Innovation Efficiency - Company Overview

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1 Innovation Efficiency - Company Overview Evotec AG, TVM Conference, Montreal, 7th October 2013

2 Research never stops Evotec Mission Together with our partners we are building a product pipeline based on systematic, unbiased and comprehensive discovery platforms We are investing along our core competences, but we do not take the risk of unpartnered clinical development We are making the drug discovery process truly capital efficient this motivates our ca. 600 Evotec scientists, and our customers 2

A global company with a complete offering Evotec worldwide

Francisco and Branford, USA ~35 employees Compound

employees Medicinal chemistry ADMET Structural biology ~200

Munich, Germany ~30 employees Phosphoproteomics Chemical

Regenerative Medicine 3 Sales representation (Boston, Tokyo)

German biophysical chemist and one of the worldwide leading

In 1967, he won the Nobel Prize in Chemistry for his work on

3 A global company with a complete offering Evotec worldwide operations Hamburg, Germany Manfred Eigen1) Campus San Francisco and Branford, USA ~35 employees Compound Procurement Compound QC and storage Abingdon, UK ~245 employees Medicinal chemistry ADMET Structural biology ~200 employees Screening HTS,NMR In vitro & in vivo biology Munich, Germany ~30 employees Phosphoproteomics Chemical proteomics Göttingen, Germany ~50 employees Metabolics Regenerative Medicine 3 Sales representation (Boston, Tokyo) Operations & sales representation 1) Manfred Eigen (*1927), German biophysical chemist and one of the worldwide leading pioneers in biotechnology. In 1967, he won the Nobel Prize in Chemistry for his work on a special measuring method of fast chemical reactions, which, until then, were considered to be immeasurable. He initiated the foundation of Evotec AG.

4 R&D productivity challenge will accelerate and increase the outsourcing market opportunity Market dynamics 1 Outsourcing grows, but only strong organizations will be able to cope with Pharma volatility Global Drug Discovery Outsourcing market revenues, in $ bn New players will emerge, deeper more complete offerings and innovation will be key Western science solutions will drive business together with asian cost leverage % p.a. 4 Pharma reorganizations, and internal politics will be the major obstacles to outsourcing solutions (e) 2014 (e) 2015 (e) 2016 (e) 2017(e) 4 Source: Visiongain; Drug Discovery Outsourcing: World Market 2012

5 Shifting innovation outward is not trivial R&D Innovation outsourcing models Evotec offers what pharma and biotech really needs! Impact Speed Creativity New Technologies Agility Affordability 5 Source: The Innovation Gap in Pharmaceutical Drug Discovery & New Models for R&D Success. Hu et al. paper from Kellogg Northwestern Business School

Highest quality drug discovery platforms Constant upgrade and improvement of core technologies Compound Focus IWQ / Q-Patch (2010) TI/TV platform in diabetes / metabolic disease (2011) Comprehensive

6 Highest quality drug discovery platforms Constant upgrade and improvement of core technologies Compound Focus IWQ / Q-Patch (2010) TI/TV platform in diabetes / metabolic disease (2011) Comprehensive compound / library management (2013) Access to patient derived ips cell lines (2012) Rapid Fire / MS screening (2012) Patch clamping at high throughput / sensitivity Target identification / validation Library management Assay development Screening Lead optimization (2012) B-cell based fully human Ab libraries (2013) Customized cell based assays and cell lines (2011) Versatile proteomics platform, compound profiling, biomarkers 6

7 One company with two services Organizational segmentation Execute Low risk, service business EVT Execute Guiding principals A. Strict fee for service, cost efficient, minimum GM margin 25%, minimal R&D, high capex B. Platform selling, with low risk component, few milestone derived projects C. Strong multi site management EVT Innovate Guiding Principals Innovate High risk high reward innovation business A. Focused R spend B. High returns on R&D investment C. Credible scientific leaders towards pharma and academia, very targeted business development, 7

8 Broad stand-alone execution business Comprehensive drug discovery platform EVO Apps Compound Management Hit-to-Lead Platform Protein Production Structural Biology A true high quality service business The western strategic outsourcing partner of choice Industrial logic and leadership Target Deconvolution Compound Profiling In vitro and in vivo Pharmacology Computational and Medicinal Chemistry 8

9 Systematic, unbiased and comprehensive approach EVT Integrate & Innovate disease focus Oncology Diabetes & Complications of Diabetes Neurology Offering complete infrastructure and discovery solutions Disease and target track record leveraged across indications Pain & Inflammation 9

First-in-class diabetes pipeline Expanding into disease complications & new mechanisms Diabetes pipeline overview Molecule(s) Indication (mechanism) Partner Status Next milestone Commercials

10 First-in-class diabetes pipeline Expanding into disease complications & new mechanisms Diabetes pipeline overview Molecule(s) Indication (mechanism) Partner Status Next milestone Commercials DiaPep277 Type 1 diabetes (immunomodulation) 2nd Phase III recruitment closed Final Phase III data Up to 40 m milestones, royalties, potential market approx. 500 m EVT770 ALM Type 1 and 2 diabetes (beta cell regeneration) Type 1 and 2 diabetes (beta cell regeneration) Pre-clinical Phase I 6 m upfront, high margin research payments, up to 254 m milestones/product, significant royalties Pre-clinical Phase I 2 m upfront, high margin research payments, up to 183 m milestones/product, significant royalties EVT070 Type 1 and 2 diabetes (beta cell regeneration) Advanced lead PDC 7 m upfront, high margin research payments, up to 237 m milestones, significant royalties Various CureBeta Type 1 and 2 diabetes (beta cell regeneration) Target ID/ validation ND 8 m upfront, high margin research payments, up to $ 300 m milestones/product; significant royalties Various CureNephron Chronic kidney disease Target ID/ validation Pharma partnership ND 1

Alzheimer s disease late-stage opportunity drives CNS pipeline Neurology pipeline overview Molecule(s) EVT302 Indication (mechanism) Partner Status Next milestone Commercials Alzheimer s disease

11 Alzheimer s disease late-stage opportunity drives CNS pipeline Neurology pipeline overview Molecule(s) EVT302 Indication (mechanism) Partner Status Next milestone Commercials Alzheimer s disease (MAO-B) Phase IIb Completion of Phase II, Phase III start $ 12 m upfront, up to $ 820 m milestones, significant royalties EVT100 series Depression (NR2B) Phase II/ pre-clinical Confirmation of pre-clinical study/phase II start $ 2 m upfront, up to $ 160 m milestones, significant royalties EVT201 Insomnia Phase II Start clinical trials Milestones, royalties Various Huntington s Disease Target validation NA Research payments ASIC family Multiple sclerosis BMBF/ undisclosed Pharma Lead generation Lead status ND 1

Strong portfolio and partnerships for novel pain and inflammation targets Pain and inflammation pipeline overview Molecule(s) EVT401 Indication (mechanism) Partner Status Inflammation (P2X7

12 Strong portfolio and partnerships for novel pain and inflammation targets Pain and inflammation pipeline overview Molecule(s) EVT401 Indication (mechanism) Partner Status Inflammation (P2X7 inhibitor) Next milestone Commercials Phase I/II Phase II start Up to 60 m milestones, royalties Various Endometriosis Pre-clinical Pre-clinical candidate 12 m upfront, total value up to approx. 580 m, royalties Various Various/Pain Pre-clinical Phase I start Undisclosed upfront, research payments, milestones, royalties Various Inflammation Pre-clinical Phase I start High margin research payments, up to 183 m milestones/product, significant royalties Undisclosed Various/Pain Pre-clinical Successful PoC Research payments, milestones, royalties 1

13 BI alliance leads pipeline of oncology targets Oncology pipeline overview Molecule(s) Somatropin (DG3173) Indication (mechanism) Partner Status Next milestone Acromegaly/NET Phase IIa Phase II data in acromegaly Commercials Consulting fees, royalties Various Various Phase I Phase I, First in man Research payments, milestones, royalties Pathway screen Cbl-B pathway Pre-clinical Pharma partnership Shared research costs, milestones, royalties Epigenomics targets Various Pre-clinical Pharma partnership ND 1

14 Where does the next generation pipeline come from EVT Innovate projects started since 2011 CureBeta (Havard) 2011 CureNephron (Havard) CureAD (internal) TargetFGFR3 (internal) TargetPicV (Heplogen) 2012 TargetCbI-B (Apeiron) Open Innovation Alliance (Yale) TargetPGB (Havard) TargetKDM (Belfer) CureMN (Harvard) TargetIDH (internal) TargetEEM (Havard) 08/

15 Accelerated innovation strategy Key metrics for 2013 in m Strong, milestone-driven revenue growth m Focused R&D investments for first-in-class innovation Key trends for 2013 Sales approx. 10 Gross margin % Operating profitability¹) (e) R&D ratio SG&A ratio Free cash flow CAPEX ~ 10 m Strong liquidity despite significant investments for M&A (e) >90.0 Scientists (e) (e) 15 1) Operating result excl. impairments and reversal of impairments and changes in contingent consideration

16 The right team to deliver innovation, growth and industrialisation Management & shareholder structure 1) BVF Management Management Board Supervisory Board TVM Capital Roland Oetker/ ROI Number of shares: m1) Listing: TecDAX, ~9.0% ~13.0% ~9.0% ~1% Frankfurt OTCBB 52 week high/low: 3.07/ 2.06 Werner Lanthaler (CEO) Long-time experience in biotech & Pharma growth organisations Mario Polywka (COO) 18 years Evotec experience Cord Dohrmann (CSO) Outstanding background in metabolics Colin Bond (CFO) Big industry multi-national background Key scientific Advisors Doug Melton Harvard University/HHMI William Jenkins Ex-Novartis Walter Wenninger Ex-Bayer Roland Oetker ROI Hubert Birner TVM Capital Mary Tanner Burrill & Company Andreas Pinkwart Dean of Leipzig Graduate School of Management Claus Braestrup Ex-Lundbeck 1 1) Admission expected in October

17 Positioning for sustainable growth Strategic overview Today Build world-class drug discovery capabilities for integrated projects Establish capital efficiency strategy for sustainable profitability latest in 2012 FOCUS & GROW Build global presence with optimal cost leverage Expand disease expertise & upgrade technology platforms Increase upside potential through longterm performancebased alliances INNOVATE Industrialize EVT Execute and EVT Innovate offerings Balance innovation with profitability and cash flow generation for optimal shareholder value Build operational venture company ACCELERATE & INDUSTRIALIZE Action Plan 2012 Action Plan

18 Your contact: Dr Werner Lanthaler Chief Executive Officer +49.(0) (0) Fax

Evotec & Sanofi enter into exclusive negotiations for major multi-component strategic collaboration

Evotec & Sanofi enter into exclusive negotiations for major multi-component strategic collaboration Evotec AG, Investor and Analyst Call, 03 December 2014 Forward-looking statements Information set forth