- DRIVING INNOVATION AND CAPITAL EFFICIENCY WITH STRONG
LIQUIDITY POSITION
- POSITIVE NEWS FLOW CHARACTERISES THIRD QUARTER
2013
Evotec AG (Frankfurt:EVT) (TecDAX) (ISIN:DE0005664809) today
reported financial results and corporate updates for the third
quarter and first nine months of 2013 ending 30 September 2013.
Significant milestones achieved
-- Nine-months revenues for 2013 amounted to € 60.3 m (2012: €
64.2 m)
-- Operating loss for the first nine months of 2013 at €
4.2 m mainly due to impairment charges as a consequence of the
closure of Evotec's Indian operations
-- Significant improvement of gross margin excluding milestones,
upfronts and licences compared to the same period of the previous
year
-- Strong liquidity position at € 84.7 m
-- High and increased equity ratio at 72.2%
Extension agreement in EVT Execute business; Good
pipeline progress with the transition of an oncology molecule into
Phase I clinical trials; Cure X and Target X partnerships deliver
first-in-class assets to EVT Innovate
-- Extension and expansion of research collaboration with the
Jain Foundation in skeletal muscular dystrophy diseases
-- Evotec and The Leukemia & Lymphoma Society enter into a
strategic research collaboration (after period-end)
-- Important pre-clinical and clinical milestones achieved in
Boehringer Ingelheim alliance
-- Evotec achieves first milestones in multi-target deal with
UCB
-- Evotec and Harvard Stem Cell Institute form
CureMN collaboration to advance ALS research
-- Evotec enters into second research collaboration,
TargetEEM (Enteroendocrine Mechanisms), with the
laboratory of Doug Melton
-- Evotec enters into integrated alliance with AstraZeneca in
kidney diseases (after period-end)
-- Evotec and Johnson & Johnson Innovation form
TargetAD alliance to identify and develop novel
Alzheimer's disease therapies (after period-end)
-- Significant clinical data points ahead
Indian operations closed
Financial guidance for 2013 confirmed and cash guidance
adopted
-- Revenues are expected to grow to a level between
€ 90-100 m
-- Operating result before impairment and changes in contingent
consideration is expected to improve over 2012
-- R&D expenditure is expected to be around
€ 10 m
-- Given the cash inflow following a capital increase, Evotec
increased its cash guidance to >€ 90 m at the end of
2013
Others
-- Evotec raises € 30 m from Biotechnology Value Fund
("BVF") in a capital increase
-- Evotec intends to report two segments from 01 January 2014
onwards
-- Evotec strengthens its management team with the appointment
of Dr Thomas Hanke as Head of Immunology & Inflammation
(after period-end)
-- Dr Hubert Birner decided to resign from his position as
member of the Supervisory Board (after period-end)
1. OPERATIONAL PERFORMANCE
Significant milestones achieved
Reported revenues for the first nine months of 2013 decreased by
6% to € 60.3 m (2012: € 64.2 m). Revenues
for the first nine months of 2013 included milestones from
Boehringer Ingelheim of € 7.5 m in total and a first
milestone from UCB. The third quarter 2013 reported revenues of
€ 23.6 m, an increase of 7% compared to the same period
of the previous year (2012: € 22.2 m). The operating
loss for the first nine months of 2013 amounted to
€ 4.2 m, mainly resulting from the impairment of tangible
assets (€ 1.1 m) and the impairment of goodwill
(€ 1.9 m) as a consequence of the decision to cease
operations at Evotec (India) Private Ltd. However, despite this
significant one-time impact the operating result for the third
quarter 2013 was positive at € 0.2 m. As stated before,
Evotec's operating result may vary significantly between quarters
as a result of the timing of performance-based milestone payments
and partnering events. Liquidity including cash, cash equivalents
and investments at the end of September 2013 amounted to
€ 84.7 m.
Overall, the Company is expected to achieve increased full-year
profitability over 2012 (before impairment and changes in
contingent considerations).
2. EVOTEC ACTION PLAN 2016 – INNOVATION
EFFICIENCY
Extension agreement in EVT Execute business; Good
pipeline progress with the transition of an oncology molecule into
Phase I clinical trials; Cure X and Target X partnerships deliver
first-in-class assets to EVT Innovate
Action Plan 2016 – Innovation Efficiency is the strategic
framework that was initiated in March 2012. EVT Execute aims to
deliver cost-efficient and industrialised services for drug
discovery on a fee-for-service basis. EVT Integrate and EVT
Innovate involve accelerating promising drug discovery ideas and
assets to partnerships with potential upfront payments, premium
research fees, milestone payments and royalties.
A. EVT Execute
Extension and expansion of research collaboration with
the Jain Foundation in skeletal muscular dystrophy
diseases
In 2012, Evotec and the Jain Foundation initiated a research
project to develop a cell-based high-throughput screening assay
using dysferlin deficient cells. The aim of this project was to
develop a simple test for the well-being of muscle cells in the
absence of dysferlin so that compounds that improve the well-being
of dysferlin deficient muscle cells can be identified. In August
2013, the Jain Foundation extended and expanded this research
collaboration with Evotec.
Evotec and The Leukemia & Lymphoma Society enter
into a strategic research collaboration (after
period-end)
In November 2013, Evotec entered into an integrated research
collaboration with The Leukemia & Lymphoma Society ("LLS").
Evotec will support one of LLS's Screen-to-Lead Programs. In this
collaboration, Evotec partners with LLS to support selected
programmes and principal investigators with resources for
high-throughput screening and optimisation of small molecules into
drug-like compounds. Evotec delivers an industrialised,
cutting-edge, comprehensive and unbiased drug discovery
infrastructure to support innovation efficiency as part of a fully
integrated solution.
B. EVT Integrate
Important pre-clinical and clinical milestones achieved
in Boehringer Ingelheim alliance
In September 2013, Evotec reached two milestones in its alliance
with Boehringer Ingelheim. The first milestone (€ 2.0 m)
was for the transition of an oncology molecule into Phase I
clinical trials. The second milestone, which is the 20th milestone
as part of the alliance with Boehringer Ingelheim, recognises a
second oncology compound transitioning into pre-clinical
development and triggered revenues of € 4.0 m for
Evotec.
Evotec achieves first milestones in multi-target deal
with UCB
In September 2013, Evotec achieved its first milestone in its
multi-year, multi-target integrated drug discovery collaboration
with UCB in the field of immunology. This first milestone was
achieved upon the progression of a project into the hit-to-lead
phase. The second milestone was reached after period-end upon the
progression of a project into lead optimisation.
C. EVT Innovate
Evotec and Harvard Stem Cell Institute form CureMN
collaboration to advance ALS research
In September 2013, Evotec announced a strategic partnership with
the Harvard Stem Cell Institute ("HSCI") to identify compounds that
prevent or slow down the loss of motor neurons, which is
characteristic of the human disease amyotrophic lateral sclerosis
("ALS"). The CureMN (CureMotorNeuron)
collaboration leverages human motor neuron assays based on ALS
patient-derived induced pluripotent stem ("iPS") cells. Prototypes
of these assays were originally developed by Dr Lee Rubin, HSCI
Principal Faculty member and professor in the Department of Stem
Cell and Regenerative Biology at Harvard, and Dr Kevin Eggan, Early
Career Scientist at the Howard Hughes Medical Institute, HSCI
Principal Faculty member and professor in the Department of Stem
Cell and Regenerative Biology at Harvard.
This agreement marks the third collaboration between Evotec and
leading Harvard Stem Cell Institute scientists – and the fourth
with Harvard scientists – and significantly expands a partnership
model which combines cutting-edge academic research from Harvard
with Evotec's leading drug platform and expertise.
Evotec enters into second research collaboration,
TargetEEM (Enteroendocrine Mechanisms), with the laboratory of Doug
Melton
In September 2013, Evotec started a second research
collaboration, TargetEEM, with the laboratory of
Doug Melton. The objective of this collaboration is to identify
novel enteroendocrine mechanisms, pathways and signals regulating
key metabolic processes that have disease-modifying potential in
diabetic patients. Evotec's first collaboration with the Melton
laboratory was focused on beta cell replication.
TargetEEM is a comprehensive screening effort
by Harvard and Evotec designed to systematically search for novel
pathways and targets that have the potential to address key
pathophysiological mechanisms involved in insulin resistance and
energy handling. The basis of this effort is disease-relevant
animal models as well as unbiased transcriptional and proteomic
profiling platforms contributed by both collaboration partners.
Harvard and Evotec are collaborating in a highly integrated and
fashion and will share potential commercial rewards.
Evotec enters into integrated alliance with AstraZeneca
in kidney diseases (after period-end)
In October 2013, Evotec signed an agreement with AstraZeneca in
the field of kidney diseases. The focus of this alliance is to
explore compounds and targets with novel mechanisms that have
disease-modifying potential for the treatment of chronic kidney
diseases.
Under the terms of this licence and collaboration agreement,
AstraZeneca receives access to a selected series of molecules
identified in a screening effort, which is part of Evotec's
systematic kidney disease initiative. This particular programme has
been designed to explore a key mechanism in the field of chronic
kidney disease. AstraZeneca will provide industrial scope and scale
as well as pharmaceutical development expertise and marketing
capabilities.
The agreement between Evotec and AstraZeneca triggered an
undisclosed upfront payment as well as pre-clinical, clinical and
regulatory milestones. Evotec is also eligible for additional
milestone and royalty payments related to commercialisation. Evotec
will receive research funding for work that will be conducted in
collaboration with AstraZeneca.
Evotec and Johnson & Johnson Innovation form
TargetAD alliance to identify and develop novel Alzheimer's disease
therapies (after period-end)
In November 2013, Evotec entered into a collaboration with the
Johnson & Johnson Innovation Center in California to identify
new targets for Alzheimer's disease drug discovery and development.
Under the terms of the agreement, Janssen Pharmaceuticals, Inc., a
member of the Johnson & Johnson family of companies, and Evotec
will work together to discover and develop novel treatments for
Alzheimer's disease.
Termed TargetAD (Alzheimer's disease),the
collaboration will seek to identify new drug targets for discovery
of novel treatment approaches to Alzheimer's disease. Janssen will
fund target discovery research via a combination of defined
research payments and progress-related milestones over the next
three years.
Janssen will have the opportunity to internalise selected
targets and therapeutic candidates from the
TargetAD database and progress them into
pre-clinical and clinical development. Janssen will reimburse up to
$ 10 m in FTE-based research costs and make pre-clinical,
clinical, regulatory and commercial payments up to a maximum of
between approximately $ 125 m to $ 145 m per
programme upon achieving agreed-upon milestones. In addition,
Evotec will receive royalties on future sales of any products that
may result from the alliance.
Evotec's proprietary TargetAD database provides
a unique source of potentially novel Alzheimer's disease drug
targets derived from the analysis of dysregulated genes in
high-quality and well-characterised human brain tissues
representing all stages of disease progression as well as control
tissues from non-demented subjects. Identifying new targets for
drug development based on disease pathology may have the potential
to impact the disease at its earliest stages, resulting in greater
therapeutic benefit to patients.
Significant clinical data points ahead
The first Phase III clinical trial on DiaPep277® demonstrated
the achievement of both its primary and secondary endpoints.
Moreover, results from an extension study to its Phase III clinical
trial in type 1 diabetes patients demonstrating that DiaPep277® was
well-tolerated and had a good safety profile were announced by
Andromeda in June 2013. Results of a second pivotal trial are
expected towards the end of 2014.
At the end of 2012, Roche started a substantial Phase IIb trial
with EVT302 that aimed to recruit 495 patients in more than 140
centres worldwide to assess the efficacy and safety of this
compound in patients with moderate-severity Alzheimer's disease.
This clinical trial is one of very few late-stage trials in this AD
patient population. Results are expected early 2015.
In December 2012, Evotec entered into a licence agreement with
Janssen for its NR2B subtype selective NMDA-antagonist portfolio
for development against diseases in the field of depression. Based
on certain pre-clinical validation tests, which are expected to
read out in 2013, Evotec forecasts to receive a significant
milestone before year-end. The Company expects that Janssen will
initiate Phase II clinical trials for the treatment of depression
early in 2014.
In September 2013, the FDA granted Orphan Drug Designation for
Aspireo's Somatoprim, a novel somatostatin analogue (SSA), for the
treatment of acromegaly. Orphan drug designation is granted for
novel drugs that aim to treat rare diseases and provides seven
years of market exclusivity for the drug upon approval. In
September 2012, Evotec and Aspireo entered into a strategic
advisory agreement for support in the development and partnering of
Aspireo's Somatoprim.
3. RESTRUCTURING
Indian operations closed
In July 2013, Evotec announced that it would close its Chemistry
Operations in Thane, India. All project work in Thane was completed
by the end of September 2013 and Evotec (India) Private Ltd is now
in the process of being wound down. As a consequence, approximately
100 Thane-based employees left the Company as of 30 September 2013
and Evotec took a one-time impairment charge in the third quarter
of 2013.
4. GUIDANCE
Evotec confirms operating financial targets for the
financial year 2013
Given the cash inflow of € 30 m from the increase of
its share capital against cash contribution from Biotechnology
Value Fund, L.P. in September this year, the guidance of the
Company's liquidity position increased to above € 90 m by
end of the year 2013. All other financial targets published on 26
March 2013 in Evotec's Annual Report 2012 (page 78) remain
unchanged.
In 2013, total Group revenues are expected to grow to a level
between € 90 m and € 100 m. This assumption is
based on the current order book, expected new contracts and
contract extensions, as well as the achievement of certain
milestone revenues. Milestones are difficult to predict, but they
remain a fundamental part of the business model of Evotec.
On this basis, gross margins in 2013 are expected to improve
slightly on those achieved in 2012. However, quarterly margins will
continue to be volatile, as they are dependent upon the timing of
milestone payments.
Evotec expects research and development (R&D) expenses in
2013 to increase above the levels of 2012. This is primarily due to
additional investments in the strategic Cure X franchise primarily
in the fields of metabolic diseases and regenerative medicine. In
total, R&D expenditure is expected to be around
€ 10 m in 2013.
Evotec's Group operating result before impairment and changes in
contingent consideration is expected to improve from its 2012 level
for the year 2013.
At constant year-end 2012 currencies, the Company increases its
cash guidance to above € 90 m by the end of 2013,
excluding any potential cash outflow for M&A or similar
transactions due to the capital inflow to Evotec of
€ 30 m from the increase of its share capital against
cash contribution.
5. OTHERS
Evotec raises € 30 m from Biotechnology Value Fund in a
capital increase
In August 2013, Evotec resolved on a capital increase from its
authorised capital against cash contribution by issuing 11,818,613
new shares to Biotechnology Value Fund and other affiliates of the
US biotech specialist investment firm BVF Partners L.P.
In a direct placement capital increase, BVF invested
€ 30 m to subscribe for 11,818,613 new shares of Evotec
at a share price of € 2.55 per share.
In a simultaneous transaction, BVF also purchased an option from
TVM V Life Science Ventures GmbH & Co. KG ("TVM") granting BVF
the right to acquire an additional 11,818,612 shares of Evotec at
€ 4.00 per share within the next 30 months. 50% of the options
provided by TVM to BVF are subject to an option granted by ROI
Verwaltungsgesellschaft mbH ("ROI") to TVM with similar conditions
as in the option agreement between BVF and TVM.
Evotec intends to report two segments from 01 January
2014 onwards
From 01 January 2014 onwards, the Company intends to operate and
manage the business under two segments. In preparation for this the
Company is currently in the course of reorganising responsibilities
in the organisation, revising compensation schemes and redesigning
the internal and external reporting structure. Those preparations
are planned to be finalised by beginning of 2014. The planned
segment reporting should further increase internal and external
transparency of the business.
Webcast/Conference Call
The Company is going to hold a conference call to discuss the
results as well as to provide an update on its performance:
Conference call details
Date: |
Tuesday, 12 November
2013 |
Time: |
09.30 am CET (08.30 am GMT, 03.30 am
EST) |
|
|
From Germany: |
+49 (0) 6103 485 3001 |
From UK: |
+44 207 153 2027 |
From USA: |
+1 888 457 4228 |
Access Code: |
4645643 |
A simultaneous slide presentation for participants dialling in
via phone is available at www.eqs.com, password: evotec1113.
Webcast details
To join the audio webcast and to access the presentation slides
you will find a link on our home page www.evotec.com shortly before
the event.
A replay of the conference call will be available for 24 hours
and can be accessed in Europe by dialling +49 69 58 99 90 568
(Germany) or +44 207 154 2833 (UK) and in the US by dialling +1 303
590 3030. The access code is 4645643#. The on-demand version of the
webcast will be available on our website:
http://www.evotec.com/article/en/Investors/Finance/Financial-Reports-2011-2013/188/6/26.
ABOUT EVOTEC AG
Evotec is a drug discovery alliance and development partnership
company focused on rapidly progressing innovative product
approaches with leading pharmaceutical and biotechnology companies.
We operate worldwide providing the highest quality stand-alone and
integrated drug discovery solutions, covering all activities from
target-to-clinic. The Company has established a unique position by
assembling top-class scientific experts and integrating
state-of-the-art technologies as well as substantial experience and
expertise in key therapeutic areas including neuroscience, pain,
metabolic diseases as well as oncology and inflammation. Evotec has
long-term discovery alliances with partners including Bayer,
Boehringer Ingelheim, CHDI, Genentech, Janssen Pharmaceuticals,
MedImmune/AstraZeneca and Ono Pharmaceutical. In addition, the
Company has existing development partnerships and product
candidates both in clinical and pre-clinical development. These
include partnerships with Boehringer Ingelheim, MedImmune and
Andromeda (Teva) in the field of diabetes, with Janssen
Pharmaceuticals in the field of depression and with Roche in the
field of Alzheimer's disease. For additional information please go
to www.evotec.com.
FORWARD LOOKING STATEMENTS — Information set
forth in this press release contains forward-looking statements,
which involve a number of risks and uncertainties. The
forward-looking statements contained herein represent the judgement
of Evotec as of the date of this report. Such forward-looking
statements are neither promises nor guarantees, but are subject to
a variety of risks and uncertainties, many of which are beyond our
control, and which could cause actual results to differ materially
from those contemplated in these forward-looking statements. We
expressly disclaim any obligation or undertaking to release
publicly any updates or revisions to any such statements to reflect
any change in our expectations or any change in events, conditions
or circumstances on which any such statement is based.
Results for the first
nine months 2013 |
|
|
Key figures of
consolidated interim income statement |
Evotec AG and subsidiaries |
|
In T€ except share data and
per share data |
|
January to |
September |
|
July to |
September |
|
|
2013 |
2012 |
Change |
2013 |
2012 |
Change |
|
|
|
in % |
|
|
in % |
|
|
|
|
|
|
|
Revenues |
60,320 |
64,201 |
(6.0) |
23,630 |
22,155 |
6.7 |
Gross margin in % |
35.9 |
36.4 |
|
46.9 |
38.9 |
|
|
|
|
|
|
|
|
Research and development expenses |
(7,475) |
(6,091) |
22.7 |
(2,656) |
(2,167) |
22.6 |
Selling, general and administrative
expenses |
(12,331) |
(12,274) |
0.5 |
(4,155) |
(4,248) |
(2.2) |
Amortisation of intangible
assets |
(2,419) |
(1,997) |
21.1 |
(703) |
(780) |
(9.9) |
Restructuring expenses |
(380) |
-- |
100 |
(380) |
-- |
100 |
Impairment of tangible assets |
(1,076) |
-- |
100 |
(1,076) |
-- |
100 |
Impairment of goodwill |
(1,948) |
-- |
100 |
(1,948) |
-- |
100 |
Other operating income |
910 |
2,505 |
(63.7) |
494 |
933 |
(47.1) |
Other operating expenses |
(1,161) |
(2,669) |
(56.5) |
(501) |
(809) |
(38.1) |
|
|
|
|
|
|
|
Operating income
(loss) |
(4,241) |
2,870 |
(247.8) |
162 |
1,537 |
(89.5) |
Operating
income (loss)* |
(950) |
1,351 |
(170.3) |
3,186 |
703 |
353.2 |
|
|
|
|
|
|
|
Net income (loss) |
(4,866) |
7,533 |
(164.6) |
(283) |
5,854 |
(104.8) |
|
|
|
|
|
|
|
Weighted average shares
outstanding |
118,146,894 |
117,170,597 |
|
118,828,586 |
117,459,556 |
|
Net income (loss) per share
(basic and diluted) |
(0.04) |
0.06 |
|
0.00 |
0.05 |
|
* Excluding impairments and
reversal of impairments and changes in contingent
considerations |
|
|
Key figures of
consolidated interim statement of financial position |
Evotec AG and subsidiaries |
|
In T€ |
|
30 September |
31 December |
Change |
|
2013 |
2012 |
in % |
|
|
|
|
Cash, cash equivalents and
investments |
84,665 |
64,159 |
32.0 |
Working capital |
11,026 |
3,287 |
235.4 |
Current and non-current loan
liabilities and finance lease obligations |
17,286 |
17,402 |
(0.7) |
Stockholders' equity |
177,691 |
152,547 |
16.5 |
|
|
|
|
Total assets |
245,876 |
225,427 |
9.1 |
CONTACT: Gabriele Hansen
Head of Corporate Communications
+49.(0)40.560 81-255
+49.(0)40.560 81-222 Fax
gabriele.hansen@evotec.com
Evotec AG
Manfred Eigen Campus
Essener Bogen 7
22419 Hamburg (Germany)
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