Compound gets second chance
Hamburg – When the compound EVT302 failed proof-of-concept testing in the spring of 2009, investors began backing away from Evotec AG shares. Now the selective MAO-B inhibitor is back, and has powered a leap in the company’s stock price of more than 10%. The primary reason for the jump rests with Swiss pharma giant Roche, which in early September signed a significant licensing agreement for the potential Alzheimer’s disease treatment. Roche has agreed to pay US$10m for the rights to EVT302, and if development efforts prove successful, another US$820m could be added. Evotec is also eligible for double-digit millions participation in any sales. Roche will begin the development process immediately, and Phase IIb trials are scheduled for next year. The tab for clinical study costs will also be picked up by Roche. Due to the advance payment, Evotec was able to raise its annual sales forecast from the €70m-€72m range up to €79m-€77m. Liquidity should be at least a60m. Analysts welcomed the deal. Interestingly, Roche knows EVT302 well; in 2006, Evotec purchased the substance together with another MAO-B inhibitor out of Roche’s pipeline, and tried to develop it as a therapy for addiction to smoking, but stumbled in the Phase II trial. Now the compound is getting a second chance.