Bavarian Nordic: A Stock You Should Not Miss In 2017


  • Bavarian Nordic has projected a strong year-over-year revenue growth for 2017.
  • Stockpiling target of the US Government related to non-replicating small pox vaccine is a solid revenue driver for Bavarian Nordic.
  • Positive PROSTVAC data readouts will result in robust milestone payments from Bristol-Myers Squibb in 2017.
  • Bavarian Nordic is currently trading at discounted forward price-to-earnings multiple as compared to its peers.

Headquartered in Denmark, Bavarian Nordic (OTCPK:BVNRY) is focused on developing vaccines in oncology and infectious diseases segments. While the company currently has only one approved vaccine, Bavarian Nordic is involved in eight other research programs.

In 2016, Bavarian Nordic managed to reach the DKK 1.0 billion milestone for the fifth year in row. Further, despite having invested approximately half of its total revenues in R&D programs, the company did not post a loss for 2016.

At the end of 2016, Bavarian Nordic’s cash preparedness which includes cash and cash equivalents, marketable securities, and undrawn credit lines, amounted to around DKK 2.3 billion or $325 million. The company managed to raise capital worth $100 million in 2016. Despite heavy ongoing R&D investments, Bavarian Nordic expects to increase its cash preparedness to DKK 2.4 billion or $340 million in 2017. This highlights the company’s confidence in its revenue-earning potential in 2017.

I believe that there are multiple short-term drivers capable of propelling Bavarian Nordic’s stock price in 2017. Here, I will present them to explain my rationale for considering the stock as a compelling investment opportunity for 2017.

Bavarian Nordic has given a solid revenue and EBIT guidance for 2017

The first and foremost reason why I believe investors should be picking up Bavarian Nordic is that the company expects a solid revenue and EBIT growth in 2017. The company has projected that its 2017 revenues will be around $183 million, which is 28.7% higher than $143 million revenues earned in 2016. Bavarian Nordic has also projected its 2017 EBIT to be around $50 million, which would be a 900% year-over-year growth for 2017.

In today’s volatile environment when the entire pharmaceutical and biotechnology industry is facing stiff pricing pressures and multiple regulatory constraints, majority of the companies have played safe by projecting

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Leave a Reply

Your email address will not be published. Required fields are marked *