Evotec SE Q4 FY2022 Earnings Call

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Evotec SE Preliminary Figures Full-Year 2022 Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. I would now like to turn the conference over to Dr. Werner Lanthaler, CEO. Please go ahead.

Thank you very much. A warm welcome from sunny Hamburg to all listeners. And let me first remind you that we have uploaded a presentation for this call, which you can find on the Internet, called 'Ahead of the Curve: Leadership in Our Focus Areas for Medicines that Matter.' This brings me directly into how we wanted to start this discussion with you today because it is amazing to see what we have achieved in 2022. Let me start by thanking the whole company who is working every day to find new medicines that matter. Let me also thank my closest team; it's a big pleasure and a great satisfaction to go forward with you also in a year like 2022, which overall was quite challenging, but still, we have achieved a lot. As you have seen, in an environment where many things came unexpectedly, we have done the right thing and have kept our traction in being ahead of the curve. Looking at my team, I want to wholeheartedly say thank you to Enno. It has been a great pleasure to work with you for such a long time, and I'm very, very certain that our paths will cross again in the near future. At the same time, I would like to introduce Laetitia to you. Laetitia will join us as of April and has started her onboarding process but will grow fully into Evotec as of April. You will, for the first time, see and hear Laetitia at our Q1 presentation. Now, reflecting on 2022, it is important to see what we are doing in the context of the convergence of technologies that ease going faster than ever before. When we say convergence of technologies, it has only one goal for us: to understand diseases better than ever before and with this generate better starting points. We have pointed out here a few selected industry megatrends, and you have heard about all of them. However, we want to highlight that Evotec is truly ahead of the curve, for example, by applying AI and ML-based discovery methods or by using Omics as a key tool for precision medicine of the future. If you think back only one decade, Evotec started with an iPSC platform and you have seen how often we have seen megatrends coming and where we have positioned the company ahead of the curve to achieve significant results, which will provide medicines that matter very soon. On that note, let me guide you a bit into the highlights of 2022, but also not neglect that it was a challenging year where we also saw some lowlights. On the highlights, it is significant progress that we can show in our partnerships throughout the industry network, especially with BMS. We have formed the largest targeted product degradation alliance in the industry, and importantly, this is an 8-year alliance. Regarding our iPSC beta cell replacement therapy alliance, we are also making great progress towards a functional cure for diabetics. When you look at our multiple partnerships in many disease areas, progress is made on many fronts. On Just – Evotec Biologics, we are laying the foundation for strong growth in 2023, and by building J.POD number 2 in Toulouse, we are fully aligned with our plans. We have made some smaller but very important acquisitions in 2022, and I want to highlight here how important our Evotec Modena clinical and commercial manufacturing platform for small molecules and cell therapies is, as well as our small molecule acquisition in Halle, Evotec DS. Progress on our data-driven precision medicine platform is huge, and launching PanHunter is just one action that shows how far we are ahead of the curve here. Generating the key data analytics tool in the industry is one of the triggers for many of our transactions that you have seen in the past and many more to come. Many diseases in the future will only be treated if we understand their molecular core. Therefore, creating molecular databases, which we call E.MPD, is a key highlight that we have started aggressively in 2022 and will continue into 2023, 2024, and beyond. Another highlight which came after year-end, but we want to mention here, is a very large and strategic collaboration with Janssen where we are addressing very significant therapeutic areas. The endorsement of the European Investment Bank to provide us a large loan for the second time should also not be overlooked; it was reported after the period ended. On the lowlights, very few are mentioned, but we must highlight that the discontinuation of our P2X3 program as one of our portfolio assets in women's health was unexpected and disappointing, but we have clearly already digested that in our operations. Increased costs from energy and materials were out of our control, but we suffered quite significantly from this in the first half of 2022. We corrected many of these situations in the second half of 2022, leading to a stronger Q4 and a solid start into 2023. The slightly slower anticipated ramp-up of J.POD in the U.S. should not concern anyone as we feel fully on track with this operation. On Page number 8, you should see that this was an impressive year for our growth and profitability profile. This marks the 13th year of continued double-digit growth, and we are excited to say that the 14th year will also come with strong double-digit growth. If you look at our Q4, many indicators are pointing in the right direction despite a grim biotech environment regarding current funding situations. Page number 9 shows you our initial guidance for 2023, where you see that we are clearly committed to grow our bottom line faster than our top line, and both will reflect double-digit growth figures. Nevertheless, we are not compromising on our R&D commitment, which will still be in the range of €70 million to €80 million. This is where we expect our projects to be initiated and then rolled into strategic partnerships in the future. Many people ask us how this fits into your Action Plan 2025. Remember that J.POD will show its initial contribution to our top and bottom line by the end of 2023, beginning of 2024, and that J.POD number 2 will go online by the end of 2024, beginning of 2025. This is why a step function will be seen in our top and bottom lines by then. The negative contributions will be eliminated, and you will also see a step function in many of our milestone-bearing collaborations in the years 2024 and 2025. Our Action Plan 2025 is fully on track. If you look at Evotec, do not only focus on the short-term numbers because the royalty pool we are building for the future and the substantial milestone pool we are building is growing every day. It is our pleasure to announce today that another €4 billion in milestone potential was added and another royalty cascade of a vast portfolio due to the CNS collaboration with our long-term partners BMS. If you continue in this presentation, allow me to guide you deeper into our focus areas. Building a company that is ahead of the curve means we want to stay focused on areas where we can win. We defined four areas of competitive advantage: PanOmics, iPSC-based cell therapies, Just – Evotec Biologics, and our end-to-end shared R&D platform. On Page number 14, you see our portfolio of offerings. Moving to Page number 17, we are diving into the first focus area: PanOmics is already a success and is just beginning. The future of Omics starts now. Looking back in a few years, you may refer to this as an iPhone moment in drug discovery and development as we delve into transcriptomics and Omics level to understand diseases better than ever before. The endorsement from many partners is encouraging, and it’s exciting to know that better drugs will be developed soon. A major endorsement for Omics was the first transaction in targeted product degradation we executed, then expanded with BMS last year. Within the challenges of the biotech environment regarding funding, the potential disruption of this transaction was significant, as we are identifying more innovative drug targets than anyone else in the industry. The scale of the effort here is profound, and Evotec stands to gain enormously from a deal valued over $5 billion, with double-digit royalties attached. You will see in our morning announcements how essential it is for us to solidify and expand our strategic partnerships, as evidence of our commitment to build a leading portfolio. Creating a partnership for 8 years is a commendable express of commitment from both parties as we endeavor to build a world-leading portfolio. Page number 19 emphasizes that great deals stem from great teams, and I must particularly thank Cord and Richard Hargreaves from BMS for their scientific vision which is quickly transforming into product stages. On Page number 20, as we listen in on this call, it is vital for us to understand the growing burden of neurodegenerative diseases as we age. Our goal is to live long and healthy lives. Thus, creating novel interventions for these diseases is essential since we know the pipelines are empty or only offer symptomatic treatments. Looking at Page 21, we can see that our industrialized iPSC platform is at the heart of these efforts, combined with our molecular patient databases will create entirely new drug targets where we can predict with remarkable accuracy which targets will have higher probabilities of success, as the data is human-derived. If you contextualize this on Page 22, it becomes clear that the industry is once again getting highly enthusiastic about CNS. Leading the industry with the best technologies and our collaboration with BMS is essential to building a broader franchise. And by broader, I signify that we aim to venture outside of just neurodegenerative diseases with our iPSC platform and molecular patient databases. Switching to the next focus area, iPSC-derived therapies, we should recognize that this marks the inception of affordable, widely usable iPSC-derived therapies. This has historically been the industry's bottleneck, and we foresee a significant renaissance in cell therapies in the upcoming years, particularly when off-the-shelf therapies become manufacturable and affordable. Regarding manufacturability and the product being the process for biologics, we have added to our Modena facility, allowing us to create manufacturing processes that follow biological principles. We are leading the industry towards a comprehensive end-to-end solution for iPSCs. On Page 26 regarding iPSCs and cell therapies, we are building a comprehensive portfolio, and our partnering efforts have just begun. Expect more efforts in our partnering world. With our scientific understanding combined with manufacturing capabilities, we anticipate a positive reception for our offerings in the industry; Janssen is a partner we are very proud of in this context. On Just – Evotec Biologics, we have made it clear that we stand firmly behind this effort today. We're strongly positioned to meet and possibly exceed our sales guidance of being above €100 million by the end of 2022, as we are involved in multiple discussions with public institutions, innovative biotech firms, pharma companies, and biosimilar companies. Our partner portfolio is expected to expand nicely in the near future. This is significant because on Page 30, we detail that our CapEx spend necessary before onboarding customers into our J.POD is increasing. This start-up phase is expected to be volatile but should stabilize as we commence marketing by the end of 2023, 2024, and 2025. Our last focus area is our end-to-end shared R&D platform. On Page 32, the number of partners on our platform stands vital with over 800 partners at any moment, justifying our reputation for supporting the shared economy in R&D. Increasing our repeat business from 90% to 92% in 2022 demonstrates our focus on customer satisfaction at Evotec. We're creating a greater number of partners where our engagements exceed €1 million in revenue, which presents us with a solid portfolio effect. Page 33 highlights our belief in this megatrend, positioning us as leaders in high-quality growth in the global market for variable costs. Regarding the biotech funding crisis, many biotech firms realize that they are better off collaborating with Evotec on a variable cost basis than incurring fixed costs alone. Therefore, we are positioned as a solution in response to the biotech funding crisis. With that, let me hand over to Enno, who will provide context to our financial performance of 2022. Enno, this will be your last presentation in this role, but it's wonderful to see you present the best numbers for Q4 ever.

Yes, thank you, Werner. It's my great pleasure to report our financial performance for 2022, starting with an overview of our preliminary numbers. Compared to the previous year, the group revenue increased by a strong 22% to €751.4 million, surpassing our upper revenue guidance by over €15 million. This significant growth was primarily driven by our robust base business, with favorable FX effects adding an additional €40.6 million. However, we did see a decrease in milestone revenues of €31.4 million compared to 2021. The gross margin amounted to 23.2% for 2022, leading to a decrease of 130 basis points compared to the previous year, primarily due to increasing costs associated with Just – Evotec Biologics manufacturing and lower contribution from milestone revenue. Additionally, inflated energy prices, more expensive materials, and higher logistics costs negatively impacted gross margins, as Werner highlighted. Unpartnered R&D jumped 21% from €58.1 million in the previous year to €70.2 million in 2022. This reflects our commitment to enhancing Evotec's capabilities in efficiency and precision medicine platforms. When comparing this to our guidance, the result for unpartnered R&D costs falls within the lower end of our target range of €70 to €80 million. Our ambitious EBITDA guidance was set between €105 million and €120 million, and we report a like-for-like adjusted EBITDA of €104.1 million, supported by a balanced development between growth and profitability of Evotec's base business. Still, significant investments to enhance the high potential of Just J.POD negatively impacted the EBITDA outcome, coupled with lower milestone contributions. Strong inflationary headwinds presented challenges to our EBITDA, particularly in the first half of 2022. Overall, the M&A adjusted EBITDA improved from €101.7 million to €104.1 million. Excluding the financial performance from Just – Evotec Biologics it would achieve an outstanding EBITDA of €138.3 million for the full-year 2022. Looking at Page 36, this slide depicts our excellent revenue growth of 22%, which was spread across most of our business units. Of this, 15% resulted from organic growth at constant FX. FX tailwinds of about 6.6 percentage points were crucial to the achieved revenue growth. After adjusting for Just J.POD, revenue standalone grew by 24%. Just looking at the base revenues, these increased by an impressive 30%, indicating the growing demand by our existing and new partners. Although we saw a decrease overall in gross margin, it would actually increase from 28.4% to 31.1% when excluding Just – Evotec Biologics, thus exceeding last year's gross margin by 2.7 percentage points. Despite reduced margins from milestone contributions coupled with inflationary pressures, we consider the results highly satisfactory this year. On Page 37, the Q4 EBITDA contribution was €57.1 million, largely driven by milestones, upfront payments, licenses, and royalties. The tremendous growth came from the excellent development of our base business, which includes strong operating leverage and remarkable performance from Just – Evotec Biologics in the final quarter. The achieved dynamic growth rate was 34% in Q4 2022 versus Q4 2021. The Q4 revenue growth reached 29% compared to a robust Q4 2021, aided by a milestone contribution of €12.3 million. The gross margin in Q4 rose to 34.4%, a 6.5 percentage point increase from Q4 2021, significantly attributed to milestone achievements, strong base business performance, and an improved contribution from Just – Evotec Biologics. The EBITDA in Q4 improved by 53% compared to Q4 2021. Importantly, 52% of the year’s EBITDA was recorded in Q4, significantly influenced by the fluctuating share price development of our shareholding in Exscientia. On Page 39, this slide highlights our main balance sheet and cash flow KPIs of 2022. The balance sheet remained stable, totaling €2.2 billion in total assets. With an equity ratio of 52.6%, we maintain a solid basis for future investments, providing considerable financing flexibility for our growth trajectory. The decrease in the equity ratio is primarily due to the fair value adjustment of Exscientia shares, which amounted to an adjustment of €175 million in 2022. Our operating cash flow totaled €203 million, showing an increase of over €80 million compared to the previous year. A notable event was receiving a $2.5 million payment from BMS in the first half of 2022. Additionally, our negative net debt ratio of -2.0 adjusted EBITDA factor demonstrates our solid financing basis, with ample room for financing flexibility. Evotec's liquidity position of €719 million facilitates our ambitious growth and investment strategy. CapEx in 2022 totaled €181.4 million, with a significant portion going towards site expansions. For example, €58 million was invested in J.POD Europe, particularly in Toulouse, €50 million in J.POD U.S., and another €86 million for expansions in Munich, Alderley Park, Abingdon, and Toulouse. Additionally, we allocated nearly €60 million for new and existing equity investments and minority shareholdings, including €23 million for the acquisitions of Evotec Modena and Evotec DS. With this, I conclude my financial overview. Thus, I hand back to Werner, and before I do so, I want to thank our audience, investors, shareholders, analysts, and media for their support over the years. It has been a true pleasure interacting with you, and I hope to continue doing so.

Thank you, Enno. To summarize the final portion of this presentation on Page 41, I reiterate our Action Plan 2025. Moving to Page 42, it is essential to foster a growth company with a growth culture. In 2023, we are bringing in about 500 new talents, and we are committed not only to building the culture but also to providing prospects for these new team members to feel motivated for a long-term future at Evotec. As we see Page 43, we are increasingly noted for our commitment to ESG and sustainability. We want to contribute not only to patients but to the entire planet. Everyone can start here, and we want all our employees to realize that we are deeply committed to this from the management team throughout the organization. If you go to the next page, we will continue and accelerate our ESG goals in 2023. Understanding growth is crucial, as is our engagement survey in 2023 to gauge employee perspectives. When it comes to our news flow in 2023, on Page 45, we have already made progress with numerous developments in PanOmics, iPSCs, Just – Evotec Biologics, and our end-to-end shared R&D platform. We are at the beginning of a transformative year for Evotec and foresee a long-term vision that aims for groundbreaking success. Thank you all for your attention, and I welcome any questions.

The first question is from the line of Zoe Karamanoli with Royal Bank of Canada. Your question, please.

Hi. Thank you for taking my questions. Two questions from me, please. First one on Just. How much capacity are current projects utilizing, and of these, what proportion is late-stage preclinical versus early-stage preclinical? And how many more customers do you need to have before you expand the capacity on Evotec Just? If you could comment by the development stage, that would be helpful. As a follow-up, is there an ideal split between how many customers' projects you need to have at each stage of development? Thank you.

Great. First question goes to Craig.

Thanks for the question, Zoe. It's important to remember we are still in a build-out and ramp-up phase; the whole design of the Just – Evotec Biologics concept allows for modular expansion. We are not fully utilizing our capacity as it stands today. However, a lot of the sales completed in 2022 should contribute significantly to revenue in Q4 and into 2023. Regarding how many more customers we need before expanding, it's more about the magnitude of demand than just the number of customers. The nature of demand also comes with varying impacts on the facility. For instance, batches may take about 9 months to complete. Thus, we can adjust capacity in response to business needs efficiently.

Thank you. Next question, please. Zoe, was there a follow-on? Sorry to interrupt you.

Next question is from the line of Peter Verdult with Citi. Your question, please.

Thank you. Peter Verdult from Citi. Werner, I have three questions for you. First, could you provide more details on Just? You mentioned not expecting to reach breakeven this year, but can you clarify how close you anticipate being by the end of 2023, and what makes you confident that capacity utilization will increase this year? Second, you made some intriguing comments during your prepared remarks. Could you elaborate on what you're hearing from your new customers? It's clear that CMO players are bracing for a challenging first half, and those customers are reducing their inventory. I’d like to hear your thoughts on that. Lastly, regarding your guidance, you referenced new clinical trials and partnered assets entering the clinic. It was disappointing for everyone about certain developments, but could you highlight one or two assets you're particularly excited about that fall into the category of new clinical trials or partnered assets? Thank you.

On Just and the market situation, I'll hand over to Matthias. When it comes to partner feedback, I'd like Craig to comment. Regarding partner assets, for example, our neuro asset partnered with BMS has undergone Phase 1 and is an example of precision medicine at its best. It highlights the potential of these platforms. Additionally, we're also excited about assets in our collaborations with Bayer and Lilly. However, we will disclose these only as our partners show progress.

Hi, Peter. It's Matthias Evers. Thank you for that question. In relation to Just, concerning our current pipeline and order situation, we anticipate double-digit growth in revenues and expect lower losses compared to last year. While we don't expect breakeven on a full-year basis, we are aiming towards achieving this in the final quarter.

Thanks, Peter. Your question about market vibrations and partner feedback. We remain in close contact with our partners, and while cautionary notes are indeed observed, we maintain a favorable mix of biotech, government, non-profit, and big pharma partners. This mix provides protection against challenges faced by any single segment. Our flexible, capital-efficient model enhances the success probability of our partnerships.

Furthermore, it's crucial to recognize that precision tools like transcriptomics, proteomics, and PanHunter are not commodities in the industry. That places Evotec in a unique position as partners prefer working with us for a precise approach rather than an outdated one. Hence, while we see a grim funding environment now, our differentiated offering places us in a category ahead of many competitors.

Thank you, very clear.

Great. Next question, please.

And the next question is a follow-up from Zoe Karamanoli from Royal Bank of Canada. Zoe, your question, please.

Yes. Hi, sorry. You mentioned business mix regarding demand for Just. I’d like to clarify—do you have guidance on the number of projects? For instance, are two projects similar to Alpine and DoD sufficient to reach capacity? Or is that not the case? Would 10 smaller early-stage projects be required? Thank you.

Great question, and it goes to Matthias.

Thank you for the question. Our goal remains to develop a portfolio across all stages from discovery to clinical supply, engaging diverse partners. While I can't comment on specifics, we are focusing on building a portfolio across various projects.

The portfolio we need to generate currently includes identified partners and discussed projects. We are aware of the partners and prospects ahead of us.

To clarify, if you're asking about the specific mix of work necessary due to facility constraints, that’s essential to understand. We can do a large number of small projects or one major project using the same infrastructure in a flexible manner.

Great. Thank you.

Next question, please.

The next question is from James Quigley with Morgan Stanley. Your question, please.

Thank you for taking my questions. I have three. First on guidance, could you give us more details on the components? Your constant FX guidance suggests about 11% to 14% growth year-on-year. With Matthias mentioning that Just Bio should see double-digit growth, it implies a step-down in growth for the base business. What do you assume regarding base business, Just Bio, and milestones? If growth is anticipated to step down from the earlier 30%, what are the main drivers? Secondly, for proprietary R&D spend, it was stated at the lower end of guidance and remains the same for 2023. How should we gauge the necessary increase to €100 million by 2025? Lastly, with your CDMO offering developing nicely, how do you plan to broaden other modalities here, and what should we expect from the CDMO business? Thank you.

Thank you, James. Let me address the guidance first. Our dynamic environment for capital allocation—our 5-year plan, disclosed in 2021—retains flexibility to invest in R&D opportunities that demonstrate industry-leading potentials or significant returns on investment. We feel comfortable with our planned spending of €70 million to €80 million for R&D this year, which is conservative in light of high demand. If an increase to €100 million is required, it will largely depend on the partnerships we secure, such as our neurodegenerative partnership, which established new profit centers. Regarding the components of our guidance, rest assured that we are left somewhat alarmed by factors such as the SVB Bank incident and other elements regarding biotech funding situations in the U.S. So, in terms of competitive base business and capacity, we are not expecting significant growth. That said, how many companies consistently generate double-digit growth for 13 years? Instead, it’s more about how many projects we undertake in the context of available capacity; that’s the challenge we face, not the lack of demand. Regarding new milestones in the guidance, we are anticipating a higher number in 2023. This corresponds to our larger milestone-bearing collaborations reaching data points. However, certain elements can create variability. This, of course, started early in the year and will continue as we look at 2024 too. Our guidance reflects a balanced initial approach.

In terms of the CDMO strategy, we are utilizing a hybrid model while ensuring that we effectively integrate capabilities in API and finished product delivery, as well as our shared R&D platform. We are focusing on a hybrid model rather than adding modalities. Our strategy aims to leverage existing strengths in all modalities where we currently operate.

Yes, thank you very much.

Pleasure. Next question, please.

The next question is from an unidentified analyst with Bank of America. Your question.

Thank you for taking the question. Can you briefly comment on the quantification of the Bristol Myers collaboration? You had comments in the PR regarding the timing of recognizing it in 4Q versus 1Q. Is this split between execute and innovate? Also, is there anything we should be aware of regarding 2023 guidance attributed to that?

Yes. First of all, it is an extension and expansion. The ongoing collaboration already accounted for in our guidance. We will receive the upfront of €50 million; this will likely be distributed over time, thus it won't have a significant contribution to expectations for 2023. However, we have a large portfolio of projects linked to substantial milestones. Remember, it's not just the €4 billion target potential, but there's also double-digit royalties attached that could elevate overall contributions neatly.

Any clarity regarding pacing or seasonality for 2023? I think 2022 exhibited a strong step-up from 3Q to 4Q.

We hope for smoother seasonality compared to 2022. We anticipate a solid start in Q1 2023 and indicate clear expectations towards double-digit growth. The grim circumstances from 2022 in energy prices and supply chain costs should not repeat in the current first half of 2023.

Just to clarify your thoughts on inflation, cost levels, and performance trends carried into 2023? What's expected for inflation, wage inflation, cost inflation based on your projections? Are any unforeseen factors included?

We've forecasted based on where we concluded Q4, reflecting our current outlook. External shocks—like bank crises or other disasters—aren't included in our planning. We haven't incorporated extreme scenarios but do see potential alleviation of some costs as seen in energy prices.

Thank you.

Pleasure.

The next question is from Steven Mah with Cowen. Your question, please.

Thank you. Two questions regarding Just Biologics. Firstly, did you disclose the CapEx for J.POD Redmond and Toulouse for this year? Secondly, how do you perceive the Just Biologics pipeline in the context of potential market challenges? Are you maintaining your timelines for Toulouse and Redmond expansion?

Enno will respond to the CapEx question, while I'll address capacity build-out concerning market conditions.

For 2022, CapEx on both locations totaled roughly €75 million. In 2023, we expect it to exceed €130 million as we advance our building phase in Europe.

We remain fully committed to Just – Evotec Biologics and are on track as planned with the build-out in Toulouse, aiming to have J.POD 2 operational in the second half of 2024.

We are creating a paradigm shift in biologics production for more precise drugs, leveraging continuous manufacturing that significantly alters costs. This investment is not a simple capacity play but a shift in operational culture.

The next question is from an unidentified analyst.

Thank you for your responses. Have the recent issues with non-human primates in the U.S. impacted your business positively or negatively?

We are prepared for business without any negative implications from that incident. This could indeed propel interest in our technologies regarding the three Rs—replacement, reduction, and refinement—in addition to the phase-out towards more refined human-oriented predictive tools when looking at safety assessments.

Our operations regarding non-human primates remain secure, and we are positioned favorably to expand.

Moreover, a growing push toward modern Omics technologies emphasizes our commitment and market fit during this transition.

The next question is from Joseph Hedden with Rx Securities.

Questions on the targeted protein degradation deal: how many employees are involved now, and what does growth in personnel look like given the recent €75 million payment?

Currently, we have over 200 employees dedicated to the proteomics platform linked to targeted protein degradation. With this deal, we are ramping up further, having more than 40 mass spectrometers generating substantial data that leads our industry.

The next question is from Falko Friedrichs with Deutsche Bank. Your question.

Can you provide more detail on the progress of the compound in Phase 1 with BMS? When can we expect the first clinical readouts?

Regrettably, I'm not permitted to provide specific details regarding the compound progress without appropriate permissions from our partner.

The next question is from Christian Ehmann with Warburg Research. Your question, please.

Regarding Janssen Corporation, what added value will you bring to your collaboration, especially concerning your technology?

Unfortunately, I cannot disclose details beyond what we've announced regarding the partnership. We aim for effective collaboration, and we will share news as it becomes available. In the absence of further questions, I would like to thank everyone once again for their insightful questions. I appreciate your participation and keen interest in Evotec. We know the sector has had easier times ahead but trust in science, as it’s evolving as we speak. Thank you, and I hope to see you all soon.

If I may, we have a final question. No, it's gone. Sorry for that.