Evotec SE — Investor Presentation 2016

Jun 8, 2016

Leading Innovation Efficiency – Evotec Company Overview

Evotec AG, Jefferies 2016 Global Healthcare Conference, 08 June 2016

Forward-looking statements

Information set forth in this presentation contains forward-looking statements, which involve a number of risks and uncertainties. The forward-looking statements contained herein represent the judgement of Evotec as of the date of this presentation. Such forward-looking statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in these forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

Agenda

Evotec Overview

EVT Execute

EVT Innovate

Financials & Outlook

Leading innovation efficiency

Evotec at a glance

1	Strong growth and financial performance
2	More than 70 partnered product opportunities
3	Unique business model based on top-quality drug discovery platform
4	Focused investments with near-term news flow and partnering events
5	Strong balance sheet and very good strategic corporate position

Leadership in drug discovery

Our mission

Based on the highest quality drug discovery science, and through innovative collaborations, we are building a partnered product pipeline.

Our "Sweet spot"

Pre-clinical development candidate (PDC)

Leading the macro trend of R&D productivity

Market dynamics in drug discovery

Globally leading service company and first-in-class partnered product pipeline

Strategy overview

Our offering close to Pharma, biotech and academia

Evotec's global footprint – Approx. 1,000 employees

Strong financial performance

Financial highlights of FY 2015 – Selected KPIs

in € m

2014 2015

PAGE 9 1) Adjusted for changes in contingent consideration as well as for one-time effects with regards to the bargain purchase resulting from the acquisition of Evotec (France) SAS in 2015 and of Bionamics GmbH in 2014 and excluding impairments on goodwill, other intangible and tangible assets as well as the total non-operating result

2) Driven by the one-time effect of the income from bargain purchase resulting from the acquisition of Evotec (France)

3) Excluding M&A and related payments (Earn-out Euprotec)

Business model meets partners' needs

EVT Execute & EVT Innovate

Agenda

Evotec Overview

EVT Execute

EVT Innovate

Financials & Outlook

Broad stand-alone innovation services

EVT Execute – Comprehensive drug discovery platform

• No. 1 in drug discovery
• High-quality service business
• The strategic outsourcing partner of choice

Above market performance

EVT Execute – Key performance indicators Q1 2016

Well balanced customer mix

EVT Execute – Selected customer and revenue metrics

Revenues by customer segment ytd 20161) (in %)			Customer type ytd 2016 (in %)			Revenues by region ytd 2016 (in %)
Remaining	7%	100%	Mid-sized Pharma	9%	100%	ROW	1%	100%
Top 10-30 Customers	16%		Foundations	19%		USA	47%
			Biotech	24%
Top 10 Long-term Strategic Alliances	77%		Top 20 Pharma	48%		Europe	52%

Evolving as trusted partner of foundations

Foundations & Evotec

Indication (mechanism)	Partner	Timeline
Parkinson's Disease	Michael J. Fox Foundation	Start 2016
Huntington's Disease	CHDI Foundation	Extended through to 2018
Alzheimer's Disease	Gladstone Institutes	Start 2015
Juvenile Batten Disease	Beyond Batten Disease	Start 2015
Leukemia	The Leukemia & Lymphoma Society	Start 2013
Muscular dystrophies	Jain Foundation	Start 2013
Malaria	Medicines for Malaria Venture (MMV)	Start 2014

Disease foundations are increasingly driving science and they are turning to companies like Evotec to pursue novel drug discovery pathways1)

Strong partner base accessing integrated drug discovery value chain

EVT Execute – Representative partners

Outlook 2016

EVT Execute – Expected key milestones 2016

• New long-term deals with large and mid-sized Pharma
• Expansion of foundations and biotech network in USA/EU
• New performance-based integrated technology/disease alliance
• Milestones from existing alliances

Agenda

Evotec Overview

EVT Execute

EVT Innovate

Financials & Outlook

Five fields of core expertise

Overview

Strong revenue growth reflects new partnerships

EVT Innovate – Key performance indicators Q1 2016

• Strong revenue growth and improved EBITDA due to new partnerships signed in 2015
• Increased R&D expenses due to intensified efforts in CNS and oncology
• Full impairment of EVT100 series (€ 1.4 m)2)

PAGE 20

¹⁾ Adjusted for changes in contingent considerations

²⁾ In Q1 2016, Evotec was informed by Janssen Pharmaceuticals, Inc. that Janssen intends to phase out the licence agreement regarding NMDA antagonist with effect from August 2016.

Constantly growing pipeline of product opportunities

Partnership portfolio

	Molecule	Therapeutic Area/Indication	Partner	Discovery	Pre-clinical	Phase I	Phase II	Phase III
al c ni Cli	EVT3021)	CNS – Alzheimer's disease
	EVT201	CNS – Insomnia
	EVT1001)	CNS – Depression
	EVT401	Immunology & Inflammation
	ND2)	Oncology
	ND2)	Oncology
	ND2)	CNS – Pain
	ND2)	Oncology
al	Various	Women's health – Endometriosis
c ni	EVT770	Metabolic – Diabetes (type 2/1)
cli	ND2)	Respiratory
e-	ND2)	Immunology & Inflammation
Pr	EVT801	Oncology
	EVT701	Oncology
	EVT601	Oncology
	Various	Immunology & Inflammation
	Various	Metabolic – Diabetes (type 2/1)
	Various	Metabolic – Diabetes (type 2/1)
	Various	Nephrology
y	Various	Metabolic – Diabetes
er v	Various	CNS – Alzheimer's
o c	Various	Oncology – Immunotherapy
s	Various	Immunology & Inflammation – Tissue fibrosis
Di	Various	CNS – Multiple Sclerosis	NEU2
	Various	Metabolic – Diabetes	>5 further programmes
	Various	CNS	>5 further programmes
	Various	Oncology	>10 further programmes
	Various	CNS – Pain & Inflammation	>5 further programmes

1) EVT302 and EVT100: Evotec has regained the licence rights and is currently assessing potential business opportunities 2) Not disclosed Investor Presentation Focus

World-leading effort in Endometriosis

Bayer & Evotec in Endometriosis – Since 2012

Mission

• Goal of developing three clinical candidates for the treatment of endometriosis within five years
• Both parties contribute innovative drug targets and high quality technology infrastructures

Background

• Endometriosis affects approx. 200 million women worldwide, 10% of women of reproductive age
• There is no known cure for endometriosis

Agreement with Bayer

• € 12 m upfront payment
• Up to € 580 m in potential milestone payments based on the achievement of pre-clinical, clinical and sales milestones, up to double-digit royalties
• Integrated collaboration involving more than 30 scientists at Evotec
• Strategic, five-year multi-target collaboration

Identify and develop novel therapies in AD

J&J Innovation & Evotec in Alzheimer's disease (AD) – Since 2013

Mission

Explore genes dysregulated in Alzheimer's disease patients to identify new targets for drug discovery and development

Background

• Approximately 7.7 million new cases of dementia are diagnosed each year. \$ 612 bn were spent on the treatment of dementia in 2014
• AD costs equal about 1% of the world's GDP

Agreement with J&J Innovation

• \$ 10 m in FTE-based research costs
• Pre-clinical, clinical, regulatory and commercial payments up to approximately \$ 125 m to \$ 145 m per programme
• Significant royalties on future sales of any products that may result from the alliance
• Integrated three-year collaboration, resources involving more than 20 scientists at Evotec and J&J Innovation

Small molecule-based cancer immunotherapies

Sanofi & Evotec in Immuno-oncology – Since 2015

Mission

Development of small molecule-based cancer immunotherapies for next-generation immunooncological therapies to complement current offerings of checkpoint inhibitors

Background

• Based on partnership between Apeiron and Evotec initiated in 2012/13
• Immuno-oncology will become a new pillar of cancer therapy – Market potential estimated to be \$ 35 bn in 2023

Agreement with Sanofi

• Significant pre-clinical, clinical and regulatory milestones exceeding € 200 m
• Significant royalties upon commercialisation
• Integrated collaboration involving more than 20 scientists between Evotec, Sanofi and Apeiron
• Multi-year research payments for Evotec and Apeiron

Novel mechanisms in tissue fibrosis

Pfizer & Evotec in Fibrosis – Since 2015

Mission

Evotec and Pfizer develop novel mechanisms as targeted anti-fibrotics in multi-organ fibrosis

Background

• Tissue fibrosis is a huge unmet medical need Total market value up to \$ 100 bn
• Four major indications: liver, kidney, cardiac, lung fibrosis

Agreement with Pfizer

• Undisclosed upfront payment
• Potential milestone payments based on the achievement of specific development and sales milestones (undisclosed)
• Integrated collaboration involving more than 10 scientists between Evotec
• Strategic four-year collaboration

Restoring beta cell function – iPS cell-based projects

Sanofi & Evotec in Diabetes – Since 2015

Mission

Development of beta cell replacement therapy and drug discovery based on functional human beta cells derived from stem cells

Background

• Fast growing insulin market already exceeds >\$ 22 bn in 2014
• Diabetes is driven by loss in beta cell function
• Human beta cells offer only disease-modifying product opportunity

Agreement with Sanofi

• Upfront fee of € 3 m
• Potential pre-clinical, clinical, regulatory and commercial milestones exceeding € 300 m
• Significant royalties upon commercialisation
• Integrated collaboration, resources involving more than 15 scientists at Evotec and Sanofi

Translating first-in-class science to Pharma

EVT Innovate

• Carefully selected discovery stage projects in indications of high unmet medical need
• Advancing and partnering projects at tangible value inflection points
• Fuelling Evotec's pre-clinical and clinical opportunities

More than 10 projects primed for partnering

EVT Innovate – Cure X/Target X

2011	2012	2013	2014	2015	2016
CureBeta (Harvard Stem Cell Institute)	CureNephron (Harvard, BWH, USC, AstraZeneca) TargetASIC (BMBF/undisclosed Pharma partner) Somatoprim (Cortendo) TargetPicV (Haplogen) TargetFibrosis (Pfizer)	TargetImmuniT (Apeiron/Sanofi) TargetDBR (Yale) TargetMB (Second Genome) TargetPGB (Harvard) TargetKDM (Dana-Farber, Belfer) TargetIDX (Debiopharm) CureMN (Harvard) TargetEEM (Harvard) TargetAD (NBB/J&J)	TargetBCD (Sanofi) TargetDR (Internal) TargetATD (Internal) TargetFX (Internal) TargetKX (undisclosed) TargetCytokine (DRFZ/BMBF) Various (Fraunhofer Institute)	TargetFRX (Internal) TargetNTR (Internal) TargetKras (OSU) Various (Gladstone Institute) …	TargetaSN (MJFF) TargetBispecifics (ex scientia) TargetRhoB (undisclosed) …

Driving value of hidden assets – First-in-class approach for tolerance induction

Topas Therapeutics: An Evotec spin-off company

• Topas Therapeutics GmbH is focused on the development of novel tolerizing particles for immune-mediated diseases using proprietary NdL® nanotechnology platform
• Use of nanoparticles to deliver selected antigenic peptides to the liver (Topas = Tolerizing particles)
• € 14 m Series A funding secured with VC consortium
• Pre-clinical development for multiple sclerosis has been initiated; Phase I to start in 2017; strong pipeline
• Evotec will remain the largest shareholder Bionamics

Vision for improved development probabilities

Evotec's iPS cell accelerator

Outlook 2016

EVT Innovate – Expected key milestones 2016

• New clinical initiations and good progress of clinical pipeline within partnerships
• Expansion of network of top-class academic alliances

Partnering of Cure X/Target X initiatives

Strong focus on iPSC (induced pluripotent stem cells) platform

Agenda

Evotec Overview

EVT Execute

EVT Innovate

Financials & Outlook

Group revenues +74%, higher gross margin

Key financials Q1 2016: Condensed income statement (IFRS)

in € m

	Q1 2015	Q1 2016	% vs. 2015
Revenues	21.5	37.5	74%
Gross margin	28.0%	33.3%	–
 R&D expenses	(3.8)	(4.4)	14%
 SG&A expenses	(5.1)	(5.4)	5%
 Impairment of intangible assets	–	(1.4)	–
 Other op. income (expenses), net	(0.4)	1.4	–
Operating income (loss)	(3.3)	2.7	–
EBITDA adjusted1)	(0.3)	7.2
Net loss	(1.1)	(1.2)	9%

• Revenue increase mainly driven by strong performance of the base business, milestone achievement in Padlock collaboration and three months of the Sanofi contribution
• Adjusted Group EBITDA strong and significantly increased

Strong revenue growth in EVT Execute and increased investments in EVT Innovate

Condensed segment information for Q1 2016

in € m

	EVT Execute	EVT Innovate	Inter segment elimination	Evotec Group
External revenues	31.1	6.4	–	37.5
Intersegment revenues	7.5	–	(7.5)	–
Gross margin	26.1%	46.1%		33.3%
 R&D expenses	(0.1)	(4.8)	0.5	(4.4)
 SG&A expenses	(4.4)	(1.0)	–	(5.4)
 Impairment of intangible assets	–	(1.4)	–	(1.4)
 Other op. income (expenses), net	1.1	0.3	–	1.4
Operating income (loss)	6.8	(4.0)	–	2.7
EBITDA adjusted1)	9.6	(2.4)		7.2

• Strong revenue growth and improved EBITDA for both segments
• Increased investments in Cure X/Target X initiatives and oncology projects in Toulouse in-line with expectations and strategy plans
• Impairment of EVT100 series

Accelerated path to growth and sustainability

Key metrics 2010 – 2015

1) Adjusted for changes in contingent considerations

2) Cash and cash equivalents and investments

3) Effective on 01 April 2015, Evotec acquired Sanofi's scientific operations in Toulouse, France; 2015 number including the employees from this transaction

Strong team and shareholders for innovation

Management & shareholder structure

Number of shares: 132.8 m Listing: Frankfurt Stock Exchange (TecDAX), OTCBB 52 week high/low: € 4.31/€ 2.86

Management Board

• Werner Lanthaler (CEO) Long-time experience in Pharma & biotech
• Mario Polywka (COO) Strong operational and commercial management track record
• Cord Dohrmann (CSO) Outstanding background in metabolics
• Enno Spillner (CFO) – as of 18 July 2016 Long-time experience in finance & biotech

Supervisory Board

• Wolfgang Plischke Ex-Bayer
• Bernd Hirsch Bertelsmann SE & Co. KGaA
• Claus Braestrup Ex-Lundbeck
• Paul Herrling Ex-Novartis
• Iris Löw-Friedrich UCB

• Elaine Sullivan Carrick Therapeutics

• 1) Deutsche Asset Management Investment GmbH 2) Allianz Global Investors GmbH

• 3) BVF Partners L.P. and its affiliates

Strong growth and important R&D triggers expected in 2016

Guidance 2016

KPIs	Guidance 2016	Actual 2015
Group revenues1)	More than 15% growth	€ 115.4 m
EBITDA2) Adjusted Group	Positive and significantly improved compared to prior year	€ 8.7 m
R&D expenses	Approx. € 20 m	€ 18.3 m
Liquidity3)	Similar level compared to 2015	€ 134.5 m
Capex investments	Up to € 10 m	€ 11.2 m

in € m

PAGE 37

3) Excluding any potential cash outflow for M&A or similar transactions

¹⁾ Excluding milestones, upfronts and licences

²⁾ Before contingent considerations, income from bargain purchase and excluding impairments on goodwill, other intangible and tangible assets as well as the total non operating result

Your contact:

Dr Werner Lanthaler Chief Executive Officer

+49.(0).40.560 81-242 +49.(0).40.560 81-333 Fax werner.lanthaler@evotec.com