Evotec Se · XETR:EVT
Evotec — FY2007 Earnings Presentation
60 slides from Evotec's earnings presentation, Mar 28, 2008
Slide 1: FY 2007 Results Presentation
Evotec AG FY 2007 Results Presentation, March 28, 2008
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. Such forward- looking statements include, but are not limited to, statements about the anticipated benefits of our products, the consummation
Slide 3: Agenda
Agenda 01 Highlights 2007 02 Pipeline Update 03 Collaborations 04 FY 2007 Results 05 The Merger with Renovis 06 Outlook 2008 3/27/2008 Folie 3
Slide 4: Highlights 2007
01 Highlights 2007 Highlights 2007 O Transition to a global biopharmaceutical company Merger agreement signed with Renovis, shareholder approval expected May 01, 2008 Divestment of non-core assets for cash O Clinical progress EVT 201 preclinical and POC data suggest strong efficacy and safety
Slide 5: Financial guidance for 2007 achieved
01 Highlights 2007 Financial guidance for 2007 achieved Evotec Group (in €m) 2006* 2007** ∆ Guidance Revenues 85 54 -36% – - Continuing business*** 41 33 -19% 30 – 35 R&D expenses 33 37 +10% – Net income (28) (11) +60% – Liquidity at year end 79 94 +19% 93 – 98 * As restated ** Chemical Development
Slide 6: New Evotec
01 Highlights 2007 Strategic transformation New Evotec 49% Libraries Discovery and Evotec Development Chemical Development, Screening € 43 m Formulation € 24 m Technologies Services 3/27/2008 Page 6
Slide 7: Strategic transformation
01 Highlights 2007 Strategic transformation Evotec 49% Discovery and Development € 43 m € 24 m 3/27/2008 Page 7
Slide 8: New Evotec and Renovis
01 Highlights 2007 Strategic transformation New Evotec Renovis Discovery and Discovery and Evotec Development Development CNS Pain Inflammation € 141 m cash* * Based on end of December 2007 cash, after expected transaction costs. 3/27/2008 Page 8
Slide 9: Agenda
Agenda 01 Highlights 2007 02 Pipeline Update 03 Collaborations 04 FY 2007 Results 05 The Merger with Renovis 06 Outlook 2008 3/27/2008 Page 9
Slide 10: EVT 201: Strong Proof-of-Concept Data in 2007
02 Pipeline Update EVT 201: Strong Proof-of-Concept Data in 2007 Partial positive allosteric modulator for GABAA receptors O Phase II results Successfully completed in 2007 Data reviewed with members of a key opinion leader panel Results offer great potential for a new treatment of insomnia O
Slide 11: Market need
02 Pipeline Update Market need O Datamonitor report on insomnia April 2007 O 5 areas of unmet need identified 1: Reduction of residual daytime sedation 2: More effective treatments for insomnia in the elderly 3: Improvement in sleep maintenance 4: Lack of potential for tolerance and addictio
Slide 12: EVT 201's best-in-class profile: expected differentiation
02 Pipeline Update Our assessment of EVT 201’s best-in-class profile: Expected differentiation on safety & efficacy O Longer duration of action, more sustained effect in the 2nd half of the night vs Ambien CR, continued dosing leads to tolerance pPAM pharmacology expected to produce less toleran
Slide 13: Principle Investigator Dr James Walsh
02 Pipeline Update Principle Investigator Dr James Walsh Executive Director of the Sleep Medicine and Research Center, St John’s Mercy Medical Center “EVT 201 appears to have an ideal pharmacokinetic profile and dose relationship to promote sleep induction and sleep maintenance for 7-8 hours, withou
Slide 14: EVT 302: Good safety data and start of Phase II
02 Pipeline Update EVT 302: Good safety data and start of Phase II Selective MAO-B inhibitor for smoking cessation & Alzheimer’s O Multiple ascending dose study in healthy subjects successfully completed Well tolerated in young & elderly up to the highest dose levels No significant adverse event
Slide 15: EVT 302: PET study successfully completed
02 Pipeline Update EVT 302: Single ascending and multiple dose PET study successfully completed O Single ascending dose PET study in 18 healthy subjects dosed up to 15 mg Dose dependent occupancy and complete blockade of MAO-B achieved in relevant areas of brain Potency of EVT 302 higher than th
Slide 16: EVT 302: Phase II quit rate study to start in H2
02 Pipeline Update EVT 302: Phase II proof-of-concept quit rate study to start in H2 Design in progress O 8 weeks treatment in smokers withdrawing from cigarettes 4 groups in parallel design – estimated patient number 400 EVT 302 once daily, placebo, with and without nicotine replacement therapy
Slide 17: EVT 101: Phase Ib higher repeat dose cognition study
02 Pipeline Update EVT 101: 4 week Phase Ib higher repeat dose cognition study, dosing completed O Study conducted in France and dosing has completed satisfactorily No significant adverse events or concerns from all safety monitoring assessments EVT 101 continues to be well tolerated O Blinded r
Slide 18: EVT 101: Brain imaging fMRI study completed
02 Pipeline Update EVT 101: Brain imaging fMRI study in healthy volunteers completed O Study completed at Institute of Psychiatry London O Single dose of placebo, 8, 15 mg EVT 101 given to 19 healthy subjects EVT 101 well tolerated with no significant adverse effects O Modulation of the activity o
Slide 19: Phase Ib fMRI study: EVT 101-induced changes in rCBF
02 Pipeline Update Phase Ib fMRI study: EVT 101-induced changes in rCBF 3/27/2008 Page 19
Slide 20: EVT 101: Progress in response to FDA IND review
02 Pipeline Update EVT 101: Progress in response to FDA IND review O Additional preclinical studies requested by FDA have been initiated O Studies progressing to plan and expectations O Start of single dose spinal cord injury associated neuropathic pain study in US dependent on these results and the
Slide 21: EVT 101: Summary of progress
02 Pipeline Update EVT 101: Summary of progress O Phase I fMRI study completed and reported today; dosing in 4 week higher repeat dose study completed At a dose level which was safe and well tolerated EVT 101 demonstrated penetration into the CSF to occupy NR2B receptors to a significantly highe
Slide 22: Progress on additional development programs
02 Pipeline Update Progress on additional development programs O EVT 103 Preclinical toxicology completed satisfactorily Progression to Phase I planned – timing dependent on budget O Renovis P2X7 antagonist Preclinical toxicology completed satisfactorily Planned first in human Phase I study
Slide 23: Agenda
Agenda 01 Highlights 2007 02 Pipeline Update 03 Collaborations 04 FY 2007 Results 05 The Merger with Renovis 06 Outlook 2008 3/27/2008 Page 23
Slide 24: Research results for a top quality customer network
03 Our Collaborations Research results for a top quality customer network 3/27/2008 Page 24
Slide 25: Strategic progress
03 Our Collaborations Strategic progress O Higher value and strategic deals in preferred therapeutic areas Boehringer Ingelheim collaboration extended for another year Significant expansion of CHDI collaboration in Huntington‘s Disease Expansion of DAC collaboration into medicinal chemistry ph
Slide 26: High-value added, results-based collaborations
03 Our Collaborations High-value added, results-based collaborations O Deliver preclinical candidates exploiting Evotec’s GPCR and other target class expertise O 76 FTE committed (36 from Evotec) O Duration 6 years Extended in 2008 for another year O Research payments, milestones, royalties, right
Slide 27: Substantial contracts in preferred therapeutic areas
03 Our Collaborations Substantial contracts in preferred therapeutic areas O Three-year extension of integrated drug discovery contract in Huntington‘s Disease O Worth up to US $ 37m O Covers Evotec’s entire drug discovery offering O Example for strategic expertise in CNS O Biology and medicinal che
Slide 28: Fragment-based drug discovery platform EVOlution
03 Our Collaborations Fragment-based drug discovery platform EVOlution™ leads to significant new deal flow O Collaboration on HSP90 advanced well into lead optimization based on fragment-based approach O Validation phase completed generating novel IP O Fragment-based drug discovery program yields po
Slide 29: Agenda
Agenda 01 Highlights 2007 02 Pipeline Update 03 Collaborations 04 FY 2007 Results 05 The Merger with Renovis 06 Outlook 2008 3/27/2008 Page 29
Slide 30: Key financials 2007: Increased R&D investment
04 FY 2007 Results Key financials 2007: Increased R&D investment Condensed Profit & Loss Statement (IFRS) – continuing business in €m 2006 Actual 2007 Actual % vs. Actual 06 Revenues 40.6 32.9 -19% Gross margin 33.9% 24.4% – R&D expenses 30.3 36.9 +22% – SG&A expenses 15.0 17.8 +18% – Amortization &
Slide 31: Revenues impacted by library JV and absence of milestones
04 FY 2007 Results Revenues impacted by library JV and absence of milestone payments in 2007 Revenues, continuing business (in €m) 40.6 3.2 6.6 32.9 0.9 32.0 30.8 2006 2007 Trad.Revenues Library Milestones 3/27/2008 Page 31
Slide 32: Adjusted for foreign exchange ongoing business increased by 9%
04 FY 2007 Results Adjusted for foreign exchange ongoing business increased by 9% Revenues, continuing business (in €m) 33.5 1.5 30.8 % +9 32.0 d j uste X Ad cl. F in 2006 2007 Trad.Revenues FX-effect 3/27/2008 Page 32
Slide 33: Milestone payments lead to margin volatility
04 FY 2007 Results Milestone payments lead to margin volatility Group gross margin, continuing business (in %) 33.9% Key drivers: 24.4% O Milestone impact: € 3.2m milestones improved GM in 2006 by 6% O Currency effect due to weak USD : -3%-points O Different revenue-mix towards higher risk milestone
Slide 34: Research & Development: Creating pipeline value
04 FY 2007 Results Research & Development (R&D): Creating pipeline value Group R&D spend, continuing business (in €m) 2007: 36.9 - €36.9m for proprietary R&D 30.3 (Discovery: 23% / Clinical Development: 64%) 6.6 2006: - €23.7m for proprietary R&D 23.7 (Discovery: 24% / Clinical Development: 57%) - €
Slide 35: Higher operating loss mainly due to lower GP and impairment
04 FY 2007 Results Higher operating loss mainly due to lower GP, increased R&D investment & impairment Operating result, continuing business* (in €m) 2006 2007 Amortization & Impairment 2006 Amortization intangible assets € 3.3m -31.8 Reversal of impairment € -0.6m -47.0 -2.7 -34.5 Amortization & Im
Slide 36: Net Income improved by 60%
04 FY 2007 Results Net Income improved by 60% Net loss, total business* (in €m) -11.2 -27.7 Net income in 2007 improved by the divestment of O ET €11.2m O CPD € 25.2m 2006 2007 * 2006 as restated 3/27/2008 Page 36
Slide 37: Chemical Development Business: Discontinued operations
04 FY 2007 Results Chemical Development Business, sold to Aptuit effective November 30, 2007 : Discontinued operations Condensed Profit & Loss Statement (IFRS) – Chemical Development Business (CPD) in €m 2006 Actual 2007 Actual* % vs. Actual 06 Revenues 26.8 21.5 -20% Gross margin 34.3% 25.5% – R&D
Slide 38: Cash development 2007
04 FY 2007 Results Cash development (incl. investments) 2007*: Cash flow from operations dominated by R&D expenditure in € m Sale of CPD Business -3.1 -1.1 Capex Other -8.8 excl. investing & finance financing FX effect 42.5 leases CF Acquisition Neuro3d -33.4 18.9 93.7 78.7 Operating CF Cash Cash 31
Slide 39: Sharpening the focus on proprietary research
04 FY 2007 Results Sharpening the focus on proprietary research Employees as of Dec 31, year-end, total business 566 554 299 Growing R&D discovery operations 87 38 53 2005 2006 2007 Services Pharma 3/27/2008 Page 39
Slide 40: Reduced asset base due to divestments
04 FY 2007 Results Reduced asset base due to divestments Balance sheet – Assets* (in €m) 243.1 207.9 78.7 15.7 93.7 20.1 34.7 18.2 Cash, cash equivalents & investments 18.5 Other current assets 93.9 Assets classified as held for sale 77.5 Property, plant and equipment Intangible assets + other long-
Slide 41: Capital expenditures handled restrictively
04 FY 2007 Results Capital expenditures handled restrictively, includes € 1.1m acquired assets from Combinature Capital expenditures – continuing business * / ** (in €m) 3.5 3.1 0.2 2.9 2006 2007 Purchase PPE (fixed assets) Purchase intangible assets * Without finance leases ** 2006 as restated 3/27
Slide 42: Equity ratio increased to 82%
04 FY 2007 Results Equity ratio increased to 82% Balance sheet – Liabilities & stockholders’ equity* (in €m) 5.2 243.1 43.2 207.9 5.1 7.0 19.2 Thereof 22.2m 19.3 liability to 13.0 deliver ET (equiv. to prepayment) 168.3 170.6 Accruals 69% 82% Other short-term liabilities Liabilities classified as he
Slide 43: Agenda
Agenda 01 Highlights 2007 02 Pipeline Update 03 Collaborations 04 FY 2007 Results 05 The Merger with Renovis 06 Outlook 2008 3/27/2008 Page 43
Slide 44: Renovis history
05 The Merger with Renovis Renovis history O 2004 IPO: 3 clinical programs Lead program in stroke, positive data in May, 2005 Wall Street “darling” until October 2006 with pivotal trial failure Peak market cap: ~$700 million O 2006 Re-start: Trading at cash, <$100 million Down-sizing, top ma
Slide 45: The combination: Multi-faceted pipeline, strong fit
05 The Merger with Renovis The combination: Multi-faceted pipeline, strong fit and differentiating science Discovery Preclinical Phase I Phase II Phase III EVT 201 GABAA receptor partial positive modulator for Insomnia EVT 302 MAO-B inhibitor – Smoking Cessation, Alzheimer‘s EVT 101 NMDA NR2B subtyp
Slide 46: VR1 - Vanilloid Receptor 1 antagonist
05 The Merger with Renovis VR1 - Vanilloid Receptor 1 antagonist Exclusive worldwide collaboration O Pooled program signed Q2 2005 O >$20m+ lic. fees & research funding O $170m+ milestones possible for each product candidate $1.5m milestone payment (2006) $4.5m milestone payment (2007) O Double-
Slide 47: VR1 - potential for safe, best-in-class analgesic
05 The Merger with Renovis VR1 - Vanilloid Receptor 1 antagonist Potential for safe, best-in-class analgesic, non-addictive, minimal side effects O Clinical & preclinical validation for pain O Competitive R&D activity O Potentially ideal drug profile… Strong analgesic Non-addictive Minimal sid
Slide 48: P2X7 receptor antagonist
05 The Merger with Renovis P2X7 receptor antagonist Potential best-in-class molecule O Strong industry interest Best-in-class opportunity O Multiple large potential indications Pain, RA, IBD, COPD O Clinical candidate & back-up series O Planned Phase 1 in 2008 O Partnering opportunity 3/27/2008
Slide 49: P2X2/3 receptor antagonist
05 The Merger with Renovis P2X2/3 receptor antagonist O Validated for multiple pain types O Strong industry interest: 1st-in-class O Lead series with superior properties O Multiple large potential indications Inflammatory pain Neuropathic pain Urinary incontinence O Planning Phase 1 in H1 2009
Slide 50: Key facts on Renovis acquisition
05 The Merger with Renovis Key facts on Renovis acquisition Data pro-forma O Merger close Form F-4 declared effective by the SEC in March 2008 NASDAQ listing expected in May 2008 Closing subject to shareholder vote on May 01, 2008 O 34.57m Evotec shares exchanged for 32.79m Renovis shares Fi
Slide 51: Key anticipated benefits
05 The Merger with Renovis Key anticipated benefits O Operational footprint in leading biotech region – Bay Area in the US Strong inflammation / pain talent pool Academia O Expansion / de-risking of pipeline Several significant value inflection points in 2008/2009 O Pipeline funding O NASDAQ l
Slide 52: High-value and strategic partnerships: Milestones expected
05 The Merger with Renovis High-value and strategic partnerships: Milestones expected in 2008, 2009 Post-merger partnership profile 76 FTEs, 6 year collaboration, milestones, royalties VR1, US$ 10m in upfront payment, >US$ 10m in FTE funding, >US$ 170m milestones, double-digit royalties CNS target,
Slide 53: Agenda
Agenda 01 Highlights 2007 02 Pipeline Update 03 Collaborations 04 FY 2007 Results 05 The Merger with Renovis 06 Outlook 2008 3/27/2008 Page 53
Slide 54: Sales and Order Book
06 Outlook 2008 Sales and Order Book 2008 Sales and Order Book, continuing business Status as of February (in €m) 19.1 19.2 2007 2008 3/27/2008 Page 54
Slide 55: Financial guidance 2008 (incl. Renovis)
06 Outlook 2008 Financial guidance 2008 (incl. Renovis) O Based on current order book, expected new Revenues contracts, contract extensions and some milestones before out-licensing income: O May be substantially higher, depending €34m - €36m on contribution from out-licensing and additional mileston
Slide 56: Our research plan 2008 (incl. Renovis)
06 Outlook 2008 Our research plan 2008 (incl. Renovis) Budget 2008 Milestone EVT 201 Manufacturing/preclinical studies EVT 101 Completion Phase Ib studies / start of POC studies EVT 302 Start / completion of POC Phase II studies in Smoking Cessation EVT 103 Subject to successful out-licensing of EVT
Slide 57: Combined newsflow 2008
06 Outlook 2008 Combined newsflow 2008 Partnership EVT 201 EVT 302: - Initiate Ph II quit rate study NASDAQ listing (9) - Ph II craving data Merger close - Tyramine interaction data EVT 101: - Ph Ib fMRI cognition data9 EVT 101: Initiate Phase II POC - Ph Ib higher repeat dose data EVT 302: - Ph I s
Slide 58: Major value inflection points by end 2009
06 Outlook 2008 Major value inflection points by end 2009 O Partnering opportunity for EVT 201 in 2008 O Phase II POC data for EVT 302 in 2008/2009 Craving study Quit rate study O Phase II POC data for EVT 101 in 2009 Depending on start and final study design O Entry of several drug candidates
Slide 59: A compelling CNS investment
A compelling CNS investment O Global CNS pure play O Lead insomnia compound EVT 201 Partner-ready, best-in-class O Broad and deep pipeline, with clinical momentum Proprietary and partnered O Fully integrated discovery-through-development core competencies O Multiple partners generating collabora
Slide 60: Tomorrow's Drugs Today
Tomorrow’s Drugs Today™ Your contacts: Jörn Aldag President & CEO P: +49.(0)40.56081-375 joern.aldag@evotec.com Anne Hennecke SVP, Investor Relations P: +49.(0)40.56081-286 anne.hennecke@evotec.com 3/27/2008 Page 60