Evotec revenue up for quarter to €18.8 million; company confirms full-year guidance

By E. Janene Geiss

Philadelphia, Aug. 11 - Evotec AG said Friday that revenues in the second quarter of 2006 were up 2% to €18.8 million compared with €18.4 in the second quarter of last year.

Net results shrank to a loss of €1.0 million in the quarter from a loss of €23.4 million for the same period last year, according to a company news release.

This is the result of charges from amortization of intangible assets and impairment of goodwill reduced by more than €20 million compared to the second quarter in 2005.

Evotec also achieved a total non-operating result of €6.6 million as compared to a loss of €1.5 million in the second quarter of last year mainly due to a profit from the sale of intellectual property assets, better results from currency hedging and the absence of "loss from equity investments," officials said.

Research and development expenditures increased significantly over 2005 to €6.9 million from €2.3 million, mainly driven by increased investment for the development of Evotec's pipeline projects.

Some of the company's second-quarter highlights included positive results in second proof-of-principle study with insomnia drug candidate EVT 201. That drug candidate is on track for the start of a phase 2 trial in the third quarter.

The company completed its phase 1 trial for Alzheimer's disease and neuropathic pain drug candidate EVT101, and it signed an alliance with Roche to discover new drug candidates.

"In the second quarter, we have accomplished our business goals successfully in all our divisions and look forward to a strong 2006 performance," Joern Aldag, president and chief executive officer, said in the release.

Evotec's management board said it remains positive with regard to its ability to meet financial targets for 2006 and confirmed the guidance given in March that indicates the company expects 0% to 5% revenue growth for the full year on its remaining business.

Revenues and operating profitability for the company's services division are expected to remain similar to last year's positive performance. The group sales and order book for 2006 has increased to €74 million as of July, compared with €69 million in July of last year.

The company also said it expects its group research and development spending in 2006 to be at the high end of its anticipated range of €30 million to €35 million.

Based on this guidance, Evotec's liquidity position at the end of 2006 is targeted to exceed €48 million, officials said.

Evotec is a Hamburg, Germany, biotechnology company.

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