Evotec focuses on high-value discovery research and collaborations

Chemical Development business to be integrated into global development business of Aptuit

Proceeds will allow Evotec to accelerate its CNS pipeline development

Cash guidance 2007 significantly improved to EUR 93 - 98 million

Conference call to be held at 2:00 p.m. CET, dial-in details below


 
Hamburg, Germany | Greenwich, CT, US | Oxford, UK - Evotec AG (Frankfurt Stock Exchange: EVT) announced today that it has sold its Chemical Development Business to Aptuit, Inc., Greenwich, CT, US, for approximately EUR 46.4 million (approx. US$ 63.9 million) in cash.
 
The Chemical Development business comprises Evotec's capabilities in process research & development (PRD), custom preparation, analytical development, pilot plant manufacturing and formulation. With approximately 210 people based in Oxford and Glasgow, UK, this business generated EUR 26.8 million of third-party revenues (40% of 2006 total Group revenues) for the full-year 2006. Aptuit intends to retain all of the employees of the Chemical Development business.
 
"The deal announced today will position our Chemical Development business within an environment where it can thrive, as Aptuit is a global company focused on streamlining and supporting the drug development process for biotechnology and pharmaceutical innovators. It will allow Evotec to focus even more on its strategy to become an emerging pharmaceutical company providing higher value research solutions to our partners through collaborative research and partnering of preclinical and clinical programmes developed internally," said Jörn Aldag, President & Chief Executive Officer of Evotec. "The Chemical Development business has been a mainstay of Evotec for many years and we are delighted to have found a purchaser to move this business on. The excellent terms achieved in this transaction put us in a much stronger position to leverage our clinical CNS assets and we are committed to further expand our pipeline and capabilities through in-licensing or M&A. I would also like to thank all the employees in the Chemical Development group sincerely for their hard work and their strong commitment to Evotec over the years and wish them well for the future." 
 
"This acquisition continues Aptuit's momentum as we assemble a complete suite of drug development services in all three major geographies in Europe, North America and Asia," said Michael A. Griffith, Chief Executive Officer and Founder of Aptuit. "We will integrate the highly-regarded scientific staff and two pilot plants in Oxford and state-of-the-art parenteral fill/finish capabilities in Glasgow into our existing global network. We will then leverage those capabilities to drive our commercial-scale capabilities in India, providing our clients with world-class drug development services from discovery to commercialisation. That we can consummate a cross-border transaction of this magnitude in the current market downturn is due to the strength of our equity partners at Welsh, Carson, Anderson & Stowe and Temasek."
 
Evotec remains committed to being the premier partner for pharmaceutical and biotech companies by providing innovative solutions to their research needs. The Company will continue to enter into collaborative research partnerships utilising its drug discovery technologies and platform including high throughput screening, fragment-based drug discovery and medicinal chemistry expertise across various therapeutic areas. These partnerships will include creative deal structures intended to share in the downstream value of the research. In addition, Evotec will continue to build its pipeline of CNS programmes which it will actively seek to partner supported by preclinical and/or clinical results.
 
2007 revenues for the continuing operations are expected to be in the range of EUR 30 - 35 million (approx. US$ 41 - 48 million). This range includes milestone related payments which are expected to be triggered towards year end. The deal will contribute a non-operating profit of approximately GBP 17 million (approx. EUR 25 million; US$ 35 million) in Q4 2007 subject to the final closing of the books. Including the cash proceeds from this transaction, the targeted year-end cash position improves significantly to between EUR 93 million and EUR 98 million (approx. US$ 128 - 135 million).
 
MCF Corporate Finance served as corporate financial advisor to Evotec in this transaction.
 
Note: All foreign exchanges are based on exchange rates of 10 September 2007 including forward looking statements.
 
Conference Call
Evotec will hold a conference call on Tuesday, 11 September 2007, at 02.00 p.m. CET (01.00 p.m. UK time/08.00 a.m. US time East Coast) to discuss further details. Jörn Aldag, President & CEO, and Dr Mario Polywka, Chief Operating Officer, will lead the call.
 
Conference Call Numbers:
Europe:
+49.(0)69.5007 1308 (Germany)
+44.(0)20.7806 1955 (UK)
US: +1.718.354 1388
Access Code: 9469927
Webcast: www.evotec.com
 
A replay of the conference call will be available for 24 hours and can be accessed in Europe by dialing +49.(0)69.22222 0418 (Germany) or +44.(0)20.7806 1970 (UK) and in the US by +1.718.354 1112. The access code is 9469927#. The on-demand version of the webcast will be available on our website: www.evotec.com - Investors - Webcasts.
 
Contact: Anne Hennecke, Senior Vice President, Investor Relations & Corporate Communications, Evotec AG, Phone: +49-40-56081-286, anne.hennecke@evotec.com