Dear, ladies and gentlemen, welcome to the conference call of Evotec SE. At our customer’s request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] May I now hand you over to Dr. Werner Lanthaler, CEO, who will lead you through this conference. Please go ahead, sir.

Good afternoon. This is Werner speaking from sunny Hamburg. Welcome to our Half Year Report 2020. You can find the supporting slides for this call on the web as usual. We often get asked, what’s the purpose of Evotec? And it’s very simple. We design and apply innovative technologies and processes across all modalities in order to expand access to more precise medicines together with our partners. Or if you want it even more simple, we are the drug discovery and drug development Autobahn. Especially in times of a pandemic crisis, acceleration and even more speed on this Autobahn is needed today more than ever before. I’m here together with my team, our CFO, Enno; our COO, Craig; our CSO, Cord. And it’s great to also have Volker Braun for the first time here together with us in the room, who will be our key contact for investors and analysts in the future. If you go to Page number 3 of the presentation, you see that our long-term growth mission and aspiration is fully intact and we see good growth across all business segments. Short-term, I’m very happy to report a strong Q2, a strong H1, and with this we can – and we can report this with minimum negative impact of COVID-19. More importantly, we can report some very strong mega trends supporting our long-term strategic vision. And some of these trends even seem to accelerate in times of COVID crisis. The first mega trend is the outsourcing mega trend. Switching from fixed cost to variable cost is especially now very relevant that many people have started to validate their supply chains. A strong pipeline of new expanded deals is a very visible consequence on our platform, because people find a very stable platform that supports their supply chain with Evotec. The second mega trend is the super-cycle of innovation and the convergence of technology where we aim. Our integrated, systematic and unbiased approach to the best technologies from small molecules, biologics, gene therapy, antisense and, of course, cell therapies allow even more radical innovation here and in the future. The third mega trend is nearshoring of research and development. We can see an accelerated flowback of outsourcing work to the U.S. and Europe. This makes especially our capacities in the U.S. and in Europe highly valuable discovery and development powerhouses close to our partners and very close to our patients who we work for. If you go to Page number 5, you see that this long-term mega trend translate into very strong numbers. Our H1 numbers reflect especially a very strong base business. And we are very happy to confirm our top-line and our bottom-line guidance. And more importantly, we think it is fantastic that we can accelerate our R&D investments in our Innovate project by upgrading our guidance here on unpartnered R&D projects, which we are doing as of today. If you go to Page number 6 of this presentation, when we think about the medicine of the future, we increasingly see the importance of patient-derived data. This is in the center of what we do and how our platforms operate. This guiding principle to precision medicine is something where we understand and we know that we are just at the beginning of a mega trend. And that’s what you can expect as something that we will accelerate within our Action Plan 2025 going forward. On Page number 7, you see that the key of everything that we do are our fantastic people. I could give you hundreds of stories of how every single Evotec employee has helped to navigate through the first month of this pandemic. With this a very big thank you to the whole Evotec group out there and to the whole Evotec group of employees, because it has been nothing short but wonderful, how our staff has helped to keep not only the business open, but even to accelerate our business. Also very importantly, our leadership team have shown the commitment to continue to integrate best of global talents to our long-term mission. We did not slow down our recruitment. You see that we have added 300 new talents already in the first 7 months of 2020. This is so important, because this will drive our action plan into the future. With this, I hand over to Enno.

Thank you, Werner, and also from my side a truly warm welcome today here from Hamburg. I’m very happy to introduce you to our H1 2020 numbers, confirming that Evotec’s growth story is well on track despite eventful times. Let’s start with consolidated overview. H1 2020 numbers show a good 12% gain on the revenue line, driven by various factors. And I will come back to the details of this success on the next page. R&D expenses increased compared to last year’s level. This reflects our strong commitment with respect to growing unpartnered R&D, continuously investing into innovation, into sustainability and long-term value generation. The increase in SG&A is mainly driven by the growing number of employees and personnel-related expenses due to the overall growth. Focus areas just to name a few are the continuous growth of BD and administration. The first time H1 addition of Just and J.POD in Seattle, and we added new business setup of Evotec GT in Austria in Q2 2020, as well as various equity engagement. The other operating income turns out to be slightly above last year’s level. This value contains 2 mutually offsetting developments. With R&D tax credits increased for UK and for France, we are facing changes in the R&D regulations in Italy, which have led to a substantial reduction of R&D tax credits in Italy, resulting in total, in a 3% increase of other operating income. With regard to cost coverage for partnered R&D, under the Sanofi ID engagement, income remained on the same level as in H1 2019, which is also recognized under other operating income. With a total of €47.3 million, our adjusted EBITDA was below the level of H1 2019. The lower EBITDA line despite growing revenue line, in a summary is mainly to be seen in context of the following points that I would like to list for you. Temporarily reduced efficiency due to the COVID-19 related challenges, reduced milestone-related payments, fading out of the payments from Sanofi for to lose cost coverage after Q1 2020 and increased – or an increase in unpartnered R&D. Ramp-up of our J.POD activities in the U.S., as well as growth-related additional SG&A cost, while at the same time total tax credits have remained stable as already described. On the reverse, it’s fair to say that we have experienced some tailwind with regard to favorable FX rates from U.S. dollar versus euros in H1 2020, positively affecting revenues, adjusted EBITDA and net income. However, looking at the latest weak development of the U.S. dollar versus the euro, we prepare for a situation that this impact could be reversed in the second half of the year 2020. Let’s take a closer look now at the development of our top-line and our gross margin on Page 10. Group revenue successfully increased by solid €23.9 million, or 12% against H1 2019. It’s worth noting that this growth has been realized despite terminated Sanofi Toulouse payments after the end of Q1 2020 with negative sales impact of approximately €7.5 million plus significantly less milestones recognized compared against H1 2019. Thus, the positive performance, in particular, originates from the continued very strong growth of the base business across various fields within the organization. When subtracting the positive H1 contribution of approximately €16.3 million by Just – Evotec Biologics and eliminating some of the cost coverage for Toulouse year-on-year, plus taking our favorable FX effects after taking them out, we recognized a very solid like-for-like growth rate of the base business of approximately 15.3% despite the currently challenging environment. Revenues from milestones, licenses and upfronts, totaling to €7.8 million in H1 2020 came in significantly lower than in the comparable 2019 period showing €19.1 million. This once again shows the volatility among the quarters, when comparing milestone revenues. The euro-U.S. dollar foreign exchange rate related played also to Evotec’s favor in this regard. Consequently, the overall gross margin totaled at 23% confirming a solid base margin, but in total notably 7.8 percentage points below last year. This also as mainly due to the significantly lower milestone achievements in H1 2020, loss of cost coverage for Toulouse, the IFRS 15 charges and adjustments being above last year by approximately €4 million, but without any margin contribution and an increase of amortization due to adding the final PPA of Just – Evotec Biologics. Looking at the 2 segments on Page 11, we can confirm that both segments Execute and Innovate are continuing to develop along their strategic plan. Year-to-date, Execute revenues including intersegment revenues amounted to €228 million coming from €197 million in H1 2019. External revenues increased net by €18.3 million and included €16.3 million from Just and the J.POD. Intersegment revenues increased significantly to €51 million versus €38 million in the same period of the last year. And this is due to higher project demand by Innovate, reflecting our commitments into first-in-class product development and technology platforms. The Execute gross margin, as per year-to-date June was 24.6% and thus below last year’s 27.7% due to the reasons that I outlined before. The year-to-date 2020 adjusted EBITDA of €58.2 million, especially on the last year’s adjusted EBITDA level. Innovate revenues, year-to-date amounted to €44.6 million and 8% above last year, due to higher base revenues, including higher project revenues and added long-term partnerships. But compared to last year, substantially lower level of upfronts and milestones was realized. In addition, Evotec keeps investing significantly into active partnerships to increase the likelihood of achieving further milestones. Hence, the margin was impacted at 3.4% versus last year’s 33.3%. Innovate’s total R&D amounted to €32 million and SG&A amounted to €7 million slightly above last year. The adjusted EBITDA was negative but was within the expected range. Coming to the Q2 results, we can note the impacts from the challenges we have faced in the last month. Q2 2020 numbers show a good 8% gain on the revenue line reflecting the strong base business despite the – again low level of milestones and the fade off of the Sanofi payments for Toulouse. Like for H1, the gross margin is negatively affected by various different effects, resulting in a margin of 17.7%. R&D expenses are accelerating into €14.7 million underlining our strong commitment to our long-term value generation activity. The increase in SG&A versus last year is mainly personnel-related, originating from Just/J.POD the ramp up of the Evotec GT, Austria and general full time equivalent growth across administrative functions. Overall, the development of the single P&L positions result in an adjusted EBITDA of €17.3 million, which was below last year’s €28.2 million. The reasons are basically the same, as already outlined for H1 2020. Slide 13 summarizes financial KPIs that confirm Evotec’s strong spending during these very special times. Therefore, I would like to draw your attention to a few non-P&L numbers. Total assets remained very stable at €1.19 billion compared to €1.18 billion at the end of December 2019. Other than some decrease in noncurrent contract liabilities and some increase in stockholders’ equity, none of the balance sheet position changed significantly. Evotec’s equity ratio remains very solid at 40% and also increased since year-end, Evotec continues to maintain – sorry, and also – although increased since year-end, Evotec’s continues to maintain a very conservative net debt ratio of 0.8 times our EBITDA, and this is excluding IFRS 16 considerations. Evotec’s liquidity position of €275.7 million continues to be very robust. This figure compares to €320 million as per end of December 2019. We will take a closer look at the cash developments on the next slide. Overall, a very solid balance sheet and cash position, which with we feel comfortable to meet and fulfill our business goals and anticipations of the future to develop. Lastly, let’s take a look at our cash flows. The cash flow used in operations amounted to minus €7 million. Slide 14 also shows that Evotec invested significantly in growth CapEx and in equity or equity-like investments in the first six months of 2020. CapEx investment in the new J.POD facility in Redmond amounted to €15.7 million and will further increase in the second half of 2020 and the beginning of 2021. On the equity side, amongst others, Evotec participated in the Series C funding round of Exscientia, the world-leading AI-driven drug discovery company. This completes the financial overview and I would like to hand over to Craig for more details from the operational perspective. Thank you. Over to you, Craig.

Thank you, Enno, and a warm welcome from me too. It’s my pleasure to begin this next session – section on scientific and operational performance. So on Page 16, as already reported by Enno, one of the highlights and clear achievements from the first half of 2020 is a very strong base business performance, with double – robust double-digit growth in revenue in the Evotec Execute segment, and this even despite the loss of Sanofi subsidy in Toulouse and a challenging operating environment due to COVID-19. This base business performance represents further illustration of the power and the attractiveness of our flexibly accessible and the highest quality infrastructure. The fully integrated the multimodality drug discovery and development Autobahn, which provides the efficient platform to support our own R&D and innovate projects as well as the co-owned pipeline and execute partners alike. This is perhaps even more true for our partners during times of global disruption like these past few months. Despite the pandemic, in the first half of the year, we’ve continued to invest in new science, additional capabilities, and expand our overall capacity to fuel and sustain our long-term growth ambitions. And so I’d like to take a few moments to highlight a selection of these in the coming slide. As usual, we’ll continue to add a number of new partners such as Boston Pharma, as well as continuing to expand the breadth of existing partnerships, including those with Amgen and Takeda. And we continue to see a very high return rate over 90% of repeat customers. We’re very pleased to announce a multi project strategic partnership with Ildong Pharmaceuticals in March. And during Q2, we agreed to second INDiGO start under this partnership. In April, we also launched Evotec gene therapy, adding this exciting therapeutic modality to our capabilities. The very experienced team of gene therapy research has made a great start and as already fully operational in the new premises, benefiting from immediate access to the wider set of Evotec group capabilities for the efficiency and the synergies. I’ll come on to some of the other operating highlights in the coming slides. So on Page 17, when Evotec acquired Aptuit in 2017, we had 2 strategic intentions: firstly to extend the highest quality small molecule development offering ideally right through to commercial launch; and secondly, to create a fully integrated and seamlessly connected value stream continuum from discovery into development. And today, I’m very pleased to report achievements in both of these areas. We see a steady growth of demand and successful delivery of integrated CMC projects with a doubling of the number of projects over the past couple of years. In addition, the vision of smooth transition from our discovery operations into preclinical development has been realized for a number of projects including some assets in the Evotec co-owned pipeline. The integrated agile planning, the problem solving in the moment and removal of handoffs and a seamless transition saves our own 6 months in this critical phase of molecules progression. We’ve also strengthened the scientific and technological firepower of our clinical development through a strategic senior recruitment, and also investment and partnership with leon-nanodrugs to further supplement our existing leading capabilities in formulation signs. Importantly, in addition, we’ve successfully extended the end-to-end value offering right through to commercial manufacturer in the small molecule arena too, which is particularly well suited to niche and orphan indications. And we’re very pleased to be providing commercial supplies of FINTEPLA for Zogenix. FINTEPLA received FDA approval in June 2020 for treatment or Dravet syndrome, which is a rare and severe childhood-onset epilepsy. On Page 18, I’d like to handle – highlight both excellent scientific and business progress with Cyprotex. Now based on the nature of the business, which is high quality, high throughput [admit] [ph] one may expect this line to be particularly exposed to COVID-19 related slowdown, as customers reduced their own internal operations. Therefore, we are very pleased to report an 8% growth in revenue in the first half of 2020 compared to the same period 2019. I take this as a further indicative signal of the resilience and the quality of our base business across the group overall. This growth enabled by continued investment and capacity processes and technology has been driven by multiple factors including an increase in the synergy between bespoke Cyprotex assays and fully integrated discovery and development projects; expanded new strategic partnerships such as with the U.S. EPA, and a continued demonstration of scientific leadership, particularly in the field of predictive safety. On Page 19, one year after the acquisition, I’m very pleased to confirm that Just – Evotec Biologics is really making excellent progress. The vision of Just to invent a disruptive and innovative end-to-end integrated process to transform the agility and the flexibility in the cost base of biologics manufacturer to enable wider access to important biologic therapies. This vision resonates very strongly in the industry and most notably, is perfectly suited to pandemic response. As a result, we’ve disclosed important new deals related to COVID-19 in which the speed of success is highly critical, namely with Ology Bioservices to identify and bring forward a much needed highly developable antibody to SARS-CoV-2. And also with the U.S. Department of Defense to develop GMP processes for 2 SARS-CoV-2 antibodies. In addition, we’ve initiated new partnerships with OncoResponse, an immuno-oncologyd and Advanced BioScience labs for HIV, as well as others. And since April, we’ve been delighted with a high level scientific interest in a prepublication in bio archive of how the first time disclosure of an AI-based methodology to create human-like or humanoid antibody libraries. The novel concept here is to create an antibody screening library, which is populated with members which are predicted to have highly favorable developability characteristics coded in at source, thus removing highly costly and unproductive iterations for selection and improvement from the antibody development path, thus cutting both cost and time. On Page 20, all of this highly intensified and horizontal integration creates the opportunity to scale out rather than scale up from clinical to commercial manufacture, first reducing development risk. So we’re also very pleased to confirm that the construction of the first J.POD in North America to create the facility of the future, which is subject our partnership with Merck remains on track to begin operations in the second half of 2021. And on Page 21, in the context of a very strong integrated base business, our confident view ahead for continued growth, strong trajectory in Toulouse since 2015, and a successful transition out of and beyond the end of the Sanofi subsidy, we have acquired the Toulouse site from Sanofi with over 600 employees today and expansion space to grow to over 1,000. This move contributes a secure growth plate for the group as a whole. And under the new name, Campus Curie Toulouse, and collocated with the Oncopole, it forms a focal point for biomedical research in the region. I’d draw the section to close by concluding that Evotec Execute continues on the same positive trajectory of recent yields with double-digit growth and very high resilience through COVID-19. And we continue to build and add technologies, modalities and capacity to support our future growth intentions. With that, I’ll handle over to Cord, who will update you on Evotec Innovate.

Thank you, Craig, and good morning, good afternoon to everybody on the call. It’s my great pleasure to give you an update on the Evotec Innovate. Evotec Innovate posted a strong first half in 2020, revenues increased by 8%, despite an overall challenging environment and lower milestone contributions. We continue to make good progress in expanding our co-owned product pipeline, and in particular, our clinical stage part of the pipeline is making good progress. In our Bayer, endometriosis collaboration, we continue to move projects forward into the clinic and keep progressing, in particular, our very exciting P2X3 antagonists program in a number of high value indications. Moving to the preclinical part of the pipeline. In the beginning of the year, we regained the rights of our beta cell therapy program for the treatment of diabetes. Since then, they have continued to invest into this very promising project and initiated partnering and financing initiatives, which are gaining good momentum. Similarly, our global health franchise is also progressing quite well. In our TB collaboration with the Bill & Melinda Gates Foundation, we continue to progress various TB initiatives. Furthermore, together with the NIH, we filed an IND application for our Chikungunya antibody project. The exact date for the start of the Phase I study which will be carried out by Duke University in North Carolina, is not entirely clear yet, and this is mainly due to COVID-19, but it is expected to happen within the next 12 months. In response to the COVID-19 crisis, the ramp up our efforts here as well, in particular, organizing a large repositioning effort of marketed drugs as well as drugs in clinical development, when advanced stages of preclinical development. Beyond the ongoing COVID-19 global health crisis, there’s another crisis looming, which we all know is coming. This is the increasing prevalence of antibiotic resistance, which is threatening healthcare as we know it. Here, we continue to invest and recently signed a licensing deal with Resolute Therapeutics, giving Evotec access to a high innovative, very promising broad spectrum antibiotics project. Furthermore, we continue to invest in expanding our multimodality platform beyond small molecules, antibodies, cell therapy and gene therapy, we now also added antisense therapeutics as a new modality. Antisense technology will give us yet another option to develop drugs based on drug targets that are not easily accessible for more conventional modalities such as small molecules antibodies. Finally, in regards to academic bridge and equity strategy, we also made considerable progress. We established a new bridge with the UCLA called Autobahn Labs, but last – and last but not least, the expanded our equity portfolio with 4 investments into very exciting therapeutic and technology development companies. Before we present the progress of our co-owned pipeline, we wanted to highlight the increasingly involved in composition of this pipeline, when it comes to treatment modalities, pursued by Evotec. The increasingly diversified composition of our pipeline is shown on Page 23. Only 5 years ago, Evotec was essentially completely focused on small molecule approaches, this has really changed dramatically. Today, small molecules still make up the majority of the pipeline, but contribute now less than 70% of the pipeline projects. Biologics continue to catch up, and in conjunction with cell therapy approaches are making up now more than 30% of the pipeline. This ratio most likely will continue to shift towards biologics and cell therapeutic approaches going forward. Evotec’s multimodality approach to drug discovery gives us the opportunity to approach each disease for the most suitable mechanisms, as it do not have to rely on small molecule or antibody targets only. But we can address all targets and mechanisms that are generally viewed as undruggable as well. Page 24 shows the progress of Evotec’s co-owned pipeline, which continues to expand through new partnerships. In addition, more and more projects are moving from discovery into preclinical development and from here into the clinic. We are particularly pleased with the progress we have made in our endometriosis collaboration with Bayer. In total, 4 molecules have been brought forward into the clinic, covering a variety of mechanisms. The most advanced project with Bayer is based on P2X3 agonist, which is beyond endometriosis has potential in a number of additional indications, including chronic cough. The chronic cough indication is currently the most advanced. In an initial Phase II study in chronic cough patients BAY1817080 has demonstrated a highly promising safety and efficacy profile. A follow-up Phase IIb study and refractory and/or as unexplained chronic cough is expected to start in 2020. Furthermore, additional Phase II studies in other high value indications are expected to start within the next 12 months. We will give a slightly more detailed update on the Phase II results on the following slide. Further additions, however, to the pipeline to [indiscernible] are expected still this year. For example, together with our partner, Exscientia, we developed an A2A inhibitor for the treatment of oncological indications, for which we expect to start a Phase I study towards the end of 2020. Finally, after period-end, Jingxin Pharma informed us that they initiate a Phase III trial of EVT 201 for the treatment of insomnia in China. This study will be carried out as a multicenter, randomized, double-blind, placebo-controlled trial with planned enrollment of 450 patients. This study will include patients 18 to 65 years of age, as well as elderly patient groups over 65 years of age. The study is expected to take about 2 years to complete. On Page 25, we would like to go into a bit more detail on the efficacy and safety profile of Bayer 1887080, exhibited in the initial Phase II study and chronic cough patients. But first a few words about refractory unexplained chronic cough. Patients with chronic cough suffer continuously, as they cough between 10 to 100 times per hour for at least 8 weeks. The continuous coughing makes regular activities like phone calls, meetings, and theater visits increasingly difficult, embarrassing and stressful. This coughing continues for months or even years. It leads to a lack of sleep from overnight [boots] [ph], and combined with daytime coughing increasingly leads to exhaustion. Chronic cough is a frequent cause of medical consultation and is associated with a large number of pulmonary and extrapulmonary disorders. Its prevalence is estimated between 11% to 13% of the population. Patients are only diagnosed with refractory chronic cough once all other possibilities or causes have been ruled out. Currently, there are only limited treatment options available to manage this condition. P2X3 antagonism is a possible new treatment, which directly interferes with desensitization of the cough reflex. In our P2X3 antagonist program, an important milestone was achieved already last year. In a Phase II study, patients with refractory chronic cough all study endpoints regarding safety and efficacy were met. After only 1 week of treatment, BAY1887080 reduced chronic cough counts by 33%, which is essentially in line with all other competitor compounds, like from Merck and Shionogi. Concomitantly, BAY817080 also reduced cough severity in a dose-dependent session, which is also very encouraging. Furthermore, at this point, it may turn out to become an important aspect of the overall profile of BAY1817080. Only low rates of mild taste-related adverse events were observed. Although, all clinical results presented here are not directly comparable to competitor compounds, which is due to the different development phases, potential geographic differences, and difference in treatment durations. In conclusion, we believe that BAY1887080 clearly has potential to add significant therapeutic benefit for patients suffering from refractory chronic cough and even the potential to become the best-in-class P2X3 antagonist in the field. Preparations for Phase-IIb study in patients with refractory chronic cough are currently ongoing and are further studies in additional indications for which we hope to be able to update you later in the year. With the next slide, Page 26, we would like to shift gears and give an update on our cell therapy program in diabetes. At the end of last year, Sanofi announced that they intend to discontinue their efforts in diabetes research. In the wake of this strategy, strategic decision, Evotec regained all rights to diabetes beta cell therapy project early in 2020. Since then, we continued the development of this program with an initiative we call QRbeta Therapeutics. The program has made significant progress, especially when it comes to the identification of a possible device, which is needed for transplantation of iPSC-derived beta cells. Furthermore, we complemented the program by gaining access to GMP-compliant immuno-invisible cell lines, through a partnership with panCELLa. These cell lines come with and without a potential killswitch and thus enabled the development of a second generation beta cell product which will not need a device. Based on all the progress we have made in the first half of 2020, we feel that Evotec’s QRbeta initiative provides an exciting partnering opportunity for potential pharma companies and/or strategic investors for the next 12 months. With this, I would like to move to Page 27, and update you on exciting developments in our ID portfolio. The ongoing COVID-19 pandemic is a stark reminder that infectious diseases will always have to be reckoned with. Evotec is committed to the field of infectious diseases and continues to be very active in global health, antimicrobials and antivirals. In regards to COVID itself, Evotec is involved in a number of important activities. Evotec is leading the pre-clinical repurposing effort of a large number of pharma companies trying to identify possible therapeutics based on drugs that are already on the market, in clinic development or advanced pre-clinical development. Evotec is part of the NIH-led initiative ACTIV. Evotec recently signed an agreement with the U.S. Department of Defense for process development and manufacturing of monoclonal antibodies against COVID-19. Finally, we are involved in efforts to establish a fast response platform that allows early identification of viruses that has the potential to lead to future pandemics to recognize them early and have tools available to rapidly develop treatments. In this context, I would like to briefly mention Kara Carter, who has been leading all of these efforts at Evotec. Kara is a world-renowned expert in antiviral and we are all very proud that she has been appointed as President of the International Society of Antiviral Research. Beyond COVID-19, there is another global health crisis, which we can always see coming and need to prepare for. The global health crisis is the increasing development of antimicrobial resistance towards the currently existing arsenal of antibiotics. Evotec continues to be active in the field. And we are proud to have added yet another exciting program to our current pipeline from Resolute Therapeutics, which we would like to introduce on Page 28. Resolute’s program is based on a clinically proven target and has the potential to be developed into a novel broad spectrum antibiotic, covering major Gram-positive and Gram-negative pathogens. The program is currently at lead stage and the best analog display, really outstanding attributes. This cover essentially most, if not, all major pathogens, with antibiotic resistance. There’s no cross resistance to known antibiotics that has been observed. They have little potential to drive the selection of resistant strains. And the lead compound efficacious in multiple modes of infection and they have an overall promising in-vivo profile, including safety. We are very excited that we have been able to add this program to our AMR portfolio and we are advancing it with highest priority. In this respect, we also want to acknowledge the very strong support of CARB-X. CARB-X will support this program with up to US$8.4 million, covering most of the development cost into the clinic. So much for the update on Evotec Innovate pipeline. On Page 29, we want to give a very brief update on the further expansion of our platform technologies. As part of the Evotec Innovate strategy, we continuously invest into proprietary platform technologies, whose access is coupled to licensing fees or product royalties. We recently announced a further expansion of our multi-modality approach to drug discovery, which is essential to offer the best possible approach to each and every disease-related mechanism. So, beyond small molecules, which Evotec covers, in essentially all flavors, that is to say in traditional small molecules by function of natural products, we also cover antibodies, cell and gene therapy. And now, we also cover antisense therapeutics through a strategic alliance with Secarna. Antisense therapies are able to target mechanisms that are either difficult or impossible to approach by other treatment modalities. They usually specifically target mRNA expression through a variety of mechanisms. These include RNA’s age-mediated destruction of messenger RNA, direct steric blockade of messenger RNA translation into disease causing proteins and axon content modulation to slicing side binding. Several antisense oligonucleotides have already been approved in the United States and Europe. Secarna’s locked nucleic acid stabilized antisense technology belongs to the market-leading technologies, which also underpins key products in the antisense field, such as Spinraza and Nusinersen, for the treatment of SMA. Spinraza, for example, belongs to the most expensive drugs in market today in more than 40 countries. Through our strategic alliance, we can use Secarna’s antisense technology for in-house Evotec Innovate project or offer it directly through Evotec Innovate partners. We are very excited about the addition of Secarna’s antisense technology to our multimodality platform as it does fill an important gap. So much for the update on Evotec Innovate. With this, I would like to hand back to Werner.

Thank you, Cord. On Page 30, we want to just illustrate to you that our Autobahn also has bridges. And we are very happy that we were able to add Autobahn labs in the U.S. to this concept where you will hear much more about in the future. On Page 31, we illustrate to you that our equity co-owning strategy is also fully up to speed and gaining momentum. And we are very happy to report back to you that we were invited to participate in the foundation of great companies like Cajal Neuroscience and QUANTRO just recently. Page 33 is giving a brief outlook that we see Evotec well on track when it comes to the achievement of our news flow and deal making goals that we have given ourselves for 2020. If this follow us and when you follow us, you should also go to Page 34, where I want to confirm again, our guidance on revenues and EBITDA, and where at the same time, we are very happy that we can increase our Evotec Innovate R&D investments for the long-term value generation and growth of the company. Page 35 gives you an overview of our dates to come and Page 36 should mark one calendar date very highly for you, because I cannot tell you how much we would love to have a big party or meet you for lunch in New York City in the fall. But as it looks right now, we will have to make our Capital Markets Research Day as a virtual event. Nevertheless, be excited about it and make a mark on your calendar for November 19. With this, we are very happy that you follow us. And with this, we are inviting you for questions. Thank you so much.

Dear, ladies and gentlemen, we will now begin our question-and-answer session. [Operator Instructions] And the first question received is from Joe Hedden of Rx Securities. Your line is now open. Sir, please go ahead.

Hi there. Joseph Hedden from Rx Securities. I’m just looking at your infectious disease research, and obviously, there is some positive updates and you’ve expanded there a bit recently. I’m just wondering about the Sanofi part of your infectious disease research, and whether there’s been any progress on any of the pipeline programs that you inherited when you took over their facility. And then, just a couple on the financials, I was wondering on other operating income, would it be possible, could you split out for us what is coming from Sanofi there and what component is tax credit? And then, thirdly, just on the EIB loan, I know you’ve drawn down another €16 million. I was wondering if you had any specific investments earmarked for that? And how much of the facility is left to draw down? Thanks.

Thank you very much, Joseph. First question will go to Cord. Second question will go to Enno, third question also goes to Enno.

Yeah. So in regards to the Sanofi pipeline, actually, the chikungunya antibody project is an example. So that’s the project that originally came from Sanofi, which is progressing quite nicely and other projects in earlier stages are also progressing here as well.

Okay, Werner, I take the other operating income questions. First of all, this basically splits up into roughly €12 million into tax credits. And then there’s another €18 million cost coverage coming in by Sanofi ID Lyon mainly and the rest is other small stuff, but this is the 2 major positions. With regards to the EIB loan, you were referencing to the last drawdown of €16 million, so there’s roughly a remainder which is only a small amount of €1.6 million. And the amounts that we draw down are normally dedicated to Innovate R&D projects. But here they go into a wide range of different projects. So there’s not a very specific or dedicated one. But it’s really a portfolio that we are feeding. And the way we handle this is that we normally have a 50% coverage by this loan and the other 50% is internal cash going into these projects.

Next question, please.

Thanks.

And the next question received is from Igor Kim of Bankhaus Lampe. Your line is now open. Please go ahead.

Yes, hi. I’ve got a couple of questions. First, on your R&D expenses that you have increased by roughly €5 million, could you give a bit of a color on what – for what projects you have increased the R&D budget? I assume it’s beta cell project that you have regained from Sanofi or is there anything else on top of that? And then speaking of beta cell project that you took over from Sanofi, do you think it’s still realistic to expect a decision before the end of the year? Or it might also take a little longer, probably up until H1 next year? And the third question is more of a general character regarding your multimodality strategy. You have recently increased it into antisense, before that the gene therapy. Do you continue – do you plan to continue to increase the platform? And if yes, what kind of technologies you could imagine to add on top of your platform? So far, these questions. Thanks.

Thank you very much. First question I will take. It’s really a portfolio of projects where we are speeding up our investments. And, of course, the cell therapy platform that we are building is one part of this portfolio. But also let me highlight our Induced pluripotent stem platform, in general, where many projects are looking just fantastically well at this stage and where we feel that there is no reason to wait in bringing these projects forward. And that’s the underlying portfolio that we are bringing forward here and where we are increasing our spend a little bit. When it comes to our beta cell project, we will make the best decision here and certainly not the fastest decision. So therefore, we don’t give us a real timeline. When this has to be partnered, it has to be the alignment of partners who have the right strategy in mind here. And all I can say and Cord alluded to this that we find a very good momentum with many parties who understand what we want to achieve here, with this cell therapy project going forward. When it comes to our multimodality strategy, I think we have never felt so complete in being systematic, unbiased and comprehensive of what we can do when it comes to modalities. And I think when you look a bit forward, and if you would go deeper into our Innovate and also our Execute platform strategies, it’s really now connecting the dots in giving our partners the integrated ability to use these modalities in parallel and integrated fashion. I think that’s currently what we are doing. And the other priority that we have set within the company, and Craig alluded to this a little bit, is accelerating the platforms via machine learning and artificial intelligence driven technologies. And I think we are probably one of the very few companies globally, who are working on intelligence-driven and algorithm-driven drug discovery in the small molecule space, but with HAL, also in the biologic space. And these are the platforms, which going forward, I think will connect the multimodality Autobahn even better than what you can visibly see right now. And we can tell you that our partners start to appreciate every day more.

Great.

Next question, please.

And the next question is from Falko Friedrichs of Deutsche Bank. Your line is now open, sir. Please go ahead.

Thank you. I have 3 questions, please. Firstly, on the outlook for the Execute segment. Has the pandemic lead to disruptions that could impact growth of the segment over the next month and next year? Or is it not really impacted at all and should continue to grow in the double-digits? Then secondly, could you share some more color on your expectations for milestone achievements in the second half of this year? Your EBITDA guidance obviously implies a bit of an acceleration in H2. So what gives you the confident that you can achieve these milestones in order to meet your guidance? And then thirdly, given the very high interest for your Just.Bio offering, do you feel like your initial capacity plans are still sufficient? Or is the demand already much more than expected, so that you have to consider expanding capacity earlier than planned?

Thank you, Falko. Question 1 and 3, Craig will take. Question 2, milestones are scientifically driven events that are in their outcome, not predictable. That’s the only volatility that you have to accept on this and you cannot predict them on a quarter-by-quarter basis. So therefore, for us, we are completely relaxed about that situation. What counts for us is the total potential of milestone events that are coming. And here, there is, of course, a slight delay that the whole industry is suffering from right now, because there was a parallel shift of preclinical starts and also clinical starts for about 3 to 6 months, because clinical centers just didn’t open clinical trials. This parallel shift is something where we see centers opening already in the fall. That’s why we have a high confidence that some of the clinical milestones that we – or clinical events that we are expecting will happen. That’s one thing. And the other thing on the preclinical milestones achievements, we see that our platforms are operational and working, and that the multitude of milestone events is there. If biology supports these milestones, that’s always an open topic and a separate topic. But overall, that’s probably giving you a color on how we approach this question. And why we are so confident on achievement of our milestones, and with this, our EBITDA guidance.

Yeah, thanks for your question. So on the Execute segment and the outlook, I think it’s fair to say that, of course, we’re all still in certain – uncertain times. But nevertheless, we are very confident in maintaining our outlook for the year, because we see a sustained demand for our Execute services even during this time, and perhaps even in the manner of the mega trends that Werner mentioned at the beginning of the call. If anything, the global uncertainty can actually promote the use of flexibly accessible platforms that are high-quality and peer-to-peer quality with our partners. So as it stands at the moment, we feel confident in the outlook for the second half of the year and indeed into 2021, which is why we continue to invest and build and recruit and so on. So I hope that addresses your question on Execute. And then on just, of course, we’re very satisfied and pleased with the initial 12 months performance. And one of the beauties of the Just vision is this flexible and very capital efficient way to create modular approaches to biological manufacturer. And that means that in terms of current demand and modular build out, we are very closely monitoring the interest and monitoring the consumption of that capacity in advance. And as I said, the modular nature means that it’s possible for us to closely monitor and anticipate at what point any further capacity would be needed.

And maybe, Falko, to further illustrate what Craig just said on point one of your question, it’s – I think really very important to see the continued recruitment of talent. Because ultimately, you can, in our Execute business, more or less extrapolate that if we are able to recruit top talent on our platform, we will be able to translate this into revenue growth. And that’s why we are so happy that our – first of all, retention is very strong at this stage in the company; and secondly, that we are able to find excellent talent.

Perfect. Thank you.

Next question, please.

And the next one is from Victoria English of MedNous. Your line is now open, madam. Please go ahead.

Yes, I have 2 questions. One is to ask you to give us a little bit of a briefing on QUANTRO and where that fits into your – or how it fits into your drug discovery business? And the second concerns, the anti-infective, you mentioned antimicrobial resistance. And of course, we all know a lot of that is bacterial. But there hasn’t been much activity on fungal – antifungal agents, except today, when an Austrian company called F2G raised €60 million for new antifungal agent. And I’m wondering whether antifungal agents are on your agenda as well.

Hi, Victoria, this is Werner. First of all, greetings to you. Secondly, it’s great to see Austria thriving forward in biotech. With this, I hand over the question on AMR to Cord.

Yeah, so in regards to AMR, we currently mostly focus on the antimicrobials and – because, we firmly believe that this is a clear present danger to the healthcare system and that – this is a great opportunity also for Evotec here to really make a difference. And when it comes to antifungals, I would say they are in our radar, but we are not very active at this point in time here. Once again, here the current focus is clearly more on antivirals, where we also feel like we have a pretty strong presence and portfolio, and we’re continue to – would like to continue to expand this.

Okay.

Thank you. And Victoria, with regards to your QUANTRO question, I hope you forgive us and you understand that without circling back to our partners, we do not like to give more information than what we hand out in the press releases. So that’s why we are very happy that we were invited to this super technology platform. But we are not illustrating this at a deeper level right now without circling back.

Okay. Thank you.

Thank you.

And the next question received is from Ram Selvaraju of HCW. Your line is now open. Please go ahead.

Hi, this is Boobalan dialing in for Ram Selvaraju. I have 3 questions. So first of all, what are your thoughts concerning the impact of COVID-19 on the CDMO industry in general, especially comparing this quarter versus previous quarter? And what might or might not change moving forward for the remainder of the year? The second question is with respect to your R&D site for gene therapy in Austria, what are your initial and long-term expectations from this site? And third, we see that you recently participated in a financing route with respect to Exscientia. So apart from funding, where do you see Evotec’s key contribution in both near- and long-term and how do you measure the impact of your contributions on the company’s growth? Thank you.

Thank you very much. On your first question, I think the platform resilience on COVID-19 that we have seen as illustrated by Craig is very strong. And also here, I think we can highlight that over the last month, our processes has become even better, even stable, even more resilient to a situation where, for example, we would have an infection in the company and we would be affected directly by COVID. So I think here the platform has learned, the resilience is high, and most importantly, the customer demand is very strong, and we have a very good visibility here already until the end of the year and into 2021. Why? Because we have long-term contracts with an average contract duration of about 18 months and that gives you the visibility on the platform going forward. So that’s why I think the resilience of the platform is very strong already into 2021. On Evotec GT, we started this platform, basically with the core team, which used to be within Shire and then within Takeda, and it’s a fantastic group of highly experienced drug discovery and drug development people in that field. It’s about 28 talents that we were able to recruit, in total at this stage. This group from an IP perspective and also from a project perspective, at this stage has no capacity to work outside of the partnership that we have initiated with Takeda. So the strategy here is to increase capacity in the coming months and quarters. And with this then also open the portfolio to further partnerships and further R&D projects outside of the currently ongoing Takeda partnership that Cord illustrated. And on Exscientia and KPIs how we value our investments. So first of all, on Exscientia which was one of our earlier investments, we have really, I would say, a partnership in many aspects and a very fruitful exchange also of how drug discovery should progress going forward. You – we also have a joint project that we are sharing with Exscientia. So that’s a separate measure of success, and otherwise, in the long run when we look at our equity portfolio companies, these are financial investments, which have a financial return equation behind them, where our expected return equation is venture like. So that’s what we see here is the opportunity, and that’s also what we expect as the returns. And when I mean venture like, we typically look at these investments in a horizon of about 3 to 5 years as a minimum, and we look at these investments with a 5x return, also as a minimum expectation here. I hope that answers your question. And with this, I invite you to the next question.

And the last question we receive is from Chouhan Naresh of Intron Health. Your line is now open, sir. Please go ahead.

Hi, there. It’s Naresh Chouhan from Intron Health. A couple of questions, please, a bit more specific questions on COVID and the impact. So in Cyprotex, you mentioned that you had some strong growth announced despite COVID. Could it be that actually it’s because of COVID that actually you’re getting a lot of new orders on your new business? Because people are – other companies are unable to keep their labs open due to social distancing or lockdowns, and they’ve outsourced it to you because you’ve been able to keep your labs open. And therefore, is that a potential for there have been an artificial boost of sales, which may subside perhaps next year or year after whenever that might be? Secondly and particularly in the biotech space, also you’ve got big exposure to biotech arena. Are you finding that or are you seeing any signs yet that they’ve gone into cash preservation mode and a cutting back on, particularly and execute some of the things they might have done or would have liked to have done before, on maybe, let’s say, secondary asset, not the lead asset, and they’re slowing those things down and that might lead to slower revenues either in H2 or particularly more likely next year? I’m just trying to get a sense as to whether or not you’re seeing any signs of that at all. We are seeing signs of companies going to cash – particularly, biotechs going to cash preservation mode, because their clinical trials are being delayed. I would imagine that has a knock-on effect on the early stage pre-clinical, very early stage R&D side. And then thirdly, you just talked about your equity participation and how you view that as a kind of VC – as a VC fund. Would you be able to help us quantify the size of that fund and whether or not you’ve been able to assess what the returns may have or may not have been over the last 12, 18 months ago for us to get a sense of, 1, the size and, 2, how that might grow over the next few years? And that’s probably not in most people’s valuation. So it’d be helpful to get a sense as to how big that number is? Thank you.

Hi, Naresh. This is Werner.

Hi. Hi, Werner.

Question 1 will be taken by Craig. Question 3 will be taken by Enno. Let me give you my view on question 2 when it comes to cash preservation and funding cycle slowdown. We see the opposite at this stage. Why do we see the opposite, because I’m fundamentally convinced that the window opening for the healthcare industry in general is just starting. And that’s why I would not take the anecdotal things where individual companies are slowing down. If you look at the super cycle of innovation, the intention of first VC funds to put money to work in virtual companies, the intention of foundations, the intention of governments to support the healthcare innovation sector, I think has never been as high as I see it right now. And I’m in this industry for the last 25 years. So I think I would not go down that route and make the conclusion like we have seen this 12 years ago or 16 years ago, when a crisis led to an atomic winter in VC biotech funding or in IPOing new companies. And I think that’s also what you can observe on NASDAQ, that cash flow into companies via IPOs is happening. Funding rounds are happening and, yes, there might be some delays up or down. But the mega trend is I think fully intact and accelerating. So that’s why I think also our platform will benefit in the long run and not see here any knock-on effect in negative way. Maybe, Craig, on Cyprotex and then to Enno.

Yeah, hi, Naresh. Thanks for the question, yeah. And it’s an interesting thesis and I can understand why you would ask is it artificially boosted, because we are working and others are not. Basically, I can say with some confidence, because we know where the compounds come from. And we know the patterns of supply and demand in that area of business that the 8% growth that we’ve seen in Cyprotex in half 1 compared to 2019, and the fact that it’s behind the rest of the Execute segment growth, I think is indicative that we did indeed see a slight slowdown of compound supply from some of our partners that had actually closed their operations. So when they close their chemical operations, then there are lack of compounds for tests and I admit. And so, we did see that slowdown, but then we saw a very strong return towards the end of the quarter as the worst of confinement and the loosening up began. So I’m really confident in saying that the growth that we’ve seen in Cyprotex in the first half of the year is genuinely strong. And it’s actually been, if anything, blunted a little by the COVID impact.

And maybe, Enno, a few KPIs on our equity strategy, but please be short because we don’t want to overstretch this.

No, fine. Yeah, so but just generally for the structure, this is not – it doesn’t have really an own fund structure, but this is more like an evergreen fund, where we are investing from our balance sheet. And so far over the past couple of years, we have invested close to €70 million, so 7-0, into the current about 20 engagements. And for 2020, of the engagements that we have started new, plus following rounds that have been taking place and will take place, you can probably expect, in total, a slightly €30 million to be invested in engagements. Please also bear in mind, we generate quite a bit of revenues out of these engagements as well, that helps kind of building the counterpart. Activities are backed by the EIB R&D loan, because we can utilize this money also for financing these equity engagements.

Great. Thank you so much.

Thanks.

With this, if there is another question on the line, happy to take it. Otherwise, I would invite you to reach out directly to our new contact [Technical Difficulty]. But if there’s a question, please just raise it.

So we received no further questions.

Thank you so much. So Volker is looking forward to his e-mails. And with this, let me thank my team. Let me thank our employees. And let me thank you for doing the best in difficult times to make healthcare even better than it has ever been before. Thank you so much.