Hamburg, Germany - November 12, 2009: Evotec AG (Frankfurt Stock Exchange: EVT, TecDAX; NASDAQ: EVTC) today reported results and corporate updates for the third quarter and nine months ended September 30, 2009.
Strong operational performance; important milestones achieved
- 9 months revenues +16%; 9 months operating result +6%
Closing of significant alliance with Boehringer Ingelheim (after period-end) and further new alliances and extensions
Execution of restructuring program "Evotec 2012 - Action Plan to Focus and Grow" shows clear results
- US facility closed as planned; acquisition of Indian RSIPL completed
Phase I study with EVT 103 started; start of Phase II with EVT 101 in early 2010
TecDAX re-entry in October
Year-end guidance of > EUR 40m revenues and > EUR 65m
liquidity comfortably confirmed; Strong liquidity of EUR 64m, cash flow positive Q4 expected
1. Operational performance and Discovery Alliance Business update
Strong operational performance (9 months revenues +16%; 9 months operating result +6%)
Evotec's revenues for the first nine months of 2009 amounted to EUR 29.1 million, an increase of 16% compared to the same period of the previous year (2008: EUR 25.2 million). Gross margin was strong at 38.3% (2008: 38.0%). Despite a Q1 impairment charge of EUR 6.6 million and EUR 4.7 million of restructuring expenses, Evotec's operating loss decreased by 6% to EUR 32.9 million (2008: EUR 35.2 million), before these exceptional items by 38% to EUR 21.6 million (2008: EUR 35.1 million).
In the third quarter of 2009 revenues were EUR 10.4 million (2008: EUR 10.7 million). The operating loss for the third quarter decreased by 54% to EUR 3.8 million (2008: EUR 8.3 million). This significant decrease in operating loss is a result of the Company's strong top-line performance and its significant reductions in operating expenses following the implementation of "Evotec 2012 - Action Plan to Focus and Grow".
Closing of significant alliance with Boehringer Ingelheim
Based on the successful collaboration to date, Boehringer Ingelheim signed a new, minimum four-year extension of its discovery collaboration with Evotec on November 9, 2009 (after period-end). Jointly, both companies aim to identify novel therapeutics in innovative disease-focused programs with an initial focus on oncology targets. Evotec will receive increased research payments compared to the original contract as well as payments for the achievement of pre-clinical milestones. In addition, the contract provides substantial long-term upside for Evotec through potential clinical milestone achievements and royalties.
Further new alliances and extensions with strategic partners
In October 2009 (after period-end), Evotec extended also another important collaboration with one of its strategic partners Ono Pharmaceutical, initiating a new discovery program on an ion channel target. A new research agreement was signed in September with Biogen Idec. These important contracts clearly demonstrate the value Evotec brings to its alliance partners in the area of drug discovery.
Excellent execution on customer programs - important milestones achieved
The Company continues to make excellent progress in its discovery alliances. In July, Evotec announced the achievement of a research milestone in its drug discovery alliance with Boehringer Ingelheim. A second milestone was achieved in October (after period-end). The achievement of both milestones will lead to total payments of EUR 4.0 million to Evotec. Evotec also achieved a milestone with Cardioxyl Pharmaceuticals.
Acquisition of Indian RSIPL completed, creating a global leader in drug discovery and development services
On August 6, 2009, Evotec announced the acquisition of a controlling majority shareholding of the Indian company Research Support International Private Limited (RSIPL) for EUR 2.4 million. The acquisition was successfully completed as of August 31, 2009 and the company is in the process of being fully integrated as Evotec (India) Ltd.
3. Update on Evotec 2012 Action Plan and cost reductions
Execution of restructuring program shows clear initial results
Based on the "Evotec 2012 - Action Plan to Focus and Grow", Evotec implemented strict restructuring measures from March 2009 (see press releases of March 27 and May 5, 2009). These measures are clearly reflected in the results of the third quarter. R&D expenses were down 66% and SG&A expenses were down 13% compared to the same period of the prior year, leading to a 54% improvement of the operating result.
US facility of Renovis, Inc. closed as planned; delisting of Evotec ADSs from NASDAQ initiated; TecDAX re-entry in October
In order to leverage more efficiently its research and development infrastructure, Evotec decided in May 2009 to concentrate its operations in Europe. Consequently, the Company has now completed the closure of the former facility of Renovis, Inc. in South San Francisco.
In November, Evotec decided to delist from the NASDAQ Global Market and to prepare for a de-registration with the Securities and Exchange Commission (SEC) in the future. In parallel, Evotec reentered into the German technology index TecDAX. These steps are intended to further streamline Evotec's activities, to reduce unnecessary complexity in its capital market presence and to focus the liquidity of Evotec stock on one trading platform.
4. Status of clinical programs and partnering of assets
Roche collaboration: Phase I study with EVT 103 started; start of Phase II with EVT 101 in early 2010
In September, Evotec started, as planned, the first Phase I study for EVT 103. Data from this study are expected to be reported in early 2010. EVT 103 is the next generation molecule following EVT 101. Both members of the EVT 100 compound family are planned to be developed for treatment-resistant depression (TRD) in collaboration with Roche.
Preparations of the Phase II TRD study for EVT 101 are ongoing, however, Evotec now expects the study to start in early 2010 rather than 2009, based on the latest feedback of the FDA on toxicology and safety monitoring and due to a more complex and bigger study design.
Strong liquidity of EUR 64m, cash flow positive Q4 expected, year-end guidance of > EUR 40m revenues and > 65m liquidity comfortably confirmed
The Company confirms all financial targets for the fiscal year 2009 published on March 27 and updated on August 7, 2009. In the context of its second quarter report, Evotec increased its 2009 revenue guidance to above EUR 40 million (previously above EUR 35 million). R&D and SG&A expenses are expected to significantly decrease year-on-year. On this basis, Evotec's Group operating result before impairment for 2009 is expected to improve significantly over 2008.
Liquidity including cash and cash equivalents, short-term investments and auction rate securities at the end of September 2009 is at EUR 64.0 million. With strong revenue contributions, including a EUR 2.5 million milestone payment from Boehringer Ingelheim, Evotec expects to report a cash flow positive fourth quarter 2009. On this basis, Evotec remains confident to deliver on its liquidity guidance of above EUR 65 million at constant year-end 2008 currencies by the end of 2009, a strong basis to comfortably develop the Company to sustainability.
The Company is going to hold a conference call to discuss the results and to give an update on its business strategy:
Conference call details:
Date: Thursday, November 12, 2009
Time: 09.30 a.m. CST
08.30 a.m. GMT
03.30 a.m. US time (East Coast)
From Europe: +49.(0)69.2222 9550 (Germany)
+44.(0)20.7784 1036 (UK)
From the US: +1.718.354 1152
Access Code: 9023741
A simultaneous slide presentation for participants dialing in via phone is available at www.equitystory.com, password: evotec121109.
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 dialing +49.(0)69.2222 2236 (Germany) or +44.(0)20.7111 1244 (UK) and in the US by +1.347.366 9565. The access code is 9023741#. The on-demand version of the webcast will be available on our website: www.evotec.com - Investors - Finance - Financial Reports 2008 - 2009.
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 about our ability to achieve a cash flow positive fourth quarter in 2009 and to deliver on our liquidity guidance, our expectation that our funds will be sufficient to finance our planned activities through to sustainability, our expectation that our reentry into the German technology index TecDAX will increase liquidity for our shareholders and that our voluntary delisting from NASDAQ and de-registration with the SEC will streamline our activities and focus the liquidity of Evotec's stock on one trading platform, our expectations and assumptions concerning regulatory, clinical and business strategies, the progress of our clinical development programs and timing of the commencement and results of our clinical trials, strategic collaborations 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 the Company may be unable to reduce its cash burn through recent restructuring and cost containment measures and may not recognize the results of such measures within the expected timeframe; risks that product candidates may fail in the clinic or may not be successfully marketed or manufactured; the risk that we will not achieve the anticipated benefits of our collaborations, partnerships and acquisitions in the timeframes expected, or at all; the risk that we will not achieve the anticipated benefits of our voluntary delisting from NASDAQ and de-registration with the SEC; 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; and risks of new, changing and competitive technologies and regulations in the U.S. and internationally.
The list of risks above is not exhaustive. Our most recent Annual Report on Form 20-F, filed with the Securities and Exchange Commission, and other documents filed with, or furnished to the Securities and Exchange Commission, contain 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 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: Dr Werner Lanthaler, Chief Executive Officer,
Evotec AG, Tel.: +49.(0)40.56081-242, firstname.lastname@example.org
Key Figures of Consolidated Interim Statements of Operations
Evotec AG and Subsidiaries
Euro in thousands except share data and per share data
Nine months ended September 30,
Three months ended September 30,
Change in %
Gross margin in %
Research and development expenses
Selling, general and administrative expenses
Amortization of intangible assets and impairment
Other operating income
Other operating expenses
Weighted average shares outstanding
Net loss per share (basic and diluted)
*Before impairment and restructuring expenses.
Key Figures of Consolidated Interim Balance Sheets
Evotec AG and Subsidiaries
Euro in thousands
Sep 30, 2009
Dec 31, 2008
Current and non-current portion of loans and finance lease obligations
*Including auction rate securities.