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First Quarter 2004: Delivering on Forecast and Strategy

On May 12, 2004 Evotec OAI (Deutsche Börse: EVT, TecDAX 30) reported financial results for the first quarter 2004 (Press release, Evotec, MAY 12, 2012, View Source;announcements/press-releases/p/first-quarter-2004-delivering-on-forecast-and-strategy-4574 [SID1234538885]).

Financial highlights:
– Q1 revenues amounted to EUR 14.4 million (2003: EUR 17.8 million) due to the general difficult market conditions in 2003, adverse currency effects and a major single item sale in Q1 2003
– EBITDA amounted to EUR (2.7) million (2003: EUR (0.3) million)
– Growth expectation confirmed. Visibility on new contracts significantly improved in Q1
– R&D expenses increased to EUR 4.9 million (2003: EUR 4.4 million), incl. the Metabolic Disease discovery programme with DeveloGen

Operational highlights:
– Strong deal flow in Q1 with contracts signed with Rib-X, Panacos, Fujisawa and Toray
– Strategic worldwide chemistry agreement initiated with Roche (post period end, 12 May)
– Substantial progress achieved in Discovery Programs Division:
– Three Metabolic Disease projects advanced into hit-to-lead phase
– Evotec Neurosciences in-licensed five pre-clinical drug candidates from Roche and closed biggest European VC first round of financing for two years (EUR 25 million)

"2004 is marked by a recovery in our industry leading to an increasing order book and significant deal flow in our Discovery and Development Services going forward, while the market weakness experienced in 2003 has led to a decline in revenues in Q1 compared to last year. We are currently seeing clear indications that pharma companies are increasing their outsourcing activities, reversing an 18 month negative trend. In addition, recent financings of biotech companies in the private and public equity markets, in particular in the US, are indicative of improving overall health in the sector. We therefore expect revenue growth for the full year of 2004, helping us to deliver another year of sound performance. We are also making significant progress in our Discovery Programs Division in both our DeveloGen joint venture and our subsidiary Evotec Neurosciences. Activity in our Metabolic Disease programme is now increasing with a number of compounds progressing towards lead optimisation. In line with our communicated strategy we are committed to enter into and fund additional discovery programmes; which will allow our shareholders to benefit from their potential upside," said Joern Aldag, President and Chief Executive Officer of Evotec OAI.

Evotec OAI revenues for the first quarter of 2004 were EUR 14.4 million (2003: EUR 17.8 million). The quarterly decline year on year is a result of three specific effects which supports our belief that it is not indicative of the expected full year performance.

1. Q1 sales in the previous year included approximately EUR 3 million revenues from the delivery of an EVOscreen Mark III system to Pfizer. We expect to sell one or two such systems per year and the resulting revenue may fall into any quarter with a resulting distorting effect.

2. The strong Euro continued to affect our sales recognised in US-Dollars. At constant 2003 currencies, revenues in Q1 2004 would have been EUR 0.8 million higher.

3. In addition, the difficult market conditions in 2003 still affected our revenues in Q1 2004, since there is a time lag between customer funding, outsourcing decisions, contract signatures and revenue recognition.

Adjusting for the EVOscreen revenue effect in the previous year and adjusting for currency, our sales would have increased by 2%.

Our Discovery and Development Services Division (DDS) achieved revenues of EUR 11.1 million (2003: EUR 13.9 million) in the first quarter of 2004. These include deliveries of EUR 1.0 million to the DeveloGen JV. Development chemistry revenues for the first quarter were adversely affected due to a significant delivery being delayed until Q2.

Revenues in our Discovery Programs Division (DPD) amounted to EUR 0.9 million (2003: EUR 0.0 million), resulting from the agreement Evotec Neurosciences (ENS) signed with Takeda in August 2003. These revenues consist of FTE based R&D payments and the allocation of a target database access fee spread over the four-year contract period. Due to the reduction of our shareholding in ENS following the venture capital round closed in March, ENS revenues will no longer be consolidated after Q1 2004.

For the three months to 31 March 2004, our Tools and Technologies Division "Evotec Technologies" achieved revenues of EUR 3.6 million (2003: EUR 4.5 million). Adjusting for the effect of the delivery of an EVOscreen Mark III instrument to Pfizer in Q1 2003 shows that the instrumentation and consumable business (bench-top systems, excluding EVOscreen systems) has again grown significantly (137%) from EUR 1.5 million in 2003.

As a result of the revenue decline and a significant negative currency impact on gross profit in DDS (4% points, EUR 0.7million), the Evotec OAI group operating loss for Q1 2004 increased by 22% to EUR (7.1) million (2003: EUR (5.8) million). Excluding amortisation charges, losses from operations for the first three months amounted to EUR (4.5) million (2003: EUR (3.0) million).

Net loss increased to EUR (6.2) million (2003: EUR (5.0) million) due to the decline in operating result and the research activities in the DeveloGen JV. It was positively impacted by total tax income increasing to EUR 1.6 million mainly due to the new tax regime in the UK. Net income per share was EUR (0.17) (2003: EUR (0.14)).

Earnings before interest and taxes, depreciation and amortisation (EBITDA) amounted to EUR (2.7) million (2003: EUR (0.3) million).

Cash, cash equivalents and marketable securities at the end of the first quarter amounted to EUR 16.3 million.

Outlook. Our order book for 2004 continues to build positively both in quality as well as in quantity. As of April, it totalled EUR 47 million. The sales order book for the year is currently lower than in the comparable period of 2003 (EUR 61 million) but the volume of contracts in late stage negotiations significantly increased. This mainly reflects the market recovery we are experiencing for outsourced Discovery and Development Services. It also gives us confidence that we will achieve revenue growth for the remainder of the year. Consistent with our previous guidance, we believe we will at current exchange rates exceed 2003 revenues for the full year 2004 and grow by approx. 3%.

We have built a world class drug discovery platform and a reputation for delivering to our customers. We have successfully started internal programmes in Central Nervous Systems and Metabolic Diseases and validated this concept by partnering with Takeda and putting together a significant financing for Evotec Neurosciences. These achievements are a very strong basis to implement our strategy of expanding our internal programmes within our Discovery Programs Division with the objective to provide higher returns for Evotec OAI shareholders over the longer term through substantial milestone and royalty payments. We are rapidly developing our discovery projects within our DeveloGen joint venture and we are exploring opportunities for additional programmes, Evotec OAI-internal or in partnership with pharma companies.

In summary, we continue to be consistent in our view of the performance expected in 2004. Despite the tough market environment in 2003 which limited the growth of our Company in the first quarter of this year, we expect to deliver good operational performance for the full year. We are encouraged to believe that the upturn currently observed in the pharmaceutical market, as evidenced by enhanced deal flow, will translate into stronger growth in the medium-term.

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GlaxoSmithKline to fully acquire Cellzome for £61 million

On May 12, 2012 GlaxoSmithKline plc (GSK) reported that it has entered into an agreement to acquire those shares it does not currently own in Cellzome, a leader in the development and advancement of proteomics technologies, for £61 million (US $99 million) in cash (Press release, GlaxoSmithKline, MAY 12, 2012, View Source [SID1234538115]). Cellzome, a privately owned company with laboratories in Cambridge, UK, and Heidelberg, Germany, will become part of GSK’s R&D organisation.

Cellzome’s proteomics technologies can be used throughout drug discovery from screening to selectivity profiling of compounds in different cells and also in patient samples. The technologies that Cellzome has developed differ from other traditional methods used in early drug discovery by assessing drug interactions with target proteins in a setting which more closely represents that found in a whole biological system. This allows scientists the opportunity to observe how candidate drugs affect both intended and non-desired targets in a close-to-physiological environment and may pinpoint potential safety issues earlier in the process.

"The acquisition of Cellzome adds significantly to our scientific capabilities and capacity to characterise drug targets and provides the opportunity to further enhance GSK’s ability to bring medicines to patients in a more effective manner," said John Baldoni, senior vice president, Platform & Technology Science, at GSK.

The acquisition of Cellzome by GSK supports the company’s R&D strategy of collaborating with external partners and seeking out the best science, wherever it may be. This is the third platform technology acquisition since 2007 and highlights the company’s growing expertise in the scientific platforms upon which new medicines are discovered, developed and readied for manufacture. In 2007, GSK acquired two platform technology companies — Domantis Ltd, a leader in developing the next generation of antibody therapies, and Praecis, a Massachusetts-based company that created novel therapeutic programs and an innovative chemical-synthesis and screening technology.

Acquisition of Cellzome will give GSK a state-of-the-art, proteomic mass spectrometry and screening capability, enabling greater knowledge of drug targets and their interactions with compounds in the early phases of drug discovery. Through the use of this technology, GSK believes it can reduce attrition of potential new medicines during the development phase.

GSK and Cellzome have two active early stage research collaborations using these discovery capabilities within the immune-inflammation therapy area. With the acquisition, the technologies could be leveraged across GSK’s whole portfolio.

"We are pleased to announce this transaction, which will enable GSK to progress the technologies that we have been developing for more than a decade," said Tim Edwards, chief executive officer of Cellzome. "This follows nearly four years of successful collaboration with GSK, during which time we demonstrated the value and breadth of the Cellzome platform for drug discovery."

GSK, which currently owns a 19.98 percent equity interest in Cellzome, will assume full control of the company. Simultaneous with the acquisition, Cellzome shareholders, including GSK, intend to create a spin-off company, which would hold the rights to certain of Cellzome’s assets and activities that GSK does not wish to progress. The acquisition is not subject to any third party approvals and is anticipated to complete on 21 May 2012.

Platform Technology & Science at GSK

Platform Technology & Science provides deep scientific expertise and core technologies and services, supporting the full range of GSK drug discovery and development, and spanning early phase scientific exploration through preclinical and late stage development.

GlaxoSmithKline – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For further information please visit www.gsk.com

(Press release Coherus Biosciences, MAY 7, 2012, http://www.coherus.com/press-releases/daiichi-sankyo-and-coherus-biosciences-establish-strategic-collaboration-to-develop-and-commercialize-biosimilar-candidates/ [SID:1234501799])

Manhattan Pharmaceuticals, Inc. Announces Name Change to TG Therapeutics, Inc. and Reverse Stock Split

On April 27, 2012 Manhattan Pharmaceuticals, Inc. (OTCQB:TGTX) reported that is has filed a Certificate of Amendment to its Certificate of Incorporation to change its name from Manhattan Pharmaceuticals, Inc. to TG Therapeutics, Inc. and also to implement a 1 for 56.25 reverse stock split (Press release, TG Therapeutics, APR 27, 2012, View Source [SID:1234510711]). The Board of Directors along with a majority of the shareholders voted for these amendments at the Annual Meeting of Stockholders which took place on April 16, 2012.

The name change from Manhattan Pharmaceuticals, Inc. to TG Therapeutics, Inc. and the reverse stock split will take effect at 12:01 am on April 30, 2012. As a result of the reverse stock split, every 56.25 shares of the Company’s pre split common stock will be converted into one share of post-split common stock. No fractional shares of common stock will be issued as a result of the split. Shareholders of pre-split common stock who would be entitled to receive a fractional share as a result of the reverse stock split will be entitled to round such fractional value up to the nearest whole number. The reverse split will affect all stockholders uniformly, with the exception of adjustments related to fractional shares, and will have no effect on the par value of the common stock.

The split adjusted shares of common stock will begin trading on April 30, 2012 under the symbol "TGTXD" with a "D" added for a period of 20 trading days to provide notice of the reverse stock split. After this period, the symbol will revert back to "TGTX." TG Therapeutics’ transfer agent, American Stock Transfer & Trust Company, will act as the exchange agent for the reverse split and will send instructions to stockholders of record regarding the exchange of outstanding stock certificates for new post-split stock certificates.

(Press release, X-Body, APR 27, 2012, View Source [SID:1234504037])