Ad hoc: Evotec Acquires ENS and Secures € 47m in Cash to Develop CNS Pipeline

Evotec OAI AG (Evotec) today announces the acquisition of the outstanding 78% of Evotec Neurosciences (ENS Holdings, Inc., ENS) not already owned by Evotec. ENS discovers and develops therapeutics for the treatment of Alzheimer's disease and other Central Nervous System (CNS) disorders with high unmet medical needs. The acquisition will be effected through a share-for-share transaction in which Evotec will issue approximately 14,300,000 new ordinary shares. The transaction values ENS at Euros 49 million (including approximately Euros 20 million of ENS cash).
Evotec also announces that a group of investors (the "Investors") have committed today to subscribe to 10 million new ordinary shares of Evotec priced at Euros 2.72 each. Existing Evotec shareholders will be offered the opportunity to participate in the financing on the same terms as the Investors and pro rata to their existing holdings. The financing announced today is subject to the approval of shareholders at the upcoming Annual Shareholders Meeting to be held on 7 June 2005.
Upon completion of the acquisition of ENS and this equity investment, Evotec shall have total cash resources of more than Euros 60 million, made up of Euros 20 million from ENS, Euros 27 million from the equity investment and approximately Euros 15 million cash on Evotec's balance sheet prior to the transactions. The funds will be used to develop the ENS pipeline with the objective of having two products in clinical trials in 2006, and at least one of these developed to proof-of-concept and ready for partnering by 2008.
The contract research business, which is currently being restructured to focus on cash generation, gives Evotec the necessary expertise and critical mass in drug discovery and development and the Company's management remains committed to its development and expansion.
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