Evotec SE(US:EVO)2021-05-11 18:27Financial Data and Key Metrics Changes - Q1 2021 revenue increased by 11%, with a 17% gain when adjusted for foreign exchange effects [13] - Gross margin was 23.1%, lower than the previous year due to the fadeout of the Sanofi subsidy and lower milestone achievements [14] - Adjusted EBITDA for Q1 2021 was €21.1 million, aligning with expectations [17] - Net income amounted to €52.7 million, benefiting from a one-off effect related to the fair value adjustment of Exscientia shares [17] Business Line Data and Key Metrics Changes - Execute revenues increased to €137 million from €118 million in Q1 2020, driven by demand for integrated offerings [20] - Innovate Q1 revenues reached €28.2 million, a 21% increase year-over-year, reflecting higher demand for precision medicine [22] - The gross margin for Execute was 21.4%, down from 29.3% the previous year, primarily due to the absence of Sanofi payments [21] Market Data and Key Metrics Changes - The overall sales development was negatively impacted by the end of Sanofi Toulouse payments and adverse foreign exchange effects, with a currency effect of minus €6 million [24] - The company reported a strong organic growth of 26% in the base business, indicating solid revenue quality from sustainable repeat business [23] Company Strategy and Development Direction - The company introduced an updated business model called "Action Plan 2025," focusing on data-driven R&D and achieving leadership in data and science [6][7] - The strategy emphasizes building a co-owned pipeline and leveraging data for drug discovery, aiming to create significant value through innovation [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2021 goals despite ongoing COVID-19 challenges, with a strong long-term outlook [5] - The company anticipates increased activity in its co-owned pipeline as clinical centers reopen, expecting positive momentum in the second half of the year [30] - The long-term plan includes expected group revenues between €560 million and €570 million and EBITDA between €105 million and €120 million for 2021 [41] Other Important Information - Total liquidity decreased to €460.6 million, primarily due to expected capital expenditures for growth projects [27] - The company is committed to ESG initiatives, integrating these topics into employee goals and organizational strategies [39][40] Q&A Session Questions and Answers Question: Details on the OxVax collaboration - The company views itself as an operational synergy-seeking investor in the OxVax project, leveraging its iPSC platform [45] Question: Clarification on the collaboration with BMS - The partnership with BMS focuses on exploiting protein degradation strategies, but specific details cannot be disclosed [46] Question: Update on EVT801 and expectations from Kazia Therapeutics - The clinical entry for EVT801 is expected by the end of 2021 or early 2022, with Kazia showing strong scientific insight [47] Question: Extrapolation of operating income for the year - The operating income is expected to remain stable, with slight increases in tax credits and SG&A as the organization grows [55] Question: Update on the beta cell project and monetization of data - The CureBeta initiative is progressing well, with discussions ongoing with pharma and venture partners for potential licensing or company formation [60] - The company is already monetizing data through partnerships, such as with Novo Nordisk, leveraging its NURTuRE database [61] Question: Update on iPSC candidates entering the clinic - The first iPSC-derived novel target is expected to enter the clinic in the second half of 2021, with positive progress reported [86]