Revenues at Germany's Evotec has posted significant declines in sales and earnings for the first quarter of 2008 but the firm is optimistic about the future having just completed its acquisition of the USA’s Renovis.

Revenues fell 16% to 7.3 million euros, due to the absence of library synthesis revenues, following the transfer of Evotec's entire library business into a joint venture with India’s RSIL, and the further weakening of the US dollar against the euro. Net loss increased 54.1% to 13.8 million euros, due in part to 73% rise in R&D expenses to 12.8 million euros.

Evotec’s lead candidate is its insomnia drug candidate EVT 201 and chief executive Joern Aldag said that partnering discussions for the compound are ongoing. He added that it is “one of our primary goals for 2008 to sign a partner agreement for the future development of this molecule” which has demonstrated advantages in sleep onset, maintenance and lack of ‘hangover’ in trials to date.

The firm noted that it also successfully completed a Phase I repeat dose safety and tolerability study with EVT 302 for smoking cessation which showed that the compound was well tolerated in young and elderly subjects up to the highest dose levels tested. A Phase II craving study started in February and a Phase II quit rate trial is scheduled for the middle of the year.

The most significant event, however, has been the completion of the Renovis acquisition, a stock deal valued at just under $152 million. Mr Aldag said that “we believe we have now one of the strongest CNS pipelines in our sector with three clinical candidates, a strong late-stage preclinical pipeline focusing on areas of neurological and inflammatory diseases and a strong cash position to drive these assets through development.”

He concluded by saying that by the end of 2009, “we expect to have at least six compounds in clinical development, three of which should have proof-of-concept data to attract partners, and our cash is expected to last through 2010." Evotec added that its full-year revenues are expected to be in the range of 34-36 million euros.