This article discusses the recent BioShield contract awarded by the US Department of Health and Human Services to Bavarian Nordic. The contract specifies the manufacture and delivery of Bavarian Nordic's smallpox vaccine Imvamune#174; for the US Government stockpile, and has a potential value of US$1.6 B, the largest ever for a deal under the BioShield initiative. Aspects of the deal that are discussed include the reasons why the US Government may have awarded this particular contract to Bavarian Nordic, the company's contract history with the US Government, the main competition facing the Imamune vaccine #8211; and the advantages of this vaccine, as well as the deals that Bavarian Nordic has entered into with other governments. Recent changes to the BioShield initiative, and how Bavarian Nordic will benefit from these, are also examined.