Sanofi strategic research agreement bolsters Evotec's topline
In March, French Pharma Giant Sanofi paid Evotec €40m ($43m) up front as part of a €250m strategic partnership to discover a number of oncology and diabetes drug candidates.
The Hamburg, Germany-based contract research organisation (CRO) reported revenues of €93m for the first nine months 2015 this week, attributing the 52% increase year-on-year in part to this deal.
“The collaboration for Sanofi under this year’s master services agreement crossed all disciplines and we are pleased to say that all deliverable objectives are being met and the need continues to outstrip our initial forecast for this contract,” said Chief Operating Officer, Mario Polywka during a conference call discussing results (transcript here).
“Of course [the growth is] being driven in some part by the significant expansion of what we do with Sanofi through the recent transaction,” Polywka continued, but he added the growth of Evotec’s core business, currency effects and the performance of its anti-infectives business in Manchester, UK, had also strengthened sales.
Despite the Sanofi revenue, the firm said its customer portfolio remained well-balanced.
“Our top 30 customers account for about 90% of our revenues, which shows the strong strategic nature of our business development and correcting even for the Sanofi bias is really quite an evenly spread distribution across pharma, biotech, mid-size pharma and foundations and not for profit organizations.”
Toulouse research site integration
As part of the agreement, Evotec acquired Sanofi’s research site in Toulouse, France, and took on the workforce of around 200 employees to service the deal and bolster its drug discovery capabilities and capacities.
“The acquisition and development of the global Evotec sites gives us the capacity and the capabilities to be able to maintain and deliver on this strong growth curve,” Polywka said, and “the integration of the Toulouse operation continues to proceed very successfully.”
However, the CRO did take a €1.8m hit on its expenses for the period due to ongoing SG&A costs at the Toulouse site.
