DGAP-News: Evotec AG reports first nine months 2013 results
(firmenpresse) - DGAP-News: Evotec AG / Key word(s): Quarter Results
Evotec AG reports first nine months 2013 results
12.11.2013 / 07:29
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- DRIVING INNOVATION AND CAPITAL EFFICIENCY WITH STRONG LIQUIDITY
POSITION
- POSITIVE NEWS FLOW CHARACTERISES THIRD QUARTER 2013
Hamburg, Germany - 12 November 2013: Evotec AG (Frankfurt Stock Exchange:
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 EUR 60.3 m (2012: EUR 64.2 m)
- Operating loss for the first nine months of 2013 at EUR 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 EUR 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 EUR 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 EUR 10 m
- Given the cash inflow following a capital increase, Evotec increased
its cash guidance to>EUR 90 m at the end of 2013
Others
- Evotec raises EUR 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 EUR
60.3 m (2012: EUR 64.2 m). Revenues for the first nine months of 2013
included milestones from Boehringer Ingelheim of EUR 7.5 m in total and a
first milestone from UCB. The third quarter2013 reported revenues of EUR
23.6 m, an increase of 7% compared to the same period of the previous year
(2012: EUR 22.2 m). The operating loss for the first nine months of 2013
amounted to EUR 4.2 m, mainly resulting from the impairment of tangible
assets (EUR 1.1 m) and the impairment of goodwill (EUR 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 EUR 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 EUR 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 (EUR 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 EUR 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(R) 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(R) 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 EUR 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 EUR 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 EUR
90 m and EUR 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 EUR 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 EUR 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 EUR 30 m from the increase of its share capital against cash
contribution.
5. OTHERS
Evotec raises EUR 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 EUR 30 m to subscribe
for 11,818,613 new shares of Evotec at a share price of EUR 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 EUR 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 TEUR except share data and per share data
Janua- Septe- July to Septe-
ry to mber mber
2013 2012 Chan 2013 2012 Chan
ge ge
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 (47.7)
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 TEUR
30 31 Change
September December
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 Evotec AG:
Gabriele Hansen, Head of Corporate Communications, Phone:
+49.(0)40.56081-255, gabriele.hansen(at)evotec.com
End of Corporate News
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Language: English
Company: Evotec AG
Manfred Eigen Campus / Essener Bogen 7
22419 Hamburg
Germany
Phone: +49 (0)40 560 81-0
Fax: +49 (0)40 560 81-222
E-mail: info(at)evotec.com
Internet: www.evotec.com
ISIN: DE0005664809
WKN: 566480
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart
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