Shares in Germany’s Evotec dipped 1.7% after the company said that revenues in the first half of 2007 had fallen 8% to 28.5 million euros.

The decline is primarily due to a milestone payment from the collaboration with Boehringer Ingelheim recorded in the prior year as well as foreign exchange effects but on a brighter note, the Hamburg-based firm’s net loss narrowed 39.1%, helped by proceeds from the divestment of Evotec Technologies to PerkinElmer in the first quarter, which was sold for around 23 million euros.

The highlight of the first half for the company was achieving first Phase II proof-of-concept with its insomnia drug candidate EVT 201. Chief executive Joern Aldag said that the “highly competitive results to date provide us with an excellent basis to progress partnering discussions for further clinical development”. He added that a second Phase II study in elderly insomniacs “will deliver headline results shortly which we expect will further strengthen EVT 201's differentiating profile and competitive position".

Mr Aldag stated that the results were in line with expectations for the year and noted that Evotec ended the first half with a strong cash balance of 72.4 million euros, which includes the contribution of France’s Neuro3d of France. The acquisition of the latter, which gives the firm access to assays and know-how about a target that has potential for the treatment of a number of diseases of the central nervous system, was completed on April 1.