Evotec: Strong 2015 down to Sanofi strategic partnership
For the full year 2015, German contract research organisation (CRO) Evotec reported revenues of €128m ($143m), up 43% on the previous year. The company also reported net profits of €16.5m compared to a €7m loss in 2014.
“The majority of the changes in the balance sheet categories are the result of the Sanofi collaboration,” said Evotec’s CFO Colin Bond during a call to discuss results yesterday.
The CRO signed a €250m five-year research partnership deal with the French pharma giant in March last year, which included an upfront fee of €40m. A diabetes drug development deal worth up to an additional €330m was signed in August.
While the deal had the largest impact on Evotec’s 2015 balance sheet, COO Mario Polywka stressed the importance of the CRO’s strategic partnership approach, saying “more than 70% of our revenues come from our top ten clients.”
However, while Evotec boasts other alliances with large pharma companies, such as Boehringer Ingelgheim, Novartis, Roche and Shire, Polywka said it is benefitting from small biotechs leveraging Evotec’s drug discovery platform offerings.
“We continue to see trend of US biotech adopting a virtual or near virtual model of operation with Evotec serving at the operational execution partner.”
Evotec is not alone in its pursuit of strategic partnerships. Large CRO Parexel said a couple of years back that such client-vendor relationships were reshaping the industry, and since then there has been a flurry of such deals in the sector.
Ex-Sanofi Facility
As part of the deal with Sanofi, Evotec took over a 20,000m2 R&D facility in Toulouse, France, incorporating 208 workers.
Polywka said the facility has now been fully integrated into Evotec - which has hired an additional 40 staff split equally between operations and support functions – and while the facility will carry out work on behalf of Sanofi, it will be central in opening up new capacity and winning new contracts.
“We approach full capacity in our German, UK and US sites and that was the driving force behind the acquisition of the Toulouse operations which give us a fully integrated drug discovery capability and capacity,” he said.
“We are now adding new business to that capacity. We have the opportunity to expand which we’ve done so far to meet the new business requirements on top of the Sanofi requirements. We anticipate that capacity true growth headcount though should server us for the next two to three years as we meet our strategy, our long term strategy.”
Already this year, Evotec has announced it will service a compound collection management deal with Belgian biopharma UCB from the site.
