HAMBURG, Germany, May 8, 2008 (PRIME NEWSWIRE) -- Evotec AG (Frankfurt:EVT) (Nasdaq:EVTCV) reported today results for the first quarter of 2008.
Evotec revenues for the first quarter of 2008 were EUR 7.3 million, 16% below last year's level (2007: EUR 8.7 million). This is mainly the result of: (i) The absence of library synthesis revenues following the strategic decision to transfer Evotec's entire library business into a joint venture with Indian RSIL effective October 2007. In the first quarter of 2007, library synthesis revenues amounted to EUR 0.6 million. (ii) The further weakening of the U.S. dollar against Evotec's reporting currency, the Euro. At constant 2007 currencies (UK Sterling and U.S. dollar), revenues in the first quarter of 2008 would have been EUR 0.7 million higher at EUR 8.0 million. Adjusting 2008 for currency exchange rates and excluding the transferred business from 2007, revenues would have been approximately on last year's level (2007 adjusted: EUR 8.1 million).
The Group operating result for the first quarter of 2008 amounted to EUR 14.4 million (2007: EUR 9.8 million). The increase is a result of high investment in the research and development. R&D expenditure for the first quarter of 2008 increased by 73% to EUR 12.8 million (2007: EUR 7.4 million) primarily due to a milestone payment to Roche based on the initiation of Phase II trials with EVT 302, which is paid in ordinary shares issued to Roche in the second quarter, and due to our sizable clinical development program for EVT 302 and EVT 101. Other operating costs and expenses decreased by 22% to EUR 3.7 million (2007: EUR 4.8 million). For the first quarter 2008, net loss amounted to EUR 13.8 million (2007: EUR 9.0 million).
Cash and investments at the end of March 2008 amounted to EUR 73.1 million (end of December 2007: EUR 93.7 million). On a pro-forma basis, including Renovis, the combined company's liquidity position and auction rated securities (EUR 8.6 million) as of March 31, 2008 amounted to EUR 119.0 million.
All 2008 results shown and discussed in this press release are compared to the 2007 continuing operations. On September 11, 2007 Evotec sold a major line of business, its Chemical Development Business, to Aptuit effective November 30, 2007. From the effective date onwards, this business was no longer consolidated in the Evotec Group accounts and income and expenses for that business are retrospectively disclosed as discontinued operations in the statements of operations.
Jorn Aldag, President & Chief Executive Officer of Evotec AG, commented: "The start of 2008 was marked by a significant amount of activity relating to the acquisition of Renovis. We are delighted to have reached this important milestone and we are pleased that a significant majority of Renovis shareholders voted in favor of it. We believe we have now one of the strongest CNS pipelines in our sector with three clinical candidates, a strong late stage preclinical pipeline focusing on areas of neurological and inflammatory diseases and a strong cash position to drive these assets through development. During the first quarter our clinical development, programs continued to make good progress. We successfully completed a Phase I safety and tolerability study for EVT 302 and reported encouraging first data from our Phase Ib studies with EVT 101. They showed good CNS penetration of the compound and first effects on the brain in man. The partnering discussions for our lead compound EVT 201 are ongoing. It is one of our primary goals for 2008 to sign a partner agreement for the future development of this molecule."
First Quarter 2008 and Recent Highlights:
-- Clinical pipeline continued to progress:
* Successful completion of Phase I repeat dose safety and
tolerability study with EVT 302 (smoking cessation); the
compound was well tolerated in young and elderly subjects up
to the highest dose levels tested; a Phase II craving study
started in February 2008 and a Phase II quit rate study is
scheduled for the middle of the year
* The Phase Ib brain imaging study completed in March 2008 with
EVT 101 provided first evidence of an effect in the crucial
regions of the brain in healthy volunteers and revealed
encouraging signals of potential activity in both Alzheimer's
disease and pain. Results from a second Phase Ib repeat dose
cognition study with higher doses of EVT 101 are expected in
the second quarter of 2008
-- Significant new or extended collaborations signed with CHDI, the
U.S. based Huntington Disease Foundation, and Ono Pharmaceutical
of Japan
-- Financials in-line with Evotec's full year expectations
* Total revenue base is lower today due to the divestment of
non-core businesses for cash
* On a pro-forma basis, including Renovis, the combined company's
liquidity position and auction rated securities as of March 31,
2008 amounted to EUR 119.0 million
* Liquidity is expected to last through 2010
-- Acquisition of U.S.-based Renovis successfully closed on May 2,
2008 (Post period end)
* Merger creates a global company with three clinical candidates
that are now backed by a strong late stage preclinical pipeline
focusing on areas of neurological and inflammatory diseases
* Three programs from the former Renovis are expected to enter
Phase I clinical trials in 2008/2009
* Evotec ADSs now traded on NASDAQ Global Market
2008 financial targets confirmed
Evotec's financial objectives in this outlook section are those of the combined new Evotec Group including Renovis from May 1, 2008. In 2008, total Group revenues are expected to reach EUR 34 million to EUR 36 million, ignoring upside potential from a major out-licensing income. This is based on the current order book, expected new contracts and contract extensions as well as, to a lesser extent, the achievement of certain research milestones. Depending on the contribution from out-licensing and additional milestone income, revenues may also be substantially higher.
Absent any impairment charges or out-licensing income, the 2008 operating result is expected to be in approximately the same range as 2007. In the event of a successful out-licensing event, it may significantly outperform 2007. Evotec continues to invest in research & development (R&D). The Company expects R&D expenses to amount to EUR 46 to EUR 51 million plus the cost of share-based compensation allocated to R&D in 2008. The increase is mainly driven by progress in the clinical pipeline and the Renovis acquisition.
Liquidity and auction rated securities at the end of 2008 after the acquisition of Renovis is targeted to exceed EUR 85 million excluding major out-licensing payments. Assuming the Company's ambitious portfolio development goals and no major partnering event, the cash position is currently expected to be sufficient to fund Evotec's development programs until the end of 2010.
Conference Call
Evotec will hold a conference call today at 02.00 p.m. CET (01.00 p.m. BST/08.00 a.m. U.S. time East Coast) to discuss the financial results as well as progress of the first quarter 2008. Jorn Aldag, President & CEO, Dr. Klaus Maleck, Chief Financial Officer, and Dr. John Kemp, Chief Research & Development Officer, will lead the call.
Conference call details:
Date: Thursday, May 8, 2008
Time: 02.00 p.m. CET
01.00 p.m. BST
08.00 a.m. U.S. time (East Coast)
Conference call numbers:
Europe: +49.(0)69.5007 1308 (Germany)
+44.(0)20.7806 1955 (UK)
U.S.: +1.718.354 1388
Pass Code: 4112525
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 U.S. by +1.718.354 1112. The access code is 4112525#. The on-demand version of the webcast will be available on our website: www.evotec.com - Investors - Financial Reports.
About Evotec AG
Evotec is a leader in the discovery and development of novel small molecule drugs. Both through its own discovery programs and through research collaborations, it is generating the highest quality research results to its partners in the pharmaceutical and biotechnology industries. In proprietary projects, Evotec specializes in finding new treatments for diseases of the Central Nervous System. Evotec has three programs in clinical development: EVT 201, a partial positive allosteric modulator (pPAM) of the GABAA receptor complex for the treatment of insomnia, EVT 101, a subtype selective NMDA receptor antagonist for the treatment of Alzheimer's disease and/or pain, and EVT 302, a MAO-B inhibitor in development for smoking cessation. Evotec's proprietary preclinical research programs focus on the purinergic receptors, P2X3 and P2X7, for the potential treatment of pain and inflammatory diseases. In addition, Evotec has worldwide collaboration and license agreements with Pfizer to research, develop and commercialize small molecule vanilloid receptor (VR1) antagonists. 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. Such forward-looking statements include, but are not limited to, statements about the anticipated benefits of our products, the anticipated benefits of the acquisition of Renovis, including future financial and operating results, our plans, objectives, expectations and intentions, the anticipated timing and results of our clinical and pre-clinical programs, and other statements that are not historical facts. We caution readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. These include risks and uncertainties relating to: our failure to successfully integrate the Renovis business; unexpected costs or liabilities resulting from the acquisition of Renovis; the risk that synergies from the acquisition may not be fully realized or may take longer to realize than expected; disruption from the acquisition making it more difficult to maintain relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; the need to develop new products and adapt to significant technological change; implementation of strategies for improving internal growth; use and protection of intellectual property; general worldwide economic conditions and related uncertainties; future legislative, regulatory, or tax changes as well as other economic, business and/or competitive factors; and the effect of exchange rate fluctuations on our international operations. The list of risks above is not exhaustive. Our Registration Statement on Form F-4, as amended, filed with the Securities and Exchange Commission in connection with the merger, and other documents filed with, or furnished to the Securities and Exchange Commission, contain additional factors that could impact our businesses and financial performance following the merger. 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.
First Quarter Report 2008
Key figures of consolidated interim statements of operations
according to IFRS Evotec AG and Subsidiaries
Euro in thousands except share data and per share data
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Three months ended Delta
March 31, in %
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2008 2007*
restated
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Total revenue 7,313 8,708 (16.0)
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Gross margin 29.4 27.8
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Research and development
expenses 12,810 7,426 0.7
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Selling, general and
administrative expenses 3,345 3,988 (0.2)
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Amortization of intangible assets 301 805 (0.6)
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Restructuring expenses 116 -- --
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Other operating income (422) (447) (5.6)
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Other operating expenses 380 438 (13.2)
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Operating result** (14,077) (8,983) (56.7)
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Net result (13,840) (8,976) (54.2)
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Weighted average shares
outstanding 73,868,447 68,078,819
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Net income (loss) per share
(basic and diluted) (0.19) (0.13)
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* Excluding contributions from Evotec Technologies and the Chemical
Development Business.
** Before amortization and impairment.
Key figures of consolidated interim balance sheets according to IFRS
Evotec AG and Subsidiaries
Euro in thousands
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Mar 31, Dec 31, Change
2008 2007 in %
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Cash and investments 73,132 93,676 (21.9)
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Net working capital 2,646 (4,336) 161.0
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Current and non-current portion
of loans and finance lease
obligations 11,472 11,661 (1.6)
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Stockholders' equity 153,391 170,553 (10.1)
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Total assets 184,600 207,878 (11.2)
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