(new: more background, statements from analyst conference, extended cooperation with BMS, new CFO, share price updated)

HAMBURG (dpa-AFX) - With weighty collaborations behind it, Hamburg-based pharmaceutical drug discovery company Evotec hopes for a better run in the future. In 2023, operating profit is expected to increase significantly, after high costs weighed on earnings last year. Even a strong final quarter could not change this. Despite expected continued high expenses, the board is counting on the "strong order situation" and a better sales mix for the coming months. In addition, the extension of an important research alliance with Bristol Myers-Squibb (BMS) is expected to bring in plenty of cash, Evotec announced on Tuesday.

The latter's shares led the MDax mid-cap index in the early afternoon with a gain of more than two percent. After the announcement of an extended cooperation with the US pharmaceutical company, the share price had even risen by more than five percent at times. Initially, the share price had declined slightly in early trading in response to the key data and the outlook.

Evotec and BMS are extending their 2016 partnership in the search for drugs to treat neurodegenerative diseases by another eight years. The Hanseatic company put the potential total volume at four billion U.S. dollars, fed by potential success-based milestones, royalties and an initial upfront payment of 50 million U.S. dollars (approx. 46.4 million euros). The collaboration with BMS is one of Evotec's key flagships.

Meanwhile, one trader was unconvinced by last year's key data and outlook. In 2022, Evotec topped revenue expectations, but operating profit was slightly weaker, the trader said. According to Jefferies analyst Peter Welford, Evotec had performed better than expected in the final quarter, but the market consensus was already at the upper end of the 2023 full-year targets.

According to preliminary calculations, Evotec's revenues in 2022 increased by more than one fifth to approximately 751 million euros thanks to a flourishing core business and a strong final quarter, which meant that the Group exceeded its own peak revenue target. However, adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) came in at around 102 million euros, below the prior-year figure of 107 million euros. The Executive Board thus slightly missed its own profit target.

High expenditures for the build-up of production for biologically manufactured active ingredients (biologics), significantly increased energy costs and inflation as a whole all ate into profits in day-to-day business. Following a loss of more than 148 million euros in the first nine months, the bottom line in the final quarter was again negative at minus 27.2 million euros, according to a company presentation. The group had taken large write-downs after the share price of its British investment Exscientia fell massively last year. In 2021, Evotec had still generated a profit of a good 215 million euros. The final figures are to be published on April 25.

In the current year, the Group aims to boost sales to 820 to 840 million euros. However, with a maximum increase of about twelve percent, growth would be significantly slower than in the previous year. Adjusted operating profit is expected to increase by up to 28 percent to 115 to 130 million euros in 2023, despite renewed charges. Evotec anticipates increasing expenses for wages, materials and energy. In addition, unspecified adjustments to organizational structures would be required and the Management Board does not rule out a further increase in research costs.

The start-up of two biologics plants has also not yet been digested. While construction is still underway in Toulouse, France, the plant in the United States is not yet operating at full capacity. Company CEO Lanthaler therefore does not expect a positive contribution from the so-called JPod technology until the end of 2023 at the earliest, as he told analysts in a conference.

At the same time, numerous collaborations from the current order backlog are expected to contribute to revenue growth this year, such as the one the U.S. subsidiary Just Evotec-Biologics has with the U.S. Department of Defense. Further new contracts, contract extensions and milestone payments are foreseeable, he added. Lanthaler also did not rule out exceeding the sales forecast, as the number of partnerships should continue to grow "very nicely". He remained confident that Evotec is at the beginning of a strong phase with its extensive research portfolio and biologics production, which is why the targets for 2025 remain valid.

In the year to date, Evotec has already announced several large milestone payments. Among others, many millions of dollars flowed from another collaboration with BMS for targeted protein degradation and from a new cancer alliance with the US manufacturer Johnson & Johnson.

As has been known for a few weeks, Evotec's finances will be overseen by a woman in the future. Effective April 1, Laetitia Rouxel will take over from Enno Spillner, who plans to pursue new responsibilities outside the company. Rouxel joins Evotec from plastic pipe manufacturer Wavin in the Netherlands, where she was most recently also responsible for finance as a member of the Management Board./tav/lew/he