Partnered Drug Discovery & Development
Evotec Partnered Drug Discovery and Development
Evotec AG, Company Presentation, February 2019 Forward-looking statement
Information set forth in this presentation contains forward-looking statements, which involve a number of risks and uncertainties. We caution investors that forward-looking statements contained herein are based upon management’s expectations and assumptions 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.
PAGE 1 Agenda
Overview
Partnered drug discovery & development
Financials & Outlook
PAGE 2 Leading external drug discovery & development
Company snapshot
100+ € 350 m+ € 80 m+ Co-owned pipeline programmes with significant Revenues1) Adjusted Group EBITDA1) milestone & royalty potential
25+ 2,500+ 200+ Years track record Top-class employees Long-term partnerships
PAGE 3 1) in 2018 Medicine of the future will see radical change
Technologies & mega trends
Next gen sequencing More precise & early diagnostics iPSC & CRISPR gene editing Patient-centric medicine RNAi technologies, CAR-T Digital health Checkpoint inhibitors Predictive & preventive medicine & Partners Artificial intelligence, big data Value-based care 3D printing, blockchain, wearables, sensors Real-world data,…
PAGE 4 Productivity challenge will increase
Development costs vs. average peak sales
Development Cost, $ m Sales, $ m
1,992
1,188 +68% 816
465 -43%
2010 2017 2010 2017
Cost per asset increased ~2/3rd since 2010 Average peak sales almost halved since 2010
PAGE 5 Source: Deloitte’s Centre for Health Solutions: A new future for R&D? Measuring the return from pharmaceutical innovation 2017 From fixed to variable costs
R&D outsourcing in € bn ~30-36 ~85-90 ~10 100% 90%
80% 55 5 (~60%) (~50%) 70% ~7 (~70%) 60% ~25 ∑ Capital 50% (~90%) Elasticity € ~150 bn 40%
30% 35 5 (~50%) (~50%) 20% ~3 10% (~30%) ~3 (10%) 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Discovery Pre-clinical/IND Manufacturing & Clinical development Others
Not outsourced Outsourced
PAGE 6 Source: Visiongain – Drug Discovery Outsourcing Market Forecast 2015-2025 and Evotec’s estimates Building a co-owned portfolio in partnerships
Unique strategy and business approach – Action Plan 2022
Own R&D Co-Owned Pipeline
Action Plan 2022
Fee for Service
PAGE 7 R&D solutions up to IND and CMC manufacturing
Our core competencies
Pre- Hit Lead Target ID/ clinical identi- optimi- Phase I Phase II Phase III Approval Market validation Tox fication sation testing
PAGE 8 Focus in small molecules and new modalities
Small molecules, biologics & other modalities in R&D
Global pharmaceutical market1), 2) US$ bn
CAGR 2017-22e +7% 918 856 >50% 794 743 703 670 8% Cell/Gene therapy
Biologics
5% Small molecules – EVT Core Expertise
2017 2018e 2019e 2020e 2021e 2022e
PAGE 9 1) Small molecules forecast from May 2017 and Biologics forecast from Dec 2017 2) Excluding sales not classified by EvaluatePharma Source: EvaluatePharma > 2,500 x unique expertise
Global centres of excellence
Abingdon, Alderley Park ~650 employees
Hamburg, Göttingen, Munich ~550 employees
Verona, Basel Princeton, Watertown, Branford Toulouse, Lyon ~650 employees ~150 employees ~550 employees
PAGE 10 Output goals define R&D intensity
Bayer & Evotec in Endometriosis – Example
Scientists Bayer targets 100 Total resource 90
80 Bayer resource 4 INDs 70 40% 3 novel 60 EVT targets more cost first-in- 50 1) EVT resource efficient class tar- 40 gets in 30% faster clinic 30 than 20 industry Academia 10 benchmark 0 Years 1 2 3 4 5 Target ID/ Hit identi- Lead opti- Pre- IND validation fication misation clinic
PAGE 11 1) Bayer estimates; White Paper 2017; Excelling Together for the Benefit of Women Suffering from Endometriosis The Bayer-Evotec Strategic Alliance Agenda
Overview
Partnered drug discovery & development
Financials & Outlook
PAGE 12 ONE fully integrated platform
EVT Execute & EVT Innovate
IP with customers IP with Evotec
PAGE 13 IP = Intellectual Property Improving quality and accelerating R&D
EVT Execute – Selected performance indicators
1,000,000+ >50 >10 Compounds in highly IND – Pre-clinical & selective library clinical candidates Technology acquisitions1) delivered (INDiGO)1)
>80% >1.8 >25% Repeat business Years average Faster delivery of data contract time at improved quality
PAGE 14 1) Since 2012 No 1 quality and fully integrated R&D services
Comprehensive service panel for external innovation
PAGE 15 Strong and well-balanced global customer mix
Who are our partners? in %
Foundations RoW
10 5
Mid-sized Pharma 15 Biotech 40 Customer Revenue 50 Europe type1) by Region1) USA 45
35 Top 20 Pharma
PAGE 16 1) Third-party revenues only Strong portfolio of highest quality partners
EVT Execute alliances – Examples
Partnership Partnership Partnership Partnership Partnership Partnership Partnership focused on focused covering broad focused on focused on focused focused on Huntington on various range of DMPK services infectious on various dermatology Disease indications services diseases indications
Initiated 2006 Initiated 2011 Initiated 2015 Initiated 2016 Initiated 2016 Initiated 2016 Initiated 2018
Partnership Partnership Partnership for Partnership Partnership Partnership Partnership focused on focused on INDiGO, DD, focused on focused on CNS focused on focused on diabetes & reproductive and CMC oncology oncology oncology obesity medicine & women’s health
Initiated 2018 Initiated 2018 Initiated 2015 Initiated 2016 Initiated 2018 Initiated 2017 Initiated 2015
PAGE 17 Building a co-owned pipeline
EVT Innovate – Selected performance indicators
7 >€ 1,000 bn >100 Disease areas of Unmet markets Co-owned pipe- core expertise1) addressed line programmes
10 >10 100% Clinical Co- First-in-Class and best in class owned assets Unpartnered large R&D approaches “Going for Cure initiatives not for Symptoms”
PAGE 18 1) CNS, Pain, Oncology, Respiratory, Diabetes/Metabolic diseases, Women’s health, Infectious disease Creating massive upside with limited cost & risk
Example for co-owned deal structures
Performance-based components (Illustrative)
Ø 8% Ø € 200 m Milestones (MS) per project
€ 5-65 m
Upfront MS 1 MS 2 MS 3 MS 4 Clinical MS 5 MS 6 MS 7 Total Royalties R&D cost and/or Start research payments
PAGE 19 > 100 projects in fully invested pipeline
Partnership portfolio
Molecule Therapeutic Area/Indication Partner Discovery Pre-clinical Phase I Phase II EVT201 CNS – Insomnia BAY-1817080 Chronic cough SGM-1019 Inflammation (NASH) Ph. II start EVT401 Immunology & Inflammation Various Women’s health – Endometriosis Various Women’s health – Endometriosis
Clinical Various Women’s health – Endometriosis CT7001 Oncology Various Respiratory ND1) CNS – Pain ND1) Immunology & Inflammation ND1) Pain Various Women’s health – Endometriosis EVT801 Oncology
clinical TargetImmuniT Oncology – Immunotherapy - ND1) Oncology (+ several discovery programmes) ND1) Fibrosis Pre NEW collaboration Various Anti-infectives >5 programmes Various CNS, Metabolic, Pain & Inflammation >10 further programmes Various ND1) Nephrology Various ND1) Immunology & Inflammation Various ND1) Nephrology Various ND1) Metabolic – Diabetes Various Oncology Various Immunology & Inflammation – Tissue fibrosis Various Neurodegeneration NEW scientific achievement ND1) Anti-bacterial Various All indications ND1) Dermatological diseases
Discovery ND1) Facioscapulohumeral Dystrophy INDY inhibitor Metabolic Various Fibrotic disease Fibrocor Therap. / Galapagos TargetPicV Antiviral Various Anti-infectives >5 programmes Various Internal: Oncology, CNS, Metabolic, Pain & Inflammation >40 further programmes
PAGE 20 1) Not disclosed Note: Several projects have fallen back to Evotec, where Evotec does not intend to run further clinical trials unpartnered, e.g. EVT302, EVT101, … Co-owned projects with great partners
EVT Innovate alliances – Examples
Oncology I Chronic kidney Oncology Fibrosis Neurodegeneration Picornavirus Multi-target alliance disease (“CKD”) Small molecule- Novel mechanisms iPSC-based drug Respiratory Diabetic immunotherapies to in multi-organ fibrosis discovery indications2) complications complement check- point inhibitors1)
Initiated 2018 Initiated 2016 Initiated 2015 Initiated 2015 Initiated 2016 Initiated 2017
Oncology II Endometriosis/Pain Diabetes Oncology & Infectious diseases Oncology Targeted protein & Respiratory iPSC Beta Cell – Respiratory Open innovation Joint Venture on degradation Non-hormonal Diabetes alliance Multi-target alliance alliance multiple targets treatments
Initiated 2018 Initiated 2012 Initiated 2015 Initiated 2012 Initiated 2018 Initiated 2016
PAGE 21 1) Together with Apeiron 2) Together with Haplogen Better translation for better drugs
Genetics, biomarkers, and better technologies improving success
Human genetics supported targets1) Biomarker-based patient stratification2) % success % success
~3x ~2x
All Genetically No Selection programmes supported biomarker biomarker
PAGE 22 1) Source: Nelson et. al., Nat. Genet. 2015 2) Source: Bio: Clinical Development Success Rates 2006-2015 Re-defining the drug discovery paradigm
Game changing platforms for better translation
Translational Holistic Superior Models Profiles Knowledge
iPSC PanOmics AI & ML platform platform platform1)
PAGE 23 1) Artificial Intelligence & Machine learning Disease-relevant profiles to deliver better drugs
Patient-centric and holistic approach
Translational Holistic Superior Models Profiles Knowledge
Define relevance Gain PanOmic insight Convert data into drugs Medical records Transcriptomic, Hypothesis building Patient iPS cell lines proteomics, Defining health and metabolomics, Patient tissue disease genomics samples Efficacy/Safety profiles data integration building PanHunter data interpretation
PAGE 24 Patient-derived assays as new gold standard
World-leading iPSC processes and network
“IPS cells can become a powerful tool to develop new drugs to cure intractable diseases because they can be made from patients’ somatic cells.” Shinya Yamanaka, Nobel prize laureate
Disease-specific drugs
Screening Patient
Disease Patient- in a dish specific iPSCs
Disease-affected cell types, i.e. neurons, …
PAGE 25 1) iPSC = Induced pluripotent stem cells New cell types open door to new indications
Patient-derived disease models as starting points
Partnered protocols Under development
Motor neurons & Dopaminergic neurons Microglia Neurodevelopmental diseases Neurodegenerative disease Retina pigment epithelia Cortical neurons Retinopathies Neurodegenerative disease Kidney Lysosomal storage disease Chronic Kidney Diseases Polycystic Kidney Disease Neurodevelopmental disease Astrocytes CNS diseases Many orphan diseases Pancreatic beta cells Oligodendrocytes Diabetes & complications Multiple sclerosis Selected LSDs
PAGE 26 BRIDGEs over the “Valley of death“
The funding gap
Basic Applied Technology Development Product Commercialisation Market Entry & Research Research and Demonstration and Market Development Market Volume
Funding Level Public Market
Project Finance Governments Funding Gap Banks/Credit Lines Sponsored Research Incubator Funds Public Private Consortia Industry Acquisition
Industry R&D Corporate Venture Capital
Angel Investors Venture Capital/Private Equity
PAGE 27 Source: Derived from an article by Sustainable Development Technology Canada (2013) Long-term optionality with efficient translation
BRIDGEs & Equity participations – Examples
Equity participation Equity participation Equity participation Equity participation Equity participation Consortium Artificial Intelligence Facioscapulohumeral Metabolic disorders Fibrosis partnership Targeting membership for automated drug muscular dystrophy with MaRS metalloenzymes Kidney diseases design Innovation
Initiated 2017 Initiated 2017 Initiated 2016 Initiated 2017 Initiated 2016 Initiated 2017
Spin-off Equity participation BRIDGE BRIDGE BRIDGE BRIDGE Nanoparticle-based Innovative molecular Partnership with Partnership with Partnership with Partnership therapeutics pathways in oncology Oxford University and MaRS Innovation Arix and Fred Hutch with Sanofi Oxford Sciences Innovation
Initiated 2016 Initiated 2016 Initiated 2016 Initiated 2017 Initiated 2018 Initiated 2018
PAGE 28 Agenda
Overview
Partnered drug discovery & development
Financials & Outlook
PAGE 29 Culture to integrate talent is key for growth
Human Resources
DMPK Chemists >2,500 Biologists 2,000
865 1,000 606
2014 2015 2016 2017 2018(e) 2019(e) Highly skilled workforce 2/3 Biologists, 1/3 Chemists >80% have more than one academic qualification >40% have worked for Evotec >5 years 6.2 years average drug discovery and development experience >53 % female >60 nationalities
PAGE 30 Strong performance continues
Financial history 2015-2019 (e) – Selected performance indicators
Total Group revenues (in € m) R&D expenses (in € m)
257.3 18.3 18.1 164.5 17.6 127.7
2015 2016 2017 2018(e) 2019(e) 2015 2016 2017 2018(e) 2019(e)
Adjusted Group EBITDA (in € m) Gross margin1) (in %)
35.6 32.0 58.4 27.5 36.2
8.7 // 2015 2016 2017 2018(e) 2019(e) 2015 2016 2017 2018(e) 2019(e)
PAGE 31 1) Gross margin in the future may be more volatile due to the dependency of receipt of potential milestone or out-licensing payments, both having a strong impact on the gross margin, also new mix of business through acquisition of Aptuit. In addition, the amortisation of the purchase price allocation of the recent strategic acquisitions will impact costs of revenue and thus the gross margin. Strong team and shareholders for innovation
Management & shareholder structure
̴ 9% Roland >3% AGI1) >3% DWS2) Oetker/ROI Management Board Supervisory Board Werner Lanthaler (CEO) Wolfgang Plischke >3% Goldman Sachs Long-time experience in Ex-Bayer pharma & biotech Bernd Hirsch >3% BlackRock, Inc. Cord Dohrmann (CSO) Bertelsmann Long-time experience in drug discovery Claus Braestrup Ex-Lundbeck Craig Johnstone (COO) Strong drug discovery and Iris Löw-Friedrich commercial track record UCB ̴ 10% Novo Holdings A/S Enno Spillner (CFO) Michael Shalmi Long-time experience in Novo Holdings A/S finance & biotech ̴ 62% Free float ̴ 1% Management Elaine Sullivan Carrick Therapeutics Number of shares: 149.4 m Listing: Frankfurt Stock Exchange (MDAX, TecDAX), OTCBB 52 week high/low: € 23.36/€ 12.07
PAGE 32 1) Allianz Global Investors GmbH 2) DWS Investment GmbH, formerly Deutsche Asset Management Investment GmbH Strong outlook for 2019
Expected key milestones 2019
Continued strong growth and new integrated service alliances
New co-owned partnerships from own R&D
New clinical initiations and important progress of co-owned pipeline
Important milestones from existing alliances
PAGE 33 Your contact:
Dr Werner Lanthaler Chief Executive Officer
+49.(0).40.560 81-242 +49.(0).40.560 81-333 Fax [email protected]