The company achieved earnings before interest, taxes, depreciation and amortisation (EBITDA) of €4 million, compared to a loss of €2.2 million last year. Evotec ended last year with €19.5 million in cash.

Encouragingly, the company believes that the strength of its result reflects a general trend towards a recovery in the drug discovery marketplace, particularly in the US and Japan, with Europe following behind 'at some distance'.

"It seems that the weakness of the market caused by soft financing markets for biotechnology companies and budget cuts by pharmaceutical companies has bottomed out at the end of 2003," said the company in a statement.

Dirk Ehlers, the company's chief financial officer, said that the sales growth was better than expected and came on the back of a strong performance from its core Discovery and Development Services business, as well as 'sizeable' instrument deliveries for its Evotec Technologies unit which placed products with number one pharmaceutical company Pfizer in the first and third quarters.

As of the end of January, the order book for 2004 totalled approximately €40 million, according to the company, and Evotec expects to stay in positive EBITDA territory in the coming year.