Innovation efficiency –
Accelerating innovation through collaboration
Dr Cord Dohrmann
Chief Scientific Officer
Evotec AG, Science-to-Market, Accelerating innovation through collaboration, Frankfurt March 2016
Agenda
The innovation challenge
EVT Innovate
Shifting the paradigm in drug discovery
PAGE
1
Costs per approved drug are unsustainably high
R&D productivity is decreasing at an accelerated pace
Cost, USD bn
Sales, USD mn
1.576
816
+33%
1.188
-50%
416
2010
2015
Cost to develop an asset has increased by
~1/3rd since 2010
PAGE
2
2010
2015
Average peak sales per asset have halved
since 2010
Deloitte. Measuring the return from pharmaceutical innovation 2015
Underlying causes are manifold…
R&D productivity is decreasing at an accelerated pace
 Increased R&D spending
While NME / BLA filings and approvals have flatlined
 Clinical attrition rates have soared
While cost of clinical development is steadily increasing
60
50
50
40
40
30
30
20
20
10
10
0
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
60
R&D spend
PAGE
3
Phase success
R&D spend in USD bn
# of new drugs approved
 Market is only willing to pay for well differentiated drugs
Development of first-in-class drugs is associated with higher risk profiles
86% 83%
68%
67% 64%
39%
60%
32%
15.3%
Phase 1
to phase 2
# of new drugs approved
Deloitte. Measuring the return from pharmaceutical innovation 2015
Phase 2
to phase 3
Phase 3
NDA/BLA to
to NDA/BLA
approval
Lead indications
All indications
10.4%
LOA from
phase 1
Over 50% of drug development suspensions after
phase III or at filing are due to efficacy
Much is lost in translation…
A better understanding of the molecular mechanisms of a disease and translatability into
humans may reduce the risk of late stage clinical development
Suspended, %
Costs, %
54%
48%
Efficacy
Safety
Approval
Target selection/Validation
5.0 7.1
9%
21.5
31%
Screening/
Lead optimisation
Phase III 39.8
Commercial
Unknown
PAGE
4
18%
9.2 Proof of mechanism/
Phase I
8%
19%
13%
Phase 3
NDA/BLA
Hay et al., (2014) Nature Biotechnology
PhRMA Annual Member Survey, 2011 and PwC research
17.4
Proof of concept/Phase II
Addressing the innovation challenge at Evotec
Bridging innovation from academia to pharma
1
Focus
 Building a highly focused and critical size discovery operation
 Over 1000 scientists in discovery
2
Capital
Efficiency
 Highly capital efficient operations based on dual business model
 Seamless integration of Execute (fee-for-service) to Innovate
(biotech) business model
3
Academic
bridge
 An operational VC model to accelerate innovation
 New models of collaboration with academia, biotech and pharma
4
Superior
platforms
 Upgrading discovery platforms with improved preclinical model
 IPSC based drug discovery
PAGE
5
Our offering close to pharma, biotech and academia
Evotec’s global footprint – Approx. 1,000 employees
San Francisco, Branford and
Princeton, USA
~70 employees
 Compound ID, selection and
acquisition
 Compound QC, storage and
distribution
 Cell & protein production
PAGE
6
Abingdon and
Manchester, UK
~300 employees
 Medicinal chemistry
 ADMET
 Structural biology
 In vitro & in vivo anti-infective
platform/screening
Toulouse, France
~230 employees
 Compound management
 Hit identification
 In vitro & in vivo oncology
 Medicinal chemistry
 ADME & PK
 Early drug formulation & Solid
form screening
 Cell, protein & antibody
production
Hamburg (HQ), Göttingen and
Munich, Germany
~400 employees
 Hit identification
 In vitro & in vivo biology
 Chemical proteomics &
Biomarker discovery and
validation
 Cell & protein production
Our “sweet spot” is discovery
Pre-clinical development candidate (PDC)
Academia
Target
ID/-Validation
HitIdentification
Lead
Optimisation
Pre-clinical Phase I
Phase II
Phase III
Market
Clinical
Phase
Pre-clinical
Phase
Duration
> 14 years
Evotec
Approx. 3–6 years
PDC –
Pre-clinical
development
candidate
Partner
Approx. 6–10 years
Approx.
$ 1–3 bn
Cost
Approx.
$ 5–15 m
Evotec’s core competencies
PAGE
Approval
7
Source: Paul et al. Nature Reviews Drug Discovery, 9 (2010)
Capital efficient dual business model
EVT Execute & EVT Innovate
PAGE
8
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
PAGE
9
Strong partner base accessing integrated drug
discovery value chain
EVT Execute – Representative partners
Cmpd
Management
Hit ID
Chemistry
Structural
Biology
In vivo
Biology
PAGE
10
In vitro
Biology
Agenda
The innovation challenge
EVT Innovate
Shifting the paradigm in drug discovery
PAGE
11
Five fields of core expertise
Overview
NEUROSCIENCE
PAIN
PAGE
12
DIABETES &
COMPLICATIONS
ONCOLOGY
ANTIINFECTIVES
Strong portfolio of partnered product opportunities
Discovery
Pre-clinical
Clinical
EVT Innovate – Over 70 projects in partnerships
PAGE
Molecule
EVT302 1)
EVT201
Somatoprim
EVT100
EVT401
ND 2)
ND 2)
ND 2)
ND 2)
Various
EVT770
ND 2)
ND 2)
Various
Various
Various
Various
Various
Various
Various
Various
Various
Various
13
Indication
Alzheimer’s disease
Insomnia
Acromegaly
CNS diseases
Inflammation
Oncology
Oncology
Pain
Oncology
Endometriosis
Diabetes – type 2/1
Pain
Inflammation
Oncology
Inflammation
Diabetes – type 2/1
Diabetes – type 2/1
Kidney disease
Diabetes
Alzheimer’s disease
Immunotherapies
Tissue fibrosis
CNS/MS
Partner
NEU 2)
1) Sembragiline/RO4602522; under evaluation
2) Not disclosed
Discovery
Pre-clinical
Phase I
Phase II
Phase III
Translating first-in-class science to Pharma
EVT Innovate – acting as an operational VC
 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
PAGE
14
More than 10 unpartnered EVT Innovate projects
Cure X/Target X projects “The Bridge”
2011
CureBeta
(Harvard Stem
Cell Institute)
PAGE
15
2012
2013
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)
TargetCanMet
(Debiopharm)
CureMN
(Harvard)
TargetEEM
(Harvard)
TargetAD
(NBB/J&J)
= Innovate Pharma partnerships signed since 2011
2014
TargetBCD
(Sanofi)
TargetDR
(Internal)
TargetATD
(Internal)
TargetFX
(Internal)
TargetKX
(undisclosed)
TargetCytokine
(DRFZ/BMBF)
Fraunhofer
Initiative
2015
TargetASN
(Internal)
TargetFRX
(Internal)
TargetNTR
(Internal)
Ohio State
University
New York
University
Gladstone
Institutes
Agenda
The innovation challenge
EVT Innovate
Shifting the paradigm in drug discovery
PAGE
16
Lack of efficacy drives late stage clinical failures
Over 60% of all phase III trials in CNS diseases failed (1990 – 2012) 1)
Phase III discontinuation
by primary indication
14%
17%
7%
6%
TOTAL
70
7%
Phase III discontinuation
by cause
13%
36%
TOTAL
70
12%
13%
11%
46%
7%
11%
Dementia
Anxiolytic
Efficacy
Neuroleptic
Epilepsy
Safety
Depression
Multiple sclerosis
Financial / other
Neuroprotective
Others
Unknown
Parkinson disease
PAGE
17
1) Source: A.S. Kesselheim et al., Two decades of new drug development for central nervous system disorders; Nature Reviews Drug Discovery 2015
iPSC may provide a solution to the problem
Ultimately we obtain “patients in a dish”
 iPSCs (induced pluripotent stem cells)
are stem cells derived from patients,
they are NOT embryonic stem cells
 These stem cells can be made from e.g.
skin cells of an adult person and renew
themselves like embryonic stem cells
 IPS cells can then be differentiated into
most cell types e.g. neuronal, cardiac,
muscle or others
 Differentiated patient derived cells can
be used to model specifically their
disease and thus develop novel
medicines for well defined patient
populations
PAGE
18
Source: www.eurostemcells.org
A paradigm shift in drug discovery
Improving success rates through early testing of human disease relevance
Current paradigm
Key steps
IPSC based paradigm
Disease relevance of preclinical models
In vitro models for drug
screening / profiling
Low
High
In vivo models for drug
screening / profiling
Low
High
Preclinical patient
stratification
NA
High
Clinical development success rates
Clinical testing in patients
PAGE
19
Low
High
Evotec’s growing portfolio of iPSC based projects
Significant markets looking for new approaches
Program
TargetUPR
TargetC9ORF
TargetBCD
(Cell therapy and drug
screening)
TargetaSN
Disease
Amyotrophic lateral
sclerosis (ALS)
Frontotemporal dementia /
ALS
Diabetes
Collaborator /
Commercial partner
Status
Screening
Cell line testing
Undisclosed
Parkinson’s
Assay development
TargetHTT
Huntington’s
Assay development
TargetAutophagy
Neurodegenerative
diseases
Alzheimer‘s disease
TargetApoE
PAGE
20
NA
Assay development
NA
Disease modelling
Our model works for our partners and us …
Evotec at a glance
1
Strong growth and financial performance
>10% average annual revenue growth rate over the last five years as drug discovery outsourcing
partner; estimated revenues of > € 120 m in 2015; strong EBITDA; cash flow positive
2
More than 70 partnered product opportunities
Significant partnered product pipeline with multiple first-in-class targets in diabetes and diabetic
complications, neuroscience, pain, oncology and infectious diseases
3
Unique business model based on top-quality drug discovery platform
 EVT Execute – Integrated service platform for Pharma, biotech and foundations
 EVT Innovate – Bridge between academia and Pharma for accelerated science translation
4
Focused investments with near-term news flow and partnering events
Approx. € 20 m R&D expenses and around € 10 m technology investments leading to more than
15 unpartnered break-through technology assets and early-stage product candidates
5
Strong balance sheet and very good strategic corporate position
Cash exceeding € 100 m, around 1,000 top-class employees, long-term committed management
and shareholders; Listing: Frankfurt Stock Exchange (EVT; TecDAX)
PAGE
21
Your contact:
Dr Cord Dohrmann
Chief Scientific Officer
cord.dohrmann@evotec.com