Welcome. This is Werner speaking from Evotec. Thank you for dialing into our Q1 Quarterly Call. We have uploaded a presentation and we hope that you can follow with this presentation through the discussion of our results together with my management team which is assembled here in Hamburg. I have Enno Spillner, our CFO with me; I have Craig Johnstone, our COO with me; and Cord Dohrmann, our CSO with me. When you go to Page Number 2 of this presentation, we want to first say welcome and at the same time we want to say like we do it on the cover page of this presentation. One secret of reaching highly aspirational goals, getting fast forward and even getting ahead of plans is just get started. And if you get started at the right pace, then you are up for a good year. With this, we are happy to report that we have started 2019 with a strong first quarter and we are also happy that there will be three more strong quarters to come in 2019. When you go to Page Number 4 of this presentation, we can report that the state of play of the company basically reflects a strong scientific and operational progress. You see here some bullets of the activities that we basically report back to you highlighting that we are at this stage following very consequently our strategy to build a world leading external innovation platform. Cord and Craig will then bring you closer to the individual events that you see here. But let me on Page Number 5 for a second reflect what we are doing also in numbers and Enno will then give you more details. But what is clear is that you see a strong financial performance which basically is reflecting with a 20% growth on our top line that the idea of a macro trend which is plus starting is reflected on our platforms from every angle. Translating a fast growth business also into a profitable business which you see in our EBITDA growth is of course making us extremely happy because that gives us the freedom to invest even more than ever before in breakthrough innovations which we do in our unpartnered R&D at this stage which will translate into high value deals at a later in point on alongside our strategy going forward. When you go to Page Number 6, let me highlight again that there is an underlying macro trend of external innovation which is just starting in drug discovery. This is why we are following a strategy that is consequent and where there’s a consistent move forward along the strategy and this is also why we put our strategy in action plans where you have seen three of them already, but there is more to come in the future. With this, I hand over to Enno.

Thank you, Werner, and welcome everyone on the call also from my side. I’m happy to take over to provide very positive Q1 2019 numbers in more detail and confirming that Evotec is well on track compared to what was planned and what was guided. Let me start on Page Number 8. Looking at the Group consolidated level, one can observe 27% uptick in revenues compared to 2019. And I’ll come on the next slide into more details regarding revenues and gross margin. So looking at the R&D efforts here right now and the R&D efforts experienced a very significant step up as indicated already during our last call in March. And please bear in mind that out of this €14.4 million R&D total, €8.1 million are considered unpartnered R&D, which means we are significantly more investing into own projects and own platforms to support our long-term sustainability, for example, on the field of metabolic and oncology diseases as well into our iPSC research for instance. For comparison in Q1 2018, we had invested about €4.6 million at the same time. With regards to SG&A, we are pretty much where we want to be and SG&A cost are growing, but still again like in the previous quarters under proportionally. Strong growth of the other operating income results from growth in R&D tax credits on the one hand side and reimbursement of our partnered R&D efforts in context of our Lyon ID activities covered by Sanofi. The letter was not yet in place in Q1 2018 as a reminder and this is also explaining one major part of the step up of other operating income in 2019. As a result of the just described, it would take – shows a more than doubling in adjusted EBITDA. And furthermore, this positive development is supported by a first time €3.1 million positive impact through first time application of IFRS 16. Moving to Page Number 9. Obviously, the positive revenue growth trend observed in the past years could be continued in Q1 of this year. As you can see, this increase was mainly triggered by solid growth of the base business and strong milestone achievements in the Execute and in the Innovate segment, for example from Bayer and from Boehringer Ingelheim. This growth of the base businesses is up almost 19% and this almost in the same ballpark, no the same range as we saw it in the previous full 2018 average numbers. These two positive revenue effects plus some favorable FX headwinds, which are triggering about 1.5 percentage points in our margin helped increasing our gross margin significantly by 7.9 percentage points to now 30.5%. To be noted that also without positive impact of the milestones, we can see a positive development of our gross margin. Slide Number 10. Good news on both segments Execute and Innovate. Execute revenues increased by almost 28% compared against Q1, 2018 and Innovate is even up over 80% when compared against the same period of the previous year. The significant R&D efforts increased to €16.3 million compared to €5.6 million in the Innovate segment in Q1 2018 and this is again the split of an increase in the unpartnered R&D and as described before a new Q1 2019. The partnered R&D also in the amount of €6.3 million. One reason explaining the strong upswing of other operating income, obviously the reimbursement of the R&D cost, as I just mentioned, by Sanofi. The Execute EBITDA almost doubled compared to Q1 2018, while Innovate improved but remained slightly negative compared to 2018 Q1. Slide Number 11 is a little bit the exception from the rule, which I will only apply in this quarter due to the significant impact through first time application of IFRS 16. I would like to draw your attention through few non P&L numbers but focusing on balance sheet and cash flow. Balance sheet totaled went up almost €110 million to a strong €881 million at the end of Q1 of this year. For the reasons described on the slides; however, the major impact being triggered by first time application of IFRS 16, which was namely an increase in property, plant and equipment following the capitalization of operating leases as now fixed assets according to the new rules. And affected loans and finance leases, which are affected significantly by this new measure. Beyond that, Evotec continues to maintain a conservative net debt of a ratio of the roughly 0.8%. And we also maintain the strong equity ratio of 51% compared to 55% at the end of last year. And maintaining a strongly liquidity position of €141.6 million at the end of Q1 2019. So overall presenting a very solid balance sheet and a very strong cash position. And with having said that, I would like to hand over to Craig to introduce the execute part.

Thank you, Enno. And good afternoon to everyone on the call from me. Together Cord and I will update you on the key aspects of the scientific and operational performance in Q1. In Page 13, this diagram simply serves as the remainder of our blended business model through which we offer access to our scientific excellence and create value for our partners and ourselves to a range of business models, because it’s through fee-for-service or FT models or indeed by means of advancing technologies and assets internally for partnering later. It’s our intention to build up abroad and valuable portfolio of co-owned projects, which have built-in quality for survivability and success through the development process. On the next slide, Page 14. We see that the strong financial performance in Q1 already detailed by Enno has been underpinned by a very strong quarter of scientific progress in major partnerships. By leveraging Polar Scientific know-how and experience coupled with advanced technologies, predictive science, machine learning, AI and short cycle times would drive the highest probability of success in all our projects. Successfully moving projects rapidly through the drug discovery and development process typically drives not only extensions of existing contracts, but often expansion of these partnerships to engage a wider breadth of resources and capabilities. The course integration of all these capabilities under one Evotec roof, enables us to provide our partners with high flexibility as well as quality whoever the project needs. Thus, all parts of their business, Evotec, Cyprotex and Aptuit often working together have all performed well in this quarter. However, we continue to monitor operational efficiency and optimize that infrastructure. We have decided to consolidate our small molecule, high-throughput screening say in Basel with Toulouse operations. Over the coming months, the business will transition to Toulouse with greater critical mass and collocation of screening and compound management offers optimal efficiency of operation and of course but actively offering support to our 15 effected colleagues there. Pleasingly but also witnessing a steady flow of projects moving from the Evotec discovery infrastructure into INDiGO, which provides enormous savings of time and complexity for our partners at this very critical stage of a drug's lifecycle. As a result, and as you see on Page 15, we continue to see a very high return rate over 90% of our broad and global customer briefs. Perhaps a couple of noteworthy details here, today we work with 19 of the top 20 pharma, while at the same time we create large long-term strategic partnerships also at the foundations such as CHDI and many biotech companies are in the world, [indiscernible] TESARO, ABIVAX to name just a few. With that I hand over the next part to Cord.

Thank you, Craig, and good afternoon to everybody on the call. After a very successful year in 2018, Evotec Innovate continuous with a strong start into 2019. In the first quarter of 2019, we have already achieved a number of milestones. Most importantly, we have further progressed our partner product pipeline, we add, for example, Galapagos to our long list of partners in a fibrosis focused partnership in the anti-infective field [indiscernible] alliances with the Helmholtz Institute for Infectious Diseases and GARDP, a global antibiotic research organization. And furthermore, we added two strategic partnerships in oncology: one with Indivumed in colorectal cancer and another one with The Mark Foundation in immune oncology. On the next page, Page 17, you can see that we are well on our way to prove our broad and deep model partner product pipeline. Overall, we have already added five new partnerships and at the same time keep progressing projects on a very broad front. They are very excited about advances in clinical development. Here we already reported two clinical starts: one in chronic cough through our partner – a partnership with Bayer and another one in NASH through our partner Second Genome. Unfortunately not everything is always progressing as planned, so we were recently informed by our partner Second Genome that the NASH trial was put on hold. Although this is unfortunate, this really exemplifies the strength of our Evotec Innovate strategy. Having built and continuing to build a very broad pipeline of co-owned projects, one project not moving forward is setback, but it's clearly not the end of the world. In this respect, we are very much looking forward to Phase II results in chronic cough this summer and hopefully further the clinical starts before the end of the year. With the following page, Page 18, we would like to remind you that we continue our efforts to redefine the drug discovery paradigms. We’re focusing on patient centric approaches. And to this put some of the more recent deals in context. Pursuing patient centric approaches really starts with a better understanding of the disease and disease related processes. This can be achieved by extensive profiling of individual patients over time and in particular conducting molecular profiling through our mixed approaches such as genomics, transcriptomics and proteomics. Accessing clinical patient records and combining these, these comprehensive molecular profiles, through our mixed data sets, provides new insights into molecular disease processes, which can then be targeted that interventional therapies. In the past, we have already made investments into accessing patient data at a larger scale like for example through our NURTuRE consortium and chronic kidney disease and the most recent collaboration with Indivumed aims at a similar approach this time just in colorectal cancer. As you can see on Page 19, Indivumed is a company focused on establishing biobanks in the field of oncology. We decided to join forces with Indivumed in the field of colorectal cancer where they have assembled one of the most comprehensive collections of patient samples and have already established molecular profiles using a comprehensive mixed approach. Together with Indivumed, we will analyze these datasets to select novel mechanisms and targets in order to bring them forward into drug discovery programs. As we are discussing patient centric approaches, I would like to briefly give you an update on NURTuRE on our NURTuRE initiative on Page 20. We are continuing to invest into the generation of molecular profiles data – for kidney diseases based on the NURTuRE consortium. This project has made great progress and that we were able to demonstrate that molecular profiles are very useful in the stratification of patient population, the validation of targets and biomarkers and generally the program is generating an increased interest in the industry. On the next page, Page 21, I would also like to briefly update you on our iPSC based drug discovery platforms. Once we have generated patient derived molecular disease profiles, the next step is to move these forward into in vitro models. Moving this forward, our iPSC based drug discovery platform, it's ideally suited to develop patient derived cell based disease models for screening hit-to-lead and lead off campaigns. As you can see on Page 22, here we are not only continued to make progress in our partnerships with Sanofi in diabetes and Celgene in new degeneration, but also in establishing further cell types. Most recently, we have built a microglia platform, which allows us to generate human microglia at high throughput for screening purposes. This is a great progress as microglia are thought to be highly relevant for many CNS borne diseases and will open doors for many more project focused approaches in microglia including neurodegeneration, neurodevelopmental disorders and neuroinflammation. So in conclusion, all in all, we've had a very strong start into 2019 for Evotec Innovate and expect to continue on this path going forward. With this, I'd like to thank you for your attention and hand over to Werner.

Thank you so much. When you go to Page 24, let's round up. It's about getting started, but for us it's about creating a long-term consistent strategy. And with this, we are well on our way for a strong 2019 with this we confirm comfortably our guidance for 2019 by basically growing about 10% on our Group revenues by growing about 10% on our adjusted EBITDA and keeping our unpartnered R&D expenses between €30 million and €40 million, which is the highest investment that we have ever done in the history of the company to create long-term partnerable projects out of these R&D investments. On the last page, you see important dates coming up. And with this, let us thank you for following Evotec from quarter-to-quarter and growing together with us. Thank you so much. We are open for questions.

The first question is from Samir Devani, Rx Securities. Your line is now open.

Thank you for taking my questions. Congrats in another good quarter. I've just got a couple – just on the Second Genome project, I'm just wondering, have you got any other backup P2X7 inhibitors that you're working on with Second Genome or anywhere else in the portfolio? So I guess that's the first question. And then just within the statement, you talk about a seasonal high cash outflow. I'm just wondering if you could just perhaps provide a little bit more color on that [indiscernible] in the other sort of Q1 for 2018 and 2017 that was seeing that perhaps you could just give us a bit more detail on that? Thanks very much.

I think it's a fair question. So on P2X7, yes there are other P2X7 projects in our portfolio, but not together with Second Genome. So that's the answer to your first question and on the cash outflow, I hand back to Enno.

Yes. It’s a pleasure, Samir. So at the end of 2018, we had a cash position of roughly €149 million, which then to the end of Q1 reduced to €142 million. So another huge change, however, in the meantime, paying back another €15 million of debt of all Deutsche Bank bridge loan of out of the Aptuit acquisition in Q1 and another €15 million immediately after closing of Q1 completely winding this loan down, driving impact this year, so in that regard, I think they have not been any major changes with the exception of having twice payback of this loan.

Okay. That's great. Thank you very much.

The next question is from Brigitte de Lima from goetzpartners. Your line is now open.

Hello. Good afternoon. I'll ask three questions if I may. So the first one is maybe just some clarity on the Innovate revenues. Just really to understand, I mean the number is very high to start with, it’s a very strong result for the Innovate business and how do we – how can we understand what the revenue, where the balance is if we take on one side the milestones you disclosed what was the rest of the revenues related to and that would I think help us understand. And the second would be on the Indivumed collaboration. I'm just wondering, how it's actually structured from a financial point of view without asking for specifics, but do the companies both invest in working on something and then if Evotec develop some molecule Indivumed retain some sort of royalty? And then the last question would be on the Bayer, chronic cough. There's now two programs in Phase II and I was just curious to understand how the two molecules differ in terms of the chemical series they come from, do they have the same target as expectation that there would be positioned in different ways or is it a way for Bayer to reduce the risk to make sure that at least one of those will eventually go all the way through development. Thank you.

Maybe starting with your third question because the second question will go to Cord, the first question will go to Enno. The philosophy behind all our large partnerships is to create a portfolio of options to basically ADC. And that's what we are doing also in the field of endometriosis, like we do it in chronic cough together with Bayer. So you should assume that there are different molecules coming from different chemical theories in different mechanisms where we always tried to go through one bottleneck, which very often is a predictive model and then we say, okay, if there are two compounds, then we tried with two compounds to see which one ultimately is better serving the indication. Then as you also know, many indications have different ways of treatments within the indication. That's at this stage too early to tell and unclear. And that's the reason why we are in these indications together with our partners in the large collaborations like Celgene in neurodegeneration or Bayer in endometriosis, in cough going here from multiple options. At the end of course you will be happy if you have one compound going into a large Phase III because that's where the cost of running a Phase III ultimately then have to be taken into consideration in account. But that's just the philosophy behind the P2X3 that you see in this collaboration and also an important guidance point that we expect from these ongoing Phase IIs by the end of 2019, the first data points, which I think then also guides us very nicely into a potential royalty coming out of these projects hopefully. Question number two goes back Cord and is on the Indivumed partnership.

Thank you for your question. So the Indivumed partnership is in line with many other partnerships that we have structured with academia and smaller partners. Here essentially Indivumed invested heavily, already into the collection of patient-derived colorectal samples and the characterization of these samples via panoramics approach. Here now at this point in time we are coming in to help analyze these data sets and identify novel targets and mechanisms to pursue and bring them forward into drug discovery programs. Here primarily Evotec will invest in these steps going forward. And Indivumed will participate in royalty rate from whatever we will ultimately – when de-commercialized, what Evotec will be getting there will get a share, depending a little bit on how much we have actually invested before the partnership is signed.

Thank you. Question number one goes back to Inno.

Yes, coming back to the segment revenues of Innovate, which indeed increased at about 80%, as I described before, and this is a mix of an increase in the field of milestones, up fronts and licenses, which if you take a look at that part is about tripling compared to Q1 2018. That said, 2018 was relatively low in that regard. And then it's also in the normal course of business just growing our collaborations. And just here is one example, the Celgene onco deal was struck last year in Q2 and was not in as a comparison in Q1 of 2018. And these large collaborations of course make a significant difference compared to the previous years.

Does this answer your questions Brigitte de?

Yes, mostly I'm still a bit puzzled about Innovate because my understanding was that it's many milestones deferred revenue and licensing revenue. So the Celgene onco deal is that – are we talking about the Fed revenue, or is an ongoing license fee that they're paying you, or what exactly are we looking at that? I'm just really trying to get to grips with what's in there apart from the milestones that we heard about?

Well you have just a normal collaboration ongoing where we have received cash in already in May of last year. And now it's being deferred over the period of the collaboration, triggering revenues over the quarters that we are working in.

Okay. So it was the deferred revenue. That’s what I wanted to ask. Thank you very much indeed, very clear.

The next question is from Michael Higgins, Ladenburg. Your line is now open.

Thank you, operator. And congratulations guys on the continued execution. A couple of questions if we could. Regarding the un-partnered, R&D how does it compare to the partnered R&D expenses for the quarter? And on the un-partnered iPSC expenses is that work that's conducted on a partnered program, or work towards reaching other iPSC collaboration agreements? Thanks.

Welcome to New York City. Hi, Michael. Maybe first on the iPSC platform because that’s simple, everything at this stage is partnered is within the partnerships that you see out of the Celgene neurodegeneration partnership well within the Sanofi beta cell collaboration. All the rest of our R&D investments, is at this stage un-partnered protocols out of the iPSC platform. If you would want to give this a number, it's somewhere between five or probably even a larger number of ongoing larger projects within this platform that we are preparing here for future partnering, which can be in the next two to three years. On R&D overall I hand back to Enno.

So out of the split where the total was EUR14.4 million, the partnered R&D is about EUR6.3 million. So that's the part that is being reimbursed by Sanofi under other operating income, and then logically about EUR8.1 million is the part that is un-partnered. So that is the efforts into our own platforms and product candidates.

Does this answer your questions Michael?

Yes, that's very helpful. Thank you. If I could ask one more, I'm trying to understand the consolidation of Basel activities into Toulouse site. How many employees do you have there now? What programs are being worked on there? And how has this changed since the Sanofi agreement? Thanks.

So maybe Craig as he is the siter of Toulouse the best to give you an information about the Toulouse site.

Sure. So thanks for the question, Michael. So today Evotec is operating three high-throughput screening centers you'll understand the business is very intensive, investment intensive, and so on. And the Basel site was pro anti-Evotec as part of the acquisition of Aptuit. So what we are doing is consolidating the work from Basel into Toulouse where we have co-location of both a very broad and large, high-throughput screening facility alongside very important compound management, compound dispensing capability. And these work together in tandem to optimize the efficiency of high-throughput screening and head fainting operations. So we've decided to move the work from Basel to Toulouse and bring to an end the operations in the Basel site around quarter three of this year. It affects 15 members of staff.

Which are invited to go to any other site that's one additional information. The other information is that when you look at Toulouse, we took over Toulouse in 2014 with 208 staff. And by the middle of 2019, we will be above 480 people who are operating in our Toulouse site now, which makes this in itself a highly productive, highly efficient and a great site where we continue to grow, because the footprint and the capacity available in Toulouse is there because the site was built for even larger capacities in the past. And the other point about Toulouse is that France for us is an excellent recruitment ground because the scientific talent and cost that we can attract in France to Toulouse is outstanding. And as we are one of the faster growing companies in the field of life science in the south of France, we are a highly attractive employer in that region so that’s where many, many positives are coming together in Toulouse for us.

Okay. That's very, very helpful. Yes, no that's great. Thank you. Then just one brief follow-up if I could is the potential expansion that you could incur organically inside Toulouse facility, you're about 480 or so now. How many employees and how much operationally could you expand to there? Thanks.

So at this stage we are growing at every site there within the footprint of Evotec, I think, that's an important message as well. We are growing, for example, very strongly in our Verona site, we are growing very strongly in our German sites, we are growing very, very strong in our U.S. operations. And of course we are also growing massively in our Manchester and our Abingdon operations in the UK. The capacity limitation for Toulouse is something where, again, this is a former pharma site which was hosting more than thousand people on that site. So there would be enough capacity and space to grow. That's not limiting organically at this stage the growth of the Toulouse site.

I appreciate it. Congrats again. Thanks guys.

Thanks.

The next question is from Victoria English, Evernow Publishing. Your line is now open.

Yes Spillner I have two questions. The first concerns your activity in the area of antibiotic. Cord quickly mentioned that in connection with the infectious, I think, it was a consortium or a group that you're working with. Could you just tell us a little bit about what you're contributing to that? And the second question concerns the microglia, the comments about the iPSCs and what could be done here in understanding CNS diseases. The question is whether this has application to Alzheimer's and the sub question to early stage Alzheimer's. And the reason I mentioned this is that SI has just started or set up an agreement to work with a number of U.S. institutions to try to work on early stage indication for the two drugs that it's taking through Phase III.

Thank you so much. Hello Victoria. Both questions I'd direct to Cord.

Victoria, I'm sorry, I'm not quite sure if I got the antibiotics question 100%.

What are we doing….

What are you doing….

More generally speaking, what we're doing now. So we have a number of ongoing projects in the antibiotic field and constantly we are trying to grow this portfolio going forward. We have built, for example, and announced the partnership with Helmholtz Centre here on a new class of natural products that have broad spectrum activity on microbes, in particular, also multidrug-resistant microbes. So maybe we are highly excited about this. This could lead to a whole platform of new potential, first-in-class antibiotics. And we are currently evaluating through the opportunities to expand the portfolio here. I think that's all I can say at this point in time about antibiotics franchise. When it comes to microglia, microglia is a cell type that is thought to be of high relevance to many CNS-borne diseases. And it has just been very difficult to access because it hasn't been possible to derived human microglia in vitro and use them for screening purposes. Microglia, as you mentioned, is clearly relevant for neurodegenerative diseases including Alzheimer's disease. And here in particularly the neuroinflammation angle is an angle that is of great excitement, but it's also highly relevant to neurodevelopmental disorders and other neurological diseases which are not in the scope of the Celgene collaboration. So it's a – this is a site also where I called it a platform because it really can be leveraged in all sorts of directions and we are just very excited about having been able to put this platform in place and making it work. And now we will try to explore it going forward.

Thank you.

Thank you so much.

The next question is from Naresh Chouhan, Intrinsic Health. Your line is now open.

Hi there, it’s Naresh Chouhan from Intrinsic Health. I have few questions please. Can you give us some sense as to the size of the milestones that you negotiate from some of the more recent partnerships in Innovate, sorry. Obviously, there has been near number of new clinical starts, how should we be thinking about the size of any potential milestones, relative to what we've seen in the past? And then last year we saw you spend more money on R&D as your revenues, as a partial [indiscernible] expectations for the year. This year looks like we could be in a similar position from a revenue perspective. And so kind of philosophically, do you see the need to accelerate some programs or invest more heavily in 2019? And then I have a couple more if you come to me please.

So, I think, first on the design of our partnerships, I think, here on our milestone and co-ownership driven partnerships, you should see that of course it always comes down to what's this, what's the first-in-class situation of certain targets that we are partnering? What's the competitive situation so there is an individual life behind every contract of our 100 co-owned innovate projects? The average number of milestones is around 200 million milestones per co-owned project. That's the first thing. The average number of royalties that is behind every of these partnerships is on average 8%. Coming to your specific question, how does this look in the recent years compared to if we look now five years back, it also comes here down to where does the partnership originate from? If for example, a partnership originates from our IPS platform, at this stage we have always been able to negotiate double digit royalties and milestones that are significantly higher than the $200 million that I have just described as an average. And that’s, I think, a pattern where again, it comes down to what's the first-in-class potential, and what's the platform and the competitive situation that we can bring together into a partnership for these type of transactions. When it comes to our R&D “need” going forward, that's the way I interpret your question. I think here you should see that for us it's not driven by how much R&D do we want to spend or can we spend. It's really driven by what project is exciting us and where we do we see a first-in-class opportunity to invest in. And that's I think a situation where we are at this stage not able to invest in everything that is exciting us because of capacity limitations. And that's also why we are planning here for the very long run. And because many of the things we just not go away in drug discovery in this year or next year or the year after. We are the beginning of our R&D efforts in drug discovery because we at the beginning of curing or going to cure a certain disease areas. And that's why limiting the view of one year is probably not enough to look at. And that's why it's such a great situation to have a profitable company going forward. So that we – that's why we are “capital markets” independently able to tailor our R&D investment on the platform. Sorry for a philosophical answer on that question, but that's really how we operate.

Okay, thanks and then a couple more. Just following on from that – are there any programs derived from the iPSC platform that are nearing entering the clinic that could help us to validate the platform. And then you've – on the – and then following up, on the iPSC platform, we've – it's clearly a very exciting technology, but we haven't seen any major new partnerships for awhile. Is that because you're still working on things like the microglia work? Or is it that the two most obvious applications are the ones that Sanofi and Celgene have signed up and therefore you've got anti-compete clause does that prevent you from signing new deals? Just some kind of insights to where that platform is going and what are the opportunities in the kind of near to medium term would be helpful.

So I think to your second part of your question, nothing would hold us back given the existing partnerships to sign new partnerships. I can also disclose that there is enough interest in the market to make new partnerships with us. There is more excitement than ever on our iPSC platform for the projects that we are bringing forward here. Having said that, we are trust – very optimizing here by sometimes investing a bit more in kick starting the project, building on the platform, making them even more robust than we have been able to do this in the past. So that's why not signing new iPSC deals I think is a good sign and it's not a sign of not the availability of partnerships here. And on your first question, we will report once we’re there in the clinic and all I can say at this stage that the portfolio of targets nearing the clinic out of both collaborations: the beta cell collaboration but also the neurodegenerative collaboration looks good. And at the same time, I just don't want to make here specific guidance to specific dates.

Okay, thanks. Can I just make one more, which is on the margin guidance; you've kept your margin guidance the same despite the currency tailwind on the gross margin. So should we expect these currency tailwinds to ease through the year and therefore kind of expect a slightly weaker margin as we go through the year?

So we are unfortunately or fortunately not in the situation to predict where currencies will go, but I think the good situation in Evotec is that there is kind of a natural hedge in the company. So we have a cost base in the U.S. We have a cost base in Europe. We have a cost base in the UK, so there are three currencies affected by that. We have the revenue base coming out of the U.S., increasingly coming out of the U.S., increasingly signed up in U.S. dollars and we have a cost base in Europe. So that's why there is a natural hedge that's where our exposure overall to FX is kind of limited. Having said that, we then use all tools to get the smoothening of the FX into our P&L and again that's I think daily bread and butter for our finance teams here to optimize that.

Thank you very much.

Pleasure.

The next question is from Franc Gregori, Trinity Delta. Your line is now open.

Hello, gentlemen. Good afternoon to you. Let me ask a provocative question. Your revenues are rising. Your margins are expanding. Your cash flows are very solid. Your debt position is very controlled. Is it time to start paying dividends?

It's actually a technical situation where given the loss carried forward that are in our group at this stage are still existing. So, therefore, technically we are not – and legally we are not allowed to pay dividends. Having said that that's a situation which we – which will come, which is fantastic for a company to have the optionality to think about these things, especially for biotech companies because as you know there are 4,400 biotech companies out there, less than 2% of them are profitable and we are one of them. Having said that, the synchronization that we want to get with our shareholders and investors is that we want to dividend in our Innovate segment because here the value creational is disproportionally higher than by dividending out on a short-term cash dividend that it would give at this stage of the company. That's the long-term potential that we see arising from the platform. Having said that it's a fantastic situation to also being able to not only on an abstract level, but in a very specific long-term plan also to think about cash dividends in the long-term future.

Thank you.

Pleasure.

We have a follow up question of Brigitte de Lima, goetzpartners. Your line is now open.

Hi, just one question. And I noticed that the revenue coming from biotech now stands at 46%, which I think is the highest, at least, I can see in my model. So I think it's sort of quite selling of the broader environment that it's really biotech that seems to be outsourcing and potentially also increasing their spend the most. But is this now – has this group now certainly become your largest customer group going forward as well? Or was this a one-off? And if biotech is not firmly your biggest customer group, does that change the sort of – how would you say average structure of the contracts, and sort of duration of these sort of long-term clients? Or is it more piecemeal? Does it make the business here harder to manage, or is this overall a very positive signal that you're having to cater to more and more biotechs?

I think it's a situation where ultimately the idea of virtualization and capital elasticity will drive all of our partners. Of course, the group that is here standing out is virtual biotechs especially coming from the east coast of the United States where you have a very good funding environment for the last year, which will also drive our long-term growth here. But again, having said that, we see for all institutions that do drug discovery trends towards virtualization and using companies like Evotec in partnership with them. The other thing that I want to highlight here is it's not biotechs only. Let me stress the importance of foundations in our business model going forward and trust going back here between 5 or 10 years, foundations did not exist as active players in the drug discovery world. Now this year we will make significant revenues with foundations where you see an element of virtualization really in its best practice because you come from the patient, have money that is on the drug discovery platform, immediately put to work and then goes back onto clinical platforms and allows many, many foundations to get into the market. Just to give you here a number, there are more than 400 patient foundations out there who want to definitely do something in their mission and that includes also drug discovery work that also just starting as a process and here a platform like Evotec is ideally suited for this customer type. So yes, biotech is growing. Also given the business mix that we are creating through our Aptuit acquisition, which we brought in two years ago because here we are providing for example INDiGO. So marching into a clinical trial packages, which are of course ideally suited for this kind of customers. And that's why you see biotechs growing, you will see foundations growing and you will also see an increased virtualization and capital elasticity driven pharma market. Sorry for a long answer to a short question, but yes, we love biotech.

So it’s really helpful answer. Thank you very much, Werner.

At the moment, there are no further questions. [Operator Instructions]

If there are no further questions, let me thank you again. It is our pleasure to work for our partners, it's our pleasure to drive R&D forward and it's also our pleasure to serve our long-term shareholders, who build Evotec together with us. Thank you so much.