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Biotech / Medical : Trickle Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: nigel bates who wrote (1265)	11/14/2002 4:43:09 AM
From: nigel bates	Read Replies (1) \| Respond to of 1784

Thursday November 14 Third quarter 2002: Evotec OAI reports solid performance in difficult market environment - 9 months sales increase of 20% to EUR 47.5m, in line with company guidance - Growth in Q3 of 8% lead to a more cautious outlook on sales and profit targets - EBITDA slightly below last year (EUR (5.0)m) - Measures taken to reduce SG&A and R&D cost by appr. 20% in 2003 and to maintain year end cash position at Q3 levels (EUR 14-15m) ADVERTISEMENT - Good order book situation: 2002 revenue target (EUR 68-72m) secured, already EUR 35m secured for 2003 Hamburg, Germany/Abingdon, UK - Evotec OAI (Xetra: 566480.DE - news) achieved a solid performance in the first nine months of 2002. Revenues increased by 20% to EUR 47.5 million (2001: EUR 39.6 million). While the growth rate for the whole period was still in line with our target of 20-30% per year, the market environment has deteriorated in Q3 with certain customers now delaying orders for reasons of their cash conservation. Although Evotec OAI has fundamentally progressed well, we could not avoid a slow down of growth in Q3 ( 8%). The Discovery Services Division revenues grew by 19% to EUR 41.2 million (2001: EUR 34.7 million). In line with our plans, our core business, discovery chemistry and biology services, continued to perform strongly ( 23%). Our solid basis through long-term partnerships with customers like Merck, Pharmacia (NYSE: PHA - news) , Amgen (NASDAQ: AMGN - news) , Vertex and our strong business development pipeline make us confident to continue to grow in 2003. At the same time development chemistry services experienced a down turn in new orders during Q3 and a decline in visibility for new orders. For the full year 2002, we expect development revenues to remain flat when compared to last year. For the nine months to September 30, 2002, the Discovery Tools and Technologies Division grew by 30% to EUR 6.2 million (2001: EUR 4.8 million). This is an excellent performance in an industry environment where the general trend in instrumentation sales pointed downwards. 50% of total group revenues were recorded in Europe, 48% in the United States, and 2% in Japan. Operating loss for the first nine months amounted to EUR (23.5) million, an improvement of 80% over the comparable period for the previous year (2001: EUR (114.9) million). This reduction is a consequence of lower regular amortisation of goodwill and other intangible assets under new US-GAAP accounting rules. Excluding amortisation charges, loss from operations for the first nine months amounted to EUR (14.4) million (2001: EUR (11.9) million). The increase is primarily a result of a decline in gross margins due to a change in revenue mix in this period as well as the planned under-utilisation in development chemistry following the start of our new pilot plant. Net loss improved by 82% to EUR (20.6) million (2001: EUR (114.8) million), again, primarily as a consequence of reduced regular amortisation charges. In addition, non-operating income in the amount of EUR 1.6 million as well as tax treatment contributed to a reduction of net loss. Earnings before interest and taxes, depreciation and amortisation (EBITDA) amounted to EUR (5.0) million (2001: EUR (4.1) million). Other noteworthy items and company announcements include: - In light of the increasingly difficult market environment we announced on October, 23, 2002 that we are reducing our financial targets for the year and that we are taking action to significantly bring down our SG&A and R&D expenses. Those expenses will be reduced by appr. 20% in 2003. As we began implementing these measures in Q3, they will start to have an impact in Q4. - One of Evotec OAI's most significant highlights: shortly after the end of Q3 Pfizer signed an expansion of our collaboration with a potential value of more than US-Dollar 25 million. As part of the contract, Pfizer (NYSE: PFE - news) will also acquire a 10% stake in Evotec Technologies which we believe is a strong validation of our fundamental strengths. - Many biotech companies are looking to partner the whole process from target to IND with us. By contributing technology, process know-how and services for their discovery efforts they allow us to become an equity partner in them while at the same time giving Evotec OAI a cash-based cost compensation. In August Evotec OAI co-founded Vmax together with UK-based Microscience. Shortly after Q3 we signed a letter of intent to become a co-founder of Genovation, a new company emerging from the planned spin-off of MediGene (Xetra: 502090.DE - news) 's cardiological drug discovery programme. In case of successful financings, these partnerships are an excellent way to create additional long-term customer relations. - Our market position is strong. We continue to show excellent performance on customer projects and our ongoing R&D investment in future value drivers yields good results: We expanded our corporate library of high-quality drug-like compounds by adding more compounds and diversity. We were successful in broadening our assay portfolio and in integrating ADME/T and computational chemistry functionality into our service offering. "In summary, despite a challenging environment we have done well in many respects. We laid the foundation for larger creative outcome-based deal structures in long-term customer relationships and have promising negotiations in progress with pharma and biotech companies", said Joern Aldag, President and Chief Executive Officer of Evotec OAI. "We believe that the current environment also presents a lot of new opportunities: Pharma companies are changing the way they look at collaborations with biotechs. And, genomics/proteomics companies are increasingly concentrating on what they excel in and partner in areas where they believe to find an excellent and established partner - our integrated process from target to IND. As Evotec OAI is considered a clear leader in this field, we are playing an exciting and valuable role." Outlook for 2002/2003. Our performance in the first nine months was still in line with our longer term trend guidance. However, as a consequence of depressed capital markets and earnings pressures certain customers have started to delay projects. Even though we believe we are fundamentally well positioned, we could not avoid a down turn in growth in Q3. We therefore announced changed forecasts for 2002 revenue with growth now being expected to be 8-14% (see press release of October 23, 2002). Based on these revenues, Evotec OAI anticipates to reach EBITDA break-even in 2003. EBITDA for 2002 is now expected to be between EUR -3 and -6 million. In light of these developments in the financial and customer markets we decided to perform an impairment review later this year. Our market capitalisation is below book value, which suggests to carefully analyse any impairment write off requirements. In the past we took a conservative approach to goodwill accounting pushing for a - non cash - linear write down of goodwill over 3 years. New SEC regulation required to change from this policy to regular impairment reviews in 2002. The review which is not finalised suggests that we are likely to take an additional, non-cash write-off charge on goodwill created in the merger with OAI amounting to EUR 110 to 130 million in Q4. This is less than the goodwill amortisation which we would have accounted for following the rules prior to the changes of US-GAAP rules, when we incurred annual amortisation of approximately EUR 140 million including the regular EUR 12.4 million amortisation charge. We deem this procedure to be prudent and conservative. It does not materially change the fundamental strength of our company and does not have an effect on our cash position. Our order situation is healthy. As of mid November, secured revenues for this year amounted to EUR 69 million (guidance 2002: EUR 68-72 million). Following the signature of the multi year contract with Pfizer, our 2003 order book already amounts to EUR 35 million. The difficult conditions of capital markets and the resulting uncertainties regarding timing of new contracts, however, do make us cautious. For the purpose of our forecast given today we assume a continued weakness in spending in the pharmaceutical and biotechnology industries throughout 2003. While we still believe in the longer term trend of 20 to 30 % revenue growth, we expect revenues to grow only by 10 to 15% in 2003, but possibly faster in 2004. On the basis of our business forecast and our efforts to reduce cost year-end cash will remain at about the level of the end of Q3. Based on this cash position and our strong pipeline of new contracts we remain confident that we can deliver on our business plan without requiring a capital increase through the stock exchange. ...

To: nigel bates who wrote (1265)	12/4/2002 8:56:11 AM
From: nigel bates	Respond to of 1784

Is this a result of the Oxford Bioscience deal ? (edit; looks a little more incestuous than that )* Fees & equity; if they get a lot of these, they could become very interesting. HAMBURG, Germany, and OXFORD, England, Dec. 4 /PRNewswire-FirstCall/ -- Evotec OAI AG (NM: EVT), a partner for integrated high-value-added drug discovery services to the pharmaceutical and biotechnology industries, and Prolysis Ltd. (Oxford, UK), a biotechnology company dedicated to the discovery and development of new antibiotics, announced that they have entered into a three-year drug discovery agreement worth approximately EUR 5 million. During the course of this agreement Prolysis will gain access to over 20 man-years of dedicated expert chemistry resource. The agreement may be extended into development increasing its value to approximately EUR 10 million. In the search for new antibiotic drugs the Evotec OAI team will apply its world-class biology, medicinal and computational chemistry skills to design and synthesise compounds against selected Prolysis targets. In this integrated biology and chemistry collaboration, Evotec OAI will optimise the drug-like and ADME/Tox properties of those substances using its cutting edge early ADME/Tox platform. Evotec OAI will receive fees for services as well as an equity stake in Prolysis. Joern Aldag, President and Chief Executive Officer of Evotec OAI, commented: "We are pleased that Prolysis has chosen Evotec OAI as its preferred partner for drug discovery. With this strategic collaboration we have once more demonstrated the attractiveness of our business model to offer innovative deal structures to target-oriented biotech companies creating substantial value for both companies in a long-term relationship." Professor Russell Smith, Prolysis' Acting Chief Executive Officer, added: "We are delighted to be working with Evotec OAI. Their excellent medicinal and computational chemistry skills combined with an integrated ADME/Tox platform will accelerate and add significant value to our drug discovery programmes. " About Evotec OAI AG Evotec OAI offers a comprehensive range of high-value added services and products required to increase the efficiency and at the same time reduce the risk in the identification of new drugs. By integrating proprietary state-of- the-art technologies and processes in biology, chemistry and screening, the Company has established a unique position for all the critical elements in the drug discovery and development process - from target to clinical development. The Company employs more than 600 people, primarily at its two main sites at Hamburg in Germany and Abingdon in the UK. Subsidiaries are located in Europe and North America. For further information visit www.evotecoai.com. About Prolysis Ltd. Prolysis Ltd, a privately owned company, was established in 1998 and is a spinout from the University of Oxford. It is dedicated to the discovery and development of effective antibacterial compounds that meet the challenge of improved efficacy and the avoidance of resistance, through novel modes of action. Prolysis has a wide range of skills and expertise in bacterial molecular and cellular biology, biochemistry, bioinformatics, functional genomics and proteomics. Prolysis uses novel patented assay technologies invented by Professor Jeff Errington at the Sir William Dunn School of Pathology at the University of Oxford, to identify drug-like compounds that inhibit novel validated antibiotic targets. For further information about Prolysis visit www.prolysis.com. *10 September 2001 : Edwin Moses Joins Prolysis as Executive Chairman Dr. Edwin Moses, who led Oxford Asymmetry International (OAI) from near start-up to a valuation this year of £316 million, will be actively involved in helping Prolysis develop and commercialise its growing portfolio of intellectual property. Like OAI, Prolysis is an Oxford University spin-out company. Formed two years ago by Professor Jeff Errington (now Chief Scientific Officer), the company aims to use its innovative research techniques to identify and develop a new generation of antibiotics. "The opportunity to help commercialise our world-class research base is attracting an exceptional management team," explains Professor Errington. "We are delighted to welcome Dr. Moses, whose leadership and experience will help us continue our progress towards delivering new antibiotic opportunities." "There have been no new classes of antibiotics for 30 years," comments Dr. Moses. "It is extremely exciting to have an opportunity to help bring new antibiotics to the clinic at a time when concern over drug resistance is so strong." Dr. Moses has extensive experience of life-science companies, most recently with OAI which he led from four people to 250, floating it on the London Stock Exchange in 1998 with an initial valuation of £120 million. In 2000, OAI merged with Evotec Biosystems AG in a deal valuing OAI at £316 million. He was President of EvotecOAI until June 30th 2001 and is now on the Supervisory Board. Biotechnology Company Prolysis located in Oxford (UK), is dedicated to the discovery and development of new antibiotics for pharmaceutical companies. Prolysis' five biotechnological methods, including bioinformatics, molecular genetics, biochemistry, cell biology and high throughput screening - identify chemical compounds with novel antibacterial activity suitable for early stage clinical trials. Founded by Jeff Errington, Professor of Microbiology at Oxford University, Prolysis has exclusive rights to patents and patent applications from the University in the search for new antibiotic drugs.