(Bloomberg) -- Denmark's government will spend as much as 800 million kroner ($125 million) to help Bavarian Nordic A/S finance development of the Danish drugmaker's experimental Covid-19 vaccine.
“It has shown really good results so far,” Health Minister Magnus Heunicke said in a Copenhagen press briefing on Monday. The vaccine is expected to be approved “early next year,” he said.
Shares in Bavarian rose 12% in Copenhagen while its partner Expres2ion Biotech Holding AB gained 19% in Stockholm.
Bavarian has been looking for outside help to finance further development of the vaccine, for which it earlier this month presented the first human-trial test results. The government's commitment to support the experimental drug means its chances of success have improved markedly, according to Sydbank analyst Soren Hansen.
Hansen said it's now around 60% likely that the vaccine will come to market, up from 20% after the initial trial results were published. Hansen said back then that results were “very positive” and showed that Bavarian has an attractive candidate for a future re-vaccination market.
Bavarian Nordic will seek the European Medicines Agency's approval to market the vaccine, with a plan to submit an application in “late in 2022,” the company said by email.
Bavarian said in an earlier statement on Monday that the state aid is potentially subject to repayment upon successful marketing authorization. The government could also be entitled to an additional royalty payment if the sales reach a certain threshold.
Heunicke told reporters that the new shot must be as secure and efficient as the vaccines from Pfizer and Moderna already in use if Denmark is to add it to its official program.
“But if it is as good as described right now, it is at least as good as the ones in our current vaccine program,” he said.
The European Commission earlier on Monday approved the aid measure.
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