Leading Innovation Efficiency Evotec Company Overview

Transcription

1 Leading Innovation Efficiency Evotec Company Overview Evotec AG, Company presentation, November 2016

2 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 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. 1

3 Agenda Evotec Overview EVT Execute EVT Innovate Financials & Outlook 2

4 Building a co-owned product pipeline Evotec at a glance 1 Strong growth and financial performance 2 More than 70 partnered product opportunities 3 Unique business model based on top-quality drug discovery platform 4 Focused internal investments and investments in external company formations 5 Strong balance sheet and very good strategic corporate position 3

5 Leadership in drug discovery Our mission Based on the highest quality drug discovery science, and through innovative collaborations, we are building a partnered product pipeline. 4

6 Leading the macro trend of R&D productivity Market dynamics in drug discovery Growth drivers Drug discovery outsourcing is a macro trend Market overview Revenues, in $ bn 1 2 Increasing comfort with outsourcing also in drug discovery Higher R&D capital efficiency through switch from fixed costs to variable business models % p.a Ability to adjust investments proportional to portfolio needs for Pharma and biotech (e) 2017(e) 2018(e) 2019(e) 2020(e) 5 Source: Visiongain; Drug Discovery Outsourcing: World Market 2015

7 High-quality drug discovery services and first-inclass partnered product pipeline Strategy overview Restructuring Capital efficiency for sustainability First Cure X investments Business segmentation Investments in discovery service platform Performance-based integrated discovery and clinical alliances Cure X/Target X strategy Royalty income from legacy pipeline Highest quality drug discovery and pre-clinical services Cure X/Target X alliances & Academic bridge strategy Company formations to accelerate drug discovery and product development 6

8 Our Sweet spot Generating the Pre-clinical Development Candidate (PDC) Academia Target ID/-Validation Hit- Identification Lead Optimisation Preclinical Phase I Phase II Phase III Approval Market Cyprotex Clinical Phase Duration > 14 years Evotec Approx. 3 6 years PDC Pre-clinical development candidate Partner Approx years Cost Approx. $ 1 3 bn Approx. $ 5 15 m Evotec s core competencies 7 Source: Paul et al. Nature Reviews Drug Discovery, 9 (2010)

9 Our offering close to Pharma, biotech and academia Evotec s global footprint Approx. 1,100 employees San Francisco, Branford and Princeton, USA ~70 employees Compound ID, selection and acquisition Compound QC, storage and distribution Cell & protein production Abingdon and Manchester, UK ~300 employees Medicinal chemistry ADMET Structural biology In vitro & in vivo anti-infective platform/screening Toulouse, France ~230 employees Compound management Hit identification In vitro & in vivo oncology Medicinal chemistry ADME & PK Early drug formulation & Solid form screening Cell, protein & antibody production Hamburg (HQ), Göttingen and Munich, Germany ~400 employees Hit identification In vitro & in vivo biology Chemical proteomics & Biomarker discovery and validation Cell & protein production Antibody discovery 8

10 The leading innovation efficient discovery platform EVT Execute & EVT Innovate The business model 9

11 Agenda Evotec Overview EVT Execute EVT Innovate Financials & Outlook 10

12 Building No 1 position in drug discovery outsourcing EVT Execute & Cyprotex Comprehensive suite of high-throughput ADME assays Proprietary toxicology and in silico PK offerings Stand-alone and integrated drug discovery support 11

13 Acquisition of Cyprotex expected to close still 2016 Summary and rationale of acquisition of Cyprotex World leader in pre-clinical ADME-Tox and DMPK testing 1) 136 employees operating from 4 sites in the UK and USA H revenues of 8.73 m ( 9.78 m*); underlying EBITDA of 2.34 m ( 2.62 m*) Listed on UK AIM market Strong addition to Evotec s drug discovery platform Strengthens EVT Execute stand-alone capabilities Early screening and predictive ADME accelerates early decision making in integrated drug discovery projects Offer: Issued share capital and funding of all existing debt of Cyprotex PLC for approx m ( 62.0 m*) paid in cash Offer of 1.60 /share represents a 9.4% premium to VWAP of past 30 trading days >50% Cyprotex shareholder irrevocables in place; intention to implement and secure transaction by a scheme of arrangement Full financial commitment for acquisition covered through Evotec s cash on balance sheet Acquisition adds high-quality revenue and accretive EBITDA If accepted by >75% of shareholders, deal should close by end of ) ADME-Tox: Absorption, distribution, metabolism, excretion-toxicolgy; DMPK: Drug metabolism and pharmacokinetics * Exchange / 1.12

14 Strong growth in EVT Execute EVT Execute Key performance indicators 9M 2016 Revenues (in m) % Adjusted EBITDA 1) (in m) % 41.3 Increase in revenues attributable to growth in the base business, milestone achievements and three full quarters of Sanofi contribution Significant upswing of adjusted EBITDA mainly due to the strong growth in revenues and milestone payments 9M 2016 includes 23.9 m of intersegment revenues 9M M M M ) Adjusted for changes in contingent considerations

15 Well-balanced global customer mix EVT Execute Selected customer and revenue metrics Revenues by customer segment ytd ) (in %) Customer type ytd ) (in %) Revenues by region ytd ) (in %) Remaining Top Customers 12% 16% 100% Mid-sized Pharma Foundations 10% 16% 100% ROW USA 41% 100% 1% Biotech 21% Top 10 Long-term 72% Strategic Alliances Top 20 Pharma 53% Europe 58% 14 1) Third-party revenues only

16 Trusted partner of foundations Foundations & Evotec Indication (mechanism) Partner Timeline Antibiotic resistance Parkinson s Disease Antibiotic Research UK Michael J. Fox Foundation Start 2016 Start 2016 Huntington s Disease CHDI Foundation Extended through to 2018 Alzheimer s Disease Gladstone Institutes Start 2015 Disease foundations are increasingly driving science and they are turning to companies like Evotec to pursue novel drug discovery pathways 1) Juvenile Batten Disease Leukemia Beyond Batten Disease Foundation The Leukemia & Lymphoma Society Start 2015 Start 2013 Muscular dystrophies Jain Foundation Start 2013 Malaria Medicines for Malaria Venture Start ) Over 6,000 rare disease NGOs; more than 10,000 relevant private foundations with more than $ 5 bn funding

17 Strong partner base accessing integrated drug discovery value chain EVT Execute Representative partners Cmpd Management Hit ID Chemistry Structural Biology In vivo Biology In vitro Biology 16

18 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 17

19 Agenda Evotec Overview EVT Execute EVT Innovate Financials & Outlook 18

20 Five fields of core expertise Overview NEURONAL DISEASES DIABETES & COMPLICATIONS PAIN ONCOLOGY ANTI- INFECTIVES 19

21 Strong revenue growth and focused R&D expenses EVT Innovate Key performance indicators 9M 2016 Revenues (in m) Adjusted EBITDA 1) (in m) R&D expenses (in m) % (12.7) Revenue growth of 26% and improved adjusted EBITDA resulting from new partnerships signed in 2015 No material change in R&D expenses Full impairment of EVT100 series ( 1.4 m) 2) +16% (10.7) 9M M M M M M ) Adjusted for changes in contingent considerations 2) In Q1 2016, Evotec was informed by Janssen Pharmaceuticals, Inc. that Janssen intends to phase out the licence agreement regarding NMDA antagonist with effect from August 2016.

22 Discovery Pre-clinical Clinical 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 EVT302 1) EVT201 EVT100 1) EVT401 ND 2) ND 2) Various ND 2) ND 2) ND 2) CNS Alzheimer s disease CNS Insomnia CNS Depression Immunology & Inflammation Oncology Oncology Women s health Endometriosis CNS Pain Immunology & Inflammation Oncology EVT770 Metabolic Diabetes (type 2/1) ND 2) ND 2) Various EVT801 EVT701 EVT601 ND 2) Various Respiratory Immunology & Inflammation Women s health Endometriosis Oncology Oncology Oncology Nephrology Immunology & Inflammation Various Metabolic Diabetes (type 2/1) Various Metabolic Diabetes (type 2/1) Various Various Various Various Various Nephrology Metabolic Diabetes CNS Alzheimer s disease Oncology Immunotherapy Immunology & Inflammation Tissue fibrosis Various CNS Multiple Sclerosis NEU 2 Various Metabolic Diabetes >5 further programmes Various CNS >5 further programmes Various Oncology >10 further programmes Various CNS Pain & Inflammation >5 further programmes 21 1) EVT302 and EVT100: Evotec has regained the licence rights and is currently assessing potential business opportunities 2) Not disclosed NEW Investor Presentation Focus

23 World-leading effort in endometriosis with Bayer Bayer & Evotec in Endometriosis Since 2012 Endometriosis Collaboration Agreement Status Endometriosis affects approx. 200 million women worldwide, 10% of women of reproductive age There is no known cure for endometriosis Strategic, five-year multi-target collaboration started in 2012 Goal of developing three clinical candidates for the treatment of endometriosis within five years Both parties contribute innovative drug targets and high-quality technology infrastructures 12 m upfront payment Up to 580 m in potential milestone payments based on the achievement of pre-clinical, clinical and sales milestones, up to double-digit royalties Integrated collaboration involving more than 30 scientists at Evotec Bayer will be responsible for subsequent clinical development and commercialisation To date, the alliance has delivered five preclinical candidates Phase I clinical development started 22

24 Restoring beta cell function ips cell-based projects Sanofi & Evotec in Diabetes Since 2015 Mission Development of beta cell replacement therapy and drug discovery based on functional human beta cells derived from stem cells Background Fast growing insulin market already exceeds >$ 22 bn in 2014 Diabetes is driven by loss in beta cell function Human beta cells offer only disease-modifying product opportunity Agreement with Sanofi Upfront fee of 3 m Potential pre-clinical, clinical, regulatory and commercial milestones exceeding 300 m Significant royalties upon commercialisation Integrated collaboration, resources involving more than 15 scientists at Evotec and Sanofi 23

25 New treatments to fight kidney diseases Bayer & Evotec in CKD Since 2016 Mission Evotec and Bayer develop novel and highly innovative therapeutics in the field of kidney diseases such as chronic kidney disease ( CKD ) in diabetes patients Background 1) CKD is a huge unmet medical need $ 35 bn annual Medicare costs >10% of population worldwide is affected by CKD > 2 million people worldwide currently receive dialysis treatments or a kidney transplant Alliance includes assets discovered within Evotec s CureNephron initiative Agreement with Bayer Minimum of 14 m including research payments and an undisclosed licence fee Potential pre-clinical, clinical and sales milestone payments of potentially over 300 m; tiered royalties of up to a low double-digit percentage of net sales Integrated collaboration with substantial efforts from both partners Strategic five-year collaboration 24 1) Sources:

26 Identify and develop novel therapies in AD J&J Innovation & Evotec in Alzheimer s disease (AD) Since 2013 Mission Explore genes dysregulated in Alzheimer s disease patients to identify new targets for drug discovery and development Background Approximately 9.9 million new cases of dementia are diagnosed each year. $ 818 bn were spent on the treatment of dementia in 2015 AD costs equal about 1% of the world s GDP Agreement with J&J Innovation $ 10 m in FTE-based research costs Pre-clinical, clinical, regulatory and commercial payments up to approximately $ 125 m to $ 145 m per programme Significant royalties on future sales of any products that may result from the alliance Integrated three-year collaboration, resources involving more than 20 scientists at Evotec and J&J Innovation 25

27 Small molecule-based cancer immunotherapies Sanofi & Evotec in Immuno-oncology Since 2015 Mission Development of small molecule-based cancer immunotherapies for next-generation immunooncological therapies to complement current offerings of checkpoint inhibitors Agreement with Sanofi Significant pre-clinical, clinical and regulatory milestones exceeding 200 m Significant royalties upon commercialisation Background Based on partnership between Apeiron and Evotec initiated in 2012/13 Immuno-oncology will become a new pillar of cancer therapy Market potential estimated to be $ 34 bn in

28 Novel mechanisms in tissue fibrosis Pfizer & Evotec in Fibrosis Since 2015 Mission Evotec and Pfizer develop novel mechanisms as targeted anti-fibrotics in multi-organ fibrosis Background Tissue fibrosis is a huge unmet medical need Total market value up to $ 100 bn Four major indications: liver, kidney, cardiac, lung fibrosis Agreement with Pfizer Undisclosed upfront payment Potential milestone payments based on the achievement of specific development and sales milestones (undisclosed) Integrated collaboration involving more than 10 scientists between Evotec and Pfizer Strategic four-year collaboration 27

29 From Academia to transformative projects EVT Innovate 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 experienced drug hunting teams/projects together right from the start 28

30 More than 10 projects primed for partnering EVT Innovate Cure X/Target X CureBeta (Harvard Stem Cell Institute) CureNephron (Harvard, BWH, USC, AstraZeneca, Bayer) TargetASIC (BMBF/undisclosed Pharma partner) Somatoprim (Cortendo) TargetPicV (Haplogen) TargetFibrosis (Pfizer) TargetImmuniT (Apeiron/Sanofi) TargetDBR (Yale) TargetMB (Second Genome) TargetPGB (Harvard) TargetKDM (Dana-Farber, Belfer) TargetIDX (Debiopharm) CureMN (Harvard) TargetBCD (Sanofi) TargetDR (Internal) TargetATD (Internal) TargetFX (Internal) TargetKX (undisclosed) TargetCytokine (DRFZ/BMBF) Various (Fraunhofer Institute) TargetFRX (Internal) TargetNTR (Internal) TargetKras (OSU) Various (Gladstone Institutes) TargetaSN (MJFF) TargetBispecifics (ex scientia) TargetRhoB (Inserm) TargetNASH (Ellersbrook/ Internal) TargetEEM (Harvard) TargetAD (NBB/J&J) 29 = Innovate Pharma partnerships signed since 2011

31 Efficient approaches for participation in first-in-class innovation Strategic rationale & examples for Evotec s innovation acceleration Spin-offs Joint Venture Panion Ltd Strategic Investments Accelerating innovation on EVT platform Spin off valuable platforms outside of Evotec s main areas of interest for potential broader/ later stage applications Participate in financing rounds of promising companies, built on EVT platforms, via strategic investments Company formations with the aim of developing assets to next value inflection points 30

32 Vision for improved development probabilities Evotec s ips cell accelerator Academia 1) Pharma Upscaling ips cell lines Disease modelling Phenotypes Differentiation Generation/ banking Disease modelling/ read-outs Phenotypic screening Hits, leads, PDCs Targets, biomarker Patient stratification Target ID Med Chem 31 1) e.g. HSCI, Gladstone, MPI, CRTD, etc.

33 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) platform 32

34 Agenda Evotec Overview EVT Execute EVT Innovate Financials & Outlook 33

35 Strong financial performance Financial highlights of FY 2015 Selected KPIs in m Total Group revenues Base revenues EVT Execute revenues EVT Innovate revenues Employees , % % % % +39% Adjusted Group EBITDA 1) Adjusted EVT Execute EBITDA 1) R&D expenses Operating income 2) Liquidity position 3) % % % +281% % (6.4) ) Adjusted for changes in contingent consideration as well as for one-time effects with regards to the bargain purchase resulting from the acquisition of Evotec (France) SAS in 2015 and of Bionamics GmbH in 2014 and excluding impairments on goodwill, other intangible and tangible assets as well as the total non-operating result 2) Driven by the one-time effect of the income from bargain purchase resulting from the acquisition of Evotec (France) 3) Excluding M&A and related payments (Earn-out Euprotec)

36 Significantly increased EBITDA Key financials 9M 2016: Condensed income statement (IFRS) in m* YTD YTD % vs Revenues % Gross margin 27.2% 38.5% R&D expenses (13.5) (12.8) (5)% SG&A expenses (19.0) (17.8) (7)% Impairment of intangible assets (0.1) (1.4) Income from bargain purchase 18.5 Other op. income (expenses), net Operating income % Adjusted Group EBITDA 1) Net income % Revenue growth mainly due to an increase in base revenues, full 9 months Sanofi contribution and milestone achievements Gross margin increase due to milestones, Sanofi collaboration and higher base margin Decrease in SG&A due to one-off M&A and related costs in m for full impairment of EVT100 in 2016 Bargain purchase of 18.5 m in 2015 R&D tax credits in UK and France ( 2.9 m increase) 35 1) EBITDA in 2015 was adjusted for changes in contingent considerations as well as for one-time effects with regards to the bargain purchase resulting from the acquisition of Evotec (France) SAS in * Differences may occur due to rounding

37 Strong performance from both segments Condensed income statement based on segments for 9M 2016 in m* EVT Execute EVT Innovate Intersegment elimination Evotec Group Revenues (23.9) Gross margin 32.9% 45.6% 38.5% R&D expenses (0.0) (16.3) 3.5 (12.8) SG&A expenses (13.9) (3.9) (17.8) Impairment of intangible assets Other op. income (expenses), net (1.4) (1.4) Strong base business and milestone achievements R&D expenses on similar level as in prioryear period Significantly improved adjusted EBITDA of EVT Execute compared to 9M 2015 ( 16.1 m) Strong gross margin in EVT Innovate Operating income (loss) 33.1 (12.7) 20.4 Adjusted EBITDA 1) 41.3 (10.7) ) Adjusted for changes in contingent considerations * Differences may occur due to rounding

38 Strong gross margin Key financials Q3 2016: Condensed income statement (IFRS) in m Q Q Revenues Gross margin 29.2% 45.1% R&D expenses (5.0) (3.8) Q gross margin improved by milestone achievements and improved capacity utilisation SG&A expenses (6.7) (6.0) Other op. income (expenses), net Operating income (loss) (0.6) 12.0 Adjusted Group EBITDA 1) Net income (loss) (2.9) ) EBITDA in 2015 was adjusted for changes in contingent considerations as well as for one-time effects with regards to the bargain purchase resulting from the acquisition of Evotec (France) SAS in 2015.

39 Strong team and shareholders for innovation Management & shareholder structure 82% Free float 11% Roland Oetker/ROI ~13.0% 3% DAMI 1) 3% AGI 2) 1% Management Management Board Werner Lanthaler (CEO) Long-time experience in Pharma & biotech Enno Spillner (CFO) Long-time experience in finance & biotech Mario Polywka (COO) Strong operational and commercial management track record Cord Dohrmann (CSO) Outstanding background in metabolics Supervisory Board Wolfgang Plischke Ex-Bayer Bernd Hirsch Bertelsmann SE & Co. KGaA Claus Braestrup Ex-Lundbeck Paul Herrling Ex-Novartis Iris Löw-Friedrich UCB Elaine Sullivan Carrick Therapeutics Number of shares: m Listing: Frankfurt Stock Exchange (TecDAX), OTCBB 52 week high/low: 6.19/ ) Deutsche Asset Management Investment GmbH 2) Allianz Global Investors GmbH

40 Strong growth and important R&D triggers Guidance 2016 Profitability guidance raised on 19 July 2016 in m KPIs Guidance 2016 Actual 2015 Group revenues 1) More than 15% growth m Adjusted Group EBITDA 2) More than double compared to prior year (Previously: Positive and significantly improved compared to prior year) 8.7 m R&D expenses Approx. 20 m 18.3 m Liquidity 3) Similar level compared to m Capex investments Up to 10 m 11.2 m 39 1) Excluding milestones, upfronts and licences 2) Before contingent considerations, income from bargain purchase and excluding impairments on goodwill, other intangible and tangible assets as well as the total nonoperating result 3) Excluding any potential cash outflow for M&A or similar transactions

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