Werner Lanthaler - CEO Mario Polywka - COO Cord Dohrmann - CSO Enno Spillner - CFO

Jean-Paul Mannie - Kempen & Co N.V. Igor Kim - Oddo Seydler Bank AG Heinz Müller - DZ Bank AG Samir Devani - Rx Securities Mike Cooper - Trinity Delta Research Limited

Welcome. Welcome to Evotec's Call for the Last Year 2016. This is the results call of our company and we would like you to -- and we would like to invite to download a presentation that you find on the internet if you go to our website. I would take this presentation and guide you through this presentation and I'm here in Hamburg together with my colleagues who I want to introduce first. I'm here with Mario, our Chief Operating Officer; Enno, our Chief Financial Officer; Cord, our Chief Scientific Officer. If you take the presentation and if you go to page number four of this presentation, you see a summary of the highlights and lowlights of 2016. And to start with, we want to say that 2016 was a fantastic year to shift gears upwards. We wanted to shift many things upwards because we feel that our business model is just about to begin to deliver what was the ambition and what is the ambition in our long-term plan. You will see when you look at the highlights and lowlights of 2016 that we see in both segments much more highlights than lowlights and that's also reflecting how at this stage, the company is positioned because we're in a strong situation -- actually we're in a very strong situations. My colleagues will then go into details of the highlights and lowlights, let me just mention a view here where in execute, it was a big success for us to really augment the company by for example, adding Cyprotex as an exhibition and with this becoming the world's leader in ADME-Tox and DMPK. Or let me highlight our IPS platform where we are the world leading platform in the industry at this stage and we're together with Celgene and other companies we are just on the beginning of making this technology really work. There are all also lowlights of course, and therefore we have to report and want to report that we are phasing out our alliance with Janssen in the neuroscience area. When you look at page number five of this presentation, you can see that what we are doing is not about one-time effects, we are asking ourselves the question what can we do to make a long-term sustainable business and if you look here at the graphs from 2013 indicating into 2017, you see that we have a continued strong performance when you look at our financial results. This is the reflection of a long-term macro trend, which is ongoing in the drug discovery field where we are benefiting from the macro trend of outsourcing innovation. When you look at page number six to the single elements of our guidance, we are very happy that we can report back to you that we have confidently achieved all elements of our guidance and Enno will bring you then details of that. When you look at the details of this guidance, you will see that all growth indicated at this stage are fully intact and we expect them to be fully intact also into 2017 and the years to come. Page number seven really for us a key page because it always is the same since 2009. This is our long-term strategy, where going forward our strategy should indicate to you that we don't intend to change our strategy, we just intend to do more of the same which might sound boring to you, but when you will listen to what we do scientifically and what we do in our daily work, nothing is more exciting than what we are doing at this stage. If you look at page number eight, you see that we have established a unique business model on the basis of a unique platform and the business model works. Both segments Evotec Execute and Evotec Innovate are delivering according to strategy for sometimes even slightly better at this stage. On that note, let me hand over to Mario who will bring you into the highlight of Evotec Execute and into the outlook of Evotec Execute for 2017.

Thank you, Werner, and hello to you all. It's a pleasure to speak to you today on the Execute segment's excellent performance in 2016. Firstly, we should we should recap on the growth in the platform subsequent to the Cyprotex's acquisition in December. The Evotec Group is now more than 1,200 people with more than 1,000 expert scientists making us the most comprehensive drug discovery partner in the Western world. The acquisition of Cyprotex added some hundred people to our U.K. headcount as well as more than 30 in the U.S., giving us much more critical mass in our U.S. operations. Our platform is now well-positioned to deliver on integrated programs across our global customer base as well as to support the increase in strategic, functional outsourcing, such as ADME-Tox, counter screening, protein production and compound management. I should also mention at this point that however in the fourth quarter of 2016, we received notification from the NIH of the termination of the compound management collaboration signed last in early 2012. The termination comes off the back of increasingly large budgetary constraints within the NIH. As a consequence of this, we have initiated the closure of the San Francisco operation with all remaining client compound management business transferred to the East Coast Frankfurt site. Moving now to slide 11 and the outstanding results of the segment Evotec Execute. Total Execute revenues including intersegment revenues of €33.2 million were up 28% to a €171 million against the €134 million in 2015. Excluding intersegment contributions, the growth was an exceptional 30%. The strong revenue growth was at a gross margin of approximately 30%, which in turn translated into an EBITDA of €50 million, some 30% of revenues and up 110% over 2015. The performance in the segment was driven by strong fundamental growth in the core business, significant milestone achievements and a full quarter more contribution from the Sanofi collaboration. On slide 12, we should remind you that Evotec Execute provide standalone discovery services as well as utilizing the whole platform for integrated projects on our partner's targets. Developments in both these areas led to the strong operational performance of the segment. Firstly, we achieved significant milestones in our collaborations with Bayer, BI, and Padlock during the year, new two integrated deals were signed with, for example, C4X Discovery, Forge, Carrick amongst others and strategic functional deals were signed with UCB and [Indiscernible]. We were also pleased to sign an extension to the long-running partnership with Genentech in in-vitro pharmacology services. The signing of long-term new deals and the continuation of successful collaborations, fuels the pipeline for 2017 and beyond. In addition to all this, we have continued to build on the platform capabilities through licensing of the CRISPR gene editing technology, the Trianni Mouse model for production of humanize monoclonal antibodies and of course, on a more functional basis, the acquisition of Cyprotex on which I will update you later. Slide 13 gives an overview of customer and revenue metrics. Our partner and project base in 2016 remained strong and balanced as was the case in 2015. 70% of our revenues are generated from long-term partnerships with 10 partners. Such partnerships are mostly multi-faceted with a number of distinct projects within each client, thus mitigating the risk of overreliance on single projects. Partnerships such as these are predictably driven by big pharma, however, the similar percentages of foundations and biotech revenues against the significantly larger total revenue number gives a good indication of the growth and balance in this area. As in 2015, there is a bias in revenues from Europe driven by the Sanofi contribution to revenues, however, adjusting for this gives a relatively even split of revenues across Europe and the U.S. In slide 14, we focus more on the recent acquisition of Cyprotex and to remind us all the acquisition was complete in December 2016, Cyprotex delisted from a final payment of €66 million. There was a small contribution to both top and bottom-line to Evotec's 2016 financials from the two weeks that Cyprotex was consolidated to our financials. We're pleased to report that, although, still in the early days, the integration is proceeding to plan. We will continue to market the activities under the Cyprotex brand; we have a new management team in place, on the main sites in the U.K. successfully moved to state-of-the-art laboratories in Alderley Park in January. Commercially, we are in negotiations with certain companies on more long-term high-volume strategic partnerships to continue to drive the growth in this business. For 2017, we anticipate delivering up with €20 million in revenues, this, despite the downtime in January due to the move to Alderley Park. Gross margins and EBITDA should be in line with the Execute segment. Moving forward to slide 15, while 2016 represented the first full year full quarters of operation of our lease facilities in business. The site is now fully integrated into our operations. Third-party revenue from the operations exceeded our strong budgetary objectives. The addition of a significant immuno-oncology expertise has led to numerous new integrated deals such as those with Carrick and C4X Discovery. We continue to deliver on our strategic research collaboration with Sanofi, mainly to the site as well as running a number of internal R&D projects on which Cord will highlight later. In all we have increased the results by over 50% over the last 24 months to more than 300 people. Our expectations and confidence in continuing to maximize the utilization of this excellent integrated capability remains high. In summary and building on the great success of 2016, 2017 is said to be another strong year in the Execute segment as shown finally in slide 16. We remain confident that through the continued strong functional outsourcing from pharma and the strong integrated deal pipeline coming from a vibrant biotech sector coupled with sustained milestone achievements from a large portfolio of milestone bearing alliances that 2017 will show continued good growth. Now, I’d like to handover to Cord for his section.

Thank you, Mario and good afternoon to everybody on the call. It is my great pleasure to give you an update on Evotec's Innovate business segment starting on page 18. I'm happy to reports that Evotec Innovate continues to drive on multiple levels alongside Evotec Execute. With an Evotec Innovate, first and foremost, it is our goal to continue to build a portfolio of partnered product opportunities, which hold significant commercial offset for Evotec in terms of long-term research contract, but in particular, via participation in the successful development of candidates for milestone payments and potential royalties upon market entry. Currently, our portfolio of core product opportunities consists of 70 projects and this portfolio continues to grow. In 2016, we have added two very significant multi-project long-term partnerships to our portfolio; one with Celgene in neurodegeneration and one with Bayer in chronic kidney disease. In order to continue to expand our Cure X/Target X initiatives which are off in basis of these partnerships, we entered into two new agreements; one with the Institute, which is the largest healthcare focused research institute in France and another one with ex Scientia, a U.K. biotech company specialized in using computer adjusted drug design to generate by-specific small molecules. This collaboration has initially focused on emerging immuno-oncology targets. Furthermore, we are proud to have expanded our Academic BRIDGE concept further and have built our first strategic Academic BRIDGE with Oxford University in the U.K., which has been ranked the best overall University worldwide by Times High Education in 2016/2017. Finally, we have participated in selected company formation such as Topas Therapeutics, Carrick Therapeutics, and Eternygen, which is essentially another tour to expand our portfolio of fully-owned product opportunities. On slide 19, we present Evotec's Innovate financial performance in 2016, which continues to move in the right direction. In 2016, we were able to record a very significant growth in revenues by close to 25% over the previous year. EBITDA also significantly improved by almost 10%, while R&D expenses stayed essentially flat at €18 million in 2016. Looking forward to 2017, we're optimistic that Evotec Innovate will continue on this path. On the next slide, I would like to talk a bit about our progress in established partnerships and novel partnerships. We have a strong portfolio of larger strategic collaboration which continues to make progress. In 2016, our endometriosis collaborations with Bayer delivered its first candidate into clinical development and is currently pursued in phase 1 of clinical development. Our fibrosis collaboration with Pfizer is making significant progress and is likely to be expanded. Our small molecule immune-oncology with Sanofi has been expanded and is also progressing well. In 2016, we have signed another strategic collaboration with Bayer in chronic kidney diseases. This collaboration is built on a unique kidney disease discovery platform establish at Evotec which includes novel targets as well as [Indiscernible] and lead compound, but also targets that are contributed by our partner Bayer. Commercially, it was not from payment of €12 million potential milestones of over €500 million as well as significant royalties up into the double-digit range. Although this collaboration is only signed in September 2016, it has already delivered two important early stage milestones and we are very optimistic that this collaboration will continue to thrive. On the next slide, I'd like to mention one area of focus R&D in 2017. We clearly continue on our past towards global leadership in induced pluripotent stem cell-based drug discovery. This is an area of focus to Evotec Innovate going forward and continues to be in area where we use stem cell-based drug discovery and in this context in particular patient-derived iPS-based drug discovery. Translating preclinical discovery efforts into effective human therapies in the clinic is still of one of the biggest hurdles in the pharmaceutical industry. Incorporating human genetics and biomarkers has already improved the success significantly. The emergence of patient-derived iPS-based disease model represents a tremendous opportunity to systematically incorporate human genetics and patience stratification strategies into the drug discovery process very early on. So we are absolutely convinced that patient derived iPS-based drug discovery platforms although still at its early stages are here to stay and will have a tremendous impact shifting the drug discovery paradigm away from traditional models towards patient disease models that will become increasingly sophisticated. At Evotec, we started our assets to build a unique iPSC-based discovery platform in 2012. Division back then was and still is to become the world leader in iPSC-based drug discovery and we believe that it has made significant steps into this direction and are planning to continue on this path. The platform by now consist of over 50 scientists dedicated to this area, various academic partnerships, the foundations such as a CHDI and Michael J. Fox Foundation, strong ties to various consortia and two commercial strategic pharma partnerships. We initiated our first collaboration in this area in 2012 at Harvard University in particular here with Kevin Eggan and Lee Rubin in the area of motor neuron diseases. This collaboration was turned to cure motor neuron indicating that the intention was always to build the most comprehensive patient-derived motor neuron discovery platform in the business. Since then, we’ve broadened the platform significantly covering now not only motor neuron, but also cortical neurons and dopaminergic neurons as well beta cells Our first commercial partnership with very significant commercial up sight for Evotec was signed in 2015 in the field of diabetes with Sanofi which is one of the market leaders and world leading companies in diabetes. In 2016, we signed the second collaboration the Celgene Corporation in the field of neurodegenerative diseases. On slide 22, these two iPSC-based drug discovery partnerships are briefly summarized. The Sanofi alliance is very much focused on diabetes and cover cell therapy approach as well as small molecule drug discovery efforts. This collaboration is very -- making very good progress scientifically and we -- hopefully, we can report on this very soon. In December 2016, we have found our second collaboration in the iPSC-based drug discovery field the Celgene Corporation focused on neurodegeneration. This collaboration is a bit special in regards to its scope and structure. We are very much aligned in our thinking this as Celgene that neurodegeneration is a very challenging field and desperate need of a new approach and this is especially true in neurodegeneration as traditional approaches has been variably failed in the past. The Celgene collaboration comes with a significant upfront payment of $45 million very significant potential milestone are up to US$250, $1 million per project and potential royalties into the double-digit range. This is certainly a landmark here for Evotec and definitely a cornerstone to aggressively expand our platform going forward. So much about the efforts on iPSC-based drug discovery now would like to shift your attention to our continuing efforts in translating breakthrough academic science into next-generation pharma projects. Evotec has been very active in forging academic partnerships to access breakthrough signs and translated signs into highly innovative Cure X/Target X drug discovery initiative which generates the next generation of Pharma projects. We have built over 30 academic partnerships with institutions such as Harvard, Yale, Dana-Farber, Brigham and Women’s, Gladstone Institute and many more in the past three years. In 2016, we clearly continued on this path and added the collaboration with Inserm Institute in France in the field of oncology. Once again, the Inserm is the largest healthcare focused research Institute in France and to source a great sign that has led to the formation of many successful biotech companies. Also in 2016, we have added the highly strategic partnership with Oxford University once again have been ranked best overall University worldwide. This academic partnership is special and that it is clearly a blueprint for the next level of evolution of how academic partnerships will be built in the future. This partnership is called LAB282, the 282 representing the pantone color code of Oxford University and consists of three major partners. First and foremost, of course Oxford University but then also as a very important partner Oxford Science of Innovation which is the largest university focused venture fund and also Evotec. Oxford of course is the source of all projects, Evotec evaluates, validates and selects the most promising projects and or OSI provides the funding. All of this with the intention to bring the most promising project forward into company formation. Evotec will hold the significant automated stake in each and every company formed and will have the right to co-invest alongside OSI in future rounds. We are extremely excited about this new concept of building academic partnerships very much aligned with the University and venture capital to select the most promising project in the data driven process and then efficiently progresses opportunities to company formation stage. This brings me to my last topic which shows our growing portfolio of spinoff in equity investment into highly promising start-up companies. Investing into highly promising spinoff and start-up company is yet another tool for Evotec to accelerate the expansion of its portfolio of co-owned first-in-class drug product opportunities. These investments follow clear principles such as we may elect to spinoff platforms that are not core to Evotec in order to fully realize the potential of these platforms into multiple product opportunities and example here is Topas Therapeutics and particle based antigen delivery platform for the treatment of autoimmune disease. We also participate in financing round promising content companies such as Carrick which has raised over GBP90 million was largest venture on to Europe and is using Evotec to develop its preclinical oncology pipeline or we invest into single asset companies such as Eternygen, which are largely virtual and the project is run exclusively on Evotec platform. So, all of these company formations and equity participations clearly follow the principal that they do fix to our areas of core expertise and that the projects are leveraging, the Evotec discovery platform. For Evotec to be intimately involved into this projects on a daily basis because Evotec first overview of the opportunity and a direct impact and show their success for development of these projects. With this I'd like to come to the outlook of Evotec Innovate for 2017. We are expecting another strong year with the new clinical initiation and good progress of the clinical pipeline within partnership. We also expect the expansion of the academic British network and here in particular an expansion of along the lines LAB282. We expect strong on e-progress and various Cure X/Target X initiative and finally, we’ll continue to focus on our R&D spend on particular on iPS upload platform expanding it. With this I’d like to thank you for your attention and hand over to Enno for the financial performance.

Yes, thank you Cord and also from my end warm welcome to everyone on the phone today. I have the pleasure to introduce these really exciting numbers to you for looking back at 2016 that has been a record year for Evotec and looking at the whole history. So starting with the overview slide on number 27. The overall message I think which is quite important to know for you if you look at the revenues and also the gross margin, this is in development which we only -- not only see in one particular part of the organization, but as an overall development. So, we are seeing increase in revenues and gross margin in different size and different segments and therefore it’s a broad development within the organization. So, I'll get back to revenues and gross margin in more detail later, just a brief summary, the main reasons for the increase in revenue and gross margin is an increase in base revenue and obviously the base margin having a full year Sanofi -- please remember that in 2015, it started -- in the second quarter of 2015. We have significant step-up in the milestones being very successful here and we have a better utilization of our existing capacities. Maybe some comments on this slide on the operating income and expense as there's two important parts here, the one is with reference to the R&D taxes, which increased quite a bit to €10.9 million compared to the previous year, was significantly lower and this is mainly coming from Toulouse which is growing quite a bit and from the U.K. Please bear in mind that the cash impact from these tax credits will lag for three years at least for the cash payout. The other important part with regard to other operating income is change in contingent consideration. This was mentioned previously already, which is the reevaluation of Evotec 770, lowering the MPV, and hence an increase or release interest on €2.2 million and are sure that we had taken when this asset was a quiet in history. Quickly speaking about taxes, here we have an increase to current taxes of -- to €6.1 million which is thanks to France, Germany, and U.K. becoming profitable parts of the organization. If you net this with our tax credits, we are looking at plus €4.8 million tax income so to say or tax rates of minus 9%. Now, let me get into the details and let me start with the segment report on page 27 with reference to the Execute segment first. So, the Execute revenues as Mario describes and including the intersegment revenues amounted to €171 million, again thanks to strong base revenue and successful milestone achievement. The milestones clearly also exceeded our original plan and contributed to the increase also of the gross margin, which is as per December 29.9% growing compared to the previous year. We had an impairment charge of €4 million recorded for the goodwill for the compound management business in the U.S., that's also already described by Mario due to the termination of the NIH contract where we reduce the according goodwill by this €4 million. And the adjusted EBITDA for the Execute segment amounted to €50.2 million, which is against last year more than doubling in value which is a big success in this regard. Innovate revenues amounted to €26.7 million which is within our budget expectations. The 2016 gross margin was at 45.3% and the Innovative R&D amounted to €22.7 million including the intersegment which is then netted at €18.1 million as described by Cord. Again here we had an impairment which we repeatedly reported during the course of last year for EVT-100, which was a program terminated by Janssen and returned to us. So, the adjusted EBITDA amounted to minus €10.7 million, improving from minus €12.7 million in the last year. With regard to Q4 in particular, on the next slide, I only would like to mention that we had quite a few cost here in context of ongoing transactions. The [Indiscernible] transaction has been named already also the negotiation of the Celgene deal went on, so that we had an increase in the SG&A. Besides that, there were no surprises in Q4 and this contributed as a major part to the overall annual result. Now, getting into the details with regards to revenues and the margin, we had a very strong growth and a very solid gross margin and the total Group revenues increased by 29% to total €165 million. The base revenue as you can see was at €146 million. As a reminder, base revenue means revenues excluding milestones upfront and licenses. Sanofi out of this contributed €54.5 million in total and it's important to know for you that also without the Sanofi revenues, we still would have significant increase of 28% in the revenues. Looking at the margin, as I said before, its whole true box of reasons for why the margin improved so well and it's going across all units within the organization. So, the total reasons are improved base margin, improved capacity utilization, the contribution over four quarters by Sanofi, we have also a favorable FX effect thanks to the decrease or weakening of the British pound. The base margin also improved to €27.3 million as you can see on this slide. Coming to R&D, which is pretty stable on page 31, so as Cord described this is amounting to roughly €18 million which is in line with the previous year and we will keep it in this area also future to come. This includes €1.1 million public grant which we received in 2016 and which has to be next against R&D expenses. With regard to SG&A, I already mentioned the increase which was mainly in Q4 due to the Cyprotex transaction and during the year, we had to strengthen the whole [Indiscernible] team due to the growth of the overall company. Coming to operating result and the adjusted EBITDA, the operating income increased to €31.3 million. This is 170% step up compared to the previous year and despite one-off effect in 2015, Evotec showed significantly better numbers in 2016 due to a better base results, released earn-out, and higher R&D tax credits. The adjusted EBITDA also significantly improved or actually more than quadrupled compared to the previous year where we had €8.7 million and the higher gross profit and the higher R&D tax credit are the main reasons for this positive -- or very positive development. Looking at the balance sheet on the next slide, having a total of roughly €350 million, we ramped up about €63 million or 22% compared to the previous year. We have a very solid equity ratio of 61%, which is slightly below last year, but still I think in a very good range. And the main balance sheet movements were due to the acquisition of Cyprotex where we have also conducted a preliminary PPA coming to goodwill of €54 million and the cash position being at €126 million at the end of the year. Speaking of cash, we have prepared a little cash [Indiscernible] for you on the next slide, and coming from €134 million at the end of 2015, we are basically ended out in the same ballpark at €126.3 million at the end of the year. And this despite, for instance, the major transaction of Cyprotex where we spent in total for acquisition and covering certain loans of €66.3 million on the counterpart, we obviously got in €45 million upfront payment by Cyprotex. Cord reminded you also of some equity and equity-like engagement and investments like Carrick, Topas, and others; obviously, this is also subtracted from our cash flow. Just a little reminder here, as you all know, we have successfully conducted a capital increase with Novo in November of this year, so out of the reporting period which added another €90 million in cash so that in February, we were looking roughly at €200 million in cash available. And having that said I'm happy to hand over to Werner who will provide the outlook to you.

Thank you very much. When you hear these results, which we should remind ourselves that this is only happening because of our coworkers within Evotec. So, let me take this moment and also thank all our coworkers who made this 2016 possible and who are eagerly working to make 2017 and our long-term plan even more successful. Going to page number 36 of this presentation, we would like to thank our shareholders and we would like -- and we would like thank our shareholders particularly for one thing that you are enabling us to build a long-term strategy in the drug discovery space because that's the foundation of making Evotec successful. And on that note, let me welcome our new strategic shareholder, Novo A/S which you see on the pie chart of page 36 is now the largest shareholder within the Evotec Group. When you look at page37, let me remind you again that we declare very clearly that we want to shift gears upwards. So, shifting gears one gear up, that's how we have done it in 2016 and that's how we will do it in 2017. We want to with this give you our guidance for 2017 where we see strong growth and accelerated innovation throughout the whole company. Putting this into a more quantitative format, we will grow by double-digits on our topline where we have changed the way we guide to one guidance here in the percentage format and we don't make the differentiation anymore between base business and base business excluding milestones. So, that will be the guidance logic for the future as well. When you come to our EBITDA, you will see that we plan to grow significantly also EBITDA growth where EBITDA growth is mainly driven by milestones, that's why we have to take in here a soft number -- a soft version to expect that. And you will see that we stay focused on our investments to really build world leading R&D efforts especially in the field of inventory produced themselves. With this, let me thank my team who has done an outstanding management job to bring Evotec where we are in 2016 starting with 2017 also strongly. And we are very happy to take your questions.

Thank you. Now we will begin our question-and-answer session. [Operator Instructions] The first question comes from Jean-Paul Mannie. Your line is now open. Please go ahead. Jean-Paul Mannie: Thank you very much and congrats gentlemen with strong results today. Three questions from my end if I may. Could you maybe remind me on 202 and 100, the rights have been returned to Evotec, is there still anything we can expect from this or is this is still under evaluation? And then on iPSC following the great deal that you did with Celgene last year, is it reasonable to expect that you would still be able to sign another deal or maybe more deals into coming year, is that already something that we might think of? And then maybe a more financial question on other operating income, I know you mentioned to the tax credit in U.K. and France, can you give us any guidance how we should look at that going forward? But also given that it had quite a big impact on the bottom-line for this year. Thanks a lot.

Thank you. Regards to Amsterdam, the first question, I will take, then hand over to Cord, and then hand over to Enno. So, it always worked that way that if the company stops working on a compound that after a certain diligence period or after not spending a certain amount of money or after achieving results that are not satisfactory to our partners that assets fallback to us. So, that's what we try to secure in all contracts with one intention that all targets that are part of are permanently fully invested. So, that's really to make sure that maximum innovation is happening throughout the world. Now, if assets like that fall back to us, of course, we put them into a reevaluation phase, of course, we put them into a repurposing exercise what can be done with these assets. But on -- for example 201, I would not want to raise expectation at this stage or also on 302, I would not want to raise your expectation at this stage because you should really then factor these things out first and look at them as a potential upside surprise, but nothing that we want to have any expectations left when we report them as being seized. Going to Cord on iPS.

Thank you for the question. Of course the iPS cell platform is -- continuous to be of great excitement for us. At this point in time, we're very much focused on delivering within our existing collaborations with Sanofi and Celgene, while we continue to expand the platform. I would say very certain that we will be to sign additional deals based on the iPS cell platform, the exact timelines are difficult to predict here.

Thank you so much. And also here it's not about speed for us; it's about quantity and leaving the field. So, it really comes down to that once you have deals something like that, you better make sure that you do it right and not too fast.

Okay, Jean-Paul and I'm taking your last question with reference to the tax credits and respective guidance. Obviously, as these tax credits are related to our R&D spending in France and U.K. in particular and then this will be at least on the same level as it is currently, tax credits should be in the same -- similar ballpark as to where they are right now or slightly above what we have.

Thank you. If this answers your questions, we'd like to take the next question please.

The next question comes from Igor Kim. Your line is now open.

Yes hello thanks. Igor Kim from Oddo Seydler Bank. I've got a couple of questions. First one, also on iPS area, could you probably briefly elaborate where would you see further collaboration or further potential aside to neurodegeneration and diabetes areas and what are the therapeutic areas do you see the most of the potential was iPSC? And second question is on multinational regarding your growth margin, I think 35.6% was on a record high level, is this something what we expect going forward or could you comment on the gross margin without [Indiscernible], whatever the best was for you? And probably the last question is regarding your Cyprotex acquisition, I think you provided an outlook for the railing use for 2017, but could you also give the highlights regarding the EBITDA margin for Cyprotex should we expect it to improve or it will give -- in 2016? Thanks so far.

Okay, thank you. Regards to Frankfurt, Igor, on the first question I'll hand over to Cord, second question Mario who is the longest in the company will take a crack on it, and on Cyprotex I'll handover to Enno.

So, Igor, regards to the iPS cell platform and future opportunities, we currently feel that what we have built in -- especially in all the generation in terms of cortical neuron platform et cetera, human neuron platform, this lends itself to be leveraged into adjacent areas such as no developmental disorders, psychiatric disorders, and genetically driven epilepsy, et cetera. So, these are areas that are on the -- are on our short list and looking beyond that, we are particularly interested in muscular skeletal disorders, this is also an area where we believe that the iPS cell platform can be a very heavily leveraged. And beyond that there are many more opportunities, but we -- these are currently the focus areas.

As you can hear, Evotec Innovate has a full plate of [Indiscernible] which could be initiated. At the same time, you should be aware of the fact that capacity shortage of what we can do is I would say at this stage also a limiting factor to the platform and one where we have to be very cautious to do it quantitatively right and not just create more and then not to deliver. On your second question, gross margin, I'll hand over to Mario.

Thanks Werner. Hello Igor. Yes, I think for 2017, well first of all you're correct, it was a record year 2016, fantastic gross margin for us. We would expect that the level of milestones, core business productivity to report a gross margin which is approximately the same level as 2016. And of course, that will include revenues and gross margin from Cyprotex and hence you should anticipate that the margin and EBITDA from Cyprotex is in line with what certainly what Execute margin and EBITDA was in 2016.

Thank you so much. If this answers your question, we're happy to take next question.

Yes, sure. Thanks.

The next question comes from Heinz Müller of DZ Bank. Please go ahead. Your line is now open. Heinz Müller: Yes, good afternoon. Heinz Müller speaking. I have question regarding your targets in the contrast of the previous years, you gave no liquidity and no CapEx target, perhaps you could give us some indications? And again with regard to the tax credits, is this one-time effect or can we expect such tax credits also in 2017? Thanks.

On the tax credit, I'll hand over to Enno then. On the guidance policy, let me just illustrate a bit. Given that we have around €200 million liquidity available at this stage and given that we are expecting a strong year 2017, it is really not that critical for us and it shouldn’t sound wrongly to give critical -- to give guidance on where our liquidity stands. So, we have access to liquid funds, we have access to for example, also banking loans within the company, so for us its more about optimizing liquidity, to not having capital cost within the company that are unnecessary, then to increase liquidity for safety cushion or what other reasons. Having that that, it’s a strategic aspect that we want to fulfill at this stage by having a strong balance sheet also with liquidity on that. So, I think that's the reason why we draw up the liquidity as a guidance element. And on CapEx, the recent years has been guided to also with around €10 million in CapEx. That's a situation where we at this stage just want to do the right thing for the business. So, we would not have a problem, neither from our liquidity, nor from the business side to even increase CapEx slightly, but as it looks right now, it's not necessary, so it will be a corridor fluctuating around this €10 million and as this has been unchanged in the previous years, it's also something which you should not expect to change going forward in dramatic ways. And on the tax question, I hand back to Enno.

Yes, Heinz, so obviously, the tax credit issue in total is very attractive to us and as you can see it can contribute to our bottom-line. And as we did that in the past already 2015 and 2016, we obviously will try to apply this also in 2017 and beyond, obviously in France and U.K. Unfortunately not in Germany, there are tax programs available for F&E or R&D related companies and as long as we have a strong R&D spending has just indicated, we should also be capable of applying for these tax credits. So, we will continue to do that and as I said at least on the same level as in 2016 if we're looking at 2017. Heinz Müller: Okay.

If this answered your question, we're happy to take next question. Heinz Müller: Thank you.

Thank you so much.

The next question comes from Devani. Please go ahead. Your line is now open.

Thanks for taking my questions. And congratulations on a very good set of numbers. A few questions from me, a few on the numbers and then just maybe a couple on the program. Are there going to be any exceptional cash costs related to the restructuring in San Fran? Maybe you can give us also some guidance on the blended tax rate that you expect to pay in 2017? And also could you tell us -- remind us how much revenue came from the NIH contract last year?

Thank you so much. Regards to London, on San Francisco I'll hand over to Mario; on tax rate, I'll hand over to Enno; and on NIH revenues, maybe Mario will take that at the same time with the question on San Francisco. Okay, hi there. So, I think first of all, of course we won't ever give guidance on specific contract values. But it was millions of dollars and it will be contracted by increased business elsewhere in 2017 and as you can see from our guidance it won’t have any impact on 2017. And of course, some cost towards the closure of San Francisco and nothing exceptional and again nothing that would affect our guidance for 2017.

Okay. Could you repeat your question with regards to the tax, I'm not quite sure they have full guidance.

Sure, I just you gave us some good guidance on the tax credit received. I am just wondering what you now think your blended tax rate payable will be for 2017?

So roughly if that’s without tax credit it would be slightly north of 30% and if it is including tax credit net against this then we will be in single-digit percentage.

Okay. That’s great. And I just got one follow-up on TargetAD, could you just take us through your plans for that program now?

So as already mentioned before once the program is phased out or stopped everything falls back to us, that's the typical way we write contract. So, as you know we have brought exclusive relationship with Celgene in the field of neurodegeneration so whatever could be for example helpful in this project would go into this project and other targets which has evaluate what we will have then going forward. So, I think that’s why it’s for us something where given that we have the infrastructure and given that we have the capacity and capabilities to run these project, it’s really the question of how much where you can expect from the target in this database that’s has been the basis of this alliance.

All right. Thanks very much.

If this answers your questions, we are heading to take the next question.

The next question comes from Victoria English. Your line is now open.

Yes, Werner I have three questions. First of all, in Cord's presentation, he has the term shift in the drug discovery paradigm when he was talking about induce pluripotent stem cells and I am wondering first of all whether this means high throughput screening is pass A and in the second instance, does this connote the shift towards personalized medicine, so that’s the first question. The second question is how does gene editing fit into your drug discovery strategy as you mentioned it once only and then the third thing I was curious ever since you made the investment with Oxford in the spinoff whether you see yourself as doing a bit of venture capital work from time-to-time?

So thank you so much first of all for the questions. On question number one and two I will hand back to Cord, maybe I will take question number three first. Venture capital is our partners in France so we don’t see ourselves competitive to this is on the contrary we see ourselves as the optimal partners for VC’s because there is many projects that we see are sometime too early to be invested in for financial institution for Venture capital or for companies, so therefore these idea of creating bridges on our infrastructure is something which perfectly applies to for example non validated academic situations that don’t have the complete information behind them at this stage and that’s how we look at this situation, that’s how we understand. Evotec very often as kind of operational VC and that’s something I would say we have just started them all and here we are happy to accelerate this together with Venture capital firm or with other institutions.

Okay. Thank you.

Hello, Victoria. This is Cord speaking. Thank you for your question regarding the iPSC platform and what we actually mean by shifting the drug discovery paradigm. It certainly does not it won’t have in our mind huge impact on high throughput screening, high content screening, HKI content screening will be a tool that will be exceedingly used in iPSC-based drug discovery. And when it comes to shifting, there are two very prominent shifts. First of all, it's the shift that we've already taken now in various areas that is the testing of human relevance or patient relevance, very early on in the drug discovery process by using patient-derived cell-based disease models for the screening process. So, in the very first set, you're testing, you're starting to test for human relevance, which is usually not the case and target-based approach. And then beyond that it is, of course, if you widen the iPS cell platform and drive iPS cell line from various different patient population and be it familiar driven genetic diseases or sporadic diseases, you can shift your paradigm towards personalized medicine, increasing towards personalized medicine by testing drug candidates very early on for their efficacy in various patient population in within the same overall indication. And that is certainly also one of the key strength of these type of platforms and so in that regard we feel there is going to be a real shift into these areas and for example, when it comes to the neuroscience rule of diseases, I think we are very much convinced that in a few years' time, you will not find a pharma company in the world that will not use these type of models for the drug discovery efforts anymore.

If these short statements answer your question because I'm all that we could probably have marginal discussion, I would hand over to the next question.

The last question comes from Mike Cooper of Trinity Delta. Please go ahead. Your line is now open.

Good afternoon gentlemen. I've got two questions as well. First question to do with the Trianni Mouse model, I was just wondering how much interest there was for you to produce biologics from externally -- or whether or not that treaty was a technology to -- for EVT Innovate? Secondly, could you give us -- you've mentioned that you've taken write-down on EVT 7702, could you give us an update on what that status is and might actually reacquire the assets from MedImmune? And finally I was surprised to see the amount of R&D in discovery has actually gone down in the last year, can you give us a bit more detail about your -- the decision-making process around R&D in discovery? And given the growth in the number of academic alliances and the opportunities there shouldn’t you actually be increasing significantly there?

Thank you, Mike. I have now four questions. On the first three, I'll hand back to Cord on the academic alliances. I think it's fair to say that also here not a question of math and of how many you do; it’s a question of quality. So, it really for us is that we want to focus on certain institutions and win the certain institutions, we want to work under best drug discovery projects because never forget we take heights [ph] in products that ultimately represent the upside for us when we do something. So, that's why it really comes down to quality and not just to build more capacity in order to do more here. And nevertheless you will see us, for example, at least imitate one or two more bridges in the next two years, because we feel that the concept and the tool that we have established is very good. And on the other questions, I hand over to Cord.

Well, thank you for your questions. I will start this here question regards the Trianni mouse model and monoclonal antibodies more generally. So, as part of Evotec Innovate, we continued to explore novel mechanisms, novel targets and here we are particularly interested in the biological and disease relevance of these targets and we want to pursue targets regardless of the drug modality. Currently, Evotec is still predominately focused in -- on small molecule drug discovery, but based on the [Indiscernible] and all of that we have established and target effort et cetera, we increasingly wanting to targets where you can ask the question if this target should be pursued by molecular approach, by a biologics approach, some sort of hybrid approach and here we want to make ourselves increasingly independent of drug modality going forward. And here -- in many ways, this is not only true for Evotec Innovate, but also for Evotec Execute that in many collaborations where we're working, it is quite often the question in terms of target, how it can be pursued if small molecules is the best possible way or is there other ways to do this and, for example, an ion channel world, some ion channels are very hard to come by or to create selectively on a small molecule approach, but it’s an antibody that it might be possible. So, here we're just increasingly expanding our tool set on how to pursue targets to increasingly widen the options here.

Thank you.

When it comes to 770, so we are in a collaboration on 770 still with AstraZeneca and MedImmune. They have not indicated to us that they have stopped the program at this point in time. Progress is I would say not as -- it doesn’t progress as fast as we would like. But we are currently pursuing all options on how this project could potentially be accelerated again as we also not completely satisfied how the progress have been in the last couple of years here.

And maybe a comment on the &D spend, here don't get any misunderstanding. There is more R&D ongoing than ever before the company. It's just the level of partnered project increased that's why you don't find them at our own R&D way off, but a lot of it is co-owned R&D and again that's more than ever before.

Okay. Thanks very much.

If this answered your question, we're happy to take the next question.

There are no further questions. I would hand back to the speakers.

Thank you so much. First of all let me thank you because with your help, with your guidance and also with your feedback, it would not be possible to build a company like Evotec. So, on that note, thank you for a great support of us in 2016 and we hope to continue this relationship with you into 2017, 2018, 2019, 2020, and a long-term forward. Thank you so much for shifting gears together with us.

Dear ladies and gentlemen, thank you for your attendance. This call has been concluded. You made disconnect now.