Slide 1: Leading R&D Efficiency & Accelerating Innovation – Building BRIDGES
Leading R&D Efficiency & Accelerating Innovation – Building BRIDGES Evotec AG, Nine-month 2016 Quarterly Statement, 10 November 2016
Slide 2: Forward-looking statements
Forward-looking statements Information set forth in this presentation 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 presentation. Such forward-looking st
Slide 3: Welcome: The Management Team
Welcome The Management Team Werner Lanthaler, CEO1) Enno Spillner, CFO1) Mario Polywka, COO1) Cord Dohrmann, CSO1) PAGE 2 1) On the call for the Nine-month 2016 Quarterly Statement
Slide 4: Agenda
Agenda Highlights 9M 2016 EVT Execute EVT Innovate Financial performance and outlook PAGE 3
Slide 5: The leading innovation efficient discovery platform
The leading innovation efficient discovery platform EVT Execute & EVT Innovate – The business model PAGE 4
Slide 6: Strong performance and new ways for innovation
Strong performance and new ways for innovation First nine months of 2016 – State of play EVT Execute EVT Innovate Important milestone achievements New multi-target alliance with Bayer in New long-term strategic drug discovery kidney diseases alliances First research collaboration under Frenc
Slide 7: Strong growth trend continues
Strong growth trend continues Financial highlights first nine months 2016 & Guidance 2016 Strong financial performance Confirmation of updated guidance 2016 Group revenues up 37% to € 120.6 m More than 15% revenue growth excluding (9M 2015: € 88.2 m) milestones, upfronts and licences EVT Execu
Slide 8: Proposed acquisition of Cyprotex follows strategy
Proposed acquisition of Cyprotex follows strategy Strategy overview 2020 2016 2012 2009 Business segmentation Investments in discovery Highest quality drug discovery Restructuring service platform and pre-clinical services Capital efficiency Performance-based Cure X/Target X alliances
Slide 9: Our "Sweet spot"
Our “Sweet spot” Generating the Pre-clinical Development Candidate (PDC) Target Hit- Lead Pre- Academia ID/-Vali- Identi- Optimi- Phase I Phase II Phase III Approval Market clinical dation fication sation Clinical Cyprotex Phase Duration > 14 years PDC – Evotec Pre-clinical Partner Approx. 3–6 years
Slide 10: Acquisition of Cyprotex expected to close still 2016
Acquisition of Cyprotex expected to close still 2016 Summary and rationale of acquisition of Cyprotex World leader in pre-clinical ADME-Tox and DMPK testing1) 136 employees operating from 4 sites in the UK and USA H1 2016 revenues of ₤ 8.73 m (€ 9.78 m**); underlying EBITDA of ₤ 2.34 m (€ 2.62
Slide 11: Agenda
Agenda Highlights 9M 2016 EVT Execute EVT Innovate Financial performance and outlook PAGE 10
Slide 12: Strong growth in EVT Execute
Strong growth in EVT Execute EVT Execute – 9M 2016 versus prior-year period Revenues Adjusted EBITDA1) Increase in revenues (in € m) (in € m) attributable to growth in the base business, milestone 126.6 41.3 achievements and three full quarters of Sanofi +36% contribution 93.4 +156% Significant
Slide 13: Most comprehensive platform in the industry
Most comprehensive platform in the industry EVT Execute – Highlights first nine months of 2016 Milestone achievements with Bayer, BI and Padlock Extension of drug discovery alliances (Genentech, Janssen Pharmaceutica NV) New long-term strategic drug discovery alliances (C4X Discovery, Antibiot
Slide 14: Integration of additional capacity works very well
Integration of additional capacity works very well Progress update Evotec (France) Evotec (France) – 18-month retrospective Complex integration successfully ongoing Evotec is now fully independent and operational on site in Toulouse and increased headcount by >30% since April 2015 Evotec ful
Slide 15: Well-balanced global customer mix
Well-balanced global customer mix EVT Execute – Selected customer and revenue metrics Revenues by customer Customer type ytd 20161) Revenues by region ytd segment ytd 20161) (in %) (in %) 20161) (in %) 100% 100% 100% Remaining 12% Mid-sized 10% ROW 1% Pharma Top 10-30 16% Foundations 16% Customers U
Slide 16: Outlook 2016: EVT Execute
Outlook 2016 EVT Execute – Expected key milestones 2016 New long-term deals with large and mid-sized Pharma Expansion of foundations and biotech network in USA/EU New performance-based integrated technology/disease alliance Milestones from existing alliances PAGE 15
Slide 17: Agenda
Agenda Highlights 9M 2016 EVT Execute EVT Innovate Financial performance and outlook PAGE 16
Slide 18: Strong revenue growth and focused R&D expenses
Strong revenue growth and focused R&D expenses EVT Innovate – 9M 2016 versus prior-year period Revenues Adjusted EBITDA1) R&D expenses (in € m) (in € m) (in € m) +26% 17.9 16.6 16.3 14.3 (10.7) (12.7) +16% 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 Revenue growth of 26% and improved adjusted
Slide 19: Constantly growing pipeline of co-owned product opportunities
Constantly growing pipeline of co-owned product opportunities – more than 70 Partnership portfolio Molecule Therapeutic Area/Indication Partner Discovery Pre-clinical Phase I Phase II Phase III EVT3021) CNS – Alzheimer’s disease EVT201 CNS – Insomnia Clinical EVT1001) CNS – Depression EVT401 Immunol
Slide 20: First-in-class and best-in-class approaches
First-in-class and best-in-class approaches – New paths of sourcing innovation EVT Innovate – Strategy highlights New multi-target alliance with Bayer in kidney diseases First research collaboration under French Academic Bridge with DIABETES & Inserm in oncology NEUROSCIENCE COMPLICATIONS Acce
Slide 21: New treatments to fight kidney diseases
New treatments to fight kidney diseases Bayer & Evotec in CKD – Since 2016 Mission Agreement with Bayer Evotec and Bayer develop novel and highly innovative therapeutics Minimum of € 14 m including in the field of kidney diseases such as chronic kidney disease research payments and an (“CKD”) in
Slide 22: From Academia to transformative projects
From Academia to transformative projects Evotec’s academic network continues to grow Carefully select projects in indications of high unmet medical need Dramatically reduce “search costs” for capital Advance projects to tangible value inflection points, i.e. licensing or spin-offs Put experi
Slide 23: EVT BRIDGE addresses challenges of innovation
EVT BRIDGE addresses challenges of innovation EVT BRIDGE value proposition Maturity of data Eliminating invalid data points right from the start Accelerating slow Optimal EVT academic scouting entry point BRIDGE and research funding processes Translating leading science into drug discovery wor
Slide 24: Oxford BRIDGE "LAB282" is the first larger scale implementation
Oxford BRIDGE “LAB282” is the first larger scale implementation of a BRIDGE fund Partnership between Oxford University, OSI, OUI and Evotec Projects Oxford University BRIDGE “LAB282”: Novel therapeutic OUI3) to provide projects to create spin-outs concept OSI to fund scouting efforts Stakeholder
Slide 25: More than 10 projects primed for partnering
More than 10 projects primed for partnering EVT Innovate – Cure X/Target X 2011 2012 2013 2014 2015 2016 CureBeta CureNephron TargetImmuniT TargetBCD TargetFRX TargetaSN (Harvard Stem (Harvard, BWH, (Apeiron/Sanofi) (Sanofi) (Internal) (MJFF) Cell Institute) USC, AstraZeneca, TargetDBR TargetDR Targ
Slide 26: Efficient approaches for participation in first-in-class innovation
Efficient approaches for participation in first-in-class innovation Strategic rationale & examples for Evotec’s innovation acceleration Accelerating innovation on Spin-offs Strategic EVT platform Investments Spin off valuable platforms outside of Evotec’s main areas of interest for potential broad
Slide 27: Outlook 2016: EVT Innovate
Outlook 2016 EVT Innovate – Expected key milestones 2016 New clinical initiations and good progress of clinical pipeline within partnerships Expansion of network of top-class academic alliances Partnering of Cure X/Target X initiatives Strong focus on iPSC (induced pluripotent stem cells) pl
Slide 28: Agenda
Agenda Highlights 9M 2016 EVT Execute EVT Innovate Financial performance and outlook PAGE 27
Slide 29: Significantly increased EBITDA
Significantly increased EBITDA Key financials 9M 2016: Condensed income statement (IFRS) in € m* YTD YTD Revenue growth mainly due 2015 2016 % vs. 2015 to an increase in base Revenues 88.2 120.6 37% revenues, full 9 months Sanofi contribution and Gross margin 27.2% 38.5% – milestone achievements
Slide 30: Strong performance from both segments
Strong performance from both segments Condensed income statement based on segments for 9M 2016 in € m* Inter- EVT EVT segment Evotec Strong base business Execute Innovate elimination Group and milestone achievements Revenues 126.6 17.9 (23.9) 120.6 R&D expenses on Gross margin 32.9% 45.6% – 38.5
Slide 31: Strong gross margin
Strong gross margin Key financials Q3 2016: Condensed income statement (IFRS) in € m Q3 2015 Q3 2016 Q3 2016 gross margin Revenues 33.2 45.2 improved by milestone achievements and Gross margin 29.2% 45.1% improved capacity utilisation R&D expenses (5.0) (3.8) SG&A expenses (6.7) (6.0) Other op
Slide 32: Business grows and with improved gross margin
Business grows and with improved gross margin Revenues & gross margin trend 9M 2016 Continued significant growth of Growth in base business, improved capacity Group revenues1) utilisation and milestone achievements (in € m) (in %) Milestones/upfronts/licences Total margin Trad. revenue 120.6 Margin
Slide 33: Strong 2016, strong visibility and outlook for 2017
Strong 2016, strong visibility and outlook for 2017 Expected key milestones 2016 EVT Execute EVT Innovate New long-term deals with large New clinical initiations and good and mid-sized Pharma progress of clinical pipeline within partnerships Expansion of foundations and biotech network in USA/
Slide 34: Important next dates
Important next dates Financial Calendar 2017 Annual Report 2016 28 March 2017 Quarterly Statement Q1 2017 10 May 2017 Annual General Meeting 2017 14 June 2017 Half-year 2017 Interim Report 10 August 2017 Quarterly Statement 9M 2017 08 November 2017 PAGE 33
Slide 35: 'Research never stops'
‘RESEARCH NEVER STOPS’