Drug Evolution Riding High

COMPANY PORTRAIT_Evotec

Drug evolution riding high

Evotec’s history illustrates that biotechnology made in Germany can set standards worldwide. The Max Planck Society is one of the company’s founders and continues to shape it to this day.

TEXT DIRK BÖTTCHER

n the early 1990s, few people had Evotec is one of Germany’s most suc- until that time, scientists had focused heard of evolutionary molecular cessful biotechnology stories. The com- their research on individual molecules, biology, this field was a source of pany is growing at a breathtaking pace, using their knowledge of biochemistry inspiration for entrepreneurs and utilizing unique technologies, and its to try to achieve specific binding prop- investors. Co-founded by the No- approach based on highly-automated, erties – and, by extension, a desired ef- bel IPrize Laureate Manfred Eigen from industrial-scale translational research fect. Just what might they achieve, the Max Planck Institute for Biophysi- has revolutionized the industry. Most however, if they could investigate a cal Chemistry in Goettingen in 1993, notably, the company has been shaped vast number of these molecules using Hamburg-based Evotec Biosystems set by some of the most remarkable scien- a quasi-evolutionary process in a single out to investigate pharmaceutical sub- tists of our time. device? Eigen’s vision, previously un- stances using the technique Eigen had imaginable, would come to fruition. developed. In a nutshell, the technique FOURTEEN SITES, SIX COUNTRIES, Visiting Evotec in Hamburg today is based on utilizing evolutionary pro- 3,000 EMPLOYEES shows how brilliant his idea was. Es- cesses such as selection by random tablished as a small company with a variations to research and develop First and foremost, they include Man- starting capital of EUR 7 million and a drugs. Such an approach, it was hoped, fred Eigen (1927–2019), co-founder and handful of employees, the company would allow scientists to conduct au- Chief Scientist of Evotec. In 1994, he tomated analyses of the effects of a described the hopes researchers had for Using technology to fight tumors: among large number of substances on specific the future of evolutionary molecular other things, Evotec utilizes lung cancer cells target structures or directly on cellular biology, a technique he was instrumen- to develop assays that can be used to develop processes. Novel drugs, for example, tal in developing, in the scientific jour- more effective cancer treatments. Visible in the cells are the nuclei (blue), mitochondria could then be developed faster, more nal Science: “You can solve problems (orange), lysosomes (dark red), and actin

precisely, and at a lower cost. in ways you never would think of.” Up filaments (green). Photo: Evotec

58 MaxPlanckResearch Special | 20 Photo: Evotec Special | MaxPlanckResearch 20MaxPlanckResearch 59 COMPANY PORTRAIT_Evotec 60 ple containers, pipettes, sorts, empties moves backandforth,grips small sam- tory. Enclosedinaglassbox,robotarm visitors with a glimpse into the labora- the entrance.Insideawindow provides fred Eigen’s name emblazoned above with itsimposingglassfacadehasMan- building headquarters. Themulti-story wingsofEvotec’sroom inthelaboratory thaler’s optimismcanbeseeninasmall The evidenceforLan- 3,000,000,000. market capitalizationismorethan EUR company isinthe black, andits the its workforce hasincreasedtenfold, bymore than3,000percent, increased 2009, thevalueofEvotecshareshas Since Lanthaler took over as CEO in ON ANINDUSTRIALSCALE DRUG SCREENING onpage63). interview embarking onitsdevelopment(seethe claims thatthecompanyisonlyjust and itscurrentCEO,Werner Lanthaler, nual salesareapproachingEUR500,000, fourteen locationsinsixcountries,an- More than 3,000 employees work at of research and developmentservices. one of the world’s leading providers headquarters andhasgrown to become now occupiesseveralbuildingsatits MaxPlanckResearch Special MaxPlanckResearch | 20

reproducibility androbustness. the higheststandardsforthroughput, ing to anindustrialscale,while meeting Evotec isaimingtoscaleupdrugscreen body’s celltypes.With itsiPSCplatform, ly andcandifferentiateintoallthe cause iPS cells can proliferate indefinite- in thefieldofregenerativemedicine,be They havehugepotential,particularly the developmentofthesetechniques. the 2012 Nobel Prize for Medicine for Yamanaka, amongothers,wasawarded iPS cells.TheJapanesescientistShinya cells canbe reprogrammed tobecome factors, adult(alreadydifferentiated) then codingforspecifictranscription duced pluripotentstemcells”(iPSC). machine thatculturesandanalyzes“in- places them in incubators – a miracle containers withtinyplastictubes,and economic potential of unexpected findings. unexpected of potential economic the harness to how recognize quickly to able was He companies. several of co-founder and Chemistry Biophysical for Institute Planck Max the of Director founding the became He reactions. chemical fast extremely for studying method a of development the for Chemistry for Prize Nobel the awarded in discoveries: promising for flair A had recentlysuccessfullylaunched the ager respectively, theyhadrecently neurs of the day. As founder and man- among themostambitious entrepre- Henco andUlrichAldagwere perhaps even thoughtwoofthem, Karsten success? It’s possiblethattheydidnot, anticipate thescaleofcompany’s 1993, didEvotec’s foundersgenuinely gen officebackatthebeginningof Sitting inManfredEigen’s Goettin- Using acombinationoffourgenes, 1967 , aged just just aged , - -

40 man company. As faraspatentswere “We hadnever ownedsharesinaGer- contribute agooddozenofits patents. five percent stakeinthecompanyand Max PlanckSocietyshould also takea Henco, andAldagproposed thatthe shares. AtEvotec’s founding,Eigen, which the Max Planck Society also held company, SugenInc.intheU.S., in the time,MIhadonlyjustfoundeda ing thespin-offcompanyEvotec.At GmbH (MI)andwasinvolvedinfound ing Director of Max Planck Innovation Erselius. ErseliusisthecurrentManag- completely newterritory,” recalls Jörn wished, butwewereventuringinto than theotherfoundersmighthave were certainly slower certainly slower “As MaxPlanckSocietyemployees,we INNOVATIONS LOOKING FORMARKETABLE and byEigen’s technology. how convincedtheywerebytheidea Eigen andtheMaxPlanckSocietyshows found anewcompany with Manfred this meteoricallysuccessfulventureto that bothofthemtooktheirleavefrom ful German biotech companies. The fact gen –stilloneofthefewhighlysuccess biotechnologycompanyQia renowned , Manfred Eigen was was Eigen Manfred ,

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Photo: Inge von Kruse concerned, some belonged solely to us, view, they are like incubators, fre- Dedicated to its founder: Evotec is located while others were jointly owned with quently enabling technologies to be on its own campus named after Manfred Eigen Qiagen. Before Sugen and Evotec, the brought to the marketplace faster and in Hamburg-Langenhorn. statutes of the Max Planck Society pro- with greater agility. “Our network of in- hibited the acquisition of shares in vestors and experienced managers is companies by their founders to pre- now very extensive and a great resource vent conflicts of interest. This complex for such start-ups.” mixture of interests turned out to be a great challenge, but a future-orientat- FOURTEEN MILLION ed solution was arrived at with the COMPOUNDS SCREENED IN 2019 Max Planck Society,” says Erselius. Today, spin-offs are common prac- When Evotec was founded, plans were tice in the science community. MI now made to develop three business divi- employs five start-up managers with a sions: pharmaceutical research, diag- predominantly business management nostics, and technical enzymes (for ex- background who support spin-offs in ample in detergents). In the medium to interdisciplinary teams. Since the early long term, the plan was to float each of 1990s, in addition to Evotec, over 150 these again on the stock market. In other companies have been spun off 2000, this was achieved with Direvo, from the Max Planck Society. These em- which manufactures technical enzymes. ploy thousands of people. Many com- Just one year earlier, in 1999, Evotec had panies have reduced their own research itself successfully gone public. It was and development expenditure in recent the first time that the Max Planck Soci- years, for example in the pharmaceuti- ety had held shares in a German com- cal industry. “More than ever before, pany, and, as a research facility, it need- such companies are now looking for ed to decide how it should manage market-ready technologies; our basic such investments. According to Erse- research is frequently still underdevel- lius, it was decided at that time “to hold oped for the market,” says Erselius. on to the stocks initially to send a sig- Start-ups are therefore often an ideal nal to the market that we had confi- way “to translate know-how from basic dence in the business model.” It was

Photo: Inge von Kruse Photo: Evotec research onto the marketplace.” In his only after a few years had passed that

Special | 20 MaxPlanckResearch 61 COMPANY PORTRAIT_Evotec

the Max Planck Society gradually sold healthy cells react to the drug under with complete consistency. Evotec its stocks worth several million euros. investigation; the goal, after all, is to charges many of its customers on a tra- An innovative regulation was also kill cancer cells rather than healthy ditional performance-based basis. For found to solve the complex problem of tissue. Other devices measure the many of the jointly developed projects, the patents it held. “Ultimately, we binding forces between the active sub- Evotec has also concluded “co-owning” combined all the patents into one port- stances and cells. The laboratory ma- agreements with its customers, where- folio and entered into a comprehensive chines work 24 hours a day, the larger by both co-owners benefit from any license agreement with Evotec.” assays running by night and the small- subsequent marketing success. Evotec In 2019, Evotec screened more than er ones by day, as these require more also receives traditional milestone pay- 14 million new compounds at its facil- staff involvement. ments when specific research objectives ities in Hamburg. Each of the compa- The samples are stored in huge have been reached. ny’s devices screens as many as 40,000 freezers, from where they are, as it samples a day – three of these are lo- were, fired into the assay devices under TESTING ELECTRICAL CURRENTS cated at the Hamburg site alone. That’s air pressure through pipes, a spectacle FOR ANTI-ALZHEIMER DRUGS equivalent to the jobs of several hun- that is as efficient as it is fascinating. dred technicians. At Evotec, such Evotec has the facilities to store more The monitors in Evotec’s laboratory comparatively simple operations are than 400,000 compounds. At its Tou- show just how advanced techniques performed by robot arms in glassed-in louse site, a library containing a further have become; current flow through sin- workspaces. They load and unload 1.7 million compounds is shared by gle ion channels of individual cells can samples, while on a monitor the anal- Evotec and the pharmaceutical compa- be visualized. The equipment can de- yses are displayed as graphs and color ny Sanofi. Maintaining such a library tect spikes of current of as little as five gradients. In one installation, strong of samples offers a key advantage: re- nanoamperes. On a computer monitor, light-gathering microscopes automat- producibility. Should an active ingredi- visitors can observe the alternating ically deliver high-resolution images ent need retesting, this can be done flashes of activity of individual nerve of cell samples. They enable scientists with precisely the same samples. The cells in a group, indicating that the cells to observe how both tumor cells and two data sets can thus be compared are communicating with each other. Perhaps one day, this research will lead to the discovery of a drug to treat Alz- An automated device for all-rounders: Evotec tests potential drugs using induced heimer’s or a new painkiller. pluripotent stem cells in a high-throughput process. It has developed a particularly effective method for cultivating such cells. In contrast to such ultra-modern, fascinating technology, the garish orange laboratory console on display in the entrance area looks like a relic from yesteryear, as though it has come straight from the original Star Trek se- ries. In fact, the crude system with its small monitors and simple manual controls was state of the art just 16 years ago. It was one of the first sys- tems that Evotec built and marketed itself. Evotec developed it in an attempt to enter the market itself as a manufacturer of technology. In the end, however, only six of the devices were sold, and Evotec lacked the resources to market them worldwide. The division was sold to the technology manufacturer Perkin-Elmer, from whom Evotec is still purchasing important equipment. Even a company like Evotec can’t pos-

sibly produce everything. Photo: Evotec

62 MaxPlanckResearch Special | 20 “We’re aiming to broaden the range of technologies we can offer.”

Werner Lanthaler, CEO of Evotec, discusses new forms of cooperation with basic academic research and the right target customers.

Dr. Lanthaler, who are Evotec’s typical ly new therapeutic approach or whose Werner Lanthaler customers? products are more innovative than those Werner Lanthaler: Our partners are phar - of their competitors. maceutical companies that outsource re- What do you expect such partnerships to search into their innovations, smaller Can you give me an example? look like in the future? biotechs that develop products virtually, One of the products we have co-developed Our Academic BRIDGEs* concept was de- and basic academic research institutions in a broad-based partnership with Bayer veloped to foster joint projects with looking to evaluate potential industrial is a drug to alleviate abdominal pain in leading research institutions and fund- applications. women; up to now, drugs have only treat- ing partners. The first of these BRIDGE ed the symptoms of such pain but not the projects, LAB282, was launched in 2016 And the customers benefit from lower underlying cause. Evotec has analyzed the together with the University of Oxford. research costs? first molecule that makes a completely There are now five more BRIDGEs in North No, nobody comes to us on account of our new treatment approach conceivable. America, France, and Israel. prices. However, we turn fixed research costs, such as expenses for personnel and When you became CEO of Evotec, the What do these involve precisely? facilities, into flexible costs incurred sole- company was making a loss of more than One of our tasks is to validate initial exper- ly due to research operations and advanc- EUR 50 million; now it generates over EUR iments based on the data. And, once again, es. That didn’t exist before Evotec. It’s a 100 million in profits. A classic success story? it’s crucial that we quickly determine mega-trend of the future, and, alongside That’s one way of looking at it, but it’s a which experiments should be continued Evotec’s technological expertise, identi- story that is only just beginning. and which should be terminated. fying it has been one of the key reasons for the company’s successful development. Why? Do you have a focus? The market for the services we provide Above and beyond traditional life sci- Why should companies or institutes is estimated at around EUR 30 billion; ences research, we want to broaden the outsource research? less than ten percent of research is cur- range of technological services we pro- It’s to do with the way we support re- rently outsourced, and the growth po- vide. The research conducted by the Max search; our work is of the highest quality tential is correspondingly high. We ex- Planck Society, for example, is much and is unbiased – without conscious or pect annual growth rates of up to ten broader than ours. Would it, for instance, unconscious interference. That’s crucial, percent. We also have more than a hun- be feasible to share capacities? because companies often actively guide dred drug targets in our pipeline that we their research in the particular direction co-own with our customers. What drives you? in which they feel themselves to be well In my daily work I experience new technol- positioned. Evotec delivers meaningful What about the competition? ogies that are currently used to research results very quickly, which can be worth We do have competition in individual ser- drugs for 3,300 diseases, whose causes at hard cash for customers, because this al- vices, but we’re the only company with a present cannot be treated. Along with be- lows them to quickly abandon projects business model of providing all assay ser- ing able to foster the growth of companies, that are not promising, or to accelerate vices under one roof. I find that highly motivating. I am particu- them if they do prove encouraging. This larly fascinated by our pluripotent stem helps companies become more agile. How would you characterize Evotec’s cells – they will dramatically transform relationship with basic academic research? research worldwide. I envisage a time one Do you also have expectations of Certainly, we can help our academic part- day when when we will be able to conduct your customers? ners to translate basic research into clinical trials in a dish. Our motto is: “First in class, best in class.” practical applications. One of our goals is Interview: Dirk Böttcher

We’re a natural fit for companies whose to cooperate even more closely with re- * The acronym BRIDGE stands for Biomedical Research, Innovation & Development Generation Efficiency. Photo: Evotec Photo: Evotec research is aimed at developing an entire- search institutes.

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