Evotec AG Reports Results Of First Quarter 2015

• VERY STRONG START TO 2015: 22% GROWTH OF GROUP REVENUES, MAINLY DRIVEN BY EVT EXECUTE
• MAJOR MULTI-COMPONENT STRATEGIC ALLIANCE WITH SANOFI CLOSED
• FULL-YEAR REVENUE GUIDANCE RAISED

HAMBURG, Germany, May 12, 2015 (GLOBE NEWSWIRE) -- Evotec AG (Frankfurt Stock Exchange:EVT) (TecDAX) (ISIN:DE0005664809) today reported financial results and corporate updates for the first quarter of 2015.

Strong EVT Execute, clear investment strategy within EVT Innovate

-- Group revenues +22% to € 21.5 m (2014: € 17.6 m); EVT Execute revenues up 21% compared to the prior year period; EVT Innovate increased R&D investments by 41%

-- Group EBITDA before contingent considerations at € (0.3) m significantly improved compared to the same period of the previous year (2014: € (1.3) m); positive EBITDA before contingent considerations of € 3.5 m for EVT Execute

-- Very strong liquidity position at € 95.8 m (before cash received from the Sanofi transaction)

-- High and stable equity ratio at 71.6%

EVT Execute

Expanding project portfolio leads to significant growth in revenues

-- New CNS alliance with C4X Discovery in stress-related addictive disorder programme

-- Evotec and New York University Office of Therapeutic Alliances initiate multiple programmes

-- Signing of various screening projects with Japanese Pharma companies

-- Opening of new protein production facility in Princeton (USA)

-- Initial success and extension with Padlock Therapeutics

-- Evotec Hamburg receives AAALAC accreditation

-- Long-term collaboration for multiple drug discovery services signed as part of Sanofi alliance (effective 01 April 2015)

EVT Innovate

Research investments and partnering strategy to drive biotech upside

-- Strategic discovery and development collaboration with Second Genome (USA)

-- Significant expansion of oncology portfolio planned through Sanofi alliance including four advanced, pre-clinical projects and further discovery-stage assets

-- Product development alliance with Roche for EVT302 in Alzheimer's disease on track to deliver results from Phase IIb study in the first half of 2015

-- Further product development alliances on track (EVT100, EVT201, EVT401)

Acceleration of EVT Execute and EVT Innovate through major strategic collaboration with Sanofi

-- Closing of multi-component transaction between Sanofi and Evotec on 31 March 2015 (effective 01 April 2015)

Revenue guidance for 2015 raised due to Sanofi alliance

-- Group revenues excluding milestones, upfronts and licences now expected to increase by more than 35% (from more than 20%)

-- Adjusted EBITDA positive

-- R&D expenditure is expected to grow to € 15 m – € 20 m

-- Liquidity is expected to be well in excess of € 100 m

-- Capacity and capability building continued with up to € 10 m

1. Operational performance

Strong EVT Execute, clear investment strategy within EVT Innovate

Revenues from the EVT Execute segment amounted to € 23.1 m in the first quarter of 2015, an increase of 21% compared to the same period of the previous year (2014: € 19.2 m). Included in this amount are € 5.4 m of intersegment revenues. The EVT Innovate segment generated revenues of € 3.8 m. Gross margin at EVT Execute was 24.8% while EVT Innovate generated a gross margin of 46.2%. R&D expenses of EVT Innovate were € 4.6 m in the first quarter 2015 and increased by 41% compared to the same period of the previous year (2014: € 3.2 m). The EVT Execute segment's adjusted EBITDA before changes in contingent consideration was positive at € 3.5 m in the first three months of 2015 and significantly improved compared to the same period of the previous year (2014: € 2.3 m). The EVT Innovate segment reported an EBITDA before changes in contingent consideration of € (3.8) m. This was unchanged compared to the same period of the previous year.

Evotec's Group revenues for the first quarter of 2015 amounted to € 21.5 m, an increase of 22% compared to the same period of the previous year (2014: € 17.6 m). This increase includes a favourable currency impact. Excluding milestones, upfronts and licences, Evotec's revenues for the first quarter of 2015 amounted to € 18.5 m and increased by 14% over the same period of the previous year (2014: € 16.3 m). Excluding revenues from the acquired business of Euprotec, the increase would have been 7% compared to the same period of the previous year (2014: € 16.3 m). This growth was driven by an increase in revenues within the Company's existing drug discovery alliances and new collaborations. Milestone and upfront revenues for the first three months of 2015 included predominantly revenues from the collaboration with Second Genome.

Adjusted Group EBITDA for the first three months of 2015 amounted to € (0.3) m (first three months of 2014: € (1.3) m). Consistent with previous quarters, EBITDA was adjusted for changes in contingent consideration. As it has often been stated previously, it is important to highlight that the EBITDA of Evotec may vary significantly between quarters as a result of the timing of performance-based milestone payments and partnering events. EBITDA for the first quarter also included remaining acquisition costs associated with the Sanofi alliance.

Overall, the Company is on track to achieve a positive EBITDA (before changes in contingent consideration, if any) at the end of 2015.

Liquidity including cash, cash equivalents and investments at the end of March 2015 was strong at € 95.8 m. This liquidity position does not include the cash from the Sanofi transaction of more than € 40 m which was received in April 2015.

2. EVT Execute and EVT Innovate

EVT Execute

Expanding project portfolio leads to significant growth in revenues

New CNS alliance with C4X Discovery in stress-related addictive disorder programme

In January 2015, Evotec announced a research collaboration with C4X Discovery Holdings plc ("C4XD") to optimise Orexin-1 selective inhibitors discovered through C4XD's unique NMR technology. In this collaboration, Evotec applies its drug discovery platform and its expertise in computational chemistry, medicinal chemistry and pharmacology to further develop several series of Orexin-1 selective inhibitors.

Evotec and New York University Office of Therapeutic Alliances initiate multiple programmes

In the first quarter of 2015, Evotec and The Office of Therapeutic Alliances at New York University ("NYU") initiated multiple programmes with the goal of accelerating the next generation of innovative therapeutics to come out of NYU's academic labs. The collaboration leverages synergistic strengths from both organisations to advance programmes for further investment by biopharma, venture capital, and/or not-for-profit foundations.

Signing of various screening projects with Japanese Pharma companies

In March 2015, Evotec initiated a multi-target screening collaboration on several ion channel targets, with Asahi Kasei Pharma Corporation, a wholly owned subsidiary of Asahi Kasei Corporation, Tokyo, Japan. In addition, Evotec's activity in the Asian market gained momentum, resulting in various new drug discovery alliances with large Japanese pharmaceutical companies, which provide a solid foundation for future growth in this area.

Opening of new protein production facility in Princeton (USA)

Evotec's new facility in Princeton, NJ, USA, became operational in the first quarter of 2015. Having been converted into a functioning drug discovery facility, it will support protein production and other discovery services for East Coast-based Pharma clients. The new facility is modular in approach, meaning that it is scalable to accommodate future business growth. This addition complements the expansion of such services at the Abingdon facility and meets an increasing need to deliver services to major US partners.

Initial success and extension with Padlock Therapeutics

In January 2015, Evotec and Padlock Therapeutics, Inc. announced the successful completion of the initial goal in a programme focused on developing inhibitors of protein-arginine deiminases (PADs) enzymes with an important role in the generation of autoantigens, inflammation and immune complex formation in autoimmune diseases, and have further extended the collaboration that was first signed in January 2014. The collaboration now extends through March 2017.

Evotec Hamburg receives AAALAC accreditation

In the first quarter of 2015, Evotec's in vivo pharmacology facility in Hamburg, Germany, received full accreditation from the Association for the Assessment and Accreditation of Laboratory Animal Care ("AAALAC") International. AALAC International is a private, non-profit organisation that promotes the humane treatment of animals in science through voluntary accreditation and assessment programmes. Participation in this accreditation programme includes a very thorough examination and assessment of facilities and processes.