Full Press Release Details
| 4 | NEW AND EXTENDED ALLIANCES underline PIPELINE POTENTIAL |
| 4 | NEW GUIDANCE For full-year 2023 confIRMED |
CYBER-incident IMPACTING STRONG organic REVENUE GROWTH
| 4 | Group revenues increased by 14% to 383.8 m (H1 2022: 336.9 m) driven by strong demand for base business and successful partnering activities; like-for-like revenue growth (excluding fx-effects and M&A effects) 14%, thereof 36.9 m coming from the new Biologics partnership in Q2. |
| 4 | Costs of 39.3 m were incurred in Q2 as a direct result of the cyber-incident, including additional expenditures and underutilised capacities. |
| 4 | Total EVT Execute revenues (incl. intersegment revenues) up 2% to 356.6 m (H1 2022: 351.0 m), strongly affected by cyber-incident; EVT Innovate revenues up 66% to 129.7 m (H1 2022: 78.0 m) |
| 4 | Adjusted Group EBITDA totalled 26.1 m (H1 2022: 33.6 m); delivery of Sandoz work packages and Bristol-Myers Squibb ("BMS") collaboration yield excellent gross margin, partially compensating for underutilised capacities as a result of the cyber-incident. |
and extended alliances reflect success of growth strategy "ACTION PLAN 2025"
| 4 | New significant collaboration announced with Janssen |
| 4 | Extension and expansion of strategic neurodegeneration partnership with BMS, and strong progress in strategic targeted protein degradation partnership with BMS |
| 4 | Validation of Just - Evotec Biologics' strategy, new agreements with Sandoz and the U.S. Department of Defense (after period-end) |
| 4 | Milestone payment received with first patient dosed in Phase I study of Bayer kidney disease program |
Outlook for Full-Year 2023 reflecting CYBER-ATTACk;
goals 2025 Confirmed
| 4 | Group revenues expected to be in a range of 750 - 790 m ( 765 - 805 m at constant exchange rates) (2022: 751 m) in FY 2023 |
| 4 | Adjusted Group EBITDA guidance range between 60 - 80 m ( 70 - 90 m at constant exchange rates) (2022: 102 m) |
| 4 | Unpartnered research and development expenses expected to be in a range of 60 - 70 m (2022: 70 m) |
| Guidance 2023 | Guidance 2023 at constant fx 1) | Actual 31 December 2022 2) | ||||
| Group revenues | 750 - 790 m | 765 - 805 m | 751 m | |||
| Unpartnered R&D expenses | 60 - 70 m | - | 70 m | |||
| Adjusted Group EBITDA | 60 - 80 m | 70 - 90 m | 102 m |
1) Average exchange rate
euro vs. US Dollar for 2023: 1.0530
2) Including effects related
the M&A (Rigenerand, Central Glass)
Due to the criminal cyber-attack
discovered on 6 April 2023, productivity was affected throughout the entire second quarter. In response to the criminal cyber-attack,
Evotec took immediate action to contain and remediate the attack by taking its external-facing systems offline. This was deemed necessary
to protect all the Company's partners and stakeholders and meant Evotec could ensure that integrity of scientific data remained
unaffected. The Company re-started operations at the end of April with productivity reaching approx. 50% in May and more than
The following table provides an initial
overview of the financial performance in the first half-year 2023 compared to the same period in 2022. More detailed information can
be found from page 6 of this report.
Key figures of unaudited consolidated
income statement & segment information
Evotec SE & subsidiaries - First half-year 2023
| In k | Evotec Group H1 2023 | Evotec Group H1 2022 | ||||||
| Revenues 1) | 383,835 | 336,875 | ||||||
| Intersegment revenues | - | - | ||||||
| Costs of revenue | (284,275 | ) | (273,685 | ) | ||||
| Gross profit | 99,560 | 63,190 | ||||||
| Gross margin in % | 25.9 | % | 18.8 | % | ||||
| R&D expenses 2) | (30,863 | ) | (36,838 | ) | ||||
| SG&A expenses | (88,192 | ) | (67,379 | ) | ||||
| Other operating income (expenses), net | (4,278 | ) | 37,738 | |||||
| Net operating income (loss) | (23,773 | ) | (3,307 | ) |
1) Adjusted for exchange
rate effects of 0.8 m, Group revenues would have amounted to 383.0 m
2) Includes unpartnered
R&D expenses of 29.0 m in H1 2023 (H1 2022: 33.3 m)
The following table details Evotec's
segment revenues and operating income (loss) for the six months ended 30 June 2023
| In T | EVT Execute | EVT Innovate | Intersegment Eliminations | Evotec Group 6M 2023 | ||||||||||||
| Revenues | 254,150 | 129,685 | (102,445 | ) | 383,835 | |||||||||||
| Operating result | (24,708 | ) | 934 | - | (23,773 | ) |
Signing of new and extended drug
discovery and development agreements
In the first half-year of 2023, Evotec
continued to further expand its operational activities based on its fully integrated End-to-End shared R&D and precision medicine
platforms. Despite the cyber-attack, the Company entered into several new partnerships and extended existing alliances across the various
stages of drug discovery and development e.g.:
| In January, Evotec announced a new strategic collaboration and licence agreement with Janssen focussing on the development of first-in-class targeted immune-based therapies for oncology. Besides research funding, Evotec is entitled to an undisclosed upfront payment, success-based research and commercial milestones exceeding US$ 350 m over a minimum of 3 years, as well as tiered royalties on products resulting from the collaboration. | ||
| In February, Evotec extended and expanded its integrated multi-target drug discovery agreement with Related Sciences to continue to grow the joint portfolio of drug development candidates through 2030, leveraging Evotec's industry-leading capabilities across the full R&D continuum. | ||
| In March, Evotec announced key scientific progress in the targeted protein degradation alliance with BMS , first signed in 2018. Performance-based and programme-based achievements triggered payments of in total US$ 72.6 m to Evotec. | ||
| Also in March, Evotec and BMS extended and expanded their neurodegeneration partnership, originally signed in 2016 for an additional 8 years. Evotec received a US$ 50 m upfront payment, undisclosed license, and performance milestone payments, as well as tiered royalties of up to low double-digit percentages on product sales. Including the upfront and downstream performance milestone payments, the overall transaction results in a deal value of US$ 4 bn with revenue recognized over the lie of the contract. |
Just - Evotec Biologics:
Validation of paradigm shift in biologics manufacturing
Just - Evotec Biologics, while
still in start-up and investment phase, has demonstrated its strategic potential through newly signed agreements and ongoing discussions
from discovery through process development to clinical and commercial supply.
| In May, Just - Evotec Biologics and Sandoz launched a multi-year, long-term tech partnership for the immediate development and subsequent manufacturing of multiple biosimilars. Just - Evotec Biologics will receive a double-digit-million upfront and future payments US$ 640 m dependent on successful development progress of as well as additional payments dependent on progress into commercial manufacturing. | ||
| In June, the successful installation of multiple cleanroom PODs significantly advanced the construction of J.POD Toulouse, France (EU) . The strategic investment in this platform expansion will make Just - Evotec Biologics' J.POD technology, with its cost-effective and flexible clinical and commercial supply solutions for biomanufacturing available for the first time in Europe. | ||
| On 5 July 2023 (after period-end), the U.S. Department of Defense ("DOD") awarded Just - Evotec Biologics a second contract under the accelerated antibodies program valued up to US$ 74 m for the rapid development of monoclonal antibody ("mAb") -based drug product prototypes targeting orthopoxviruses. |
Co-owned pipeline projects progressing
New funding for long-term growth
| In February, Evotec and the European Investment Bank ("EIB") finalized an agreement for an unsecured loan facility that includes a low fixed interest rate plus a reward-sharing component for the EIB. The loan will be invested over a period of three years and each tranche will mature seven years after drawing down. Evotec will use the loan, with a total volume of up to 150 m, to fund its internal R&D activities, equity investments, as well as the new biologics manufacturing facility, J.POD Toulouse, France (EU). | ||
| In June, Evotec received a US$ 1.7 m grant from Open Philanthropy . Under the grant, Evotec leverages its RNA-targeting small molecules platform to identify promising RNA sequences to target with small molecule ligands that can be developed into potentially first-in-class therapeutics against Henipaviruses. |
Strong start to the year
Prior to the cyber-attack on 6 April,
the Company's Q1 results remained materially unaffected and represented a strong start to the year. While all efforts were focused
on a fast return to full productivity and business recovery, Q2 saw delays in business operations, of which most are expected to be recovered
in the second half of 2023.
on the Financial Situation and Results
1. Results of operations
Group revenues in the reporting
period increased by 14% or 47.0 m to 383.8 m (H1 2022: 336.9 m). Evotec had a
strong start to the year with revenues of 213.6 m (Q1 2022: 164.7 m) and 30% revenue growth in the
first quarter of 2023, driven by robust underlying business dynamics in a challenging environment and payments from BMS after the extensions
and expansions of strategic alliances in targeted protein degradation and neurodegeneration. Due to the criminal cyber-attack on 6 April 2023,
productivity was affected throughout the entire second quarter. In response to the criminal cyber-attack, Evotec took immediate action
to contain and remediate the attack by taking its external-facing systems offline. This was deemed necessary to protect all the Company's
partners and stakeholders and Evotec could ensure that integrity of scientific data remained unaffected. The Company re-started operations
at the end of April with productivity reaching approx. 50% in May and more than 80% in June leading to a contribution
of 170.2 m (Q2 2022: 172.2 m). The second quarter was positively influenced by the recognition
of the delivery of work packages as part of the new Technology-Partnership with Sandoz. Excluding the recognition of minor fx-effects,
Group revenues grew by 14% or 47.0 m to 383.8 m within the first 6 months. Growth of the base business
was 14% or 49.4 m from 330.1 m in H1 2022 to 379.5 m in the first six months
of 2023, of which 212.0 m were generated in Q1 2023 and 167.5 m in the second quarter of 2023.
In connection with other collaborations, we generated milestone, upfront and license revenues of 4.3 m (H1 2022:
6.8 m); thereof 1.6 m achieved between January and March, 2.7 m from April until June 2023.
Just - Evotec Biologics more than doubled its revenue share year-over-year to 59.0 m during the six months ended
30 June 2023 (H1 2022: 21.4 m) which composes of 11.1 m in Q1 2023 and 47.9 m
Geographically, 26% of Evotec's
revenues were generated with partners in Germany, France, and UK, 72% with partners in the USA and 2% with partners in the rest of the
world. This compares to 29%, 53% and 17%, respectively, in the same period of the previous year.
The Costs of revenue during the
six months ended 30 June 2023 amounted to 284.3 m (H1 2022: 273.7 m) yielding a gross
margin of 25.9% (H1 2022: 18.8%). The significant increase of margin was attributable to recent signed beneficial cooperations and
partnerships with BMS, Sandoz and the milestone payment of 2 m from Bayer. Excluding Just - Evotec Biologics, total
gross margin amounted to 25.3% vs. 27.3% during the same period last year. The cost of revenues of the group was divided into 160.3 m
in Q1 2023 (Gross margin: 24.9 %) versus 124.0 m in Q2 2023 (Gross margin: 27.2 %).
Total R&D expenses decreased
by 6.0 m or 16% for the six months ended 30 June 2023 to 30.9 m (H1 2022: 36.8 m).
The decrease in unpartnered R&D expenses by 11% to 29.0 m (H1 2022: 33.3 m) and partnered
R&D expenses by 64% to 1.9m (H1 2022: 3.5 m) was primarily related to the impacted business
activity due to the cyber incident in the second quarter leading to a temporary reduction of R&D costs in Q2 2023. to
12.2 m (Q2 2022: 18.7 m) after 18.7 m in Q1 2023 (Q1 2022: 18.1 m).
In comparison to the same period of
2022, SG&A expenses increased by 20.8 m or 31% to 88.2 m (H1 2022: 67.4 m),
mainly driven by increasing headcount at all sites to sustain the business expansion.and strengthen the end-to-end global processes and
Other operating income and expenses
amounted in total to (4.3) m expense (H1 2022: Other operating income of 37.7 m). The decrease is mainly
resulted from costs related to managing the impact of the cyber-attack in Q2. These costs - which are one-off costs in nature -
related to third party involvement like consultants and legal advisors as well as to work contributed by Evotec staff and totalled to
39.3 m as of 30 June 2023. Internal costs reported under Other operating expenses related mainly to time spent
in IT and other departments on recovering after the cyber-attack. Further, the company recognized 5.1 m of impairment
on intangible assets.
Less activity in R&D resulted in
a lower than anticipated other operating income from R&D tax credits of 20.1 m (H1 2022: 19.3 m). Recharges