Bavarian Nordic earns from two engines: government-contract Public Preparedness (the mpox/smallpox vaccine JYNNEOS/IMVANEX, boosted by the 2022– outbreaks) and a faster-growing Travel Health franchise (rabies, TBE, typhoid, cholera, plus the new chikungunya vaccine Vimkunya). The balance sheet is genuinely strong — net cash ~DKK 2.1bn, no dividend, modest buyback — and the brands are durable.
The catch is returns and price. FY2025 EBIT includes a DKK 810M gain on selling a Priority Review Voucher; removing that non-operating windfall drops adjusted ROIC to 5.2%, below the cost of capital, so the heavy acquired-product-rights base (~DKK 5.5bn) is not yet earning its keep. With the stock pricing ~28% perpetual growth, the reverse-DCF fair value sits ~48% below today's price.
Capitalising adjusted NOPAT of DKK 556M at WACC−g and bridging net cash, zero-to-GDP-growth fair value is ~DKK 89–96/share versus DKK 187 — a wide overvaluation because the market extrapolates outbreak-era economics. PEBV 1.57 says the price already embeds material value creation that the normalised ROIC does not deliver.
Base DKK 96 (−48%) on normalised, ex-windfall economics; bull DKK 150 if 2026 'normalised' (non-outbreak) earning power plus pipeline/M&A optionality lifts ROIC back above WACC; bear DKK 75 if Public Preparedness keeps fading without an offsetting Travel Health step-up.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 5% ≈ WACC 8%) it cannot reach the current EV. No-growth value is DKK 102/share (57% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | DKK 150 | ≥-50% | -16% | 25% | 2026 normalised ROIC recovers above WACC; pipeline/M&A optionality |
| Base | DKK 96 | ≥-50% | -46% | 45% | Ex-windfall economics; sub-WACC returns persist |
| Bear | DKK 75 | ≥5% | -58% | 30% | Public Preparedness fades without Travel Health offset |
| Prob-weighted | DKK 103 | — | -42% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 125 | 120 | 117 | 109 | 103 | 83 |
| 7.25% | 112 | 105 | 100 | 91 | 83 | 59 |
| 8.00% (base) | 102 | 94 | 88 | 77 | 69 | 42 |
| 8.75% | 94 | 86 | 79 | 67 | 58 | 30 |
| 9.50% | 88 | 79 | 72 | 60 | 50 | 20 |
Green = fair value above the current price of DKK 179.40. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Adjusted ROIC 5.2% < 8% WACC, EP −DKK 292M — the deep-dive's core finding: the GAAP screen (11% ROIC) was flattered by a one-off.
Market-leading rabies/TBE/typhoid/cholera brands + Vimkunya launch — the steadier, higher-quality half of the business.
Net cash ~DKK 2.1bn, undrawn RCF — funds the pipeline and a possible capital-return review after the 2025 takeover approach lapsed.
Guidance upgraded to DKK 5.5–5.7bn / ~28% EBITDA margin; 2026 is the first ex-outbreak year and the real read on underlying economics.
Bavarian Nordic is a high-quality-optionality, low-current-returns story priced as if the outbreak windfall were permanent. Strip the PRV gain and it earns below its cost of capital with ~48% downside to fair value. HOLD, low conviction — own it only for the franchise/pipeline optionality, not the economics or the price.
A genuine BUY needs evidence that normalised (ex-outbreak) ROIC structurally clears 8% — the 2026 guidance is the first test.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
NOPAT adjustments: THE CORE OF THE ANALYSIS: other_one_off_addback = -810.088 MDKK = the company's 'Other operating income, net' (IS line, DKK k: 810,088 = 1,032,896 other operating income - 222,808 other operating expense). This is the net gain from the sale of a Priority Review Voucher (PRV) received upon the FDA approval of the chikungunya vaccine Vimkunya in Feb 2025; the PRV was sold and recognized as income in Q3 2025 (p.4-5, p.24). We NORMALIZE OUT the entire +810.088 (negative sign = reduces EBIT) because it is a non-operating one-off with no link to underlying vaccine sales. The PRV gain sits entirely in the FY2025 part of the LTM window (neither Q1 2025 nor Q1 2026 contains it), so the full amount is in the LTM. The company itself confirms the isolation via the APM 'EBITDA excluding other operating income, net' = 1731.837 MDKK (Q1 report p.3). after_tax_total = -810.088 * (1-0.236) = -618.907. R&D IS NOT CAPITALIZED (Note 15: development costs are expensed as incurred) -> rd_capitalization_reversal = 0. Operating inventory write-downs/scrap (DKK 450M) and idle capacity (Bern DKK 93M) are RECURRING in this manufacturing model -> NOT normalized (we do NOT adopt the company's full 'before special items' basket). Takeover-defense costs ~18M (admin) are left in (immaterial, 0.3% of rev). IFRS 16: lease interest already sits below EBIT -> no NOPAT add-back. Pension net interest 0.985M (Note 26) immaterial -> 0.
Post-tax add-backs: Write-downs FY2025 = 23.756 MDKK (Note 9), relating to old lab equipment/machinery (PPE) in production costs - immaterial (0.4% of rev) and operationally recurring -> NOT added back. NO goodwill or product-rights impairment (Note 15: valuation models show values above the NPV of the purchase considerations, no impairment need). The company has NO goodwill on the balance sheet - intangible assets are 100% acquired product rights + developed production processes + software.
Company add-backs we reject: ppa_amortization = amortization of ACQUIRED product rights FY2025 = 376.667 MDKK (Note 15: product rights Rabipur/RabAvert+Encepur 285M over 20 years, Vivotif/Vaxchora 38M, Vimkunya 54M; recognized in production costs/COGS). This is the medtech equivalent of PPA amortization (acquired intangible asset from GSK 2019 + Emergent 2023). mttssn does NOT add this back - it is a real economic cost for the M&A-built commercial franchise. share_based_comp = 84.486 MDKK (Note 29, IFRS 2: warrants 61.323 + RSU 23.163). mttssn does NOT add back SBC. (Amortization of developed production processes 37.486M is also kept in opex.)
Invested capital: BS snapshot as of 2026-03-31 (Q1 2026 report p.16, DKK k -> MDKK). total_equity 12688.276; nci_amount 0 (all subsidiaries 100% owned). accumulated_oci = translation reserve 21.827 + hedge reserve (cash-flow hedge) -8.806 = 13.021 (Q1 changes-in-equity p.17). NOTE: share-based compensation reserve 274.099 is NOT INCLUDED in OCI (IFRS 2 reserve, stays in equity). 13.021/12688 = 0.1% of equity -> immaterial but stripped for transparency. equity_ex_oci = 12688.276 - 13.021 = 12675.255. interest_bearing_debt = debt to credit institutions 10.339 (non-current) + 2.159 (current) = 12.498 (mortgage; RCF DKK 1000M undrawn as of 2025-12-31). net_pension_liability = 84.095 (Swiss subsidiary Bavarian Nordic Berna GmbH, Note 26; DBO 558.835 - plan assets 475.869). cash_and_equivalents = cash 692.850 + securities 1599.447 = 2292.297 (securities = short-term Danish government/mortgage bonds, treated as cash-like). operational_cash = min(cash, 0.02*LTM-rev 5955.211) = 119.104. excess_cash = 2292.297 - 119.104 = 2173.193. Lease liability 126.785 (83.129+43.656) EXCLUDED from IC (ROU 109.274 = ~5% of PP&E 2057.464; office/equipment, not a primary operating asset). IC = 12675.255 + 12.498 + 84.095 - 2173.193 = 10598.655. NO capitalized R&D to add (Note 15: R&D expensed). IMPORTANT: IC is dominated by acquired product rights (net 5464M as of Q1) - the M&A-built franchise is heavy on invested capital.
Pages read — FY: [2, 4, 5, 23, 24, 25, 26, 27, 123, 124, 125, 126, 127, 138, 145, 146, 164, 165, 167, 174] · Q: [2, 3, 4, 5, 6, 7, 8, 14, 15, 16, 17] 📄 p.2
How the mttssn view has evolved — each prior dated note is preserved.