On March 27, 2023 Evotec SE (Frankfurt Stock Exchange: EVT, MDAX/TecDAX, ISIN: DE0005664809; NASDAQ: EVO) reported preliminary financial results and corporate updates for the fiscal year ended 31 December 2022 (Press release, Evotec, MAR 27, 2023, View Source;very-strong-performance-in-a-challenging-year-6267 [SID1234629405]).
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FINANCIALS REFLECT GREAT PERFORMANCE
Group revenues significantly exceeded the revenue target, up 22% to € 751.4 m (+15% like for like, excluding portfolio and fx effects (2021: € 618.0 m))
Excellent base business up 30% to € 725.3 m in 2022
Adjusted Group EBITDA at € 101.7 m, adjusted for portfolio effects at € 104.1 m (2021: € 107.3 m) after a very strong fourth quarter
Unpartnered R&D expenses of € 70.2 m up 20% (2021: € 58.1 m)
GREAT PROGRESS AND STRONG DEMAND IN ALL LANES
Significant progress in and 8-year extension of targeted protein degradation alliance with Bristol Myers Squibb ("BMS")
Important milestones achieved in iPSC-based neuroscience collaboration with BMSMultiple new strategic partnerships e.g. in metabolic diseases, ophthalmology, dermatology, oncology, as well as an iPSC-based beta cell replacement therapy alliance with Sernova to advance a functional cure for diabetes
Just – Evotec Biologics: Multiple new collaborations initiated at first J.POD in Redmond (US) laying foundation for strong strategic growth (e.g. Alpine, Department of Defense, …); Construction of second J.POD at Evotec’s Campus Curie in Toulouse started and progressing according to plan
Excellent progress in data-driven precision medicine platforms; Commercial launch of unique multi-omics data analysis platform PanHunter; Launch of translational molecular patient database E.MPD
Collaboration with Janssen to develop first-in-class targeted immune-based therapies for oncology (after period-end)
European Investment Bank ("EIB") has granted an additional unsecured loan facility of € 150 m (after period-end)
CORPORATE HIGHLIGHTS
Expansion of footprint with the acquisition of cell therapy manufacturing facility (Evotec Modena) and clinical & commercial manufacturing facility for small molecules (Evotec DS)
Laetitia Rouxel joins Evotec as Chief Financial Officer effective 01 April 2023 (after period-end)
FINANCIAL GUIDANCE 2023 – CONTINUED STRONG GROWTH
Group revenues expected to be in a range of € 820 – 840 m; € 835 – 855 m at constant exchange rates (2022: € 751.4 m)
Unpartnered research and development expenses expected to be in a range of € 70 – 80 m (2022: € 70.2 m)
Adjusted Group EBITDA expected to be in the range of € 115 – 130 m;
€ 125 – 140 m at constant exchange rates (2022: € 101.7 m)
FINANCIAL PERFORMANCE
Another year with double-digit top line growth
In 2022, Evotec has once more increased its Group revenues at a double-digit rate of 22%: During the twelve months ended 31 December 2022 Group revenues increased significantly by € 133.4 m to € 751.4 m compared with the same period of the previous year (2021: € 618.0 m) (€ 748.4 m excluding acquisitions and M&A-related revenues). The substantial rise against the prior-year period is based on a strong performance of the base business, compensating a slower start of Just – Evotec Biologics, which is still in its ramp-up phase. In addition, the comparable basis for revenues from milestones, upfronts and licenses was exceptionally strong in 2021. Growth of the base business was 30% from € 556.7 m in 2021 to € 725.5 m in 2022.
Adjusted Group EBITDA for the twelve months ended 31 December 2022 amounted to € 101.7 m and € 104.1 m excluding acquisitions and M&A-related costs (2021: € 107.3 m) which is the result of a well-balanced development between the very favourable growth and profitability of Evotec’s base business, preparations for future growth of Just – Evotec Biologics, and a lower contribution from milestones, upfronts and licenses. Moreover, higher energy costs as well as overall inflation affect the year-over-year comparison.
In the financial year 2022, unpartnered R&D expenses increased by 20% (€ 70.2 m vs. 2021: € 58.1 m) reflecting continued strong investments in Evotec’s capabilities to improve its efficiency and precision medicine platforms.
GREAT PROGRESS AND STRONG DEMAND IN ALL LANES
Selected highlights
Evotec continued its successful development in 2022 with new and extended alliances. In 2022, Evotec was involved in > 800 alliances and recorded a repeat business of 92%. Evotec achieved notable progress within its strategic partnerships, important clinical trial initiations, the generation of the milestone income and signed multiple new partnerships e.g., with Eli Lilly in metabolic diseases, with Almirall in medical dermatology, and with Boehringer Ingelheim in ophthalmology.
Evotec also made significant progress towards building globally leading data-driven precision medicine platforms with the launch of its molecular patient database ("E.MPD"). E.MPD is Evotec’s central data repository of PanOmics data for precision drug understanding. Starting out from metabolic diseases, the database is continuously growing through proprietary screens and data partnerships to build up critical mass into other disease areas. Also in 2022, a first commercial version of PanHunter, Evotec’s A.I./M.L.-enabled multi-omics data analysis platform, was launched.
In May 2022, Evotec significantly expanded its alliance with BMS in targeted protein degradation for an additional 8 years with the goal of generating a promising pipeline of molecular glue degraders. The partnership has a deal potential of $ 5 bn and Evotec received an upfront payment of $ 200 m. In March 2023 (after period-end), Evotec announced that further performance- and programme-based achievements in the strategic partnership triggered payments of in total $ 75 m to Evotec.
Over the course of 2022, further important progress was achieved within the iPSC-based neuroscience collaboration with BMS leading to payments totalling $ 57 m from BMS.
In May 2022, Evotec and Sernova Corp., announced a partnership in the field of diabetes. Both Companies will leverage their respective strengths to develop an implantable iPSC-based beta cell replacement therapy for the treatment of insulin-dependent diabetes, including type 1 and 2. In conjunction with the agreement, Evotec made a strategic € 20 m equity investment in Sernova.
Just – Evotec Biologics laid the foundation for strong growth in 2023 and beyond by continuing the collaboration with the US Department of Defense. In September 2022, Evotec’s Seattle-based subsidiary was awarded a contract valued up to $ 49.9 m for the rapid development of monoclonal antibody-based drug product prototypes targeting plague, one of the designated targets of interest under the Accelerated Antibodies Program. In September 2022, Evotec launched the construction of its second J.POD biologics manufacturing facility at Evotec’s Campus Curie in Toulouse. J.POD Toulouse, France (EU) is expected to be operational in the second half of 2024.
In January 2023 (after period-end), Evotec entered into a strategic collaboration and licence agreement with Janssen to develop 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 $ 350 m as well as tiered royalties on products resulting from the collaboration.
In February 2023 (after period-end), Evotec announced that the European Investment Bank granted Evotec an unsecured loan facility of € 150 m to support the Company’s R&D activities, equity investments and the building of the new J.POD biologics manufacturing facility on Evotec’s Campus Curie in Toulouse, France.
Dr Werner Lanthaler, Chief Executive Officer of Evotec, commented: "2022 was a successful year for Evotec because of significantly increased revenues, our excellent base business, and a strong balance sheet as a solid base for future growth. Together with our partners, we focus on a comprehensive disease understanding at the molecular level, cutting-edge technologies and platforms to translate this understanding into effective precision therapeutics. Evotec’s technological leadership in all our focus areas is why we consider ourselves ‘ahead of the curve’ for medicines that matter."
OUTLOOK
In 2023, Evotec expects revenues of € 820 – 840 m based on current exchange rates of major currencies (esp. USD; GBP). Based on constant exchange rates compared to 2022, Group revenues are expected to increase to € 835 – 855 m. This assumption is based on the current orders on hand, foreseeable new contracts and the extension of contracts as well as prospective milestone payments. Furthermore, the forecast takes account – as far as possible – of the potential impact of current global uncertainties.
Adj. EBITDA is expected to be in a range of € 115 – 130 m. This projection takes into account the strong order book, an improving revenue mix, but also increasing expenses for wages, materials, energy, promising R&D projects, the adoption of organisation structures to ensure sustainable growth, and the continued ramp-up of the Just – Evotec Biologics business via the remaining investments in the further expansion of the J.POD capacity in the US and the construction of a second J.POD in Europe (Toulouse, France). At constant currencies, Evotec expects the adjusted Group EBITDA to grow to € 125 – 140 m.
Evotec’s activities are all related to R&D. Aside from the partnered and funded R&D, Evotec will continue to strongly invest in its own unpartnered R&D to further expand its long-term and sustainable pipeline of first-in-class projects and platforms. Evotec expects unpartnered R&D investments in this area between € 70 and 80 m in 2023.
Annual report
The full annual report 2022 as well as the sustainability report 2022 will be available for download on 25 April.
Webcast/Conference Call
The Company is going to hold a conference call to discuss the preliminary results as well as provide an update on its performance. The conference call will be held in English.
Conference call details
Date: Tuesday, 28 March 2023
Time: 02.00 pm CEST (08.00 am EDT, 01.00 pm BST)
To join via phone, please pre-register via this link. You will then receive a confirmation email with dedicated dial-in details such as telephone number, access code and PIN to access the call.
A simultaneous slide presentation for participants dialling in via phone is available under this link.
Webcast details
To join the audio webcast and to access the presentation slides you will find a link on our homepage www.evotec.com shortly before the event.
The on-demand version of the webcast will be available on our website: View Source