Bavarian Nordic and GlaxoSmithKline Enter into Global Collaboration on IMVAMUNE.

COPENHAGEN, Denmark -- Bavarian Nordic A/S and GlaxoSmithKline (GSK) have entered into an international collaboration on the production and marketing of Bavarian Nordic's smallpox vaccine IMVAMUNE(TM), which is based on Bavarian Nordic's proprietary MVA-BN(R) technology.

Under the contract, Bavarian Nordic will transfer its technology on production and use of IMVAMUNE(TM) to GSK. GSK will then manufacture and market the IMVAMUNE(TM) smallpox vaccine to most international markets, including North and South America, Japan as well as a number of important EU-markets, including Great Britain and France.

Bavarian Nordic will continue to manufacture and market IMVAMUNE(TM) to all German-speaking countries, the Nordic countries, the Baltic States, China, the Middle East and South East Asia.

Bavarian Nordic will be responsible for development and production of IMVAMUNE(TM) to the U.S. government under the National Institutes of Health (NIH) RFP-programme. Bavarian Nordic and GSK will closely collaborate and act as commercial partners on future U.S. government programmes, including the NIH's forthcoming RFP3, which is expected to include an order for supply of up to 60 million doses of smallpox vaccine.

Peter Wulff, President and CEO of Bavarian Nordic, said, "The agreement with GSK opens up global business opportunities for Bavarian Nordic. With Bavarian Nordic's growing production capacity and GSK's capacity and global presence, we can ensure that sufficient supply of IMVAMUNE(TM) is available to meet increasing international demand for a modern, safe smallpox vaccine to the important U.S. market, major overseas markets and growing EU and Far East markets."

The agreement will not impact the company's financial projections for 2004 of revenues of DKK 400 million and earnings before tax of DKK 60-80 million.

About Bavarian Nordic:

Founded in 1994, Bavarian Nordic A/S is a leading biopharmaceutical company in the field of innovative vaccines to prevent and treat infectious diseases. With operations in Denmark and Germany, Bavarian Nordic employs over 100 people and is listed on the Copenhagen Stock Exchange under the trading symbol BAVA.

For more information please visit www.bavarian-nordic.com

"Safe Harbour" statement under the Private Securities Litigation Reform Act of 1995:

Except for the historical information contained herein, this release contains "forward-looking statements" within the meaning of the Private Securities Reform Act of 1995. No "forward-looking statement" can be guaranteed, and actual results may differ materially from those projected. Bavarian Nordic undertakes no obligation to publicly update any "forward-looking statement", whether as a result of new information, future events, or otherwise. Additional information regarding risks and uncertainties is set forth in the current Annual Report and in Bavarian Nordic's periodic reports, if any, which we incorporate by reference.

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Bavarian Nordic and GlaxoSmithKline enter into global collaboration on IMVAMUNE(TM).