Filling the gap

Evotec partners with PsychoGenics Inc. to provide integrated CNS drug discovery solutions

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HAMBURG, Germany—Evotec AG has entered into a strategic alliance with PsychoGenics Inc. of Tarrytown, N.Y., to provide integrated central nervous system (CNS) drug discovery solutions to pharmaceutical and biotech companies. The two companies will work together to provide existing and new clients access to their complementary drug discovery platforms for the identification and development of new therapeutics to treat CNS disorders.

PsychoGenics' expertise lies in preclinical neurobiology applied to the CNS, and pain drug discovery and development. Its proprietary, high-throughput behavioral testing platforms employ advanced bioinformatics that allow the rapid screening and optimization of compounds for CNS activity. These proprietary platforms are used for the characterization of drugs, the phenotyping of disease models and the multidimensional testing of drugs in disease models.

Evotec has therapeutic area expertise in metabolic disease, CNS, pain, inflammation and oncology, and differentiates itself based on a strong track record in drug discovery, scientists with many years experience in the industry and its proprietary HTS detection methodology. The two companies got together based on previous experience with PsychoGenics by one of the Evotec team.

"We had gaps in our in-vivo pharmacology in CNS," explains Dr. Mario Polywka, the company's chief operating officer. "PsychoGenics takes the subjectivity out of testing with tools such as robotics and computer vision. We think the partnership based on our like-minded approaches will result in true innovation."

Founded in 1992, Evotec is today more accurately described as a merger of very high-throughput instruments, Polywka notes. The company acquired discovery and chemistry development capabilities when they bought Oxford Asymetry in 2000. The company's 600 personnel are divided among facilities in the United Kingdom, Germany and Mumbai, and are focused on chemistry, biology and metabolic diseases.

This year, Evotec acquired the compound management business from Galapagos and entered into a medicinal chemistry collaboration with Active Biotech AB—activity that underscores Polywka's assertion that Evotec is moving away from doing its own drug development toward a model based on partnerships and alliances. He also points to the technology platform provided by its acquisition of Kinaxo Biotechnologies in February 2011. The KINAXO platform allows comprehensive analysis of signal transduction processes and their response to drug treatment to reveal a drug's mode of action in biological samples and facilitate identification of biomarkers for patient stratification.

The goal is to support decision-making at various stages of the drug discovery process and enable prediction of a drug's therapeutic outcome, thus tailoring therapy to increase the individual's therapeutic benefit and reduce the risk of unwanted side effects.

About the PsychoGenics collaboration, Polywka observes that, "Our clients and partners will benefit through an increased probability of success and faster and more informed decision making in their drug discovery efforts with the goal of delivering preclinical candidates in the most time and cost efficient manner."

Dr. Emer Leahy, president and CEO of PsychoGenics, notes that her company and Evotec both have a longstanding history of successful partnerships in which they share discovery risk with pharmaceutical companies and have delivered several preclinical candidates.

"Now, third parties will have the opportunity to avail themselves of fully-integrated and proprietary capabilities to drive and transform their CNS discovery programs and lower their overall risk," she says.

PsychoGenics works with pharmaceutical and biotechnology companies, academic institutions and not-for-profit research foundations to help discover treatments for such major neurological and psychiatric disorders as: ALS, anxiety, cognitive impairment, depression, Huntington's disease, psychosis/schizophrenia and Spinal Muscular Atrophy (SMA). PsychoGenics has ongoing relationships with Roche, Lilly, CHDI, SMA Foundation and others.

Evotec has long-term discovery alliances with partners including Boehringer Ingelheim, CHDI, Genentech, Novartis, Ono Pharmaceutical and Roche. Evotec has product candidates in clinical development and a series of preclinical compounds and development partnerships, including a strategic alliance with Roche for the EVT 100 compound family, subtype selective NMDA receptor antagonists for use in treatment-resistant depression and an alliance in the field of diabetes with Andromeda with Teva.

Evotec acquires Galapagos' compound management business

HAMBURG, Germany—Evotec AG also recently announced its acquisition of Compound Focus Inc., the compound management business of BioFocus, a Galapagos NV company, for $15 million cash upfront.

Under the terms of the acquisition, Evotec will pay an additional $3.3 million in potential earn-out payments upon performance of the business in 2012 and 2013, depending on revenues and certain corporate milestones.

Evotec said the acquisition will augment its early drug discovery offering substantially, provide critical mass to its existing compound management offering and add profitable revenues.

Based in South San Francisco, Calif., Compound Focus provides small-molecule compound management services, and the company's technologies are focused on automated storage and custom design solutions for small-molecule drugs. Its current customer base includes U.S. federal institutes and pharma companies such as Elan, Lundbeck, Sepracor and Procter & Gamble. In 2010, Compound Focus had revenues of $11.4 million, with an operating profit of $3.8 million.

Following the transaction, Evotec changed its revenue guidance for 2011 from $93 million to $96 million to $99 million to $102 million. Galapagos lowered its revenue guidance for 2011 from $218 million to $213 million.

"This acquisition will substantially improve our ability to support our alliance partners in developing and managing their compound libraries," said Dr. Werner Lanthaler, Evotec's CEO, in a statement. "The link to our industry-leading screening platform further strengthens our hit identification capabilities. In addition, the profitable revenues shown by Compound Focus over the last years will further enhance our earnings profile going forward."

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