Bavarian Nordic Introduces New Incentive Programs for Executive Management and Employees

COPENHAGEN, Denmark, December 8, 2016 - Bavarian Nordic A/S (OMX: BAVA, OTC: BVNRY) announced today that the board has decided to issue warrants to executive management and certain employees in the Bavarian Nordic Group. The decision is made in accordance with the shareholder authorization for the board of directors adopted as Article 5b of the Articles of Association and the Company's guidelines regarding incentive programs.

The warrant program entails the issuance of 450,300 warrants in total which entitle the warrant holders to subscribe for up to 450,300 shares in total with a nominal value of DKK 10 each at an exercise price of DKK 260.2 per share. The warrants may be exercised wholly or partly during eight fixed subscription periods during 2020 and 2021.

The value of each warrant equals DKK 54.2 and is calculated on the Black-Scholes model with a risk-free interest rate of -0.48 per cent and on the historical volatility of the shares. The calculation is based on a share price of DKK 222.5.

Furthermore, the Company introduces a three year incentive program in January 2017 for certain employees in the Bavarian Nordic Group. The program is a cash bonus program based on the development in the Company's share price. The incentive program will not have a dilutive effect on the shareholders.

Each employee participating in the program is awarded so-called phantom shares every month of employment until 31 December 2019. The exercise price is DKK 260.2. The phantom shares may be exercised in January 2020, only if the Company's share price by then exceeds the exercise price by at least DKK 5. In that case, each phantom share will yield a cash bonus equivalent to DKK 1 per point the share price exceeds the exercise price.

Based on the current number of employees in the Group eligible for participating in the program, the program will comprise up to 58,032 phantom shares. Executive management and other employees receiving warrants will not participate in the program. The average value of each phantom share granted equals DKK 37.9 calculated on the basis of the Black-Scholes model with a risk-free interest rate of -0.48 per cent and on the historical volatility of the shares. The calculation is based on a share price of DKK 222.5.

About Bavarian Nordic
Bavarian Nordic is a fully integrated biotechnology company focused on the development, manufacturing and commercialization of cancer immunotherapies and vaccines for infectious diseases, based on the Company's live virus vaccine platform. Through long-standing collaborations, including a collaboration with the U.S. government, Bavarian Nordic has developed a portfolio of vaccines for infectious diseases, including the non-replicating smallpox vaccine, IMVAMUNE®, which is stockpiled for emergency use by the United States and other governments. The vaccine is approved in the European Union (under the trade name IMVANEX®) and in Canada. Bavarian Nordic and its partner Janssen are developing an Ebola vaccine regimen, which has been fast-tracked, with the backing of worldwide health authorities, and a vaccine for the prevention and treatment of HPV. Additionally, in collaboration with the National Cancer Institute, Bavarian Nordic has developed a portfolio of active cancer immunotherapies, including PROSTVAC®, which is currently in Phase 3 clinical development for the treatment of advanced prostate cancer. The company has partnered with Bristol-Myers Squibb for the potential commercialization of PROSTVAC. For more information visit or follow us on Twitter @bavariannordic.

Forward-looking statements
This announcement includes forward-looking statements that involve risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. Forward-looking statements include statements concerning our plans, objectives, goals, future events, performance and/or other information that is not historical information. All such forward-looking statements are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, except as required by law.

Rolf Sass Sørensen
Vice President Investor Relations (EU)
Tel: +45 61 77 47 43

Seth Lewis
Vice President Investor Relations (US)
Tel: +1 978 341 5271

Company Announcement no. 31 / 2016