Lack of Milestones Affect Q1 but Evotec Optimistic for Future
The drug discovery company reported sales of €17.1m ($22m) for the first quarter 2013, a fall of 15% on the same period 2012, whilst operating loss was also down to €2.7m from €1.3m.
The poor results reflect the lack of milestone payments Evotec had in the quarter according to CEO Werner Lanthaler who told investors in a conference call this morning that “So far we have not scored our goals” but stressed the company “will score [its] goals in the second half of 2013.”
Lanthaler toldl stakeholders Evotec has been building up its profile pipeline focusing on four key areas of drug discovery with its pharma partners: diabetes, oncology, pain and inflammation, and neurology, to “create pharma pipelines without taking risks” as part of a two year ambition “to continue and expand the clinical stage pipeline.”
He said it expects a minimum of three clinical trials to commence in the near future as well as one commercial initiative and, as such, added 2013 guidance has not been altered in reflection of this quarter’s results.
Evotec is banking on a number of milestones including a potential €160m from the partnership forged last year with Janssen over its depression therapy EVT100 currently awaiting confirmation of pre-clinical studies.
However, Lanthaler said Evotec was looking at the next two years as a number of programmes should end in fruition.
Some of the more lucrative ones include the 2nd Phase III results for the Andromeda/Teva diabetes drug partnership which could result in milestone payments of €40m and commercial royalties from a market potentially worth €500m, and the development of Roche’s Alzheimer drug EVT302 that could net Evotec €630m plus royalties.
Underlying Growth
Last year’s first quarter included a €3.9m milestone payment earned in the development of diabetes drug DiaPep277 for Andromeda/Teva, skewing results which would otherwise have seen revenue growth of 5%.
Such growth was described as “very encouraging” by COO Mario Polywka and was attributed to Evotec’s core activities in the quarter.
A number of contracts have been inked including one fee-for-service deal with a Top 5 Pharma in the area of protein production and cell culture services, and a full-time-equivalent extension contract with Genentech.
Furthermore, Evotec has struck a number of deals for its compound management services which has helped drive the recent expansion of its facilities. Expected to be fully operational in Q3 2013, the facility in Branford, Connecticut will add an East Coast presence to the company’s current San Francisco site.
