1. business and industrial
2. business operations
3. management
4. project management

Innovation Efficiency –
Evotec Company Overview
Evotec AG, Company presentation October 2014
Forward-looking statements
Information set forth in this presentation contains forward-looking statements, which involve a
number of risks and uncertainties. The forward-looking statements contained herein represent
the judgement of Evotec as of the date of this presentation. Such forward-looking statements are
neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of
which are beyond our control, and which could cause actual results to differ materially from those
contemplated in these forward-looking statements. We expressly disclaim any obligation or
undertaking to release publicly any updates or revisions to any such statements to reflect any
change in our expectations or any change in events, conditions or circumstances on which any
such statement is based.
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1
Agenda
Evotec at a glance
Driving innovation efficiency
Financial strategy & outlook
PAGE
2
Leadership in drug discovery
Our mission
Based on the highest quality drug discovery
science, and through innovative
collaborations, we are building a partnered
product pipeline.
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3
First-in-class & best-in-class drug discovery
Evotec overview1)
Unique track-record
Systematic,
unbiased and
comprehensive
innovation infrastructures
• 20 years history
• >100 lead series
• >30 pre-clinical
candidates
Rich Phase III,
Phase II, Phase I
product pipeline,
including
unpartnered first-inclass targets
Profitable, growing
business driven by
milestones and
strong cash position
• >20 clinical
compounds
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4
1)
Founded in 1993, publicly listed on TecDAX (Germany), ~65% free float, >600 employees, Headquarter in Hamburg, Germany
Our end product: The “PDC”
Evotec’s core competence
Academia
Target
ID/-Validation
HitIdentification
Lead
Optimisation
Pre-clinical Phase I
Pre-clinical
Phase
Phase II
Approval
Market
Clinical
Phase
Duration
(in Years)
> 14 Years
Evotec
Approx. 3–6
PDC –
Pre-clinical
development
candidate
Cost
Partner
Approx. 6–10
Approx.
$ 1–3 bn
Evotec’s core competences
PAGE
Phase III
5
Source: Paul et al. Nature Reviews 9: 2013
More than 650 scientists within a global company
Evotec worldwide
San Francisco and
Branford, USA
~50 employees
Abingdon and
Manchester, UK
~280 employees
Hamburg,
Germany
(Manfred Eigen
Campus1))
~270 employees
Munich,
Germany
~25 employees
Göttingen,
Germany
~60 employees
Operations & sales representation (Boston, Tokio)
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6
1)
Manfred Eigen (*1927), German biophysical chemist and one of the worldwide leading pioneers in biotechnology. In 1967, he won the Nobel Prize in Chemistry for his
work on a special measuring method of fast chemical reactions, which, until then, were considered to be immeasurable. He initiated the foundation of Evotec AG.
Agenda
Evotec at a glance
Driving innovation efficiency
Financial strategy & outlook
PAGE
7
Shifting innovation outward
R&D outsourcing
Ease of
implementation
Innovation alliances
Evotec offers what the
industry really needs
• Impact
Level 3
• Speed
Capital efficient
outsourcing
• Creativity
• New technologies
R&D Reorganisation
Level 2
• Affordability
Biotech in-licensing/
Acquisition
Industry
Consolidation
Level 1
Increased R&D
Spend
Timeline
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8
Based on Source: “The Innovation Gap in Pharmaceutical Drug Discovery & New Models for R&D Success.” Hu et al. paper from Kellogg Northwestern Business School
Drug discovery outsourcing is a growth market
Market dynamics
Global drug discovery outsourcing market
Revenues, in $ bn
Drivers of more flexible models
Increasing comfort with
outsourcing
1
21.3
~+10%
p.a.
18.8
16.6
14.8
12.8
2
Need for higher R&D capital
3
Ability to adjust speed
proportional to portfolio,
success, funding, etc.
9.7
2011
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9
11.1
2012
Source: Visiongain; Drug Discovery Outsourcing: World Market 2012
2013
2014(e) 2015(e) 2016(e) 2017(e)
ONE company – TWO segments
EVT Execute & EVT Innovate
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10
Broad stand-alone innovation services
EVT Execute – Comprehensive drug discovery platforms
High-quality service
business
The “western”
strategic outsourcing
partner of choice
Industrial logic and
leadership
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11
Systematic, unbiased and comprehensive pipeline
EVT Innovate – Cure X and Target X initiatives
Oncology
Diabetes &
Complications
of Diabetes
• Offering complete
infrastructure and discovery
solutions across five major
fields
CNS/
Pain &
Inflammation
Neurology
Anti-infectives
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12
• Driving existing product
candidates to expand
strategy of “Pharma pipeline
without financial risk”
Large portfolio of product opportunities
Discovery
Pre-clinical
Clinical
Partnership portfolio
PAGE
Molecule
Indication
EVT3021)
AD
EVT201
Insomnia
Somatoprim
Acromegaly
EVT100
CNS diseases
EVT401
Inflammation
ND2)
Oncology
ND2)
Oncology
ND2)
Pain
ND2)
Oncology
Various
Endometriosis
EVT770
Diabetes – type 2/1
ND2)
Pain
Various
Inflammation
EVT070
Diabetes – type 2
Various
Diabetes – type 2/1
Various
Diabetes – type 2/1
Various
Kidney disease
Various
Oncology
Various
Alzheimer’s disease
Various
CNS/MS
13
Partner
NEU2 / Bionamics
1) RO4602522
2)
Not disclosed
Discovery
Pre-clinical
Phase I
Phase II
Phase III
Expanding portfolio in diabetic complications
Diabetes and diabetic complications pipeline overview
Project(s)
Indication (mechanism)
EVT770
Status
Next milestone
Commercials
Type 1 and 2 diabetes
(beta cell regeneration)
Pre-clinical
Phase I
€ 5 m upfront,
high margin research payments,
up to € 254 m milestones,
significant royalties
ALM
Type 1 and 2 diabetes
(beta cell regeneration)
Discovery
Phase I
€ 2 m upfront,
high margin research payments,
up to € 183 m milestones/product,
significant royalties
EVT070
Type 2 diabetes
(insulin resistance)
Discovery
Pre-clinical candidate
€ 7 m upfront
high margin research payments,
up to € 237 m milestones,
significant royalties
Various
Kidney disease
ND1)
ND1)
Undisclosed upfront,
high margin research payments,
milestones/product,
royalties
TargetEEM
Type 1 and 2 diabetes
(enteroendocrine)
Discovery
Pharma partnership
CureNephron
Chronic kidney disease
Discovery
Pharma partnership
CureBeta
Type 1 and 2 diabetes
(beta cell regeneration)
Discovery
Pharma partnership
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14
Partner
1) Not
disclosed
Multiple options in CNS
Neurology pipeline overview
Molecule(s)
Indication (mechanism)
EVT302
Status
Next milestone
Commercials
Alzheimer’s
disease (MAO-B)
Phase IIb, recruitment
completed
Completion of Phase II,
Phase III start
$ 10 m upfront,
up to $ 820 m milestones, significant
royalties
EVT201
Insomnia
Phase II
Start clinical trials
Milestones,
royalties
EVT100 series
CNS diseases (TRD)
Phase II/Pre-clinical
Confirmation of preclinical study/
Phase II start
$ 2 m upfront,
up to $ 173 m milestones, significant
royalties
Various
CNS/Multiple sclerosis
Pre-clinical/Various
ND1)
ND1)
Various
Huntington’s
disease
Discovery
ND1)
Research payments
Not disclosed
Neurodegeneration
Discovery
ND1)
Research payments
Not disclosed
Fabry’s disease
Discovery
ND1)
Research payments
TargetAD
Alzheimer’s disease
(Novel MoA)
Discovery
ND1)
Up to $ 10 m research payments,
approx. $ 125-145 m milestones,
royalties
TargetASIC
Multiple sclerosis
Discovery
Lead status
Co-funded
CureMN
Amyotrophic lateral
sclerosis (ALS)
ND1)
Pharma partnership
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15
Partner
NEU2 / Bionamics
Undisclosed
Pharma
1)
Not disclosed
EVT302 – Recruiting of Phase IIb completed
Product development alliance with
Alzheimer’s disease (AD)
EVT 302/RG1577/
RO4602522
Status
Expected key milestones
• AD is the most common
form of dementia
A potent small molecule
inhibitor of monoamine
oxidase-B (MAO-B) which
reduces the formation of
toxic reactive oxygen
species in the brain of
Alzheimer’s disease
patients where over
expression of MAO-B is
postulated to contribute to
neuronal damage
• One of the very few latestage small molecule AD
clinical trials in this
specific AD patient
population
• Results of Phase IIb trial
expected in 2015
• 44 m people diagnosed
with dementia in 2013
worldwide
• Approx. 7.7 m new cases
of dementia are
diagnosed each year
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16
Source: Alzheimer’s Disease International
• Patient recruitment for
Phase IIb, multicentre,
randomised, doubleblind, parallel-group,
placebo-controlled study
to evaluate the efficacy
and safety in patients
with moderate severity
Alzheimer disease
completed (n=544, 52
week trial)
Novel pain and inflammation targets
Pain and inflammation pipeline overview
Molecule(s)
Indication
(mechanism)
Partner
Status
Next milestone
Commercials
EVT401
Inflammation
(P2X7 inhibitor)
Phase I/II
Phase II start
Up to € 60 m milestones,
royalties
Various
Endometriosis
Pre-clinical
Pre-clinical
candidate
€ 12 m upfront,
up to approx. € 580 m milestones,
royalties
Various
Various/Pain
Pre-clinical
Phase I start
Undisclosed upfront,
research payments,
milestones,
royalties
Not disclosed Various/Pain
Pre-clinical
Successful PoC1)
Research payments,
milestones,
royalties
Discovery
Pre-clinical
Research payments,
up to € 183 m milestones/product,
significant royalties
Discovery
Pre-clinical
Milestones,
significant royalties
Various
Inflammation
Not disclosed Pain
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17
1)
Proof of Concept
Long-term vision in novel fields of oncology
Oncology pipeline overview
Molecule(s)
Indication
(mechanism)
Somatoprim (DG3173)
Partner
Status
Next milestone
Commercials
Acromegaly/NET
Phase IIa
Pharma partnership
Consulting fees,
royalties
ND1)
Oncology
Phase I
ND1)
Research payments,
milestones,
royalties
ND1) /Biomarker
Oncology
Phase I
ND1)
Success-based milestones
ND1)
Oncology
Pre-clinical
ND1)
Research payments,
milestones,
royalties
TargetImmuniT
Various
Discovery
Pharma partnership
Shared research costs,
milestones,
royalties
Discovery
Pharma partnership
ND1)
Discovery
Pharma partnership
ND1)
Discovery
ND1)
Research payments,
milestones,
royalties
(Immunotherapy)
TargetKDM
Various
(Epigenetic targets)
TargetDBR
Glioblastoma
(brain tumour)
TargetCanMet
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18
Various
1)
Not disclosed
Establishing an infectious disease portfolio
Anti-infectives pipeline overview
Project(s)
Indication
TargetPicV
TargetPGB
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19
Partner
Status
Next milestone
Viral host targets
Discovery
Pre-clinical candidate
Antibiotics
Discovery
Pre-clinical candidate
Commercials
“The Bridge”
EVT Innovate initiated R&D projects
2011
CureBeta
(Harvard Stem Cell
Institute)
2012
CureNephron1)
(Harvard, BWH, USC,
AstraZeneca)
TargetSP
(Internal)
TargetASIC1)
(BMBF/undisclosed
Pharma partner)
Somatoprim
(Aspireo)
TargetPicV
(Haplogen)
TargetCanMet1)
(Debiopharm)
PAGE
20
1) Today
2013
TargetImmuniT
(Apeiron)
TargetDBR
(Yale)
TargetFX
(Internal)
TargetPGB
(Harvard)
TargetKDM
(Dana-Farber, Belfer)
CureMN
(Harvard)
TargetEEM
(Harvard)
TargetAD1)
(NBB/J&J)
at least partly progressed under commercial partnership
2014
TargetSX
(undisclosed)
TargetBCD
(Internal)
TargetDR
(Internal)
TargetNX
(Internal)
TargetKX
(undisclosed)
TargetCytokine
(Internal)
Undisclosed
(Fraunhofer)
...
Agenda
Evotec at a glance
Driving innovation efficiency
Financial strategy & outlook
PAGE
21
Cash generating in EVT Execute – Investing for
long-term upside in EVT Innovate
Condensed profit & loss statement based on segments for H1 2014
In € m
InterEVT
EVT
segment Evotec
Execute Innovate elimination Group
Revenues
39.7
8.6
23.1%
44.7%
• R&D expenses
(0.5)
(7.0)
1.2
(6.3)
• SG&A expenses
(6.7)
(2.2)
–
(8.9)
• Amortisation of intangible assets
(1.2)
(0.2)
–
(1.4)
• Other op. income (expenses), net
0.9
0.2
–
1.2
Operating income (loss)
1.7
(5.3)
–
(3.6)
EBITDA, adjusted1)
5.5
(4.9)
–
0.6
Gross margin
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22
1)
(8.2)
40.1
29.4%
• Positive adjusted
EBITDA of
€ 5.5 m in
EVT Execute despite
low milestone
contribution in H1
• Strong Innovate
margin shows value
in partnered assets,
but depends on
milestones
Depreciation split on estimated basis/Adjusted EBITDA: EBITDA was adjusted for changes in contingent considerations as well as for extraordinary effects with regards
to the bargain purchase resulting from the acquisition of Bionamics.
Self sustainable and driving first-in-class innovation
Key metrics for 2014
in € m
Milestones/Upfronts/Licences
Trad. Revenue
High single-digit percentage growth
excluding milestones
80.1
25.2
87.3
20.7
85.9
16.5
54.9
66.6
69.4
2011
2012
2013
Focused R&D investments for
first-in-class innovation
10-14
8.4
8.3
9.7
Key trends
for 2014
Sales
Gross
margin %
2014(e)
2011
2012
2013
2014(e)
R&D ratio
SG&A ratio
Operating profitability1)
Strong liquidity
5.8
2011
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23
1.4
1.2
2012
2013
1) Operating
2014(e)
62.4
64.2
2011
2012
Free cash flow
96.1
>90
2013
2014(e)
result excl. impairments and reversal of impairments and changes in contingent consideration
CAPEX
Strong team for innovation
Management & shareholder structure
9% TVM Capital
13% Roland
Oetker/ ROI
9% BVF
3% AGI1)
Management Board
Supervisory Board
• Werner Lanthaler (CEO)
Long-time experience in
Pharma & biotech
• Wolfgang Plischke
Ex-Bayer
• Mario Polywka (COO)
18 years Evotec experience
~13.0%
• Cord Dohrmann (CSO)
Outstanding background in
metabolics
• Colin Bond (CFO)
Big industry multi-national
background
65% Free float
1% Management
Number of shares: 131.7 m
Listing: Frankfurt TecDAX, OTCBB
52 week high/low: € 5.08/€ 2.75
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24
1)
Allianz Global Investors Europe GmbH
Key scientific advisor
• Doug Melton
Harvard University/HHMI
• Walter Wenninger
Ex-Bayer
• Claus Braestrup
Ex-Lundbeck
• Paul Herrling
Ex-Novartis
• Bernd Hirsch
Symrise AG
• Iris Löw-Friedrich
UCB
Growth driven by high-quality services and
innovation alliances
Expected key events 2014
Key milestones in 2014
EVT Execute
• Expansion of existing drug discovery alliances
• New long-term deals with big and mid-sized Pharma and biotech
• At least 1 new integrated technology/disease alliance
EVT Innovate
• Expansion of network of top-class academic alliances
• Increased investments in Cure X/Target X initiatives
• Strong progress of clinical pipeline within partnerships (at least 2 clinical starts in 2014)
• Partnering of at least one Cure X/Target X initiative
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25
Building innovative
drug discovery alliances
Your contact:
Dr Werner Lanthaler
Chief Executive Officer
+49.(0).40.560 81-242
+49.(0).40.560 81-333 Fax
werner.lanthaler@evotec.com
Reporting dates 2014
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27
• 3M/Q1 Interim Report 2014
14 May 2014
• AGM 2014 in Hamburg
17 June 2014
• 6M/Q2 Interim Report 2014
12 August 2014
• 9M/Q3 Interim Report 2014
12 November 2014
Bridging the gap
The discovery highway
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28