DGAP-News

Evotec reports results of the first nine months of 2014

DGAP-News: Evotec AG / Key word(s): 9-month figures
Evotec reports results of the first nine months of 2014

12.11.2014 / 07:29

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- STRONG OPERATIONAL PERFORMANCE, POSITIVE EBITDA

- UNIQUE STRATEGIC POSITION DESPITE RECENT DIAPEP277(R) SETBACK

- IMPORTANT MILESTONES EXPECTED FOR Q4

- VERY STRONG CASH POSITION

Hamburg, Germany - 12 November 2014: Evotec AG (Frankfurt Stock Exchange:
EVT, TecDAX, ISIN: DE0005664809) today reported financial results and
corporate updates for the first nine months of 2014.

Revenues excluding milestones, upfronts and licences in the first nine
months of 2014 up 5% compared to the first nine months of 2013; adjusted
nine-month 2014 EBITDA positive
- Group revenues amounted to EUR 58.9 m (2013: EUR 60.3m); revenues
excluding milestones, upfronts and licences rose by 5%, up 7% at
constant 2013 FX rates

- Positive adjusted EBITDA before contingent considerations of EUR 0.3 m
for the Group and EUR 9.8 m for EVT Execute

- Impairment charges of EUR 8.7 m triggered by termination of
DiaPep277(R)

- Very strong liquidity position of EUR 90.3 m despite acquisitions and
significant investments to support further growth

- High and stable equity ratio at 72.8%

EVT Execute
Strong performance in EVT Execute business leads to contract extensions and
expansions
- Expansion of protein production capabilities initiated in US to serve a
major US Pharma partner (after period-end)

- Important initial milestone achieved as part of multi-target alliance
with Bayer HealthCare

- Collaboration expansion with the Jain Foundation

- Three-year extension and expansion of collaboration with CHDI
Foundation to fight Huntington's disease

- Long-term compound management collaboration with Medicines for Malaria
Venture

EVT Innovate
Building a partnered product pipeline comprising more than 40 projects and
expanding the EVT Innovate strategy by means of new collaborations with
leading German research institutions
- Phase IIb trial of EVT302 in Alzheimer's disease within Roche alliance
progressing according to plan

- Janssen continues developing the EVT100 series in the field of CNS
diseases

- Successful completion of all safety studies for EVT201 and initiation
of late-stage clinical programmes for registration in China

- Setback with the announcement that Hyperion is terminating its
DiaPep277(R) programme; Evotec will take legal steps

- Further milestones achieved in TargetAD collaboration

- Public grants awarded to Evotec to develop new drug candidates to treat
multiple sclerosis

- New collaboration with Fraunhofer IME in joint drug discovery
programmes

Upgrading the drug discovery platform, enhancing innovation offering
through acquisitions
- Acquisition of Bionamics GmbH to accelerate 'EVT Innovate' strategy

- Acquisition of Euprotec adds and expands expertise and capabilities in
infectious diseases

Financial guidance for 2014 confirmed; important milestones expected for
the remainder of the year
- High single-digit percentage growth in Group revenues excluding
milestones, upfronts and licences

- R&D expenditure is expected to be in the range of EUR 10 m to EUR 14 m

- Group EBITDA before changes in contingent considerations expected to be
positive and at a similar level to 2013 (2013: EUR 10.4 m)

- Liquidity is expected to exceed EUR 90 m at the end of 2014

- Positive operating cash flow at a similar level to 2013 (2013: EUR 6.7
m)


1. Operational performance

Revenues excluding milestones, upfronts and licences in the first nine
months of 2014 up 5% compared to the first nine months of 2013; adjusted
nine-month 2014 EBITDA positive
Evotec's revenues for the first nine months of 2014 amounted to EUR 58.9 m,
a decrease of 2% compared to the same period of the previous year (2013:
EUR 60.3 m). This decrease was primarily due to significantly lower
milestone contributions in the first nine months of 2014 compared to the
same period of the previous year, when large milestone contributions of EUR
7.5 m in total from Boehringer Ingelheim and a first milestone from UCB
were recorded. Excluding milestones, upfronts and licences, Evotec's
revenues for the first nine months of 2014 rose by 5% and were up 7%
compared to the same period of the previous year at constant 2013 foreign
exchange rates.

EBITDA before changes in contingent consideration amounted to EUR 0.3 m in
the first nine months of 2014 (first nine months of 2013: EUR 5.9 m).
EBITDA was adjusted for changes in contingent considerations as well as for
extraordinary effects with regards to the bargain purchase resulting from
the acquisition of Bionamics. Note: The adjusted EBITDA of Evotec may vary
significantly between quarters as a result of the timing of
performance-based milestone payments and partnering events. Overall, the
Company is on track to achieve a positive EBITDA at a similar level to 2013
(before changes in contingent consideration, if any) at the end of 2014.

Revenues from the EVT Execute segment amounted to EUR 61.5 m in the first
nine months of 2014 and included EUR 13.2 m of intersegment revenues. The
EVT Innovate segment generated revenues totalling EUR 10.6 m. The gross
margin in EVT Execute amounted to 24.8% while EVT Innovate generated a
gross margin of 32.0%. R&D expenses in the first nine months of 2014 stood
at EUR 0.7 m for the EVT Execute segment. The EVT Innovate segment reported
R&D expenses in the amount of EUR 10.4 m. In the first nine months of 2014,
the EBITDA before changes in contingent consideration of the EVT Execute
segment amounted to EUR 9.8 m and the EVT Innovate segment reported an
EBITDA before changes in contingent consideration of EUR (9.5) m.

Liquidity including cash, cash equivalents and investments at the end of
September 2014 remained very strong at EUR 90.3 m.


2. EVT Execute and EVT Innovate

EVT Execute
Strong performance in EVT Execute business leads to contract extensions and
expansions

Expansion of protein production capabilities initiated in US to serve a
major US Pharma partner (after period-end)
Work has been initiated to establish a protein production and cell services
facility on the US East Coast. The new laboratory will become operational
in the first quarter of 2015. This addition complements the expansion in
such services at the Abingdon facility and is to meet an increasing need to
deliver services to a major US partner and the general growth in this area.

Important initial milestone achieved as part of multi-target alliance with
Bayer HealthCare
In September 2014, Evotec announced that its multi-target collaboration
with Bayer HealthCare ("Bayer") had reached an important initial milestone
for the transition of a molecule into pre-clinical development for the
treatment of endometriosis. The goal of this collaboration is to develop
three pre-clinical candidates within the five-year alliance. Both parties
contribute innovative drug targets and high-quality technology
infrastructures and share the responsibility for potential clinical
candidates in endometriosis.

Collaboration expansion with the Jain Foundation
In September 2014, Evotec and Jain Foundation Inc. announced a further
extension and expansion of the collaboration first signed in 2012. This
phase of the collaboration includes the screening of compound libraries in
multiple assay formats to further support the Jain Foundation's goals of
understanding and curing dysferlinopathies, a group of inherited skeletal
muscular dystrophy diseases.

Three-year extension and expansion of collaboration with CHDI Foundation to
fight Huntington's disease
In September 2014, Evotec and CHDI Foundation, Inc. ("CHDI") announced the
extension and expansion of their collaboration through to 2017. The
collaboration - which aims to find new treatments for Huntington's disease,
an inherited neurodegenerative disorder - means that CHDI will now fund up
to 52 full-time scientists at Evotec for the next three years. The
collaboration, initiated in 2006, has expanded considerably over this
period to fully leverage Evotec's integrated neuroscience platform. Evotec
provides a full range of research activities and expertise in the
neuroscience area to CHDI, including integrated biology and chemistry
supported by compound and library management, target validation, stem cell
research, high-content screening, computational chemistry, in vitro
pharmacokinetics and protein production.

Long-term compound management collaboration with Medicines for Malaria
Venture
In August 2014, Evotec (US), Inc. and Medicines for Malaria Venture ("MMV")
entered into a multi-year compound management agreement in support of MMV's
Malaria and Pathogen Box initiatives. In this collaboration, Evotec
leverages its industry-leading and long-standing compound management
services to support MMV's efforts to establish, maintain and distribute
vital research tools to the global malaria research community.

EVT Innovate
Building a partnered product pipeline comprising more than 40 projects and
expanding the EVT Innovate strategy by means of new collaborations with
leading German research institutions

Phase IIb trial of EVT302 in Alzheimer's disease within Roche alliance
progressing according to plan
The patient recruitment for the Phase IIb multicentre, randomised,
double-blind, parallel-group, placebo-controlled study to evaluate the
efficacy and safety of RO4602522 (RG1577/EVT302) in patients with moderate
severity Alzheimer's disease ("AD") was completed in the first quarter of
2014; Roche and its subsidiary Chugai (Japan) have also initiated and
completed several Phase I safety trials during 2014. Results from the Phase
IIb study are expected in H1 2015. This clinical trial is one of the very
few late-stage small molecule trials in this specific AD patient
population. EVT302 is a potent small molecule inhibitor of monoamine
oxidase-B (MAO-B) which reduces the formation of toxic reactive oxygen
species in the brain of Alzheimer's disease patients where overexpression
of MAO-B is postulated to contribute to neuronal damage.

Janssen continues developing the EVT100 series in the field of CNS diseases
In December 2012, Evotec entered into a licence agreement with Janssen
Pharmaceuticals, Inc. ("Janssen") for its NR2B subtype selective
NMDA-antagonist portfolio for development against diseases in the field of
depression. In December 2013, Evotec announced that certain pre-clinical
studies performed by Janssen did not confirm certain properties of the
antagonist and further development of the project was evaluated by Janssen.
In March 2014, Janssen informed Evotec that it would resume development of
the programme in CNS.

Successful completion of all safety studies for EVT201 and initiation of
late-stage clinical programmes for registration in China
At the end of September 2014, JingXin Pharmaceutical Co., Ltd. ("JingXin")
completed all safety studies for EVT201 in China. All of the data met the
required standards to progress the compound into further clinical trials
for insomnia. Patient recruitment is ongoing and JingXin plans to initiate
late-stage trials for China in the near future. EVT201 is a GABAA receptor
partial positive allosteric modulator developed for the treatment of
insomnia.

Setback with the announcement that Hyperion is terminating its DiaPep277(R)
programme; Evotec will take legal steps
Hyperion Therapeutics, Inc. ("Hyperion") announced in September 2014 that
it would be terminating the development of DiaPep277(R) for newly diagnosed
Type 1 diabetes. Hyperion claimed that it had uncovered evidence that
certain employees of the Israel-based Andromeda Biotech, Ltd.
("Andromeda"), which Hyperion acquired from the Israeli firm Clal
Biotechnology Industries Ltd. ("Clal") in June 2014, engaged in serious
misconduct involving the trial data of DiaPep277(R). Evotec holds certain
royalty and milestone rights on DiaPep277(R) and still has an open
receivable against Andromeda, which amounts to EUR 3.4 m. After careful
evaluation, Evotec will take legal steps against Andromeda to recover all
Evotec claims and potential damages resulting from this misconduct.

Further milestones achieved in TargetAD collaboration
In September 2014, Evotec achieved further milestones in its TargetAD
collaboration with Janssen for the identification and selection of
additional targets from the TargetAD database. These target selections were
achieved under the collaboration between Evotec and Janssen, facilitated by
the Johnson & Johnson Innovation Center in California, signed in November
2013. Under the terms of the agreement, Janssen and Evotec are
collaborating to identify new drug targets for discovery of novel treatment
approaches to Alzheimer's disease.

Public grants awarded to Evotec to develop new drug candidates to treat
multiple sclerosis
In September 2014, Evotec announced it had entered into three novel
research projects for the treatment of multiple sclerosis ("MS") supported
by research funds from the German Federal Ministry of Education and
Research ("BMBF"). The projects originate from the Deutsches
Rheuma-Forschungszentrum ("DRFZ"; an institute of the Leibniz Association)
and the University Medical Center Hamburg-Eppendorf ("UKE") comprising
cytokine regulation, neuroprotection and tolerance induction. Evotec will
utilise its drug discovery platform, its project management capabilities
and its market presence to identify drug candidates in these novel
approaches to tackle MS and to commercialise these at a later stage.
Current MS treatments mostly constitute symptomatic approaches while more
specific, well-differentiated disease-modifying treatment modes are eagerly
looked for by the industry. The three projects have a term of between 1.5
and 3 years and have a total budget of about EUR 5 m.

New collaboration with Fraunhofer IME in joint drug discovery programmes
In July 2014, Evotec announced an exclusive strategic collaboration with
the Fraunhofer Institute for Molecular Biology and Applied Ecology ("IME")
in several disease areas by combining the relevant platforms of both
organisations for internal and external drug discovery projects.


3. Upgrading the drug discovery platform, enhancing innovation offering
through acquisitions

Acquisition of Bionamics GmbH to accelerate 'EVT Innovate' strategy
Signed in March 2014 and effective 01 April 2014, Evotec acquired the
German-based company Bionamics GmbH ("Bionamics"), an asset management
company that focuses on the translation of academic innovations into
attractive assets for the biotech and Pharma industry. The transaction
comprises the acquisition of all shares in Bionamics against cash (EUR 0.5
m) and potential future earn-out payments amounting to EUR 0.4 m. The
deferred earn-out payments will be due for a period of four years after the
acquisition and are dependent upon the achievement of certain project
revenues. In addition to an experienced management team, Bionamics brings a
portfolio of fully funded projects that have potential upside for Evotec.

Acquisition of Euprotec adds and expands expertise and capabilities in
infectious diseases
Effective 27 May 2014, Evotec acquired all of the shares in Euprotec Ltd
("Euprotec"), a UK-based specialist contract research organisation focusing
on infectious disease drug discovery services. The acquisition of Euprotec
strengthens Evotec's position as the quality leader in drug discovery
services and creates a new disease franchise to accelerate Cure X and
Target X initiatives. The purchase price consists of a cash consideration
of £ 2.5 m and a potential deferred earn-out component of £ 1.25 m in cash.
The deferred earn-out payments will be due for a period of two and a half
years after the acquisition and are dependent upon the achievement of
certain revenue targets. The integration of Euprotec into Evotec has been
completed and already synergies across Evotec's business segments EVT
Execute and EVT Innovate have been realised.


4. Financial guidance for 2014 confirmed; important milestones expected for
the remainder of the year

All of the financial targets published on 25 March 2014 in Evotec's Annual
Report 2013 (page 69) remain unchanged.

In 2014, total Group revenues excluding milestones, upfronts and licences
are expected to see high single-digit percentage growth.

Evotec expects research and development (R&D) expenses in 2014 to increase
above the levels of 2013. This is primarily due to additional investments
in the strategic Cure X and Target X franchise. In total, R&D expenditure
is expected to be in the range of EUR 10 m to EUR 14 m in 2014. In 2014,
Evotec will continue to invest in its technology platforms and capacities
in order to drive its long-term growth strategy. It is therefore planned
that EUR 5 m to EUR 7 m will be invested in further capacity increases and
the upgrade of Evotec's technological capabilities.

Evotec's Group EBITDA before changes in contingent considerations is
expected to be positive and at a similar level to 2013. EBITDA is defined
as earnings before interest, taxes, depreciation and amortisation of
intangibles. EBITDA excludes impairments on intangible and tangible assets
as well as the total non-operating result. EBITDA is disclosed from 2014
onwards and replaces the adjusted operating result as the key performance
indicator for productivity. The reason for this change is that EBITDA
better facilitates comparisons between companies and industries by
eliminating the effects of financing (i.e. interest) and capital
investments (i.e. depreciation and amortisation).

In 2014, top-line growth is expected to generate a positive operating cash
flow at a similar level to 2013 and liquidity is expected to exceed EUR 90
m at 31 December 2014. This forecast excludes any potential cash outflow
for M&A or similar transactions.

The Company's mid-term financial plan does not envisage the need for any
additional external financing for Evotec's operating business. However, all
strategically desirable moves such as potential company or product
acquisitions will need to be considered separately.

The statements on business direction and strategy, expected research and
development, business opportunities and dividends continue to be valid as
published in Evotec's Annual Report 2013 on pages 67 to 69.


Webcast/Conference Call

The Company is going to hold a conference call to discuss the results as
well as to provide an update on its performance. The conference will be
held in English.

Conference call details

Date: Wednesday, 12 November 2014
Time: 09.30 am CET (08.30 am GMT, 3.30 am EST)

From Germany: [phone]
From UK: [phone]
From USA: [phone]
Access Code: 129176#

A simultaneous slide presentation for participants dialling in via phone is
available at http://www.audio-webcast.com/ password: evotec1114.


Webcast details

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 dialling [phone] (Germany) or [phone]
5200 (UK) and in the US by dialling [phone]. The access code is
350788#. The on-demand version of the webcast will be available on our
website:
http://www.evotec.com/article/en/Investoren/Finanzberichte-2012-2014/238/6.


ABOUT EVOTEC AG
Evotec is a drug discovery alliance and development partnership company
focused on rapidly progressing innovative product approaches with leading
pharmaceutical and biotechnology companies. We operate worldwide providing
the highest quality stand-alone and integrated drug discovery solutions,
covering all activities from target-to-clinic. The Company has established
a unique position by assembling top-class scientific experts and
integrating state-of-the-art technologies as well as substantial experience
and expertise in key therapeutic areas including neuroscience, pain,
metabolic diseases as well as oncology, inflammation and infectious
diseases. Evotec has long-term discovery alliances with partners including
Bayer, Boehringer Ingelheim, CHDI, Genentech, Janssen Pharmaceuticals,
MedImmune/AstraZeneca, Roche and UCB. In addition, the Company has existing
development partnerships and product candidates both in clinical and
pre-clinical development. These include partnerships with Boehringer
Ingelheim and MedImmune in the field of diabetes, with Janssen
Pharmaceuticals in the field of depression and with Roche in the field of
Alzheimer's disease. For additional information please go to
www.evotec.com.

FORWARD LOOKING STATEMENTS - Information set forth in this press release
contains forward-looking statements, which involve a number of risks and
uncertainties. The forward-looking statements contained herein represent
the judgement of Evotec as of the date of this press release. Such
forward-looking 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. 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.


Results for the first nine months 2014

Key figures of consolidated interim income statement
Evotec AG and subsidiaries

In TEUR except share data and per share data


Janua- Septe- Cha- July to Septe- Cha-
ry to mber nge mber nge
2014 2013 in % 2014 2013 in %

Revenues 58,933 60,320 (2) 18,848 23,630 (20)
Gross margin in % 28.3 35.9 25.9 46.9

Research and development
expenses (9,181) (7,475) 23 (2,897) (2,656) 9
Selling, general and
administrative expenses (12,797) (12,331) 4 (3,917) (4,155) 6
Amortisation of intangible
assets (1,905) (2,419) (21) (552) (703) (22)
Restructuring expenses - (380) - (380)
Impairment of tangible assets - (1,076) - (1,076)
Impairment of goodwill - (1,948) - (1,948)
Impairment of intangible assets (8,735) - (8,735) -
Other operating income 8,879 910 6,546 494
Other operating expenses (1,652) (1,161) (480) (501)

Operating income (loss) (8,725) (4,241) (5,160) 162
EBITDA adjusted* 335 5,898 (272) 5,440

Net income (loss) (7,995) (4,866) (3,568) (283)

Weighted average shares
outstanding 131,247,152 118,146,894 131,325,032 118,828,586
Net income (loss) per share
(basic and diluted) (0.06) (0.04) (0.03) 0.00


* EBITDA was adjusted for changes in contingent considerations as well as
for extraordinary effects with regards to the bargain purchase resulting
from the acquisition of Bionamics.


Segment information

In TEUR


EVT EVT Intersegment Evotec
Execute Innovate eliminations Group

Revenues 61,497 10,630 (13,194) 58,933
Gross margin in % 24.8 32.0 15.1 28.3

Research and development
expenses (745) (10,422) 1,986 (9,181)
Selling, general and
administrative expenses (9,821) (2,976) - (12,797)
Amortisation of intangible
assets (1,621) (284) - (1,905)
Impairment of intangible
assets - (8,735) - (8,735)
Other operating income 2,667 6,212 - 8,879
Other operating expenses (1,652) - - (1,652)

Operating income (loss) 4,082 (12,807) - (8,725)
EBITDA adjusted* 9,855 (9,520) 335


* EBITDA was adjusted for changes in contingent considerations as well as
for extraordinary effects with regards to the bargain purchase resulting
from the acquisition of Bionamics.


Key figures of consolidated interim statement of financial position
Evotec AG and subsidiaries

In TEUR


30 31 Dec Change
September
2014 2013 in %

Cash, cash equivalents and investments 90,300 96,143 (6)
Working capital 10,114 4,657
Current and non-current loan liabilities and
finance lease obligations 21,420 17,241 24
Stockholders' equity 155,625 158,967

Total assets 213,653 227,380 (6)




Contact Evotec AG:
Gabriele Hansen, VP Corporate Communications & Investor Relations, Phone:
+49.(0)40.56081-255, [e-mail]



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Language: English
Company: Evotec AG
Manfred Eigen Campus / Essener Bogen 7
22419 Hamburg
Germany
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
Internet: www.evotec.com
ISIN: DE0005664809
WKN: 566480
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart


End of News DGAP News-Service
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296614 12.11.2014