HAMBURG, Germany and OXFORD, England, November 9 /PRNewswire-FirstCall/ -- Evotec AG (ISIN: DE000 5664809, EVT) today reported strong growth in revenues and profits for the third quarter 2006. Group revenues of the Hamburg-based drug discovery and development company increased by 30% to EUR 24.6 million (Q3 2005: EUR 19.0 million) with all three divisions (Services, Pharmaceuticals, Tools & Technologies) contributing. The main revenue drivers include the above average performances in pilot plant and formulation services, the successful installation of an ultra-high-throughput screening system in the US as well as a milestone payment from the Japanese research partner Takeda. The gross margin in Q3 was therefore particularly high at 39.9%.
As a consequence, Q3 operating result improved by 46% to EUR (4.2) million (2005: EUR (7.7) million) despite continued higher R&D investment. As planned, Evotec has increased its R&D expenses for the third quarter from EUR 3.9 million to EUR 7.3 million due to a higher investment in proprietary CNS drug development (Pharmaceuticals Division). The Q3 operating results for the Services and Tools & Technologies Divisions were positive. The Q3 operating loss before amortisation for the Evotec Group improved by 28% to EUR (3.1) million (2005: EUR (4.3) million).
Q3 Highlights:
* Phase II with insomnia drug candidate EVT 201 started
* Development of Alzheimer compound EVT 301 discontinued
* Phase I with Alzheimer/neuropathic pain candidate EVT 101 successfully completed
* Evotec continues development of EVT 101 into Phase II trials: Roche did not opt in after Phase I, however, expressed continued interest in further option rights after proof-of-concept
(after period end)
* Second milestone payment received from Takeda
* Drug discovery collaboration initiated with Daiichi
“Q3 was the strongest quarter of the year. Revenues as well as profits increased significantly over last year. These quarterly results, although they can not be extrapolated and need to be evaluated in the 2006 full-year context, indicate that all our divisions are performing well and we are on track to achieve our corporate objectives”, said Joern Aldag, President & Chief Executive Officer of Evotec AG. “Our proprietary drug development is progressing well. We have two promising CNS candidates in our portfolio, one in Phase II (EVT 201) and one about to enter Phase II (EVT 101). The first efficacy data in patients should be reported next year and we are looking forward to this important milestone.”
Evotec on track for full year 2006
Evotec revenues for the first nine months 2006 increased by 15% to EUR 61.2 million (2005: EUR 53.2 million). All three divisions contributed to revenue growth: Services Division up 10% to EUR 47.7 million (2005: EUR 43.3 million), Pharmaceuticals Division up 155% to EUR 2.9 million (2005: EUR 1.1 million) as well as Tools & Technologies Division (third party revenues) up 21% to EUR 10.7 million (2005: EUR 8.9 million).
Gross profit for the first nine months of 2006 increased by approximately 30% to EUR 23.2 million (2005: EUR 17.9 million), translating into an improvement in gross margin to 37.9% (2005: 33.6%). R&D expenses for the first nine months increased substantially as planned from EUR 8.6 million to EUR 24.1 million, primarily originating from proprietary drug development. All other operating expenses including SG&A, amortisation of intangible assets, impairment of goodwill as well as “other operating expenses” amounted to EUR 21.4 million (2005: EUR 44.4 million). This reduction mainly results from the fact that such operating expenses 2005 included charges from acquisition-related goodwill impairment of Evotec Neurosciences and regular amortisation charges from Evotec’s acquisition of Oxford Asymmetry International in the year 2000, and that neither occurred in 2006.
As a consequence, group operating result improved by 36% to EUR (22.3) million (2005: EUR (35.0) million). The operating result in the Services Division was positive at EUR 1.4 million in the first nine months of this year. Group net loss declined to EUR 16.1 million (2005: EUR 35.6 million).
Solid balance sheet structure
Evotec’s cash position at the end of September amounted to EUR 57.3 million (end of December 2005: EUR 53.5 million). The increase is primarily a result of the capital increase in April 2006, partially offset by higher R&D spend. The equity ratio as of 30 September 2006 was approximately 80%.
Strong order situation, guidance increased
Evotec is increasing its revenue target for the full year 2006: from EUR 77 million - EUR 81 million to EUR 82 million - EUR 84 million. Group R&D spend is anticipated to come in at middle of the Company’s guidance (EUR 30 million to EUR 35 million). Based on this adjusted guidance, Evotec’s targeted liquidity position at the end of 2006 increased to over EUR 50 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 Q3 progress. Joern Aldag, President & CEO, Dr Dirk Ehlers, CFO, and Dr John Kemp, Chief Research & Development Officer, will lead the call.
Conference call numbers (listen only): Europe: +49-(0)69-2222-3105 (Germany) +44-(0)20-7138-0827 (UK) US: +1-718-354-1358 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 9473629#. The on-demand version of the webcast will be available on our website: www.evotec.com - Investors - Financial Reports.
Third Quarter Report 2006 Key figures of consolidated statements of operations according to IFRS - condensed - Evotec AG and Subsidiaries Euro in thousands except share data and per share data 01-09/ 01-09/ Change 07-09/ 07-09/ Change 2006 2006 in % 2006 2005 in % Total revenue 61,245 53,247 15.0 24,610 18,966 29.7 Cost of revenue 38,017 35,332 7.6 14,790 13,295 11.3 Gross profit 23,228 17,915 29.7 9,820 5,671 73.2 Gross margin 37.9 33.6 39.9 29.9 Research and development expenses 24,083 8,554 181.5 7,262 3,899 86.3 Selling, general and administrative expenses 17,056 14,617 16.7 5,274 4,712 11.9 Amortisation of intangible assets 3,081 8,785 (64.9) 1,075 3,364 (68.0) Restructuring expenses - 866 (100.0) - 866 (100.0) Impairment of goodwill - 18,478 (100.0) - - - Other operating Expenses 1,280 1,656 (22.7) 391 529 (26.1) Operating loss (22,272) (35,041) (36.4) (4,182) (7,699) (45.7) Net loss (16,132) (35,625) (54.7) (4,804) (7,262) (33.9) Weighted average shares outstanding (basic) 65,795,671 48,405,696 68,057,204 62,744,415 Net loss per share (0.25) (0.74) (0.07) (0.12) Key figures of consolidated balance sheets according to IFRS - condensed - Evotec AG and Subsidiaries Euro in thousands 30/09/06 31/12/05 Change in % Cash and cash equivalents 57,347 53,520 7.2 Net working capital 4,699 -1,219 - Current and non-current portion of loans and finance lease obligations 12,556 13,273 (5,4) Stockholders’ equity 152,620 148,669 2.7 Total assets 190,832 186,111 2.5 Contact: Evotec AG Anne Hennecke Director, Investor Relations & Corporate Communications Phone: +49-(0)40-56081-286 Fax: +49-(0)40-56081-333 E-Mail: anne.hennecke@evotec.com
Evotec AG
CONTACT: Contact: Evotec AG, Anne Hennecke, Director, Investor Relations &Corporate Communications, Phone: +49-(0)40-56081-286, Fax:+49-(0)40-56081-333, E-Mail: anne.hennecke@evotec.com
