain S2 We depend on workers in our value chain to perform services, either as contracted services at our premises (on-premise workers), or as part of services and/or production at supplier or business partner premises (off-premise workers). described below. We have not identified any signif- icant risks of child labor or forced labor among the stakeholders in our value chain. The disclosures related to interests and views of stakeholders and policies related to this topic are presented at an aggregate level, followed by disclo- sures on processes, actions and targets, which are presented alongside each impact. On-premise services include repairs, mainte- nance, construction work, and other similar work performed by people who are not classified as employees or non-employees (as defined in the Own workforce section of these sustainability statements) but are performing work or services at our sites. General policies and processes On- and off-premise value chain workers are covered under our Environmental, Health, and Safety (EHS) Policy which is described in Own work- force section of these sustainability statements. Off-premise tasks involve upstream activities of sourcing of raw materials used in our vaccines and contract research and manufacturing (CROs and CMOs). Our Responsible Sourcing Standards Policy outlines our expectations for suppliers regarding health and safety, aiming to protect workers from work-related hazards and potential dangers. The general objec- tives of the policy include compliance with relevant regulations, proactive risk assessment, and the implementation of protective measures to safeguard workers' health and safety. The policy addresses material impacts such as chemical, biological, and physical hazards, and outlines the process for moni- toring compliance through audits and corrective actions. As a part of the double materiality assessment (DMA) process, we have gathered an increased understanding of how people in our value chain are actually and potentially exposed to specific impacts, risks, and opportunities - for both on-site and off-site workers. As such, the scope of the following disclosure includes only people in our value chain who perform services that are subject to the iden- tified material potential health and safety impacts Bavarian Nordic Annual Report 2024 90 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Engaging with on-premise value chain workers The policy applies to all activities within our upstream and downstream value chain, encom- passing suppliers and sub-suppliers, including workers performing services in our value chain, regardless of their location. The policy excludes no specific activities or geographies, ensuring compre- hensive coverage and protection for all stakeholders involved. the negative impacts for our own employees as described in the Own workforce section of these statements. Material impacts and risks Our engagement with value chain workers on-site is direct in relation to training and information about their health and safety. We engage with this group of stakeholders as they enter our sites to perform a visitor induction. The induction includes information about what the visitors, including the workers, may encounter when entering our sites, how they are expected to behave, their duties related to our site rules. Visitors must sign documentation following the information provided to them and, depending on their designated access level, some will be accompanied by a Bavarian Nordic employee while on-site. IRO Health & safety of on-premise workers in the value chain The monthly EHS meetings are in place to ensure continuous attention to health and safety-related impacts on our sites. We make use of external companies and individuals who carry out various services at our manufacturing sites, some of whom may be exposed to processes that could result in a negative impact on their physical health. This impact applies to potential indi- vidual incidents of on-premise workers in the value chain who perform services at our sites. The need for workers in the value chain to perform various services on-site, e.g. construction and repairs is related to our business relationships, as the workers do not fall into the categories of the services and employment types for the people described in the topical standard related to our own workforce and non-employees as defined in the Own workforce section of these statements. As the impact poten- tially occurs in our site operations, it is a direct impact which can potentially involve a reputational risk for us, however there are no identified material risks associated with this impact. Due to the nature of our business needs for having manufacturing and research sites, there is an inherent risk related to negative health and safety impact for people located on-premise. Managing these remains a priority in all our manufacturing and research facili- ties, and the identified impact informs the daily and strategic decision-making. Our Ethics Hotline is publicly available and workers in the value chain can raise confidential and anony- mous reporting of suspected violations of the Code of Conduct and applicable laws and regulations. The most senior level accountable for the imple- mentation of this policy is the Chief Operating Officer. Our Code of Conduct and Human Rights Policy also apply to workers in the value chain and are described in the Business conduct and Own work- force section of these statements. Actions The site head holds the operational responsibility for ensuring that the engagement happens and monthly meetings are held in which EHS matters are discussed. These inform the decision-making related to the process for engaging with value chain workers on-site. The needs of workers who may be particularly vulnerable are assessed on an indi- vidual basis, taking into consideration any special provisions to ensure the health and safety of these individuals. Our completed and planned key actions related to the potential negative impact are described below. These actions are taken and planned to limit the likelihood of us causing or contributing to the identi- fied potential negative impact. Based on data from our Ethics Hotline (see the Busi- ness conduct section of these statements), there are no reported cases of adverse human rights impacts (incidents and non-respect) of the UN Guiding Prin- ciples on Business and Human Rights, ILO Declara- tion on Fundamental Principles and Rights at Work or OECD Guidelines for Multinational Enterprises involving value chain workers in our upstream and downstream value chain. • We have developed a new global EHS strategy with the purpose of further defining our roadmap and focus areas. We have started implementa- tion and are planning to fill several key full-time positions in our EHS department with the purpose of driving our strategic ambitions, including areas related to the identified potential negative impact. This includes building governance, lead- ership, standards and capabilities on a global and local level across all EHS topics, including health and safety for on-premise value chain workers. Processes for remediation We have established processes to address and remediate the potential negative impact on on-premise value chain workers as part of our duty of care for people on our sites. These general processes align with those in place to remediate Bavarian Nordic Annual Report 2024 91 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Actions • As part of our strategy, we have updated our EHS Policy with the purpose of addressing health and safety impacts related to our own workforce as well as on- and off-premise workers. See more in the Own workforce section of these statments. as vaccines research and manufacturing. As such, PSCI engagement in 2024. The Global EHS Director has the operational responsibility for health & safety engagement with suppliers and CMOs, and the respective lines of business engage with suppliers and CMOs through ongoing work and collaboration. Each are responsible for ensuring that engagement happens and that the results inform our approach in the area. This responsibility includes regular assess- ments of the effectiveness of our engagement, including the learnings and outcomes gained from the engagement. this impact is connected with our business model, as we have dependencies on the workers in the value chain working for suppliers and business partners. This impact applies to potential individual incidents of off-premise workers in the value chain. It is an indirect impact as it originates from our business relationships with suppliers and partners. It can potentially involve a reputational risk for us, however, there are no identified material risks associated with this impact. As our business model requires us to source raw materials and engage CMOs in the manufacturing of our products, there is an inherent potential health and safety risk for people working with these tasks and within manu- facturing facilities. As such, the health and safety of workers is a priority throughout our value chain, and the identified potential impact informs our deci- sion-making related to the suppliers and business partners we choose to collaborate with. Our completed and planned key actions related to the potential negative impact are described below. • The further development of a supplier manage- ment program is a strategic priority and a part of our Responsible Value Chain program. The purpose of the program is to further develop our supplier management and engagement processes to enable an understanding of our adverse impacts and how to address these. We have completed a mapping of our value chain and high-level risk screening of our tier 1 suppliers and business partners in defined service cate- gories. The mapping was based on industry practice and internal guidelines and will guide our efforts in this area. We plan to develop the program further in the coming years by building internal governance structures in the area and continuously collaborate with new and existing suppliers and business partners. Key stakeholders within the EHS, Procurement, External Manufac- turing, and Corporate Sustainability departments collaborate on developing and implementing the program, including the type of action needed in response to the identified potential negative impact. • We have updated our visitor induction training on our sites to enable all visitors, including on-premise workers. The purpose of the induction is to enable visitors to understand their responsi- bilities and site rules prior to entering our site. Our actions will be tracked and assessed regularly by the site head in collaboration with EHS depart- ment to ensure that the intended outcomes are met. As the PSCI is an organization solely focusing on pharmaceutical supply chains, the insights provided by them are deemed to take into consideration the perspectives of workers that may be particularly vulnerable to impacts. Targets The target disclosed in Health & Safety of our own workforce also applies to on-premise value chain workers. Processes for remediation To further capture the health and safety impacts in our value chain, we are in the process of further developing our Responsible Value Chain Program. Based on risk screenings, we aim to conduct targeted engagements with suppliers and business partners to collaborate on tracking, monitoring and mitigating health and safety impacts. Engaging with off-premise value chain workers IRO Our engagement with value chain workers working off-premise occurs through monthly and ad hoc meetings in our industry collaboration membership in the Pharmaceutical Supply Chain Initiative (PSCI). We consider the PSCI a credible proxy with insights into the situation of off-premise workers in our value chain. While key functions at our EHS, Procure- ment and Corporate Sustainability departments have taken part of the engagement, and the ESG Director held the operational responsibility for our Health and safety of off-premise workers in the value chain Suppliers and partners in our value chain manage and handle chemicals, which can potentially have a direct impact on the health and safety of workers in the value chain. As an inherent part of our business model, we engage in business relationships with suppliers from whom we source raw materials and CMOs whose workers perform services such Our Ethics Hotline is publicly available and workers in the value chain can raise confidential and anony- mous reporting of suspected violations of the Code of Conduct and applicable laws and regulations. • As a part of our commitment to the PSCI and its Principles for Responsible Supply Chain Manage- ment, we have initiated work to increase the coverage of supplier audits. This action is also Bavarian Nordic Annual Report 2024 92 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users anchored with our Responsible Value Chain Program. Since 2024 is our first year of tracking the vendor audit rate, we do not have a baseline value for 2023. We have reached our target for 2024. • We have introduced an EHS Policy with the purpose of addressing health and safety impacts related to our own workforce as well as on- and off-premise workers. See Health & Safety for on-premise workers in the Own workforce section of these statements. Vendor audit rate S2 – table 1 Target Actual 2024 2025 2026 2027 12.5% 25% 12.6% Our actions will be tracked and assessed monthly by the key stakeholders involved in driving forward the strategic initiative to ensure that the intended outcomes are met. 40% 70% Accounting policies Vendor audit rate Suppliers and business partners in scope refer to Contract Manufacturing Organizations (CMO's) or other manufacturing organization or suppliers providing critical production raw materials for commercial products. Targets To track the effectiveness of our actions related to our Responsible Value Chain Program, we have set a target to increase the share of scoped suppliers and business partners that have undergone an audit in accordance with the Pharmaceutical Supply Chain Initiative (PSCI) audit standards or similar. Our long-term target is for 70% of all in-scope suppliers and business partners have undergone an audit in accordance with PSCI audit principles. The long-term target is due in 2027 with annual milestone targets. The metric indicates the proportion of scoped suppliers that have been audited in compliance with PSCI audit standards or equivalent. This propor- tion reflects the ratio of our total expenditures on audited vendors to all scoped vendor-related expenditures in the reporting period. No individual vendor exceeded 10 percentage points of the metric. The target setting process involved internal subject matters experts and the target was approved by Executive Management. The monitoring of progress is performed by key internal stakeholders. Bavarian Nordic Annual Report 2024 93 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Consumers and end-users S3 The people we serve are the distribution and sales, and are as such anchored in a combination of our own operations and in our upstream and downstream value chain. All identi- fied IROs relating to consumers and end-users occur in both short-term, medium-term and long-term. foundation of our business. Our commitment to saving and improving lives by unlocking the power of the immune system remains strong as we have continued to increase our impact on global health in 2024. Within each category, we have disclosed applicable policies, procedures, actions and targets. Central to our overall sustainability ambitions, business model and strategy is our ability to expand access to our vaccines across geographies, where we foster trust amongst stakeholders through responsible interactions and by supplying safe and efficacious vaccines. Our policies reflect our commitment to human rights throughout our organization and supply chain, as defined by the United Nations Guiding Principles on Business and Human Rights (UNGPs), International Labour Organization’s (ILO) Declaration on Funda- mental Principles and Rights at Work, principles of the UN Global Compact, and the Universal Declara- tion of Human Rights (UDHR). We have identified the following impacts, risks and opportunities (IROs) related to consumers and end-users, defined as vaccine recipients, clinical trial participants, and/or health care professionals (HCPs), in our double materiality assessment. All potentially affected end-users are included in the scope of these disclosures. Following regulatory requirements and industry standard practices, all clinical trials are reviewed and approved by independent review boards (IRB), independent bioethics committee (IBC), or an independent ethics committee (IEC) tasked with protecting the human of the individuals involved in clinical trials and ensure that our clinical trials are ethical, follow applicable regular standards, and appropriately protect the rights, safety and well- being of clinical trial participants. We, in compliance with associated regulations and ethical standards, The identified IROs are disclosed on an aggregate level, divided into three categories: Safety, Access to vaccines, and Responsible marketing. These three areas are central to our business model and strategy from research, development, manufacturing, Bavarian Nordic Annual Report 2024 94 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users require that all clinical trial participants be provided an opportunity for informed consent, including risks associated with participation, and that their informed consent is documented. Our processes require that both adverse safety events and devia- tions from the approved protocol be documented, investigated, assessed, and reported to the IRB and regulatory authorities, as appropriate. We use a Corrective and Preventive Action (CAPA) system to assign and resolve corrective actions to remedy identified issues and to help prevent future similar problems. In collaboration with regulatory authori- ties, relevant safety information from clinical trials and post-marketing adverse events reports are included in our product labels to inform healthcare professionals and the general public about both the risks and the benefits of our products. certain effects of climate change that relate to the spread of certain diseases. could have positive financial effects for us through revenue growth. Material impacts, risks and opportunities This positive impact through the prevention of the spread of infectious diseases affects the patients, communities and public health systems where our vaccines are administered and occurs in the short term. Barriers to access that slow or prevent the delivery of vaccines IRO Access to vaccines Distributing vaccines to a global market, we may face situations where access barriers slow or Access to vaccines saves, empowers and improves lives across the world. We take pride in pioneering advancements in vaccine development and distribu- tion. This endeavor protects individuals and safe- guards communities from the damaging effects of infectious diseases. prevent our ability to deliver vaccines to persons in need, particularly in low-income countries (LICs) and low-middle-income countries (LMICs). These barriers may be linked to local regulatory processes, lack of cold-chain transportation, affordability and other factors, which could impact our ability to do busi- ness, and deliver vaccines, to certain markets. Expanding access to vaccines in endemic countries By expanding access to vaccines in our current port- folio to low- and lower-middle-income countries, we can help to reduce the spread of preventable infec- tious diseases and positively impact underserved communities. Global health security: Prevention of the spread of infectious diseases, including those due to climate change Access barriers that prevent us from delivering vaccines to people in need could have a negative financial effect on us in the medium term as well as potentially causing negative reputational conse- quences for the company. Vaccination with our vaccines will save and protect the lives of patients by immunizing them against infectious diseases. By preventing the spread of infectious diseases, vaccines contribute to healthier populations and reduce the burden on healthcare systems. This potential positive impact affects patients living in endemic regions who cannot access vaccines Expanding our vaccine portfolio We have an opportunity to develop or acquire new vaccines to our portfolio which could serve new disease areas and prevent the spread of infectious diseases. This risk does not stem from any dependencies on natural, human and/or social resources for our business processes. In addition, through our Public Preparedness and Travel Health portfolios, we develop and supply vaccines which can prevent the spread of infec- tious diseases. The spread of certain diseases can be attributed to the effects of climate change, and infectious diseases that previously were endemic in certain geographies are now, or have the poten- tial to, spread to other geographies. Therefore, our vaccines, on condition that they are administered, can have a positive impact on human adaptation to Policies Developing and supplying vaccines that address unmet medical needs is core to our strategy. This opportunity, which depends on the successful development of clinical trials and approval and implementation of new vaccines, or the successful acquisition of an existing vaccine, is concentrated in our own activities in the medium term and We are committed to the prevention of infectious diseases through innovation in the development, manufacture and supply of life-saving vaccines. While we do not have a formal policy related to access to vaccines, we manage the associated Bavarian Nordic Annual Report 2024 95 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users impacts, risks and opportunities through the actions described below. ment, the European Commission’s Health Emergency Preparedness and Response Authority (HERA), and Bavarian Nordic. safety and efficacy of the vaccine in children 2-12 years of age as well as in pregnant women and children between 4 and 23 months of age. The strategy focuses on vaccines which have the highest impact on unmet medical needs, where our business model is well suited to manufac- ture and distribute vaccines. The timeline for the strategy runs to 2028 beginning with defining and taking action on concrete steps in 2025. The overall strategy is anchored with our Executive Manage- ment. Actions Together with Gavi, the Vaccine Alliance, we announced an advance purchase agreement (APA) to secure 500,000 doses of the mpox vaccine to be supplied to countries in Africa impacted by the mpox outbreak. The first doses arrived in the Central African Republic and Liberia in December 2024. Chikungunya: Expanding our vaccine portfolio Our chikungunya vaccine candidate was approved in February 2025 by the U.S. Food and Drug Admin- istration (FDA), and received a recommendation for approval in Europe in 2025 (final marketing authorization is pending adoption by the European Commission). Chikungunya is a mosquito-borne viral disease caused by the chikungunya virus (CHIKV). CHIKV disease typically presents acute symptoms, including fever, rash, fatigue, headache, and often severe and incapacitating joint pain. While mortality is low, morbidity is high; nearly 50% of individuals with CHIKV disease have debilitating long-term symptoms that can intensify with age. In the past 20 years, CHIKV has emerged in several previously non-endemic regions in Asia, Africa, southern Europe, and the Americas, often causing large unpredictable outbreaks. Mpox: Working with partners to reach populations in low- and lower- middle-income countries During 2024, Africa experienced one of the largest and deadliest known mpox outbreaks to date, with the majority of cases occurring in the Democratic Republic of Congo (the DRC). Both the Africa CDC and World Health Organization (WHO) declared a public health emergency in August. License and Manufacturing Agreement We have in 2024 entered into a License and Manu- facturing Agreement for our mpox vaccine with Serum Institute of India (SII). Under the agree- ment, the companies will undertake a technology transfer of the current manufacturing process for the mpox vaccine to SII to enable supply for the Indian market, for which SII obtains the license to sell and distribute the vaccine. Furthermore, upon the relevant regulatory approvals, the agreement enables SII to perform contract manufacturing of mpox vaccine for Bavarian Nordic which expands the manufacturing capacity, ensuring global access even during outbreaks of mpox. Later that month, we signed an agreement with UNICEF for the supply of 1 million doses of mpox vaccine for countries in Africa impacted by the outbreak. Combined with donations by various governments, institutions and Bavarian Nordic, this agreement helped to secure more than 2.5 million doses, thus fulfilling the short-term requirement as expressed by the Africa CDC and allowing an imme- diate response in the affected countries. Through this contract, we have ensured vaccine access with the lowest price for the 77 low- and lower-mid- dle-income countries. To strengthen the response in the African region, we collaborated with global health partners, including WHO, United Nations Children's Fund (UNICEF), Africa CDC, and Gavi to provide our mpox vaccine, which served as an important tool to help control the 2022- 2023 mpox outbreak. In September, our vaccine became the first mpox vaccine to receive prequalification from WHO, a prerequisite for governments and organizations like Gavi and UNICEF to procure and distribute vaccines in African countries. Access to medicine strategy in low-income (LIC) and lower-middle-income countries (LMIC) Clinical initiatives to expand access to groups in need This partnership will significantly expand our supply capability and will allow us to ensure the access of the vaccine to a region of the world where we currently have no presence. During 2024, we took steps to further formalize our access and approach to access to relevant vaccines in our portfolio in LICs and LMICs. The work in 2024 defined the overall strategy approach, defined timelines for next steps and agreed on a govern- ance structure to oversee the access strategy and approach. Children suffer disproportionately from mpox. In September, our mpox vaccine was approved for use against mpox and smallpox in adolescents 12-17 years of age after expedited review with the European Medicines Agency. We are also working with partners, including the Coalition for Epidemic Preparedness Innovations (CEPI) to evaluate the As a first response to the 2024 mpox outbreak in central and eastern Africa, doses were delivered to the Democratic Republic of Congo (the DRC) in early September, initiating the delivery of more than 250,000 doses total donated by the U.S. govern- Bavarian Nordic Annual Report 2024 96 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users Engaging with consumers and end-users IRO Engaging with consumers and end-users safety requirements, and all Good Practice (GxP) standards across our trials, manufacturing and testing. It aligns with regulatory expectations and industry best practices to maintain the highest quality standards. We have ongoing engagement with supranational organizations, NGOs, governments and other partners as described in the Action section above. We consider these business partners as credible proxies for the people potentially in need of one of our vaccines. Our Vice President, Commercial, Rest of World is the most senior position within Bavarian Nordic that has the operational responsibility for this type of engagement. Safety Our pharmacovigilance system supports the ongoing collection, assessment, and notification of relevant safety data. We have procedures in place for reporting adverse events, reactions, and/or product quality complaints, and all our employees are trained in the proper handling of information, should they become aware of an adverse event, reactions, or other potential safety issue related to our products. The safety of vaccine recipients and clinical trial participants is a top priority and is paramount to our business model. Vaccine development and delivery is a highly regu- lated area, with a strong regime of inspections and approvals which set high standards for our work, from early research, preclinical development, clinical trials, product approval, and commercial manufac- turing through distribution. The procedures governing our QMS are accessible to all employees and mandatory training is required to ensure full understanding and adherence. The Senior Vice President of Global Quality serves as the management representative, bearing responsi- bility for the effective implementation of the QMS. This includes achieving defined quality objectives, clearly establishing and communicating roles and responsibilities, and ensuring the provision of adequate resources and authority throughout the organization Our Chief Medical Officer is the most senior position within Bavarian Nordic that has operational respon- sibility engagement. Targets As one of the three KPIs included in our Sustain- ability Linked Loan (SLL) credit facility, we have a target to finalize our “Access to vaccines” strategy directed at low- and lower-middle-income countries by the end of 2024. In 2025, we have a target to define quantitative targets and execute these in the following years. The KPI was set in collaboration with key internal functions, including the Corporate Sustainability department, Finance and Commercial, as well as the banks involved in providing the credit facility. Policies Our commitment to end-user safety is supported through our framework of quality and safety policies and procedures which includes, as applicable: Processes for remediation Efforts to remediate negative impacts for partic- ipants in clinical trials are handled internally or through the CRO, to whom we transfer obligations but maintains oversight and assessment through the standard operating procedure for selection and management of vendors for services in the Devel- opment department. When an adverse event does occur in connection with a clinical trial, the clinical trial participant is advised by the responsible health- care professional. • Good Clinical Laboratory Practice (GCLP) • Good Manufacturing Practice (GMP) • Good Distribution Practice (GDP) • Good Pharmacovigilance Practice (GVP) • Applicable ethical standards Code of Conduct The Bavarian Nordic Code of Conduct acknowledges our responsibility to ensure patient safety. We develop and supply innovative, high-quality prod- ucts, and we require all employees to comply with all relevant laws and regulations governing product quality and safety as well as all requirements for reporting adverse events and product quality complaints. The target for 2024 is completed as our “Access to vaccines” strategy was approved by Executive Management in December 2024. In 2025, we aim to continue with the next steps as defined in our SLL agreement. We follow the regulatory guidelines from the International Council for Harmonisation (ICH), which provides guidelines on safety, quality, and efficacy topics, the Declaration of Helsinki, Good Clinical Practice (GCP). Participants in clinical trials can contact the respec- tive investigators or the CRO. All communications via this channel are addressed through channels established by the investigators, the CRO and in agreement with us, and all such engagements are If our employees become aware of an adverse event or other potential safety issue, they are instructed to report it to the company’s pharmacovigilance team. Our Quality Management System (QMS) is designed to ensure compliance with applicable legislation, Bavarian Nordic Annual Report 2024 97 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users treated in accordance with data privacy laws. The effectiveness of this channel for participants is assessed through mandated regulatory quality and compliance procedures. We have not formalized an external reporting target; Our documented processes include descriptions of roles and responsibilities for the review and approval of promotional material, disease aware- ness (lay public educational material), and other relevant communications. We respect all local laws and regulations with regard to our marketing materials. Where appropriate, our processes include Medical Affairs, Commercial, Regulatory Affairs, Legal and Clinical Safety & Pharmacovigilance review, participation or approval. Additionally, we utilize a system of record for all advertising and promotional materials to ensure appropriate review and that approvals have been obtained, to document the approvals and uses of materials, to conduct periodic reviews, for version control, and to expire and cease use of material that is no longer relevant. We only promote our products consistent with the regulations of each country, and the product or commercial information that is shared with healthcare professionals and patients is scientifi- cally sound, accurate, balanced, fair, objective and substantiated. however, we do have a Safety Committee, work to continuously evaluate our pharmacovigilance program, require pharmacovigilance training for all employees, and routinely assess the safety of our products to appropriately inform regulatory authori- ties, healthcare professionals and the general public about both the risks and benefits of our products Vaccine recipients of marketed products who expe- rience adverse effects can raise concerns through a publicly accessible e-mail, and all communications via this channel are addressed through established procedures and treated in accordance with data privacy laws. The effectiveness of this channel for participants is assessed through mandated regula- tory quality and compliance procedures. We have policies, procedures, and systems in place to ensure that our promotion of pharmaceutical products and other communication activities, including social media activities, comply with all applicable laws and regulations. IRO Responsible marketing practices The pharmaceutical industry is highly regulated regarding product promotion to healthcare profes- sionals (HCPs) and the public. In many countries, prescription-only medicines are not allowed to be promoted to the public. Where it is allowed, we follow high ethical standards. The Code of Conduct applies to all employees, including temporary staff and employees employed on fixed-term contract, to the Executive Manage- ment and the Board of Directors. Third parties acting on behalf of Bavarian Nordic must also adhere to the standards of Code of Conduct which is publicly available on our website. Actions & targets When needed, we update our framework of quality and safety policies and procedures to align with changes made by national health regulations. These processes include all products for which Bavarian Nordic is a distributor and are designed to ensure that we are operating ethically and in compliance with all local rules. We have policies, procedures, and systems in place to ensure that our promotion of pharmaceutical products and other communication activities comply Internal and external audits are also undertaken to ensure the effectiveness of the framework. The Code of Conduct was most recently approved by the Board of Directors in December 2024. Policies with all applicable laws and regulations. All relevant employees in our organization are required to complete “GxP” refresher trainings every 2 years and when the applicable GxP policies, SOPs or guidance are updated, either as part of regulatory requirements or our own initiatives. All employees in our organization are required to complete training in pharmacovigilance, which is managed in the quality management system. Code of Conduct The Bavarian Nordic Code of Conduct is committed to compliance with all applicable legal and regu- latory requirements, including promotion of our products. Policies Engaging with consumers and end-users Our approach to responsible marketing to HCPs and the public is anchored in our Code of Conduct, which is supported by documented processes and proce- dures for marketing approval in the countries where we operate. Marketing and engagements with consumers and end-users are highly regulated in the pharmaceu- tical industry, and we follow and apply required standards and procedures to manage and govern such interactions and engagements. The disclosures throughout this section on consumers and end-users We communicate to healthcare professionals about our products to help healthcare professionals make the best treatment choice for their patients. Bavarian Nordic Annual Report 2024 98 General disclosures Environmental Social Governance Appendix Own workforce Workers in the value chain Consumers and end-users describe in greater detail how such processes and engagements are managed in relation to impacts. • Relevant third parties received appropriate training, where applicable • Employees were trained on the Code of Conduct Processes for remediation We have not developed any formalized targets due to the differences in local promotional regulations and the evolving regulatory landscape. However, we require that the respective materials review committees periodically re-review previously approved marketing materials to ensure that they remain truthful and non-misleading, and to update or cease use of the materials as appropriate. HCPs and members of the public (in countries where direct-to-consumer advertising is permitted) have a range of options to raise concerns about our marketing and promotions activities. These include: • The Bavarian Nordic Ethics Hotline. See Business Conduct. • Regulatory authorities such as the U.S. Food and Drug Administration (FDA), Health Canada, the European Medicines Agency and the national competent authorities in each member state where applicable. • National advertising oversight bodies. Actions & targets To ensure understanding of the Code of Conduct, we provide annual training and communication to employees worldwide. Training on our processes for review and approval of marketing materials is mandatory for those partici- pating in the material creation, review, and approval processes. In 2024: • Relevant employees received training on marketing materials review Bavarian Nordic Annual Report 2024 99 General disclosures Environmental Social Governance Appendix Governance Bavarian Nordic Annual Report 2024 100 General disclosures Business conduct Environmental Social Governance Appendix programs, and conduct annual assessments to measure compliance and identify areas for improve- ment. Material impacts and risks Business conduct G1 IRO Reported violations of the Code of Conduct and applicable laws and regulations are handled according to the Speak-Up Policy. The Ethics Hotline enables confidential and anonymous reporting of suspected violations of the Code of Conduct and applicable laws and regulations. Claims reported to the Ethics Hotline are subject to an initial assurance review by outside counsel and Legal & Compliance which has an inde- pendent reporting line to the Board through FRAC. Reports are managed by external counsel or qualified lawyers in Legal & Compliance, data is stored in a secure and restricted system, and quarterly reporting is anonymized to secure the integrity of the process and to protect whistleblowers and those cooperating with investigators. Anti-coruption and corporate culture As we undergo high growth and rapidly onboard new employees, it is central to maintain a healthy and sound corporate culture and effective collabo- ration to prevent negative impacts on employees. We establish our corporate culture through business conduct policies, including the Code of Conduct, Anti-Corruption Policy, Third-Party Intermediary Policy, and Speak-Up Policy. These policies establish an obligation to report suspected violations and apply to all employees, Executive Management, the Board of Directors, as well as third parties acting on our behalf. Functions-at-risk identified in the annual Global Business Ethics Compliance Risk Assessment and their management are trained on the Anti-Corruption Procedure. Ad hoc training is provided as necessary. Trainings include read & understand campaigns, and face-to-face or virtual trainings. Policies The Code of Conduct, Anti-Corruption Policy, and Speak-Up Policy prohibit corruption and bribery and establish an obligation to report suspected violations and apply to all employees, Executive Management, the Board of Directors, and third parties acting on our behalf. The Global Business Ethics Compliance Program includes annual monitoring activities including third parties and Health Care Professionals. These efforts are key in an industry where inter- actions with government officials and healthcare professionals are a prerequisite for doing business, as breaches of anti-corruption and anti-bribery laws could result in, litigation, severe fines, and charges. To evaluate our corporate culture, we regularly review and update our policies and training The Ethics Hotline enables confidential and anony- mous reporting of suspected violations of the Code Bavarian Nordic Annual Report 2024 101 General disclosures Business conduct Environmental Social Governance Appendix of Conduct and applicable laws and regulations, including corruption and bribery. Claims reported to the Ethics Hotline are subject to an initial assurance review by outside counsel and Legal & Compli- ance which has an independent reporting line to the Board of Directors through the Finance, Risk & Audit Committee (FRAC). The Global Business Ethics Compliance Committee and FRAC receive anonymized reports on received compliance concerns. the Global Business Ethics Compliance Program, ensuring that business conduct aligns with our ethical standards and regulatory requirements. Our Chief Compliance Officer, who reports directly to our CEO and independently to the FRAC, is responsible for implementing the compliance program and heads the Legal & Compliance Function. conducted under stringent guidelines to ensure their levels of well-being. detailing the responsibilities of personnel, biolog- ical protection and safety levels, and procedures for entering the facility. Preclinical and batch release testing are being performed in our in-house facilities. These activi- ties are governed by a set of internal requirements, policies, standard operating procedures (SOPs), and mandatory national and international guidelines and regulation. We obtain a specific permit related to animal welfare as part of any study. This permit is reviewed by the appropriate authority to ensure that all formal requirements are met and that appropriate technologies and methods are used. We are, for batch-release protocols, exploring the opportunity to replace in vivo potency testing with in vitro potency testing. Our policies enforce a daily routine check to ensure proper living conditions for mice, including equip- ment checks and animal health inspections, with a focus on maintaining welfare in housing conditions. Our Executive Management oversee day-to-day oper- ations and ensuring that business conduct policies are effectively implemented across all levels of the organization. They are responsible for embedding ethical practices into our operational processes and ensuring compliance with regulatory standards. All procedures are subject to both internal and external approvals to ensure that protocols are adhered to while emphasizing careful handling and proper techniques. This applies to both preclinical studies and tests as part of our batch release proce- dures – both of which are required from a regulatory perspective All employees, Executive Management, and the Board receive training on the Code of Conduct, Anti-Corruption Policy, and Speak-Up Policy. All functions-at-risk identified in the annual Global Business Ethics Compliance Risk Assessment and their management are trained on the Anti-Corruption Procedure. Ad hoc training is provided as necessary. Trainings include read & understand campaigns, and face-to-face or virtual trainings. The expertise of these bodies in business conduct matters is extensive. Members of the Executive Management and the Board of Directors bring signif- icant experience in governance, compliance, and ethical business practices. This collective expertise ensures that we adhere to high standards of integrity and transparency in all its activities. Our commitment to animal welfare is reflected in our research and development processes, ensuring that the animals in our care are treated with respect and consideration. Our internal policies relate to animal welfare for research and development activities and batch release testing. Our Vice President, Research is accountable for implementation of the policies. Code of Conduct Our Code of Conduct acknowledges the ethical and humane treatment of animals required for scien- tific investigation as our responsibility. We value the 3R-principle (Reduce, Replace & Refine animal testing) and all applicable regulations with internal and external evaluation restricting in vivo testing to the absolute minimum needed to ensure safe and efficacious treatments. No incidents of corruption or bribery During the reporting period there have been no reported incidents of corruption or bribery, no confirmed incidents, no convictions or fines, and no actions taken as a result. IRO Animal welfare Policies The role of the administrative, We are committed to high standards of animal welfare in our research, development, and batch release testing activities. The use of animals in our studies is a regulatory necessity driven by the need and requirement to develop safe and effective vaccines. Our work with animals is regulated and management and supervisory bodies The administrative, management, and supervisory bodies at Bavarian Nordic play a crucial role in providing oversight and management of business conduct matters. The Board of Directors and the Finance, Risk & Audit Committee (FRAC) oversee To ensure proper conduct in our research activities, we have several policies which are described here in aggregate. When conducting our preclinical trials, we care for the welfare of animals, and all our animal handling staff is thoroughly trained in best practices and is regu- larly evaluated to make sure they possess the right competences and understanding of the well-being of animals in our care. Our animal facility policy covers general aspects such as specific premises, access control, and hygiene, Bavarian Nordic Annual Report 2024 102 General disclosures Environmental Social Governance Appendix Sustainability statements appendix Statement on due diligence Content index of material disclosure requirements ESRS 2 GOV-4 - Appendix table 1 ESRS 2 IRO-2 - Appendix table 2 Core elements of due diligence Page List of material disclosure requirements ESRS 2 – General disclosures Page a) Embedding due diligence in governance, strategy and business model 43, 44, 53-59 BP-1 General basis for preparation of the sustainability statements 42 42 43 b) Engaging with affected stakeholders in all key steps of the due diligence c) Identifying and assessing adverse impacts 43-48 49-59 BP-2 Disclosures in relation to specific circumstances GOV-1 The role of the administrative, management, and supervisory bodies Information provided to, and sustainability matters addressed by the under- taking’s administrative, management and supervisory bodies GOV-2 GOV-3 GOV-4 GOV-5 SBM-1 SBM-2 43, 44 44 Integration of sustainability-related performance in incentive schemes Statement on due diligence d) Taking actions to address those adverse impacts 63, 64, 69, 71, 73, 84, 85, 88, 91-93, 96, 98, 99 103 45 Risk management and internal controls over sustainability reporting Strategy, business model and value chain 6 e) Tracking the effectiveness of these efforts and communicating 64-66, 69, 73, 74, 83, 84, 85, 86, 88, 92, 93, 97-99 Interests and views of stakeholders 45-48 Material impacts, risks and opportunities and their interaction with strategy and business model SBM-3 IRO-1 IRO-2 53-59 49-52 53 Description of the processes to identify and assess material impacts, risks and opportunities Disclosure requirements in ESRS covered by the undertaking’s sustainability statements E1 – Climate change ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes 44 E1-1 Transition plan for climate change mitigation 61, 62 Material impacts, risks and opportunities and their interaction with strategy and business model ESRS 2 SBM-3 54, 62, 63 Description of the processes to identify and assess material climate-related impacts, risks and opportunities ESRS 2 IRO-1 51, 52 63 E1-2 Policies related to climate change mitigation and adaptation Bavarian Nordic Annual Report 2024 103 General disclosures Environmental Social Governance Appendix List of material disclosure requirements Page List of material disclosure requirements Page E1-3 E1-4 E1-5 E1-6 E1-7 E1-8 Actions and resources in relation to climate change policies Targets related to climate change mitigation and adaptation Energy consumption and mix 63, 64 64, 65 65 E4-2 E4-3 E4-4 E4-5 Policies related to biodiversity and ecosystems 71 Actions and resources related to biodiversity and ecosystems Targets related to biodiversity and ecosystems 71 71 Gross Scopes 1, 2, 3 and Total GHG emissions 66 Impact metrics related to biodiversity and ecosystems change Not material GHG removals and GHG mitigation projects financed through carbon credits Not material Anticipated financial effects from biodiversity and ecosystem-related risks and opportunities E4-6 Phase-in Internal carbon pricing Not material Anticipated financial effects from material physical and transition risks and potential climate-related opportunities E1-9 Phase-in E5 – Resource use and circular economy Description of the processes to identify and assess material resource use and IRO-1 E5-1 E5-2 E5-3 E5-4 E5-5 circular economy-related impacts, risks and opportunities Policies related to resource use and circular economy Actions and resources related to resource use and circular economy Targets related to resource use and circular economy Resource inflow 49, 50, 52 73 E2 - Pollution Description of the processes to identify and assess material pollution-related impacts, risks and opportunities ESRS 2 IRO-1 E2-1 49, 50, 52 73 Policies related to pollution 68, 69 73 E2-2 Actions and resources related to pollution Targets related to pollution 69 Not material 72, 73, 74 E2-3 69 Resource outflows E2-4 Pollution of air, water and soil Not material 69 Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities E5-6 Phase-in E2-5 Substances of concern and substances of very high concern Anticipated financial effects from pollution-related impacts, risks and oppor- tunities E2-6 Phase-in S1 – Own workforce ESRS 2 SBM-2 Interests and views of stakeholders 45, 46, 47 E4 - Biodiversity and ecosystems Transition plan and consideration of biodiversity and ecosystems in strategy and business model Material impacts, risks and opportunities and their interaction with strategy and business mode ESRS 2 SBM-3 S1-1 56, 84, 85, 87 81, 84, 85, 87 82, 84, 87 E4-1 71 Policies related to own workforce Material impacts, risks and opportunities and their interaction with strategy and business model S1-2 Processes for engaging regarding impacts ESRS 2 SBM-3 ESRS 2 IRO-1 55, 71 49, 50, 52 S1-3 Processes to remediate negative impacts and raise concerns Taking action on material impacts on own workforce 82, 84, 85, 88 84, 85, 88 Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks and opportunities S1-4 Bavarian Nordic Annual Report 2024 104 General disclosures Environmental Social Governance Appendix List of material disclosure requirements Page List of material disclosure requirements S4 – Consumers & End-Users Page S1-5 Targets related to managing material impacts, risks and opportunities Characteristics of the undertaking’s employees 84, 85, 88 83 S1-6 ESRS 2 SBM-2 Interests and views of stakeholders 45, 46, 47 S1-7 Characteristics of non-employee workers in the undertaking’s own workforce Phase-in Material impacts, risks and opportunities and their interaction with strategy and business model ESRS 2 SBM-3 S4-1 57, 95, 97, 98 95, 97, 98 S1-8 Collective bargaining coverage and social dialogue Diversity metrics Not material Policies related to consumers and end-users S1-9 86 S4-2 Processes for engaging with consumers and end-users about impacts 96, 97, 98 S1-10 S1-11 S1-12– S1-13 S1-14 S1-15 S1-16 S1-17 Adequate wages Not material Phase-in Not material Phase-in 88 Processes to remediate negative impacts and channels for consumers and end-users to raise concerns Social protection S4-3 S4-4 S4-5 97, 99 Persons with disabilities Actions on material impacts, risks and opportunities 96, 98, 99 97, 98, 99 Training and skills development metrics Health and safety metrics Targets related to managing material impacts, risks and opportunities Work-life balance metrics Phase-in 86 G1 – Business Conduct Compensation metrics (pay gap and total compensation) Incidents, complaints and severe human rights impacts ESRS 2 GOV-1 The role of the administrative, supervisory and management bodies 43, 102 88 Description of the processes to identify and assess material impacts, risks and opportunities ESRS 2 IRO-1 G1-1 49, 50, 52 101, 102 S2 – Workers in the Value Chain Corporate culture and Business conduct policies and corporate culture Management of relationships with suppliers Prevention and detection of corruption and bribery Confirmed incidents of corruption or bribery Political influence and lobbying activities Payment practices ESRS 2 SBM-2 Interests and views of stakeholders 45, 46, 47 G1-2 Not material 101, 102 Material impacts, risks and opportunities and their interaction with strategy and business model G1-3 ESRS 2 SBM-3 S2-1 56, 91, 92 90, 91 G1-4 102 Policies related to value chain workers G1-5 Not material Not material S2-2 Processes for engaging with value chain workers about impacts 91, 92 G1-6 Processes to remediate negative impacts and channels for value chain workers to raise concerns S2-3 S2-4 S2-5 91, 92 Actions on material impacts, risks and opportunities 91, 92, 93 92, 93 Targets related to managing material impacts, risks and opportunities Bavarian Nordic Annual Report 2024 105 General disclosures Environmental Social Governance Appendix Datapoints derived from EU legislation Disclosure requirement Datapoint SFDR reference Pillar reference Benchmark Regulation reference EU Climate Law reference Page number ● ● ● ESRS 2 GOV-1 ESRS 2 GOV-1 ESRS 2 GOV-4 ESRS 2 SBM-1 ESRS 2 SBM-1 ESRS 2 SBM-1 ESRS 2 SBM-1 ESRS E1-1 Board's gender diversity paragraph 21 (d) 34 Percentage of board members who are independent paragraph 21 (e) Statement on due diligence paragraph 30 37 ● ● ● ● 103 ● ● ● ● ● Involvement in activities related to fossil fuel activities paragraph 40 (d) i Involvement in activities related to chemical production paragraph 40 (d) ii Involvement in activities related to controversial weapons paragraph 40 (d) iii Involvement in activities related to cultivation and production of tobacco paragraph 40 (d) iv Transition plan to reach climate neutrality by 2050 paragraph 14 Undertakings excluded from Paris-aligned Benchmarks paragraph 16 (g) GHG emission reduction targets paragraph 34 Not material Not material Not material Not material 61, 62 ● ● ● ● ● ● ESRS E1-1 61 ● ● ● ● ● ESRS E1-4 64, 65 65 ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) paragraph 38 Energy consumption and mix paragraph 37 ESRS E1-5 65 ESRS E1-5 Energy intensity associated with activities in high climate impact sectors paragraphs 40 to 43 Gross Scope 1, 2, 3 and Total GHG emissions paragraph 44 65 ● ● ● ESRS E1-6 66 ● ESRS E1-7 GHG removals and carbon credits paragraph 56 Not material Phase-in Phase-in ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks paragraph 66 ● ● ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk paragraph 66 (a) ESRS E1-9 Location of significant assets at material physical risk paragraph 66 (c). ESRS E1-9 ESRS E1-9 ESRS E2-4 Breakdown of the carrying value of its real estate assets by energy-efficiency classes paragraph 67 (c). Degree of exposure of the portfolio to climate- related opportunities paragraph 69 Phase-in ● Phase-in ● Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, paragraph 28 Not material ● ● ● ● ESRS E3-1 ESRS E3-1 ESRS E3-1 ESRS E3-4 Water and marine resources paragraph 9 Dedicated policy paragraph 13 Not material Not material Not material Not material Sustainable oceans and seas paragraph 14 Total water recycled and reused paragraph 28 (c) Bavarian Nordic Annual Report 2024 106 General disclosures Environmental Social Governance Appendix Disclosure requirement Datapoint SFDR reference Pillar reference Benchmark Regulation reference EU Climate Law reference Page number ● ● ● ● ● ● ● ● ● ● ESRS E3-4 Total water consumption in m3 per net revenue on own operations paragraph 29 E4 paragraph 16 (a) i Not material ESRS 2- IRO 1 ESRS 2- IRO 1 ESRS 2- IRO 1 ESRS E4-2 71 71 71 71 71 71 74 73 81 E4 paragraph 16 (b) E4 paragraph 16 (c) Sustainable land / agriculture practices or policies paragraph 24 (b) Sustainable oceans / seas practices or policies paragraph 24 (c) Policies to address deforestation paragraph 24 (d) Non-recycled waste paragraph 37 (d) ESRS E4-2 ESRS E4-2 ESRS E5-5 ESRS E5-5 Hazardous waste and radioactive waste paragraph 39 Risk of incidents of forced labour paragraph 14 (f) ESRS 2- SBM3 - S1 ● ESRS S1-1 ESRS S1-1 Human rights policy commitments paragraph 20 81 81 ● Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21 ● ● ● ● ● ● ● ● ● ● ESRS S1-1 ESRS S1-1 ESRS S1-3 ESRS S1-14 ESRS S1-14 ESRS S1-16 ESRS S1-16 ESRS S1-17 ESRS S1-17 Processes and measures for preventing trafficking in human beings paragraph 22 Workplace accident prevention policy or management system paragraph 23 Grievance/complaints handling mechanisms paragraph 32 (c) 81 87 82 ● ● Number of fatalities and number and rate of work-related accidents paragraph 88 (b) and (c) Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e) Unadjusted gender pay gap paragraph 97 (a) 88 Phase-in 86 Excessive CEO pay ratio paragraph 97 (b) 86 Incidents of discrimination paragraph 103 (a) 88 ● Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a) Significant risk of child labour or orced labour in the value chain paragraph 11 (b) 81 ESRS 2- SBM3 – S2 90 ● ● ● ESRS S2-1 ESRS S2-1 ESRS S2-1 Human rights policy commitments paragraph 17 91 Policies related to value chain workers paragraph 18 90,91 91 ● Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19 Bavarian Nordic Annual Report 2024 107 General disclosures Environmental Social Governance Appendix Disclosure requirement Datapoint SFDR reference Pillar reference Benchmark Regulation reference EU Climate Law reference Page number ● ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19 91 ● ● ● ● ● ● ● ● ● ● ● ESRS S2-4 ESRS S3-1 ESRS S3-1 ESRS S3-4 ESRS S4-1 ESRS S4-1 ESRS S4-4 ESRS G1-1 ESRS G1-1 ESRS G1-4 ESRS G1-4 Human rights issues and incidents connected to its upstream and downstream value chain paragraph 36 Human rights policy commitments paragraph 16 91 Not material Not material Not material 94 ● ● Non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines paragraph 17 Human rights issues and incidents paragraph 36 Policies related to consumers and end-users paragraph 16 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17 Human rights issues and incidents paragraph 35 94 94 United Nations Convention against Corruption paragraph 10 (b) Protection of whistle-blowers paragraph 10 (d) Not material Not material 102 ● Fines for violation of anti-corruption and anti-bribery laws paragraph 24 (a Standards of anti- corruption and anti- bribery paragraph 24 (b) 102 Bavarian Nordic Annual Report 2024 108 General disclosures Environmental Social Governance Appendix EU Taxonomy — nuclear and fossil gas related activities Nuclear energy related activities Yes/No 1 2 The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. No The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. No No 3 The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. Fossil gas related activities 4 5 The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. No No The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. 6 The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. No Bavarian Nordic Annual Report 2024 109 General disclosures Environmental Social Governance Appendix Key terms and abbreviations The abbreviations and respective definitions apply to the sustainability statement. Corporate Sustainability Reporting Directive. They define the requirements for companies to disclose sustainability-related information, covering environ- mental, social, and governance factors. Opportunity 3R principles Refers to a potential positive effect that sustainabili- ty-related factors can have on a company's financial performance. Reduce, Reuse, Recycle are key guidelines for sustainable waste management aimed at mini- mizing environmental impact. • Terms with a single "" are terms and/or abbrevi- ations which related to our company • Terms with a double "" relate to industry specific terms or abbreviations • All others relate to CSRD and ESRS related abbre- viations and terms FRAC* NFRD CMOs Finance Risk and Audit Committee is a governance body within an organization responsible for over- seeing financial reporting, risk management, and audits. Non-Financial Reporting Directive is an EU regulation that requires large companies to disclose non-finan- cial information related to environmental, social, and governance factors. Contract Manufacturing Organizations are third- party companies that produce products on behalf of another company. CROs IROs Subject matter expert Is a professional with knowledge and expertise in a specific field or industry. Contract Research Organizations are companies that provide outsourced research services for another company. CSRD Impacts, risks, and opportunities refer to the key sustainability-related impacts, risks, and opportuni- ties identified through a double materiality assess- ment. Corporate Sustainability Reporting Directive is an EU regulation that mandates companies to disclose detailed sustainability information, including envi- ronmental, social, and governance impacts, risks, and opportunities. Sustainability matter EHS Refers to any environmental, social, or governance (ESG) issue that is relevant to a company's opera- tions, value chain, or stakeholders. These matters can include topics, sub-topics and sub-sub-topics. Environmental, Health and Safety. Impact Refers to the positive or negative effects that a company’s activities, products, operations have on the environment or society. ERM* DMA Enterprise Risk Management is a structured approach used by organizations to identify, assess, manage, and monitor risks that could impact their operations, strategy, and financial performance. Double materiality assessment is a process that evaluates both how sustainability issues impact a company’s financial performance and how the company’s activities affect the environment and society. TCFD Risk Task Force on Climate-related Financial Disclosures is a framework for identifying companies' climate-re- lated financial risks and opportunities. Refers to a potential negative effect that sustainabil- ity-related factors may have on a company's finan- cial performance. ESRS European Sustainability Reporting Standards are a set of reporting standards developed under the Bavarian Nordic Annual Report 2024 110 General disclosures Environmental Social Governance Appendix GHG Protocol IUCN Red List PSCI UN Global Compact or UNGC * The Greenhouse Gas Protocol is the global standard for measuring, managing, and reporting green- house gas (GHG) emissions. It provides guidelines and frameworks for organizations to track their carbon footprint and develop strategies for reducing emissions. The International Union for Conservation of Nature Red List is the global indicator on the conservation status of species, assessing their risk of extinction from Least Concern to Extinct. A species classified as Vulnerable faces a high risk of extinction in the wild due to factors like habitat loss, climate change, pollution, or overexploitation, indicating a signifi- cant population decline that requires conservation efforts to prevent further deterioration. Pharmaceutical Supply Chain Initiative is a non-profit industry organization focused on promoting respon- sible supply chain management in the pharmaceu- tical and healthcare industries. The UN Global Compact is a United Nations initiative that encourages businesses worldwide to adopt sustainable and socially responsible practices. It is based on ten principles covering human rights, labor, environment, and anti-corruption, helping companies align their strategies with global sustain- ability goals. It also supports the UN Sustainable Development Goals (SDGs), which are 17 global objectives designed to address climate change, poverty, inequality, and environmental protection by 2030. SBT Science-Based Target is a specific, measurable emissions reduction target set by a company to align with climate science and the goals of the Paris Agreement. GO Guarantee of Origin is an energy certificate that verifies that a specific amount of electricity was produced from renewable sources. MSL Medical Science Liaison is a scientific expert who acts as a bridge between pharmaceutical or biotech companies and healthcare professionals. SBTi GxP Science Based Targets initiative is an independent organization that provides guidance, validation, and certification for companies setting Science-Based Targets to ensure they meet credible climate science criteria. GxP is a general abbreviation for the Good "x" Prac- tice which are quality guidelines and regulations which apply to the pharmaceutical sector (amongst other sectors). The "x" stands for the various fields for example Good Clinical Practice (GCP), Good Manufacturing Practice (GMP), etc. NACE code Nomenclature of Economic Activities is a European industry classification system used to categorize businesses based on their economic activities. It is used for statistical, regulatory, and administrative purposes within the EU. SLL Sustainability-Linked Loan is a type of loan where the interest rate and terms are tied to the borrow- er's sustainability performance. HCPs* Healthcare Professionals are individuals who provide medical care, treatment, and health-related services to patients. PPA Power Purchase Agreement is a long-term contract between an energy producer and a buyer. It defines the terms for purchasing electricity. SSP Shared Socioeconomic Pathways are scenarios used in climate research to describe possible future global developments based on different economic, social, and environmental trends. Bavarian Nordic Annual Report 2024 111 Financial statements Contents 113 Financial statements – Group 120 Notes 170 Financial statements – Parent Company 175 Notes 190 Statement by the Board of Directors and Executive Management on the Annual Report 194 Independent auditor’s report Bavarian Nordic Annual Report 2024 112 Financial statements – Group Contents Notes 1 Financial statements Consolidated income statement Material accounting policies Key accounting estimates and judgments Revenue 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Trade receivables 2 Other receivables Consolidated statement of comprehensive income Consolidated statement of cash flow 3 Prepayments 4 Production costs Other liabilities Consolidated statement of financial position – Assets Consolidated statement of financial position – Equity and liabilities Consolidated statement of changes in equity 5 Sales and distribution costs Research and development costs Administrative costs Financial risks and financial instruments Deferred consideration 6 7 Debt to credit institutions 8 Staff costs Retirement benefit obligations Lease liabilities 9 Depreciation, amortization and impairment losses Fees to auditor appointed at the annual general meeting Financial income 10 11 12 13 14 15 16 17 18 Prepayment from customers Share-based payment Financial expenses Acquisition of businesses Tax for the year Impact from write-down of ABNCoV2 Contingent liabilities and other contractual obligations Related party transactions Significant events after the balance sheet date Approval of the consolidated financial statements Earnings per share (EPS) Intangible assets Property, plant and equipment Right-of-use-assets Inventories Bavarian Nordic Annual Report 2024 113 Financial statements – Group Financial statements – Parent Company Statements Consolidated statement of comprehensive income For the years ended December 31, 2024 and 2023 Consolidated income statement For the years ended December 31, 2024 and 2023 DKK thousand Note 2024 2023 DKK thousand Note 2024 2023 Revenue 3 5,716,206 2,897,448 7,062,340 2,459,294 Net result for the year 987,977 1,475,189 Production costs Gross profit 4,8,9 Other comprehensive income 2,818,758 4,603,046 Remeasurements of defined benefit plans Income tax 26 13 (17,390) 4,171 (32,555) 4,505 Sales and distribution costs Research and development costs Administrative costs 5,8 6,8,9 500,336 862,510 331,579 2,228,080 540,848 Items that will not be reclassified to the income statement (13,219) (28,050) 7,8,9,10 516,142 Recycled to financial items (45,887) (31,894) Total operating costs 1,878,988 3,100,507 Change in fair value of financial instruments entered into to hedge future cash flows (29,203) (8,927) 45,887 34,489 48,482 Income before interest and tax (EBIT) 939,770 1,502,539 Exchange rate adjustments on translating foreign operations Items that will be reclassified to the income statement (84,017) Financial income 11 12 150,065 118,478 112,784 132,380 Financial expenses Other comprehensive income after tax Total comprehensive income for the year (97,236) 890,741 20,432 Income before company tax 971,357 1,482,943 1,495,621 Tax on income for the year 13 (16,620) 7,754 Net result for the year 987,977 1,475,189 Earnings per share (EPS) - DKK Basic earnings per share of DKK 10 Diluted earnings per share of DKK 10 14 14 12.6 12.6 19.2 19.2 Bavarian Nordic Annual Report 2024 114 Financial statements – Group Financial statements – Parent Company Statements Consolidated statement of cash flow For the years ended December 31, 2024 and 2023 DKK thousand Note 2024 2023 DKK thousand Note 2024 2023 Net result for the year 987,977 1,475,189 Investments in product rights 15,24 15 (1,586,633) (18,343) (82,661) - (298,117) (536,763) (142,525) (1,831,573) (38,706) Investments in other intangible assets Investments in property, plant and equipment Cash used for acquisition of businesses Investments in financial assets Investments in securities Adjustment for non-cash items: Financial income 16 11 12 (150,065) 118,478 (16,620) 663,375 78,672 (112,784) 132,380 7,754 30 Financial expenses (29,766) (1,448,447) 1,294,987 (1,870,863) Tax on income for the year Depreciation, amortization and impairment Share-based payment (10,834) 9 1,111,504 55,477 Disposal of securities 1,912,954 (945,564) 29 Cash flow from investment activities Changes in inventories (683,573) 617,864 19,636 (599,015) (1,345,427) 24,744 Changes in receivables Payment on loans 25 25 25 (1,921) (1,105,545) Changes in provisions Proceeds from loans - (41,639) 126,794 - 240,000 (34,270) 45,517 Changes in current liabilities Cash flow from operations (operating activities) 222,987 1,858,731 368,739 1,118,561 Repayment of lease liabilities Proceeds from warrant programs exercised Proceeds from capital increase Costs related to issue of new shares Purchase of treasury shares 1,641,913 (42,795) (8,988) Received financial income Paid financial expenses 141,146 (32,188) 63,260 (52,412) - (27,459) 55,775 Paid company taxes (17,857) (10,203) Cash flow from financing activities 735,832 Cash flow from operating activities 1,949,832 1,119,206 Cash flow of the year 134,744 909,474 Cash and cash equivalents as of January 1 Currency adjustments 1,477,234 11,512 575,407 (7,647) Cash and cash equivalents as of December 31 1,623,490 1,477,234 Bavarian Nordic Annual Report 2024 115 Financial statements – Group Financial statements – Parent Company Statements Consolidated statement of financial position – Assets December 31, 2024 and 2023 DKK thousand Note 2024 2023 DKK thousand Note 2024 2023 Non-current assets Current assets Inventories Product rights 4,660,426 1,286,782 343,619 21,371 4,791,442 1,286,749 - 18 19 2,327,309 1,643,736 Acquired rights and development in progress Developed production processes Software Trade receivables Tax receivables Other receivables Prepayments 1,175,744 928 1,778,104 84 12,443 391,102 20 21 43,665 95,136 Intangible assets in progress Intangible assets 18,694 64,324 18,510 15 6,330,892 6,481,736 Receivables 1,284,661 1,891,834 Land and buildings 939,006 18,316 987,013 25,047 Securities 23 551,538 1,623,490 2,175,028 390,247 1,477,234 1,867,481 Leasehold improvements Cash and cash equivalents Securities, cash and cash equivalents Plant and machinery 417,210 412,674 Fixtures and fittings, other plant and equipment Assets under construction 626,376 159,660 2,160,568 696,060 206,721 2,327,515 Total current assets Total assets 5,786,998 5,403,051 Property, plant and equipment 16 17 14,405,864 14,353,213 Right-of-use assets 81,899 125,170 Other receivables Prepayments 20 21 9,086 36,421 45,507 11,185 4,556 Financial assets 15,741 Total non-current assets 8,618,866 8,950,162 Bavarian Nordic Annual Report 2024 116 Financial statements – Group Financial statements – Parent Company Statements Consolidated statement of financial position – Equity and liabilities December 31, 2024 and 2023 DKK thousand Note 2024 2023 DKK thousand Note 2024 2023 Equity Share capital Treasury shares Retained earnings Other reserves Equity 788,548 (2,843) 780,978 (1,537) Deferred consideration Debt to credit institutions Lease liabilities 24 25 27 28 1,081,465 2,074 1,360,133 1,913 10,434,197 188,659 9,330,002 230,489 39,470 44,633 - Prepayment from customers Trade payables 131,408 1,045,134 - 11,408,561 10,339,932 954,142 7,205 Company tax Liabilities Other liabilities 22 497,457 2,797,008 419,843 2,787,869 Deferred consideration Debt to credit institutions Retirement benefit obligations Deferred tax liabilites Lease liabilities 24 25 26 13 27 - 13,053 113,589 - 1,016,856 15,135 Current liabilities 80,732 Total liabilities 2,997,303 4,013,281 29,068 Total equity and liabilities 14,405,864 14,353,213 73,653 200,295 83,621 Non-current liabilities 1,225,412 Bavarian Nordic Annual Report 2024 117 Financial statements – Group Financial statements – Parent Company Statements Consolidated statement of changes in equity December 31, 2024 Reserves Reserves for Share capital Treasury shares Retained earnings for currency adjustment cash flow Share-based DKK thousand hedge payment Equity The share capital comprises a total of 78,854,857 shares of DKK 10 as of December 31, 2024 (78,097,834 shares). The shares are not divided into share classes, and each share carries one vote. Equity as of January 1, 2024 780,978 (1,537) 9,330,002 10,932 45,887 173,670 10,339,932 Comprehensive income for the year Net result for the year - - - - - - 987,977 (13,219) 974,758 - (8,927) (8,927) - (75,090) (75,090) - - - 987,977 (97,236) 890,741 Treasury shares In May 2024, the Board of Directors decided to launch a share buy-back program, under which the Company bought back 162,288 of its own shares (43,954 shares in 2023). The purpose of the share buy-back program was to meet the Company's obligations arising from the share-based incentive program for the Executive Management and the Board of Directors. Under the share-based incentive program, payment of half of the achieved bonus for 2023 for members of the Executive Management are converted to restricted stock units for a value corresponding to half of the achieved bonus. As part of the long-term incentives Executive Management are also granted performance restricted stock units. The restricted stock units will be released to the Exec- utive Management 3 years after grant. This to further increase the long-term shared interests between the Executive Management and the Company's share- holders. The Board of Directors is granted restricted stock units corresponding to 50% of the annual fee (excl. committee fee). The vesting period for those restricted stock units is also 3 years. Treasury shares represent 0.36% (0.16%) of the total share capital. For further information about share based payment see note 29. Other comprehensive income Total comprehensive income for the year Transactions with owners Share-based payment - - - 147,806 474 - - - - - - - - - - - - - - 78,665 (28,582) (474) - 78,665 126,794 - Warrant programs exercised Warrant programs expired 7,570 - - - Costs related to issue of new shares Purchase of treasury shares Transfer regarding restricted stock units Total transactions with owners - - (112) (112) - - (1,623) 317 (25,836) 7,105 - (27,459) - (7,422) 42,187 7,570 (1,306) 129,437 177,888 Equity as of December 31, 2024 788,548 (2,843) 10,434,197 2,005 (29,203) 215,857 11,408,561 Bavarian Nordic Annual Report 2024 118 Financial statements – Group Financial statements – Parent Company Statements Consolidated statement of changes in equity December 31, 2023 Reserves for Reserves for currency adjustment fair value Share capital Treasury shares Retained earnings of financial Share-based instruments The share capital comprises a total of 78,097,834 shares of DKK 10 as of December 31, 2023 (70,735,376 shares). The shares are not divided into share classes, and each share carries one vote. DKK thousand payment Equity Equity as of January 1, 2023 707,354 (1,463) 6,300,575 (23,557) 31,894 135,184 7,149,987 Comprehensive income for the year Net result for the year Rules on changing Articles of Association Changing the Articles of Association requires that the resolution passes by at least 2/3 of the votes as well as 2/3 of the voting capital represented. - - - - - - 1,475,189 (28,050) - 34,489 34,489 - 13,993 13,993 - - - 1,475,189 20,432 Other comprehensive income Total comprehensive income for the year 1,447,139 1,495,621 Transactions with owners Share-based payment - - - 54,856 - - - - - - - - - - - - - - - - 58,677 58,677 45,517 - Warrant programs exercised 3,156 - - (12,495) Warrant programs expired - 1,276 (1,276) Capital increase through private placement Costs related to issue of new shares Purchase of treasury shares 70,468 - 1,571,445 (42,795) (8,548) - 1,641,913 (42,795) (8,988) - - - - - - - (440) 366 (74) Transfer regarding restricted stock units Total transactions with owners 6,054 (6,420) 38,486 73,624 1,582,288 1,694,324 Equity as of December 31, 2023 780,978 (1,537) 9,330,002 10,932 45,887 173,670 10,339,932 Transactions on the share capital DKK thousand 2024 2023 2022 2021 2020 Share capital as of January 1 780,978 707,354 704,684 584,501 323,891 Issue of new shares 7,570 73,624 2,670 120,183 260,610 Share capital as of December 31 788,548 780,978 707,354 704,684 584,501 Bavarian Nordic Annual Report 2024 119 Financial statements – Group Financial statements – Parent Company Statements Note 1 Material accounting policies Implementation of new and revised standards and interpretations Management has assessed the impact of new or amended and revised accounting standards and inter- pretations issued by the IASB and the IFRS Accounting Standards endorsed by the European Union effective on or after January 1, 2024. It is assessed that application of amendments effective from January 1, 2024 has not had a material impact on the consolidated financial statements for 2024. Furthermore, Management does not anticipate any significant impact on future periods from the adoption of these amendments. The specific disclosures required by the IFRS Accounting Standards are provided in the Consolidated Financial Statements unless the information is considered imma- terial to the users of the financial statements. prepared in accordance with the Group’s accounting policies and for the same accounting period. Basis of preparation The consolidated financial statements for Bavarian Nordic have been prepared in accordance with the IFRS Accounting Standards class D as adopted by the EU and Danish disclosure requirements for the consolidated financial statements of listed companies. Danish disclo- sure requirements for the presentation of consolidated financial statements are imposed by the Statutory Order on Adoption of the IFRS Accounting Standards issued under the Danish Financial Statements Act. The accounting policies are unchanged from last year except for changes due to implementation of new and revised standards that were effective January 1, 2024. Intra-group income and expenses together with all intra-group profits, receivables and payables are eliminated on consolidation. In the preparation of the consolidated financial statements, the book value of shares in subsidiaries held by the parent company is set off against the equity of the subsidiaries. Accounting policies The accounting policies for specific line items are described in the notes to the financial statements. Set out below is a description of the accounting policies for the basis of consolidation, foreign currency translation and the cash flow statement. Foreign currency translation On initial recognition, transactions denominated in currencies other than the Group’s functional currency are translated at the exchange rate ruling at the trans- action date. Receivables, payables and other monetary items denominated in foreign currencies that have not been settled at the balance sheet date are translated at the exchange rates at the balance sheet date. Exchange differences between the exchange rate at the date of the transaction and the exchange rate at the date of payment or the balance sheet date, respec- tively, are recognized in the income statement under financials. Property, plant and equipment and intan- gible assets, inventories and other nonmonetary assets acquired in foreign currency and measured based on historical cost are translated at the exchange rates at the transaction date. On recognition in the consolidated financial state- ments of subsidiaries whose financial statements are presented in a functional currency other than Danish Recognition and measurement Income is recognized in the income statement when generated. Assets and liabilities are recognized in the balance sheet when it is probable that any future economic benefit will flow to or from the Group and the value can be reliably measured. On initial recognition, assets and liabilities are measured at cost, except for financial instruments, which are measured at fair value. Subsequently, assets and liabilities are measured as described in the description of the accounting policies in the respective notes to the financial statements. Standards and interpretations not yet in force At the date of publication of the consolidated financial statements, a number of new and amended standards and interpretations have not yet entered into force or have not yet been adopted by the EU. Therefore, they are not incorporated in the consolidated financial state- ments. None of the new or amended standards and interpre- tations are expected to have a material impact on the consolidated financial statements. The consolidated financial statements are presented in Danish kroner (DKK), which is the functional currency of the parent company. The consolidated financial statements are presented on a historical cost basis, apart from derivative financial instruments, securities and liability relating to phantom shares, which are measured at fair value. The accounting policies have been consistently applied for the financial year and for the comparative figures except for implementation of new standards and amendments, see further below. In the narrative sections of the consolidated financial statements comparative figures for 2023 are shown in brackets. Basis of consolidation The consolidated financial statements include Bavarian Nordic A/S and the subsidiaries in which the Group holds more than 50% of the voting rights or otherwise has control. Applying materiality The consolidated financial statements are a result of processing large numbers of transactions and aggre- gating those transactions into classes according to their nature or function. The transactions are presented in classes of similar items in the consolidated financial statements. If a line item is not individually material, it is aggregated with other items of a similar nature in the consolidated financial statements or in the notes. Principles of consolidation The consolidated financial statements are prepared on the basis of the financial statements of the parent company and the individual subsidiaries, and these are Bavarian Nordic Annual Report 2024 120 Financial statements – Group Financial statements – Parent Company Statements Note 1 Material accounting policies (continued) kroner (DKK), the income statements are translated at the average exchange rates of the respective months. Cash flows in foreign currencies are translated into Danish kroner (DKK) at the exchange rate on the trans- action date. The line items in the consolidated financial statements are XBRL-tagged to the elements of the ESEF taxonomy that are considered to match the content of those line items. For line items not considered to be covered by line items defined in the taxonomy, entity-specific extensions to the taxonomy have been incorporated. Except for subtotals, these extensions are anchored to standard elements of the ESEF taxonomy. Balance sheet items are translated at the exchange rates at the balance sheet date. Exchange differences arising on the translation of foreign subsidiaries’ opening balance sheet items to the exchange rates at the balance sheet date and on the translation of the income statements from average exchange rates of the respective months to exchange rates at the balance sheet date are recognized as other comprehensive income. In the cash flows from operating activities, net profit for the year is adjusted for non-cash operating items and changes in working capital. Cash flows from investing activities include cash flows from the purchase and sale of intangible assets, prop- erty, plant and equipment, investments and securities. Cash flows from financing activities include cash flows from the raising and payment of loans and capital increases. Additionally, cash flows from assets held under finance leases are recognized by way of lease payments made. Consistently with the requirements of the ESEF Regu- lation, the annual report approved by Management is comprised of a ZIP file bava-2024-12-31-en.zip, which includes an XHTML file that may be opened using standard web browsers, and a number of technical XBRL files enabling mechanical retrieval of the XBRL data incorporated. Segment reporting The Group does not prepare segment reporting inter- nally and therefore only reports one operating segment externally. Geographic spilt of revenue and revenue from major customers is disclosed in note 3 to the consolidated financial statements. Geographic location of noncurrent assets is disclosed in note 15 and 16 to the consolidated financial statements. Net asset value per share: Equity Number of shares at year-end Share price/Net asset value per share: Market price per share Net asset value per share Equity share, %: Equity x 100 Total assets Earnings per share and diluted earnings per share are calculated in accordance with IAS 33 “Earnings per share” and specified in note 14. Reporting under the ESEF Regulation The Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) requires the use of a particular electronic reporting format for annual reports of listed companies in the EU. More specifically, the ESEF Regulation requires the annual report to be prepared in XHTML format with iXBRL tagging of the consolidated financial statements including notes. The Company’s iXBRL tagging has been made using the ESEF taxonomy disclosed in the annexes to the ESEF Regulation and developed based on the IFRS Accounting Standards taxonomy published by the IFRS Foundation. Cash flow statement The cash flow statement is prepared in accordance with the indirect method on the basis of the Group’s net result for the year. The statement shows the Group’s cash flows broken down into operating, investing and financing activities, cash and cash equivalents at year end and the impact of the calculated cash flows on the Group’s cash and cash equivalents. Bavarian Nordic Annual Report 2024 121 Financial statements – Group Financial statements – Parent Company Statements Note 2 Key accounting estimates and judgments Note 3 Revenue Key accounting estimates In the preparation of the consolidated financial state- ments, Management makes a number of accounting estimates and judgements, which form the basis for the presentation, recognition and measurement of the Group's assets and liabilities. The recognition and measurement of assets and liabil- ities often depend on future events that are somewhat uncertain. In that connection, it is necessary to assume a course of events that reflects Management’s assess- ment of the most probable course of events. The key accounting estimates and judgements identi- fied are those that have a significant risk of resulting in a material adjustment to the measurement of assets and liabilities in the following reporting period. Accounting policies Sale of goods Revenue from sale of goods is recognized when Bavarian Nordic has transferred control of products sold to the buyer and it is probable that Bavarian Nordic will collect the consideration to which it is entitled for transferring the products. Control of the products is transferred at a point in time, typically on delivery. The amount of sales to be recognized is based on the consideration Bavarian Nordic expects to receive in exchange for its goods. When sales are recognized, Bavarian Nordic also records estimates for a variety of sales deductions, including product returns as well as rebates and discounts to government agencies, wholesalers, health insurance companies, managed healthcare organizations and retail customers. These sales deductions are recognized as "Gross to net deduc- tion" under other liabilities. Revenue is measured net of value added tax, duties, etc. collected on behalf of a third party. Where contracts contain customer acceptance criteria, Bavarian Nordic recognizes sales when the acceptance criteria are satisfied. The pricing mechanisms in the US market and the different kind of rebates are described below. Management bases its estimates and judgements on historical experience and various other assumptions that are held to be reasonable under the circumstances. The underlying assumptions are reviewed on an ongoing basis. If necessary, changes are recognised in the period in which the estimate and judgement are revised. Management considers the key accounting estimates and judgements to be reasonable and appro- priate based on currently available information. The actual amounts may differ as more detailed informa- tion becomes available. Management has made the following accounting estimates and judgements which significantly affect the amounts recognized in the consolidated financial statements:" sions with drug manufacturers for the commercial channels, and determine which drugs are offered as preferred options on their drug lists. US Medicaid & Medicare rebates Medicaid & Medicare are government insurance programmes. Medicaid and Medicare rebates have been estimated using a combination of historical expe- rience, product and population growth, price increases, and the impact of contracting strategies. The calcula- tion also involves interpretation of relevant regulations that are subject to changes in interpretative guidance from government authorities. Bavarian Nordic adjusts the provision periodically to reflect actual sales perfor- mance. Wholesaler charge-backs Wholesaler charge-backs relate to contractual arrange- ments between Bavarian Nordic and indirect customers whereby products are sold at contract prices lower than the list price originally charged to wholesalers. A wholesaler charge-back represents the difference between the invoice price to the wholesaler and the indirect customer’s contract price. Accruals are calcu- lated for estimated charge-backs using a combination of factors such as historical experience, current whole- saler inventory levels, contract terms and the value of claims received but not yet processed. Accounting policy Key accounting estimates and judgments Note Revenue Estimate of US sales deductions and provisions for sales rebates 3 Estimate regarding impairment of assets; assessment whether future sales Intangible assets and development milestones have become probably; assessment whether 15 development costs should be expensed or capitalized Inventories Estimate of indirect production costs capitalized and inventory write-down 18 Pricing mechanisms in the US market In the US, sales rebates are paid in connection with government and commercial programmes. Key customers in the US include private payers, Group Purchasing Organizations (GPOs) and government payers. GPOs play a role in negotiating price conces- Other discounts and sales returns Other discounts are provided to wholesalers, hospi- tals, pharmacies, etc. They are usually linked to sales volume or provided as cash discounts. Accruals are Bavarian Nordic Annual Report 2024 122 Financial statements – Group Financial statements – Parent Company Statements Note 3 Revenue (continued) Accounting policies (continued) Key accounting estimates Provisions for sales deductions Sales discounts and rebates are predominantly issued in the US in connection with the US Federal and State Government Healthcare programs, namely Medicare and Medicaid, and commercial rebates. The estimate of sales discounts and rebates is based on a calculation which includes a combination of historical utilization data, combined with expectations in relation to the development in sales and utilization. Further- more, specific circumstances regarding the different programs are considered. The obligations concerning sales discounts and rebates are incurred at the time the sale is recorded. However, the actual discount or rebate related to a specific sale may be invoiced later. Bavarian Nordic considers the provisions established for sales discounts and rebates to be reasonable and appropriate based on currently available information. However, the actual amount of discounts and rebates may differ from the amounts estimated as more detailed information becomes available. Partner contracts Whether a component of a multiple element contract has value to the partner on a stand-alone basis is based on an assessment of specific facts and circumstances and is associated with judgement. This applies also to the assessment of whether a license transfers rights associated with ownership of an intangible asset. Furthermore, allocation of the total consideration of a contract to separately identifiable components requires considerable estimates and judgement to be made by Management. At inception and throughout the life of a contract Management is performing an analysis of the agreement with its partners based on available facts and circumstances at each assessment date such as historical experience and knowledge from the market to the extent obtainable. This includes also an understanding of the purpose of the deliverables under the contract and the negotiation taken place prior to concluding the contract. calculated based on historical data and recorded as a reduction in gross sales at the time the related sales are recorded. Sales returns are related to damaged or expired products. dependent upon the achievement of certain clinical, regulatory or commercial milestones, as well as royal- ties on product sales of licensed products, if and when such product sales occur, and revenue from the supply of products. For these agreements that include multiple elements, total contract consideration is attributed to separately identifiable components on a reliable basis that reasonably reflects the selling prices that might be expected to be achieved in stand-alone transactions provided that each component has value to the partner on a stand-alone basis. The allocated consideration is recognized as revenue in accordance with the principles described above. Sale of services and licenses Furthermore, revenue comprises the fair value of the consideration received or receivable for income derived from development services where revenue is measured at the expected net sales price. Sales of licences that transfer the rights associated with ownership of intellectual property are recognized at a point in time when control is transferred. Revenue from development services and licences that do not transfer the right of ownership to intellectual property are recognized over time in line with the execution and delivery of the work. Agreements with commercial partners generally include non-refundable upfront license and collabora- tion fees, milestone payments, the receipt of which is Bavarian Nordic Annual Report 2024 123 Financial statements – Group Financial statements – Parent Company Statements Note 3 Revenue (continued) DKK thousand 2024 2023 Travel health Rabipur/RabAvert 1,352,461 1,161,162 Encepur 497,130 416,756 Vivotif 179,212 118,885 Vaxchora 64,153 23,736 Other product sale 193,629 156,533 2,286,585 1,877,072 Public preparedness Mpox/smallpox vaccine sale 3,206,186 5,027,001 Sale of goods 5,492,771 6,904,073 Contract work 223,435 158,267 Sale of services 223,435 158,267 Revenue 5,716,206 7,062,340 Total revenue includes: Fair value adjustment concerning financial instruments entered into to hedge revenue 5,486 5,016 DKK thousand 2024 2023 Geographic split of revenue: USA 2,702,900 2,577,081 Germany 972,759 714,136 Canada 493,208 1,556,039 France 268,766 740,256 Saudi Arabia 265,730 4,839 Belgium 218,193 - Singapore 124,649 42,041 Finland 98,467 15,720 Netherlands 69,793 39,325 Switzerland 52,591 107,738 Sweden 49,805 71,966 Taiwan 40,046 53,796 Spain - 429,664 Australia - 338,076 Other geographic markets 359,299 371,663 Revenue 5,716,206 7,062,340 Other product sale consists of the following: • Sale of Dukoral and Ixiaro licensed from Valneva • Sale of Heplisav licensed from Dynavax In 2024 revenue achieved on the Danish market amounted to DKK 28.1 million (DKK 18.9 million). In 2024 the following customers represented more than 10% of total revenue: • Biomedical Advanced Research and Development Authority (BARDA), USA, DKK 1,328.5 million. In 2023 the following customers represented more than 10% of total revenue: • Biomedical Advanced Research and Development Authority (BARDA), USA, DKK 1,708.3 million. • Health Canada/PHAC, Department of Health, Canada, DKK 1,534.8 million. • Agence nationale de santé publique FR, France, DKK 729.9 million. Bavarian Nordic Annual Report 2024 124 Financial statements – Group Financial statements – Parent Company Statements Note 3 Note 4 Production costs Revenue (continued) Accounting policies Production costs consist of costs incurred in gener- ating the revenue for the year. Costs for raw materials, consumables, production staff and a proportion of production overheads, including maintenance, amorti- zation, depreciation and impairment of intangible and tangible assets used in production as well as operation, Accounting for contract with Biomedical Advanced Research and Development Authority (BARDA) When drug substance batches are invoiced to BARDA the batches remain in the Company's physical posses- sion until filling as final product. The filling takes place either at the Company's facility in Kvistgaard or at CMO's (a bill-and-hold arrangement). Revenue is recognized once the batches are releasable according to contract with BARDA. Payment is due within 30 days after invoicing. administration and management of the production facility are recognized as production costs. Amortization of acquired product rights are recognized as production costs. In addition, the costs related to idle capacity and write-down to net realisable value of goods on stock are recognized. DKK thousand 2024 2023 Cost of goods sold 1,580,276 1,608,263 Contract costs 152,267 126,877 Other production costs 847,456 426,125 Amortization of product rights 317,449 298,029 Production costs 2,897,448 2,459,294 Other production costs primarily consist of un-allocated costs, including the cost of idle manufacturing capacity and cost of unsuccessful production runs, plus write- downs. Net write-downs reflect write down of products and material capitalized as inventory and amounted to DKK 141.3 million. The amount is primarily explained by write-down of MVA-BN batches failing final tests. See note 18. The remaining part of Other production costs was impacted by factors like water damage at the Kvist- gaard site, cost of switching campaigns due to the tech-transfer program, full-year effect of the Bern site and later than expected ramping up for chikungunya manufacturing. The product rights to Rabipur/RabAvert and Encepur were amortized with DKK 278.9 million (DKK 272.9 million). The product rights for Vivotif and Vaxchora were amortized with DKK 38.5 million (DKK 25.1 million). Bavarian Nordic Annual Report 2024 125 Financial statements – Group Financial statements – Parent Company Statements Note 5 Sales and distribution costs Note 6 Research and development costs Accounting policies Sales and distribution costs comprise costs incurred for the sale and distribution of products sold during the year. This includes costs incurred for sales campaigns, training and administration of the sales force and for direct distribution, marketing and promotion. Also included are salaries and other costs for the sales, distribution and marketing functions, loss allowance for expected credit losses, amortization, depreciation and other indirect costs. Accounting policies Research and development costs include salaries and costs directly attributable to the Group’s research and development projects, less government grants. Further- more, salaries and costs supporting direct research and development, including costs of patents, rent, leasing and depreciation attributable to laboratories, and external scientific consultancy services, are recognized under research and development costs. No indirect or general overhead costs that are not directly attributable to research and development activities are included in the disclosure of research and development expenses recognized in the income statement. Research costs are expensed in the year they occur. Development costs are generally expensed in the year they occur. In line with industry custom, capitaliza- tion of development costs does not begin until it is deemed realistic that the product can be completed and marketed and it is highly likely that a marketing authorization will be received. In addition, there must be sufficient certainty that the future earnings to the Group will cover not only production costs, direct distri- bution and administrative costs, but also the develop- ment costs. Contract research and development costs incurred to achieve revenue are included in "Research and devel- opment costs incurred this year" in the table and then transferred under "Contract costs recognized as produc- tion costs" to be recognized as production costs. Grants that compensate the Group for research and development expenses incurred, which are recognized directly in the income statement, are set off against the costs of research and development at the time when a final and binding right to the grant has been obtained. Bavarian Nordic Annual Report 2024 126 Financial statements – Group Financial statements – Parent Company Statements Note 6 Note 7 Administrative costs Research and development costs (continued) Accounting policies Administrative costs include costs of Group Manage- ment, staff functions, administrative personnel, office costs, rent, short-term lease payments and depreciation not relating specifically to production, research and development or sales and distribution. DKK thousand 2024 2023 Research and development costs incurred this year 1,014,777 1,797,274 Of which: Contract costs recognized as production costs (note 4) (152,267) (126,877) Impairment loss of ABNCoV2 development program - 557,683 Research and development costs recognized in the income statement 862,510 2,228,080 Impairment loss of ABNCoV2 development program Acquired rights and development in progress - 1,403,264 Intangible assets in progress - 26,224 Prepayments - 456,551 Prepayment and loan from Government - (806,420) Deferred consideration - (521,936) Impairment loss of ABNCoV2 development program - 557,683 San Diego site In December 2024, Bavarian Nordic made the stra- tegic decision to close its San Diego site. This decision was driven by the need to streamline operations and optimize resources. The closure of the San Diego site resulted in a one-time restructuring cost of DKK 80 million, which has been included in the research and development expenses for the year. asset no longer represented a commercial opportunity for Bavarian Nordic as the regulators, EMA and FDA, could not accept a submission for licensure. Therefore Management decided to fully write-down all assets and liabilities related to the development program. The net write-down amounted to DKK 558 million and was recognized as an impairment loss and included as part of the research and development costs. See note 31 for a summarized income statement and a summarized financial position showing how the write- down has impacted the Annual Report. ABNCoV2 development program 2023 Following the Phase 3 results announced in August 2023, where ABNCoV2 demonstrated a reduced level of neutralizing antibodies against a circulating variant, the Bavarian Nordic Annual Report 2024 127 Financial statements – Group Financial statements – Parent Company Statements Note 8 Staff costs DKK thousand 2024 2023 Wages and salaries 1,327,419 1,026,464 Contribution based pension 116,171 68,051 Social security expenses 76,057 52,640 Other staff expenses 88,440 68,262 Share-based payment, see specification in note 30 78,672 55,477 Staff costs 1,686,759 1,270,894 Staff expenses are distributed as follows: Production costs 793,584 545,968 Sales and distribution costs 220,433 148,016 Research and development costs 391,617 333,548 Administrative costs 281,125 209,564 Capitalized salaries - 33,798 Staff costs 1,686,759 1,270,894 Average number of employees converted to full-time 1,529 1,255 Number of employees as of December 31 converted to full-time 1,611 1,379 DKK thousand 2024 2023 Staff costs include the following costs: Board of Directors: Remuneration 6,490 6,345 Share-based payment 2,070 2,070 Remuneration to Board of Directors 8,560 8,415 Executive Management: Salary 13,227 11,330 Paid bonus 9,884 2,484 Other employee benefits 797 705 Contribution based pension 1,832 1,574 Share-based payment 17,100 13,443 Corporate Management 42,840 29,536 Salary 11,588 12,622 Paid bonus 4,850 2,639 Other employee benefits 1,332 1,471 Contribution based pension 1,877 2,228 Share-based payment 15,538 11,999 Salary and benefits in notice period 19,966 - Other Executive Management 55,151 30,959 Remuneration to Executive Management 97,991 60,495 Total management remuneration 106,551 68,910 The Group has mainly defined contribution plans and pays regular fixed contributions to independent pension funds and insurance companies. Bavarian Nordic Annual Report 2024 128 Financial statements – Group Financial statements – Parent Company Statements Note 8 Note 9 Depreciation, amortization and impairment losses Staff costs (continued) CEO and President of the Company Paul Chaplin and CFO Henrik Juuel constitute the Corporate Management in the Parent Company. COO Russell Thirsk, CPO Anu Kerns, CCO JC May constitute the Other Executive Management. CMO Laurence De Moerlooze resigned in May 2024 and CPO Anu Kerns will resign beginning of 2025. Salary and benefits in the notice period have been accrued. Restricted stock units In March 2024 Corporate Management was granted 27,873 restricted stock units (excl. matching shares) (10,927 restricted stock units) at a value of DKK 4.6 million (DKK 2.5 million) at grant. Other Executive Management was granted 30,161 restricted stock units (excl. matching shares) (11,502 restricted stock units) corresponding to a value of DKK 4.9 million (DKK 2.6 million) at grant. In December 2024 Corporate Management was granted 31,919 (32,028) performance restricted stock units at a value of DKK 6.2 million (DKK 5.3 million) at grant. Other Executive Management was granted 14,781 (29,574) performance restricted stock units at a value of DKK 2.9 million (DKK 4.9 million) at grant. In April 2024, the members of the Board of Directors were granted in total 13,637 restricted stock units (10,644 restricted stock units) corresponding to 50% of their fixed fee amounting to DKK 2.1 million (DKK 2.1 million). For further description of restricted stock units see note 29. DKK thousand 2024 2023 Depreciation and amortization included in: Production costs 545,901 477,544 Sales and distribution costs 80 181 Research and development costs 20,424 19,631 Administrative costs 58,495 56,465 Depreciation and amortization 624,900 553,821 Hereof loss from disposed fixed assets 2,526 704 Impairment losses included in: Research and development costs 38,475 557,683 Impairment losses 38,475 557,683 Warrants In December 2023 Corporate Management was granted 80,839 warrants (83,921 warrants) with a fair value of DKK 6.2 million (DKK 5.3 million). Other Executive Management was granted 37,435 warrants (77,491 warrants) with a fair value of DKK 2.9 million (DKK 4.9 million). Fair value calculated based on Black-Scholes, cf. note 29. Incentive programs for the Executive Management and other employees are disclosed in note 29. Members of the Executive Management have contracts of employment containing standard terms for members of the Executive Management of Danish listed compa- nies, including the periods of notice that both parties are required to give and competition clauses. If a contract of employment of a member of the Executive Management is terminated by the Company without misconduct on the part of such member, the member of the Executive Management is entitled to compen- sation, which, depending on the circumstances, may amount to a maximum of 8-18 months' remuneration. In the event of a change of control the compensation may amount to 24 months' remuneration. The product rights to Rabipur/RabAvert and Encepur are amortized over 20 years with an amortization of DKK 278.9 million for 2024. The product rights were acquired from GSK as per December 31, 2019. The product rights for Vivotif and Vaxchora are amor- tized over 10-20 years, starting from the acquisition date May 15, 2023. The amortization amounted to DKK 38.5 million in 2024. The product rights were acquired from Emergent BioSolutions May 15, 2023. Amortization of product rights is recognized as part of cost of goods sold under production costs. See further description in note 15. The impairment losses included in reaserch and devel- opment cost of 38.5 million for 2024 relates to the impairment of the right of use asset relating to the San Diego lease, as well as laboratory equipment at the San Diego site. Bavarian Nordic Annual Report 2024 129 Financial statements – Group Financial statements – Parent Company Statements Note 10 Fees to auditor appointed at the annual general meeting Note 11 Financial income Accounting policies Interest income is recognized in the income state- ment at the amounts relating to the financial year. Financial income also includes net positive value adjustments of financial instruments and securities, adjustment of the net present value of provisions and net currency gains. DKK thousand 2024 2023 Audit of financial statements 2,685 3,903 Other assurance services 1,800 268 Tax advisory - 486 Other services 60 653 Fees 4,545 5,310 The fee for non-audit services provided to the Group by KPMG P/S, Denmark, amounted to DKK 1.9 million (DKK 0.9 million) and consisted of limited assurance on the sustainability statements, assistance with compli- ance reviews, and other accounting and tax advisory services. DKK thousand 2024 2023 Financial income from bank and deposit contracts1 48,307 40,214 Financial income from securities 27,369 14,340 Fair value adjustments on securities 7,831 30,777 Adjustment of deferred consideration due to change in estimated timing of payments - 13,759 Currency adjustment deferred consideration - 2,563 Net gains on derivative financial instruments at fair value through the income statement - 11,131 Net foreign exchange gains 66,558 - Financial income 150,065 112,784 1 Interest income from financial assets measured at amortized cost Bavarian Nordic Annual Report 2024 130 Financial statements – Group Financial statements – Parent Company Statements Note 12 Financial expenses Note 13 Tax for the year Accounting policies Interest expenses are recognized in the income statement at the amounts relating to the financial year. Financial expenses also include adjustment of net present value of the deferred consideration, cf. note 24, negative value adjustments of financial instruments and securities and net currency losses. Accounting policies Income tax for the year comprises current tax and deferred tax for the year. The part relating to the profit for the year is recognized in the income statement, and the part attributable to items in the comprehensive income is recognized in the comprehensive income statement. The tax effect of costs that have been recognized directly in equity is recognized in equity under the rele- vant items. Current tax receivable is recognized in the balance sheet under current assets. Current tax payable is recognized in the balance sheet under current liabilities. Deferred tax assets arising from temporary deductible differences and tax losses carried forward are recog- nized when it is probable that they can be realized by offsetting them against taxable temporary differences or future taxable profits. At each balance sheet date, it is assessed whether it is probable that there will be sufficient future taxable income for the deferred tax asset to be utilized. Deferred income tax is provided on temporary taxable differences arising on investments in subsidiaries, unless the parent company is able to control the timing when the deferred tax is to be realized and it is likely that the deferred tax will not be realized within the foreseeable future. Deferred tax is calculated at the tax rates applicable on the balance sheet date for the income years in which the tax asset is expected to be utilized. DKK thousand 2024 2023 Interest expenses on debt1 5,190 3,558 Unwinding of the discount related to deferred consideration 72,682 101,961 Adjustment of deferred consideration due to change in estimated timing of payments 7,090 - Currency adjustment deferred consideration 24,899 - Financial expenses, other 8,617 11,469 Net foreign exchange losses - 15,392 Financial expenses 118,478 132,380 1 Interest expenses on financial liabilities measured at amortized cost Deferred tax is measured using the balance sheet liability method on all temporary differences between accounting values and tax values. Deferred tax liabili- ties arising from temporary tax differences are recog- nized in the balance sheet as a liability. Bavarian Nordic Annual Report 2024 131 Financial statements – Group Financial statements – Parent Company Statements Note 13 Tax for the year (continued) Tax on income is an income of DKK 16.6 million (expense of DKK 7.8 million), corresponding to an effective negative tax rate of 1.7% (positive 0.5%). The parent company’s taxable income for 2024 is DKK 0.0 million after use of tax losses carried forward (DKK 0.0 million). Current tax expensed in 2024 relates mainly to Bavarian Nordic GmbH, while change in deferred tax recognized as income in 2024 relates solely to Bavarian Nordic Berna GmbH. 'Income()/expenses that are not taxable/deductible for tax purposes' is primarily related Bavarian Nordic Inc. use of previously not recognized tax loss carried forward. 'Special tax credit' primarily relates to the 8% step up deduction on research and development costs according to Section 8B of the Danish Tax Assessment Act. 'Current tax on profit for previous years' relates primarily to refunded state taxes in Bavarian Nordic Inc. DKK thousand 2024 2023 Tax recognized in the income statement Current tax on profit for the year 11,211 11,493 Adjustments to current tax for previous years (3,119) (9,929) Current tax 8,092 1,564 Change in deferred tax (24,712) 6,190 Deferred tax (24,712) 6,190 Tax for the year recognized in the income statement (16,620) 7,754 Tax on income for the year is explained as follows: Income before company tax 971,357 1,482,943 Calculated tax (22.0%) on income before company tax 213,699 326,247 Tax effect on: Different tax percentage in foreign subsidiaries (31,236) (3,308) Non-recognized deferred tax asset on current year losses in foreign subsidiaries (3,197) (747) Income ()/expenses that are not taxable/deductible for tax purposes (13,657) 16,273 Deduction for interest and currency adjustments related to debt forgiveness - (60,009) Special tax credit (12,321) (32,788) Change in unrealized intra-group profits 40,866 (11,025) Change in non-recognized tax asset (207,655) (216,960) Adjustments to current tax for previous years (3,119) (9,929) Tax on income for the year (16,620) 7,754 Tax recognized in other comprehensive income Remeasurements of defined benefit plans 4,171 4,505 Tax recognized in equity Tax on share based payment - - Bavarian Nordic Annual Report 2024 132 Financial statements – Group Financial statements – Parent Company Statements Note 13 Tax for the year (continued) 2024 Exchange rate adjust- Recognized ments on Adjustment in the translating January 1, to previous income Recognized foreign December DKK thousand 2024 year statement in equity operations 31, 2024 Product rights (50,074) (977) (126,909) - - (177,960) Acquired rights and development in progress (111,104) (9,686) (56,605) - - (177,395) Property, plant and equipment 52,065 (761) (16,354) - 472 35,422 Right-of-use assets 183 - 271 - - 454 Development projects for sale 25,944 - (6,501) - - 19,443 Unrealized intra-group profits (9,598) - (40,866) - 913 (49,551) Receivables 218 - 225 - - 443 Provisions 1,100 110 330 - - 1,540 Defined benefit plans 11,173 - 10,843 4,171 (287) 25,900 Financial instruments (10,095) - (89) 16,609 - 6,425 Share-based payment 35,790 - 9,393 - - 45,183 Tax losses carried forward 445,010 (15) 43,319 - (913) 487,401 Not recognized tax asset (419,680) 11,329 207,655 (16,609) - (217,305) Recognized deferred tax assets/liabilities (29,068) - 24,712 4,171 185 - 2023 Exchange rate adjust- Additions Recognized ments on Adjustment from Acqui- in the translating January 1, to previous sition of income Recognized foreign December DKK thousand 2023 year businessess statement in equity operations 31, 2023 Product rights 62,881 - - (112,955) - - (50,074) Acquired rights and development in progress (2,659) - - (108,445) - - (111,104) Property, plant and equipment 88,124 643 (33,546) (1,223) - (1,933) 52,065 Right-of-use assets 287 - - (104) - - 183 Development projects for sale 32,446 - - (6,502) - - 25,944 Unrealized intra-group profits (21,265) - - 11,025 - 642 (9,598) Receivables 191 - - 27 - - 218 Provisions - - - 1,100 - - 1,100 Defined benefit plans - - 7,732 (1,428) 4,505 364 11,173 Financial instruments (7,017) - - - (3,078) - (10,095) Share-based payment 27,405 - - 8,385 - - 35,790 Tax losses carried forward 470,385 (11,703) - (13,030) - (642) 445,010 Not recognized tax asset (650,778) 11,060 - 216,960 3,078 - (419,680) Recognized deferred tax assets/liabilities - - (25,814) (6,190) 4,505 (1,569) (29,068) Bavarian Nordic Annual Report 2024 133 Financial statements – Group Financial statements – Parent Company Statements Note 13 Note 14 Earnings per share (EPS) Tax for the year (continued) Deferred tax Deferred tax assets relate to temporary differences between the tax base and accounting carrying amount and tax losses carried forward. Deferred tax assets arising from temporary deductible differences and tax losses carried forward are recog- nized to the extent they are expected to be offset against future taxable income. amounts to DKK -4.5 million (DKK 0 million). Tax rate used for Swiss entities is 22.8%. For the Group in total, the tax value of non-recognized tax losses carried forward amounts to DKK 487.4 million (DKK 445.0 million), whereas the tax value of non-rec- ognized temporary deductible differences amounts to DKK -270.1 million (DKK -25.3 million), bringing the net non-recognized tax asset to DKK 217.3 million (DKK 419.7 million). Danish joint taxed company's right to use the tax losses carried forward is not time-limited. Use of tax losses carried forward for the Swiss entity, Bavarian Nordic Berna GmbH, is limited to 7 years. Accounting policies Earnings per share is calculated as the profit or loss for the year compared to the weighted average of the issued shares in the financial year. The basis for the calculation of diluted earnings per share is the weight- ed-average number of ordinary shares in the financial year adjusted for the dilutive effects of warrants. DKK thousand 2024 2023 Net result for the year 987,977 1,475,189 Earnings per share of DKK 10 12.6 19.2 Diluted earnings per share of DKK 10 12.6 19.2 The weighted average number of ordinary shares for the purpose of diluted earning per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows: Weighted average number of ordinary shares 78,340,169 76,860,003 Weighted average number of treasury shares (236,410) (149,442) Weighted average number of outstanding ordinary shares used in the calculation of basic earnings per share 78,103,759 76,710,561 Average dilutive effect of outstanding warrants under incentive schemes - - Weighted average number of outstanding ordinary shares used in the calculation of diluted earnings per share 78,103,759 76,710,561 Outstanding warrants that may have an effect on the calculation of diluted earnings per share in the future. 2024-program 1,156,783 - 2023-program 1,143,379 1,258,558 2022-program 914,266 992,310 2021-program 610,463 651,074 2020-program 811,014 1,105,219 2019-program - 513,754 Outstanding warrants, cf. note 29 4,635,905 4,520,915 Recognized tax losses carried forward relate to Bavarian Nordic A/S and the two Danish subsidiaries Aktieselskabet af 1. juni 2011 I and Aktieselskabet af 1. juni 2011 II regulated within Danish tax jurisdiction and Bavarian Nordic Berna GmbH regulated within the Swiss tax jurisdiction. The tax value of non-recognized tax losses carried forward in Bavarian Nordic A/S and the two Danish subsidiaries amounts to DKK 482.9 million (DKK 445.0 million), whereas the tax value of non-recognized temporary deductible differences amounts to DKK -265.6 million (DKK -25.3 million). Tax rate used for Danish entities is 22.0%. For Bavarian Nordic Berna GmbH, the tax value of non-recognized tax losses carried forward amounts to DKK 4.5 million (DKK 0 million), whereas the tax value of non-recognized temporary deductible differences Pillar II Following the net result for 2024 the Bavarian Nordic Group will become in scope of the Minimum Tax Act (Pillar II) from 2025, as adopted by the Danish Parlia- ment on December 7, 2023. No additional tax costs is expected for the Bavarian Nordic Group, based on the current group structure. It will result in a not insignifi- cant compliance task for the Bavarian Nordic Group if the group is unable to utilize the safe harbour rules. The average exercise price for outstanding warrants (DKK 234) are below the average share price of the Company for the year (189), therefore no dilution impact on the earnings per share. Bavarian Nordic Annual Report 2024 134 Financial statements – Group Financial statements – Parent Company Statements Note 15 Intangible assets Accounting policies Intangible assets are measured at historic cost less accumulated amortization and impairment losses. Cost of acquired product rights are measured at cash consid- eration and present value of any deferred payments for those rights. Furthermore costs of acquired product rights include transaction costs that are directly attrib- utable to the acqusition. Internal development projects that meet the require- ments for recognition as intangible assets are meas- ured at direct cost relating to the development projects. Amortization is provided on a straight-line basis over the useful economic lives of the assets. The useful lives of acquired product rights are esti- mated to be 10-20 years and software is estimated to be 3-5 years. Amortization of acquired product rights is recognized as part of cost of goods sold under production costs. Key accounting estimates Product rights When determining the amortization period for acquired product rights, Management need to make an assessment of expected useful economic life. In the assessment Management take among other things the following components into consideration: The maturity of the products acquired, development in the market the acquired products are targeting, the current competitors, clinical development of new competing products and entry barriers to the market due to advanced production technology. Straight-line amortization reflects the use and impairment of the product rights. Management continuously updates the valuation model used when acquiring the product rights from GSK to assess the value creation expected from the acquisi- tion. The latest update of the valuation model shows a value above the net present value of the purchase price, hence there is no indications of impairment. Key accounting judgments Management has made the following accounting judg- ments which significantly affect the amounts recog- nized in the consolidated financial statements: Impairment The carrying amounts of intangible assets carried at cost or amortized cost are tested at least annually to determine whether there are indications of any impair- ment in excess of that expressed in normal amortiza- tion. If that is the case, the asset is written down to the recoverable amount, which is the higher of its fair value less costs to sell and its value in use. Impairment losses on intangible assets are recognized under the same line item as amortization of the assets. For development projects in progress, the recoverable amount is assessed annually, regardless of whether any indications of impairment have been found. Acquired rights and development in progress Under the Group’s accounting policies and in accordance with common industry practice, development costs are generally expensed in the year they occur. This approach is taken due to the uncertainty surrounding the future benefits of these costs until commercial approval is obtained. Bavarian Nordic Annual Report 2024 135 Financial statements – Group Financial statements – Parent Company Statements Note 15 Intangible assets (continued) 2024 Acquired Other rights and Developed intangible Product development Production assets in DKK thousand rights in progress Process Software progress Total Costs as of January 1, 2024 5,908,277 2,690,013 - 114,958 417,326 9,130,574 Additions 186,433 - - 233 21,259 207,925 Transfer - - 374,857 17,902 (392,759) - Transfer to/from property, plant and equipment - - - (2,265) (884) (3,149) Disposals - (1,403,264) - - (26,224) (1,429,488) Exchange rate adjustments - 33 - 66 (24) 75 Cost as of December 31, 2024 6,094,710 1,286,782 374,857 130,894 18,694 7,905,937 Amortization and impairment losses as of January 1, 2024 1,116,835 1,403,264 - 102,515 26,224 2,648,838 Amortization 317,449 - 31,238 8,120 - 356,807 Transfer - - - (1,231) - (1,231) Disposals - (1,403,264) - - (26,224) (1,429,488) Exchange rate adjustments - - - 119 - 119 Amortization and impairment losses as of December 31, 2024 1,434,284 - 31,238 109,523 - 1,575,045 Carrying amount as of December 31, 2024 4,660,426 1,286,782 343,619 21,371 18,694 6,330,892 Geographical split of intangible assets – 2024 Denmark 6,325,789 Germany 685 USA 1,838 Switzerland 2,580 Total intangible assets 6,330,892 Product rights December 31, 2019 the Company acquired the product rights to two commercial products owned by GSK - Rabipur/RabAvert and Encepur. The products have been on the market for more than 20 years. There is no need to further develop the prod- ucts. Management assesses that it will require up to 10 years of clinical development for competitors to bring a new competing product to the market likewise the production process required to produce these products is highly complex. Based on these factors Management assesses that the acquired product rights should be amortized over 20 years. In June 2024, based on higher-than-expected sales of Rabipur and Encepur during the second quarter of 2024, Management assessed it likely that Bavarian Nordic would reach the trigger for the sales milestone included in the Asset Purchase Agreement concluded in 2019 and this was finally confirmed by end of July 2024. The sales milestone of DKK 186 million has been recognized as an addition to the product rights and the deferred consideration. In May 2023, the Company concluded a Purchase and Sale Agreement with Emergent BioSolutions. The agreement included acquisition of product rights to two commercial travel vaccines - Vivotif and Vaxchora. Vivotif and Vaxchora were first licensed in the US in 1989 and 2016 respectively. Vaccines have historically shown to have a long lifespan due to stringent regu- latory requirements, high research and development costs and a complex manufacturing process. Vaxchora Bavarian Nordic Annual Report 2024 136 Financial statements – Group Financial statements – Parent Company Statements Note 15 Intangible assets (continued) is targeting a market that has a relatively low market value, which further lowers the chance of competitors entering the market and taking significant market shares. Based on these factors Management assesses that the Vaxchora product right should be amortized over 20 years. Vivotif was developed more than 30 years ago and the market is larger than for Vaxchora. Therefore, the risk of competition is also deemed higher, hence the amorti- zation period is assessed to be 10 years. The acquisition price for the two product rights consists of an upfront payment of DKK 312 million for Vivotif and DKK 137 million for Vaxchora. The Purchase and Sale Agreement also includes an earnout payment starting at USD 30 million. The earnout payment relates to sale of Vivotif and Vaxchora. As per December 31, 2023 Management does not judge the sales milestone to be probable and there- fore the earnout payment has not been recognized as either part of the project rights nor the deferred consid- eration. The agreement with Emergent BioSolutions also included milestone payments totaling USD 80 million related to submission and approval of Biologics License Application (BLA) to FDA and Marketing Authorization Application to EMA for the chikungunya development asset. At initial recognition the net present value of probable future development milestone payments to Emergent BioSolutions Inc. amounted to DKK 499 million and was recognized as deferred consideration (note 24). 2024 Carrying amount Remaining DKK thousand Acquistion price December 31, 2024 amortization period Rabipur/RabAvert 3,252,110 2,463,437 15 years Encepur 2,393,023 1,811,007 15 years Vivotif 312,208 259,759 8.5 years Vaxchora 137,369 126,223 18.5 years Total product rights 6,094,710 4,660,426 Developed production processes Developed production processes consist of the the as-is technology transfer from GSK to Bavarian Nordic of the manufacturing process for Rabipur/RabAvert and Encepur. The Company has incurred material costs in terms of internal labour and consultancy to handle the technology transfer and has gained crucial knowledge about the manufacturing process. These costs are capi- talized as an intangible asset. As per December 31, 2024 the capitalized costs amounts to DKK 344 million. 2023 Carrying amount Remaining DKK thousand Acquistion price December 31, 2023 amortization period Rabipur/RabAvert 3,140,250 2,512,200 16 years Encepur 2,318,450 1,854,760 16 years Vivotif 312,208 291,357 9.5 years Vaxchora 137,369 133,125 19.5 years Total product rights 5,908,277 4,791,442 Intangible assets in progress Other intable assets in progress relates to IT invest- ments. Acquired rights and development in progress The Purchase and Sale Agreement concluded with Emergent BioSolutions included acquisition of a late- stage vaccine candidate for Chikungunya virus. The initial acquisition price amounted to DKK 788 million. No further cost will be capitalized. Bavarian Nordic Annual Report 2024 137 Financial statements – Group Financial statements – Parent Company Statements Note 15 Intangible assets (continued) 2023 Acquired Other rights and intangible Product development assets in DKK thousand rights in progress Software progress Total Costs as of January 1, 2023 5,458,700 1,013,484 106,094 274,490 6,852,768 Additions - 389,751 3,034 143,978 536,758 Transfer - - 2,353 (2,353) - Additions from acquisition of businesses 449,577 1,286,778 4,207 1,212 1,741,779 Disposals - - (1,227) - (1,227) Exchange rate adjustments - - 497 (1) 496 Cost as of December 31, 2023 5,908,277 2,690,013 114,958 417,326 9,130,574 Amortization and impairment losses as of January 1, 2023 818,805 - 91,326 - 910,131 Amortization 298,030 - 12,028 - 310,058 Impairment losses - 1,403,264 - 26,224 1,429,488 Disposals - - (1,111) - (1,111) Exchange rate adjustments - - 272 - 272 Amortization and impairment losses as of December 31, 2023 1,116,835 1,403,264 102,515 26,224 2,648,838 Carrying amount as of December 31, 2023 4,791,442 1,286,749 12,443 391,102 6,481,736 Geographical split of intangible assets – 2023 Denmark 6,475,179 Germany 270 USA 2,005 Switzerland 4,282 Total intangible assets 6,481,736 Bavarian Nordic Annual Report 2024 138 Financial statements – Group Financial statements – Parent Company Statements Note 16 Property, plant and equipment Accounting policies Property, plant and equipment include land and build- ings, production equipment, leasehold improvements, office and IT equipment and laboratory equipment and is measured at cost less accumulated depreciation and impairment losses. Cost includes the costs directly attributable to the purchase of the asset, until the asset is ready for use. For assets constructed by the Group cost includes mate- rials, components, third-party suppliers and labour. Borrowing costs directly attributable to the construction of property, plant and equipment are included in cost. Other borrowing costs are recognized in the income statement. Depreciation is charged over the expected economic lives of the assets, and the depreciation methods, expected lives and residual values are reassessed indi- vidually for the assets at the end of each financial year. Assets are depreciated on a straightline basis over their estimated useful lives as follows: Buildings 10-20 years Installations 5-15 years Leasehold improvements 5 years Office and IT equipment 3-5 years Laboratory equipment 5-10 years Production equipment 3-15 years Management reviews the estimated useful lives of material property, plant and equipment at the end of each financial year. Impairment The carrying amounts of property, plant and equipment carried at cost or amortized cost are tested annually to determine whether there are indications of any impair- ment in excess of that expressed in normal deprecia- tion. If that is the case, the asset is written down to the recoverable amount, which is the higher of its fair value less costs to sell and its value in use. Impairment losses on property, plant and equipment are recognized under the same line item as depreciation of the assets. Bavarian Nordic Annual Report 2024 139 Financial statements – Group Financial statements – Parent Company Statements Note 16 Property, plant and equipment (continued) 2024 Other fixtures and fittings, other Land and Leasehold Plant and plant and Assets under DKK thousand buildings improvement machinery equipment construction Total Costs as of January 1, 2024 1,268,062 47,036 646,707 889,215 206,721 3,057,741 Additions - - 1,498 5,189 72,825 79,512 Transfer 11,127 1,516 71,763 34,526 (118,932) - Transfer from intangible assets - - 3,149 - - 3,149 Disposals - (1,271) (2,137) (11,243) (538) (15,189) Exchange rate adjustments (5,144) 104 (1,305) (1,415) (416) (8,176) Cost as of December 31, 2024 1,274,045 47,385 719,675 916,272 159,660 3,117,037 Depreciation and impairment losses as of January 1,2024 281,049 21,989 234,033 193,155 - 730,226 Depreciation 54,136 7,394 67,637 92,301 - 221,468 Transfer - - 1,529 (1,529) - - Transfer from intangible assets - - 1,231 - - 1,231 Impairment losses - - - 12,044 - 12,044 Disposals - (337) (2,019) (5,198) - (7,554) Exchange rate adjustments (146) 23 54 (877) - (946) Depreciation and impairment losses as of December 31, 2024 335,039 29,069 302,465 289,896 - 956,469 Carrying amount as of December 31, 2024 939,006 18,316 417,210 626,376 159,660 2,160,568 Geographical split of property, plant and equipment – 2024 Denmark 1,509,265 Germany 47,818 USA 18,283 Switzerland 585,202 Total property, plant and equipment 2,160,568 Mortgage loans of DKK 15.1 million are secured by mortgages totaling DKK 50.0 million on the property Bøgeskovvej 9/Hejreskovvej 10A, Kvistgaard. In addi- tion, as of December 31, 2024, mortgage deeds for a total of DKK 75.0 million have been issued. The carrying amount of assets mortgaged in security of mortgage loans is DKK 1,356.2 million (land and buildings: DKK 939.0 million; plant and machinery: DKK 417.2 million Bavarian Nordic Annual Report 2024 140 Financial statements – Group Financial statements – Parent Company Statements Note 16 Property, plant and equipment (continued) 2023 Other fixtures and fittings, other Land and Leasehold Plant and plant and Assets under DKK thousand buildings improvement machinery equipment construction Total Costs as of January 1, 2023 858,543 40,237 514,369 626,036 196,130 2,235,315 Additions 13,387 2,838 20,600 8,864 96,836 142,525 Transfer 79,712 2,688 43,983 21,797 (148,180) - Additions from acquisition of businesses 300,131 1,234 86,336 234,826 58,926 681,453 Disposals (178) - (27,101) (11,603) - (38,882) Exchange rate adjustments 16,467 39 8,520 9,295 3,009 37,330 Cost as of December 31, 2023 1,268,062 47,036 646,707 889,215 206,721 3,057,741 Depreciation and impairment losses as of January 1,2023 228,405 15,472 192,624 114,841 - 551,342 Depreciation 51,424 6,491 62,552 85,511 - 205,978 Disposals - - (25,277) (8,745) - (34,022) Exchange rate adjustments 1,220 26 4,134 1,548 - 6,928 Depreciation and impairment losses as of December 31, 2023 281,049 21,989 234,033 193,155 - 730,226 Carrying amount as of December 31, 2023 987,013 25,047 412,674 696,060 206,721 2,327,515 Mortgage loans of DKK 17.0 million are secured by mortgages totaling DKK 50.0 million on the property Bøgeskovvej 9/Hejreskovvej 10A, Kvistgaard. In addi- tion, as of December 31, 2023, mortgage deeds for a total of DKK 75.0 million have been issued. The carrying amount of assets mortgaged in security of mortgage loans is DKK 1,399.7 million (land and buildings: DKK 987.0 million; plant and machinery: DKK 412.7 million). Geographical split of property, plant and equipment – 2023 Denmark 1,615,213 Germany 52,711 USA 40,006 Switzerland 619,587 Total property, plant and equipment 2,327,517 Bavarian Nordic Annual Report 2024 141 Financial statements – Group Financial statements – Parent Company Statements Note 17 Right-of-use-assets 2024 Rent Car DKK thousand facility leasing Equipment Total Right-of-use assets as of January 1, 2024 112,867 11,154 1,149 125,170 Additions 1,307 4,415 532 6,254 Modifications 20,441 (56) (31) 20,354 Disposals (15,488) (4,373) (307) (20,168) Depreciations (36,665) (6,805) (629) (44,099) Impairment (26,431) - - (26,431) Reversal depreciations 15,488 3,813 307 19,608 Exchange rate adjustments 1,177 34 - 1,211 Right-of-use assets as of December 31, 2024 72,696 8,182 1,021 81,899 Accounting policies The right-of-use assets comprise the initial measure- ment of the corresponding lease liability. Right-of-use assets are subsequently measured at cost less accumu- lated depreciation and impairment losses. All operating leases with a lease term of more than 12 months are recognized on the balance sheet as right- of-use-assets. For leases with a lease term of less than 12 months the lease payments are recognized as an operating expense on a straight-line basis over the term of the lease. The right-of-use-assets are measured at the present value of all future lease payments. When assessing the lease term, any extension or termination options are included in the assessment. The options are included in determining the lease term, if exercise is reason- ably certain. When determining the discount rates used to calculate the net present value of future lease payments, an incremental country specific borrowing rate is used, based on a government bond plus the Group’s credit margin, ranging from 4.8% to 6.93%. A single discount rate is used for a portfolio of lease assets with reasonable similar characteristics. Initial direct costs are not included in measurement of the right-of-use-assets. Non-lease components are not separated from lease components. A maturity analysis for lease payments is described in note 22. Impact from change in lease terms, lease payments or modification of the lease contract is further described in note 27. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The depreciation starts at the commencement date of the lease. IAS 36 is applied to determine whether a right-of-use asset is impaired and any iden- tified impariment losses are accounted for as described in note 15. 2023 Rent Car DKK thousand facility leasing Equipment Total Right-of-use assets as of January 1, 2023 58,467 8,392 574 67,433 Additions 2,551 8,767 - 11,318 Additions from acquisition of businesses 41,943 - - 41,943 Modifications 47,096 210 993 48,299 Disposals (7,109) (2,216) (409) (9,734) Depreciations (30,862) (5,800) (419) (37,081) Reversal depreciations 675 1,798 409 2,882 Exchange rate adjustments 106 3 1 110 Right-of-use assets as of December 31, 2023 112,867 11,154 1,149 125,170 DKK thousand 2024 2023 Amounts included in the income statement Interest expense leases 4,737 3,074 Depreciation recognized on right-of-use assets 44,099 37,081 Impairment recognized on right-of-use assets 26,431 - Bavarian Nordic Annual Report 2024 142 Financial statements – Group Financial statements – Parent Company Statements Note 18 Inventories Accounting policies Inventories are measured at the lower of cost less write-downs for obsolescence and net realisable value. The net realisable value is the estimated sales price in the ordinary course of business less relevant sales costs determined on the basis of marketability, obsolescence and changes in the expected sales price. Raw materials are measured at cost based on the FIFO method. For raw materials, cost is determined as direct acquisition costs incurred. The cost of work in progress and finished goods produced in-house are measured at standard cost and includes raw materials, consumables, external manu- facturing services and direct payroll costs plus allocated indirect costs of production (production overheads). Indirect costs of production include indirect materials and labour as well as maintenance of and depreciation on the machinery used in production processes, factory buildings and equipment used and cost of production administration and management. DKK thousand 2024 2023 Raw materials and supply materials 313,878 317,392 Work in progress 1,557,074 1,231,858 Manufactured goods and commodities 712,285 319,101 Write-down on inventory (255,928) (224,615) Inventories 2,327,309 1,643,736 Write-down on inventory as of January 1 (224,615) (162,419) Additions from acquisition of businesses - (14,498) Write-down for the year (187,183) (75,300) Use of write-down 126,322 27,602 Reversal of write-down 29,548 - Write-down on inventory as of December 31 (255,928) (224,615) Cost of goods sold amounts to, cf. note 4 1,580,276 1,608,263 Significant accounting estimates Production overheads are measured on the basis of actual costs. The basis of the actual costs is reassessed regularly to ensure that they are adjusted for changes in the utilization of production capacity, production changes and other relevant factors. Biological living material is used, and the measurements and assump- tions for the estimates made may be incomplete or inaccurate, and unexpected events or circumstances may occur, which may cause the actual outcomes to later deviate from these estimates. It may be necessary to change previous estimates as a result of changes in the assumptions on which the estimates were based or due to new information or subsequent events, for which certainty could not be achieved in the earlier estimates. Estimates that are material to the financial reporting are made in the determination of any impairment of inventories as a result of 'out-of-specification' products, expiry of products and sales risk. The inventory value of Encepur and Rabipur/RabAvert products amounted to DKK 1,624.9 million (DKK 947.5 million), Jynneos/Imvamune/Imvanex amounted to DKK 302.6 million (DKK 286.8 million), Vivotif and Vaxchora amounted to DKK 93.9 million (DKK 67.1 million) and chikungunya amounted to DKK 68.4 million (DKK 0 million) as per December 31, 2024 incl. write- down. Write-down for the year amounted to DKK 187.2 million (DKK 75.3 million) and mainly relates to write down of MVA-BN batches. Use of write-down in 2024 of DKK 126.3 million (DKK 27.6 million) relates to scrap of expired finish products and finally failed batch productions. As of December 31, 2024, the write down of PPQ batches for chikungunya has been reversed. Bavarian Nordic Annual Report 2024 143 Financial statements – Group Financial statements – Parent Company Statements Note 19 Trade receivables Loss allowance is calculated using the ‘full lifetime expected credit losses’ method, whereby the likelihood of non-fulfilment throughout the lifetime of the finan- cial instrument is taken into consideration. A provision account is used for this purpose. The table details the risk profile for trade receivables. Accounting policies Receivables are measured at initial recognition at fair value and subsequently at amortized value usually equal to the nominal value, net of impairment based on expected credit losses. Trade receivables Gross carrying Loss Net carrying DKK thousand amount allowance amount 2024 Not past due date 1,089,771 - 1,089,771 Overdue by 0-3 months 42,299 - 42,299 Overdue by 3-6 months 41,204 (1,954) 39,250 Overdue by 6-12 months 5,465 (1,041) 4,424 Overdue by more than 12 months - - - Trade receivables 1,178,739 (2,995) 1,175,744 2023 Not past due date 1,730,046 - 1,730,046 Overdue by 0-3 months 39,613 (191) 39,422 Overdue by 3-6 months 8,188 (539) 7,649 Overdue by 6-12 months 2,755 (1,768) 987 Overdue by more than 12 months 729 (729) - Trade receivables 1,781,331 (3,227) 1,778,104 DKK thousand 2024 2023 Trade receivables from public preparedness business 877,588 1,660,604 Trade receivables from travel health business 297,975 110,832 Trade receivables from contract work 181 6,668 Trade receivables 1,175,744 1,778,104 Credit risk Bavarian Nordic’s customers are predominantly public authorities and renowned wholesalers and therefore the credit risk is very low. There are overdue receiva- bles as of December 31, 2024 DKK 89 million (DKK 51 million). As of December 31, 2024 a loss allowance of DKK 3 million (DKK 3 million) has been recognized. The Group has applied the simplified approach to measure the expected credit loss and a lifetime expected loss allowance for all trade receivables.The allowance is an estimate based on shared credit risk characteristics and the days past due. At the time of revenue recognition, Bavarian Nordic assesses the full lifetime expected credit losses. In addition, undue and due receivables are analyzed in an ongoing process. Based on the credit assessment, receivables analysis, historical experience and industry experience, it is estimated whether the receivables are recoverable or write-downs are needed. Bavarian Nordic monitor the credit exposure on all customers, both new and existing. Bavarian Nordic recognizes a loss allowance for expected credit losses and writes off trade receivables when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. Subsequent recovery of amounts previously written down is credited against sales and distribution costs. The payment conditions for the customers, including credit periods and any payment of interest in case of non-payment, vary, but are always based on industry practice in the relevant market. The average credit period is approximately 30 days for the public prepar- edness business, while the average credit period for the travel health business is 60 days. Bavarian Nordic Annual Report 2024 144 Financial statements – Group Financial statements – Parent Company Statements Note 20 Other receivables Note 21 Prepayments Accounting policies Receivables are measured at initial recognition at fair value and subsequently at amortized value usually equal to the nominal value, net of impairment, to counter the loss after an individual assessment of risk of loss. Accounting policies Prepayments recognized under assets include costs paid in respect of subsequent financial years, including incurred costs related to technology transfer activities at CMO's, where the costs subsequently will be recog- Derivative financial instruments are measured at fair value. nized as inventory in concurrence with purchase of production services from the CMO's. Prepayments are measured at cost. DKK thousand 2024 2023 Prepayments to CMO's 73,986 4,556 Other prepayments 26,759 18,510 Prepayments 100,745 23,066 Classified as: Non-current assets 36,421 4,556 Current assets 64,324 18,510 Prepayments 100,745 23,066 DKK thousand 2024 2023 Deposits 9,086 11,185 Receivable VAT and duties 38,910 46,585 Derivative financial instruments at fair value 698 45,887 Interest receivables 3,687 2,664 Other receivables 370 - Other receivables 52,751 106,321 Classified as: Non-current assets 9,086 11,185 Current assets 43,665 95,136 Other receivables 52,751 106,321 As per December 31, 2024 the main part of the prepay- ments to CMO's related to the scale-up activities to prepare for production of drug product for commercial launch of Chikungunya. Costs related to the technology transfer activities are recognized as prepayments when costs incur and then recognized as inventory in concurrence with purchase of production services from the CMO's. As per December 31, 2024 DKK 36.4 million (DKK 4.6 million) has been recognized as non-current prepayments. As per December 31, 2023 the main part of the the technology transfer of the production and packaging activities for Encepur and Rabipur/RabAvert takes place at CMO's (filing of Encepur, labelling and packing). Bavarian Nordic Annual Report 2024 145 Financial statements – Group Financial statements – Parent Company Statements Note 22 Other liabilities Accounting policies Derivative financial instruments are measured at fair value. Other financial liabilities are measured at initial recognition at fair value less any transaction costs. Subsequent other financial liabilities are measured at amortized cost using the effective interest method, whereby the difference between proceeds and the nominal value is recognized in the income statement as a financial expense over the period. Amortized cost usually equal to the nominal value. DKK thousand 2024 2023 Financial instruments at fair value 29,902 - Payable salaries, holiday accrual etc. 242,736 212,122 Gross to net deduction accrual 186,576 159,802 Other accrued costs 38,243 47,919 Other liabilities 497,457 419,843 Gross to net deduction accruals consist of a variety of sales deductions, including product returns as well as rebates and discounts to government agencies, whole- salers, health insurance companies, managed health- care organizations and retail customers. The different components are further described in note 3. For a further description of financial instruments see note 23. Bavarian Nordic Annual Report 2024 146 Financial statements – Group Financial statements – Parent Company Statements Note 23 Financial risks and financial instruments Accounting policies Derivative financial instruments On initial recognition, derivative financial instruments are measured at the fair value on the settlement date. Directly attributable costs related to the purchase or issuance of the individual financial instruments (transaction costs) are added to the fair value on initial recognition, unless the financial asset or the financial liability is measured at fair value with recognition of fair value adjustments in the income statement. Subse- quently, they are measured at fair value at the balance sheet date based on the official exchange rates, market interest rates and other market data such as volatility adjusted for the special characteristics of each instru- ment. The Company has designated certain derivative finan- cial instruments as cash flow hedges as defined under IFRS 9 "Financial Instruments". Hedge accounting is classified as a cash flow hedge when the hedges of a particular risk is associated with the cash flows of highly probable forecast transactions. Changes in the fair value of derivative financial instru- ments designated as and qualifying for recognition as effective hedges of future transactions (cash flow DKK thousand 2024 2023 Categories of financial instruments Trade receivables 1,175,744 1,778,104 Other receivables 52,053 60,434 Cash and cash equivalents 1,623,490 1,477,234 Financial assets measured at amortized cost 2,851,287 3,315,772 Securities 551,538 390,247 Financial assets measured at fair value through the income statement 551,538 390,247 Derivative financial instruments to hedge future cash flows (exchange rate) - 44,784 Derivative financial instruments to hedge future cash flows (interest) 698 1,103 Financial assets used as hedging instruments 698 45,887 Deferred consideration 1,081,465 2,376,989 Debt to credit institutions 15,127 17,048 Lease liabilities 113,123 128,254 Prepayment from customers 131,408 - Trade payables 1,045,134 954,142 Other liabilities 467,555 419,843 Financial liabilities measured at amortized cost 2,853,812 3,896,276 Derivative financial instruments to hedge future cash flows (exchange rate) 29,902 - Financial liabilities used as hedging instruments 29,902 - hedges) are recognized as comprehensive income. The ineffective portion is recognized immediately in the income statement. When the hedged transactions are realized, cumulative changes are recognized in the income statement together with the hedged transac- tion or in respect of a non-financial item as part of the cost of the transactions in question. For derivative financial instruments that do not qualify for hedge accounting, changes in fair value are recog- nized as financials in the income statement as they occur. Securities Securities consist of highly liquid, listed bonds with high credit rating, which are measured at fair value on initial recognition and as of the balance sheet date. The Group’s portfolio of securities is treated as "financial items at fair value through profit or loss", as the port- folio is accounted for and valued on the basis of the fair value in compliance with the Company's investment policy. Both realized and unrealized value adjustments are recognized in the income statement under financials. Bavarian Nordic Annual Report 2024 147 Financial statements – Group Financial statements – Parent Company Statements Note 23 Financial risks and financial instruments (continued) Policy for managing financial risks Through its operations, investments and financing the Group is exposed to fluctuations in exchange rates and interest rates. These risks are managed centrally in the Parent Company, which manages the Group´s liquidity. The Group pursues a treasury policy approved by the Board of Directors. The policy operates with a low risk profile, so that exchange rate risks, interest rate risks and credit risks arise only in commercial relations. The Group therefore does not undertake any active specula- tion in financial risk. The Group´s capital structure is regularly assessed by the Board of Directors relative to the Group´s cash flow position and cash flow budgets. The interest rate risk involved in placing cash funds and investing in securities is managed on the basis of duration, preferably via a low portfolio duration and pari settlement of securities in order to minimize value adjustment risks. Exchange rate risks on recognized financial assets and liabilities Cash and cash equivalents, Net DKK thousand securities Receivables Liabilities position 2024 USD 334,980 619,176 (1,218,425) (264,269) EUR 208,849 660,007 (1,530,566) (661,710) CHF 8,473 39,541 (206,248) (158,234) 2023 USD 205,315 1,334,432 (945,701) 594,046 EUR 149,934 455,057 (2,679,716) (2,074,725) CHF 10,281 4,649 (181,627) (166,697) Sensitivity analysis on exchange rates Likely change Hypothetical Hypothetical in exchange change in change in DKK thousand rate equity net result 2024 Change if higher USD-rate than actual rate 8% 30,868 29,544 Change if higher EUR-rate than actual rate 2% (12,725) (18,385) Change if higher CHF-rate than actual rate 9% 54,515 (17,809) 2023 Change if higher USD-rate than actual rate 15% 110,532 118,270 Change if higher EUR-rate than actual rate 1% (19,347) (21,505) Change if higher CHF-rate than actual rate 5% 29,518 (8,117) Exchange rate risks The Group’s exchange rate exposure is primarily to USD and EUR. The exchange rate exposure to USD is hedged to the greatest possible extent by matching incoming and outgoing payments denominated in USD, looking at maximum one year ahead. Regular assessments are made of whether the remaining net position should be hedged by currency forward contracts or currency option contracts. The exposure to EUR for operating and financing activ- ities are not hedged as management believes that fluctuations in EUR are limited due to the Danish fixed- rate policy which is expected to be maintained and that matching of incoming and outgoing payments denom- inated in EUR reduces the net exposure significantly. Thus the fluctuations in EUR do not have a significant impact on financial performance. Given the magnitude of payable milestones denominated in EUR, manage- ment has chosen to hedge the EUR exposure on this part of the Group's investment activities. Market risks Market risk is the risk that changes in market prices will affect the Group’s profit or the value of its holdings of financial instruments. Bavarian Nordic is exposed to various market risks with the main risks being exchange rate risks, interest rate risks and cash risks. All market risks are managed in accordance with the treasury policy approved by the Audit Committee. Interest rate risk It is the Group's policy to hedge interest rate risks on loans obtained with floating rate and a maturity of more than five years. Hedging will then consist of interest rate swaps that convert floating rate loans to fixed rate loans. Management determines the economic relationship between the hedged item and the hedging instrument to ensure a high hedge effectiveness. Bavarian Nordic Annual Report 2024 148 Financial statements – Group Financial statements – Parent Company Statements Note 23 Financial risks and financial instruments (continued) The sensitivity analysis shows the net effect it would have had on equity and profit for the year if the year-end exchange rates of USD, EUR and CHF had been 8%, 2% or 9%, respectively (USD, EUR and CHF had been 15%, 1% or 5%, respectively), higher than the actual exchange rates. A corresponding decrease in the actual exchange rates would have had an opposite (positive/negative) effect on net result and equity. The percentages used year-end 2024 for USD and CHF are based on the historical maximal currency rate spread in 2024. The percentage used for EUR is based on the maximum spread in the ERM II framework. These concluded currency forward contracts are deemed to be effective hedges of future transac- tion (cash flow hedges) and thus treated as hedge accounting. Cash flow hedge – forward currency contracts Fair value Contract adjustment amount Fair value recognized in Forward based on as of other compre- DKK thousand price agreed rates December 31 hensive income 2024 Forward currency contracts (USD/DKK) Sell USD 6.76 - 7.07 1,832,534 (37,980) (77,165) Forward currency contracts (DKK/EUR) Buy EUR 7.40 - 7.41 1,333,378 8,078 2,479 (29,902) (74,686) 2023 Forward currency contracts (USD/DKK) Sell USD 6.90 - 6.94 1,454,570 39,184 9,159 Forward currency contracts (DKK/EUR) Buy EUR 7.41 - 7.42 2,150,674 5,600 5,600 44,784 14,759 Cash flow hedge – interest rate swap Fair value Contract adjustment amount Fair value recognized in based on as of other compre- DKK thousand agreed rates December 31 hensive income 2024 Interest rate swap DKK - fixed rate 0.9625% p.a. (expiry 2031) 14,880 698 (405) 698 (405) 2023 Interest rate swap DKK - fixed rate 0.9625% p.a. (expiry 2031) 17,041 1,103 (766) 1,103 (766) In 2016 the Company refinanced the old mortgage loans (fixed rate) and obtained a new mortgage loan with floating rate. The Company also concluded an interest rate swap to convert the floating rate loan to a fixed rate loan. The interest rate swap has the same maturity date and nominal amount as the mortgage loan to secure high effectiveness of the hedge. Derivative financial instruments not designated as hedge accounting Currency forward contracts and currency option contracts which are not designated as hedge accounting are classified as financial assets/liabilities measured at fair value with value adjustments recog- nized through the income statement. There were no open currency contracts as of December 31, 2024 or as per December 31, 2023 not designated as hedge accounting. Cash risks The Group´s bank deposits are placed in deposit accounts without restrictions. The Group's cash and cash equivalents totaled DKK 1,623.5 million as of December 31, 2024 (DKK 1,477.2 million). The Group's fixed rate bond portfolio expires as shown below. Amounts are stated excluding interest. Hedging of expected future cash flows The Company has concluded currency forward contracts to sell USD 264 million (sell USD 210 million) and to buy EUR 180 million (buy EUR 290 million) to hedge net USD cash position during 2025 and EUR milestone payments in 2025. Bavarian Nordic Annual Report 2024 149 Financial statements – Group Financial statements – Parent Company Statements Note 23 Financial risks and financial instruments (continued) 2024 2023 Fair value as of Effective Fair value as of Effective DKK thousand December 31 interest December 31 interest Bond portfolio Within 0-2 years 399,833 2.5% 230,192 3.6% Within 3-5 years - - - - After 5 years 151,705 2.8% 160,055 3.2% Total 551,538 2.6% 390,247 3.5% Maturity of financial liabilities 2024 Undiscounted contractual cash flow Due Due within between 1 Due after Carrying DKK thousand 1 year and 5 years 5 years Total amount Deferred consideration 1,104,708 - - 1,104,708 1,081,465 Credit institutions 2,588 10,162 4,345 17,095 15,127 Lease liabilities 39,602 80,357 - 119,959 113,123 Prepayment from customers 131,408 131,408 131,408 Trade payables 1,045,134 - - 1,045,134 1,045,134 Other liabilities 467,555 - - 467,555 467,555 Non-derivative financial liabilities 2,790,995 90,519 4,345 2,885,859 2,853,812 Derivative financial liabilities 29,902 - - 29,902 29,902 Fluctuations in interest rate levels affect the Group's bond portfolio. A change in the interest rate level by 1 percentage point relative to the interest rate level on the balance sheet date will have an impact of DKK 11.5 million on the Group´s net result and equity (DKK 13.0 million). The bond position with a duration of more than 5 years is a result of previous year's investment strategy. The Group is in process of adapting the bond portfolio to the amended investment strategy with the aim of reducing the duration of the portfolio. The outstanding deferred consideration as of December 31, 2024 is expected to be fully paid in first half of 2025, see note 24 for further description. 2023 Undiscounted contractual cash flow Due Due within between 1 Due after Carrying DKK thousand 1 year and 5 years 5 years Total amount Deferred consideration 1,394,805 1,082,525 - 2,477,330 2,376,989 Credit institutions 2,720 10,698 7,167 20,586 17,048 Lease liabilities 45,679 93,568 166 139,413 128,254 Trade payables 954,143 - - 954,143 954,143 Other liabilities 445,181 - - 445,181 445,181 Non-derivative financial liabilities 2,842,528 1,186,791 7,333 4,036,652 3,921,615 Derivative financial liabilities - - - - - Bavarian Nordic Annual Report 2024 150 Financial statements – Group Financial statements – Parent Company Statements Note 23 Financial risks and financial instruments (continued) Financial liabilities due within one year of DKK 2,821 million (DKK 2,843 million) are expected to be settled with short term assets recognized as of December 31, 2024, consisting of cash and cash equivalents, securities together with trade receivables and other receivables to a total of DKK 3,394 million (DKK 3,706 million). The financial liabilities due after one year of DKK 95 million (DKK 1,194 million) are expected to be settled with the excess short term assets of DKK 573 million (DKK 863 million) in conjunction with expected cash flow from future operations. To further mitigate potential liquidity fluctuations, the Group obtained access to a Revolving Credit Facility of DKK 1,000 million in 2023. The facility was undrawn as of December 31, 2024. The Group has a credit facility of DKK 20 million (DKK 20 million) at Nordea. As of December 31, 2024, DKK 0.3 million (DKK 0.3 million) of the credit facility is utilized for bank guarantees. With respect to the Group´s debt to credit institutions, a change in the applicable interest rate by 1 percentage point would have had an impact on the Group's net result and equity of DKK 0.1 million (DKK 0.2 million). Debt to credit institutions is a mortgage loan of DKK 15.1 million (DKK 17.1 million), further described in note 25. considering changes in the macro environment that might impose an increased risk of losses. The Group´s customers are predominantly public authorities and renowned pharmaceutical companies and wholesalers, and the credit risk on the Group's receivables is there- fore considered to be very low. A loss allowance of DKK 2,995 thousand (DKK 3,227 thousand) has been recog- nized as of December 31, 2024, cf. note 19. To manage credit risk regarding financial counterpar- ties, Bavarian Nordic only enters into derivative finan- cial contracts, repurchase contracts and money market deposits with financial counterparties possessing a satisfactory long-term credit rating from at least two out of the three selected ratings agencies: Standard and Poor’s, Moody’s and Fitch. Cash and cash equivalents are not deemed to be subject to any special credit risk as they are deposited with Nordea and Danske Bank. The bond portfolio is invested in either Danish government bonds, Danish mortgage bonds or bonds issued by Danish banks with high ratings. note 24, debt to credit institutions, cf. note 25, lease liabilities, cf. note 27 with subtraction of cash and cash equivalents together with securities, that in total forms a net receivable of DKK 965 million (net debt DKK 655 million). Total equity as of December 31, 2024, amounted to DKK 11,409 million (DKK 10,340 million). The Group obtained in 2023 access to a committed Revolving Credit Facility (RCF) of DKK 1,000 million with Nordea and Danske Bank as joint lenders. The facility was undrawn as of December 31, 2024 (undrawn as of December 31, 2023). As an integrated part of the RCF agreement, the Group is subject to covenant require- ments consisting of a net interest-bearing debt to EBITDA ratio. The Group regularly secures that compli- ance with the covenant is met. Management regularly assesses whether the Group´s capital structure best serves the interests of the Group and its shareholders. The overall goal is to ensure that the Group has a capital structure which supports its long-term strategy and growth target. In supporting this goal and to maintain the capital structure, the Group can issue new shares, return capital to share- holders, sell assets to reduce debt or increase the groups debt obligations, including taking on bank debt and by way of deferred consideration, provided finan- cial covenants are respected. Derivative financial instruments (level 2) Currency forward contracts, currency option contracts and interest swap contracts are valued according to generally accepted valuation methods based on rele- vant observable swap curves and exchange rates. Managing capital structure The Group's definition of capital encompasses equity together with net interest-bearing debt. The 2023 addition of net interest-bearing debt to the capital defi- nition, did accommodate the introduction of external capital as a resource for the Group in accordance with the conclusion of a committed Revolving Credit Facility in 2023, see further below. As of December 31, 2024 (December 31, 2023) net inter- est-bearing debt consists of deferred consideration, cf. Securities (level 1) The portfolio of publicly traded government bonds, publicly traded mortgage bonds and bank bonds is valued at listed prices and price quotas. Credit risks The primary credit risk relates to trade receivables. The Company assesses the expected credit losses also Bavarian Nordic Annual Report 2024 151 Financial statements – Group Financial statements – Parent Company Statements Note 23 Note 24 Deferred consideration Financial risks and financial instruments (continued) Accounting policies Deferred consideration including contingent milestone payments is recognized when its payment is probable and it can be measured reliably and is at initial recog- nition measured at fair value which equals the present value of future deferred payments. Subsequently, the deferred consideration is measured at amortized cost. This means that the difference between the present value of the consideration and the nominal amounts Fair value hierarchy for financial instruments measured at fair value 2024 DKK thousand Level 1 Level 2 Total Securities 551,538 - 551,538 Financial assets measured at fair value through the income statement 551,538 - 551,538 Derivative financial instruments to hedge future cash flow (currency) - (29,902) (29,902) Derivative financial instruments to hedge future cash flow (interest) - 698 698 Financial assets/liabilities used as hedging instruments - (29,204) (29,204) 2023 DKK thousand Level 1 Level 2 Total Securities 390,247 - 390,247 Financial assets measured at fair value through the income statement 390,247 - 390,247 Derivative financial instruments to hedge future cash flow (currency) - 44,784 44,784 Derivative financial instruments to hedge future cash flow (interest) - 1,103 1,103 Financial assets/liabilities used as hedging instruments - 45,887 45,887 due is recognized in the income statement as a finan- cial expense over the period until expected payment date using the effective interest method. The expected phasing of future payments and the probability of contingent payments are assessed on each reporting date and the impact is recognized as a financial item. Due within Due between Due after DKK thousand 1 year 1 and 5 year 5 years Total 2024 Deferred consideration, product rights 731,520 - - 731,520 Deferred consideration, development project 349,945 - - 349,945 Total 1,081,465 - - 1,081,465 2023 Deferred consideration, product rights 1,163,599 709,635 - 1,873,234 Deferred consideration, development project 196,534 307,221 - 503,755 Total 1,360,133 1,016,856 - 2,376,989 Product rights The Asset Purchase Agreement with GSK includes mile- stone payments relating to transfer and registration of marketing authorizations, technology transfer of different steps of the production and packaging activi- ties as well as a milestone payment when all services agreed to be rendered by GSK have been completed. In total EUR 470 million. The Asset Purchase Agree- ment with GSK also includes a sales milestone of EUR 25 million, which previos year wasn't assessed to be probable and therefore the sales milestone was not recognized as either part of the product rights (note 15) nor the deferred consideration. Due to stronger than expected sales performance the sales milestone was reached in July 2024 and the milestone of EUR 25 million became payable. Following the completion of the technology transfer of the bulk production for both Encepur and Rabipur/RabAvert two milestones were Bavarian Nordic Annual Report 2024 152 Financial statements – Group Financial statements – Parent Company Statements Note 24 Note 25 Debt to credit institutions Deffered consideration (continued) Accounting policies Loans are measured at the time of borrowing at fair value less any transaction costs. Subsequently, debt is measured at amortized cost. This means that the differ- ence between the proceeds of the loan and the amount reached. One has been paid during the year, whereas the other was invoiced in December 2024 and paid in January 2025, EUR 80 million. At end of 2024 only one technology transfer milestone and the completion milestone are outstanding, in total DKK 100 million. Payments are expected to be payable in first half of 2025. The cash flow from payment of deferred consider- ation will be recognized as cash flow from investment activities. The carrying amount is measured using a discount rate of 4% per annum. The discount rate was determined at intial recognition based on an interest rate on a similar loan of the same size and maturity as the contingent milestone payments and the Company's credit rating as of December 31, 2019. The fair value of the deferred consideration as per December 31, 2024 amounts to DKK 725 million (DKK 1,839 million), measured using the updated discount rate of 5.97% (6.25%). The discount rate has been determined based on the same components as described above. BioSolutions amounted to DKK 499 million and was recognized as deferred consideration. During 2024 two milestones were reached and paid, in total USD 30 million. The remaining two milestones, totalling USD 50 million, are expected to become payable in first half of 2025. The cash flow from payment of deferred consideration will be recognized as cash flow from investment activities. The carrying amount are measured using a discount rate of 6% per annum. The discount rate was deter- mined at intial recognition based on an interest rate on a similar loan of the same size and maturity as the contingent milestone payments and the Company's credit rating as of May 15, 2023. The fair value of the deferred consideration as per December 31, 2024 amounts to DKK 350 million (DKK 502 million), measured using the updated discount rate of 5.97% (6.25%). The discount rate has been deter- mined based on the same components as described above. The Purchase and Sale Agreement concluded with Emergent BioSolutions in May 2023 includes an earnout payment starting at USD 30 million. The earnout payment relates to sale of Vivotif and Vaxchora. As per December 31, 2024 Management does not judge the sales milestone to be probable and therefore the earnout payment has not been recognized as either part of the project rights (note 15) nor the deferred consideration. to be repaid is recognized in the income statement over the term of the loan as a financial expense using the effective interest method. Due within Due between Due after DKK thousand 1 year 1 and 5 year 5 years Total 2024 Mortgage1 2,074 8,869 4,184 15,127 Total 2,074 8,869 4,184 15,127 2023 Mortgage1 1,913 8,470 6,665 17,048 Total 1,913 8,470 6,665 17,048 1 Floating interest - swapped to fixed interest of 0.9625% - expiry 2031 The fair value of the debt to credit institutions amounts to DKK 15.1 million (DKK 17.0 million). The fair value of mortgage debt is based on the market value of the underlying bonds set by the bank (level 2). Development project The Purchase and Sale Agreement concluded with Emergent BioSolutions includes milestone payments relating to submission and approval of Biologics License Application (BLA) to FDA and Marketing Authorization Application to EMA for the chikungunya development asset. In total USD 80 million. The tables detail changes in the Group's liabilities arising from financing activities, both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group's consolidated statement of cash flow as cash flows from financing activities. At initial recognition the net present value of probable future development milestone payments to Emergent Bavarian Nordic Annual Report 2024 153 Financial statements – Group Financial statements – Parent Company Statements Note 25 Note 26 Retirement benefit obligations Debt to credit institutions (continued) Accounting policies In defined contribution plans, the Group makes regular payments of fixed contributions to independent pension funds and insurance companies. The Group is under no obligation to pay additional contributions. Costs for defined contribution plans are recognized in the income statement as the Group assumes an obliga- tion to make the payment. In defined benefit plans, the Group is under an obliga- tion to pay a defined benefit on retirement. The actuar- ially calculated present value less the fair value of any plan assets is recognised in the balance sheet under retirement benefit obligations. The total service costs of the year plus calculated interest based on actuarial estimates and financial assumptions at the beginning of the year are recognized in the income statement. The difference between the forecast development in plan assets and liabilities and the realized values at the end of the year is called actuarial gains or losses and is recognized in other comprehensive income. In connection with a change in benefits regarding the employees’ employment with the Group to date, there will be a change in the actuarial calculation of the net present value, which is taken directly to the income statement. Cash flow from financing activities January Cash Non-cash December DKK thousand 1, 2024 movement movement 31, 2024 2024 Mortgage 17,048 (1,921) - 15,127 Lease liabilities 128,254 (41,639) 26,508 113,123 Total liabilities from financing activities 145,302 (43,560) 26,508 128,250 January Cash Non-cash December DKK thousand 1, 2023 movement movement 31, 2023 2023 Mortgage 18,930 (1,882) - 17,048 Security lending (repo transactions) 1,103,661 (1,103,661) - - Prepayment and loan from Government 566,420 240,000 (806,420) - Lease liabilities 70,321 (34,270) 92,203 128,254 Total liabilities from financing activities 1,759,332 (899,813) (714,217) 145,302 Defined contribution plans The Group offers pension plans to all employees in Denmark and abroad. Most of the pension plans are defined contribution plans, expect for the pension plan in Bavarian Nordic Berna GmbH, see below. The Group funds the plans through regular payments of premiums to independent insurance companies responsible for the pension obligations towards the beneficiaries. Once the pension contributions for defined contribution plans have been made, the Group has no further obligation towards current or former employees. Contributions to defined contribution plans are recognized in the income statement when paid. Defined benefit plans The pension plan in Bavarian Nordic Berna GmbH is part of a collective foundation in which other plans of non-related employers also participate, and the different plans all participate in the various risks relating to the foundation. Defined benefit liabilities are recognized in the balance sheet and in the income statement as indicated below. Employees from Bavarian Nordic Switzerland AG have been transferred to Bavarian Nordic Berna GmbH in August 2024 and are included in the new pension plan as from December 31, 2024. The previous pension plan in Bavarian Nordic Switzerland AG was recognized as a contribution benefit plan and therefore no pension obligation was recognized. The net assets under the Bavarian Nordic Berna GmbH pension plan have been adjusted to include the transferred employees. Bavarian Nordic Annual Report 2024 154 Financial statements – Group Financial statements – Parent Company Statements Note 26 Retirement benefit obligations (continued) DKK thousand 2024 2023 Defined contribution plans 84,966 66,935 Defined benefit plans 31,205 1,116 Cost of pension plans recognized in income statement 116,171 68,051 Current service cost 12,749 11,817 Past service cost 17,186 (12,023) Administration expenses 309 298 Net interest expenses 961 1,024 Cost of defined benefit plans recognized in income statement 31,205 1,116 Actuarial gains/losses on pension obligations (89,584) (34,324) Actuarial gains/losses on plan assets 72,194 1,769 Actuarial gains/losses on defined benefit plans recognized in other comprehensive income (17,390) (32,555) Plan assets as of January 1 221,024 - Additions from acquisition of businesses - 206,938 Exchange adjustments (3,492) 10,648 Actual rate of interest 3,006 4,542 Actuarial gains/losses on plan assets 72,194 1,769 Administration expenses paid (309) (298) Employer contributions 14,182 11,808 Employee contributions 9,358 7,117 Benefit paid out 29,582 (21,500) Other restructuring events 41,936 - Plan assets as of December 31 387,481 221,024 DKK thousand 2024 2023 Specification of present value of defined benefit obligation Present value of defined benefit liability as of January 1 301,756 - Additions from acquisition of businesses - 262,925 Exchange adjustments (5,048) 13,529 Current service costs 12,749 11,817 Past service costs1 17,186 (12,023) Calculated interest on liability 3,967 5,566 Actuarial gains/losses, financial assumptions 17,250 34,186 Actuarial gains/losses, demographic assumptions - (213) Actuarial gains/losses, experience 72,334 352 Employee contributions 9,358 7,117 Benefit paid out 29,582 (21,500) Other restructuring events 41,936 - Present value of defined benefit liability as of December 31 501,070 301,756 Fair value of plan assets as of December 31 (387,481) (221,024) Net liability of defined benefit plans as of December 31 113,589 80,732 Net liability of defined benefit plans as of January 1 80,732 - Additions from acquisition of businesses - 55,987 Expenditure for the year 31,205 1,116 Actuarial gains/losses on pension obligation 89,584 34,325 Exchange adjustment (1,556) 2,881 Actuarial gains/losses on plan assets (72,194) (1,769) Payments received (14,182) (11,808) Net liability of defined benefit plans as of December 31 113,589 80,732 1 A reduction in the conversion factors (rate at which the accumulated account balance is converted to an annual pension at retirement) was announced by the Swiss pension provider Servisa in 2023. The impact of this change was calculated as if the change happened as of December 31, 2023, and led to a reduction of CHF 1.5 million in the defined benefit liability. Bavarian Nordic Annual Report 2024 155 Financial statements – Group Financial statements – Parent Company Statements Note 26 Retirement benefit obligations (continued) The below sensitivity analysis shows the change in one of the actuarial assumptions, while other assumptions are kept constant. In practice, this is unlikely to occur as changes in some of the assumptions may be correlated. Percentage increase/decrease in the gross liability resulting from a change in a single actuarial assumption. DKK thousand 2024 2023 Percentage of plan assets invested in asset category Equity 33.5% 31.0% Bonds 25.5% 28.4% Property 13.6% 16.0% Other 27.4% 24.6% Actuarial assumptions applied at the balance sheet date (expressed as an average) Discount rate 1.00% 1.35% Future rate of salary increases 1.80% 1.75% Inflation 1.10% 1.25% DKK thousand 2024 2023 +0.5%-point +0.5%-point Discount rate -7.7% -8.2% +1 year +1 year Life expectancy 1.7% 1.5% Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience. These assumptions translate into an average life expectancy in years for a pensioner retiring at age 65 as follows: Life expectancies Retiring aged 65 at the end of the reporting period Male 22.1 22.0 Female 23.9 23.8 Retiring aged 65, 20 years after the end of the reporting period Male 24.1 24.0 Female 25.8 25.7 The contributions to the plan for 2025 are expected in the same level as in 2024. Bavarian Nordic Annual Report 2024 156 Financial statements – Group Financial statements – Parent Company Statements Note 27 Lease liabilities Note 28 Prepayment from customers Accounting policies The lease liability is initially measured at the present value of the future lease payments (see further in note 17), discounted by using an incremental country specific borrowing rate ranging from 4.8% to 6.93% applying only a single discount rate for a portfolio of lease assets with reasonable similar characteristics. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability using the effective interest method and by reducing the carrying amount to reflect the lease payments made. Accounting policies Prepayments are recognized under liabilities and will be recognized in the income statement as the delivery of paid products takes place. • The lease term has changed, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. • The lease payments change due to changes in an index or rate, in which case the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate. • A lease contract is modified and the lease modifi- cation is not accounted for as a seperate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. DKK thousand 2024 2023 Prepayment from customers as of January 1 - - Prepayments received during the year 131,408 - Prepayment from customers as of December 31 131,408 - As of December 31, 2024, the majority of prepayments from customers were received from BARDA. Addition- ally, prepayments were also received for a chikungunya clinical study. The recognition of revenue is described in note 3. The lease liability is remeasured and corresponding adjustments are made to the related right-of-use-asset whenever: DKK thousand 2024 2023 Non-current 73,653 83,621 Current 39,470 44,633 Lease liabilities 113,123 128,254 Due within Due between Due after DKK thousand 1 year 1 and 5 year 5 years Total 2024 Lease liabilities 39,470 73,653 - 113,123 Total 39,470 73,653 - 113,123 2023 Lease liabilities 44,633 83,621 - 128,254 Total 44,633 83,621 - 128,254 Bavarian Nordic Annual Report 2024 157 Financial statements – Group Financial statements – Parent Company Statements Note 29 Share-based payment Accounting policies Share-based incentive plans in which employees can only opt to buy shares in the Company (warrants) are measured at the equity instruments’ fair value at the grant date and recognized in the income statement over the vesting period. The balancing item is recog- nized directly in equity. The fair value on the date of grant is determined using the Black-Scholes model. Restricted stock units and performance restricted stock units are measured at fair value at grant date. For Executive Management cash bonus converted to restricted stock units, the number of restricted stock units are calculated by dividing the allocated cash bonus amount by the share price of the Company at grant date. As the cash bonus has already been accrued and expensed in the income statement, the grant of restricted stock units has no additional impact on the income statement. The accrued liability for the converted cash bonus is reclassified to equity. Matching shares are measured at the same fair value as the initial restricted stock units and expensed over the three year vesting period. The balancing item is recog- nized directly in equity. Performance restricted stock units granted to Execu- tive Management as part of their long-term incentive scheme are expensed over the three year vesting period with the balancing item recognized directly in equity. Vesting is subject to achievement of certain Key Performance Indicators (“KPIs”) as determined by the Board of Directors. Restricted stock units granted as sign-on bonus for members of the Executive Management and restricted stock units granted to the Board of Directors are expensed at grant date with the balancing item recog- nized directly in equity. to the provisions of the Danish Public Companies Act regarding termination of employees prior to their exercise of warrants in the case of recipients who are subject to the act. For warrants granted to Executive Management in December 2022 and onwards, vesting is subject to achievement of certain Key Performance Indicators (“KPIs”) as determined by the Board of Directors. Number of granted warrants are adjusted on an annual basis based on performance. The recognized costs are adjusted accordingly. Incentive plans In order to motivate and retain key employees and encourage the achievement of common goals for employees, management and shareholders, the Company has established incentive plans by way of warrant programs and restricted stock units programs, the latter only for members of the Executive Manage- ment and Board of Directors. Warrants The Board of Directors has been granting warrants to the Company´s management and selected employees of the Company and its subsidiaries. The warrants are granted in accordance with the authorizations given to the Board of Directors by the shareholders. The Board of Directors has fixed the terms of and the size of the grants of warrants, taking into account authorizations from the shareholders, the Group's guidelines for incentive pay, an assessment of expectations of the recipient´s work efforts and contri- bution to the Group´s growth, as well as the need to motivate and retain the recipient. Grant takes place on the date of establishment of the program. Exercise of warrants is by default subject to continuing employ- ment with the Group. The warrants granted are subject Bavarian Nordic Annual Report 2024 158 Financial statements – Group Financial statements – Parent Company Statements Note 29 Share-based payment (continued) Outstanding Outstanding Can be Average as of as of exercised as of exercise Warrant overview – 2024 January 1 Additions Exercised Annulled Terminated December 31 December 31 price (DKK) November 2019 513,754 - (488,446) (12,164) (13,144) - - 146 January 2020 7,039 - (7,039) - - - - 156 November 2020 1,098,180 - (261,538) (25,628) - 811,014 811,014 207 November 2021 651,074 - - (40,611) - 610,463 - 353 April 2022 81,872 - - - - 81,872 - 190 December 2022 910,438 - - (78,044) - 832,394 - 225/271 December 2023 1,258,558 - - (115,179) - 1,143,379 - 172/192 December 2024 - 1,156,783 - - - 1,156,783 - 199/223 Total 4,520,915 1,156,783 (757,023) (271,626) (13,144) 4,635,905 811,014 Outstanding Outstanding as of as of Warrant overview – 2024 January 1 Additions Exercised Annulled Terminated Transferred December 31 Corporate Management 669,064 80,839 (141,771) - - - 608,132 Other Executive Management 484,041 37,435 (7,039) - - (129,050) 385,387 Other employees 2,916,601 1,038,509 (404,904) (271,626) (2,916) (176,975) 3,098,689 Resigned employees 451,209 - (203,309) - (10,228) 306,025 543,697 Total 4,520,915 1,156,783 (757,023) (271,626) (13,144) - 4,635,905 Weighted average exercise price (DKK) 226 221 167 223 147 - 234 Weighted average share price at exercise (DKK) 241 Number of warrants which can be exercised as of December 31, 2024 811,014 at a weighted average exercise price of DKK 207 Bavarian Nordic Annual Report 2024 159 Financial statements – Group Financial statements – Parent Company Statements Note 29 Share-based payment (continued) Outstanding Outstanding as of as of Warrant overview – 2023 January 1 Additions Exercised Annulled Terminated Transferred December 31 Corporate Management 725,932 83,921 (140,789) - - - 669,064 Other Executive Management 429,550 77,491 (23,000) - - - 484,041 Other employees 1,982,127 1,097,146 (100,020) (42,799) (19,853) - 2,916,601 Resigned employees 514,398 - (51,810) - (11,379) - 451,209 Total 3,652,007 1,258,558 (315,619) (42,799) (31,232) - 4,520,915 Weighted average exercise price (DKK) 231 189 144 252 142 - 226 Weighted average share price at exercise (DKK) 179 Number of warrants which can be exercised as of December 31, 2023 520,793 at a weighted average exercise price of DKK 142 Specification of parameters for Black-Scholes model Nov. 2020 Nov. 2021 Apr. 2022 Dec. 20223 Dec. 20233 Dec. 20243 Average share price 179.84 307.20 171.35 224.70 172.40 198.90 Average exercise price at grant 206.82 353.06 190.11 270.91 191.58 223.33 Average exercise price at grant – Executive Management 224.70 172.40 198.90 Applied volatility rate2 39.8% 41.8% 42.3% 46.6% 53.3% 57.7% Expected life (years) 3.0 3.0 3.0 3.0 3.0 3.0 Expected dividend per share - - - - - - Risk-free interest rate p.a. -0.66% -0.53% 0.39% 2.04% 2.55% 1.65% Fair value per share at grant1 41 76 47 64 62 75 Fair value per share at grant – Executive Management1 78 68 82 Recognized costs in 2024 DKK 57.0 million compared to DKK 48.0 million in 2023. 1 Fair value of each warrant at grant date applying the Black- Scholes model 2 The applied volatility is based on the volatility for a peer group. 3 The December 2022, December 2023 and December 2024 program have two set of exercise conditions. Executive Manage- ment can subscribe future shares at a exercise price of DKK 224.70/172.40/198.90 per share equivalent to the market price of Bavarian Nordic's shares at the time of grant. Vesting of the warrants is subject to prior fulfilment of KPI's as determined by the Board of Directors. Other employees can subscribe future shares at a exercise price of DKK 270.91/191.58/223.33 per share, determined as the average market price (closing price) of the Company's shares on Nasdaq Copenhagen over a period of 15 business days prior to grant plus 15%. Bavarian Nordic Annual Report 2024 160 Financial statements – Group Financial statements – Parent Company Statements Note 29 Share-based payment (continued) Exercise periods Can be exercised wholly or partly in a period of 14 days commencing from the day of publication of: December 2024 Annual Report 2027 Interim Report Q1 2028 Interim Report Q2 2028 Interim Report Q3 2028 Annual Report 2028 Interim Report Q1 2029 Interim Report Q2 2029 Interim Report Q3 2029 December 2023 Annual Report 2026 Interim Report Q1 2027 Interim Report Q2 2027 Interim Report Q3 2027 Annual Report 2027 Interim Report Q1 2028 Interim Report Q2 2028 Interim Report Q3 2028 December 2022 Annual Report 2025 Interim Report Q1 2026 Interim Report Q2 2026 Interim Report Q3 2026 Annual Report 2026 Interim Report Q1 2027 Interim Report Q2 2027 Interim Report Q3 2027 April 2022 Interim Report Q2 2025 Interim Report Q3 2025 Annual Report 2025 Interim Report Q1 2026 Interim Report Q2 2026 Interim Report Q3 2026 Annual Report 2026 Interim Report Q1 2027 November 2021 Annual Report 2024 Interim Report Q1 2025 Interim Report Q2 2025 Interim Report Q3 2025 Annual Report 2025 Interim Report Q1 2026 Interim Report Q2 2026 Interim Report Q3 2026 November 2020 Annual Report 2023 Interim Report Q1 2024 Interim Report Q2 2024 Interim Report Q3 2024 Annual Report 2024 Interim Report Q1 2025 Interim Report Q2 2025 Interim Report Q3 2025 Bavarian Nordic Annual Report 2024 161 Financial statements – Group Financial statements – Parent Company Statements Note 29 Share-based payment (continued) Phantom shares In 2020, the Company established a three-year phantom share program for all employees of the Group except for management and other employees receiving warrants. The employees received up to five phantom shares per month free of charge during the period from January 1, 2021 to December 31, 2023. Each employee who was a full-time employee during the entire term of the plan was eligible to receive a maximum of 180 phantom shares. Restricted stock units In March 2024, the Board of Directors decided to post- pone the payment of half of the achieved cash bonus for members of the Executive Management for 3 years, converting the postponed bonus of DKK 9.5 million into 58,034 unconditional restricted stock units using the share price of the Company at grant date (DKK 163). The Board of Directors decided to grant additional restricted stock units free of charge on expiry of a 3 years period (so-called "matching shares") upon the recipient still being employed in March 2027. One matching share is granted for each two acquired restricted stock units. The maximum number of matching shares is 29,015. The initial granted restricted stock units and the poten- tial matching shares total 87,049 shares. 2021-2023 phantom share program DKK thousand 2024 2023 2022 2021 Outstanding as of January 1 113,125 79,132 37,996 - Granted during the year - 33,993 41,136 37,996 Expired during the year (113,125) - - - Outstanding phantom shares as of December 31 - 113,125 79,132 37,996 Liability in DKK thousand as of December 31 - - 3,732 3,589 Specification of parameters for Black-Scholes model Share price December 31 177 213 269 Average share exercise price 203 203 203 Expected volatility rate - 47% 42% Expected life (years) - 1.0 2.0 Expected dividend per share - - - Risk-free interest rate p.a. - 3.46% 0.11% On expiry of the program, the employees could exer- cise the phantom shares granted to them and thus be entitled to a cash bonus calculated on the basis of the increase in the price of the Company´s shares. The exercise was conditional on the price of the Company´s shares being at least DKK 5 higher than the exercise price at the time of exercise. The program expired in January 2024 with no exercise as the program was out-of-money. At the annual general meeting in April 2024, the Board of Directors were granted a total of 13,637 uncondi- tional restricted stock units corresponding to 50% of the annual fixed fee of DKK 2.1 million (excl. committee fee). The restricted stock units will be delivered after 3 years in May 2027. The expected volatility is based on the volatility for a peer group. Recognized costs in 2024 DKK 0 million compared to a net income of DKK 3.2 million in 2023. In May 2024, the Company bought back 162,288 of its own shares to meet the obligation to deliver up to 162,288 shares to the members of the Executive Management and the Board of Directors in March 2028. Bavarian Nordic Annual Report 2024 162 Financial statements – Group Financial statements – Parent Company Statements Note 29 Share-based payment (continued) The grant of the initial restricted stock units to the Exec- utive Management related to conversion of cash bonus (58,034 shares) had no impact on the income statement for 2024, as the corresponding cash bonus (DKK 9.5 million) was accrued in 2023, though the amount has been reclassified from "Salary and wages" to "Share- based payment" in the staff cost note (note 8). The obligation related to the matching shares amount to DKK 4.7 million measured at the same fair value as the initial restricted stock units (DKK 163). The obligation will be expensed over the three-year vesting period. The grant of performance restricted stock units to the Executive Management (46,700 shares) will be expensed over the three-year vesting period. During 2024, DKK 19.6 million (DKK 8.6 million) has been expensed and recognized as share-based payment related to Executive Management. The grant of restricted stock units to the Board of Directors (13,637 shares - DKK 2.1 million) were fully expensed at grant. Outstanding restricted stock units 2024 Outstanding Outstanding Granted Released as of Value at grant as of January 1 during the year during the year December 31 date (DKK) Vesting date Executive Management: Performance restricted stock units 2024 - 46,700 - 46,700 194 Mar. 2028 Conversion of cash bonus for 2023 - 58,034 - 58,034 163 Mar. 2027 Matching shares - bonus 2023 - 29,015 - 29,015 163 Mar. 2027 Performance restricted stock units 2023 61,602 - - 61,602 167 Mar. 2027 Conversion of cash bonus for 2022 22,429 - - 22,429 227 Mar. 2026 Matching shares - bonus 2022 11,213 - - 11,213 227 Mar. 2026 Conversion of cash bonus for 2021 22,578 - - 22,578 163 Mar. 2025 Matching shares - bonus 2021 11,288 - - 11,288 163 Mar. 2025 CEO retention plan 17,109 - - 17,109 156 May 2025 Matching shares - CEO retention plan 8,554 - - 8,554 156 May 2025 Sign-on bonus COO 4,446 - - 4,446 165 May 2025 Matching shares - sign-on COO 2,223 - - 2,223 165 May 2025 Conversion of cash bonus for 2020 16,413 - (16,413) - 222 Mar. 2024 Matching shares - bonus 2020 8,207 - (8,207) - 222 Mar. 2024 Executive Management 186,062 133,749 (24,620) 295,191 Board of Directors: Fee 2024 - 13,637 - 13,637 152 May 2027 Fee 2023 10,640 - - 10,640 194 May 2026 Fee 2022 11,467 - - 11,467 153 May 2025 Fee 2021 7,127 - (7,127) - 273 Apr. 2024 Board of Directors 29,234 13,637 (7,127) 35,744 Total 215,296 147,386 (31,747) 330,935 Bavarian Nordic Annual Report 2024 163 Financial statements – Group Financial statements – Parent Company Statements Note 29 Share-based payment (continued) Outstanding restricted stock units 2023 Outstanding Outstanding Granted Released as of Value at grant as of January 1 during the year during the year December 31 date (DKK) Vesting date Executive Management: Performance restricted stock units 2023 - 61,602 - 61,602 167 Mar. 2027 Conversion of cash bonus for 2022 - 22,429 - 22,429 227 Mar. 2026 Matching shares - bonus 2022 - 11,213 - 11,213 227 Mar. 2026 Conversion of cash bonus for 2021 22,578 - - 22,578 163 Mar. 2025 Matching shares - bonus 2021 11,288 - - 11,288 163 Mar. 2025 CEO retention plan 17,109 - - 17,109 156 May 2025 Matching shares - CEO retention plan 8,554 - - 8,554 156 May 2025 Sign-on bonus COO 4,446 - - 4,446 165 May 2025 Matching shares - sign-on COO 2,223 - - 2,223 165 May 2025 Conversion of cash bonus for 2020 16,413 - - 16,413 222 Mar. 2024 Matching shares - bonus 2020 8,207 - - 8,207 222 Mar. 2024 Conversion of cash bonus for 2019 11,003 - (11,003) - 240 Mar. 2023 Matching shares - bonus 2019 5,500 - (5,500) - 240 Mar. 2023 Sign-on bonus CMO 8,651 - (8,651) - 149 May 2023 Matching shares - sign-on CMO 4,325 - (4,325) - 149 May 2023 Executive Management 120,297 95,244 (29,479) 186,062 Board of Directors: Fee 2023 - 10,640 - 10,640 153 May 2026 Fee 2022 11,467 - - 11,467 153 May 2025 Fee 2021 7,127 - - 7,127 273 Apr. 2024 Fee 2020 7,111 - (7,111) - 190 Jun. 2023 Board of Directors 25,705 10,640 (7,111) 29,234 Total 146,002 105,884 (36,590) 215,296 Bavarian Nordic Annual Report 2024 164 Financial statements – Group Financial statements – Parent Company Statements Note 29 Note 30 Acquisition of businesses Share-based payment (continued) Total share-based payments Below a specification of all share-based payments expensed in 2024 and 2023. The amounts reconcile to note 8. DKK thousand 2024 2023 Warrants 56,958 47,989 Restricted stock units 21,707 10,653 Share-based payment recognized directly in equity 78,665 58,642 Phantom share program 7 (3,165) Share-based payment recognized as a liability (change during the year) 7 (3,165) Total share-based payment expensed, cf. note 8 78,672 55,477 Non-cash adjustment in cash flow statement 78,672 55,477 On February 15, 2023, Bavarian Nordic A/S entered into an agreement with Emergent BioSolutions to acquire two marketed travel vaccines, Vivotif® for the preven- tion of typhoid fever and Vaxchora® against cholera as well as a Phase 3 vaccine candidate for the prevention of chikungunya virus. The acquisition further included a Swiss-based biologics manufacturing facility, US-based research and development facilities related to the development of the chikungunya vaccine, and EU/ US-based commercial operations with a specialty sales- force. The acquisition included four subsidiaries, the main being the manufacturing facility in Switzerland. The US-based activities were carved-out from Emergent BioSolutions and were integrated into Bavarian Nordic’s current US entity. The transaction closed on May 15, 2023. The consid- eration included an upfront payment of USD 270 million and up to USD 110 million in future conditional milestone payments. Additionally, USD 4 million were added to the cash payment to Emergent BioSolutions which included estimated adjustments for net working capital, debt, and other customary closing adjustments. The actual working capital adjustment led to a post- closing payment of USD 0.6 million. Transaction costs of DKK 64 million were included in administration costs in the income statement for 2023. Bavarian Nordic is conditioned to pay Emergent BioSolutions upon the achievement of milestones related to the successful development of the chikun- gunya vaccine (USD 80 million) and sales performance of the marketed vaccines (USD 30 million). Based on regulatory plans and expectations for future submission and approval of applications related to the chikungunya-vaccine all development milestones were assumed probable. The net present value of the probable milestone payments, DKK 499 million, was recognized as part of the "Acquired rights and devel- opment in progress" (further addition to the asset) and a corresponding liability was recognized as deferred consideration. The sales milestone of USD 30 million related to future sale of Vivotif® and Vaxchora® was not considered probable. The acquisition in total contributed with DKK 142.6 million and DKK 399 million to revenue and EBITDA, respectively in 2023. Details of the acquisition The purchase price was allocated to the acquired net asset, see further below. The transaction was not subject to recognition of goodwill. Bavarian Nordic Annual Report 2024 165 Financial statements – Group Financial statements – Parent Company Statements Note 30 Acquisition of businesses (continued) Accounting policies The purchase price for the acquisition comprises of identifiable assets and liabilities and contingent liabil- ities assumed measured at fair value at the date of acquisition by applying relevant valuation methods. Acquisition-related costs are expensed as incurred. Cost of acquired product rights are measured at cash consid- eration and present value of any probable deferred milestone payments for those rights. A corresponding deferred consideration is recognized at initial recogni- tion. Subsequently, the deferred consideration is meas- ured at amortized cost. The acquisition has been included in the Consolidated Financial Statements of Bavarian Nordic as of the date of acquisition May 15, 2023. Bavarian Nordic has made the following provisional calculation of the fair value of the acquired net assets at the time of the acquisition: DKK thousand Total acquisition in 2023 Product rights 449,577 Development asset 1,286,778 Other intangible assets 5,419 Property, plant and equipment 681,453 Right-of-use assets 41,943 Inventories 126,933 Receivables 20,503 Prepayments 39,899 Cash 66,531 Deferred tax assets (liabilities), net (25,814) Retirement benefit obligations (55,988) Trade payables (136,686) Leasing liabilities (41,943) Other payables (61,189) Total acquisition price 2,397,416 Contingent consideration (499,312) Consideration transferred 1,898,104 Cash acquired (66,531) Cash used for acquisition of business 1,831,573 Number of employees 280 Bavarian Nordic Annual Report 2024 166 Financial statements – Group Financial statements – Parent Company Statements Note 31 Impact from write-down of ABNCoV2 Following the Phase 3 results announced in August 2023, where ABNCoV2 demonstrated a reduced level of neutralizing antibodies against a circulating variant, the asset no longer represented a commercial opportunity for Bavarian Nordic as the regulators, EMA and FDA, could not accept a submission for licensure. Therefore, Management decided to fully write-down all assets and liabilities related to the development program as per December 31, 2023. 2023 Financial Financial position position including ABNCoV2 excluding DKK thousand write-down write-down write-down Intangible assets 6,481,736 1,429,488 7,911,224 Property, plant and equipment 2,327,515 - 2,327,515 Right-of-use assets 125,170 - 125,170 Financial assets 15,741 235,711 251,452 Total non-current assets 8,950,162 1,665,199 10,615,361 Inventories 1,643,736 - 1,643,736 Receivables 1,891,834 220,840 2,112,674 Securities, cash and cash equivalents 1,867,481 - 1,867,481 Total current assets 5,403,051 220,840 5,623,891 Total assets 14,353,213 1,886,039 16,239,252 Equity 10,339,932 557,683 10,897,615 Deferred consideration 2,376,989 521,936 2,898,925 Other non-current liabilities 208,556 806,420 1,014,976 Other current liabilities 1,427,736 - 1,427,736 Total equity and liabilities 14,353,213 1,886,039 16,239,252 2023 Income Income statement statement including ABNCoV2 excluding DKK thousand write-down write-down write-down Revenue 7,062,340 - 7,062,340 Production costs 2,459,294 - 2,459,294 Gross Profit 4,603,046 - 4,603,046 Sales and distribution costs 331,579 - 331,579 Research and development costs 2,228,080 557,683 1,670,397 Administrative costs 540,848 - 540,848 Total operating costs 3,100,507 557,683 2,542,824 Income before interest and tax (EBIT) 1,502,539 (557,683) 2,060,222 EBITDA 2,614,543 - 2,614,543 Net result for the year 1,475,189 (557,683) 2,032,872 Bavarian Nordic Annual Report 2024 167 Financial statements – Group Financial statements – Parent Company Statements Note 31 Note 32 Contingent liabilities and other contractual obligations Impact from write-down of ABNCoV2 (continued) Write-down of ABNCoV2 development program The net write-down of ABNCoV2 development program amounted to DKK 558 million and consisted of the following components: • Intangible assets DKK 1,429 million: Included the upfront payment to AdaptVac of DKK 33 million, the net present value of probable future sales/devel- opment milestones DKK 596 million, capitalized development costs for running Phase 2 study and Phase 3 study DKK 774 million and DKK 26 million in capitalized scale-up activities in Kvistgaard. • Financial assets DKK 236 million: Incurred cost for scale-up activities at the CMO for preparation for commercial launch. • Receivables DKK 221 million: Commercial batches produced at CMO as part of the process qualification process. • Deferred consideration DKK 522 million: As part of the ABNCoV2 write-down the previous recog- nized deferred consideration of DKK 596 million was reduced to DKK 74 million, reflecting the most likely milestone scenario. • Other non-current liabilities DKK 806 million: The obtained funding from Danish Ministry of Health was reclassified from an obligation to a grant received. The amount included DKK 6 million in amortized cost. DKK thousand 2024 2023 Collaborative agreements Contractual obligations with research (CRO) and manufacturing (CMO) partners. - Due within 1 year 139,183 44,080 Earnout to Emergent The Purchase and Sale Agreement concluded with Emergent BioSolutions in May 2023 includes an earnout payment starting at USD 30 million. The earnout payment relates to sale of Vivotif and Vaxchora. As per December 31, 2023 Management does not judge the sales milestone to be probable and therefore the earnout payment has not been recognized as either part of the project rights (note 15) nor the deferred consideration (note 24). on the fair market value of consideration received, if and when the Group grants such sublicenses. Payments considered remote are not included in the amounts above. Company mortgage The Company has by letter of indemnity granted Nordea a floating charge on unsecured claims arising from the sale of goods and services and stocks of raw materials, intermediate products and finished products, DKK 150 million (DKK 150 million). The floating charge secures the operating credit line of DKK 20 million and the line for trading in financial instruments, DKK 50 million (DKK 50 million). License agreements National Cancer Institute The Group has license agreements with the National Cancer Institute (NCI) and Public Health Service (PHS) in the U.S. for PROSTVAC, CV301 and BN-Brachyury, respec- tively. The agreements include contingent liabilities for the Group to pay performance-based royalties, if and when certain milestone events are achieved. Further, the agreements include potential contingent liabilities for the Group to pay additional sublicensing royalties Lawsuits Based on management's assessment the Group is not involved in any lawsuits or arbitration cases which could have a material impact on the Group's financial position or results of operations. Bavarian Nordic Annual Report 2024 168 Financial statements – Group Financial statements – Parent Company Statements Note 33 Related party transactions Note 34 Significant events after the balance sheet date The Group Management and Board of Directors of Bavarian Nordic A/S are considered related parties. Besides the remuneration of the Board of Directors and the Executive Management, cf. note 8, and the share- based payments, cf. note 29, there are no transactions with related parties. On January 31, 2025, the Company completed a share buy-back program, which was announced and initiated on January 9, 2025. As planned, the Company repur- chased shares of approximately DKK 150 million with the purpose of adjusting the capital structure. On February 14, 2025, the U.S. Food and Drug Adminis- tration (FDA) approved VIMKUNYA™, the first virus-like particle single-dose chikungunya vaccine in the US for persons 12 years of age and older. Upon approval, Bavarian Nordic received a Priority Review Voucher, which the Company intends to monetize when appro- priate. On February 25, 2025, the Company announced a stra- tegic partnership with Biological E. Limited, initially signing a contract manufacturing agreement with the aim to provide capacity for the future supply of chikun- gunya vaccines to endemic low- and middle-income countries. On February 28, 2025, the Company received marketing authorization in Europe for VIMKUNYA® for persons 12 years of age and older. This followed a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) on January 31, 2025. Transactions with subsidiaries are eliminated in the consolidated financial statements, in accordance with the accounting policies. Except as noted above, there have been no significant events between December 31, 2024 and the date of approval of these financial statements that would require a change to or additional disclosure in the financial statements. Note 35 Approval of the consolidated financial statements The consolidated financial statements were approved by the Board of Directors and Corporate Management and authorized for issue on March 5, 2025. Bavarian Nordic Annual Report 2024 169 Financial statements – Group Financial statements – Parent Company Statements Financial statements – Parent Company Contents Financial statements Notes Income statement 1 Material accounting policies and key accounting estimates and judgments 12 13 14 15 16 17 18 19 20 21 22 Right-of-use-assets Statement of financial position – Assets Statement of financial position – Equity and liabilities Statement of changes in equity Investment in subsidiaries Inventories 2 Revenue 3 Research and development costs Staff costs Lease liabilities 4 Prepayment from customers Other liabilities 5 Depreciation, amortization and impairment losses Fees to auditor appointed at the annual general meeting Financial income 6 7 Contingent liabilities and other contractual obligations Mortgages and collateral 8 9 10 11 Financial expenses Related party transactions Proposed appropriation of net profit/(loss) Significant events after the balance sheet date Tax for the year Intangible assets Property, plant and equipment Bavarian Nordic Annual Report 2024 170 Financial statements – Group Financial statements – Parent Company Statements Income statement For the years ended December 31, 2024 and 2023 DKK thousand Note 2024 2023 Note Notes with reference to the consolidated financial statements Revenue 2 5,684,020 2,886,066 6,932,388 2,473,002 Revenue 3 6 8 4 5 7 Production costs Gross profit 4,5 Research and development costs Staff costs 2,797,954 4,459,386 Sales and distribution costs Research and development costs Administrative costs 4 3,4,5 4,5,6 333,482 967,885 295,202 2,286,844 550,961 Production costs Sales and distribution costs Administrative costs 529,951 Total operating costs 1,831,318 3,133,007 Income before interest and tax (EBIT) 966,636 1,326,379 Income from investments in subsidiaries Financial income 13 7 (13,432) 150,167 138,625 964,746 84,703 159,998 Financial expenses 8 141,415 Income before company tax 1,429,665 Tax on income for the year 9 - (10,972) Net result for the year 21 964,746 1,440,637 Bavarian Nordic Annual Report 2024 171 Financial statements – Group Financial statements – Parent Company Statements Statement of financial position – Assets December 31, 2024 and 2023 DKK thousand Note 2024 2023 DKK thousand Note 2024 2023 Non-current assets Current assets Inventories Product rights 4,660,426 1,286,782 343,619 18,875 4,791,442 1,286,782 - 14 2,117,790 1,527,397 Acquired rights and development in progress Developed production processes Software Trade receivables Receivables from subsidiaries Other receivables Prepayments 881,960 356,853 33,140 1,699,601 89,779 7,881 92,817 Other intangible assets in progress Intangible assets 16,188 389,073 6,475,178 93,512 11,437 10 6,325,890 Receivables 1,365,465 1,893,634 Land and buildings 630,561 2,230 664,357 1,316 Securities 551,538 1,519,200 2,070,738 390,247 1,421,677 1,811,924 Leasehold improvements Cash and cash equivalents Securities, cash and cash equivalents Plant and machinery 337,442 436,841 102,191 324,881 452,163 172,496 1,615,213 Other fixtures and fittings, other plant and equipment Assets under construction Total current assets Total assets 5,553,993 5,232,955 Property, plant and equipment 11 12 13 1,509,265 14,256,464 14,228,815 Right-of-use assets 45,289 55,791 Investments in subsidiaries Other receivables 814,897 280 841,145 512 Other financial non-current assets Financial assets 6,850 8,021 822,027 849,678 Total non-current assets 8,702,471 8,995,860 Bavarian Nordic Annual Report 2024 172 Financial statements – Group Financial statements – Parent Company Statements Statement of financial position – Equity and liabilities December 31, 2024 and 2023 DKK thousand Note 2024 2023 Note Equity Notes with reference to the consolidated financial statements Trade receivables Share capital 788,548 (2,843) 780,978 (1,537) 19 21 23 24 25 28 29 Treasury shares Retained earnings Reserve for development costs Other reserves Equity Prepayments 10,434,216 18,471 9,351,470 6,491 Financial risks and financial instruments Deferred consideration for product rights Debt to credit institutions 169,363 202,266 11,407,755 10,339,668 Prepayment from customers Share-based payment Liabilities Deferred consideration Credit institutions Lease liabilities - 13,045 32,658 45,703 1,016,856 15,135 15 43,167 Non-current liabilities 1,075,158 Deferred consideration Credit institutions 1,081,465 2,074 1,360,133 1,913 Lease liabilities 15 16 14,694 13,455 - Prepayment from customers Trade payables 131,408 878,551 421,312 273,502 2,803,006 829,059 357,713 251,716 2,813,989 Payables to subsidiaries Other liabilities 17 Current liabilities Total liabilities 2,848,709 3,889,147 Total equity and liabilities 14,256,464 14,228,815 Bavarian Nordic Annual Report 2024 173 Financial statements – Group Financial statements – Parent Company Statements Statement of changes in equity December 31, 2024 Reserve for Share capital Treasury shares Retained development Other reserves DKK thousand earnings costs Equity Equity as of January 1, 2024 780,978 (1,537) 9,351,470 6,491 202,266 10,339,668 Net result for the year - - - - 964,746 (13,988) - - - - 964,746 (13,988) Exchange rate adjustments Change in fair value of financial instruments entered into to hedge future cash flows - - - - - (75,090) (75,090) Share-based payment - - - 78,665 78,665 Warrant program exercised Warrant program expired 7,570 - 147,806 474 - (28,582) 126,794 - - - (474) - Warrant recharged - - - 14,531 (112) - - 14,531 Costs related to issue of new shares Purchase of treasury shares Transfer regarding restricted stock units Reserve for development costs Equity as of December 31, 2024 - - - (112) - (1,623) 317 (25,836) 7,105 - - - (7,422) - (27,459) - - - - - (11,980) 10,434,216 11,980 18,471 788,548 (2,843) 169,363 11,407,755 Transactions on the share capital and rules on changing Articles of Associations, see statement of changes in Group equity. Other reserves consist of costs for share-based payments and hedging reserves. Bavarian Nordic Annual Report 2024 174 Financial statements – Group Financial statements – Parent Company Statements Note 1 Note 2 Material accounting policies and key accounting estimates and judgments Revenue Accounting policies Accounting policies and significant accounting estimates See consolidated financial statements note 3. The financial statements of the Parent Company Bavarian Nordic A/S have been prepared in accordance with the Danish Financial Statements Act (Class D). statement of comprehensive income in the consol- idated financial statements are recognized directly in the statement of changes in equity in the Parent Company’s financial statements. DKK thousand 2024 2023 The financial statements are presented in Danish kroner (DKK), which also is the functional currency of the Parent Company. The accounting policies are unchanged from previous year. Warrant recharged to subsidiaries is treated as the Parent Company’s issuance of equity in exchange for cash. Travel health Rabipur/RabAvert Encepur 1,322,648 511,258 87,943 993,714 417,371 Changes in accounting policies The accounting policies are unchanged from last year. The recharge is subsequently recognized in the income statement under the cost plus agreements with the subsidiaries. Income tax effects relating to warrant recharged is recognized in the income statement. Vivotif 147,542 38,537 Vaxchora 46,228 Other product sale 187,089 2,155,166 149,736 1,746,900 Supplementary accounting policies for the Parent Company Accounting policies for investments in subsidiaries are described in note 13. As allowed under section 86 (4) of the Danish Finan- cial Statements Act, no cash flow statement has been prepared for the Parent Company, as it is included in the consolidated cash flow statement. Public preparedness Mpox/smallpox vaccine sale Sale of goods 3,305,435 5,027,009 Pursuant to the schedule requirements of the Danish Financial Statements Act, entries recognized in the 5,460,601 6,773,909 Milestone Payments Contract work - 223,419 223,419 - 158,479 158,479 Sale of services Revenue 5,684,020 6,932,388 Total revenue includes: Fair value adjustment concerning financial instruments entered into to hedge revenue 5,486 5,016 For further disclosures see the consolidated financial statements note 3. Bavarian Nordic Annual Report 2024 175 Financial statements – Group Financial statements – Parent Company Statements Note 3 Note 4 Research and development costs Staff costs Accounting policies See consolidated financial statements note 6. Accounting policies See consolidated financial statements note 8. DKK thousand 2024 2023 DKK thousand 2024 2023 Research and development costs incurred this year 1,120,251 1,856,001 Wages and salaries Contribution based pension Social security expenses Other staff expenses Share-based payment Staff costs 694,317 59,192 580,149 49,897 5,942 Of which: 5,247 Contract costs recognized as production costs Impairment loss of ABNCoV2 development program Research and development costs recognized in the income statement (152,366) - (126,840) 557,683 53,817 78,672 891,245 42,963 55,702 734,653 967,885 2,286,844 Impairment loss of ABNCoV2 development program Acquired rights and development in progress Intangible assets in progress Staff expenses are distributed as follows: Production costs - - - - - - 1,403,264 26,224 579,931 22,006 56,248 233,060 - 457,306 17,065 Sales and distribution costs Research and development costs Administrative costs Prepayments 456,551 (806,420) (521,936) 557,683 50,315 Prepayment and loan from Government Deferred consideration 187,423 22,544 734,653 Capitalized salaries Impairment loss of ABNCoV2 development program Staff costs 891,245 For impact from write-down of ABNCoV2 see descrip- tion in note 31 in the consolidated financial statements. Average number of employees converted to full-time 891 956 762 815 Number of employees as of December 31 converted to full-time Bavarian Nordic Annual Report 2024 176 Financial statements – Group Financial statements – Parent Company Statements Note 4 Staff costs (continued) CEO and President of the Company Paul Chaplin and CFO Henrik Juuel constitute the Corporate Management in the Parent Company. Incentive programs for management and other employees are disclosed in the consolidated financial statements note 29. DKK thousand 2024 2023 Staff costs include the following costs: COO Russell Thirsk and CPO Anu Kerns constitute the Company's member of the Other Executive Manage- ment. Anu Kerns will resign beginning of 2025. Salary and benefits in the notice period have been accrued. The CEO's contract of employment contains standard terms for members of the management of Danish listed companies, including the extended period of notice that both parties are required to give. For the Company, the notice is maximum 18 months. In the event of a change of control, the term of notice for the Company may be extended to maximum 24 months. Board of Directors: Remuneration 6,490 2,070 8,560 6,345 2,070 8,415 Share-based payment Remuneration to Board of Directors Executive Management: Salary 13,227 9,884 797 11,330 2,484 705 Paid bonus Other employee benefits Contribution based pension Share-based payment Corporate Management 1,832 17,100 42,840 1,574 13,443 29,536 Salary 6,520 2,249 156 5,843 1,074 154 Paid bonus Other employee benefits Contribution based pension Share-based payment Salary and benefits in notice period Other Executive Management 864 776 8,829 6,671 25,289 5,116 - 12,963 Remuneration to Executive Management Total management remuneration 68,129 76,689 42,499 50,914 Bavarian Nordic Annual Report 2024 177 Financial statements – Group Financial statements – Parent Company Statements Note 5 Note 6 Fees to auditor appointed at the annual general meeting Depreciation, amortization and impairment losses DKK thousand 2024 2023 DKK thousand 2024 2023 Depreciation and amortization included in: Production costs Audit of financials statements Other assurance services Other services 2,045 1,800 60 3,616 268 485,294 2,443 426,707 2,442 Research and development costs Administrative costs 653 22,206 509,943 24,444 453,593 Fees 3,905 4,537 Depreciation and amortization Hereof profit ()/loss from disposed fixed assets (80) - Impairment losses included in: Research and development costs Impairment losses - 557,683 - 557,683 For further disclosures see the consolidated financial statements note 9. Bavarian Nordic Annual Report 2024 178 Financial statements – Group Financial statements – Parent Company Statements Note 7 Note 8 Financial income Financial expenses Accounting policies See consolidated financial statements note 11. Accounting policies See consolidated financial statements note 12. DKK thousand 2024 2023 DKK thousand 2024 2023 Financial income from bank and deposit contracts Financial income from subsidiaries 48,097 3,516 27,359 7,831 - 38,383 49,045 14,340 30,777 13,759 2,563 Interest expenses on debt 2,919 22,418 72,682 7,090 1,019 10,078 101,961 - Financial expenses to subsidiaries Financial income from securities Unwinding of the discount related to deferred consideration Adjustment of deferred consideration due to change in estimated timing of payments Currency adjustment deferred consideration Financial expenses, other Fair value adjustments on securities Adjustment of deferred consideration due to change in estimated timing of payments Currency adjustment deferred consideration Net gain on derivative financial instruments at fair value in the income statement Net foreign exchange gains 24,899 8,617 - - 11,469 16,888 141,415 - 11,131 - Net foreign exchange losses - 63,364 150,167 Financial expenses 138,625 Financial income 159,998 Bavarian Nordic Annual Report 2024 179 Financial statements – Group Financial statements – Parent Company Statements Note 9 Tax for the year 'Income()/expenses that are not taxable/deductible for tax purposes' are primarily deduction limitations on 'Management salaries'. Deferred tax Accounting policies See consolidated financial statements note 13. Recognized deferred tax assets relate to temporary differences between valuations for accounting and taxation purposes and tax losses carried forward. DKK thousand 2024 2023 'Special tax credit' primarily relates to the 8% step up deduction on research and development costs according to Section 8B of the Danish Tax Assessment Act. Tax recognized in the income statement Current tax on profit for the year Current tax on profit for previous years Currrent tax - - - - (10,972) (10,972) Adjustment Recognized January 1, to previous in the income Recognized December 31, DKK thousand Product rights 2024 year statement in equity 2024 Tax for the year recognized in the income statement - (10,972) (50,074) (977) (126,909) - (177,960) Acquired rights and development in progress Tax on income for the year is explained as follows: Income before company tax (111,104) 92,307 183 (9,686) (56,605) (25,688) 271 - (177,395) 65,857 454 964,746 212,244 1,429,665 314,526 Property, plant and equipment Right-of-use-asset (762) - Calculated tax (22.0%) on income before company tax - - Development projects for sale Receivables 25,944 218 - (6,501) 225 - 19,443 443 Tax effect on: - - Income from investments in subsidiaries Income()/expenses that are not taxable/deductible for tax purposes Deduction for interest and currency adjustments related to debt foregiveness Special tax credit 2,955 (18,635) 13,853 Provisions 1,100 110 330 - 1,540 6,425 45,183 433,255 (217,245) - 4,755 Financial instruments Share-based payment Tax losses carried forward Not recognized tax asset Recognized deferred tax assets (10,095) 35,790 435,319 (419,588) - - (89) 16,609 - (60,009) (32,788) (10,972) (216,947) (10,972) - (4) 9,393 (2,060) 207,633 - - (12,321) - (16,609) - Current tax on profit for previous years Change in non-recognized tax asset - (207,633) - 11,319 - Tax on income for the year Tax recognized in equity - - - - For further disclosures see the consolidated financial statements note 13. Tax for the year recognized in equity Bavarian Nordic Annual Report 2024 180 Financial statements – Group Financial statements – Parent Company Statements Note 10 Intangible assets Accounting policies See consolidated financial statements note 15. 2024 Developed Production Process Acquired Other intangible assets in progress rights and Product development DKK thousand rights in progress Software Total Costs as of January 1, 2024 5,908,277 2,690,046 - 105,580 415,297 20,402 9,119,200 206,835 - Additions 186,433 - - - Transfer - - - 374,857 17,546 (392,403) (884) Transfer to/from property, plant and equipment Disposal - - - - - - (884) (1,403,264) 1,286,782 (26,224) 16,188 (1,429,488) 7,895,663 Cost as of December 31, 2024 6,094,710 374,857 123,126 Amortization as of January 1, 2024 Amortization 1,116,835 317,449 - 1,403,264 - 31,238 - 97,699 6,552 - 26,224 2,644,022 355,239 - (1,403,264) - - (26,224) - Disposals (1,429,488) 1,569,773 Amortization as of December 31, 2024 1,434,284 31,238 104,251 Carrying amount as of December 31, 2024 Carrying amount as of December 31, 2023 4,660,426 4,791,442 1,286,782 1,286,782 343,619 - 18,875 7,881 16,188 6,325,890 6,475,178 389,073 Bavarian Nordic Annual Report 2024 181 Financial statements – Group Financial statements – Parent Company Statements Note 11 Property, plant and equipment Accounting policies See consolidated financial statements note 16. 2024 Other fixtures and fittings, other plant and Land and Leasehold Plant and machinery Assets under construction DKK thousand buildings improvement equipment Total Costs as of January 1, 2024 Additions 934,911 4,819 562,531 - 562,585 172,496 51,008 (105,618) - 2,237,342 51,008 - - - 1,516 - - Transfer 10,773 63,008 884 30,321 Transfer to/from intangible assets Disposals - - - - 884 - (1,517) 624,906 (15,695) 102,191 (17,212) 2,272,022 Cost as of December 31, 2024 945,684 6,335 592,906 Depreciation and impairment losses as of January 1, 2024 270,554 44,569 - 3,503 602 - 237,650 51,331 110,422 45,643 - - - - - 622,129 142,145 (1,517) Depreciation Disposals (1,517) Depreciation and impairment losses as of December 31, 2024 315,123 4,105 287,464 156,065 762,757 Carrying amount as of December 31, 2024 Carrying amount as of December 31, 2023 630,561 664,357 2,230 1,316 337,442 324,881 436,841 452,163 102,191 172,496 1,509,265 1,615,213 For collateral see the consolidated financial statements note 16. Bavarian Nordic Annual Report 2024 182 Financial statements – Group Financial statements – Parent Company Statements Note 12 Note 13 Right-of-use-assets Investment in subsidiaries Accounting policies See consolidated financial statements note 17. Accounting policies Investments in subsidiaries are recognized and meas- ured under the equity method. This means that, in the balance sheet, investments are measured at the pro rata share of the subsidiaries' equity plus or less unam- ortized positive, or negative, goodwill and plus or less unrealized intra-group profits or losses. revaluation reserve according to the equity method under equity, if the net revaluation is positive. If the net revaluation is negative, it is recognized in retained earnings in equity. 2024 Rent Car leasing Equipment DKK thousand facility Total Goodwill is calculated as the difference between cost of the investments and the fair value of the assets and liabilities acquired which have been measured at fair value at the date of acquisition. The amortization period for goodwill is usually five years. Right-of-use assets as of January 1, 2024 Additions Modifications Disposals Depreciations 53,162 1,307 (255) (3,407) (11,186) 3,407 1,525 639 (56) (97) (870) 97 1,104 532 (30) - (583) - 55,791 2,478 (341) (3,504) (12,639) 3,504 Subsidiaries with a negative equity value are measured at zero value, and any receivables from these subsidi- aries are written down by the Company’s share of such negative equity if it is deemed irrecoverable. If the negative equity exceeds the amount receivable, the remaining amount is recognized under provisions if the Company has a legal or constructive obligation to cover the liabilities of the relevant subsidiary. Reversal depreciations Right-of-use assets as of December 31, 2024 Investments in subsidiaries are written down to the lower of recoverable amount and carrying amount. 43,028 1,238 1,023 45,289 2023 Car leasing Equipment Income from investments in subsidiaries' contains pro rata share of subsidiaries profits or losses after elimina- tion of unrealized intra-group profits and losses. Rent facility Upon distribution of profit or loss, net revaluation of investments in subsidiaries is transferred to the net DKK thousand Total Right-of-use assets as of January 1, 2023 Additions 16,587 432 1,898 402 468 - 18,953 834 Modifications Disposals Depreciations Reversal depreciations Right-of-use assets as of December 31, 2023 46,484 (90) (10,341) 90 210 993 47,687 (2,297) (11,683) 2,297 (1,798) (985) 1,798 1,525 (409) (357) 409 53,162 1,104 55,791 DKK thousand 2024 2023 Amounts included in the income statement Interest expense leases 2,551 553 Depreciation recognized on right-of-use assets 12,639 11,683 Bavarian Nordic Annual Report 2024 183 Financial statements – Group Financial statements – Parent Company Statements Note 13 Investment in subsidiaries (continued) Voting rights DKK thousand 2024 Company summary Domicile Ownership Costs as of January 1, 2024 Additions 1,251,275 1,493 Subsidiaries Bavarian Nordic GmbH Germany USA 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Cost as of December 31, 2024 1,252,768 Bavarian Nordic, Inc. Bavarian Nordic Switzerland AG Bavarian Nordic Berna GmbH Bavarian Nordic Italy S.r.l. Bavarian Nordic Spain SLU Bavarian Nordic Portugal, Lda. Bavarian Nordic Canada Inc. Bavarian Nordic Sweden AB Bavarian Nordic UK Ltd. Switzerland Switzerland Italy Net revaluation as of January 1, 2024 Net share of profit/loss for the year Change in unrealized intra-group profits Exchange rate adjustments (410,130) 164,170 (177,602) (14,309) (437,871) Spain Portugal Canada Sweden UK Net revaluation as of December 31, 2024 Carrying amount as of December 31, 2024 Carrying amount as of December 31, 2023 814,897 841,145 Bavarian Nordic Belgium BV Bavarian Nordic France Belgium France Aktieselskabet af 1. juni 2011 I Aktieselskabet af 1. juni 2011 II Denmark Denmark Bavarian Nordic Annual Report 2024 184 Financial statements – Group Financial statements – Parent Company Statements Note 14 Note 15 Inventories Lease liabilities Accounting policies See consolidated financial statements note 27. Accounting policies and significant accounting estimates See consolidated financial statements note 18. DKK thousand 2024 2023 DKK thousand 2024 2023 Non-current Current 32,658 14,694 47,352 43,167 13,455 56,622 Raw materials and supply materials Work in progress 257,297 1,482,162 607,978 295,918 1,185,796 223,112 Lease liabilities Manufactured goods and commodities Write-down on inventory Inventories (229,647) 2,117,790 (177,429) 1,527,397 Due within Due between Due after 5 years DKK thousand 1 year 14,694 13,455 1 and 5 year Total 47,352 56,622 Write-down on inventory as of January 1 Additions from acquisition of businesses Write-down for the year (177,429) - (162,419) (460) 2024 Lease liabilities 32,658 - - (160,902) 80,024 (42,152) 27,602 - Use of write-down 2023 Reversal of write-down 28,660 (229,647) Lease liabilities 43,167 Write-down on inventory as of December 31 (177,429) Cost of goods sold amounts to 1,614,214 1,622,326 For further details regarding development in inventory values see consolidated financial statements note 18. Bavarian Nordic Annual Report 2024 185 Financial statements – Group Financial statements – Parent Company Statements Note 16 Note 17 Prepayment from customers Other liabilities Accounting policies Accounting policies See consolidated financial statements note 28. See consolidated financial statements note 22. DKK thousand 2024 2023 DKK thousand 2024 2023 Prepayment from customers as of January 1 Recognized as income during the year - 131,408 131,408 - - - Derivative financial instruments at fair value in the income statement Payable salaries, holiday accrual etc. Gross to net deduction accrual 29,902 122,093 85,965 - 104,632 111,762 35,322 Prepayment from customers as of December 31 Other accrued costs 35,542 Other liabilities 273,502 251,716 For further details of derivative financial instruments, see consolidated financial statements note 23. The phantom share programs are disclosed in the consoli- dated financial statements note 29. Bavarian Nordic Annual Report 2024 186 Financial statements – Group Financial statements – Parent Company Statements Note 18 Note 19 Contingent liabilities and other contractual obligations Mortgages and collateral DKK thousand 2024 2023 DKK thousand 2024 2023 Collaborative agreements Guarantees for subsidiaries Contractual obligations with research partners for long-term research projects. - Due within 1 year The Parent Company stands surety for a credit facility to a subsidiary of a maximum of The Parent Company stands surety for letter of credit to subsidiaries of a maximum of 3,767 2,342 3,651 2,341 139,183 44,080 Earnout to Emergent stands surety with the other companies in the joint taxation of Danish corporate taxes and also withholding taxes on dividends, interest and royalties. Corpora- tion taxes and withholding taxes payable in the joint taxation pool was DKK 0 as of December 31, 2024. Any adjustments of the taxable joint taxation income or taxes withheld at source may have the effect that the Company's liability increases. Mortgages The Purchase and Sale Agreement concluded with Emergent BioSolution Inc. in May 2023 includes an earnout payment starting at USD 30 million. The earnout payment relates to sale of Vivotif and Vaxchora. As per December 31, 2024 Management does not judge the sales milestone to be probable and there- fore the earnout payment has not been recognized as either part of the project rights nor the deferred consid- eration. See description regarding property, plant and equip- ment in note 16 in the consolidated financial state- ments. Company mortgage and lawsuits See the consolidated financial statements note 32. Joint taxation The Company is jointly taxed with all Danish subsid- iaries. As the administration company the Company Bavarian Nordic Annual Report 2024 187 Financial statements – Group Financial statements – Parent Company Statements Note 20 Related party transactions The Corporate Management and Board of Directors of Bavarian Nordic A/S are considered related parties as they have significant influence over the Company. Bavarian Nordic Switzerland AG provides research and development services and global commercial services to Bavarian Nordic A/S. Nordic A/S. This is done under a Distribution Agree- ment. Bavarian Nordic Portugal, LDA, distributes and sells Vivotif and Vaxchora in Portugal on behalf of Bavarian Nordic A/S. This is done under a Distribution Agree- ment. Main intercompany transactions: Bavarian Nordic Sweden AB provides regional commer- cial services to Bavarian Nordic A/S. Bavarian Nordic GmbH provides research and devel- opment services and regional commercial services to Bavarian Nordic A/S. Bavarian Nordic Canada Inc. provides research and development services and regional commercial services to Bavarian Nordic A/S. Bavarian Nordic UK Ltd. provides regional commercial services to Bavarian Nordic A/S. Bavarian Nordic, Inc. distributes and sells Jynneos, RabAvert, Vivotif and Vaxchora in the US on behalf of Bavarian Nordic A/S. This is done under a Distribution Agreement. Bavarian Nordic Berna GmbH, distributes and sells Vivotif in Switzerland on behalf of Bavarian Nordic A/S. This is done under a Distribution Agreement. Bavarian Nordic Belgium BV provides research and development services and global commercial services to Bavarian Nordic A/S. Bavarian Nordic, Inc. provides research and develop- ment services to Bavarian Nordic A/S. Bavarian Nordic Berna GmbH, Manufactures and sells Vivotif and Vaxchora to Bavarian Nordic A/S. This is done under a Contract Manufacturing Agreement. Bavarian Nordic France SAS provides regional commer- cial services to Bavarian Nordic A/S. Bavarian Nordic, Inc. also provides services to Bavarian Nordic A/S in terms of commercial affair work towards the U.S. Government, with the purpose of ensuring an efficient communication and service to U.S. authorities, in order to maintain existing contracts and explore new product/contract opportunities on the U.S. market. All services except for the distribution agreements are delivered under cost plus agreements and on arms length conditions. Bavarian Nordic Berna GmbH provides research and development services and global commercial services to Bavarian Nordic A/S. The distribution agreements are honored according to OECD's guidelines for a Limited Risk Distributor. Bavarian Nordic Spain SLU, distributes and sells Vivotif and Vaxchora in Spain on behalf of Bavarian Nordic A/S. This is done under a Distribution Agreement. Bavarian Nordic Switzerland AG distributes and sells Encepur and Rabipur in Switzerland on behalf of Bavarian Nordic A/S. This is done under a Distribution Agreement. Apart from intra-group transactions mentioned above and the remuneration of the Board of Directors and Corporate Management, cf. note 8 and note 29 in the consolidated financial statements, there are no transac- tions with related parties. Bavarian Nordic Italy S.r.l., distributes and sells Rabipur, Vivotif and Vaxchora in Italy on behalf of Bavarian Bavarian Nordic Annual Report 2024 188 Financial statements – Group Financial statements – Parent Company Statements Note 21 Proposed appropriation of net profit/(loss) DKK thousand 2024 964,746 2023 Retained earnings 1,440,637 Total 964,746 1,440,637 Note 22 Significant events after the balance sheet date See description in note 34 in the consolidated financial statements. Bavarian Nordic Annual Report 2024 189 Financial statements – Group Financial statements – Parent Company Statements Hellerup, March 5, 2025 Statement by the Board of Directors and Executive Management on the Annual Report Executive Management Paul John Chaplin President and CEO Henrik Juuel Executive Vice President and CFO The Board of Directors and the Executive Manage- ment have today considered and approved the Annual Report of Bavarian Nordic A/S for the finan- cial year January 1, 2024 - December 31, 2024. Group's and the Parent company’s business and financial matters, the results for the year and of the Parent company’s financial position and the finan- cial position as a whole of the entities included in the consolidated financial statements, together with a description of the principal risks and uncertainties that the Group and the Parent company face. Board of Directors The consolidated financial statements are presented in accordance with IFRS Accounting Standards as endorsed by the EU. The parent financial statements are presented in accordance with the Danish Finan- cial Statements Act. Furthermore, the Annual Report is prepared in accordance with Danish disclosure requirements for listed companies. The Sustainability statement is prepared in accord- ance with the European Sustainability Reporting Standards (ESRS) as required by the Danish Finan- cial Statements Act, as well as article 8 in the EU Taxonomy regulation. Luc Debruyne Chairman of the Board Anders Gersel Pedersen Montse Montaner Deputy Chairman In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group’s and the Parent company’s financial position at December 31, 2024, as well as of the results of their operations and cash flows for the financial year January 1, 2024 - December 31, 2024. In our opinion, the Annual Report of Bavarian Nordic A/S for the financial year January 1, 2024 to December 31, 2024 identified as bava-2024-12-31-en. zip is prepared, in all material respects, in accord- ance with the ESEF Regulation. Frank A.G.M. Verwiel Anne Louise Eberhard Johan van Hoof Heidi Hunter Thomas Alex Bennekov Employee-elected Anja Gjøl Employee-elected Karen Merete Jensen Employee-elected Linette Munksgaard Andersen In our opinion, the management commentary contains a fair review of the development of the We recommend the Annual Report for adoption at the Annual General Meeting. Employee-elected Bavarian Nordic Annual Report 2024 190 Financial statements – Group Financial statements – Parent Company Statements Independent auditor’s limited assurance report on sustainability statement To the shareholders of Bavarian Nordic A/S Limited assurance conclusion “General” section of the sustainability statement; and in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. ment 1, which requires the firm to design, imple- ment and operate a system of quality management including policies or procedures regarding compli- ance with ethical requirements, professional stand- ards and applicable legal and regulatory require- ments. We have conducted a limited assurance engage- ment on the sustainability statement of Bavarian Nordic A/S (the “Group”) included in the Manage- ment’s Review (the “sustainability statement”), page 40 – 111, for the financial year 1 January – 31 December 2024. • compliance of the disclosures in subsection “EU Taxonomy” within the “Environmental” section of the sustainability statement with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regula- tion”). We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Our responsibilities under this standard are further described in the Auditor’s responsibilities for the assurance engagement section of our report. Other matter Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the sustainability statement is not prepared, in all mate- rial respects, in accordance with the Danish Financial Statements Act paragraph 99 a, including: The comparative information included in the sustainability statement of the Group was not subject to an assurance engagement on sustaina- bility information prepared in accordance with the Danish Financial Statements Act section 99 a. Our conclusion is not modified in respect of this matter. Basis for conclusion We conducted our limited assurance engagement in accordance with International Standard on Assur- ance Engagements (ISAE) 3000 (Revised), Assurance engagements other than audits or reviews of histor- ical financial information (“ISAE 3000 (Revised)”) and the additional requirements applicable in Denmark. Our independence and quality management We are independent of the Group in accordance with the International Ethics Standards Board for Account- ants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark. We have also fulfilled our other ethical responsibilities in accord- ance with these requirements and the IESBA Code. • compliance with the European Sustainability Reporting Standards (ESRS), including that the process carried out by the management to iden- tify the information reported in the sustainability statement (the “Process”) is in accordance with the description set out in subsection “The double materiality assessment process” within the Inherent limitations in preparing the sustainability statement In reporting forward-looking information in accord- ance with ESRS, management is required to prepare the forward-looking information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by the The procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engage- ment. Consequently, the level of assurance obtained KPMG Statsautoriseret Revisionspartnerselskab applies International Standard on Quality Manage- Bavarian Nordic Annual Report 2024 191 Financial statements – Group Financial statements – Parent Company Statements Group. Actual outcomes are likely to be different since anticipated events frequently do not occur as expected. • the assessment of the materiality of the identi- fied impacts, risks and opportunities related to sustainability matters by selecting and applying appropriate thresholds; and assumptions and estimates that are reasonable in the circumstances. • Considering whether the information identified addresses the applicable disclosure requirements of the ESRS, and Auditor’s responsibilities for the assurance engagement Management’s responsibilities for the sustainability statement • Designing and performing procedures to eval- uate whether the Process is consistent with the Group’s description of its Process, as disclosed in the subsection “The double materiality assess- ment process” within the “General” section of the sustainability statement. • making assumptions that are reasonable in the circumstances. Our objectives are to plan and perform the assur- ance engagement to obtain limited assurance about whether the sustainability statement is free from material misstatement, whether due to fraud or error, and to issue a limited assurance report that includes our conclusion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reason- ably be expected to influence decisions of users taken on the basis of the sustainability statement as a whole. Management is responsible for designing and implementing a process to identify the information reported in the sustainability statement in accord- ance with the ESRS and for disclosing this Process as part of the subsection “The double materiality assessment process” within the “General” section of the sustainability statement. This responsibility includes: Management is further responsible for the prepara- tion of the sustainability statement, in accordance with the Danish Financial Statements Act paragraph 99 a, including: Our other responsibilities in respect of the sustaina- bility statement include: • compliance with the ESRS; • Identifying disclosures where material misstate- ments are likely to arise, whether due to fraud or error; and • understanding the context in which the Group’s activities and business relationships take place and developing an understanding of its affected stakeholders; • preparing the disclosures in subsection “EU Taxonomy” within the “Environmental“ section of the sustainability statement, in compliance with Article 8 of the Taxonomy Regulation; As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise professional judgement and maintain professional scepticism throughout the engagement. • Designing and performing procedures responsive to disclosures in the sustainability statement where material misstatements are likely to arise. The risk of not detecting a material misstate- ment resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrep- resentations, or the override of internal control. • the identification of the actual and potential impacts (both negative and positive) related to sustainability matters, as well as risks and opportunities that affect, or could reasonably be expected to affect, the Group’s financial posi- tion, financial performance, cash flows, access to finance or cost of capital over the short-, medium-, or long-term; • designing, implementing and maintaining such internal control that management determines is necessary to enable the preparation of the sustainability statement that is free from material misstatement, whether due to fraud or error; and Our responsibilities in respect of the Process include: • Obtaining an understanding of the Process but not for the purpose of providing a conclusion on the effectiveness of the Process, including the outcome of the Process; • the selection and application of appropriate sustainability reporting methods and making Bavarian Nordic Annual Report 2024 192 Financial statements – Group Financial statements – Parent Company Statements Summary of the work performed A limited assurance engagement involves performing procedures to obtain evidence about the sustainability statement. In conducting our limited assurance engagement, with respect to the sustainability statement, we: • Performed substantive assurance procedures on selected information in the sustainability state- ment; Copenhagen, 5 March 2025 KPMG • Obtained an understanding of the Group’s reporting processes relevant to the preparation of its sustainability statement including the consol- idation processes by obtaining an understanding of the Group’s control environment, processes and information systems relevant to the preparation of the sustainability statement but not evalu- ating the design of particular control activities, obtaining evidence about their implementation or testing their operating effectiveness; Statsautoriseret Revisionspartnerselskab CVR-nr. 25 57 81 89 • Evaluated methods, assumptions and data for developing material estimates and forward- looking information and how these methods were applied; The nature, timing and extent of procedures selected depend on professional judgement, including the identification of disclosures where material misstatements are likely to arise, whether due to fraud or error, in the sustainability statement. Sara Carstensen State Authorised Public Accountant mne34191 • Obtained an understanding of the process to identify taxonomy-eligible and taxonomy-aligned economic activities and the corresponding disclo- sures in the sustainability statement; and In conducting our limited assurance engagement, with respect to the Process, we: • Obtained an understanding of the Process by performing inquiries to understand the sources of the information used by management; and reviewing the Group’s internal documentation of its Process; and • Evaluated whether material information identified by the Process is included in the sustainability statement; • Where applicable, compared selected disclosures in the sustainability statement with the corre- sponding disclosures in the financial statements and Management’s Review; Simon Vinberg Andersen State Authorised Public Accountant mne35458 • Evaluated whether the structure and the pres- entation of the sustainability statement are in accordance with the ESRS; • Evaluated whether the evidence obtained from our procedures about the Process implemented by the Group was consistent with the description of the Process set out in the subsection “The double materiality assessment process” within the “General” section of the sustainability state- ment. • Performed inquiries of relevant personnel and analytical procedures on selected information in the sustainability statement; Bavarian Nordic Annual Report 2024 193 Financial statements – Group Financial statements – Parent Company Statements Independent auditor’s report To the shareholders of Bavarian Nordic A/S Report on the audit of the Consolidated Financial Statements and Parent Company Financial Statements Opinion Audited financial statements Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the audit of the financial state- ments" section of our report. lation (EU) 537/2014 and that we remained inde- pendent in conducting the audit. In our opinion, the consolidated financial statements and the Parent Company financial statements give a true and fair view of the Group's and the Parent Company's assets, liabilities and financial position at 31 December 2024 and of the results of the Group's and Parent Company's operations and cash flows for the financial year 1 January – 31 December 2024. The consolidated financial statements are prepared in accordance with the IFRS Accounting Standards as adopted by the EU and additional requirements in the Danish Financial Statements Act, and the parent financial statements are prepared in accordance with the Danish Financial Statements Act. Bavarian Nordic A/S' consolidated financial state- ments and parent company financial statements for the financial year 1 January – 31 December 2024 comprise the income statement, statement of comprehensive income, balance sheet, statement of changes in equity, statement of cash flows and notes, including summary of material accounting policy information, for the Group as well as for the Parent Company (the financial statements). The consolidated financial statements are prepared in accordance with the IFRS Accounting Standards as adopted by the EU and additional requirements in the Danish Financial Statements Act, and the parent financial statements are prepared in accordance with the Danish Financial Statements Act. We were appointed auditors of Bavarian Nordic A/S for the first time on 16 April 2024 for the financial year 2024. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements for the 2024 financial year. These matters were addressed in the context of our audit of the financial statements as a whole, and in the forming of our opinion thereon. We do not provide a separate opinion on these matters. Independence We are independent of the Group in accordance with the International Ethics Standards Board for Account- ants' International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accord- ance with these requirements and the IESBA Code. Our opinion is consistent with our long-form audit report to the Board or Directors and the Audit Committee. Basis for opinion Statement on the Management's review Management is responsible for the Management's review. We conducted our audit in accordance with Interna- tional Standards on Auditing (ISAs) and the addi- tional requirements applicable in Denmark. We declare, to the best of our knowledge and belief, that we have not provided any prohibited non-audit services, as referred to in Article 5(1) of the Regu- Bavarian Nordic Annual Report 2024 194 Financial statements – Group Financial statements – Parent Company Statements Key audit matter How our audit addressed the key audit matter Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. Management's responsibility for the financial statements Revenue recognition For the purposes of our audit, the procedures we carried out included the following: Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the IFRS Accounting Standards as adopted by the EU and additional requirements in the Danish Financial Statements Act and for such internal control that Management determines is necessary to enable the preparation of financial statements that are free from material misstate- ment, whether due to fraud or error. Refer to note 3 in the consolidated financial statements. In connection with our audit of the financial state- ments, our responsibility is to read the Manage- ment's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. We obtained an understanding of the related business processes and assessed design and implementation of the respective controls. The Group recognizes revenue under various contracts including agreements with govern- mental institutions. Specifically, the Group has arrangements with Biomedical Advanced Research and Development Authority (BARDA) an institution under the U.S. Department of Health and Human Services to sell drug substance batches. We evaluated the appropriateness of the Group’s accounting for revenue recognition, estimating sales rebates and chargebacks, including provi- sions related to contractual discounts, returns, and other variable considerations. Moreover, it is our responsibility to consider whether the Management's review provides the information required by the Danish Financial Statements Act. This does not include the requirements in paragraph 99a related to the sustainability statement covered by the separate auditor’s limited assurance report hereon. In preparing the financial statements, Management is responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. We evaluated the principles applied by manage- ment, to determine whether they are compliant with the requirements of the applicable financial reporting framework. The respective contracts include complexi- ties such as long-term supply agreements, discounts, and rebates, and returns policies, which require management to exercise signif- icant judgment. We tested the timing of revenue recognition and the amounts determined for the variable considerations, assessing their consistency with contractual terms, and supporting documenta- tion. Especially the determination of the timing of revenue recognition and the determination of variable considerations are complex, with the latter also requiring Management to make assumptions. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act except for the requirements in paragraph 99a related to the sustainability statement, cf. above. We did not identify any material misstatement of the Manage- ment's review. We assessed the reasonableness of the recorded accruals for variable considerations at the reporting date by looking at historical trends, current inventory levels, and contractual terms. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it We evaluated the related presentation and disclosures. Bavarian Nordic Annual Report 2024 195 Financial statements – Group Financial statements – Parent Company Statements exists. Misstatements may arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. estimates and related disclosures made by Management. are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. Report on compliance with the ESEF Regulation As part of our audit of the Consolidated Financial Statements and Parent Company Financial State- ments of Bavarian Nordic A/S we performed proce- dures to express an opinion on whether the annual report of Bavarian Nordic A/S for the financial year 1 January – 31 December 2024 with the file name bava-2024-12-31-en.zip is prepared, in all mate- rial respects, in compliance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the Consolidated Financial Statements. • conclude on the appropriateness of Manage- ment's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Parent Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern. We communicate with those charged with govern- ance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: We also provide those charged with governance with a statement that we have complied with rele- vant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. • identify and assess the risks of material misstate- ment of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes: • The preparing of the annual report in XHTML format; From the matters communicated to those charged with governance, we determine those matters that were of most significance in the audit of the finan- cial statements of the current period and therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we deter- mined that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. • evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. • The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxonomy, for financial information required to be tagged using judgement where necessary; • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circum- stances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Parent Company's internal control. • plan and perform the group audit to obtain suffi- cient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements and the Parent Company financial statements. We • Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human readable format; and • evaluate the appropriateness of accounting poli- cies used and the reasonableness of accounting Bavarian Nordic Annual Report 2024 196 Financial statements – Group Financial statements – Parent Company Statements • For such internal control as Management deter- mines necessary to enable the preparation of an annual report that is compliant with the ESEF Regulation. • Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and • Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements. Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in compliance with the ESEF Regu- lation based on the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the auditor’s judgement, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The procedures include: In our opinion, the Annual Report of Bavarian Nordic A/S for the financial year January 1, 2024 to December 31, 2024 identified as bava-2024-12-31-en. zip is prepared, in all material respects, in accord- ance with the ESEF Regulation. Copenhagen, 5 March 2025 KPMG Statsautoriseret Revisionspartnerselskab CVR no. 25 57 81 98 • Testing whether the annual report is prepared in XHTML format; Sara Carstensen • Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process; State Authorised Public Accountant mne34191 • Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements; Simon Vinberg Andersen State Authorised Public Accountant mne35458 • Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy and the creation of extension elements where no suitable element in the ESEF taxonomy has been identified; Bavarian Nordic Annual Report 2024 197 Forward-looking statement This annual report contains forward looking state- ments. The words “believe”, “expect”, “anticipate”, “intend” and “plan” and similar expressions iden- tify forward looking statements. Actual results or performance may differ materially from any future results or performance expressed or implied by such statements. The important factors that could cause our actual results or performance to differ materi- ally include, among others, risks associated with product discovery and development, uncertainties related to the outcome and conduct of clinical trials including unforeseen safety issues, uncertainties related to product manufacturing, the lack of market acceptance of our products, our inability to manage growth, the competitive environment in relation to our business area and markets, our inability to attract and retain suitably qualified personnel, the unenforceability or lack of protection of our patents and proprietary rights, our relationships with affil- iated entities, changes and developments in tech- nology which may render our products obsolete, and other factors. For a further discussion of these risks, please refer to the section “Risk Manage- ment” in this Annual Report. Bavarian Nordic does not undertake any obligation to update or revise forward looking statements in this Annual Report nor to confirm such statements in relation to actual results, unless required by law. Bavarian Nordic Annual Report 2024 198 Encepur®, IMVAMUNE®, IMVANEX®, JYNNEOS®, MVA-BN®, RabAvert®, Rabipur®, Typhoral®, Vivotif®, Vaxchora® and VIMKUNYA® are registered trademarks owned by Bavarian Nordic.