Invest to innovate virtuous circle starts to deliver

Evotec's H1/2021 numbers were much In line with consensus. At €271m compared to €231m (H1/2021 vs. 2020) the 17% growth in group H1/2021 revenues highlights the robust health of the underlying business. The sharp €47m to €36m YoY fall in H1 EDITDA is due to the continued investment in R&D and pre-production capacity build up of J.POD. With COVID delayed milestones expected in H2, management confirmed its previous €550m - €570m topline guidance, but indicated an EBITDA near the bottom of the €105

Positive Q1 as pipeline inflection nears

Evotec delivered promising Q1/2021 results in line with consensus estimates as revenues grew 11% YoY to €133m. This comes soon after ambitious new 2025E guidance provided by management, indicating revenue and adj. EBITDA CAGRS of >15% and 25% respectively driven by continued strong performance from Just - Evotec Biologics in the short term (2021E - 2023E) followed by the maturing clinical pipeline from 2024E onwards. While Evotec's share price has shown strong recent performance (+10.5% YTD, +48

Positive momentum to continue into 2021E

Evotec reported Q3/2020 results marginally below our estimates, but comfortably exceeding consensus forecasts for both the quarter and first 9 months. Both segments saw strong performance despite disruption due to COVID-19, with the EVT Execute business in particular demonstrating better than expected resilience. We expect this trend to continue into 2021E, lifting 2021E - 2024E Execute revenue contributions by 1% - 4% supported by a full order book for 2021E indicated by the acceleration of gro

Small molecule to biologic developing best in class

Having established itself as a leading innovatorin pharmaceucal outsourcing forsmall molecule R&D, Evotec made an important step into the biologics market in 2019 with the acquision of Just Biotherapeucs ("Just Bio"). With biologics accounng for over half of the global pharmaceucal pipeline, the acquision provides accessto the lion's share of the $180bn drug development spend; synergies between Just Bio and EVT's established plaorm potenally doubling EVT's forecast revenues. EVT's capabi

Evotec - Q1/2020 results review

Evotec reported a strong set of Q1/2020 results, with revenues increasing 15% YoY vs. Q1/19 to €119.4m supported by growth in the base business for both the EVT Execute and EVT Innovate segments. Base revenue growth more than offset a lower contribution from milestones, upfront payments, and licenses (€5.4m Q1/2020 vs. €10.1m Q1/2019) with Evotec maintaining a stable adjusted EBITDA of €30m (Q1/2019: €30m). Despite the ongoing global pandemic, all Evotec sites have been able to continue operatio

Stellar 2019. Expected to weather the COVID-19 storm.

An outstanding Q4 topped off Evotec's strong financial results for FY2019, which exceeded both our and consensus estimates at both the top and bottom lines. Revenues totalled €446m (+19% YoY) with growth in the base business driven by solid performance from both the Execute and Innovate segments. 2020 may prove a challenging year for Evotec, with the COVID-19 crisis likely to disrupt operations of Execute's services business and potentially delay milestone revenue from the coowned Innovate pipel

Building on progress in precision medicine

Evotec announced the launch of a second research collaboration Indivumed GmbH focused on the discovery of innovative new therapies for non-small cell lung cancer ("NSCLC"). This comes on the back of an initial collaboration in colorectal cancer ("CRC") which successfully identified three novel targets within three months by leveraging Indivumed's multi-omics cancer database, IndivuType, in combination with Evotec's PanHunter bioinformatics platform. The new agreement in lung cancer highlights Ev

Strong momentum to continue into 2020E

Evotec reported strong Q3/2019 results that beat our and consensus' estimates. All business segments delivered a solid performance, including the recently acquired biologics business. We expect the positive trend to continue into 2020E and have therefore lifted 2019E - 2023E revenues by 1% - 2% and adj. EBITDA by up to 6%. Our FY2019E forecasts are 3% - 5% above revised company outlook and we think that the risk to our estimates is to the upside. Evotec shares are trading significantly below our

Nephrology JV with Vifor: patient-centric approach

Evotec announced the launch of a 50:50 joint venture ("JV") with Swiss specialty Pharma company Vifor Pharma AG for the discovery and development of innovative nephrology therapies. The JV combines Evotec's strong expertise in drug discovery with Vifor's proven commercial platform and ambition to become a global leader in nephrology. The aim will be to identify novel targets by leveraging clinical data from a kidney biobank (NURTuRE), reflecting Evotec's patient-centric approach of feeding patie

Biologics boost raises expectations

Evotec reported Q2/2019 revenues in line with cons. forecasts and adj. EBITDA c.8% ahead. Combined with the consolidation of Just Biotherapeutics (“Just.Bio”, closed on 2nd July), this has led management to increase financial outlook for FY2019E. Changes to our model are due largely to adding forecasts for Just.Bio and the increased debt position following the placing of a €250m Schuldschein (promissory note) in June. We maintain our OUTPERFORM recommendation and target price (“TP”) of €28 per s

Financial outlook upgraded post strong H1 results

Evotec reported solid H1/2019 results, with revenues in line with our and consensus forecasts and adjusted EBITDA 3% - 4% ahead. This, combined with the consolidation of Just Biotherapeutics (acquisition closed on 2nd July) led management to increase its financial outlook for FY2019E, suggesting modest upside to our top-line forecasts. Evotec ended the half year with a strong liquidity position of €342m following the issue of a promissory note ("Schuldschein") and the final €54m repayment of the

Evotec expands into high-growth biologics segment

Evotec announced that it has signed a definite agreement to acquire Seattle-based Just Biotherapeutics ("Just.Bio") for up to $90m (c.€81m) in cash. The acquisition is expected to close in Q2/2019E and accelerate Evotec's revenue growth. Just.Bio is a technology company focused on the design, development and manufacturing of biologics with speed, flexibility and cost-effectiveness at its heart. Despite its short existence (founded in 2014/2015), Just.Bio has already grown to approx. 90 employees

Macro trend drives strong start to the year

Evotec reported strong Q1/2019 results that comfortably exceeded our and consensus estimates on the top and bottom line, driven by solid performance across both business segments (EVT Execute and EVT Innovate). Once again, the results reflect that Evotec is well positioned to benefit from the accelerating macro trend towards external innovation in drug discovery and beyond. On the results call, management stated that “we comfortably confirm our guidance”, which may appear conservative in light o

Q1 results beat on strong top-line growth

Evotec reported strong Q1/2019 financial results that beat our and consensus forecasts at the top and bottom line. Revenues came in at €103.8m, +31% YoY, well ahead of our and cons. estimates of €90m and €94m, respectively, driven by solid performance across both business segments (Execute and Innovate). The gross margin of 30% was also ahead of our expectations. Total operating costs of €13m (in line with GPSLe) yielded an adjusted EBITDA result of €30m (vs. GPSLe €20m and cons. €22m), more tha

Q1/2019E results preview

Evotec reports Q1/2019 financial results on Tuesday, 14 May 2019. We forecast total revenues of €90m, +14% YoY and adjusted EBITDA of €20m, +43% YoY. While we anticipate robust growth for the EVT Execute business, we expect Q1 overall to be weaker than subsequent quarters this year due to modest milestone income in the EVT Innovate business, which we estimate at <€7m. The expected high EBITDA growth rate reflects the low level achieved in the prior year, where total milestone income was <€3m. Mi

Warpaint London+ (W7L, House Stock at 470p) - Outstanding FY23A - Upgrades!

Shield Therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

Cambridge Nutritional Sciences - Operational efficiencies; adjusted EBITDA profi

Cambridge Nutritional Sciences (CNS) has provided a trading update for the 12 months to 31 March 2024, noting that a combination of strong sales growth and significant margin improvements, driven by operational efficiencies, have played key factors in the group’s expectation of being adjusted EBITDA positive in FY 2024. Revenues are expected to be £9.8m (30% YoY growth), ahead of our £9.0m forecast, with gross profits expected to exceed £6m, which is again ahead of our year-end forecast of £5.6m

Creo Medical Group - Speedboat savings validated

An official NHS Supply Chain case study has quantified the savings made by an NHS Trust from adopting Creo Medical’s Speedboat device to perform Speedboat Submucosal Dissection (SSD) in comparison to surgical alternatives. In total, the net cash saving from 130 SSD procedures for the NHS Trust was calculated at £687k, including savings from reduced length of hospital stay and reduced theatre costs. Notably, these savings did not include the patient and financial benefits associated with reduced

Morning Note – 24 April 2024

Warpaint London+ (W7L, House Stock at 375p) - Trading ahead of expectations - +10% upgrade implied

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Cambridge Nutritional Sciences - H1 2024 interims: Executing a newly focussed st

Cambridge Nutritional Sciences (CNS) has published its H1 2024 results to end September 2023. Group revenues grew 44% to £4.9m and gross profits increased by 63% to £3.1m, with the company benefitting from newfound operational efficiencies. With its now streamlined strategy focussing on the core Health & Nutrition business and the initial signs of an encouraging uptick in sales momentum, we believe the company is well positioned for growth that will help create future value for shareholders. We

e-therapeutics - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Venture Life Group - Strong organic growth; focus on EBITDA

Venture Life has reported FY23 results to December 2023, following the February trading update. Revenues grew 17% in the year to £51.4m (our est. £50.7m) and adjusted EBITDA was £11.6m (our est. £11.6m). Cash conversion was 85%, generating £9.8m of cash from operations. Cash generation and no M&A in 2023 allowed the company to de-lever, closing FY23 with net debt to adjusted EBITDA at 1.3x. Management have focused on growth with three therapy areas generating double-digit revenue growth and onli

Warpaint London (W7L, House Stock, 196p) - Strong foundation, even stronger upgrade momentum

Morning Note – 8 April 2024

Shield Therapeutics - FY 2023 TU; total revenues in line but Accrufer scrip revi

Total reported revenues and other income were $17.5m (our forecast $16m) in 2023 vs $5.5m in 2022. The composition of that revenue was different to our expectations such that Accrufer US revenues of $11.6m compared with $3.6m in 2022 but came in below our estimate of $13.6m. In the release, the company has noted that the methodology used by the third-party data provider for US Accrufer scrips has resulted in an overstatement for 2023. Revised figures for 2023 have been given showing 77,000 total