Leading Innovation Efficiency Evotec Company Overvie · Leading Innovation Efficiency – Evotec...
Transcript of Leading Innovation Efficiency Evotec Company Overvie · Leading Innovation Efficiency – Evotec...
Leading Innovation Efficiency –
Evotec Company Overview
Evotec AG, Jefferies 2016 Global Healthcare Conference, 08 June 2016
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Forward-looking statements
1
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.
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Agenda
2
Evotec Overview
EVT Execute
EVT Innovate
Financials & Outlook
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Leading innovation efficiency
3
Evotec at a glance
1 Strong growth and financial performance
3 Unique business model based on top-quality drug discovery platform
4 Focused investments with near-term news flow and partnering events
5 Strong balance sheet and very good strategic corporate position
2 More than 70 partnered product opportunities
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Leadership in drug discovery
4
Our mission
Based on the highest quality drug discovery
science, and through innovative
collaborations, we are building a partnered
product pipeline.
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Our “Sweet spot”
5
Pre-clinical development candidate (PDC)
Source: Paul et al. Nature Reviews Drug Discovery, 9 (2010)
Duration
Phase II Phase III
Approval
Academia
Target
ID/-Vali-
dation
Hit-
Identi-
fication
Lead
Optimi-
sation
Phase I Pre-clinical
> 14 years
Market
Cost Approx.
$ 1–3 bn
Partner Evotec
Clinical
Phase Pre-clinical
Phase
Approx. 3–6 years Approx. 6–10 years
PDC –
Pre-clinical
development
candidate
Approx.
$ 5–15 m
Evotec’s core competencies
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Leading the macro trend of R&D productivity
6
Market dynamics in drug discovery
Source: Visiongain; Drug Discovery Outsourcing: World Market 2015
1
2
3
Increasing comfort with
outsourcing also in drug
discovery
Higher R&D capital efficiency
through switch from fixed costs
to variable business models
Ability to adjust investments
proportional to portfolio needs
for Pharma and biotech
Growth drivers Drug discovery outsourcing is a macro trend
Market overview – Revenues, in $ bn
5–10% p.a.
12.8 14.5
16.6 19.2
21.8 24.5
27.1 29.7
2013 2014 2015(e) 2018(e) 2019(e) 2020(e) 2016(e) 2017(e)
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Globally leading service company and first-in-class
partnered product pipeline
7
Strategy overview
2009
Business segmentation
Investments in discovery
service platform
Performance-based
integrated discovery and
clinical alliances
Cure X/Target X strategy
Royalty income from
legacy pipeline
Restructuring
Capital efficiency
for sustainability
First EVT Innovate
investments
Highest quality drug discovery
and pre-clinical services
– EVT Execute
Cure X/Target X strategy &
“Academic bridge”
– EVT Innovate
Company formations to
accelerate drug discovery and
product development
– EVT Equity
2012
2016 2020
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Our offering close to Pharma, biotech and academia
8
Evotec’s global footprint – Approx. 1,000 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
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
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
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Strong financial performance
9
Financial highlights of FY 2015 – Selected KPIs
1) 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)
in € m
2015 2014
Total Group
revenues
Base
revenues
EVT Execute
revenues
EVT Innovate
revenues
Employees
Adjusted Group
EBITDA1)
Adjusted EVT
Execute EBITDA1)
R&D
expenses
Operating
income2)
Liquidity
position3)
89.5
+43%
127.7
73.4
+57%
115.4
93.3
+44%
134.0
14.7
21.5
+46% +39%
717
1,000
12.4
+48%
18.3 22.1 23.8
+8%
7.7
+13%
8.7
(6.4)
+281%
11.6
93.1
+44%
134.5
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Business model meets partners’ needs
10
EVT Execute & EVT Innovate
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Agenda
11
Evotec Overview
EVT Execute
EVT Innovate
Financials & Outlook
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Broad stand-alone innovation services
12
EVT Execute – Comprehensive drug discovery platform
No. 1 in drug
discovery
High-quality service
business
The strategic
outsourcing partner
of choice
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Above market performance
1) Adjusted for changes in contingent considerations
EVT Execute – Key performance indicators Q1 2016
Revenues
(in € m)
Adjusted EBITDA1)
(in € m) Q1 2016 includes € 7.5 m of
intersegment revenues
Revenue growth driven by strong
performance of the base
business, milestone achievement
from the Padlock collaboration
and full quarter of Sanofi
contribution
Strong adjusted EBITDA growth
mainly due to higher margins in
the base business, milestones
and the contribution of the Sanofi
collaboration
38.6
Q1 2015
23.1
Q1 2016
9.6
Q1 2015
3.5
Q1 2016
+67%
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48%
24%
19%
9%
Well balanced customer mix
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EVT Execute – Selected customer and revenue metrics
1) Third-party revenues only
Top 20
Pharma
Mid-sized
Pharma
Biotech
Foundations
Revenues by customer
segment ytd 20161) (in %)
Customer type ytd 2016
(in %)
Revenues by region ytd 2016
(in %)
77%
16%
7%
Top 10
Long-term
Strategic
Alliances
Top 10-30
Customers
Remaining 100%
52%
47%
1%
Europe
USA
ROW 100% 100%
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Evolving as trusted partner of foundations
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Foundations & Evotec
1) Over 6,000 rare disease NGOs; more than 10,000 relevant private foundations with more than $ 5 bn funding
Disease foundations are
increasingly driving
science and they are
turning to companies
like Evotec to pursue
novel drug discovery
pathways1)
Indication (mechanism) Partner Timeline
Parkinson’s Disease Michael J. Fox
Foundation
Start 2016
Huntington’s Disease CHDI Foundation Extended through
to 2018
Alzheimer’s Disease Gladstone Institutes Start 2015
Juvenile Batten Disease Beyond Batten Disease Start 2015
Leukemia The Leukemia &
Lymphoma Society
Start 2013
Muscular dystrophies Jain Foundation Start 2013
Malaria Medicines for Malaria
Venture (MMV)
Start 2014
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Strong partner base accessing integrated drug
discovery value chain
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EVT Execute – Representative partners
Chemistry
Cmpd
Mana-
gement Hit ID
Structural
Biology
In vitro
Biology
In vivo
Biology
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Outlook 2016
17
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
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Agenda
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Evotec Overview
EVT Execute
EVT Innovate
Financials & Outlook
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Five fields of core expertise
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Overview
DIABETES &
COMPLICATIONS NEUROSCIENCE
ONCOLOGY
ANTI-
INFECTIVES PAIN
PAGE 20
Strong revenue growth reflects new partnerships
1) 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.
EVT Innovate – Key performance indicators Q1 2016
Revenues
(in € m)
Adjusted EBITDA1)
(in € m)
Strong revenue growth and improved EBITDA due to new partnerships signed in 2015
Increased R&D expenses due to intensified efforts in CNS and oncology
Full impairment of EVT100 series (€ 1.4 m)2)
6.4
3.8
(2.4)
Q1 2015
(3.8)
Q1 2016
R&D expenses
(in € m)
4.9 4.6
Q1 2015 Q1 2016 Q1 2015 Q1 2016
+67%
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Constantly growing pipeline of product opportunities
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Partnership portfolio
Molecule Therapeutic Area/Indication Partner Discovery Pre-clinical Phase I Phase II Phase III
Clin
ica
l
EVT3021) CNS – Alzheimer’s disease
EVT201 CNS – Insomnia
EVT1001) CNS – Depression
EVT401 Immunology & Inflammation
ND2) Oncology
ND2) Oncology
Pre
-cli
nic
al
ND2) CNS – Pain
ND2) Oncology
Various Women’s health – Endometriosis
EVT770 Metabolic – Diabetes (type 2/1)
ND2) Respiratory
ND2) Immunology & Inflammation
EVT801 Oncology
EVT701 Oncology
EVT601 Oncology
Dis
co
ve
ry
Various Immunology & Inflammation
Various Metabolic – Diabetes (type 2/1)
Various Metabolic – Diabetes (type 2/1)
Various Nephrology
Various Metabolic – Diabetes Various CNS – Alzheimer’s
Various Oncology – Immunotherapy
Various Immunology & Inflammation – Tissue fibrosis
Various CNS – Multiple Sclerosis NEU2
Various Metabolic – Diabetes >5 further programmes
Various CNS >5 further programmes
Various Oncology >10 further programmes
Various CNS – Pain & Inflammation >5 further programmes
1) EVT302 and EVT100: Evotec has regained the licence rights and is currently assessing potential business opportunities 2) Not disclosed
Investor Presentation Focus
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World-leading effort in Endometriosis
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Bayer & Evotec in Endometriosis – Since 2012
Agreement with Bayer
€ 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
Strategic, five-year multi-target collaboration
Background
Endometriosis affects approx. 200 million women
worldwide, 10% of women of reproductive age
There is no known cure for endometriosis
Mission
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
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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
Background
Approximately 7.7 million new cases of dementia
are diagnosed each year. $ 612 bn were spent on
the treatment of dementia in 2014
AD costs equal about 1% of the world’s GDP
Mission
Explore genes dysregulated in Alzheimer’s
disease patients to identify new targets for drug
discovery and development
Identify and develop novel therapies in AD
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J&J Innovation & Evotec in Alzheimer’s disease (AD) – Since 2013
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Agreement with Sanofi
Significant pre-clinical, clinical and regulatory
milestones exceeding € 200 m
Significant royalties upon commercialisation
Integrated collaboration involving more than 20
scientists between Evotec, Sanofi and Apeiron
Multi-year research payments for Evotec and
Apeiron
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
$ 35 bn in 2023
Mission
Development of small molecule-based cancer
immunotherapies for next-generation immuno-
oncological therapies to complement current
offerings of checkpoint inhibitors
Small molecule-based cancer immunotherapies
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Sanofi & Evotec in Immuno-oncology – Since 2015
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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
Strategic four-year collaboration
Background
Tissue fibrosis is a huge unmet medical need –
Total market value up to $ 100 bn
Four major indications: liver, kidney, cardiac, lung
fibrosis
Mission
Evotec and Pfizer develop novel mechanisms as
targeted anti-fibrotics in multi-organ fibrosis
Novel mechanisms in tissue fibrosis
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Pfizer & Evotec in Fibrosis – Since 2015
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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
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
Mission
Development of beta cell replacement therapy
and drug discovery based on functional human
beta cells derived from stem cells
Restoring beta cell function – iPS cell-based
projects
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Sanofi & Evotec in Diabetes – Since 2015
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Translating first-in-class science to Pharma
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EVT Innovate
Carefully selected discovery stage projects in indications of high unmet medical need
Advancing and partnering projects at tangible value inflection points
Fuelling Evotec’s pre-clinical and clinical opportunities
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More than 10 projects primed for partnering
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EVT Innovate – Cure X/Target X
= Innovate Pharma partnerships signed since 2011
CureBeta
(Harvard Stem
Cell Institute)
2011
CureNephron
(Harvard, BWH,
USC, AstraZeneca)
TargetASIC
(BMBF/undisclosed
Pharma partner)
Somatoprim
(Cortendo)
TargetPicV
(Haplogen)
TargetFibrosis
(Pfizer)
2012
TargetImmuniT
(Apeiron/Sanofi)
TargetDBR
(Yale)
TargetMB
(Second Genome)
TargetPGB
(Harvard)
TargetKDM
(Dana-Farber,
Belfer)
TargetIDX
(Debiopharm)
CureMN
(Harvard)
TargetEEM
(Harvard)
TargetAD
(NBB/J&J)
2013
TargetBCD
(Sanofi)
TargetDR
(Internal)
TargetATD
(Internal)
TargetFX
(Internal)
TargetKX
(undisclosed)
TargetCytokine
(DRFZ/BMBF)
Various
(Fraunhofer
Institute)
2014
TargetFRX
(Internal)
TargetNTR
(Internal)
TargetKras
(OSU)
Various
(Gladstone
Institute)
…
2015
TargetaSN
(MJJF)
TargetBispecifics
(ex scientia)
TargetRhoB
(undisclosed)
…
2016
PAGE
Driving value of hidden assets –
First-in-class approach for tolerance induction
29
Topas Therapeutics: An Evotec spin-off company
Topas Therapeutics GmbH is focused on the
development of novel tolerizing particles for
immune-mediated diseases using proprietary
NdL® nanotechnology platform
Use of nanoparticles to deliver selected
antigenic peptides to the liver
(Topas = Tolerizing particles)
€ 14 m Series A funding secured with VC
consortium
Pre-clinical development for multiple
sclerosis has been initiated; Phase I to start
in 2017; strong pipeline
Evotec will remain the largest shareholder
Bionamics
GmbH
Principal
shareholder
Investors &
Partners
Epidarex, EMBL,
GIMV
Licence
NdL®
PAGE
Vision for improved development probabilities
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Evotec’s iPS cell accelerator
1) e.g. HSCI, Gladstone, MPI, CRTD, etc.
Academia1)
iPS cell lines
Disease
modelling
Phenotypes
Pharma
Hits, leads,
PDCs
Targets,
biomarker
Patient
stratification
Upscaling
Med Chem Target ID
Phenotypic
screening
Generation/
banking
Disease
modelling/
read-outs
Differen-
tiation
PAGE
Outlook 2016
31
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
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Agenda
32
Evotec Overview
EVT Execute
EVT Innovate
Financials & Outlook
PAGE
Group revenues +74%, higher gross margin
33
Key financials Q1 2016: Condensed income statement (IFRS)
1) Adjusted for changes in contingent consideration
in € m
Revenue increase
mainly driven by
strong performance
of the base
business, milestone
achievement in
Padlock
collaboration and
three months of the
Sanofi contribution
Adjusted Group
EBITDA strong and
significantly
increased
Q1 2015 Q1 2016 % vs. 2015
Revenues 21.5 37.5 74%
Gross margin 28.0% 33.3% –
R&D expenses (3.8) (4.4) 14%
SG&A expenses (5.1) (5.4) 5%
Impairment of intangible assets – (1.4) –
Other op. income (expenses), net (0.4) 1.4 –
Operating income (loss) (3.3) 2.7 –
EBITDA adjusted1) (0.3) 7.2
Net loss (1.1) (1.2) 9%
PAGE
Strong revenue growth in EVT Execute and
increased investments in EVT Innovate
34
Condensed segment information for Q1 2016
in € m
Strong revenue growth
and improved EBITDA
for both segments
Increased investments
in Cure X/Target X
initiatives and
oncology projects in
Toulouse in-line with
expectations and
strategy plans
Impairment of EVT100
series
EVT
Execute
EVT
Innovate
Inter-
segment
elimination
Evotec
Group
External revenues 31.1 6.4 – 37.5
Intersegment revenues 7.5 – (7.5) –
Gross margin 26.1% 46.1% 33.3%
R&D expenses (0.1) (4.8) 0.5 (4.4)
SG&A expenses (4.4) (1.0) – (5.4)
Impairment of intangible assets – (1.4) – (1.4)
Other op. income (expenses), net 1.1 0.3 – 1.4
Operating income (loss) 6.8 (4.0) – 2.7
EBITDA adjusted1) 9.6 (2.4) 7.2
1) Adjusted for changes in contingent considerations
PAGE
Accelerated path to growth and sustainability
35
Key metrics 2010 – 2015
1) Adjusted for changes in contingent considerations 2) Cash and cash equivalents and investments 3) Effective on 01 April 2015, Evotec acquired Sanofi’s scientific operations in Toulouse, France; 2015 number including the employees from this transaction
Revenues (in € m)
R&D expenses (in € m)
EBITDA adjusted1) (in € m)
Liquidity2) (in € m)
Alliances
Employees3)
55.3
127.7
2010 2015
72
>150
2010 2015
6.1
18.3
2010 2015
70.4
133.9
2010 2015
519 1,000
2010 2015
6.5 8.7
2010 2015
PAGE
Strong team and shareholders for innovation
36
Management & shareholder structure
1) Deutsche Asset Management Investment GmbH 2) Allianz Global Investors GmbH 3) BVF Partners L.P. and its affiliates
Number of shares: 132.8 m
Listing: Frankfurt Stock Exchange (TecDAX), OTCBB
52 week high/low: € 4.31/€ 2.86
Management Board
Werner Lanthaler (CEO)
Long-time experience in
Pharma & biotech
Mario Polywka (COO)
Strong operational and
commercial management
track record
Cord Dohrmann (CSO)
Outstanding background in
metabolics
Enno Spillner (CFO) – as
of 18 July 2016
Long-time experience in
finance & biotech
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
77% Free float
~13.0%
3% DAMI1)
1% Management
13% Roland Oetker/ROI
3% BVF3)
3% AGI2)
PAGE 37
Strong growth and important R&D
triggers expected in 2016
Guidance 2016
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 non-
operating result 3) Excluding any potential cash outflow for M&A or similar transactions
KPIs Guidance 2016 Actual 2015
Group revenues1) More than 15% growth € 115.4 m
Adjusted Group EBITDA2) Positive and significantly improved
compared to prior year € 8.7 m
R&D expenses Approx. € 20 m € 18.3 m
Liquidity3) Similar level compared to 2015 € 134.5 m
Capex investments Up to € 10 m € 11.2 m
in € m
Your contact:
Dr Werner Lanthaler Chief Executive Officer
+49.(0).40.560 81-242 +49.(0).40.560 81-333 Fax [email protected]