Charles Weston: Okay. All right. Thank you. And then my second question is just on the — is on the Sandoz deal. The potential revenues here, which you highlighted when you announced the deal are very high, but I guess the revenue is going to ramp over time and there’s going to be some costs potentially coming in ahead of this as you add heads to be able to deliver on that work. Can you help us think about the trajectory of that revenue and EBITDA from this deal over the next few years, please?
Werner Lanthaler: Yes. Best is probably to hand over to Matthias for that question because Matthias was also really the man in the middle to create this tech partnership with Sandoz. So maybe you can elaborate.
Matthias Evers: Sure. Thanks, Charles, for the question. Good morning, good afternoon, everyone, also from my side. With regard to the Sandoz partnership, we are productively progressing and no change in guidance and dynamic as we communicated previously. We worked — we started working on an accelerated timeline on a number of molecules, and as indicated in one of our last discussions that, the revenues that we indicated of €648 million, I mean, spread over a couple of years, reflecting typical biosimilars timeline and that we quickly get into the development process for these molecules. So we indicated at the time, we ramp up over, carefully said, three years over this period. So we are fully in line and no further change, Charles, at this point of time.
Charles Weston: Okay. Thank you. So it’s around three years for the sort of development process there and maybe a slightly staggered start over this year and next year in terms of the beginning of the project?
Matthias Evers: So, yes. I mean, let’s say three plus, not to be too aggressive here, three plus, somewhat staggered, but that’s a model you can work with.
Charles Weston: Thank you. That’s great.
Werner Lanthaler: And maybe — if I may add one sentence, of course, these are biosimilars, where we think attrition rate will be very low when it comes to the biology. Obviously, biologics is really my question, where do we see the or where does Sandoz see the market opportunity, so that will probably then not lead to a full portfolio of all the biosimilars that we are making, but biology attrition rate should be very low.
Charles Weston: Thank you, Werner.
Werner Lanthaler: Pleasure. We go to the next question and we hope that works a bit better on the operating level now?
Operator: The next question comes from the line of Pippa Pritchard with Morgan Stanley. Please go ahead.
Pippa Pritchard: Hi, there. Thank you for taking my questions. I just have two, please. So first question is on 2025 guidance for revenue of over €1 billion. How much of this is milestones, what is the probability adjustment and to what extent has biotech funding put some of these milestones at risk, for example, with the recent Exscientia pipeline reprioritization. And secondly, I was wondering if you could provide an update or some color on how the adoption of AI techniques has been across your client base? For example, what proportion of companies are outsourcing AI efforts now versus using their own internal resources? Where do you expect this to go and what would the triggers for this shift be? For example, would it be first drug to be approved using AI, technological barriers, et cetera? Any color you could provide on that and what you are seeing and what your expectations are into the future would be useful? Thank you.
Werner Lanthaler: So on the second question, I would like to highlight, again, our Capital Markets Day of next week and invite you for that, because that’s exactly kind of the discussions that we want to have and that we want to have on a broad basis with you. So that’s why maybe for now it would take too long to really fully answer that and I am happy to invite you to a discussion with Matthias, Cord and Craig to go deeper in this discussion, but again, the invitation to Capital Markets Day is for next week. When it comes to our revenue guidance and biotechs funding and the milestones that are attributed to that. We at this stage have a range of about €70 million that are, quote-unquote, the bridge to — that are milestone driven in there.
Having said that, going beyond the €1 billion on topline will be clearly possible also without milestones, but achieving our EBITDA is critical to achieve milestones, because as you know, milestones have high, high gross margins on them. That’s why I think on the topline, we are very comfortable and on the EBITDA guidance, that’s where milestones have to come in and will come in. And that’s why highlighting the €15 billion existing contracted milestones is so important because that’s not milestones where we still have to find partners to come to these data points, they are already there. Typically, we don’t have large milestones agreement with biotech companies in place. So, if you would go through the €15 billion contracted milestones that we have in place, I would say, less than 1% comes from biotech partnerships at this stage or maybe less than 5% comes from biotech partnerships at this stage.
And that’s why biotech funding, and for example, programs or companies falling on the wayside through biotech funding does not have an influence on our royalty pool-building vision and plan at all at this stage, because these are typically companies like Novo Nordisk, like Lilly, like BMS, where pipeline building together with us is the name of the game and where milestones are part of that trajectory. Of course, biotech funding plays a role, if you also want to have a sentence on that when it comes to our underlying service business at this stage and we have no — made no doubt about that, that the market is softer than what we have seen in the past, but again, we see the offering of Evotec, especially from our integrated services, as the solution for high quality data points that are fundable for the venture community and not part of the problem.
