Michael Ryskin: Thanks so much. Yeah.
Matthias Evers: Yeah and thanks for the questions to allow us a little bit to talk about the underlying market dynamics. Broadly, I mean, we showed significant growth in the demanding market. The demanding market, I would describe as we have seen a shift from what has been perhaps a bit more a seller’s market to a buyer’s market. Where we see, of course, if you look at our portfolio of partnerships with big pharma, mid-size pharma and biotech. That on the biotech side, we have seen muted demand given the low number of Series A, Series B funding. We definitely see that. And we have seen some budget tightening on the pharma side. So that’s why I think the market dynamics have shifted. However, it’s strong — I would strongly note that the unmet needs, all the way to the patient, but also the need in the pipelines for innovation remains very high.
So we see a series of very attractive partnerships that are constructed not only by us, but by others. So that’s why we would carefully take that buyers’ market dynamics, but buyers are out there. So one level down into the various types of businesses, as Werner has said earlier, and you have seen in the presentation, we see strong growth on the high technology driven, PanOmics driven type of partnerships. And then we see a spread of dynamics in Execute, some areas that are more commoditized and maybe more available, have more pressure, whereas we see very good positioning. So we have a spread of demand, but overall, we see a strong positioning of our services. And maybe to reiterate what Werner said on the development side. I think you will have noted that we just — a couple of days ago, actually, just yesterday, we announced a partnership with Dewpoint Therapeutics, which is just a prime point on the value of this development platform for all the companies that want to accelerate towards IND and there are plenty.
But then, of course, there are certain services that are much more commoditized and we, of course, have also seen how some CROs reduced their forecast very recently. So bottomline, more — buyers’ market from a position of the buyers and we adjust, of course, our strategies, but we see healthy demand and as a foundation for our growth.
Werner Lanthaler: Laetitia, maybe an additional comment here.
Laetitia Rouxel: To come into the financials and to answer to your questions on the Execute evolution end of September versus last year, we are still showing a revenue growth of 5% this year, end of September being at €380 million, and last year was €363 million. So we see here exactly what Matthias explained before that the market dynamic is under pressure, but we are having good progress and good long-term projects that fill our pipeline in the short term already.
Werner Lanthaler: Great. I hope this gives you color from multiple angles, and with this, we go to next question.
Operator: The next question comes from the line of Steven Mah with TD Cowen. Please go ahead.
Steven Mah: Great. I have two questions. One on the cyberattack, and one on Just-Biologics. On the cyberattack, I remember you guys had a filing where you indicated there were some potential unknowns, which could impact costs in the future. Can you give us a sense for any potential additional costs related to the cyberattack or is that completely resolved? And then the second question on Just Biologics and apologies if you discussed it already, I was having technical difficulties, had to dial back in. But on Just Biologics, given the pipeline momentum, what are your thoughts for multiple J.POD beyond Toulouse or do you guys have enough capacity with Redmond and Toulouse? Thank you.
Werner Lanthaler: So on cyberattack and unknowns, I would say, we are really looking at the cyberattack as something in the rear mirror and have identified all topics, cleaning up all topics and that’s why I wouldn’t say that there are any unknowns open and left and we have started also to give cost dimensions behind it. So I would really take that out of the equation as an unknown and park that. On Just-Evotec Biologics, I probably first hand over to Matthias again.
Matthias Evers: Yeah. I mean — thank you. I mean, at this moment of time, we have not planned for any J.POD beyond J.POD 2. That’s the short answer. Maybe to expand a little bit, because I think the observation — I mean, I agree with your observation and we feel we see significant momentum on the basis of the validation we have now seen through recent deals from the biotech side, on the biosimilar side, on the public — with the Department of Defense on the public side. We are now ramping up capacity feeding into the J.POD, also on the process development side. We are in multiple discussions with big pharma also in terms of really exploring the full potential of this technology. There will come a point to have that decision but it’s too early. So nothing to report beyond J.POD 2 and as we scheduled for opening later next year.
Werner Lanthaler: Maybe let me highlight one feature out of our Sandoz Tech partnership that, for example, Sandoz bought the option to potentially have access to the technology in their own S.POD, so to say, and that’s also something where we are, at this stage, exploring future ideas of where could the technology stack go and how could it go. What I think would be clearly a capital inefficient way of using this amazing technology is to build everything on our own. We really want to leverage this as well and high as possible into the future. I hope that gives you enough color, and by the way, great to hear you and regards to the U.S. And next question please.
Operator: The next question comes is a follow-up question from Charles Weston with RBC Capital Markets. Please go ahead.
Charles Weston: Thanks for taking my follow-up. It’s on capacity and capacity utilization. I can see that you have only increased your headcount by about 2% this year. Obviously, you have had all sorts of issues to deal with. You have also talked about some cost mitigation efforts and delivering improved operating leverage. But can I just talk about capacity? Historically that might have been very much related to number of people. How are you thinking about your capacity utilization using the current number of people that you have and efforts to improve productivity? So should we expect an uplift — a material uplift in in number of people next year, for example, to be able to deliver 2025 revenues?
Werner Lanthaler: So just to highlight one area here we are and have an exact number here, more than 200 open positions that we are at this stage trying to hire for our operations to execute on just Evotec Biologics alone in the U.S. and in Europe. So and that gives you one message first, that we look for the best people and not only for a quantity of people to deliver on our operations. The second thing is, yes, we have slowed down hiring, especially in the areas where we have commoditized competition also in in our fields that we see upcoming and we are really focusing on where can we leverage technology automatization with high quality people to do that. So that’s why the number of headcount shouldn’t be the only factor to see here how we are leveraging platforms and technology.
