Evotec SE — Investor Presentation 2020

Aug 12, 2020

"We are Autobahn"

Forward-looking statement

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.

Note:

Just - Evotec Biologics (former Just.Bio) was acquired effective 02 July, 2019 and was fully consolidated in the Group numbers from the respective date onwards. Furthermore, effective 01 April 2020, Evotec GT started its operations. Hence, numbers for the first half-year 2019 and 2020 are not fully comparable.

Welcome to H1 2020

The Management Team

One direction – Growth and innovation for more precise medicine

H1 2020 – Highlights & Lowlights

Highlights

• Business continuity fully maintained without significant negative impact despite COVID-19
• Multiple new & extended drug discovery and development alliances
• New long-term contract with US EPA for ADME-tox testing
• Commercial API supply for Zogenix
• Just Evotec Biologics strong roll-out momentum, J.POD®-construction progressing well
• Evotec GT Gene Therapy initiative started, with extension of alliance with Takeda
• Expansion into Antisense Therapies with Secarna Pharmaceuticals
• Broadening and acceleration of BRIDGE initiative and equity participations
• Initiation of "Campus Curie Toulouse" after acquisition of "Biopark By Sanofi SAS" (after period-end)
• COVID-19 biologics manufacturing with US Department of Defense (after period-end)

Lowlights

Some delays in milestones in EVT Innovate

Agenda

Highlights

Financial performance H1 2020

Scientific and operational performance H1 2020

Guidance 2020

Strong financials despite delayed milestones and COVID-19

Financials H1 2020 & FY 2020 Guidance

Strong financial performance

• Group revenues from contracts with customers up 12% to € 231.0 m (H1 2019: € 207.1 m)
• Adjusted Group EBITDA1) decreased by 19% to € 47.3 m (H1 2019: € 58.2 m) mainly due to delayed revenues from milestones, fade out of Toulouse-related payments by Sanofi and lack of Italian R&D tax credits
• Increased investment into unpartnered R&D expenses of € 21.6 m (H1 2019: € 18.7 m)
• Robust strategic liquidity position of € 275.7 m (31 December 2019: € 320.0 m)

Revenue and EBITDA Guidance confirmed2); Unpartnered R&D updated

• Total Group revenues € 440 480 m (2019: € 446.4 m)3)
• Adjusted Group EBITDA € 100 120 m (2019: € 123.1 m)
• Due to promising investments in EVT Innovate, increase of guidance for unpartnered Group R&D expenses of approx. € 45 (previously: approx. € 40 m) / (2019: € 37.5 m)

"… just the beginning" – Ideally positioned for next growth level

Long-term strategy – Action Plan 2025

Recruiting talent during crisis to secure capacity and growth

Development of global number of Evotec employees

Agenda

Highlights

Financial performance H1 2020

Scientific and operational performance H1 2020

Guidance 2020

Solid financial performance

Condensed income statement H1 2020 – Evotec SE and subsidiaries

in € m1)
	H1 2020	H1 2019	% vs. 2019
Revenues from contracts with customers	231.0	207.1	12
Gross margin	23.0%	30.8%	–
 R&D expenses	(29.8)	(29.3)	2
 SG&A expenses	(36.5)	(29.9)	22
 Impairment of intangible assets and goodwill2)	–	(11.9)	–
 Other op. income (expenses), net	32.2	31.3	3
Operating result	18.9	24.0	(21)
Adjusted Group EBITDA3)	47.3	58.2	(19)
Net income	7.3	10.7	(32)

• Strong performance across all business lines despite loss of Sanofi payments (€ 7.5 m); Just – Evotec Biologics first-time H1 contribution (€ 16.3 m)
• Gross margin decreased mainly due to lower upfront, milestone and licence contribution (€ 7.8 m compared to H1 2019: € 19.1 m)
• Adjusted Group EBITDA negatively affected by delays in milestone contributions, fade out of the Toulouse-related payment from Sanofi and less R&D tax credits in Italy; FX on the positive with approx. € 1.7 m

1) Differences may occur due to rounding

2) H1 2019: One-off impairment of intangible assets and good-will following termination of SGM-1019 programme with Second Genome

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

Growth in base revenues; Margin reflects delayed milestones in H1

Revenues & Gross margin overview

• 10% revenue growth due to strong performance in base business and Just – Evotec Biologics contribution (€ 16.3 m). FX positive with € 2.4 m.

• Lower total margin due to lower upfront, milestones and licences payments, and anticipated loss of payments from Sanofi for the Toulouse site
• Gross margins may be volatile due to the dependency of milestones – Evotec expects most H1 milestones only delayed but not lost

Continued good performance in both segments

Segment information H1 2020 – Evotec SE and subsidiaries

in € m1)

	EVT Execute	EVT Innovate	Inter segment elimination	Tran sition2)	Evotec Group
Revenues	228.2	44.6	(51.0)	9.2	231.0
Gross margin	24.6	3.4	–	–	23.0%
 R&D expenses	(2.6)	(31.9)	(4.7)	–	(29.8)
 SG&A expenses	(29.7)	(6.8)	–	–	(36.5)
 Impairment of intangible assets and goodwill	–	(11.9)	–	–	(11.9)
 Other op. income (expenses), net	8.1	24.1	–	–	32.2
Operating result	32.0	(13.1)	–	–	18.9
Adjusted EBITDA3)	58.2	(11.0)	–	–	47.3

• Revenue growth of 16% in EVT Execute reflects strong base business and Just – Evotec Biologics contribution of € 16.3 m
• Revenue growth of 8% in EVT Innovate driven by higher base revenues from multiple partners, whereas milestones decreased
• Adjusted EBITDA and operating result mainly influenced by lower R&D tax credits and delayed upfront, milestone and licence revenues as well as loss of Toulouse cost coverage

2) Not allocated to segments: Revenues from material recharges according IFRS 15

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

¹⁾ Differences may occur due to rounding

Good base business carries growth

Condensed income statement Q2 2020 – Evotec SE and subsidiaries

in € m1)
	Q2 2020	Q2 2019
Revenues from contracts with customers	111.6	103.2
Gross margin	17.7%	31.1%
 R&D expenses	(14.7)	(14.9)
 SG&A expenses	(19.3)	(15.1)
 Impairment of intangible assets	–	(10.3)
 Impairment of goodwill	–	(1.6)
 Other op. income (expenses), net	17.0	14.8
Operating result	2.8	5.0
Adjusted Group EBITDA2)	17.3	28.2
Net income	(9.8)	(2.4)

• Revenue growth driven by good performance in base business, despite loss of Sanofi payments (€ 7.5 m)
• Gross Margin influenced by milestone slippage, project mix effects and adjusted density of operations through COVID-19
• SG&A increased due to overall company growth and transactions (e.g. Evotec GT)
• Other operating income mainly influenced by R&D tax credits and reimbursed partnered R&D
• Consequently EBITDA lower than Q2 2019

1) Differences may occur due to rounding

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

Strong balance sheet and solid liquidity position

Balance sheet and liquidity – 31 Dec. 2019 versus 30 June 2020

Increased Capex – preparing the ground for additional growth

Agenda

Highlights

Financial performance H1 2020

Scientific and operational performance H1 2020

Guidance 2020

Strong performance in all business lines despite COVID-19

EVT Execute – Major achievements H1 2020

• Multiple new and extended drug discovery and development agreements (e.g. Amgen, Boston Pharma, two INDiGOs with Ildong, …)
• Evotec GT, strong start, extended Takeda partnership
• Increasingly strong development business, including commercial drug substance development
• After COVID-19 slow-down, strong business performance at Cyprotex, highlighted with long-term EPA contract
• Multiple new partnerships for Just Evotec Biologics
• J.POD® on track for opening in H2 2021

Integrated discovery-development continuum for quality & speed

Evotec Development Services

High quality and integrated operating model increases projects in development

• Integrated CMC (iCMC) offering includes Drug Substance (API) and Drug Product development and manufacturing from Phase I to commercial production
  • 2018: 24 iCMC active projects, >100 projects in total
  • 2020: >40 iCMC active projects, >200 projects in total
  • 5 NCEs1) smoothly entered INDiGO from Evotec-executed discovery projects in last 18m
  • Approx. 6 months saved through agility, problem-solving and planning efficiencies

State-of-the-art technologies

Flexible capabilities and scientific excellence for API Chemistry and Pharmaceutical R&D of oral and inhalation dosage form

Authorised for commercial Drug Substance and Drug Product manufacture

Small-scale supplies with focus on orphan drugs, rare diseases and niche therapeutic indications e.g. Zogenix (US) for Fenfluramine, FINTEPLA® for Dravet & LGS syndromes

Technology leadership drives strong market growth

Evotec ADME-tox and DMPK Services

Continued high-quality expansion

• Continued increase in capacity and throughput and 8% revenue growth in H1 2020 (vs H1 2019) – despite COVID-19 impact on customers in Q2
• Increase in integrated discovery and development projects leveraging bespoke Cyprotex assays to assess development risks

Driving scientific development through technology and R&D

• 5 peer-reviewed articles published in H1 2020, especially in safety assessment
• Focus on high-throughput transcriptomics R&D for toxicology prediction (EvoTox)

New Strategic relationships

• New contract with the US EPA worth up to \$ 13 m over 5 years
• Continued investment driving growth of scope of existing strategic partnerships

Better biologics with next-generation technologies

Just – Evotec Biologics Services

• Significant scientific synergies and cross selling within Evotec Group through step into biologics
• Multiple new contracts e.g. with Advanced BioScience Laboratories, Biocon, MSD, OncoResponse, Teva, Ology, Department of Defense (US)
• Platform with AI-based methodology to create Humanoid Antibody Libraries HAL initiated

Clinical and commercial GMP manufacturing

J.POD® – Flexible, Clinical and Commercial Manufacturing Design

Production from a few kilos to metric tons in the same facility fully operational in H2 2021

Campus Curie Toulouse secures essential growth opportunity

"Campus Curie Toulouse" - Acquisition of "Biopark by Sanofi" in Toulouse

• Expansion in Toulouse is an important part of overall growth strategy – More than 50 third-party customers
• Acquisition of site from Sanofi ("Biopark by Sanofi") secures capacity and flexibility for longterm growth
• 60,000m² of state-of-the-art scientific and tertiary facilities
• Currently >600 employees at Toulouse site with space to grow to >1,000
• Site will be renamed to "Campus Curie Toulouse"

"…just the beginning" of EVT Innovate

EVT Innovate – Major achievements H1 2020

• Good pipeline progress despite certain COVIDrelated delays, e.g. Bayer, Exscientia, JingXin)
• "QRbeta" initiated and accelerated within Evotec
• Global health as an important platform element and increasing portfolio (Chikungunya, Tuberculosis, COVID-19, …)
• Antibiotic project in-licenced from Resolute; CARB-X funding (after period-end)
• Modality expansion into Antisense with Secarna
• Launch of Autobahn Labs and strategic collaboration with UCLA
• Increasingly important equities (Cajal, leonnanodrugs, panCELLa, QUANTRO)

Portfolio across all modalities steadily growing

Our co-owned pipeline of assets

Fully invested pipeline, gaining visibility

Overview & Recent Highlights

Bayer-Evotec P2X3 alliance

• Preparation of Phase II b in refractory and/or unexplained chronic cough ongoing
• Start of Phase II in other high-value indications expected within next 12 - 18 months

Jingxin: EVT 201

Phase III trial in China initiated

Exscientia

Developed an A2A inhibitor for the treatment of oncological indication; start of Phase I expected for end of 2020

	Molecule	Therapeutic Area/Indication	Partner	Discovery	Pre-clinical	Phase I	Phase II	Phase III
	EVT201	Insomnia (GABA-A)	人 照明药业
Clinical	BAY-1817080	Chronic cough (P2X3)	ಕಾ
	CT7001	Oncology (CDK7)	Carrick
	CT7001	Oncology (CDK7)	Carrick
	EVT401	Immunology & Inflammation (P2X7)	12 manus
	BAYXXX	Gynecology	લક
	BAYxxx	Multiple indications	€
	BAY2328065	Gynecology	લેક
	BI 894416	Asthma (not disclosed)	B Bochringer
	BI 860585	Oncology (mTORC1/2)	Ingelheim
	TPM203	Pemphigus Vulgaris (not disclosed)	Topas & Therapeutics
	DSP-1181	Obessive-compulsive disorder (5-HT1A)	Exscientia
	CNTX 6016	Pain (CB2)	B Bochringer
	EVT894	Chickungunya (Antibody)	SANOFIL
	BAYxxx	Endometriosis (not disclosed)	લ્કે
	EVT801	Oncology (VEGFR3)	SANOFIL
	APN411	Oncology - Immunotherapy	SANOFI APEIRON
	EXS21546	Oncology (various programmes)	Exscientia
Pre-clinical	GLPGxxxx	Fibrosis (not disclosed)	Galapagos
	BAYXXXX	Nephrology (not disclosed)	e
	QRB001	Metabolic - Diabetes (not disclosed)	QRbeta
	BMSxxxx	Neurodegeneration (not disclosed)	Bristol Myers Squilbb
	EVTxxxx	CNS, Metabolic, Pain	>10 further programmes
	Various ND1)	Nephrology	AstraZeneca 2
	ND™	Nephrology	VIFOR +
	ND1)	PCOS	Co celmatix
	INDY inhibitor	Metabolic	. Prove
	Various	Oncology	@ Bristol Myers Squibbi
	יםN	Oncology	Ja The Mark Foundation
	ND™	Oncology - Colorectal cancer	Cindivumed
	ND™	Oncology - DNA damage response	BREAKPOINT O
	ND1)	Novel antibiotics	HELMHOLTZ
	ND1)	Novel antibiotics	GARDP
Discovery	ND™	Anti-bacterial	FORGE
	TargetPicV	Antiviral	1:41) 33 60
	Various	Anti-infectives	evotec >5 programmes
	Various	All indications	@ @ A A B B WEEN JA VICEN JA USEN O
	ND1)	Dermatological diseases	(Calmirall facio
	ND1)	Facioscapulohumeral Dystrophy	Pfizer
	Various	Immunology & Inflammation - Tissue fibrosis
	Various	Fibrotic disease	Fibrocor Therap./ Galapagos C
	Various ND1)	Immunology & Inflammation	CE Aeovian
	ND™	Inflammatory	Immunicas
	ND™ Various	Cancer
		Internal: Oncology, CNS, Metabolic, Pain & Inflammation >40 further programmes

Phase II proof-of-concept results support best-in-class potential

P2X3 – BAY1817080 – Proven mechanism – Safe & well tolerated – Efficacious after 1 week

Very Good safety profile of BAY1817080

• Overall BAY1817080 associated with low rates of Aes; almost no difference to placebo; No SAE was reported with BAY1817080 treatment
• All taste-related AEs were mild in severity and resolved after cessation of therapy
• Cumulative taste related AEs reported after the highest dose of treatment" (21% are cumulative across doses and depict worst case) Clear next development steps

P2X3 Mechanism of action Awake cough counts versus placebo (%)

Reduction in cough count versus placebo compares well with competitor data in other clinical trials

Treatment duration

• Bayer BAY1817080 (n=40) 1 week
• Merck Gefapixant (n=252) 12 weeks
• Shionogi S-600918 (n=31) 2 weeks
• Bellus BLU-5937 (n=62) 16 days

Benefits were seen after 1 week of each dose, even though BAY1817080 only reached steady-state plasma levels after ≈5 days

BAY1817080 – Cough severity

Dose-dependent improvements in patients also seen in the Leicester Cough Questionnaire (LCQ)

• Multiple indications targeted

Beta cell therapy – the new standard of care

QRbeta Therapeutics

Creating important footprint in infectious disease

Focus areas for long-term value creation

Viral infections Antimicrobial Global health

• Evotec supporting NIH-led initiative Therapeutic Interventions and Vaccines ("ACTIV")
• Evotec leading "COVID R&D" pre-clinical repurposing

• Kara Carter, EVP Infectious Disease of Evotec appointed as President of the International Society of the Antiviral Research (ISAR)

• Several partnerships to discover novel antibiotics (GARDP, Forge, Lygature (GNA-Now), …)

• CARB-X funding for development of a novel broad spectrum antibiotic project in-licensed from Resolute Therapeutics (after period-end)

• Several new TB initiatives (e.g. PAN-TB, ERA4TB)

• Alliance with Liverpool School of Tropical Medicine (LSTM)

Creating the next major classes of antibacterial drugs

Partnership between Evotec, Resolute Therapeutics, and CARB-X

• Global antibiotics market: \$ 45 bn in 2018 and expected to reach \$ 62 bn by 20261)
• Huge imbalance of demandsupply of antibiotics
• WHO lists antimicrobial resistance among Top-10 threats to global health2)
• Evotec received award of up to \$ 8.4 m for development of novel broadspectrum antibiotic
• Gram-positive and Gram-negative coverage, engaging well-validated antibacterial targets through novel MoA
• Programme was in-licensed to Evotec from Resolute Therapeutics in exchange for an upfront and success-based milestone payments
• Evotec retains right to take over the project at a pre-agreed value inflection point and continue the development with other potential clinical and marketing partners

1) According to a report by Grand View Research from February 2019

Partnership to build antisense pipeline

Evotec and Secarna

Further expansion of multimodality "Autobahn"

Global antisense & RNAi therapeutics market ~\$ 2 bn by 2025, growing at a CAGR of 7.5%1)

Perfect match of capacities and capabilities

• Joint strategic multi-target drug discovery alliance
• Secarna provides proprietary LNAplus™ antisense molecules; Evotec responsible for further development and subsequent partnering
• Projects co-owned
• Evotec's partners can access antisense therapeutics

If you would like to learn more about ASO and the partnership between Evotec and Secarna, please see our DDIN2)

BRIDGEs to link academia with industry continue roll-out

Long-term optionality with efficient translation

Technology, platform and R&D driven investments

Equity participations for co-owned pipeline is expanding

Equity participation Facioscapulo humeral muscu lar dystrophy Initiated 2011	Equity participation Metabolic disorders Initiated 2016	Spin-off Nanoparticle based therapeutics Initiated 2016	Equity participation Targeting metalloenzymes Initiated 2016	Equity participation Innovative path ways in oncology Initiated 2016	Equity participation Fibrosis partnership Initiated 2017	Consortium membership Kidney diseases Initiated 2017	Equity participation AI for automated drug design Initiated 2018	Joint Venture with Vifor Pharma Kidney diseases Initiated 2019
Spin-off DNA damage response	Equity participation Inflammatory disease	Equity participation Oncology / Biologics	Equity participation Women's health	Equity participation Formulation nanotechnologies	Equity participation Failsafe cloaking for cell therapies	Equity participation Neuroscience	Equity participation & partnership Oncology
Initiated 2019	Initiated 2019	Initiated 2019	Initiated 2019	Initiated 2020	Initiated 2020	Initiated in 2020	Initiated in 2020	More to come …

Agenda

Highlights

Financial performance H1 2020

Scientific and operational performance H1 2020

Guidance 2020

Strong news flow to be continued in H2 2020

Overview

EVT Execute

New integrated service alliances in drug discovery & development

EVT Innovate

• New clinical initiations and progress of co-owned pipeline
• New co-owned partnerships

EVT Equity & BRIDGES

• Initiation of new BRIDGEs
• New operational ventures

Revenues and profits confirmed; higher investments in R&D

Guidance 2020

1	Good top line growth	 480 m, based on constant 2019 Total Group revenues expected to range from € 440 – exchange rates, despite loss of € 20 m payment from Sanofi, and certain COVID-19 challenges1)
2	Strong EBITDA	 Adjusted Group EBITDA2) 120 m, at comparable expected to be in the range of € 100 – level as in 2019, despite loss of € 20 m payments from Sanofi, significant ramping up J.POD® capacities, and certain COVID-19 challenges
3	Focused R&D 3) investments	 Unpartnered Group R&D expenses of approx. € 45 (previously approx. € 40 m)

1) Given current global insecurities, a likely negative impact from the ongoing Corona pandemic is already estimated within the introduced guidance for revenues and adjusted EBITDA 2) Before contingent considerations, income from bargain purchase & excl. impairments on goodwill, other intangible & tangible assets as well as the total non-operating result 3) Evotec focuses its guidance and upcoming reporting on the "unpartnered R&D" part. ID-related R&D expenses will be fully reimbursed by its partner Sanofi ("partnered R&D").

Upcoming important dates

Financial calendar 2020

Annual Report 2019	26 March 2020
Quarterly Statement Q1 2020	14 May 2020
Virtual Annual General Meeting 2020	16 June 2020
Half-year 2020 Interim Report	12 August 2020
Quarterly Statement 9M 2020	12 November 2020

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