Bavarian Nordic A/S announced that it has agreed with GlaxoSmithKline (GSK) not to pursue a collaboration for the production and marketing of Imvamune, a third generation smallpox vaccine under development, as contemplated in a Memorandum of Understanding signed by the two companies in 2004. The Memorandum was signed to ensure sufficient production capacity from several facilities, and distribution of Imvamune to various international markets at a time where Bavarian Nordic's own state-of-the-art production facility was not established. Now Bavarian Nordic has the capacity to produce the expected RFP-III order.

Termination of the agreement will not have any negative financial consequences for Bavarian Nordic or GSK, a Bavarian Nordic press release stated.

Production, marketing and distribution of Imvamune will be handled by Bavarian Nordics own production facility and sales organisation, combined with local and regional agents and distributors experienced in delivering on government contracts.

Peter Wulff, president & CEO of Bavarian Nordic, said: "Bavarian Nordic's strategic and market position is today stronger than at the time we signed the Memorandum with GSK. We are now capable of handling production and marketing of Imvamune to the authorities ourselves. With our approved production facility we are now able to meet market demand, including the expected RFP-III order. We have also built up our own sales and marketing organisation, which has already established relations with the authorities and governments in various global markets. We are ready to exploit the commercial opportunities anticipated subsequent to the RFP-III order. If market demand should exceed our own capacity, our discussions on a future collaboration with GSK may be resumed."