Evotec raises guidance as its service business offers ‘strong basis’ for future growth

By Zachary Brennan contact

- Last updated on GMT

Related tags: Pharmacology, Pharmaceutical industry, Evotec

Evotec raises guidance as its service business offers ‘strong basis’ for future growth
With a flurry of recent deals tied to Sanofi and a string of other collaborations, Germany’s Evotec is seeing a steep rise in revenues from its contract research division and it expects that growth to continue.

In addition to the Sanofi collaborations around diabetes​ and oncology, Evotec’s Execute division, which is basically its contract research arm, also recently revealed a drug discovery collaboration with Facio Therapies, an Alzheimer’s disease initiative with Gladstone Institutes and Dolby Family Ventures, and milestones achieved in its endometriosis collaboration with Bayer HealthCare.

And as far as the Sanofi deals, the company said in its latest earnings report that the integration of a new French research site is proceeding successfully and the first small third-party projects were launched in Q2 of 2015, ahead of expectations.

For the rest of the year, the company said its revenue -- excluding milestones, upfronts and licences  --  is expected to increase more than 35%.

I think there are not many companies globally out there who can report more than 37% growth of the first half year​,” CEO Werner Lanthaler told investors on Wednesday.

And unlike other major CROs based in the US, Evotec has its own drug development division and is increasingly putting funds behind its development ideas. Evotec expects its research and development (R&D) expenses to grow to between €15m and €20m in 2015.

The company also plans to invest up to €10m in its technology platforms and capacities in order to drive its long-term growth strategy. Part of those capacity expansion funds have gone to completing the first phase of its biology facility in Princeton, NJ, which the company says is now serving an unidentified, “major” US pharma partner.

We see in our Execute business clear trend spots and lots of larger deals that are lined up for later 2015, beginning of 2016, where our platform makes a difference​,” Lanthaler added.

Related topics: Clinical Development

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