Evotec Reports Full-Year 2010 Results: A good year with a strong start into 2011

Thursday, 24. March 2011 07:30
Evotec AG /
Evotec Reports Full-Year 2010 Results: A good year with a strong start into 2011
Processed and transmitted by Thomson Reuters.
The issuer is solely responsible for the content of this announcement.

Hamburg, Germany - 24 March 2011: Evotec AG (Frankfurt Stock Exchange: EVT,
TecDAX) today reported financial results and corporate updates for the year
ended 31 December 2010.

* Strong 2010 results driven by drug discovery alliances and milestones; all
financial targets exceeded
- First time profitable in 18 year history: operating profit of € 1.7m
(+104%), net result of € 3.0m (+107%)
- Top-line revenue growth of +29% to € 55.3m, gross margin of 44.1%
- Strong and stable liquidity position of  € 70m despite acquisition
* Strong portfolio of performance based drug discovery alliances: solid basis
for growth
- Multiple new alliances and contract extensions
- Significant licensing deal with MedImmune/AstraZeneca in metabolic
* Good progress in development partnerships: significant upside without
development risk
- Evotec's clinical programmes exclusively developed in partnerships; e.g.
Phase II study ongoing with Roche in treatment resistant depression, Phase
III ongoing with Teva in diabetes
* Successful acquisitions of DeveloGen and Kinaxo foster  innovation power
- Acquisition of Kinaxo opens path into oncology (after period end)
- Acquisition of DeveloGen represents Best-in-class approach for beta cell
regeneration and unique position in regenerative medicine
- Harvard collaboration to expand leadership in beta cell technology (after
period end)
* Guidance 2011 - accelerated path to growth and sustainability
- Continued revenue growth of > 15% supported by strongest ever order book
(€ 40m, +43% vs. 2010)
- Improved operating result (before potential impairment)
- Liquidity of more than € 65m despite significant  investment programme and
strong commitment to R&D platform technologies

1. Operational performance

Revenue growth of 29%, significantly improved operating result, first time
profitable in Company history, strategic liquidity position stable at € 70m
despite acquisition

With the Evotec 2012 Action Plan slightly ahead of plan, Evotec ended the year
with a very good financial performance and also slightly exceeded the raised
guidance from August 2010. The Company delivered on all financial targets.
Evotec Group revenues amounted to € 55.3m, 29% above last year's level (2009: €
42.7m). This increase was due to a strong performance of the Company's discovery
alliances, significant milestone achievements, stable license and upfront
income, and additional revenues from the acquisition of DeveloGen (€ 0.8m). The
achievement of four milestones from Boehringer Ingelheim in 2010, amounting to €
9.0m (2009: € 4.0m), highlights the continued solid progress that was made in
several research programmes with this partner. Due to these milestone
achievements the gross margin for the Group increased by 0.9%-points to 44.1%
(2009: 43.2%).

Based on this strong top-line performance and a tightly managed cost base
(unpartnered R&D expenses -71%, SG&A cost -4%), Evotec recorded its first ever
full year operating profit of € 1.7m (+104%) compared to an operating loss of €
42.3m in 2009. The operating loss in 2009 included impairments and restructuring
charges of € 22.7m, while no impairment or restructuring charges were recorded
in 2010.

Unpartnered R&D expenditure decreased as planned to € 6.1m (2009: € 20.9m). This
reduction is mainly a consequence of focusing R&D spending on fewer core
programmes, reducing the number of unfunded research and development projects
and increased funding from partners.  Evotec signed important development
partnerships to externally fund a number of its core assets which are not
reflected in the reported R&D expenses (see below Progress in development
partnerships). The decrease in R&D now also reflects the full-year impact of the
decision that was taken in May 2009 to close the former Renovis site in the US.

Despite successful acquisition processes  Evotec ended 2010 with a liquidity of
€ 70.4m (2009: € 70.6m) which is composed of cash and cash equivalents (€
21.1m) and of investments (€ 49.3m) and thereby well above its liquidity target
of > EUR 64 m.

Evotec reported a strong Q4 results with 21% improvement in revenues of € 16.4m
(2009: € 13.5m) and a positive operating result of € 0.7m (compared to € 9.4m
loss in Q4 2009).

2. Update on discovery alliances

Evotec's strategy is to build sustainable, performance-based drug discovery
alliances. Consequently, Evotec focuses on high value, revenue generating
partnerships with pharmaceutical and biotechnology companies.

The Company is working with more than 70 partners on a global scale. In 2010,
new and extended collaborations were announced with Active Biotech, Almirall,
Apeiron Biologics, Cardioxyl, CHDI, Cubist Pharmaceuticals, Genentech,
MedImmune, Merck KGaA, Shionogi and Vifor Pharma (in alphabetical order). With
these deals the Company further strengthened its customer and revenue base and
improved the foundation for future growth.

Equally important as the number of new collaborations and contract extensions is
the further strategic development of Evotec's existing core alliances. The
Company aims to develop its large strategic alliances and deliver innovation as
the core of all its partnering activities. Evotec, with its broad and fully
integrated drug discovery process, is uniquely positioned to execute a
comprehensive outsourcing strategy in which the Company intends to employ
increasing parts of its capacity for results-based deals, with the goal of
keeping a share of the value created. In 2010, revenues in Evotec's TOP 10
alliances grew by 34%.

3. Progress in development partnerships

In addition to its revenue generating discovery alliances Evotec focuses on
signing development partnerships to externally fund a number of assets
approaching the clinic. Such partnerships allow Evotec to de-risk its exposure
but keep some portion of the upside clinical assets.

Evotec's clinical programmes are exclusively developed in partnerships with
pharmaceutical companies who fund the development. Good progress has been
achieved during the year, and the number of compounds in clinical trials
increased compared to 2009. In 2010, Evotec's insomnia drug candidate EVT 201
was partnered with Jingxin Pharma for development and marketing in China. One
compound to treat neuropathic pain progressed into the clinic within Evotec's
collaboration with Boehringer Ingelheim. Evotec acquired the ongoing Phase III
diabetes candidate Diapep277 partnered with Andromeda/Teva through its
acquisition of DeveloGen. EVT 501, Evotec's drug candidate to treat conditions
such as narcolepsy and cognitive impairment is prepared for its clinical start.
For this compound Evotec receives external funding from the BMBF that helps the
Company to advance the programme through Phase I studies.

For EVT 101, the lead compound of the EVT 100 family, Evotec received approval
from the FDA to initiate a Phase II proof-of-concept study in treatment-
resistant depression in March 2010. Patient recruitment started in mid 2010 and
is expected to be completed in 2011. Data of the study are expected in 2012.

As a consequence of executing on this strategy, the Company's clinical
development expenses decreased significantly over the past two years and the
majority of the Company's reported R&D expenses are spent on selected early
discovery projects.

4. Acquisitions and partnerships opening new routes of growth and innovation

Evotec also increasingly invests in developing early assets in highly innovative
areas of drug discovery such as regenerative medicine (e.g. beta cell
regeneration) and technologies to better understand oncology or metabolic
diseases to support further growth. To this end the Company has executed two
strategic acquisition processes in 2010 to kick-start novel innovative
approaches in drug discovery.

In July 2010, Evotec acquired DeveloGen, a biopharmaceutical company engaged in
the discovery of novel therapeutic approaches for the treatment of metabolic and
endocrine disorders. The transaction added expertise and early discovery assets
in two key fields of high unmet medical needs, especially diabetes and metabolic
disorders, and additionally opened the field of regenerative medicine - a key
strategic step for Evotec in 2010.

The acquisition also augmented and complemented Evotec's high-end drug discovery
platform and capability with DeveloGen's target discovery, validation and in
vivo/in vitro pharmacology expertise and added core disease biology know-how in
metabolic diseases. These skills further enhance Evotec's ability to deliver
high quality, innovative solutions to its partners on a global scale.

In December 2010, Evotec entered into a license and collaboration agreement with
MedImmune Ltd, a wholly owned subsidiary of AstraZeneca, in the field of
diabetes with a particular focus on the regeneration of insulin producing beta
cells. The license gives MedImmune exclusive access to a portfolio of research
and development programmes and represents the first deal executed by Evotec on
assets and capabilities acquired through its purchase of DeveloGen. After
integration of Evotec Göttingen (formerly DeveloGen) the business is profitable
and strongly growing.

On 9 February 2011 (after period end), Evotec signed a definitive agreement to
acquire all shares in Kinaxo Biotechnologies GmbH, a Munich-based drug discovery
alliance company supporting the development of targeted drugs.  The acquisition
complements Evotec integrated drug discovery offering, adding proprietary
technology for response prediction and early decisions on drug efficacy and
safety, especially in the key area of oncology. It significantly strengthened
the Company's discovery offering to customers with this unique value
proposition. The Kinaxo business is slightly profitable and strongly growing
with an expected revenue contribution of € 2.0m in 2011.

A most visible sign of Evotec's commitment to highly innovative processes
presents the recently signed collaboration with Harvard University and the
Howard Hughes Medical Institute (HHMI), which is focused on beta cell
technologies in diabetes (after period end).

5. Guidance 2011

Revenue growth of more than 15%, improved operating result before impairment and
liquidity of approximately €65 m

In 2011, total Group revenues are expected to grow by more than 15% to € 64 to €
66m. This assumption is supported by the strong March 2011 order book of €40 m
(+43%, 2010: €28m), expected new contracts and contract extensions as well as
the achievement of certain milestones. Evotec expects research & development
(R&D) expenses to increase in 2011 from 2010 levels. The Company will focus on
key programmes and targets to invest especially in the fields of innovation in
metabolic diseases and regenerative medicine. In total approximately € 10m will
be spent in R&D in 2011. Even on this basis, Evotec's Group operating result
before impairment is expected to improve over 2010.

In 2011, Evotec will invest to support its long-term growth aspirations. More
than € 8m are planned to be invested in the long-term upgrading of the Evotec
capacities. One very visible sign for this strategy will be the move into a new
high-tech facility in Hamburg "Manfred-Eigen-Campus", which will be the center
for Evotec's screening and early biology work.
The Evotec Group started the year with € 70m of cash and cash equivalents. In
2011, top-line growth is expected to significantly reduce the cash requirements
compared to the 2010 fiscal year for the operating business. However, Evotec's
planned investments into the upgrading of its capacities and capabilities will
increase cash requirements over 2010. At constant year-end 2010 currencies, the
Company therefore expects to end 2011 with a liquidity of approximately € 65m,
excluding any potential cash outflow for M&A or similar transactions.

Through the implementation of "Evotec 2012 - Action Plan to Focus and Grow"
Evotec has managed to stop the permanent cash outflow over the last years and is
currently "cash generating" or at least "cash neutral", despite its strong
commitment to R&D. This is the first step towards a truly sustainable business.

Webcast / Conference Call
Evotec is going to broadcast its press & analyst conference in Frankfurt live on
the internet. The Management Board of Evotec AG will inform you about the FY
2010 results as well as the status of the Discovery Alliance Business and the
Company's development projects. Moreover, they will provide an update on the
"Evotec 2012 - Action Plan to Focus and Grow" and the business outlook for
2011. The conference will be held in English

Date:        Thursday, 24 March 2011
Time:        10.00 am CET (09.00 am GMT/05.00 am EDT)

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.

For those who prefer to listen to the presentation via phone, please dial:

From Germany: +49 (0)69 20 17 44 210

From UK: +44 207 153 9154

From USA: +1 877 423 0830

Access Code: 605956#

The on-demand version of the webcast will be available on our website:
www.evotec.com - Investors - Events - Financial Calendar.

About Evotec AG
Evotec is a leader in the discovery and development of novel small molecule
drugs with operational sites in Europe and Asia. The Company has built
substantial drug discovery expertise and an industrialized platform that can
drive new innovative small molecule compounds into the clinic. In addition,
Evotec has built a deep internal knowledge base in the treatment of diseases
related to neuroscience, pain, oncology, inflammation and metabolic diseases.
Leveraging these skills and expertise the Company intends to develop best-in-
class differentiated therapeutics and deliver superior science-driven discovery
alliances with pharmaceutical and biotechnology companies. Evotec has long-term
discovery alliances with partners including Boehringer Ingelheim, MedImmune,
CHDI, Genentech, Novartis, Ono Pharmaceutical and Roche. Evotec has product
candidates in clinical development and a series of preclinical compounds and
development partnerships, including for example a strategic alliance with Roche
for the EVT 100 compound family, subtype selective NMDA receptor antagonists for
use in treatment-resistant depression and an alliance in the field of diabetes
with Andromeda (Teva). Most recently, the Company has established a top-class
beta cell technology platform, which collaborates with the Harvard University
for the discovery of novel potentially disease modifying approaches to treat
diabetes. For additional information please go towww.evotec.com.

Forward-Looking Statements - Information set forth in this press release
contains forward-looking statements, which involve a number of risks and
uncertainties. Such forward-looking statements include, but are not limited to,
statements regarding our expectation that our current cash, cash equivalents,
investments, and operating revenues will be sufficient to fund our planned
activities beyond 2015; our financial outlook for 2011 and 2012, including
statements regarding our expected operating results and financing and financial
position, our belief that our cash situation should remain strong throughout
2011, and our expected liquidity at the end of 2011; our revised business model
providing a sound basis for long-term sustainable growth; the anticipated
advantages of our acquisitions and collaborations, including the expected
revenue contribution from our acquisition of Kinaxo Biotechnologies GmbH; our
expectations regarding the market for drug discovery alliances, including
anticipated growth of the pharmaceutical outsourcing drug discovery market and
the opportunities such growth will provide us, and our ability to take advantage
of such market developments; our goal to reach operating profitability and to
generate cash sustainable by 2012; our beliefs regarding the sufficiency of our
existing liquidity reserves; our capital-raising plans; the expected timing of
the effectiveness of our deregistration with the SEC; our expectations and
assumptions concerning regulatory, clinical, and business strategies; and the
progress of our clinical development programs and timing of the results of our
clinical trials, strategic collaborations, acquisitions, and management's plans,
objectives and strategies. These 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. In particular, the
risks and uncertainties include, among other things: risks that we may be unable
to achieve the anticipated benefits of our revised business model or recognise
the results of our revised business model within expected timeframes; risks that
we will not achieve the anticipated benefits of our collaborations, partnerships
and acquisitions in the timeframes expected, or at all; risks that product
candidates may fail in the clinic or may not be successfully marketed or
manufactured; risks relating to our ability to advance the development of
product candidates currently in the pipeline or in clinical trials; our
inability to further identify, develop and achieve commercial success for new
products and technologies; the risk that competing products may be more
successful; our inability to interest potential partners in our technologies and
products; our inability to achieve commercial success for our products and
technologies; our inability to protect our intellectual property and the cost of
enforcing or defending our intellectual property rights; our failure to comply
with regulations relating to our products and product candidates, including FDA
requirements; the risk that the FDA may interpret the results of our studies
differently than we have; the risk that clinical trials may not result in
marketable products; the risk that we may be unable to successfully secure
regulatory approval of and market our drug candidates; risks of new, changing
and competitive technologies and regulations in the U.S. and internationally;
general worldwide economic conditions and related uncertainties; future
legislative, regulatory, or tax changes as well as other economic, business
and/or competitive factors; and the effect of exchange rate fluctuations on our
international operations. The list of risks above is not exhaustive. This press
release contains additional factors that could impact our businesses and
financial performance. We expressly disclaim any obligation or undertaking to
release publicly any updates or revisions to 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: Dr Werner Lanthaler, Chief Executive Officer,
Evotec AG, Tel.: +49.(0)40.56081-242, werner.lanthaler@evotec.com

Fiscal Year 2010 Results

Key Figures of Consolidated Income Statements
Evotec AG and Subsidiaries

Euro in thousands except share data and per share data
|   | January to December |Change|
| +-----------+-----------+ in % |
| | 2010 | 2009 | |
|  |  |  |  |
|Revenues | 55,262| 42,683| 29|
|Gross margin in % | 44.1| 43.2| 2|
|  |  |  |  |
|Research and development expenses | 6,116| 20,947| (71)|
|Selling, general and administrative expenses| 15,956| 16,695| (4)|
|Amortisation and impairment | 672| 18,293| (96)|
|Restructuring expenses | -| 4,849| -|
|Other operating income | 4,536| 4,044| 12|
|Other operating expenses | 4,423| 3,980| 11|
|  |  |  |  |
|Operating result | 1,715| (42,299)| 104|
|Operating result* | 1,715| (19,612)| 109|
|  |  |  |  |
|Net result | 2,985| (45,497)| 107|
|  |  |  |  |
|Weighted average shares outstanding |109,012,908|106,845,831|  |
|Net loss per share (basic and diluted) | 0.03| (0.43)| 107|
* Before impairment and restructuring expenses.

Key Figures of Consolidated Statement of Financial Positions
Evotec AG and Subsidiaries

Euro in thousands
|   |31 Dec |31 Dec |Change in %|
| | 2010 | 2009 | |
|  |  |  |  |
|Cash and investments* | 70,401| 70,594| -|
|Working capital |(5,039)|(6,530)| 23|
|Current and non-current portion of loans and |  |  |  |
|finance lease obligations | 11,997| 13,205| (9)|
|Stockholders' equity |132,637|111,487| 19|
|  |  |  |  |
|Total assets |191,859|146,599| 31|
* Including auction rate securities in 2009.

--- End of Message ---

Evotec AG
Schnackenburgallee 114 Hamburg Germany

WKN: 566480;ISIN: DE0005664809;
Listed: Freiverkehr in Börse Stuttgart,
Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg,
Freiverkehr in Börse Berlin,
Freiverkehr in Börse Düsseldorf,
Freiverkehr in Bayerische Börse München,
Freiverkehr in Niedersächsische Börse zu Hannover,
Prime Standard in Frankfurter Wertpapierbörse,
Regulierter Markt in Frankfurter Wertpapierbörse;


This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Evotec AG via Thomson Reuters ONE

Related Links: Evotec SE
Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.