28.03.2017
Evotec AG DE0005664809
DGAP-News: EVOTEC FISCAL YEAR RESULTS 2016: LEADING INNOVATION EFFICIENCY & FIRST-IN-CLASS DRUG DISCOVERY
DGAP-News: Evotec AG / Key word(s): Final Results
EVOTEC FISCAL YEAR RESULTS 2016: LEADING INNOVATION EFFICIENCY &
FIRST-IN-CLASS DRUG DISCOVERY
28.03.2017 / 07:29
The issuer is solely responsible for the content of this announcement.
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- EXCELLENT 2016 FINANCIAL RESULTS DELIVERED
- CONTINUED STRONG PERFORMANCE EXPECTED
- NEW WAYS TO ACCELERATE INNOVATION IMPLEMENTED
Hamburg, Germany, 28 March 2017:
Evotec AG (Frankfurt Stock Exchange: EVT, TecDAX, ISIN: DE0005664809) today
announced its financial results and corporate updates for the fiscal year
ended 31 December 2016.
FINANCIAL PERFORMANCE - ALL FINANCIAL TARGETS ACHIEVED
- Total Group revenues up 29% to EUR 164.5 m (2015: EUR 127.7 m); base
revenues up 26% to EUR 145.6 m
- Strong revenue growth in both operating segments:
EVT Execute revenues up 28% to EUR 171.0 m (2015: EUR 134.0 m);
EVT Innovate revenues up 24% to EUR 26.7 m (2015: EUR 21.5 m)
- Adjusted Group EBITDA increased to EUR 36.2 m (2015: EUR 8.7 m)
- Stable Group R&D expenses of EUR 18.1 m (2015: EUR 18.3 m)
- High and solid liquidity position of EUR 126.3 m (2015: EUR 133.9 m) by
the end of 2016; Liquidity position further improved in Q1 2017 following
EUR 90.3 m capital increase with Novo A/S
EVT EXECUTE - GLOBAL LEADERSHIP IN DRUG DISCOVERY
- Important milestone achievements (e.g. Bayer, Boehringer Ingelheim,
Padlock)
- New and extended long-term deals with large and mid-sized Pharma,
foundations and biotech (e.g. ANTRUK, C4X Discovery, Forge Therapeutics,
Genentech, Merck, Pierre Fabre, UCB)
- New licences enhancing existing drug discovery platform (e.g. CRISPR/Cas9,
Trianni)
- Full acquisition of ADME-Tox and DMPK specialist company Cyprotex PLC
opens strategic global leadership position in this field; Total cash flow of
EUR 66.3 m for acquisition of all shares and funding of company debt
- Restructuring of compound management operations in San Francisco due to
termination of NIH contract
EVT INNOVATE - SUCCESSFUL YEAR FOR EVT INNOVATE
- Partnering and initiation of Cure X/Target X initiatives (e.g. TargetαSN,
TargetNASH, TargetBiSM)
- New long-term, multi-target alliance with Bayer in kidney diseases based
on CureNephron
- Broad strategic drug discovery collaboration in neurodegeneration with
Celgene based on Evotec's unique iPSC platform
- Phase I clinical start for the treatment of endometriosis with Bayer
- Equity participation in selected company formations (e.g. Topas
Therapeutics, Carrick Therapeutics, Eternygen)
- Expansion of network of top-class academic alliances and BRIDGE from
Academia to Pharma (e.g. Inserm, LAB282 with Oxford University)
- Good progress within partnered product pipeline (Endometriosis; EVT201,
EVT401); Termination of EVT100 in treatment-resistant depression in 2016 and
phase out of TargetAD by Janssen Pharmaceuticals (after period-end)
NOVO A/S BECOMES NEW STRATEGIC, LONG-TERM INVESTOR IN EVOTEC (AFTER
PERIOD-END)
GUIDANCE 2017 - CONTINUED STRONG PERFORMANCE EXPECTED
- Group revenues expected to increase by more than 15% in 2017 (2016: EUR
164.5 m); Revenue guidance from 2017 onwards based on total Group revenues
and not on revenues excluding milestones, upfronts and licences
- Research and development (R&D) expenses in 2017 are expected to be approx.
EUR 20 m in total and thus similar to 2016 (2016: EUR 18.1 m)
- Adjusted Group EBIDTA expected to improve significantly in 2017 compared
to 2016 (2016: EUR 36.2 m)
1. FINANCIAL PERFORMANCE
ALL FINANCIAL TARGETS ACHIEVED
In 2016, Evotec's Group revenues grew to EUR 164.5 m, an increase of 29%
compared to the same period of the previous year (2015: EUR 127.7 m). This
increase resulted primarily from growth in the core EVT Execute business,
the full-year contribution of the Sanofi collaboration as well as
significant milestone payments. Excluding milestones, upfronts and licences,
Evotec's base revenues for 2016 were EUR 145.6 m and increased by 26% over
the same period of the previous year (2015: EUR 115.4 m). Revenues from
milestones, upfronts and licences amounted to EUR 18.9 m, an increase of 54%
in comparison with the previous year (EUR 12.3 m) which resulted mainly from
higher milestone achievements, in particular within the Company's alliances
with Bayer. The gross margin in 2016 increased to 35.6% (2015: 27.5%). The
margin increase over 2016 is attributable to the same drivers as in revenue
growth as well as better capacity utilisation and favourable foreign
exchange rate effects.
In 2016, overall Group R&D expenses amounted to EUR 18.1 m and remained on a
similar level compared to 2015 (2015: EUR 18.3 m). Total Group's selling,
general & administrative ("SG&A") expenses increased by 7% to EUR 27.0 m
(2015: EUR 25.2 m). This increase results primarily from the full-year
consideration of the Sanofi collaboration, an increased headcount in
response to company growth as well as one-time M&A costs mainly related to
the acquisition of Cyprotex. Adjusted Group EBITDA for 2016 increased
significantly to EUR 36.2 m (2015: EUR 8.7 m) mainly due to the strong
growth in revenues and milestone payments. Evotec's operating result
amounted to EUR 31.3 m in 2016 (2015: operating result of EUR 11.6 m).
Liquidity, which consists of cash and cash equivalents (EUR 84.0 m) and
investments (EUR 42.3 m) amounted to EUR 126.3 m as of 31 December 2016 (31
December 2015: EUR 133.9 m). Operating cash flow was positive, the slight
cash decrease is mainly due to the Cyprotex acquisition, including cash
acquired and subsequent redemption of loan notes holders, of £ 55.7 m (EUR
66.3 m; at an assumed £/EUR exchange rate of 1.19).
Revenues from the EVT Execute segment amounted to EUR 171.0 m in 2016, an
increase of 28% compared to the prior-year period (2015: EUR 134.0 m).
Included in this amount are EUR 33.2 m of intersegment revenues (2015: EUR
27.7 m). This increase mainly resulted from growth in the base business,
milestone achievements and the full-year Sanofi collaboration contribution.
The EVT Innovate segment generated revenues of EUR 26.7 m (2015: EUR 21.5 m)
consisting entirely of third-party revenues. The increase in revenues
resulted from EVT Innovate projects partnered in the second half of 2015 and
continued into 2016.
Gross margin for EVT Execute amounted to 29.9% while EVT Innovate generated
a gross margin of 45.3%. R&D expenses for the EVT Innovate segment at EUR
22.7 m in 2016 remained largely unchanged (2015: EUR 22.4 m). The adjusted
EBITDA of the EVT Execute segment was strongly positive at EUR 50.2 m in
2016 and more than doubled compared to EUR 23.8 m in the prior-year period.
The EVT Innovate segment reported an improved adjusted EBITDA of EUR (14.0)
m (2015: EUR (15.1) m).
2. EVT EXECUTE & EVT INNOVATE
The Company operates and manages its business activities under its two
business segments EVT Execute and EVT Innovate. These segments effectively
comprise various project types operating from a common drug discovery
platform. Both of them play an important role in successfully delivering on
the Company's strategy.
EVT Execute provides stand-alone drug discovery services on a typical
fee-for-service basis or integrated drug discovery collaborations on
partners' targets through a variety of commercial structures including
research fees, milestones and/or royalties.
EVT Innovate develops drug discovery programmes and assets, both internally
or through academic collaborations. Evotec seeks to partner these into
collaborations in return for upfront payments, ongoing research payments and
significant financial upside potential through milestones and royalties.
EVT EXECUTE - GLOBAL LEADERSHIP IN DRUG DISCOVERY
In 2016, EVT Execute demonstrated a strong operational performance shown
also by important milestones achievements in its collaborations with Bayer,
Boehringer Ingelheim and Padlock. Additionally, Evotec was able to enter
into new drug discovery alliances, e.g. with Pierre Fabre in compound
management, which will be managed at the Toulouse site; with C4X Discovery,
Forge Therapeutics, UCB and Antibiotic Research UK ("ANTRUK"), the latter
underlining the recent trend of an increasing number of non-governmental
organisations and foundations accessing Evotec's drug discovery platforms.
Various collaborations were extended in 2016, such as the drug discovery
alliance with Genentech.
Consistent with the Company's strategy to offer its clients the most
advanced technological platforms, Evotec continued to expand its drug
discovery platforms, e.g. with a non-exclusive licence from the Broad
Institute to the leading technology on the market for gene editing
(CRISPR-Cas9 licence) and Trianni's next-generation transgenic technology.
Along these lines, Evotec announced the acquisition of Cyprotex PLC at the
end of 2016, which adds world-leading high-quality ADME-Tox services and
strengthens Evotec's leadership in drug discovery. The integration of
Cyprotex into the Evotec Group is proceeding according to plan and new large
strategic contracts are under discussion. At the beginning of the year 2017,
Cyprotex moved to Alderley Park which allows for the expansion and
consolidation of Cyprotex' UK operations into a first-class scientific
facility.
In the fourth quarter of 2016, the National Institutes of Health ("NIH")
terminated the compound management contract with Evotec (US). Evotec has
been managing NIH's compound management activities from its South San
Francisco operations for many years. As a consequence, Evotec will close the
compound management facility in San Francisco in the first half of 2017 and
transfer all other contracted work to its Branford facility. A goodwill
impairment of EUR 4.0 m was recorded in 2016 as a result of this closure.
EVT INNOVATE - SUCCESSFUL YEAR FOR EVT INNOVATE
The EVT Innovate portfolio continued to make very good scientific and
commercial progress in 2016, resulting in a very strong performance of the
segment. EVT Innovate again demonstrated its ability to partner promising
early-stage drug discovery approaches with Pharma companies with the start
of a five-year, multi-target alliance with Bayer in the field of kidney
diseases based on assets from its CureNephron portfolio. In addition, EVT
Innovate accelerated its Cure X/Target X initiatives, e.g. with the
TargetNASH
programme together with Ellersbrook GmbH & Co. KG and an innovation
partnership with ex scientia (UK) (TargetBiSM) to develop bispecific small
molecule immuno-oncology therapeutics. In the first quarter of 2016, Evotec
was awarded a research grant from The Michael J. Fox Foundation to further
develop Evotec's TargetαSN (Alpha-synuclein) programme for the treatment of
Parkinson's disease. Furthermore, Evotec was able to announce the
progression of a first programme from its strategic alliance with Bayer in
the field of endometriosis into Phase I clinical development.
Over the last few years, Evotec directed significant resources towards
creating its unique induced pluripotent stem cell ("iPSC") platform aimed at
industrialising iPSC-based drug screening. Evotec has created an
industrialised iPSC platform in terms of throughput, reproducibility and
robustness to reach the highest industrial standards. On that basis, in
December 2016, Evotec entered into a strategic drug discovery and
development collaboration to identify disease-modifying therapeutics for a
broad range of neurodegenerative diseases with Celgene. Evotec received an
upfront payment of $ 45 m and is eligible to receive up to $ 250 m in
milestones as well as up to low double-digit royalties per in-licensed
programme. The use of patient-derived disease models for drug screening
represents a paradigm shift as it places the testing of human disease
relevance at the front end of the drug discovery process.
In March 2016, Evotec announced the formation of a spin-off company called
Topas Therapeutics GmbH focused on the field of nanoparticle-based
therapeutics to treat autoimmune diseases. The establishment of Topas
Therapeutics is the first example of the acceleration of Evotec's business
model to take advantage of carving out or investing in promising programmes
with additional upside potential. Alongside this EVT Innovate strategy,
Evotec invested in companies, e.g. Carrick Therapeutics Ltd. and Eternygen
GmbH, to accelerate drug discovery and product development.
Furthermore, EVT Innovate is also pursuing new approaches in scouting new
innovations and accelerating them along the drug discovery value chain. In
November 2016, Evotec launched the highly innovative strategic partnership
"LAB282" with the University of Oxford aimed at accelerating the translation
of breakthrough biomedical research from Oxford into new clinical
therapeutics. Within three months after initiation of LAB282, the first two
projects were selected out of a pool of high-quality project proposals
across various therapeutic areas and encompassing different therapeutic
modalities. These efforts, referred to as "BRIDGE", are focused on highly
capital efficient translation of academic science into potentially
transformative pharmaceutical projects. In addition, the Company entered
into its first research collaboration in the field of oncology under its
French Academic Bridge with Inserm. Inserm is the private subsidiary of the
French National Institute of Health and Medical Research and constitutes the
only French public research institution solely focused on human health and
medical research.
In the first quarter 2016, Janssen Pharmaceuticals, Inc. informed Evotec of
its intention to end the licence agreement regarding the NMDA antagonist
EVT100 with effect from August 2016. As a consequence, Evotec regained the
licence rights. The termination of the EVT100 contract with Janssen resulted
in a full impairment of the EVT100 series in Q1 2016 (EUR 1.4 m). After
period-end, Evotec was informed by Janssen Pharmaceuticals, Inc. of its
intention to phase out the TargetAD partnership. Evotec's clinical
development programmes (EVT201 and EVT401) with the Chinese partners JingXin
and CONBA are progressing according to plan.
3. NOVO A/S BECOMES NEW STRATEGIC, LONG-TERM INVESTOR IN EVOTEC (AFTER
PERIOD-END)
On 09 February 2017, Evotec announced that through a private placement
capital increase, Novo A/S invested EUR 90.3 m to subscribe shares of Evotec
at a price of EUR 6.87 per share. The placement was at a zero discount to
the XETRA closing auction price and results in an ownership of approx. 8.9%.
This investment will allow Evotec to accelerate its strategy to expand and
invest in best-in-class platforms and outsourcing services and to build and
invest in promising Cure X and Target X initiatives together with top
academic partners and biotech globally. Since this initial investment, Novo
A/S has augmented its shareholdings in Evotec above 10%.
4. GUIDANCE 2017
CONTINUED STRONG PERFORMANCE EXPECTED
Revenue guidance from 2017 onwards will be based on total Group revenues and
not on revenues excluding milestones, upfronts and licences. The achievement
of individual milestones are single events, which bear a certain level of
uncertainty and risk which is not under Evotec's full control. However, due
to an increasing number of milestone-bearing projects and factoring in a
probability of success, total milestone-based revenues become more
predictable and contribute more and more to the Company's total revenue and
profitability.
Guidance 2017 Actual
2016
Group revenues More than 15% growth EUR 164.5
m
Adjusted Group Significantly improved compared to EUR 36.2
EBITDA1) 2016 m
R&D expenses Approx. EUR 20 m EUR 18.1
m
1) EBITDA is defined as earnings before interest, taxes, depreciation, and
amortisation of intangibles. EBITDA excludes impairments on goodwill, other
intangible and tangible assets as well as the total non-operating result.
EBITDA is adjusted for changes in contingent consideration as well as for
the income from bargain purchase.
Webcast/Conference Call
The Company will hold a conference call to discuss the results as well as to
provide an update on its performance. Furthermore, the Management Board will
present an outlook for the fiscal year 2017. The conference call will be in
English.
Conference call details
Date: Tuesday, 28 March 2017
Time: 02.00 pm CEST (01.00 pm BST/08.00 am EDT)
From Germany: +49 69 22 22 29 043
From UK: +44 20 3009 2452
From USA: +1 855 402 7766
From France: +33 170 750 705
Access Code: 37969784#
A simultaneous slide presentation for participants dialling in via phone is
available at www.audio-webcast.com, password: evotec0317.
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 +49 69 22 22 33 985 (Germany) or +44 20 20
3426 2807 (UK) and in the USA by dialling +1 866 535 8030. The access code
is 654573#. The on-demand version of the webcast will be available on our
website:
NOTE
The 2015 and 2016 results are not fully comparable. The difference stems
mainly from the acquisition of Evotec (France) SAS, effective 01 April 2015,
as well as from the acquisition of Cyprotex PLC ("Cyprotex"), effective 14
December 2016. While the results of Evotec (France) SAS are fully included
in the accompanying consolidated income statement for 2016, they were not
fully included in the comparable period of the previous year (Q2 to Q4
only). The results of Cyprotex are only included from 14 December 2016
onwards. In addition, effective 09 December 2015, Evotec acquired 51% of the
shares in Panion Ltd., London (UK). This acquisition has been fully
consolidated since that date.
CHANGE IN PRESENTATION
The presented consolidated financial statements include a change in
presentation in the financial years 2016 and 2015. From 01 January 2016
onwards, amortisation of intangible assets in the amount of TEUR 1,908
(2015: TEUR 2,860) are no longer presented in a separate line in the
consolidated income statement but are allocated to the relating cost lines
in the income statement. The prior-year period was changed accordingly
resulting in higher costs of revenue. Such change in presentation is deemed
to provide more relevant information.
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, academics, patient advocacy
groups and venture capitalists. We operate worldwide providing the highest
quality stand-alone and integrated drug discovery solutions, covering all
activities from target-to-clinic to meet the industry's need for innovation
and efficiency in drug discovery (EVT Execute). 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, diabetes and
complications of diabetes, pain and inflammation, oncology and infectious
diseases. On this basis, Evotec has built a broad and deep pipeline of more
than 70 partnered product opportunities at clinical, pre-clinical and
discovery stages (EVT Innovate). Evotec has established multiple long-term
discovery alliances with partners including Bayer, CHDI, Sanofi or UCB and
development partnerships with Sanofi in the field of diabetes, with Pfizer
in the field of tissue fibrosis and with Celgene in the field of
neurodegenerative diseases. 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.
Fiscal year 2016 results
Key figures of consolidated income statement
Evotec AG and subsidiaries
In TEUR except share data and per share data
January to December Chang-
e
2016 2015 in %
Revenues 164,507 127,677 29
Gross margin in % 35.6 27.5
Research and development expenses (18,108) (18,343) (1)
Selling, general and administrative (27,013) (25,166) 7
expenses
Impairment of intangible assets (1,417) (7,242) (80)
Impairment of goodwill (3,989) -
Income from bargain purchase - 21,414
Other operating income (expenses), net 23,315 5,850 299
Operating result 31,342 11,640 169
Adjusted EBITDA* 36,225 8,690 317
Net income 26,839 16,516 63
Weighted average shares outstanding 132,506,697 131,678,865 1
Net income (loss) per share (basic) 0.20 0.13 54
Net income (loss) per share (diluted) 0.20 0.12 67
* Adjusted for changes in contingent considerations and income from bargain
purchase
Segment information
2016
In TEUR
EVT EVT Intersegment Not Evotec
Execute Innovate eliminations allocat- Group
ed
External 137,850 26,657 - - 164,507
revenues
Intersegment 33,165 - (33,165) - -
revenues
Gross margin in 29.9 45.3 35.6
%
R&D expenses (87) (22,721) 4,700 - (18,108)
SG&A expenses (20,930) (6,083) - - (27,013)
Impairment of - (1,417) - - (1,417)
intangible
assets
Impairment of (3,989) - - - (3,989)
goodwill
Other operating 9,254 14,061 - - 23,315
income
(expenses), net
Operating 35,425 (4,083) - - 31,342
result
Adjusted 50,183 (13,958) - 36,225
EBITDA*
* Adjusted for changes in contingent considerations
2015
In TEUR
EVT EVT Intersegment Not Evotec
Execute Innovate eliminations allocat- Group
ed
External 106,225 21,452 - - 127,677
revenues
Intersegment 27,726 - (27,726) - -
revenues
Gross margin in 21.3 52.2 27.5
%
R&D expenses (521) (22,446) 4,624 - (18,343)
SG&A expenses (19,257) (5,909) - - (25,166)
Impairment of (1,212) (6,030) - - (7,242)
intangible
assets
Income from - - - 21,414 21,414
bargain
purchase
Other operating 3,116 2,734 - - 5,850
income
(expenses), net
Operating 10,669 (20,443) - 21,414 11,640
result
Adjusted 23,839 (15,149) - 8,690
EBITDA*
* EBITDA was adjusted for changes in contingent consideration as well as for
the bargain purchase resulting from the acquisition of Evotec (France) SAS
in 2015
Key figures of consolidated statement of financial position
Evotec AG and subsidiaries
In TEUR
31 Dec 31 Dec Change
2016 2015 in %
Cash, cash equivalents and investments 126,270 133,940 (6)
Working capital (8,822) (9,187) 4
Current and non-current loan liabilities 28,607 22,943 25
Total stockholders' equity 213,936 187,094 14
Total assets 351,366 288,538 22
Contact Evotec AG:
Gabriele Hansen, VP Corporate Communications & Investor Relations, Phone:
+49.(0)40.56081-255, [email protected]
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28.03.2017 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Evotec AG
Manfred Eigen Campus / Essener Bogen 7
22419 Hamburg
Germany
Phone: +49 (0)40 560 81-0
Fax: +49 (0)40 560 81-222
E-mail: [email protected]
Internet: www.evotec.com
ISIN: DE0005664809
WKN: 566480
Indices: TecDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
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