Evotec OAI once again defied the difficult environment for drug discovery technology companies with a 20 per cent hike in nine-month revenues to €56.7 million.
The company today posted an operating loss of €12.3 million, an improvement of 48 per cent over the same period of 2002.
Joern Aldag, Evotec's chief executive, said that the performance in the third quarter "was led by growth in Discovery Biology and by Evotec Technologies, where sales were up by 250 per cent as we rolled out a portfolio of new instruments for Pfizer's R&D programme."
The agreement with Pfizer is for the development of ultra high-throughput screening systems for its internal drug discovery programmes. Evotec sells a range of uHTS systems under its EVOscreen brand, and the performance of this range contributed strongly to the 53 per cent increase in sales in the third quarter.
"Sales in the Tools and Technologies segment rose by 116 per cent to €13.4 million following the successful integration of two EVOscreen and several Opera confocal imaging readers at Pfizer's research sites", said the firm in a statement.
Third-party revenues in Evotec's Discovery and Development Services Division (DDS) increased 4 per cent to €42.8 million in the first nine months of 2003. This performance was mainly driven by strong growth in Discovery Biology, following an earlier than expected completion of primary screening campaigns on two targets with Novartis, said Evotec.
In addition, thanks to an agreement with Takeda signed in August, revenues were registered for the first time in the company's Discovery Programs Division (DPD). They amounted to €0.5 million, which consists of R&D payments and the allocation of a target database access fee, which is spread over a four-year contract period.
For the first nine months the group reached an operating cash break-even of €0.2 million, compared to a loss of €11.2 million in the like, year-earlier period, and Evotec currently has around €19 million in cash.
Aldag noted that pharma and biotech companies are continuing to shift budgets from discovery into development and to focus on fewer projects to be pushed into the market faster. In the short term, this clearly puts pressure on outsourcing revenue growth potential, so Evotec's performance in this environment is encouraging.
However, with a longer term perspective, this trend underscores Evotec's strategy, he suggested. "Pharma companies need to fill their pipelines and will increasingly have to do so by in-licensing and sourcing of discovery programmes", he noted.