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spk07: Welcome to all of you. Welcome to our half year.
spk00: Q2 were partially mitigated due to the signing of the technology partnership with Sandoz. Still adjusted BDA Q2 was in a negative territory of 8.2 million in Q2. Moving page 11, summarizing a selected balance sheet and cash flow items for Evotech. With an equity ratio of 51% compared to 52.6% as of December 2022, we remain with a very solid basis for future investments as it provides us with considerable financing flexibility. Cash flow used in operating activities in the first six months amounted to minus 5.6 million. The comparable figure last year was a cash flow of 240 million and was largely driven by a 200 million upfront payment from BMS in H1 2023. This figure is impacted by the cyber incident and does not yet reflect payments in connection with the BMS collaboration and the agreement with Sandoz, which were received in July after Q2 end. The net debt leverage ratio amounted to minus 0.9 times of adjusted EBITDA, which means we still maintain a net cash position. The group liquidity, as per end of June, amounted to 620.8 million. We continue to invest significantly into the growth of our sites and our offering into JPOD facilities in Toulouse in the first semester. This is reflected in CAPEX, which amounts to 104 million in H1. In addition, we finance our equity and minority shareholding with 9.2 million. Moving page 12 has presented in our business update end of July based on our regular review of our economic situation and our order book status. Our guidance was adjusted with revenue now expected to come in a range of 750 to 790 million. Unpartnered R&D expenses to reach 60 to 70 million and adjusted EBDA in a range of 60 to 80 million for the full year. Slide 13 shows the bridge amount between the original guidance and the revised one. We estimate revenues net of 770 million missed in Q2 due to the cyber attack. We see the visible partnering pipeline as strong, but are seeing buyers dynamic in more service-oriented business. Overall, we think we will be able to catch up and generate additional revenue of 20 to 40 million in Q3 and Q4. Earlier and better than anticipated, effects from advanced payments are mitigating part of the negative effects. With slide 14, I would like to introduce to you our initiative to bounce back ever better after Q2. with a so-called value protection plan, which includes a variety of activities we aim to secure liquidity and profitability. The identified savings potential for 2023 is representing 25 million. Furthermore, we continue to improve processes and systems as well as improve GMP compliance, good manufacturing practice, We are preparing for a focus ERP build out in the UK and for the Chez Pod site in Toulouse in Europe. A strategic review has been started which targets a portfolio realignment including capabilities and capacities. Finally, we will continue to invest in focus areas for technology leadership. Moving to page 15, we estimate the net impact of one-off cost to rebuild the business together with missed revenues of 80 to 85 million. As mentioned before, with the value protection plan, we aim to build a leaner and safer organization targeting 25 million in cost savings. This will also result in recurring savings in 2024 and beyond. The new strategy collaboration with Janssen and Sandoz as well as the expanded collaboration with BMS contribute significantly and help to mitigate the misrevenue and profitability resulting from the cyber so that we updated adjusted EDA guidance to 60 to 80 million. With this, I hand over back to you, Werner.
spk07: Thank you very much, Leticia. We are building the shared research and development economy in our industry. With this, it is essential to also build leading platforms in this industry to drive progress. So we pride ourselves not only to have the most cost-efficient and cost-effective platforms, these are also the most innovative platforms at this stage available in our industry. Let me name them. It's panomics, so omics-driven discovery and drug development. It's iPSCs in cell therapies, so using induced pluripotent stem cells for off-the-shelf solutions. And it's just Evotech biologics. And we bring this all together in an end-to-end shared R&D platform, which is accessible for more than 800 partners in our industry. Here are just a few examples of what we can do when we are applying this. So page 17 illustrates to you how we are building this massive royalty pool with our partners by fully leveraging these technologies. Going strong with Bristol's, going strong with Janssen, going into a tech partnership with Sando and also building with IPSCs a cure for diabetes together with Cernova is just highlighting the potential of these platforms in all four areas. And if you go one page forward, you see how every building block is bringing this into a portfolio in several disease areas where they're very strong and along the full value chain from clinical projects to a massive iceberg of preclinical and discovery projects that is growing over time. So yes, this is the long game that so many people have asked us to build. And yes, this is the idea of going into the same direction with a very clear strategy to build these co-owned assets. And yes, if you go to the next page, you see that this comes with a massive cascade of milestones where we are just starting. to collect and to come to the data points of the milestone cascade, which already exists. So behind Action Plan 2025 and into the future, you see illustrated here into the year 2040, that we have already built a massive pool of opportunities, which biology will now decide of how much we can collect of these more than 15 billion that are visible here. Now, going to the next page, and let me step back here for a second, because it comes to just Evotech Biologics. And I'm very often thinking back to our Capital Markets Day, which we held in November in Seattle last year, where the key question was, so will you ever find partners for these platforms? And we were just starting to create a sales order book which was stretching itself to go to the $100 million sales. Now, only a few months later, we are approaching a billion of committed sales into just Evotech Biologics. And this is why I really think we are witnessing an iPhone moment in this industry when it comes to fully continuous manufacturing for biologics. Because higher degrees of automatization and fully continuous manufacturing will bring down cost of goods and with this fulfill the original mission of just Evotech Biologics to gain access with novel products for massively more people on this planet. So watch out for just evotech biologics. This is just the beginning of a technology which will change the world and with this also the access to biologics. And that's why we are preparing what you see on page 21 for a capacity build, which is not driven by the thought of more capacity, but which is driven by the thought of a paradigm shift of technology. to really allow novel technology to build better biologics. And we are so happy that this paradigm shift is happening and is validated by the strongest and best partners that you can find in industry, for example, with Sandor, but also in public governments or in public institutions, like with the Department of Defense in the United States. And again, this is just the beginning of what we will do in the US and increasing in Europe, where J-POD 2 is in full swing very soon because we are keeping our timelines in building our J-POD in Toulouse where we have just installed recently our pods to also then establish manufacturing processes here. I couldn't be more excited about Trust Devotech Biologics as I am right now. Having said that, I also couldn't be more excited about Panomics, about iPSC cell therapies, and about our R&D end-to-end platform. When it comes to our next chapter on this presentation, let me please guide you to page 23, because it is so important for us not only to build a company, but it is important for us to contribute with our company to the planet. And with this, we are keeping our promise when it comes to our contribution to the environment, our contribution to social welfare and social well being on this planet. And when it comes to our contribution to better governance. With this we are showing you our goals of 23 and are happy to report back that all goals of 23 will be operationally executed as planned. If you go to page 24, let me, when it comes to operational execution, also tell you one more time that we will increase our pace in the second half after a stop which we had to take to protect data and our partners. And with this, I think we are really just at the beginning for the start of a very strong second half where you will see Omics, IPCCs, just Evotech Biologics and our end-to-end shared R&D platform deliver to contribute into a growth of 24, where we still think that despite a softer funding environment, our market offering is intact. And also, let me highlight on page 20, that you will see several pipeline projects emerging from this pipeline into visibility by transitioning from one phase to the next. And this is where we go from phase three projects, for example, in Asia, to very exciting preclinical projects going into the clinic with our partners. And at this point in time, let me thank you that you are following Evotech and that you are ready to also understand what we are doing and also translate this into your environments. And we are very happy to discuss. and to make our story more visible to even more of you and that's why you will see us at several conferences in the second half of 23 which we have illustrated here on page 26 for you and would be great to see you there or otherwise please be invited to our second capital markets day which will hold on the 15th of november with this for h1 let me summarize It is really a half year with two sites at this stage, a great start and an unexpected stop. But we are coming out of this stronger than ever, with more energy than ever, and with the most impressive technologies to bring our platforms forward together with our partners. And with this, I want to thank my team. I want to thank the company for all the help that we have received, also many of our outside partners.
spk09: and we are looking forward to your questions ladies and gentlemen at this time we will begin the question and answer session the first question comes from the line of peter feldwood with citigroup please go ahead thank you um people don't hear city two questions verna just um could you just talk a bit more about characterizing the funding environment
spk13: that you're seeing. I think you've noticed softness, but that, you know, Evotech will hold its own. But what are you seeing in terms of large, medium, small customers and their behavior? And then secondly, on Just Biologics, post-SANDOS, I realize you can't go into huge detail, but again, could you characterize whether you're seeing a lot more incoming and inquiries in terms of partnering with Evotech as it relates to Just Biologics going forward? Thank you.
spk07: Hi, Peter, great to hear you. On both questions, I'll hand over to Matthias, who is the person who is closest to the market as our chief business officer and therefore best witnessing what he sees.
spk01: Thank you, Werner, and thank you, Peter. Thanks for the question. So on the funding environment, this is, of course, something we watch very carefully and we developed a certain view, which is as follows. A, we see obviously starting in the year with Silicon Valley Bank, with, I think, interest rate. I mean, I don't need to tell you that biotech environment is stiffer. and that we have a certain more limited funding environment. At the other end, you have an outsourcing partnering market, which is large in nature. So by our account, at least 20 billion with a conservative measure. So not including all the adjacency, et cetera, that we see. So by default, a large market with a long term demand, which is clearly unbroken in terms of therapeutic areas with high unmet needs. And why do I open up both vectors, the short term funding challenges for small companies, as well as an environment of a very large, call it also a market and essentially profit pool for us. Because we are quite positioned with a value proposition, which is against the premium end in terms of scientific problem solving, in terms of end-to-end solution, in terms of high-end products. So this market affects us significantly. a bit so we are adjusting our tactics so we you have seen in the numbers as presented by leticia that we are adjusting our growth for the second half year by something like seven percent um you see it adjusted but we are definitely looking forward into a market environment where the value proposition of evotech is part of the solution in this environment. Because so far, I talked only about the small companies. And for those, I mean, in a funding constrained environment, accessing a highly efficient R&D platform, as well as leveraging variable costs from their perspective is helpful. And a similar argument I would take also for the large customers. So if I draw a line, we are reasonably optimistic and comfortable with our growth outlook, while recognizing that particularly for more commoditized services and solutions, the world has become a bit tougher.
spk07: And if I may add, especially in our development and manufacturing API business, we see, I would say, a more competitive market. Otherwise, market for drug discovery, high-end quality services is very strong.
spk01: Which is very fair. And then secondly, the question on Sondor. And I take the same arc of the story as Werner started, because as we presented at the Capital Markets Day, and I remember our discussions, Peter, I mean, where, I mean, obviously, we highlighted already feasibility projects in the biosimilar space, and that gave us a certain focus. And we, I mean, as we published, we see the realization of a very large tech partnership with Sando. Now, this is a... part of the commercial validation next to the public partnering with the DoD. So this has made quite an impact on the market. So we see an early partnering pipeline with more momentum. So what we feel is a priority now to properly launch and expand existing partnerships and then building into the next two years, I would say 2024, 2025, that pipeline that is following. But yes, we see increasing momentum around this technology platform. Thank you.
spk13: Great. Thank you. Very clear.
spk09: Thank you.
spk06: Next question, please.
spk09: The next question comes from the line of James Quigley with Morgan Stanley. Please go ahead.
spk08: Hello, thank you for taking my questions. I've got some clarification questions. So in the report, I think it says there's 38 million in milestones at the EBIT execute level. Then this seems to move up into service fees and FTE revenues at the group level. So does this fully relate to Sandals? How much of the of the additional amount in Sandoz or the other effects in there. I know you mentioned the buyer milestone as well. When I look at the guidance, as you sort of highlighted, there's just quite a slowdown in the second half. Can you remind us of some of the headwinds in the second half, 22 base, in terms of milestones or anything that could impact the headline growth rate? And what does the guidance imply for the underlying growth rates? And finally, on the previous call, you highlighted 20 to 40 million in revenues from a catch-up perspective. How do you expect that to be recognised between third quarter and fourth quarter? And also, there's a lot of pushes and pulls for the second half of the year, so if you could give us an idea of the cadence of third quarter and fourth quarter revenues, that would be awesome. Thank you.
spk07: Pleasure. On the guidance question into the second half, I'll then hand back to Letizia. But let me first give you a color on what we have so far seen as milestones coming in. There is nothing recognized from Sandoz. That's only upfront that we have so far recognized. So the milestones that are coming into the company at this stage are largely driven by the existing partnerships with BMS Onco, BMS Neuro. And here we have a very good visibility on a very big pipeline of these two partnerships to come. Bayer, as the milestone contribution, which was small but scientifically very important, is a big contributor. And then you see high FTE rates and high exposure to these partners where we are delivering on these platforms and that shows you also the very strong growth in what we show as innovate revenues in the first half and that's why also innovate had a despite the cyber incidents in the Q2 a very good first half. The catch-up effect and when it comes to quote-unquote headwinds of the second half I think, again, you will not see many headwinds everywhere. We are back to productivity as we wanted to have it with the exception of our API manufacturing business. And that's also where, due to the fact that we simply were not able to show when exactly we will have the platforms back, there was a kind of a gap in our business development. which will by the end of 23, beginning of 24, then kick in again. So effectively, that's where the headwind from our growth comes because all other areas in drug discovery are, I would say, almost back to normal and almost back how we expected them to be at an above double-digit growth. for uh 2023 and the development business is on a below double digit growth that that's how you you could titrate that out and when it comes to a better illustration of uh how to come to the catch-up effect of 20 to 40 millions i hand back to leticia
spk00: So, James, thank you for your question. Coming back on the guidance and on what is included as milestones and key payments we had. So, first half of the year, we had BMS 3.1 that had accounted for two times 11 million. So, let's say, rounding 22, 23 million in March. And we got the Sandoz king in June 2023. So this year for 36 million. So that's the two major elements that has come as a big bonus this year. And that's what is factored in the guidance that we share.
spk07: And the rest should be considered as potential upfronts. and very unlikely recognized revenues from execution of projects if we deliver still by the end of this year. And otherwise, it will be recognizable profitable milestones to come. But as you know, we never guide for them because they are depending on the timelines that our partners are executing. I hope that gives you a color on your question. And we are looking forward to the next question.
spk09: The next question comes from the line of Michael Riskin with Bank of America. Please go ahead.
spk12: Hi, this is Wolf Chan off on for Mike. Thanks for taking the questions. So on the first one, I kind of wanted to build off of an earlier question. I know that you talked about activity among smaller biotech customers, but a lot of your peers have also kind of called out seeing signs of budget tightening or prolonged decision making amongst larger pharmas. Is this something that you're seeing as well, or are your conversations with your larger pharma customers having a different tone? And then I have a follow-up.
spk07: Yeah, maybe I'll do the following, that we split this answer in two parts. One, that Matthias gives you a short answer on large pharma when it comes to, quote-unquote, our end-to-end platform services and cord. who is also on the line, to describe a bit to you how with large pharma we are making our long-term innovation deals and why this is less impacted in other things. So let's put this in two parts.
spk01: Well, thank you for the question. And I mean, let me dig a little bit more compared with my previous answer, because I touched on larger pharma costs. So yes, to be clear, across the industry, there are some R&D budget tightening going on. I don't think we have a different view. I think what we try to address is that in those situations, the demand for high-end innovation is unbroken. And we see that in many in the selective deals that are made at this point of time, despite the environment. And secondly, the difference between how people look at commodity, more commoditized services versus solutions that are pointing more towards pipeline building. So that's where we see Evotech strongly positioned. And let me hand over on that note to Cord.
spk10: Yeah, thank you very much, Matthias. So yeah, I want to pick up where Matthias left it off. I mean, pipeline building type of deals usually have a more strategic character for the pharmaceutical industry. These type of deals, they take more time to generate and finalize and sign. than more tactical fee-for-service deals, of course, but they're also not as much affected, I would say, as the tactical fee-for-service outsourcing. As this is really strategic, it usually involves pipeline building. It's usually driven by a very high differentiation in terms of um, technology platforms and, uh, pipeline opportunities, um, uh, pipeline projects that, that are loaded into these deals. Uh, so here, once again, at this point in time, we don't see, um, any real slowdown. Uh, we do see continued interest, um, especially in our, um, economics, uh, based on different drug discovery efforts and platforms here that are, um, uh, servicing, uh, um, a wide variety of, uh, indication areas. Uh, but we also see a lot of fraction and interest in our IPSC based cell therapy, uh, focus area, uh, where we have, uh, uh, quite a number of discussions, uh, on, uh, uh, projects and, uh, um, that are, uh, that we have been working on for quite some time. So overall, we are still very optimistic that we will continue to sign deals that are of strategic nature and here at this point in time, we don't see any real slowdown or change in the dynamics in the industry.
spk07: Thank you. And of course, you should consider that all these transactions typically are closed over timelines. starting with three years and sometimes going up to seven years in their nature. And that, of course, allows us much better visibility and planability of these partnerships than short-term tactical outsourcing. And that's why these two things should really not be mixed up in the same bag. It's really two different efforts. Pipeline building, strategic long-term beyond five years collaboration versus very tactical funding-driven crunches in pharma and in biotechs.
spk12: Next question. Got it. I really appreciate all the color. Uh, then it's just a quick followup. I, it's good to hear that most of your businesses are online after the cyber cyber attack, though. I did notice that you noted that your API manufacturing was still kind of, uh, suffering some of the after effects. So I was wondering if you'd be so kind as to size that business for us just as a percentage of revenue. And is there any chance that you've lost wallet share here as customers have looked to move to their time sensitive projects elsewhere? or given the spec and nature of these processes, are you pretty confident that you've maintained it?
spk07: Yeah. So before I hand over for numbers to Matthias, we are fully back on all our platforms. And it was really us. who were not the bottlenecks here. We had to validate everything with external authorities, which we also are ticking off as we speak and have done as we speak. So that's why we are absolutely open for business again and feel very good about it. And when it comes to our total dimension of the business, Matthias gives you a call.
spk01: Yeah, I mean, I just want to thank you for the question and to start, Werner, because I would also frame it more as a matter of revalidating and bringing online the GMP business, which is multifaceted, of course, API at the heart of it. So when we look at our development businesses, where we are in the range of 150, 270 million, then we speak, when we talk about the GMP affected areas that still need some required work, maybe a third of it, a third to less of it. So that would dimensionalize the impact, but again, I think we are bringing that online as we speak with some traffic building, rebuilding the momentum on the BD side. So as articulated by Renaud earlier.
spk07: And also coming back to a question from James at the beginning, the Indigo business is something which we which you will see in Q4, Q3, very strong. And Indigo is, so to say, leading into development manufacturing business. And that's why we are, for 24, quite optimistic for that business in this dimension, as Matthias pointed out, going up to about 200 million total capacity that we have available in that business.
spk12: You got it.
spk09: Thank you very much. The next question comes from the line of Stephen Ma with TD Cohen. Please go ahead.
spk04: Great. Thanks for taking the questions. I've got a three-part question on Jesse Witek Biologics. So one, the 1 billion euro sales book order, can you help us define exactly what that is? Does that include potential work that hasn't yet been committed? And then two, how has that order book compared to your internal projections for Just Biologics? And then finally, has the macro environment impacted your plans for multiple J-pods beyond Toulouse? Thank you.
spk07: Great questions. I think, let me start with the third question. The beauty of Just Evotech Biologics is the highest productivity holding platform in the industry. So that's why two metric tons of output of a J-pod gives us enormous output potential for a J-pod in the US and a J-pod in Europe. And these were the two geographies that we wanted to create in order to near shore biologics capacity. And when it comes to giving you color on
spk01: the order book and and how this compares to our original assumptions i hand back to matthias okay thank you thank you uh steven for the question so so what is the sales order book so we talk about closed sales so this is all committed work Now, there's no guarantee because, I mean, there are often milestones and decisions, but it's committed work. So it's not wishful thinking. So that number we are carefully tracking. And we had, of course, prior to the last Capital Markets Day and at the Capital Markets Day, we keep on tracking that for that committed work. I mean, you will remember that we were nearing 100 million in terms of at that point of time. And that's why, I mean, what I called earlier in the question from Peter, the arc of our evolution. Because we started in the space of establishing that platform in the biotech space. And we have announced, for instance, a partnership with Alpine, you might remember. So that was building up the sales funnel, reaching 100 million. And we talked about the biosimilars as a strategic space where we run feasibility projects. By now, we are more nearing a billion. And that gives us some runway into J-Pod 1 and 2. I mean, outlook, I'm not commenting. Question 3 is already answered. So I think you should see it as a metric that's determining the committed work for the next two, three, four years. And that's a metric we will also continue looking at as we build the business momentum.
spk07: And again, don't look at just Evotech Biologics as more capacity in the space of antibodies or biospecifics or something like that. This is a paradigm shift of how we in the future will manufacture biologics. So that's why it's really a question what to compare that number to. For me, it's just amazing to see that a new technology within such a short period of time has attracted a billion of committed capital. So that's really fantastic. Not capital, it's sales. I hope that answers your question, and we are looking forward to the next question.
spk09: The next question comes from the line of Joseph Haddon with RX Securities. Please go ahead.
spk02: Good afternoon. Thanks for taking my questions. Just on Just, it's clear Q2 was a great quarter with Sandoz, a strong contributor. Just on the rest of the year really, do we expect that to be the standout quarter of the year or do you see other strong contributions from Just? It's even positive for the first half. What might we expect when the full year is done? And then secondly, just thinking about how you account for the revenues, the full-time employee rates from your major collaborations, especially with BMS. So you've always kind of traditionally thought of those as innovate collaborations. Does that mean that the bulk of those revenues are being booked under FT revenues under the innovate segment, or is it a little more complex than that? Thanks very much.
spk07: So unfortunately, we cannot deliver a tech partnership with an industry leader like Sandow every quarter. Also, our exclusivity provisions would probably not allow that. So probably Q2 was definitely exceptional when it comes to the upfront and revenue impact, but the momentum in getting the technology and the paradigm shift out in the industry, I think, is just starting. That's why this is so important. But you should not expect significantly more revenues for just Evotech Biologics to come because also here we first operationally have to build the capacity that we can deliver. And never forget, we are, so to say, building... at the same time as we are rolling out this technology. And that has to come together. And this is ultimately coming together once both J-pods are fully operational, that we can also leverage capacity from one to the other one. And that will not happen before the end of 24, beginning of 25. And that's also why this vision of Action Plan 2025 and just Evotech Biologics has always been built. And on the second question, you're absolutely right. You should expect high FTE rates and milestones and royalties when they come from Nuro or from BMS Onco be revenue recognized in the Innovate lines.
spk02: Okay, that's great.
spk07: Thanks, Werner. I hope that answers your question, and we look forward to the next question.
spk09: The next question comes from the line of Charles Weston with RBC. Please go ahead.
spk03: I have three questions, please, if I can just ask them in turn. The first regards the competitive landscape, which you said is tougher in the more commoditized service. How is that actually impacting the market? Is there price cutting that you have to do to maintain your share or are you happy to maintain your higher pricing and lose share? And what might that mean in terms of your revenue mix by higher margin and lower margin business.
spk01: First question goes to Matthias. Yeah, I mean, I hinted a little bit with changing tactics. So I would say it does not lead to on our side as a response to price cutting. I would rather emphasize value-based pricing where we say, I mean, what is a fair price responding to the values that we provide? So that might include milestones, upfront risk-taking, that's for sure. So, I mean, it is a bit more competitive environment in the more commoditized services. And we are definitely looking at our full toolbox there, which is not to say, I mean, we don't see the necessity and it would also not be helpful in the market to move into price cutting.
spk03: That's very clear. Thank you. My second question, just with regard to your own ability to offset some of the pressures that you see, particularly on the funding slowness, are you able to slow down your hiring rate or do other cost-cutting measures in order to be able to protect the EBITDA progression that you're expecting?
spk07: So as Letizia has outlined to you, we have implemented what we internally call a value protection plan, where we have questioned, of course, every spending that we have taken. And I would say again, never waste a crisis. So that's why the cyber incident crisis was a good triggering point for us not only to react and rebuild, but also to question, everything that we are building at this stage. If you look to our website, you will see that we are currently looking for more than 250 open positions. Most of them dedicated to process development and just Devotec Biologics, which also shows you that we here see by far the strongest operational demand of capacity that we are building. Otherwise, we are very happy that we have continued to build our workforce in a steady state over the years. We have slowed down hiring in certain areas, but we also see that retention rates are going up. So therefore, we feel that the platform is growing with the best people at this stage. And it's, I would say at this stage, a good mix of Strong hiring in just Evotech biologics and very selective hiring in the other areas. But of course, a bit more cautious than we have been before.
spk03: Thank you very much. My last question relates to the bridge from 2023 to 2025. Should we, I guess we should be expecting that progression on EBITDA to be more back-end weighted. But can you give us a sense of how much back-end weighted it's likely to be? You've given us, you know, 23 and 25 expectations. So it would be just helpful to get just a broad sense perhaps of how we should expect that to trend over the two years.
spk07: So again, You see a company that every year over the last 14 years, by the way, has been growing by double digits on its base business revenues. So that's a clear trend that you can factor in. And there is for 24, I would say double digit revenue growth in our base business, something that we, from a capacity perspective, are able to show and also what we in our budget processes will have in the quote-unquote very close to the 10 percent and not higher than much higher than that double-digit rate of a base business and then there are two factors that you have to see that are yes back and loaded for 25 because one is how many milestones will ebda contributing fall in place and that's why i've shown you today this massive pool of existing pipeline events that are coming with high milestones behind them so the message here is we don't have to close the new deals with the high double digit million events behind the milestones they are there and in the year 25 if you look at them compared to 23 you see them three times as high from their potential But of course, they have to be proven by biology. That's an existing potential that has to come in place in 2025. And it's building up over 2024, but at a slower pace than what you will see in 2025, given the nature of the contracts that we have signed. And the third element is the EBTA contribution coming from Sando plus other just Evotech biologics elements where first, both J-pods have to be fully operational, which will also only be possible into 25, second end of 25, and where We have to deliver against our existing contracts, which again is also a bit driven by biology and delivering on projects, but also here we are quite confident. So it's these three elements coming together to make the bridge from today to go above a billion in sales. and to go to 300 million in EBDA, because what we don't want to do, we don't want to slow down our R&D efforts to get there, because there is all reason to believe that panomics-driven drug discovery and iPSC cell-based drug discovery will really open many, many doors, just as well as just Evotech Biologics does this at this stage.
spk09: Thank you for the call.
spk06: Pleasure. Next question, please.
spk09: The next question comes on the line of Douglas Tsao with HC Wainwright. Please go ahead.
spk11: Hi, good morning, and congrats on the progress. In terms of the IPSC and the pandemics business, Werner, I'm just curious, how scalable do you see those businesses, and how much of a limitation is it finding the high-quality people that that to date you've been very successful in bringing into the business.
spk07: So on scaling of Panomics and IPSCs, I'd like to hand over to Court.
spk10: Yeah, so that's a really good question. But we are very certain that both platforms are actually highly scalable. The Panomics platform, Panomics Written Drug Discovery, It's really a paradigm-shifting effort in the industry, using panomics as a guiding light, essentially, throughout the drug discovery process. From the very beginning, understanding the disease on a molecular level by profiling patient samples, tissue samples of disease tissues, to translating this into disease signatures, which can be used for drug screening purposes, and ultimately then moving them forward into the clinic based on pronomics-based biomarker strategies and patient stratification then also based on these pronomics-based biomarkers in the clinic. So we see this as a new end-to-end platform which can be applied to most disease areas. And, you know, where we are currently using it the most is probably in the context of neuro and oncology, but, you know, INI, cardiovascular, pain, essentially any other area is just as well suited. And we believe that this will come. Similarly, for IPSC-based cell therapy, there is just a large number of opportunities ahead of ourselves beyond diabetes, which is currently our leading project, most advanced one where we are hopeful to introduce this into the clinic in the third 2024 year. It's a, so they are, we are active in the oncology space here in particular, but, uh, uh, they are also many, many other opportunities, um, which are currently purely to talk about, but it's, uh, it's an absolutely scalable exercise because, uh, much of the platform, or I would say actually, uh, probably around, uh, 75 to 80% of the platform remains the same. and where you can use essentially existing platforms, proven platforms in other areas, which means that you can move and scale even faster in other areas.
spk07: Thank you so much.
spk10: I hope that answers that question.
spk07: Thank you quite. So I think the answer to your question is a clear yes, this is scalable also effectively through the fact that this is algorithm and platform driven. And with this, also being conscious of all of your time, let me thank you very much for following us in a quite exciting first half of 2023. I think it's a fair wish that we want to have only business excitement in the second half of 2023. And we are very thankful for you to follow us. And we look forward to seeing you very soon. If there are any further questions, please don't hesitate to reach out to Volker or to any one of our team. We are happy to answer all questions. All the best.
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