Investment summary

Evotec reported the first profit in its 17-year history in FY10 after sales grew by 29%. During the first nine months of 2011, sales have grown by 54% and profits should increase in FY11. This year it has formed one new alliance with Roche and two with UCB. Evotec suffered a setback when Roche returned the rights to EVT 101, but it has since out-licensed EVT 302 for Alzheimer's disease in a $830m deal to Roche. Its Type 1 diabetes drug, DiaPep277 (partnered with Andromeda), has also successfully completed its first Phase III trial, which could result in a milestone payment. Evotec had a net cash position of €49.0m at Q311, and its focus on drug discovery alliances gives it a lower risk profile than most biotech companies.

Last updated on 09/12/2011

Industry outlook

Pharmaceutical companies are outsourcing their drug discovery activities as they look to improve their productivity and decrease the fixed costs associated with them. In this expanding market, Evotec's growth depends on it being able to provide a high-quality integrated service that cheaper service providers are unable to deliver.

Last updated on 09/12/2011