Evotec AG (Frankfurt:EVT) (TecDAX) (ISIN:DE0005664809) today
announced its financial results for the fiscal year ended 31
December 2013, which are in line with the revised expectations
communicated in the fourth quarter 2013.
Strongest liquidity position in 20-year
history
-- Revenues € 85.9 m a slight decrease of 2%, at constant 2012
foreign exchange rate +0.5% to € 87.7 m
-- Operating result before impairments and contingent
considerations positive at € 1.2 m; Group EBITDA +37% to
€ 12.9 m
-- Significant impairments in 2013 led to operating loss of
€ 21.4 m and net loss of € 25.4 m
-- Operating cash flow continued to be positive at
€ 6.7 m (2012: € 12.0 m)
-- Strongest liquidity position of € 96.1 m in
Company's history
Good progress in both business segments
achieved
-- New alliances and extended collaborations announced in
2013 with Active Biotech, Dow AgroSciences, Genentech, the Jain
Foundation and the Leukemia & Lymphoma Society strengthened
customer and revenue base and improved foundation for future
growth
-- Five milestones achieved in its long-standing
collaboration with Boehringer Ingelheim and also received first two
milestones in its integrated drug discovery collaboration with
UCB
-- New facility for compound management services in
Branford, US won first client and signed a five-year compound
management services agreement
-- Cure X and Target X strategy broadened with Apeiron
(TargetImmuniT), Dana Farber`s Belfer Institute (TargetKDM),
Harvard University with TargetEEM, CureMN and TargetPGB as well as
Johnson & Johnson (TargetAD) and Yale University
(TargetDBR)
-- New integrated alliance in the field of kidney diseases
with Astra Zeneca
Product development opportunities: Significant upside
without financial risk
-- DiaPep277®, positive Phase III results confirmed, data
of second pivotal trial expected end of 2014
-- Read-out of large Phase IIb trial with EVT302 in
Alzheimer`s disease expected in 2015
-- Broad long-term pipeline of over 50 drug discovery
programmes
Accelerate innovation strategy through
acquisitions
Acquisition of Bionamics and appointment of Dr Timm Jessen as
Executive Vice President Business Development EVT Innovate to
accelerate Evotec's growth in the EVT Innovate Segment (after
period-end)
Segment reporting from January 2014 onwards – Execute
on Innovate
From 01 January 2014 onwards, the Company operates and manages
and reports the business under two segments, EVT Execute and EVT
Innovate.
Guidance 2014
-- High single-digit percentage growth in revenue excluding
milestones, upfronts and licences
-- R&D expenditure is expected to be in the range of
€ 10 m to € 14 m
-- Positive EBITDA before changes in contingent
considerations expected at a similar level to 2013
-- Liquidity is expected to exceed € 90 m at the
end of 2014
1. Operational performance
Slight increase in underlying revenues at constant
foreign exchange rates
Evotec Group revenues amounted to € 85.9 m, a slight
decrease of 2% compared to the same period of the previous year
(2012: € 87.3 m). This decrease primarily resulted from
lower revenues from upfront payments in the financial year 2013. At
constant 2012 foreign exchange rates, 2013 revenues would have
amounted to € 87.7 m, primarily due to the Euro being
significantly stronger versus the US dollar in 2013.
The total amount of milestone, upfront and licence revenues
recognised in Evotec's partnerships was € 16.5 m and
decreased in comparison with prior year (€ 20.7 m). This
was mainly due to higher revenues from upfront payments in 2012
from Janssen for the EVT100 series as part of the licence agreement
for the treatment of depression and from MedImmune for EVT770 for
the treatment of diabetes. Excluding milestones, upfronts and
licences, Evotec's revenues for the year 2013 would have increased
by 4% to € 69.4 m (2012: € 66.6 m). Despite the
decrease of milestones, upfronts and licence revenues the gross
margin increased by 0.7% points to 36.3% in comparison with the
previous year (2012: 35.6%). This mainly resulted from efficiency
improvements, higher capacity utilisation and increased
productivity.
Evotec's operating loss for 2013 amounted to € 21.4 m
(2012: € 3.2 m), which was primarily due to impairments
of intangible assets in the amount of € 22.0 m. The
impairments were mainly taken against the EVT100 series. The
operating result before impairment and changes in contingent
consideration was positive at € 1.2 m and on a similar
level to 2012 (€ 1.4 m). In addition restructuring
expenses amounted to € 0.5 m, mainly due to retention and
severance expenses resulting from the wind-down decision regarding
Evotec (India) Private Ltd. Net loss amounted to € 25.4 m
in 2013 (2012: net income of € 2.5 m). In 2012, Evotec
incurred a deferred tax income of € 8.3 m which had a positive
effect on the net result. The Group EBITDA amounted to
€ 12.9 m in 2013 and improved by 37% over last year
(2012: € 9.4 m).
R&D expenditure increased as planned to € 9.7 m
(2012: € 8.3 m). This increase is primarily due to
increased investments in Cure X and Target X initiatives.
In 2013, selling, general and administrative ("SG&A")
expenses of the Group slightly increased by 2% to
€ 16.6 m (2012: € 16.3 m). This was primarily
due to the higher cost base following the acquisition of CCS and a
slight increase in personnel-related costs.
Evotec ended 2013 with a strong liquidity position of
€ 96.1 m (2012: € 64.2 m), which is composed of
cash and cash equivalents (€ 45.6 m) and of investments
(€ 50.5 m). Due to the € 30.1 m capital
increase against cash contribution from its authorised capital by
issuing 11,818,613 new shares to the Biotechnology Value Fund, L.P.
and other affiliates of the US biotech specialist investment firm
BVF Partners and € 6.7 m cash provided by operating
activities, liquidity in 2013 improved by € 31.9 m
despite capital expenditure of € 5.2 m (2012:
€ 8.2 m) as well as acquisition costs and earn-out
payments.
Fiscal year 2013
results |
|
Key figures of
consolidated income statement |
Evotec AG and subsidiaries |
|
In T€ except share data and
per share data |
|
January to |
December |
Change |
|
2013 |
2012 |
in % |
|
|
|
|
Revenues |
85,938 |
87,265 |
(2) |
Gross margin in % |
36.3 |
35.6 |
|
|
|
|
|
Research and development expenses |
(9,664) |
(8,340) |
16 |
Selling, general and administrative
expenses |
(16,597) |
(16,301) |
2 |
Amortisation of intangible assets |
(3,222) |
(2,768) |
16 |
Impairment of intangible assets |
(22,023) |
(3,505) |
|
Impairment of goodwill |
(1,948) |
-- |
100 |
Impairment of property, plant and
equipment |
(1,076) |
-- |
100 |
Restructuring expenses |
(474) |
-- |
100 |
Other operating income |
4,410 |
2,202 |
100 |
Other operating expenses |
(1,980) |
(5,513) |
(64) |
|
|
|
|
Operating income
(expense) |
(21,351) |
(3,202) |
|
Operating income* |
1,229 |
1,401 |
(12) |
|
|
|
|
Net income |
(25,433) |
2,478 |
|
|
|
|
|
Weighted average shares
outstanding |
121,215,288 |
117,295,847 |
|
Net income per share (basic and
diluted) |
(0.21) |
0.02 |
|
* Excluding impairments and
reversal of impairments and changes in contingent
considerations |
|
Key figures of
consolidated statement of financial position |
Evotec AG and subsidiaries |
|
In T€ |
|
31 Dec |
31 Dec |
Change |
|
2013 |
2012 |
in % |
|
|
|
|
Cash, cash equivalents and
investments |
96,143 |
64,159 |
50 |
Working capital |
4,657 |
3,287 |
42 |
Current and non-current loans and
finance lease obligations |
17,241 |
17,402 |
(1) |
Stockholders' equity |
158,967 |
152,547 |
4 |
|
|
|
|
Total assets |
227,380 |
225,427 |
1 |
2. Evotec Action Plan 2016 – Execute on Innovate
to create value
Update on discovery alliances, development partnerships
and status of clinical and pre-clinical programmes
EVT Execute – Important new and extended
collaborations
In 2013, new alliances and extended collaborations were
announced with Active Biotech, Dow AgroSciences, Genentech, the
Jain Foundation and the Leukemia & Lymphoma Society which
strengthened customer and revenue base and improved the foundation
for future growth.
Five milestones were achieved within the alliance with
Boehringer Ingelheim and the first two milestones with UCB.
Furthermore, in the second quarter of 2013 Evotec signed a
multi-year lease on a facility located in Branford, Connecticut,
that is specifically designed to expand the offering of its
compound management services on the US East Coast. This new site
became operational in the third quarter of 2013 and has begun
servicing a five-year contract with a client.
In October Evotec closed its Chemistry Operations in Thane,
India. All chemistry efforts are now undertaken at its Abingdon
(UK) facility, answering to an increasing requirement to operate
closer to the principal R&D laboratories of its major
customers.
EVT Innovate – Key clinical read-outs ahead and Target
X/Cure X initiative to fuel the project pipeline
Evotec's clinical programmes are exclusively developed
in partnerships with pharmaceutical companies who fund the
development
The first Phase III trial on DiaPep277® demonstrated the
achievement of both its primary and secondary endpoints. Moreover,
DiaPep277® continues to be well tolerated and is demonstrating a
good safety profile in the completed and ongoing Phase III clinical
trials in type 1 diabetes patients as well as in extension studies
as announced by Andromeda. Results of a second pivotal trial are
expected towards the end of 2014.
Roche started a Phase IIb trial with EVT302 at the end of 2012
aiming at recruiting 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 (AD). This
clinical trial is one of the very few late-stage trials in this AD
patient population. Results are expected in 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. In
December 2013, Evotec announced that certain pre-clinical studies
performed by Janssen did not confirm certain properties of the
antagonist and did not justify the planned immediate development of
the compound and therefore did not trigger a significant milestone
payment to Evotec. The project is currently under evaluation at
Janssen.
Targeting innovation efficiency through Cure X/Target X
strategy
In the course of 2013, Evotec made a serious effort to broaden
its Cure X and Target X strategy with Apeiron (TargetImmuniT), Dana
Farber`s Belfer Institute (TargetKDM) and Yale University
(TargetDBR) to discover and develop novel cancer treatments. Three
initiatives with Harvard University such as TargetEEM to identify
novel enteroendocrine mechanisms that have diseases-modifying
potential in diabetic patients, CureMN to identify compounds that
prevent or slow down the loss of motor neurons and TargetPGB to
discover and develop novel anti-bacterial agents.
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. The agreement 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 receives research funding for work
that is conducted in collaboration with AstraZeneca.
Furthermore in November 2013, Evotec announced its TargetAD
collaboration with the Johnson & Johnson Innovation Center in
California to identify new targets for Alzheimer's disease drug
discovery and development. Janssen 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.
3. Accelerate innovation strategy
through acquisitions
In March 2014, Evotec announced the acquisition of the
German-based company Bionamics GmbH, an asset management company
that focuses on the translation of academic innovations into
attractive assets for the biotech and Pharma industry. The
transaction comprises the acquisition of all shares of Bionamics
against cash and future milestone payments. Next to an experienced
management team, Bionamics brings a portfolio of attractive and
fully funded projects as well as a participation in potential
upside of certain projects to Evotec. To further enhance Evotec's
expertise in translating early research into Pharma partnerships
Evotec has appointed Dr Timm Jessen as Executive Vice President
Business Development EVT Innovate.
4. Segment reporting
from January 2014 onwards – Execute on
Innovate
Evotec will manage its drug discovery activities under the
business segments EVT Execute and EVT
Innovate from January 2014 onwards. EVT Execute represents
all partnerships in which the partner brings the underlying target
to the table. EVT Innovate comprises all partnerships derived from
Evotec´s internal research. All long-term, integrated partnerships
will be allocated to EVT Execute whereas all innovative,
early-stage drug discovery projects, the so-called Cure X and
Target X initiatives, as well as the advanced drug candidates will
be allocated to EVT Innovate.
5. Guidance 2014
Evotec pursues a business model in which revenues and operating
profitability are highly dependent on the achievement and timing of
milestones.
In 2014, total Group revenues excluding milestones, upfronts and
licences are expected to see high single-digit percentage growth.
This assumption is based on the current order book, expected new
contracts and contract extensions.
Evotec expects research and development (R&D) expenses in
2014 to increase above the levels of 2013. This is primarily due to
additional investments in the strategic Cure X/Target X franchise.
In total, R&D expenditure is expected to be in the range of
€ 10 m to € 14 m in 2014.
In 2014, Evotec will continue to invest in its technology
platforms and capacities in order to drive its long-term growth
strategy. It is therefore planned that € 5 m to
€ 7 m will be invested in further capacity increases and
the upgrade of Evotec's technological capabilities.
Evotec's Group EBITDA before changes in contingent
considerations is expected to be positive and at a similar level to
2013. EBITDA is defined as earnings before interest, taxes,
depreciation and amortisation of intangibles. EBITDA excludes
impairments on intangible and tangible assets as well as the total
non-operating result. EBITDA is disclosed from 2014 onwards and
replaces the adjusted operating result as the key performance
indicator for productivity. The reason for this change is that
EBITDA better facilitates comparisons between companies and
industries by eliminating the effects of financing (i.e. interest)
and capital investments (i.e. depreciation and amortisation).
In 2014, top-line growth is expected to generate a positive
operating cash flow at a similar level to 2013 and liquidity is
expected to exceed € 90 m at 31 December 2014. This forecast
excludes any potential cash outflow for M&A or similar
transactions.
The Company's mid-term financial plan does not envisage the need
for any additional external financing for Evotec's operating
business. However, all strategically desirable moves such as
potential company or product acquisitions will need to be
considered separately.
Webcast/Conference Call
Evotec is going to hold a conference call to discuss the results
as well as to provide an update on its performance. Furthermore,
the Management Board will present an outlook for fiscal year 2014.
The conference will be held in English.
Conference call details
Date: |
Tuesday, 25 March 2014 |
Time: |
09.30 am CET (08.30 am GMT/04.30 am
EDT) |
|
|
From Germany: |
+49 (0) 69 2017 44 210 |
From UK: |
+44 20 7153 9154 |
From USA: |
+1 877 423 0830 |
Access Code: |
129176# |
A simultaneous slide presentation for participants dialling in
via phone is available at
http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=2182,
password: evotec0314.
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 2017 44 221
(Germany) or +44 20 3364 5200 (UK) and in the US by dialling +1 855
839 8920. The access code is 350788#. The on-demand version of the
webcast will be available on our website:
http://www.evotec.com/article/en/Investors/Finance/Financial-Reports-2012-2014/188/6/26
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 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.
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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