Evotec sells chemical development arm for USD 63.9m

German small molecule drug discovery company Evotec has sold its chemical development business to US-headquartered drug development company Aptuit for approximately EUR 46.4m (USD 63.9m) in cash.

The business comprises Evotec's capabilities in process research and development (PRD), custom preparation, analytical development, pilot plant manufacturing and formulation and generated EUR 26.8m of third-party sales (40 per cent of group sales) for FY06.

Aptuit intends to retain all of the employees of the chemical development business, with approximately 210 people based in Oxford and Glasgow.

Evotec said that FY07 sales for the continuing operations are expected to be in the range of EUR 30m to EUR 35m (USD 41m to USD 48m), which includes milestone related payments expected toward the end of 2007.

The deal will contribute a non-operating profit of approximately EUR 25m (USD 35m) in Q4 2007 for Evotec, subject to final closing.

Including the cash proceeds from this transaction, Evotec stated that the targeted year-end cash position had improved significantly to between EUR 93m and EUR 98m (USD 128m to USD 135m).

MCF Corporate Finance served as corporate financial advisor to Evotec in the transaction.

Joern Aldag, Evotec's CEO, said: "The deal will allow Evotec to focus even more on its strategy to become an emerging pharmaceutical company providing higher value research solutions to our partners through collaborative research and partnering of preclinical and clinical programmes developed internally."

CEO and founder of Aptuit, Michael A Griffith, said: "The acquisition continues Aptuit's momentum, as we assemble a complete suite of drug development services in all three major geographies in Europe, North America and Asia."