Evotec Reports Q1 2007 Results and Pipeline Progress

Hamburg, Germany | Oxford, UK - Evotec AG (Frankfurt Stock Exchange: EVT) reported a solid set of quarterly numbers today, inline with guidance for 2007.
Evotec revenues for the first quarter 2007 were EUR 15.1 million and thereby were only 4% lower than last year's level (2006: EUR 15.8 million). Last year's number was relatively high because of a significant, single-digit million Euro milestone payment from the collaboration with Boehringer Ingelheim. Also, this year's lower exchange rate of the US dollar against Evotec's reporting currency Euro affected revenues negatively. At constant 2006 currencies, Q1 2007 revenues would have amounted to EUR 15.6 million. For similar reasons gross margins decreased to 27% this quarter (2006: 37%).
The Group operating result for the first quarter 2007 improved slightly over last year's level to EUR (9.0) million (2006: EUR (9.1) million) despite the reduced revenue and gross profit levels, mainly a result of lower R&D expenses. R&D expenditure for the first quarter 2007 decreased by 14% to EUR 7.4 million, compared to EUR 8.7 million in Q1 2006 which included the vast majority of the acquisition cost for the EVT 300 programme from Roche. The operational expenses for ongoing discovery and development programmes, however, increased over Q1 2006 as progress continues as planned. The operating result of the Services business continued to be positive at EUR 0.3 million.
For the first quarter 2007, Evotec achieved a net profit of EUR 2.7 million (2006: EUR (8.8) million). This is the result of a non-operating profit of EUR 11.2 million from the divestment of Evotec Technologies to PerkinElmer.
Operational highlights:

Clinical phase of first Phase II study with insomnia drug candidate EVT 201 completed (after period end); headline results expected earlier than anticipated, in Q2 2007
Phase I studies for EVT 302 (smoking cessation) started
Preparations for short-term Phase Ib/IIa dose-ranging studies with Alzheimer/pain candidate EVT 101 ongoing
Collaborations on track; partnership with Boehringer Ingelheim expanded into Alzheimer' disease target identification
Acquisition of Neuro3d strengthens strategic position

"We are pleased with our Q1 performance. Our financial results are inline with guidance for 2007. Our operating result improved slightly, and Group net result was positive as a result of the divestment of Evotec Technologies to PerkinElmer", said Jörn Aldag, President & Chief Executive Officer of Evotec AG. "Our pipeline progresses as planned. We started one Phase I study with our MAO-B inhibitor EVT 302, and a second has received formal approval and will start imminently. We have also submitted, for ethical approval, the protocol for our first dose-finding efficacy study of EVT 101 in cognition. More importantly, we completed the clinical phase of our first Phase II study with EVT 201 in patients with primary insomnia in April, and we are looking forward to share with you the headline data of this study later this quarter. Data of the second Phase II study in the elderly will be reported late 2007 or early 2008."
Solid balance sheet structure
In total, cash and cash equivalents amounted to EUR 66.3 million at the end of Q1 2007 (end of December 2006: EUR 78.7 million). The decrease mainly results from an increase in working capital by EUR 4.7 million compared to its extraordinarily low level recorded at year-end 2006 as well as from the continued high level of investment in research and development. The cash position does not yet include the cash balances held by Neuro3d. The equity ratio as of 31 March 2007 was approximately 79%.
2007 guidance confirmed, targeted year-end cash position increased
Evotec confirms its guidance given at the end of March 2007 with the exception that it now expects an additional positive liquidity impact resulting from the Neuro3d acquisition (in 2007 EUR 18 million to EUR 19 million). The targeted year-end cash position now ranges between EUR 55 million and EUR 60 million.
Conference call
Evotec will hold a conference call today at 02.00 p.m. CET (01.00 p.m. GMT/08.00 a.m. US time East Coast) to discuss the financial results as well as Q1 progress. Jörn Aldag, President & CEO, Dr Dirk Ehlers, CFO, and Dr John Kemp, Chief Research & Development Officer, will lead the call.
Conference call numbers (listen only):
+49.(0)69.9897 2630 (Germany)
+44.(0)20.7138 0814 (UK)
US: +1.718.354 1359
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 3746842#. The on-demand version of the webcast will be available on our website: www.evotec.com - Investors - Financial Reports.
First Quarter Report 2007
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Contact: Anne Hennecke, SVP, Investor Relations & Corporate Communications, Evotec AG, Phone: +49-40-56081-286, anne.hennecke@evotec.com