Table of Contents

​

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________

Form 20-F

___________________________

(Mark One)

OR

For the fiscal year ended December 31, 2021

OR

For the transition period from____ to____.

OR

​

Date of event requiring this shell company report

Commission file number 001-34041

Evotec SE

​

(Exact name of Registrant as specified in its charter)

Not applicable

​

(Translation of Registrant’s name into English)

Federal Republic of Germany

​

(Jurisdiction of incorporation or organization)

Essener Bogen 7

22419 Hamburg

Germany

Tel: +49 40 560810

​

(Address of principal executive offices)

Dr. Werner Lanthaler

Essener Bogen 7

22419 Hamburg

Germany

Tel: +49 40 560810

​

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Table of Contents

* Not for trading, but only in connection with the registration of the American Depositary Shares.

​

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None.

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None.

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

The number of outstanding ordinary shares as of December 31, 2021 was 176,608,195.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐Yes   ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐Yes   ☒ No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒Yes   ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17    ☐Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes          ☒ No

​

​

Table of Contents

Table of Contents

​

Table of Contents

​

​

​

​

​

Table of Contents

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

The Evotec SE logo, Evotec, Evotec International, Just, the Just logo, J.POD^®, Abacus, Aptuit, the Aptuit logo, Evotec INDiGO, Aptuit INDiGO, Cyprotex and other trademarks or service marks of Evotec appearing in this annual report are the property of the Company. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this annual report are presented without the ^® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This annual report contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this annual report are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights, or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

PRESENTATION OF FINANCIAL INFORMATION

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations as issued by the International Accounting Standards Board (IASB), as adopted by the European Union (EU) and additionally as issued by the IASB. Our financial information is presented in Euros. For the convenience of the reader, we have translated some of our financial information into U.S. dollars. Unless otherwise indicated, these translations for the financial information as of and for the years ended December 31, 2021, and 2020 were made at the rate of €1.00 to $1.1318, the noon buying rate of the Federal Reserve on December 31, 2021. Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could have been purchased upon exchange of Euros at the dates indicated. All references in this annual report to “$” mean U.S. dollars and all references to “€” mean Euros. Throughout this annual report, references to “ADSs” mean American Depositary Shares or ordinary shares represented by American Depositary Shares, as the case may be.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Many of the forward-looking statements contained in this annual report can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “should,” “target,” “would” and other similar expressions that are predictions of or indicate future events and future trends, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors, including, but not limited to, those identified in the section titled “Risk Factors” in this annual report. The forward-looking statements in this annual report include, among others, statements regarding:

1

Table of Contents

The preceding list is not intended to be an exhaustive list of all our forward-looking statements. The forward-looking statements contained in this annual report speak only as of the date of this annual report, and unless otherwise required by law, we do not undertake any obligation to update them considering new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this annual report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements

Summary of Risks Associated with our Business

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the section of this annual report titled “Risk Factors”. These risks include, but are not limited to, the following:

2

Table of Contents

​

3

Table of Contents

Table of Contents

Our risk management sets the main guidelines and closely communicates with all corporate units and all risk-relevant operational and support divisions both at the group level and in the subsidiaries. It helps to identify and assess risks, providing advice for and monitoring the shaping and implementation of suitable countermeasures. In this context, contacts for risk reporting and risk management in all business units are continuously identified and nominated. The Supervisory Board is in charge of monitoring the efficiency of the risk management system. The Management Board and the Supervisory Board review the processes of the risk management system once every year during risk reporting.

As part of the comprehensive risk management system, we have an internal control system in place in which suitable structures and processes are defined and implemented in the organization. The aim of our internal control system is to minimize the occurrence of procedural risks to an acceptance level. This also includes ensuring proper and effective accounting and financial reporting in accordance with national and international accounting standard and laws.

Risks are assessed based on two criteria: probability of occurrence and potential damage. As a basic standard, all risks are evaluated on a gross (i.e., before the consideration of response measures) and a net (i.e. remaining risks after existing and risk response measures) risk basis in order to display the effectiveness of risk response activities.

The classification of risks and the risk matrix generated for the internal quarterly risk report are based on the following three-level risk classes:

Probability of occurrence

​

Potential financial impact on liquidity

​

We are exposed to various risks arising from its activities and from the sector. Each of these risks could have a significant negative impact on its general business, its financial situation, and its results.

We have classified the most important risks in the following categories: strategic risks, market risks, financial risks, legal/compliance risks, ownership and patent risks, HR risks, information technology risks, and operational risks.

5

Table of Contents

In the following, the most relevant risks are reported. Established risk control measures are taken into account so that the following risk overview is based on a net risk perspective for the probability of occurrence and the financial impact. We also report significant risks that may not be financially quantifiable in a meaningful way. In the following, we describe the individual risk categories and indicate their risk classification. The order does not imply any valuation of the risks.

​

Compared to fiscal year 2020, Evotec has fundamentally changed its valuation basis as well as the valuation methodology. Since the fiscal year, all risks are derived using a gross-net method, as recommended by German and international standards. This leads to a more accurate assessment of risks and improved management of our countermeasures. In addition, the risk management has been changed to a cash impact assessment only, which allows for an improved comparability of risks.

6

Table of Contents

Based on the principles of risk factor assessment described above, the Management Board believes that no risks have been identified currently that jeopardize the continued existence of Evotec, either alone or in a foreseeable aggregation.

Strategic risks

Failure to achieve strategic targets

Currently, we have more than 4,000 employees and, in connection with the growth and advancement of our pipeline, we expect to increase the number of employees and the scope of our operations. To manage our anticipated development and expansion, we must continue to implement and improve our managerial, operational, legal, compliance and financial systems, expand our facilities, and continue to recruit and train additional qualified personnel. Also, our management may need to divert a disproportionate amount of its attention away from its day-to-day activities and devote a substantial amount of time to managing these development activities. We are actively developing pipeline assets in many therapeutic areas and across a wide range of diseases. We also routinely pursue new service offerings, such as our recent expansion into CRO services including, but not limited to, protocol preparation and review and regulatory preparation and submission. Successfully developing candidates for, and fully understanding the regulatory and manufacturing pathways to, all these therapeutic areas and diseases requires a significant depth of talent and experience, resources and corporate processes in order to allow simultaneous execution across multiple areas. In case of limited resources, we may not be able to effectively manage this simultaneous execution and the expansion of its operations or recruit and train additional qualified personnel. This may result in weaknesses in our infrastructure, give rise to operational mistakes, legal or regulatory compliance failures, loss of business opportunities, loss of employees and reduced productivity among remaining employees. For example, by expansion into CRO services, we may become liable for acts or omissions made in connection with developing clinical protocols. The physical expansion of our operations may lead to significant costs and may divert financial resources from other projects. If our management is unable to manage effectively our expected development and expansion, the expenses may increase more than expected the ability to generate or increase revenue could be reduced and we may not be able to implement its business strategy. Our future financial performance and our ability to compete effectively will depend in part on the ability to effectively manage our future development and expansion. In order to achieve our strategic targets, we above all must continue and expand our top-quality, innovative services.

Disruptive market participants

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We face the risk that new market entrants and existing competition may try to replicate our business model or introduce a more innovative offering that renders our services less competitive or obsolete. In addition, our drug discovery and development efforts may target diseases and conditions for which there are existing therapies or therapies that are being developed by our competitors, which may have e.g., greater resources or greater manufacturing capabilities than we do. Further, any drug products resulting from our research and development efforts might not be able to compete successfully with others’ existing and future products.

We address the growing competitive and price pressure with high-quality, innovative, and flexible-access services and a unique business model based on proprietary technology platforms. Reasonable cost management continued development of capacities and technologies, diversification of revenues as well as revenues from valuable, result-driven alliances are critical factors for us in maintaining a significant role in the world of drug discovery in the pharma and biotechnology sector.

7

Table of Contents

Future risks to success in drug discovery and development

We seek to serve as a source of innovative drug candidates to potential partners. We are advancing a number of active discovery and early-stage development assets that it intends to license to partners for clinical development and commercialization. Some of our assets are not partnered, and if we cannot find a suitable partner or agree on acceptable terms with a partner, we may not be able to generate a return on such assets. Furthermore, the amount of our return on the investments in our own pipeline assets depend on many factors, such as the degree of innovation and strength of our intellectual property position, as well as on external factors outside of our control. For example, our ability to generate a return on the investments in our pipeline assets depends, in significant part, on our partners’ research and development priorities. The market environment, demand and competitive landscape for our individual pipeline assets might change significantly over time as certain diseases become more or less prevalent or other treatment options are demonstrated to be safer and more effective or become more readily available, thereby reducing the market opportunities for our pipeline assets in development. As a result, the commercial objectives of our partners with respect to individual assets and the financial proceeds we may receive from partnering individual assets is highly uncertain, subject to factors outside of our control and could deviate significantly from our projections. Whether we are eligible to receiving milestone and royalty payments is subject to our partners’ success with regard to pre-clinical and clinical testing. The outcome of respective tests and trials is inherently uncertain, and we do neither control nor drive the development process once our partners enter the clinical trial phase. Our partners also may experience unforeseen challenges during, or as a result of, any clinical trial which they conduct. This could significantly delay or even prevent successful product development and subsequent market approval. Furthermore, there is a risk that milestone and potential license payments on future drug sales by partners will be lower than anticipated in our strategic planning. This could thus lead to impairments of underlying individual intangible assets, affecting our financial position and jeopardize the corresponding strategic target in the medium to long term.

Failure of mergers and acquisitions

We have strategic growth targets which we intend to achieve through a combination of organic growth and the acquisition of complementary service and research capacities. We intend to undertake additional strategic acquisitions; however, it may not realize the intended advantages of such acquisitions and investments, in particular if we are unsuccessful in ascertaining or evaluating target businesses. For instance, our assumptions may prove to be incorrect, which could cause us to fail to realize the anticipated benefits of these transactions. If we fail to realize the expected benefits from acquisitions or investments, whether as a result of e.g., unidentified risks or liabilities or integration difficulties, our business, results of operations and financial condition could be adversely affected (e.g., impairments on goodwill or intangible assets). Moreover, we may not be able to locate suitable acquisition or partnership opportunities. Following an acquisition, we may not be able to successfully integrate the acquired business or operate the acquired business profitably. In addition, integration efforts often take a significant amount of time, place a significant strain on managerial, operational, and financial resources, might result in loss of key personnel and can prove to be more difficult or expensive than predicted. The diversion of the management’s attention and any delay or difficulties encountered in connection with any future acquisitions could result in the disruption of our on-going business or inconsistencies in standards and controls that could negatively affect our operations, including the ability to maintain third-party relationships. If we encounter difficulties integrating newly acquired assets or operations with our platform, our business, and results of operations as a group may be adversely impacted. Moreover, if we invest in new modalities and technologies, it may not be successful in integrating them into our platform offerings or generating customer or partner demand for them, which could result in failure to generate a return on our investment. Some of the businesses we may seek to acquire may be marginally profitable or unprofitable. For these businesses to achieve acceptable levels of profitability, we may need to improve our management, operations, products and/or market penetration. We may not be successful in this regard, and it may encounter other difficulties in integrating acquired businesses into our existing operations. Further, if we undertake acquisitions, it may utilize our cash, issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Further, as part of our EVOequity model, from time to time we invest in start-up companies and/or development stage technology. In evaluating these opportunities, we follow an evaluation process that considers factors such as potential financial returns, new expertise in emerging drug discovery and business benefits. Despite our best efforts to calculate potential return and risk, some, or all of these companies we invest in may be unprofitable at the time of, and subsequent to, our investment. We may incur losses from these investments, including the potential for future impairment charges on the investments, and the anticipated benefits of the technology and business relationships may be less than expected. We therefore strive to ensure the proper adjustment and smooth integration of the new companies’ technologies, cultures, systems and processes and act as ONE Evotec. Based on the experience of past acquisitions, we make use of all necessary resources and departments to ensure a smooth integration process.

8

Table of Contents

Political risks

Political risks, which we consider to be strategic risks, mainly include geopolitical decisions that lead to global trade conflicts or an uncertain economic situation. In case of instable political situations, we also face the risk of direct impact on our operations e.g. due to delays of deliveries or blacklisted countries including suppliers and customers from these countries. We address these risks by continuously monitoring political uncertainties and actively working with stakeholders in order to assess and minimize potential negative effects where possible. For this purpose, special task forces comprising representatives from all necessary business units prepare and implement measures in a timely manner, e.g., a BREXIT task force in 2020 until mid of 2021. With the Russia/Ukraine conflict, starting in 2021, we closely monitor all impacts from sanctions against Russia for our business as well as indirect impacts like e.g. significant increases in energy costs. The impact on Evotec from the Russia/Ukraine conflict is recorded directly under the purchasing risks. We address these risks by e.g. transferring orders to other suppliers on an early stage and proactively.

Market risks

Competitive situation

The world of drug discovery in the pharmaceutical and biotechnology sector has grown rapidly in recent years. As a result, we are closely monitoring the competitive situation and the competitive environment. Our mission is to discover best and first-in-class medicines for a broad range of difficult to treat diseases in collaboration with our partners. To that end, we have built a comprehensive suite of fully integrated, next generation technology platforms which we believe will transform the way new drugs are discovered. By leveraging the advanced capabilities of our integrated platforms, we are able to provide solutions to our partners that enable significant improvements in the quality of new drugs while accelerating the drug discovery process and reducing the high cost of attrition often associated with traditional drug discovery processes. The industry in which we operate is highly competitive, with many players pursuing similar scientific approaches. If we do not continually offer our partners innovative and cutting-edge solutions and remain at the forefront of precision medicine, our business may be materially and adversely affected. Moreover, our business operations are subject to challenges as a result of industry pressures. For instance, we expect the industry to continue experiencing pricing pressures due to the persistent trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs, particularly with regard to prescription drugs, has intensified and our partners are impacted accordingly. As our business is dependent on the continued health and growth of the pharmaceutical and biological industry, should the industry contract due to pricing pressure, our business may be materially and adversely affected. We address this risk with a diversified business model based on innovative, multifunctional technologies and platforms that took years to develop.

Commercial risk from out licensing and licensed products

We depend in part on out-licensing arrangements for late-stage development, marketing, and commercialization of its pipeline assets. Dependence on out-licensing arrangements subjects us to a number of risks, including the risk that we have limited control over the amount and timing of resources that our licensees devote to pipeline assets, that our licensees may experience financial difficulties or that our licensees may fail to secure adequate commercial supplies of pipeline assets upon marketing approval, if at all. Moreover, we face the risks that our future revenues depend heavily on the efforts of our licensees and that business combinations or significant changes in a licensee’s business strategy may adversely affect the licensee’s willingness or ability to complete the development, marketing and/or commercialization of the relevant pipeline assets. Finally, a licensee could move forward with a competing product candidate developed either independently or in partnership with others, including our competitors.

If we or any of our licensee’s breach or terminate their agreements with us or if any of our licensees otherwise fail to conduct their development and commercialization activities in a timely manner or there is a dispute about their obligations, we may need to seek other licensees, or we may have to develop our own internal sales and marketing capability for our pipeline assets. Our dependence on our licensees’ experience and the rights of our licensees will limit our flexibility in considering alternative out-licensing arrangements for our pipeline assets. Any failure to successfully develop these arrangements or failure by our licensees to successfully develop or commercialize any of our pipeline assets in a competitive and timely manner will have a material adverse effect on the commercialization of our pipeline assets. The commercial risk from out licensing and licensed products is a medium risk, in our view. To mitigate this risk to the extent possible, detailed project reporting is established within our Company and stipulated in any collaboration agreement.

9

Table of Contents

Overall economic development

Due to our global activities, we are exposed to risks arising from the overall economic development, which may have an adverse effect on our revenue and earnings performance in the event of an economic slowdown.

Risks related to the COVID-19 pandemic

The COVID-19 pandemic is an extraordinary shock for the economies of the EU and the rest of the world, and it has severe economic and social consequences. The COVID-19 pandemic is continually evolving and to date has led to the implementation of various containment measures, including government-imposed shelter-in-place orders, quarantines, national or regional lockdowns, travel restrictions and other public health safety measures, as well as reported adverse impacts on healthcare resources, facilities, and providers across the world. In response to the spread of COVID-19, and in accordance with direction from government authorities, we have, for example, limited the number of such personnel that can be present at our facilities at any one time, mandated the usage of face masks in all our facilities, implemented regular COVID-19 task force consultations, limited the maximum numbers of people allowed in rooms at one time and requested that many of our personnel work remotely. In the event that government authorities were to further modify current restrictions, our employees conducting research and development, or manufacturing activities may not be able to access our laboratory or manufacturing facilities and our core activities may be significantly limited or curtailed, possibly for an extended period of time. As a result of the COVID-19 pandemic, we have experienced and may in the future (with COVID-19 or other similar pandemics and outbreaks) experience severe disruptions, including:

Any of these factors could severely affect our operations. We cannot predict the scope and severity of any potential business shutdowns or disruptions as a result of the ongoing COVID-19 pandemic. The extent to which the pandemic may negatively impact our consolidated operations and results of operations or those of our third-party manufacturers, suppliers, partners or customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Although the direct financial effect of the coronavirus pandemic has been less severe for us than for other sectors up to now, due to the high likelihood of occurrence we rate the impact of COVID-19 as an ongoing material risk.

10

Table of Contents

Termination of projects and contractual relationships

We depend on certain individual large customers. The loss of any of these customers would have a material adverse impact on our results of operations. Furthermore, certain of our service contracts involve scientific or technical delivery risks. In the current fiscal year, the revenue contribution of our three largest customers was 25% compared to 24% in 2020. Although we generally have long-term contracts with our major customers, there is a risk that customers may terminate projects and contractual relationships earlier than planned for strategic reasons or reasons for which we are responsible. High quality services, innovative solutions and close interaction with customers are key measures to reduce the likelihood of early contract termination or to identify its risk at an early stage. Nevertheless, the risk cannot be fully controlled due to strategic decisions of our customers that cannot be influenced. If a customer exits a drug discovery and development project, future revenues including milestone and royalty payments would be lost in a high volume. Where contractually permitted, we will always seek to continue the advanced research projects with new partners. We classify the termination of projects and contractual relationships especially our key projects with larger customers as a material risk, which, however, is also associated with significant opportunities.

Financial risks

Liquidity risk

Revenue fluctuations, expenditures, external events, and changes in the business environment might negatively impact our short-to-medium term profitability and liquidity. As of December 31, 2021, we had €858.2 million in cash, cash equivalents and investments. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, sales of assets, marketing and distribution arrangements, other partnerships and licensing arrangements, or a combination of these approaches. Even if we believe to have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. Our spending will vary based on new and ongoing development and corporate activities. To actively address any related risk and safeguard its cash position, we have defined minimum liquidity levels and regularly undertakes scenario planning. In full compliance with our investment policy, the general risk of losing a significant amount of cash in cash investments is mitigated by spreading investments in high-quality credit instruments across several banks and by monitoring these banks and investments on an ongoing basis. The selected instruments are used exclusively to secure the underlying transactions, but not for trading or speculation. All options of refinancing are reviewed on a regular basis, including potential capital increases and the use of debt instruments. Overall, we see little liquidity risk at this point. Our business and reported profitability are affected by fluctuations in foreign exchange rates mainly between the US dollar, Pound Sterling and the Euro.

Currency and interest rate risks

We manage the currency risks via close market monitoring, forwards, natural hedges, and other selective hedging instruments. Hedging transactions are entered into for future transactions that can be reliably anticipated based on our order book. Despite active currency management, exchange rate risk cannot be eliminated due to unpredictable volatility. As a result, our business may be affected by fluctuations in foreign exchange rates, which may have a significant impact on our results of operations and cash flows from period to period. Currency exchange movements also impact our reported liquidity in respect of translating liquid assets held in U.S. dollars or pound sterling into Euros. Interest rate risks may arise from inevitable negative interest on investments of available cash after capital increases, financing, etc. Due to the European Central Bank’s negative deposit interest rate of -0.5% (European Central Bank decided on February 3, 2022, to keep the rate at -0.5%), our banks are also charging negative interest on its balances. The Corporate Treasury Team continuously screens the market for suitable short-to-medium term investment options in order to avoid negative interest. In addition, Evotec continuously monitors interest rate market developments in order to react on interest rate increase risks - due to economic developments - on our floating rate loans at an early stage.

11

Table of Contents

Risks in the context of changes in tax laws and interpretations by authorities in jurisdictions of business operations and R&D tax credit risks

We operate in many different countries and are therefore potentially taxable in several countries and subject to various national tax laws and regulations. Changes in tax laws, jurisdiction and interpretations by authorities or courts as well as findings based on audits by authorities in these countries can lead to additional tax expenses and payments, which can have a negative impact on our business, our financial position, and results. These unforeseen additional tax expenses can arise for a number of reasons. Due to the complexity of our business model, this could affect the tax treatment of individualized elements of customer contracts, the taxable presence of a group company in a tax jurisdiction, adjustments to transfer prices, the application of indirect taxes to certain transactions and the non-recognition of the benefits of double tax treaties. Furthermore, R&D tax credits in various countries form a significant part of other operating income and contribute positively to our financial performance. Influences can also arise from significant acquisitions, divestments, restructuring and other reorganizations. Due to the global economic downturn caused by the COVID-19 pandemic and the resulting increase in government costs, there is a higher risk that we will receive notifications about the reduction or failure to grant tax relief or receive adverse changes to tax assessments. In general, we work together with external consultants in all countries in which we operate in order to minimize any risks. In addition, we regularly monitor the political and legal landscape in this regard but could not completely avoid the negative effect on our results due to the lack of influence and compensation options.

Legal/compliance risks

We strive to address legal risks as early as possible and respond pro-actively. Permanent measures are meant to entirely prevent any compliance violations.

Litigation and contractual risks

Despite our pro-active measures, we are exposed to risks from litigation and cannot completely rule out infringements of legislation. As a result, we are exposed to the potential risk that legal action, court rulings or out-of-court settlements may have adverse financial consequences. For major and/or complex transactions, we pro-actively seek external advice to mitigate the related risks. We are bound by numerous complex contracts with a low degree of standardization, in particular customer contracts. Contractual clauses that are flawed or contentious or unfavorable for us may entail contractual risks like legal liability risks and financial risks. We address this risk by continuously involving our corporate legal department as well as external legal advisers when needed. Thanks to this cumulative expertise of established review and contract drafting processes, we have not recorded any judicial or material out-of-court settlements with customers in the past 10 years, so we consider the risk to be low. We and our pharmaceutical and biotechnology customers and partners are subject to extensive regulations by the FDA and similar regulatory authorities in other countries for development, manufacturing, and commercializing products for therapeutic or diagnostic use. Such regulations include but are not limited to, restrictions on testing on animals and humans, manufacturing, safety, efficacy, labelling, sale, advertising promotion and distribution of us or our partners’ products.

Regulatory risks and risks arising from changing or stricter regulations

In addition to the risk before, new laws and regulations to which we and our customers and partners are subject may change in the future affecting the viability of market entry for new products developed in our EVT Innovate segment or the ability to continue certain projects in the EVT Execute segment that may consequently be terminated at an early stage. These risks are addressed by continuously monitoring global and local legislations to ensure that looming changes are detected in time. For this purpose, we also employ external partners such as consultants, auditors, and legal advisers under contract. Provided such connections exist, we also engage in early dialogue with the authorities, e.g., regulatory authorities, to create transparency and ensure that its research and development activities conform to relevant legal and ethical requirements.

12

Table of Contents

Product liability risks

It is possible that we will be responsible for potential product liability stemming from product research, development or manufacturing and may face an even greater risk if any drug candidate that we develop is commercialized. If we cannot successfully defend ourselves against claims that drug products, we develop with our partners caused injuries, we could incur substantial liabilities. Regardless of the merit or eventual outcome of such claims, any liability claims may result in e.g., decreased demand for any drug product that we may develop with our partner, loss of revenues, significant time and costs to defend the related litigation, initiation of investigations by regulators and injury to our reputation and significant negative media attention. We are covered by liability insurance, but notwithstanding such coverage, our financial position or results could be negatively affected by product liability claims. On occasion, large judgments have been awarded in class action lawsuits based on drugs or medical treatments that had unanticipated adverse effects. We act very prudently and responsibly to prove that clinical product candidates are safe and effective for human use and approvable by regulatory agencies. In this context, the direct clinical development, the conduct of human trials and the interaction with the regulatory authorities are usually carried out by our licensing partners.

Quality risks in manufacturing and R&D activities

Our business processes are designed to meet the highest scientific quality, and the progression of drug programs and drug candidates in development partnerships is part of our non-financial performance indicators. The success of our business therefore hinges upon the fulfilment of both our own and legal quality standards. Parts of our operations are subject to Good Manufacturing Practice (GMP), Good Laboratory Practice (GLP) and Good Clinical Practice (GCP) requirements and similar foreign requirements. Regulatory authorities and our customers may conduct scheduled or unscheduled (for cause) periodic inspections of our facilities to monitor our quality control system and verify that we comply with regulatory requirements and with the terms of our quality agreements with our customers. Audit findings that are classified as “critical” may lead to a loss of certification with regulatory agencies or a loss of approved supplier status with our customers and a subsequent loss in revenue. Our manufacturing facilities also require certification and validation activities to demonstrate that they operate as designed. In addition, our manufacturing facilities are subject to regulatory inspections by the FDA, the national competent authorities in EU member states (including AIFA in Italy), the Medicines and Healthcare products Regulatory Agency (MHRA) in the UK, and other comparable regulatory authorities. If we are unable to reliably manufacture products in accordance with the legal and regulatory requirements of the relevant regulatory authorities, we may not obtain or maintain the necessary approvals. Further, our facilities may fail to pass regulatory inspections, which would cause significant delays and additional costs required to remediate any deficiencies identified by the regulatory authorities. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay regulatory approval, impair commercialization efforts, increase our cost of goods, and have an adverse effect on our business, financial condition, results of operations and growth prospects. To minimize potential quality risks in manufacturing and R&D activities, we have established a quality management system monitored by the Quality Assurance Committee. The Quality Assurance Committee submits regular reports to our management, and it defines quality requirements. In addition, it is in charge of compliance monitoring, reviewing and reporting as well as the implementation of quality improvement measures.

General Governance and compliance risks

In terms of governance and compliance risks, we are mainly exposed to privacy breach and the potential risk of antitrust violations or fraud, e.g., through price fixing, illicit gratuities and the acceptance of unauthorized invitations. All our employees are obliged to adhere to our Code of Conduct, which is applicable across the entire group. Compliance with internal company policies is paramount to our success and ensures a safe work environment for its employees and early detection of potential risks. It is essential for Evotec to ensure that the Company in general and our employees individually conduct business in a legal, ethical, and responsible manner. Employees are obliged to report any incidents they suspect of having breached the ethical guidelines laid out in our Code of Conduct to our supervisor or to our Compliance Officer. Our corporate Legal & Compliance department is in charge of the compliance monitoring. Its routine activities include reporting to the Management Board and the Supervisory Board, and the development and implementation of certain compliance guidelines and trainings.

13

Table of Contents

Risks of failing to maintain an effective internal control over financial reporting as a US listed company

As a German public company traded on Frankfurt stock exchange, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act. After the additional US listing in Nasdaq at the end of 2021, we are responsible for establishing and maintaining internal controls over financial reporting, disclosure controls, and complying with the other requirements of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes Oxley Act”), Nasdaq regulations, and the rules promulgated by the SEC thereunder. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with international financial reporting standards.

The Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting at the end of each fiscal year. The process of designing and implementing effective internal controls over financial reporting is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a US public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our results of operations. In addition, we will be required, pursuant to Section 404(a), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the annual report for the fiscal year 2022. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.

In connection with the implementation of the necessary procedures and practices related to our internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404(a). In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent registered public accounting firm in connection with the issuance of their audit report.

In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act of 2002, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements, or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our shares.

For as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404. We may lose our emerging growth status as soon as the end of Q2 2022. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

Ownership and patent risks

If our business activities conflict with patents or other intellectual property rights of third parties, activities may be suspended or there may be a legal dispute. Also, in the event that we believe that its patents or other intellectual property rights have been infringed upon by a third party, we might file lawsuits. These actions could have an influence on our financial position or results.

14

Table of Contents

The risks associated with intellectual property include the two main general risks patents and proprietary technologies as well as licenses granted for partnered assets. In the following we give a more detailed overview of the most important sub-risks from our two main general risks stated above:

Uncertain protection for Evotec´s intellectual property

Different risk scenarios could arise which we subdivide in the following risk areas. Ours success depends in part on our ability to develop, use and protect our proprietary methodologies, software, compositions, processes, procedures, systems, technologies, and other intellectual property. To protect our intellectual property position, we primarily rely upon trade secrets, confidentiality agreements and policies, invention assignments and other contractual arrangements, trademark registrations and copyrights. Although our patent portfolio is not material to certain of our business, we have filed patent applications in the United States, Europe and abroad related to our pipeline assets, processes, or other technologies (including methods of manufacture). Our collaboration partners also file patent applications on our development assets on which we may earn milestones and royalties. We may not be able to apply for patents on certain aspects of our current or future pipeline assets, processes or other technologies and their uses in a timely fashion or at a reasonable cost. Even issued patents may later be found invalid or enforceable or may be modified or revoked in proceedings before various patent offices or in courts in the United States, Europe, or other jurisdictions. The degree of future protection for our intellectual property and other proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Additionally, our intellectual property may not provide us with sufficient rights to exclude others from copying our processes and technologies or commercializing pipeline assets. If we do not adequately obtain, maintain, protect, defend and/or enforce our intellectual property and proprietary technology, competitors may be able to use our proprietary technologies and erode or negate any competitive advantage we may have, which could have a material adverse effect on our financial condition and results of operations.

Risks in a patent prosecution process

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our current or future licensors or partners will be successful in prosecuting, obtaining, protecting, maintaining, enforcing and/or defending patents and patent applications necessary or useful to protect our proprietary technologies (including pipeline assets and methods of manufacture) and their uses. Furthermore, the patent prosecution process is also expensive and time-consuming, and we may not be able to file, prosecute, maintain, protect, defend, enforce or license all necessary or desirable patents or patent applications, as applicable, at a reasonable cost or in a timely manner or in all potentially relevant jurisdictions.

Risks in case of changing patent laws

The patent position of pharmaceutical and biotechnology companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. Moreover, there are periodic changes in patent law, as well as discussions in the Congress of the United States and in international jurisdictions about modifying various aspects of patent law and such changes in patent laws or in interpretations of patent laws may diminish the value of our intellectual property. There is no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in pharmaceutical or biotechnology patents. As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain.

Risks in detecting infringement, misappropriation and other violation

Our ability to enforce our owned (solely or jointly), and in-licensed patent and other intellectual property rights depends on our ability to detect infringement, misappropriation and other violation of such patents and other intellectual property. It may be difficult to detect infringers, misappropriators and other violators who do not advertise the components or methods that are used in connection with their products and services. Moreover, it may be difficult or impossible to obtain evidence of infringement, misappropriation or other violation in a competitor’s or potential competitor’s product or service, and in some cases, we may not be able to introduce obtained evidence into a proceeding or otherwise utilize it to successfully demonstrate infringement. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded if we were to prevail may not be commercially meaningful. If any of our owned (solely or jointly) or in-licensed patents covering our pipeline assets, processes or other technologies are narrowed, invalidated, or found unenforceable, or if a court found that valid, enforceable patents held by third parties covered one or more of our pipeline assets, processes or other technologies, our competitive position could be harmed or we could be required to incur significant expenses to protect, enforce or defend our rights.

15

Table of Contents

Risks in securing licenses

We currently have rights to certain intellectual property, through our owned (solely or jointly) and in-licensed patents and other intellectual property rights, relating to identification and development of our pipeline assets, processes, or other technologies. Our pipeline assets, processes or other technologies could require the use of intellectual property and other proprietary rights held by third parties and their success could depend in part on our ability to acquire, in-license or use such intellectual property and proprietary rights. In addition, our pipeline assets may require specific formulations to work effectively and efficiently, and these intellectual property and other proprietary rights may be held by others. We may be unable to secure such licenses or otherwise acquire or in-license from third parties any compositions, methods of use, processes, or other third-party intellectual property rights that we identify as necessary or consider attractive, on reasonable terms, or at all, for pipeline assets, processes, and other technologies that we may develop. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we, or our partners, may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Third party challenge to Evotec’s or Evotec’s licensors’ patents

Our owned (solely or jointly) and licensed patents and patent applications may be subject to validity, enforceability, and priority disputes. The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability. Some of our patents or patent applications (including licensed patents and patent applications) may be challenged at a future point in time in opposition, derivation, re-examination, inter pares review, post-grant review or interference or other similar proceedings. Any successful third-party challenge to us or our licensors’ patents in this or any other proceeding could result in the unenforceability or invalidity of such patents, which may lead to increased competition to our business, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Risks from unknowing all third-party intellectual property rights

We may not be aware of all third-party intellectual property rights potentially relating to its assets. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until approximately 18 months after filing or, in some cases, not until such patent applications issue as patents. We might not have been the first to make the inventions covered by each of our pending patent applications and we might not have been the first to file patent applications for these inventions. To determine the priority of these inventions, we may have to participate in interference proceedings, derivation proceedings or other post-grant proceedings declared by the United States Patent and Trademark Office (USPTO), or other similar proceedings in non-U.S. jurisdictions (e.g., within the jurisdiction of the “Deutsches Patent und Markenamt” DPMA or European Patent Office EPO), that could result in substantial cost to us and the loss of valuable patent protection. The outcome of such proceedings is uncertain. No assurance can be given that other patent applications will not have priority over our patent applications. In addition, changes to the patent laws of the United States allow for various post-grant opposition proceedings that have not been extensively tested, and their outcome is therefore uncertain. Furthermore, if third parties bring these proceedings against our patents, regardless of the merit of such proceedings and regardless of whether we are successful, we could experience significant costs and our management may be distracted. Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations and prospects.

Future litigation by third parties

Our commercial success depends in part on our ability and the ability of future partners to develop, manufacture, market and sell our assets and use our assets and technologies without infringing, misappropriating or otherwise violating the intellectual property rights of third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology industry, as well as administrative proceedings for challenging patents, including interference, derivation, inter pares review, post-grant review, and re-examination proceedings before the USPTO, or oppositions and other comparable proceedings in foreign jurisdictions. We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our assets, manufacturing methods, software and/or technologies infringe, misappropriate or otherwise violate our intellectual property rights.

16

Table of Contents

Limited lifespan of patents

Most international jurisdictions provide a 20-year nominal patent term, though many require payment of regular, often annual, annuities to maintain pendency of an application or viability of an issued patent. In some jurisdictions, one or more options for extension of a patent term may be available, but even with such extensions, the lifespan of a patent, and the protection it affords, is limited. Even if patents covering us or our partners’ assets, processes and other technologies and their uses are obtained, once the patent term has expired, we may be subject to competition from third parties that can then use the inventions included in such patents to create competing products and technologies. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

HR risks

Loss of highly qualified staff (key employees)

The loss of any of our key employees could impede the achievement of our short-term financial targets as well as its medium- and long-term strategic goals. Our ability to compete in the highly competitive biotechnology and pharmaceutical industry depends upon our ability to identify, attract, develop, motivate, adequately compensate, and retain highly qualified managerial and scientific personnel. We are highly dependent upon members of our management and qualified scientific personnel to perform research and development work and therefore are exposed to the risk that losing employees may mean the loss of critical knowledge. We may not be able to retain these employees in particular due to the competitive environment in the biotechnology industry. The loss of any of our employees’ services may adversely impact the achievement of our strategic objectives. We currently do not have “key person” insurance on any of our employees. We also may encounter problems hiring and retaining the experienced scientific, quality-control and manufacturing personnel needed to operate our manufacturing processes and operations, which could result in delays in production or difficulties in maintaining compliance with applicable regulatory requirements. To reduce this risk, we have established defined documentation processes, shared knowledge platforms, lab journals, clearly defined job functions and project meetings to secure some of the relevant knowledge, findings, and data. At the same time, long-term incentive (LTI) awards for senior employees serve as a long-term retention measure. For reasons of risk mitigation and business strategy, we have set up its organization such that key employees develop a common level of knowledge, with well-defined rules of substitution and succession.

Information technology risks

Cyber risks, data integrity and protection and loss of data

We collect and maintains information in digital form that is necessary to conduct our business, particularly for purposes of our EVOpanOmics, EVOpanHunter, J.DESIGN and induced Pluripotent Stem Cell (iPSC) -based drug discovery platforms, and we are highly dependent on our information technology systems. In the ordinary course of our business, we collect, store, and transmit large amounts of confidential information, including intellectual property, proprietary business information, human samples, and personal information. We have also outsourced elements of our information technology infrastructure, and as a result a number of third- party vendors may or could have access to confidential information. Despite the implementation of security measures and safeguards, our information technology systems, and data and those of our current or future contractors and consultants are vulnerable to compromise or damage.

17

Table of Contents

Our internal computer systems and those of our current and any future partners, vendors, and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, cybersecurity threats, war, and telecommunication and electrical failures. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. we may also experience security breaches that remain undetected for an extended period of time. If any such material system failure, accident or security breach were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. Any such breach, loss or compromise of clinical trial participant personal data, including in connection with EVOpanHunter, may also subject us to civil fines and penalties. To the extent that any disruption or security breach were to result in a loss of, or damage to, data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur internal costs or liability, our competitive position could be harmed, and the further development and commercialization of our partners’ product candidates could be delayed. Although we take measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance or other malicious or inadvertent disruptions. Any such breach or interruption could compromise our networks and the information stored there could be accessed by unauthorized parties, manipulated, publicly disclosed, lost, or stolen. Any such access, breach or other loss of information could result in legal claims or proceedings, and liability under federal, state, or foreign laws that protect the privacy of personal information, as well as regulatory penalties. Though we have put systems and procedures in place to minimize the likelihood of security breaches, accidents or system failures occurring; we cannot guarantee that third parties will not be able to gain unauthorized access to or otherwise breach our systems in the future. Any such unauthorized access or breach could adversely affect our business, results of operations and financial condition. To minimize the risk of losing data, we invest in the resilience and expansion of our systems, makes upgrades to security systems, backs up data to different geographical locations, enhances IT policies and consolidates user awareness. These measures mitigate the effect of hazards such as natural disasters, power failures, system upgrade failures, theft and data corruption as much as reasonably possible. Compliance with corporate guidelines relating to data integrity and protection, which also regulate the assignment of access rights, is mandatory. We perform regular IT risk assessments to identify and rectify weaknesses. In addition, an IT Security Committee meets weekly to analyze threats, investigate reported incidences and make recommendations to management. Where weaknesses are identified, remedies are initiated immediately. Due to the rising number of external attacks on IT systems, the measures established to prevent cyber risks have become much more significant in the last few years. To protect us from virus attacks and cybercrime activities, we employ antivirus and antimalware software, as well as firewalls running at relevant points of entry. In addition, systems are updated as often as possible, enabling the installation of new versions or patches with better secured authorized access, improved protection against malware and viruses to all systems possible. Systems that cannot be updated for technical reasons (e.g., due to lack of technical support) are – where feasible – isolated from the main network or replaced. In addition, relevant employees (e.g., in the financial and IT departments) are educated and regularly reminded of the risks and kinds of potential attacks that may occur. We have increased resources and investments in order to further secure our IT and data on all its sites.

All the risks named above are given the highest priority regardless of the fact that potential damage can vary greatly depending on scale, duration and cause.

18

Table of Contents

GDPR and other similar jurisdictions

Considering the significantly expanded regulations under General Data Protection Regulation (GDPR) and other similar jurisdictions, we are permanently reviewing the handling of relevant internal and external data and our respective flow, storage, and access. If we fail to comply with the GDPR and the applicable national data protection laws of the European Union member states, or if regulators assert, we have failed to comply with these laws, it may lead to regulatory enforcement actions or other administrative penalties. This may be onerous and may interrupt or delay our development activities, and adversely affect our business, financial condition, and results of operations. Further, from January 1, 2021, we have to comply with the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains GDPR in United Kingdom national law. The European Commission has adopted an adequacy decision which will automatically expire in June 2025 unless the European Commission re-assesses and renews/extends that decision. The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, and it is unclear how United Kingdom data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the United Kingdom will be regulated in the long term. These changes may lead to additional costs and increase our overall risk exposure. Other jurisdictions outside the European Union are similarly introducing new or enhancing existing privacy and data security laws, rules, and regulations, which could increase our compliance costs and the risks associated with non-compliance. Privacy and data security laws are rapidly evolving, and the future interpretation of those laws is somewhat uncertain. We cannot guarantee that it is, or will be, in compliance with all applicable international regulations as they are enforced now or as they evolve. There is significant uncertainty related to the manner in which data protection authorities will seek to enforce compliance with privacy and data security laws, including the GDPR. Enforcement uncertainty and the costs associated with ensuring compliance with privacy and data security laws, including the GDPR may be onerous and adversely affect our business, financial condition, results of operations and prospects. If any of these events were to occur, our business and financial results could be significantly disrupted and adversely affected. In this regard, we have intensified our employee training efforts to increase awareness of the need to review and adjust internal data protection procedures and improve restricted access applications. In addition, we have defined routines and installed internal and external contact persons in the event of certain potential types of data breach.

Operational risks

Environmental, health and occupational safety risks

We continuously enhance our operational risk management and optimize the accountability and performance assessment mechanism of all departments and functions. We actively gather data on operational risk to enable proactive risk prevention opportunities. The long-term objective is to monitor the level of operational risk across the Group on a monthly basis to gain insights preventively, thereby reducing our operational risks and saving costs in the long term. As a global corporation, we are exposed to extensive environmental, health and occupational safety risks potentially arising from production and supply chain processes as well as from various external events, such as force majeure, natural disasters, government decisions, pandemics (e.g., COVID-19) or other global and local incidents. We have several business continuity plans tailored to different locations which are updated if the general environment changes. In addition, local task forces were installed at individual sites that introduce further measures and ensure appropriate communication with employees and major stakeholders. As a result, we are well prepared to respond as quickly as possible to external disruptions with a direct or indirect impact on its business. We have also prepared further measures, including the possibility to draw on alternative materials or suppliers, internal exchange of materials and the definition of a clear code of conduct for employees and visitors and mobile work. Aside from the safety of our processes, the safety of our employees and the protection of the environment are also given high priority at us. Any misconduct may lead to personal, property, environmental and reputational damage, which in turn may cause short-term business interruptions, (temporary) shutdowns of projects, and penalties. Based on continuous threat analyses, we have established guidelines, standards and measures that should reduce any environmental, health and occupational safety risks to a minimum. Finally, our operations, including our research, development, testing and manufacturing activities are subject to numerous environmental, health and safety laws and regulations. These laws and regulations govern, among other things, the controlled use, handling, release and disposal of, and the maintenance of a registry for, hazardous materials and biological materials. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. In the event of contamination or injury resulting from the use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. we also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

19

Table of Contents

Procurement risks

Our business depends on a reliable supply of various materials for our laboratories and production. Due to our business model, short-term order inquiries are unavoidable, so that delivery bottlenecks can lead to delays in projects and production and thus have a negative impact on our capacity planning and earnings situation. Price increases for laboratory and production materials, but also for electricity and gas, represent a financial risk for us. We face this risk by working closely with our suppliers and using different sources of supply. Due to regulatory requirements, however, we are not always able to switch to other sources of supply, so that it cannot fully mitigate the risk. We try to limit the risk by reviewing and monitoring our supplier relationships, a continuous exchange with the operational areas for the early identification of needs and constant market analyses. In the context of the Russia/Ukraine conflict we are facing high procurement risks in the short term due to increasing electricity and gas prices for entities purchasing gas and electricity on the Spot market. In the event of a short- to medium-term gas shortage, it may come to interruptions up to productions stop in Evotec’s sites if Evotec is unable to switch sufficiently to alternative sources of supply. Such a gas shortage could also have a direct impact on Evotec’s suppliers and could disrupt the entire supply chain. We also see a risk of increasing transportation costs due to higher transport times and on charging of energy costs from our suppliers.

Process risks

We recognize the importance of balanced knowledge management, for example in the context of external reporting deadlines or adequate runtimes of processes. Due to our steady growth, we must continuously adjust our organizational and functional management as well as standards, business processes and structures in accordance with our current and future scale. For example, our global finance function has initiated organizational improvement measures and additional change management measures in order to avoid knowledge monopolies and make the finance organization more robust and flexible. This is also meant to prevent process risks such as inefficiencies and ensure accurate and high-quality financial data.

Major disasters on sites

In the event of a direct or secondary disaster that results in stoppages of our activities on one or multiple sites, or in damages and/or interruptions to the operations of key suppliers, we may be forced to suspend or incur significant delays in parts or all our activities. In each case, there is a potential risk that our financial position and operating results may be substantially affected. We therefore rate this risk as high from a financial standpoint. In addition, the implementation of research and development plans may be impacted by damages to our research facilities as well as medical and other institutions at which testing is conducted. In case of major disasters such as extreme weather events, earthquakes (especially in risk areas like Seattle, US), or plane crash, we may suffer loss of business due to inability to execute contracts and fulfil client deliverables. We have created business continuity plans as well as disaster recovery plans and has insurances for these rare events.

20

Table of Contents

On November 3, 2021, our registration statement on Form F-1 (File No. 333-260143), as amended, was declared effective by the SEC for our initial public offering of our ADSs, each representing one-half of one ordinary share, no par value per share, pursuant to which we offered and sold a total of 22,995,000 of our ADSs, at a public offering price of $21.75 per share. The offering began on November 3, 2021 and was completed on November 8, 2021.

Our principal executive offices are located at Essener Bogen 7, Hamburg, Germany. Our telephone number is +49 40 560 81-0. Our website address is http://www.evotec.com. The information contained on, or that can be accessed through, our website is not incorporated by reference into this annual report. We have included our website address as an inactive textual reference only.

Our agent for service of process in the United States is Evotec (US) Inc., 303B College Road East Princeton, NJ 08540 Tel: (732) 329-2355.

We are an industry-leading drug discovery and development partner for the pharmaceutical and biotechnology industry. Our mission is to discover best and first-in-class medicines for a broad range of difficult to treat diseases in collaboration with our partners. To that end, we have built a comprehensive suite of fully integrated; next generation technology platforms, which we believe, will transform the way new drugs are discovered. By leveraging the advanced capabilities of our integrated platforms, we provide solutions to our partners that enable significant improvements in the quality of new drugs while accelerating the drug discovery process and reducing the high cost of attrition often associated with traditional drug discovery processes.

Traditional drug discovery is a lengthy, costly, and complex process that is subject to a high degree of uncertainty and high rates of failure. In addition, identifying novel compounds requires extensive screening and in vitro and in vivo testing, which can be both labor intensive and time-consuming. For every successful medicine that is commercialized, 5,000 to 10,000 compounds fail in drug discovery. Moreover, it takes approximately 12 years of intense research, development, and approximately $2 billion for a new medicine to reach patients.

To address demand for faster, cheaper, and better outcomes of early-stage drug discovery processes, we deliver fully integrated drug discovery and development programs to our partners. We believe that our expertise in deep learning and computational approaches and the integration of such knowledge across the full value chain of research, drug discovery and development are industry leading. We possess essentially all critical capabilities to run drug discovery projects from target identification to IND filing for most standard drug modalities including manufacturing. Evotec reaching from precision medicine based drug discovery, including biomarker selection, human pharmacokinetics (PK) testing to clinical trial planning, safety assessment and manufacturability. We achieve differentiated results by integrating these firmly-established R&D capabilities, innovative proprietary technologies, and the knowledge of our experienced scientists. Our drug discovery therapeutic area expertise and capabilities covers diabetes and its complications, fibrosis, infectious diseases, CNS diseases, oncology, pain and inflammation, immunology, rare diseases, respiratory diseases, and women’s health. For the near future, a substantial majority of revenues generated from the offerings to our partners will be based on “fee-for-service” agreements or FTE-based arrangements, recognized across both our reporting segments, EVT Execute and EVT Innovate. Subject to the degree of integration of proprietary technologies, or if alliances are built based on in-house R&D projects as part of EVT Innovate, we may also benefit from milestone, license, and royalty payments. In the years ended December 31, 2020 and 2021, 3.4% and 8.1%, respectively, of our total group revenues from third parties were derived from milestone, license, and royalty payments.

Recent scientific and technological advancements, including the advent of patient specific disease modelling based on induced pluripotent stem cells, genomics, transcriptomics, proteomics, and metabolomics, have significantly shifted the understanding of molecular biology, cell regulation and the pathogenesis of individual diseases. As scientific research advances rapidly towards understanding diseases on a molecular level and the development of personalized therapies, the need has increased for new platforms, tools, and methods to better understand, interpret and translate the vast information and data that is being generated.

Over the past 25 years and in response to the challenges of the dynamic industry we serve, we have positioned Evotec at the forefront of this revolution in drug discovery, emphasizing disease, patient, and drug relevance at the beginning of the drug discovery process. We believe that we are the only company among our identified competitors that offers chemistry, biology, transcriptomics, proteomics, and iPSC-based disease modelling with multi-modality expertise across small molecules, biologics, antisense, cell and gene therapy, as well as manufacturing capabilities that span the drug development continuum, from discovery through commercialization. This belief is based on our industry knowledge and review of our identified competitors’ public disclosures about their offered services, which we

21

Table of Contents

believe provide a sufficient basis for our belief. (See “Business—Competition” for a discussion of our identified competitors). We have developed proprietary Artificial Intelligence/Machine Learning (AI/ML) capabilities that facilitate industry-leading data generation, data analytics and efficacy and safety prediction. We believe the integration of these platforms, in a holistic way, results in differentiated scientific disease insights, operational efficiencies and technological capabilities allowing us to drive rapid progress and successful outcomes throughout the discovery and pre-clinical development phase where innovation is most critical.

With more than 4,000 employees, we leverage our technologies and platforms to develop precision medicines across multiple modalities, with the aim of making the right drug available to the right patient. Our drug candidates can be created at a more affordable cost at up to half the cost of current benchmarks for discovery through Investigational New Drug( IND) application than those currently generated by industry players, and at a faster speed at up to 30% less time compared to the same benchmarks. As an example, together with Bayer, we published a white paper showing that our endometriosis project entailed a total cost to IND of €30 million, which is significantly lower than the industry benchmark of approximately $75 million (€63 million) and that the first of three clinical candidates under the collaboration was progressed to IND in less than four years, 30% less than industry benchmarks. Our ability to save time during development is important for our partners and ourselves as the potential to reach IND up to 18 months faster than the competition generates real benefit in a competitive marketplace for innovative breakthrough medicines. As of December 31, 2021, our work has resulted in 13 disclosed pipeline assets in clinical development, and over 110 pipeline assets in the discovery and preclinical phase. Moreover, we have developed a broad multi-disciplinary network of collaborations with over 800 partnerships across the pharmaceutical and biotechnology industry and academia.

We report the results of our work and collaborations through two operating segments:

We leverage our offerings described throughout this annual report across both EVT Execute and EVT Innovate. Revenue generated through our collaboration arrangements may contribute to either the EVT Execute segment or the EVT Innovate segment, depending on the nature of the contract with our customer, the ownership of the intellectual property, the stage of the project and our right to generate revenue from development success. We believe our partnership model is unique and allows us to balance and diversify the risks associated with drug discovery.

Our Innovation Hub: “Data-driven R&D Autobahn to Cures”

We refer to our fully integrated discovery and development platform as our “innovation hub.” Our innovation hub comprises the platforms set forth below, the integration of which we believe allows us to drive rapid progress and successful outcomes throughout the discovery and pre-clinical development phase, creating- a “data-driven R&D Autobahn to Cures.” We believe that we are one of the leading companies in the application of artificial intelligence and machine learning technologies in drug discovery and drug development.

EVOiR&D possesses comprehensive capabilities across all stages of precision medicine discovery, from initial biological validation and target selection through to clinical trial planning, safety assessment and manufacturing. EVOiR&D differentiates us from our competition because it combines multimodality expertise, interdisciplinary integration (e.g., molecular design, chemistry, biology, pharmacology, ADME toxicology, formulation development, API manufacturing, etc.) across the various stages of discovery and development and expert coordination of these processes led by highly qualified and experienced scientists. Furthermore, the application

22

Table of Contents

of artificial intelligence, machine learning and model-building capabilities to predictive science in EVOiR&D drive optimal performance of discovery projects in terms of speed, cost and quality for partners.

Our artificial intelligence, machine learning and precision medicine platforms are complemented by our proprietary iPSC technology platform, which utilizes patient-derived cell-based assays for disease modelling. iPSC cell assays are crucial to accurately modeling diseases and are increasingly becoming the new gold standard to profile drug candidates in the pre-clinical stage.

Our iPSC platform focuses on developing off-the-shelf cell therapies with long-lasting efficacy like immune cells in oncology (e.g., NK, T cells and others), beta cells for diabetes, cardiomyocytes in heart repair, and retina cells in ophthalmology as well as iPSC-derived exosomes. Our lead cell therapy candidate is a regenerative therapy for type 1 diabetes that is currently in preclinical development.

23

Table of Contents

Building Blocks of Data Driven R&D Autobahn to Cures

We generate revenue through three core collaboration routes:

24

Table of Contents

Our Offering by Platform and Core Collaboration Route

We have experienced significant growth in the recent past. From 2020 to 2021, our revenues increased by €117.1 million, or 23.4%, from €500.9 million in 2020 to €618.0 million in 2021. Our growth is underpinned by an increase in customers to 842 in 2021 as compared to 829 in 2020. We have again maintained a repeat business percentage more than 90%, which we believe affirms the quality of our services and evidence high customer satisfaction. Revenues with our top 10 customers contributed 42% of total revenues in 2021 as compared to 41% in 2020. To facilitate future growth, we intend to expand our investments into proprietary “unpartnered” R&D, which drives the development of our pipeline. From 2020 to 2021 our unpartnered R&D expenses increased by €11.7 million, or 25.2%, from €46.4 million to €58.1 million. Because of such investments, our number of pipeline assets increased to more than 130 while equity participations increased to 24 as of December 31, 2021, with meaningful potential for acceleration on both fronts.

Our Competitive Strengths

Based on many technological advances and new biological insights, the opportunity to change the odds and improve the success rates in drug discovery has n has been made more achievable. In our view, our set-up as a fully integrated drug discovery and development innovation hub makes us well positioned to achieve results. We believe we have built the most agile platform in the industry, and we distinguish ourselves from our competition through our competitive strengths, as described below:

25

Table of Contents

Our Growth Strategy

Our growth strategy aims to address the entirety of the R&D continuum by tackling the broadest range of disease areas utilizing a modality-agnostic approach. We believe we have built one of the most efficient integrated drug discovery, development and manufacturing infrastructures that generates the highest quality results in the fastest and most cost-efficient way. In addition, by leveraging the value of our platforms and sharing intellectual property through EVOroyalty and EVOequity, we seek to de-risk our portfolio through the breadth and diversity of pipeline assets. Our goal is to have over 170 pipeline assets by the end of 2025, with our first royalties to be received in 2025.

26

Table of Contents

Our strategies include:

27

Table of Contents

Current Industry Dynamics Suggest the Need for a Disruptive Approach to R&D

Spending on R&D and the introduction of new drugs have both increased massively in the past two decades. In 2019, the U.S. pharmaceutical industry alone spent $83 billion dollars on R&D, as disclosed by the US Congressional Budget Office report published in April 2021. Adjusted for inflation, that amount is about ten times what the industry spent per year in the 1980s. Between 2010 and 2019, the number of new drugs approved for sale in the United States increased by 60 percent compared to the previous decade. The peak so far was in 2018 with fifty-nine new drugs approved. Since the advent of biologics, the biotechnology and pharmaceutical industry has started to deliver more drugs than ever, and this trend will further accelerate with the emergence of new and converging technologies.

The budget that companies devote to R&D is determined by the amount of revenue they expect to earn from a new drug, the expected cost of developing that drug, and policies that influence the supply of and demand for drugs. The expected cost to develop a new drug, including capital costs and expenditures on drugs that fail to reach the market, has reached $2 billion and is expected to further increase. In contrast to the development cost, which increased from $ 1,3 billion in 2013 to $ 2,0 billion in 2021 for the benchmark of top 15 pharma and biotech companies, the average global peak sales per drug declined in the last decade by more than 30% from $ 520 million per drug in 2013 to $ 355 million in 2021 (adjusted for the special effect of COVID-19 vaccine sales). In line with this trend, commercial returns as measured by internal rate of return (IRR) have decreased by 58% – from 6.5% in 2013 to 3.2% in 2021. Global R&D spend grew by 53%, from $ 139 billion in 2013 to $ 212 billion in 2021.

All this points to the need for a drastic shift in the R&D model to increase simultaneously the quality of drugs being developed while improving the potential for commercial returns.

28

Table of Contents

Evotec’s Solution—Data-driven R&D Autobahn to Cures in detail

We believe the existing capital inefficient R&D model with its fully integrated, pharma-like value chains is no longer sustainable and, most importantly, in many aspects no longer competitive especially when it comes to execution speed of novel ideas. We strive to make Evotec’s “Data-driven R&D Autobahn to Cures” the ideal innovation hub for our partners and provide them with the necessary toolkit to conduct innovative research. We deliver critical solutions such as enhanced speed to the clinic, better prediction of clinical efficacy and reduced manufacturing costs. We can deliver these critical solutions through a combination of:

At Evotec, we believe that the future of drug discovery and development requires the integration of different disciplines and approaches to generate treatments that are patient-relevant, disease modifying and have curative potential. Our proprietary discovery and development platforms leverage data, operational efficiencies, and technological capabilities with the goal of driving rapid progress and successful outcomes in the early stages of the R&D process. We also apply machine learning and artificial intelligence to our novel molecular patient databases and disease models to generate and analyze data.

The key criterion for our decision-making is patient-relevant data, which facilitates a more stringent project prioritization cascade than typically observable in the industry. We can generate disease profiles at a large scale, providing a significant foundation of knowledge on which to base disease modeling and other drug discovery efforts. Our large suite of automated platforms ensures data integrity, prompt test responses and productivity. We create unique analytical packages for both our own programs and our partners’ programs, customized for each phase of development. Backed by a fully integrated drug discovery platform, all approaches are designed to contribute to the goal of improving productivity for our partners and to increase the number of our own assets, derived from our platforms, alliances as well as equity investments.

Our suite of platforms is a synergistic system—the centerpiece is the high-performance integrated R&D infrastructure (EVOiR&D), enhanced even further with advanced platforms for improved prediction and probability of success, as exemplified by EVOpanOmics, EVOpanHunter and the iPSC drug discovery platform. These central platforms are applicable to all modalities including cell and gene therapy within EVOcells and EVOgenes and discovery to manufacturing capabilities for biologics (EVOaccess). Our innovation hub creates value through three core collaboration routes—fee-for-service model, EVOroyalty and EVOequity.

29

Table of Contents

EVOiR&D - Integrated Data-Driven Research and Development

EVOiR&D is our R&D platform, which we believe, differentiates us from competition as one of the organizations able to deliver fully integrated drug discovery and development programs to our partners. EVOiR&D possesses capabilities across precision medicine discovery, including biomarker selection, human pharmacokinetics (PK) testing, clinical trial planning, safety assessment and manufacturability in the early stages of precision medicine discovery. This is achieved by seamlessly integrating firmly-established R&D capabilities, such as screening platforms, deep disease knowledge and translational models, with cutting edge proprietary technologies that can—in combination with knowledge of our experienced scientists—result in significantly improved speed, quality and cost of drug discovery. Our highly qualified and experienced team is what makes EVOiR&D unique. EVOiR&D’s integrated, industrialized, high quality and comprehensive infrastructure is utilized across all our core collaboration routes—fee-for-service model, EVOroyalty and EVOequity.

Our expertise in deep learning and computational approaches and the integration of such knowledge across the full value chain of research, drug discovery and development are industry leading. We possess computational capabilities in the essential aspects of drug discovery and early development, including, for example, molecular design, product optimization, extensive human pharmacokinetic parameters and dose predictions, toxicity prediction and design tools. Our biomarker strategy and resources provide tailor-made biomarker solutions using state-of-the-art technologies. From our position of strength in chemistry and small molecules, we have added capabilities for additional modalities, such as biologics, proteins, RNA, and antibody drug conjugates. Our drug discovery therapeutic area expertise and capabilities covers diabetes and its complications, fibrosis, infectious diseases, CNS diseases, oncology, pain and inflammation, immunology, rare diseases, respiratory diseases, and women’s health. Continuous training in technology and leadership for scientists at all levels is designed to meet or exceed industry standards.

At Evotec, we approach research, drug discovery and development as a continuum instead of disparate processes. We focus on problem solving and careful planning at the very earliest stage to maximize the potential success of clinical development. By focusing on the entire continuum, we allow for smooth transitioning from discovery and preclinical development into the clinic through our INDIGO offering. We believe INDIGO provides best in class governance structures to supply fit-for-purpose resourcing, key expertise, decision-gated strategies, clear and timely communication and seamless interactions between our partners and our functional teams. Within the structure of a project or partnership, we focus on the success of the inventive step in every discipline through a combination of knowledge, experience, computational power, and process excellence.

Our integrated approach to research and development has helped us to meaningfully outperform well- recognized industry benchmarks. Recent benchmark data show that the costs and timelines for drug discovery have not improved in the last 10 years. Including the cost of attrition, it takes companies approximately U.S. $75 million to initiate a single regulatory toxicology study and around 5.5 years to proceed from a target to a first good laboratory practice toxicology dose or IND submission. In contrast, our integrated offering through EVOiR&D has achieved portfolio delivery to IND submission at up to half the cost and in up to 30% less time. This time saving is crucial as the potential to reach an IND up to 18 months faster means acceleration of the potential availability of innovative breakthrough medicines to the patient community and for difficult to treat diseases. It also generates significant benefit to our partners and ourselves in a highly competitive marketplace where many players are pursuing the same scientific concepts and there is a race to be first-to-market.

30

Table of Contents

Finding the right drug for the right patient through our EVOpanOmics, EVOpanHunter and iPSC

Platforms

We believe our disease relevance-focused approach will guide us to find the right drug for the right patient at the right dose much earlier in the drug discovery and development process by determining disease relevance right at the outset of the drug discovery and development phase instead of during clinical development, which has been the traditional approach. EVOpanOmics and EVOpanHunter in combination with iPSC-based disease modelling drive the foundation of our industrial scale artificial intelligence, machine learning and precision medicine platform. These hold the key to driving innovation within many of our internal R&D and partnered programs.

Evotec’s precision medicine paradigm determines disease relevance right at the outset to increase clinical success rates

EVOpanOmics—Industrialized high-throughput multi-omics platform

We believe that the identification of disease-relevant molecular profiles in patients is fundamental for most precision medicine approaches. Once disease-relevant molecular patient profiles have been defined, they can be used to screen and profile drug candidates in patient-derived disease models, and ultimately, they can be used to identify biomarkers that can monitor disease progression during clinical development and in patients even after commercial approval. Evotec’s capabilities are deeply rooted in the paradigm shift to precision medicine.

Our approach to precision medicine is based on multi-omics. Generally, -omics technologies are widely available and often used, however they are not routinely applied to drug discovery and development. For example, when it comes to genome sequencing, the industry has simply not sequenced enough genomes and effectively connected these to medical data to learn what the average genome tells us about expressed phenotypic characteristics. This means that genome sequences only provide a glimpse of a patient’s predispositions to disease and do not measure disease status or disease progression. For this, transcriptome and proteome data are needed.

Transcriptomics and proteomics allow us to measure directly how a genome interacts with the environment in the context of an organ, tissue, or cell. As transcriptomics and proteomics are unbiased and provide comprehensive read outs, they are crucial for a better understanding of disease processes and, in particular, disease-relevant molecular mechanisms. These technologies have not been scaled to a similar extent as genome sequencing. We believe the development of higher throughput transcriptomics and proteomics will allow for the routine use of these technologies across the drug development value chain. The two key drivers are lower costs to generate data and the adoption of machine learning tools that support the analysis of big -omics data.

We have been particularly focused on industrializing our transcriptomics and proteomics platforms so that they can be fully integrated into our mainstream drug discovery processes. We believe our proprietary multi- omics data generation platform, EVOpanOmics, is industry leading in terms of throughput, robustness, and cost efficiency, in particular in the fields of transcriptomic and proteomic

31

Table of Contents

analysis. Over the course of the last ten years, we have optimized the entire process from sample preparation to data capture and management, while also focusing on automating as many steps as possible.

ScreenSeq—High-throughput transcriptomics

High-throughput transcriptomics is necessary to build large molecular patient and drug discovery databases effectively. We have built an industry-leading high-throughput transcriptomics platform called ScreenSeq, which is able to run single-cell sequencing analysis on tissues from thousands of patients.

ScreenSeq is run in a 384 well, high throughput format, designed to run screens of up to 100,000 samples or compounds, which more than covers the requirements for any typical screens. The detection limit is around 15,000 genes, exceeding requirements needed for most purposes. ScreenSeq works for most tissues from animals or humans, which allows us to effectively bridge the gap between pre-clinic and clinic. Finally, we have ensured that all of this can be done at reasonable costs for the vast amount of information a transcriptome analysis provides for every single compound.

ScreenPep—High-throughput proteomics

Like ScreenSeq for high throughput transcriptomics, our scientists have developed ScreenPep, providing what we believe is unparalleled throughput in proteomics, while maintaining highest quality standards regarding proteome coverage and reproducibility. As the proteome provides particularly essential information on the status of a cell or tissue, we have worked to improve the throughput of our proteomics platform.

Case study: Leading position in the field of Chronic Kidney Disease

An example of the capabilities of our EVOpanOmics platform is our molecular patient-derived disease database in the field of CKD. CKD is far from uniform, so we believe that gaining a better insight on the molecular level is the only way to develop curative therapies. For example, the category of glomerular kidney diseases consists of many different diseases that are driven by vastly different disease mechanisms. Only if these mechanisms are better defined and understood will we be able to develop better medicines.

To develop a comprehensive patient derived database in the field of CKD, we entered into a collaboration with the National Unified Renal Translational Research Enterprise (NURTuRE) consortium in the United Kingdom in 2017. NURTuRE brings together a consortium of leading kidney disease companies, academic institutions, and pharmaceutical companies to share and advance cutting-edge disease processes, platforms and networks to advance research in the area of nephrology. At the start of our collaboration, the consortium had assembled one of the largest CKD databases worldwide with about 4,000 patients comprised of complete clinical patient profiles including all standard diagnostics and test results as well as treatments. The NURTuRE consortium consists of UK-based academic institutions coordinated by Kidney Research UK and select industry partners. The aim of the consortium is to provide access to thousands of kidney patient derived samples and data sets to characterize human pathology and to provide detailed histological and molecular analysis.

Utilizing the EVOpanOmics platform, we conducted molecular profiling of patient tissues and samples in the database and thereby generated crucial molecular patient data required to drive precision medicine approaches in CKD. We have continuously expanded this database, which is based on data from over 10,000 CKD patients. To our knowledge, this constitutes by far the largest CKD patient molecular database worldwide and now constitutes more than six hundred billion data points according to our internal calculations.

Based on the strength of our molecular CKD patient database, we have built four partnerships in kidney diseases in the last four years with several prominent pharmaceutical companies. Our collaborations are structured as multi-target agreements pursuant to which an undefined number of targets may be pursued. Our agreements allow us to scale our business via entering multiple collaborations in the same disease area. Our partners and we share responsibilities during discovery and pre-clinical development. If a candidate progresses to clinical development, our partner is fully responsible, financially, and operationally, for development, regulatory approval, and commercialization, and we have the right to receive R&D and sales milestones, as well as royalties on commercial sales. Depending on the nature of the product candidate (e.g., small or large molecule), potential R&D milestones range from €3.8 million to €37 million on a per product basis. If the candidate receives approval, we are generally entitled to sales milestones that range from $60 million to $250 million per product, along with royalties between 0.5% and 10% of net sales. The research term is approximately five years. The agreements expire upon the expiry of the last patent of the asset developed under the agreement, unless terminated earlier by either

32

Table of Contents

party. The agreements permit our counter parties to terminate the agreement without cause by giving written notice, usually six months. Either party may terminate the agreements prematurely for cause, in particular, for the other party’s (i) uncured material breach or (ii) bankruptcy or insolvency. See “Risk Factors—our business depends on our and our partners’ success in innovation and drug development, which is highly uncertain.”

Expanding from CKD to other disease areas

While our molecular patient database in CKD is most advanced, we aim to advance a number of additional proprietary molecular patient databases in other disease areas (e.g., Oncology, Cardiology). The opportunity to derive new targets and therapies in these disease areas is tremendous, and we aim to capitalize on these databases via additional strategic alliances.

EVOpanHunter—Advanced data analysis and prediction platform

With higher throughput systems, the amount of generated -omics data grows exponentially, and it becomes increasingly challenging to analyze these high dimensional data sets. Specifically for this purpose, we have built EVOpanHunter, a multi-omics machine learning supported analysis tool, which allows data scientists to work with massive amounts of data in a very user-friendly fashion.

33

Table of Contents

EVOpanHunter can effectively analyze extensive -omics data sets as well as establish relationships with preclinical and clinical metadata.

Source: 1) NCBI—GenBank and WGS Statistics (https://www.ncbi.nlm.nih.gov/genbank/statistics/) ; 2) NCBI—Sequence Read Archive (SRA; https://www.ncbi.nlm.nih.gov/sra/docs/sragrowth/);3) Perez-Riverol et al., The PRIDE database and related tools and resources in 2019 (doi.org/10.1093/nar/gky1106); 4) ReportLinker (reportlinker.com/p05871542/Global-Transcriptomics-Technologies-Market-Premium- Insight-Competitive-News-Feed-Analysis-Company-Usability-Profiles-Market-Sizing-Forecasts-to. html)

The increase in the amount of -omics data is driving the need for computational analysis, and EVOpanHunter supports and integrates data analysis at all levels. The platform consolidates analysis across various datasets including clinical data (demographic information, medication, co-morbidities), meta data (gene/ protein information, experimental parameters), chemical data (structures, compound information, drug databases) as well as unspecified data such as public knowledge, BioMol databases and other resources (e.g., Wikipathways).

Once the data is uploaded into EVOpanHunter, the platform allows users to freely interact and combine data in a web-based system. Results are presented immediately and can be interpreted or used as input for subsequent steps of data analysis. This rapid feedback is a crucial advantage of EVOpanHunter, distinguishing it from other tools. The EVOpanHunter platform aids the derivation of drug signatures or cell-type profiles for use as references in future investigations. In this way, EVOpanHunter offers sophisticated data mining to a broad range of scientists who do not necessarily have a bioinformatics background. It also provides the entry-point for advanced machine learning approaches.

An example of the versatility of EVOpanHunter in combination with EVOpanOmics is our industry- leading position in prediction of drug induced liver injury (“DILI”). Liver toxicity accounts for about 18% of drug withdrawals from the market. By the time these failures occur, costs are already material. With better tox-prediction available at the discovery stage, these failure rates have the potential to be reduced dramatically. In our models, the combination of EVOpanOmics with EVOpanHunter has resulted in a superior prediction rate for DILI of 82%. This compares with the current gold standard relying on high content imaging endpoints, which has a 70% prediction rate, and animal models, which has prediction rates as low as 50%.

Aside from toxicity prediction, we believe that better ways to evidence efficacy of drug candidates are needed. In our view, this can only be achieved by linking patient derived data generation such as EVOpanOmics with a suitable data analysis platform like EVOpanHunter. Over 54% of drugs in Phase III, clinical trials fail. Of these, 57% fail due to inadequate efficacy, which means that many projects continue for many years pursuing the wrong target or developing compounds that are simply not good enough. Ultimately, only approximately 9% of Phase I biologics receive approval. For this reason, there should be more emphasis than ever on demonstrating disease relevance of targets and compounds at a much earlier stage in the R&D process.

34

Table of Contents

In addition, we believe it is necessary to measure disease relevance relative to molecular patient profiles that we know are associated with the disease. As outlined above, we believe this can be done by focusing more on unbiased and comprehensive read-outs such as transcriptomics and proteomics, which are uniquely suited to measure disease status and disease progression because they capture more complex molecular disease profiles. We believe that in order to achieve relevant outcomes in a reasonable period of time, artificial intelligence-based analysis tools can be used to support the identification of mechanisms and targets that can be clearly linked to patient subpopulations defined by molecular phenotypes.

iPSC—A new paradigm in disease modelling

To accelerate the paradigm shift towards precision medicine, since 2012 we have developed an industrialized platform that builds patient derived assay systems and disease models through iPSC technology. We believe that our iPSC platform is one of the largest and most sophisticated in the industry, and we have focused on industrializing iPSC-based drug screening so that we can increase the reproducibility and robustness of such screening. We have achieved industrialization by standardizing and scaling up the process of creating patient-derived iPSC for disease modelling and drug screening.

We initially developed our iPSC platform to overcome deficiencies associated with disease models for CNS indications but have since expanded its applicability to cover multiple therapeutic areas such as cardiovascular, metabolic, oncology, endocrinology, and ophthalmology, among others. We anticipate that iPSC-based disease models will have broad applicability in multiple diseases that have been untreatable due to the absence of robust disease models or due to prior disease models not leading to viable treatment approaches.

Neurological diseases, such as Alzheimer’s, amyotrophic lateral sclerosis (ALS) and Huntington’s disease, remain a major challenge for therapeutic drug development due to poor understanding of disease pathophysiology and insufficient representation of these diseases in animal models. Furthermore, in several cases, positive efficacy results observed in pre-clinical animal models have not been reproduced in clinical trials. Based on our expertise in CNS diseases, we believe that existing disease models in this field are suboptimal because the use of immortalized or primary cells have limited disease relevance and are not scalable. For these reasons, we believe it is essential to develop better predictive, ideally human, disease models that generally reflect human disease and disease phenotypes more accurately. Accordingly, we attempt to achieve this objective through the application of our iPSC platform, which is focused on patient-derived iPSC models because they are more suitable for modeling neuronal diseases than other systems.

iPSC Technology shifts the drug discovery paradigm:

iPSCs can be reprogrammed from various patient cells (e.g., skin biopsies or blood) and have the ability to proliferate unlimitedly and differentiate into almost any cell type of the human body. Most importantly, they have been shown to replicate disease mechanisms that are found in humans. With our iPSC system, animal models are only used for pharmacokinetic and pharmacodynamics studies to determine whether a compound reaches the specific tissue and is effective there. Such compounds are then tested on various different patient in vitro models before moving into clinical trial testing. This allows us to stratify patient populations and explore at the outset whether a drug is effective for all patients or only subpopulations. With this, we obtain highly valuable information for clinical trial design, so we can ensure that we not only select the relevant patients for clinical studies but also use this new drug with relevant patients in a commercial setting.

35

Table of Contents

For accurate disease modelling, it is essential that all protocols we establish work across multiple iPSC lines to capture the highly diverse genetic causes for many diseases. Together with our partners, we have generated a large number of over 300 high quality iPSC lines according to patient consents and standardized reprogramming methods. The over 300 patient-derived iPSC bank covers a broad range of diseases including Amyotrophic lateral sclerosis, Frontotemporal dementia, Parkinson’s disease, Huntington’s disease, retinopathies, lysosomal storage diseases and other neurodegenerative diseases. We are also advancing our stem cell research platform for disease modeling and screening to develop reliable, scalable and automated manufacturing processes. All of our protocols have been simplified, shortened wherever possible and optimized for high reproducibility and cellular yield. This is an essential requirement for large-scale manufacturing in a bioreactor format and generation of large-scale batches of qualified cells for screening. All cells are seeded onto 384-well plates and handled in an automated fashion.

We expect that a clinical trial of our first iPSC-derived drug candidate will commence in 2022. The candidate has a novel mechanism in neurodegeneration derived from our iPSC-based disease models. This program is expected to progress to the clinic in less than five years as part of our broad and exclusive neurodegenerative disease collaboration with BMS. More broadly in iPSC, we have developed over 300 patient- derived cell lines for disease modelling across more than 15 disease areas, for which our main alliances include neurodegeneration and Huntington’s disease. To continue to build our capabilities, we intend to expand our iPSC capacity in Hamburg, Germany, by constructing a new building “The Lighthouse of iPSC” with an expected year of completion of 2024.

EVOaccess—Biologics for All

EVOaccess is our advanced approach to designing, discovering, developing and manufacturing modern bio-therapeutics. We believe that EVOaccess positions us well to establish further significant long-term, integrated partnerships with the expansion of our solutions into highly efficient and flexible biologics manufacturing. This differentiated offering is available to our partners on a fee-for-service and/or FTE-rates based model as well as through arrangements that involve milestones and royalties.

EVOaccess was brought into Evotec’s offering with the acquisition of Just Biotherapeutics (subsequently renamed Just—Evotec Biologics) in 2019, which represented our entry into the large and growing market for commercial biologics and expanded our multi-modality capabilities. The founding and original concept of Just—Evotec Biologics was to create an agile, flexible, and cost-effective method of biologics discovery, development and manufacture to enable affordable global access to modern biologics therapies. This powerful, horizontally integrated end-to-end system is called J.DESIGN.

​

J.DESIGN is our in-house integrated technology platform designed to accelerate development and provides superior manufacturing process control in order to produce higher quality molecules at the lowest possible cost. J.DESIGN is directed particularly toward antibody and antibody-like biotherapeutics. One of the key strengths of the platform is the broad scope and integration from discovery through manufacturing and facility design. All operations are integrated under their individual elements, which are known as J.DISCOVERY, J.MD, JP3 and J.POD®.

36

Table of Contents

The resulting efficiency of our fully integrated end-to-end platform offers partners the opportunity to capitalize on more agile and cost-effective manufacturing, scaled accordingly for the stage of development and size of the patient population. This flexibility is of critical importance as novel biologics increasingly enter highly complex disease indications with less certain outcomes. Additionally, we anticipate that increased speed and flexibility as well as reduced costs of the discovery and development processes will allow us to gain significant market share in rare disease and orphan indications as well as in the field of biosimilars where pricing can be competitive.

We are applying artificial intelligence and machine learning to create and select high quality molecules in discovery that in turn drive more productive manufacturing processes. Our technology enables continuous feedback, machine learning and model refinement to drive further improvements in speed, quality and cost. This learning loop is best represented as a circular “flywheel,” which gets better and more efficient with each turn.

We anticipate that the current technological focus of the J.DESIGN platform will have the capabilities to address greater than 70% of all biologic products in the coming years.

J.DISCOVERY—Antibody Discovery

In order to create antibody therapeutics, we utilize our J.DISCOVERY approach to build a large and diverse antibody library we call J.HAL^SM (Just-Humanoid Antibody Library). The DNA sequences coding for the antibodies in J.HAL^SM are computationally created using machine-based deep neural network learning through algorithms termed Generative Adversarial Networks (GANs). The GANs used to build J.HAL^SM are trained on hundreds of thousands of natural human antibody sequences. Since we can train J.HAL^SM with different sets of antibodies exhibiting a variety of biophysical properties, we can bias J.HAL^SM to generate DNA sequence coding for antibodies that can be developed and manufactured efficiently and may have superior properties for addressing a specific disease target. We call the billions of antibody sequences in our J.HAL^SM library “Humanoid” because they are indistinguishable from human antibodies, even though they are created computationally. The full power of disease knowledge and pharmacology expertise across Evotec ensures comprehensive pharmacological and safety understanding in tandem with developability and manufacturability. As we have control over the processes of discovery, development and manufacturing, we can feed this information back and dramatically expand J.HAL^SM based on experience and validation. The desired outcome is the creation of antibodies that are safe, developed quickly and cost-effectively and with the potential of greater efficacy.

J.MD—Molecule Design

J.MD is the molecule design aspect of J.DESIGN that reviews and improves native antibody sequences—derived from either J.HAL^SM or any other source – to enhance their manufacturability and stability. Using Abacus, an in-house suite of proprietary computational tools, we create learning algorithms that enable scientists to predict the best molecules and conditions for development. Molecules are then evaluated using assays that indicate how well a molecule is expressed, purified and formulated. Any information learned from evaluating the molecules is subsequently used to improve further the toolset for future molecules.

JP3—Process and Product Platform

JP3 is J.DESIGN’s processing and product design arm complete with proprietary cell lines, vectors, and media with process options for fed-batch, intensified fed-batch and continuous culture. This technology also includes chromatography, filtration and viral clearance capabilities for the removal of impurities. To optimize the storage stability of products, JP3 comes with biophysical and formulation development tools. The designing tools also feature high-resolution analytical capabilities including a mass spectrometry based multi-attribute method (“MAM”).

J.POD®—Manufacturing and Plant Design

The ultimate physical representation of the transformation of the biologics discovery and development continuum is the J.POD® facility. To remain competitive, companies require flexible manufacturing solutions with the right capacity at the right time and smart, high-yielding processes to increase efficiency by cost-effective and faster manufacturing without any sacrifices to quality and safety. J.POD® is the manufacturing and plant design aspect of J.DESIGN, which achieves these objectives.

J.POD® accelerates the development of highly productive processes that can be executed in relatively small unit operations and still make enough product to meet almost all commercial market needs in a single facility. These highly intensified processes reduce the size

37

Table of Contents

of unit operations to fit into relatively small, flexible “PODs” or cleanrooms and become the core manufacturing space in a J.POD® facility. Since the entire process train uses single-use technology, central and capex intense utilities like “clean in place” or “sterilize in place” systems are eliminated, as well as the large amount of stainless-steel piping and large stainless-steel vessels that must be precisely built and validated. In addition, PODs, and the equipment they contain can be built and assembled while the plant is being constructed so that the time and complexity of validation is dramatically reduced. The modular, flexible and less capital intense set-up creates the opportunity for a global network of J.POD® facilities, leading to better and cost-effective access to biologics in areas of the world that have not been served thus far.

Finally, instead of increasing the size of bioreactors and processing steps to expand capacity (as in traditional large-scale manufacturing facilities), additional bioreactors of the same size are essentially “cloned.” In essence, we “scale-out” rather than “scale-up” and effectively reduce scale-up risks by manufacturing at the same scale from early clinical development through commercial manufacturing. Our processes are highly “intensified,” using continuous perfusion and connected downstream processing to make large amounts of high-quality drug substance with a relatively small bioprocessing footprint.

We have completed construction on our first J.POD® manufacturing facility located in Redmond, Washington. The facility became operational in August 2021. The project of constructing a second facility in Toulouse, France began in April 2021 and we anticipate the European facility to commence production of first batches by 2024. Our vision is to create a global network of highly standardized manufacturing sites that can serve local demand.

Even while under construction, our first J.POD® attracted its first commercial partners. In January 2020, we announced that Just—Evotec Biologics had entered into a multi-year collaboration with Merck & Co., Inc., (“MSD”) for the development of innovative production technologies for high quality biologics. Under the terms of the agreement, Just – Evotec Biologics grants MSD access to manufacturing capacity in our innovative J.POD^® facility in Redmond, Washington.

We have also established agreements with Advanced BioScience Laboratories, Inc. (“ABL”) and Ology Biosciences in 2020. ABL is a global contract development and manufacturing organization (“CDMO”) that services both the U.S. Government and the biopharmaceutical industry. Under the agreement, Just – Evotec Biologics will design a manufacturing process required for the production of Phase I current Good Manufacturing Practice (cGMP) clinical supply of a broadly neutralizing antibody (bnAb) against HIV. The agreement with Ology Biosciences covers the evaluation and analytical characterization of antibodies against SARS-CoV-2. Under the terms of the agreement with Ology Bio, Just – Evotec Biologics acts as a subcontractor to Ology Bio and utilizes its in silicon toolset to screen a panel of anti-SARS-CoV-2 antibodies provided by Ology Bio that were generated from convalescing COVID-19 patients.

In August 2020, the U.S. Department of Defense awarded Just—Evotec Biologics an order for the development of a highly efficient manufacturing process for monoclonal antibodies against COVID-19, followed by a manufacturing agreement in January 2021. The mAbs will be tested in clinical trials and, if approved, could be used for the treatment and/or prevention of SARS-CoV-2 infections. Just – Evotec Biologics intends to use its experience in process development and clinical manufacturing to enable the realization of these potentially critical protein therapeutic treatments against SARS-CoV-2 infections.

In October 2020, Just—Evotec Biologics received funding from the Bill and Melinda Gates Foundation as part of the COVID-19 Therapeutics Accelerator initiative to support the development and manufacture of mAb candidates for the prevention of severe COVID-19 cases in vulnerable populations in low and middle-income countries. Under the grant, Just – Evotec Biologics uses its proprietary software toolset Abacus™ to perform an in silico analysis of several lead candidate sequences of potent anti-SARS-CoV-2 mAbs provided to the foundation by several leading academic medical centers around the world. Abacus™ analysis identifies key sequences that can affect developability and, if required, make recommendations to optimize the anti-SARS- CoV-2 antibody candidates. In addition, Just – Evotec Biologics will perform cell line development for two lead molecules.

EVOcells—from cells to therapies

In addition to disease modelling, we use our iPSC platform to develop the next generation of cell-based therapies. Our iPSC cell therapy portfolio spans across metabolic diseases, immuno-oncology, and heart repair. We plan to further expand and invest in our cell therapy infrastructure with a focus on off-the-shelf cell therapies with long-lasting efficacy like immune cells in oncology (e.g., Natural Killer T cells), beta cells for diabetes, cardiomyocytes in heart repair, and retina cells in ophthalmology as well as iPSC-derived exosomes.

38

Table of Contents

Our most advanced candidate in the field of iPSC-based regenerative medicine is our QRBeta initiative, aimed to cure patients suffering from type I diabetes. In in vivo models, we have demonstrated a durable normalization of blood glucose levels with our iPSC islet-like clusters that also deliver long-lasting normoglycemia at human glucose set points. They have been shown to be significantly more resilient to hypoxia and post-implantation stress compared to human primary islets. The combination of promising in vivo data and internal GMP manufacturing capabilities differentiates us from the competition, and we have the ability to scale up and accelerate development through the clinic. We retain all commercial rights to this candidate, and we are accelerating its development while evaluating options for collaboration.

In 2021, we advanced our cardiomyocytes-based program by entering into a collaboration with the University Medical Centre Hamburg-Eppendorf, UKE. The collaboration was formed to develop a first-in-class cell therapy for the treatment of heart failure. Under the terms of the partnership, Evotec and UKE will leverage their complementary strengths for the development of a new cell therapy approach using engineered heart tissue for the treatment of heart failure. We expect to leverage our industry-leading human iPSC platform to establish GMP-compatible process development and upscaling for large-scale generation of clinical-grade heart muscle cells known as cardiomyocytes. We also plan to contribute genetically modified GMP iPSC lines, which contain alterations preventing rejection of the cardiomyocyte-containing product by the patient’s immune system and include additional safety mechanisms to control unwanted proliferation of graft cells. By using GMP-grade iPSC lines, the collaboration is intended to deliver off-the-shelf products that can be implanted in broad patient populations with little to no immunosuppression. UKE will contribute its proprietary Giga Patch Method for the generation of fully functional heart tissue suitable for cardiac transplantation. In vivo validation and development activities will be shared jointly between Evotec and UKE. We will be responsible for GMP and pre-clinical activities as well as for any subsequent collaboration of the program.

In immuno-oncology, we are building a portfolio of “off the shelf” iPSC-based immune effector cells to overcome the hurdles of current autologous cell therapies in oncology such as long vein-to-vein times, limited manufacturing reliability, logistic challenges, and high price points. In the future, we plan to target the development of a comprehensive portfolio of innovative immuno-oncology programs. At this stage, our portfolio comprises of iPSC derived Natural Killer Cells (EVOcells iNKs), Macrophages (EVOcells iM) as well as αßT-cells and γδT-cells (EVOcells iT). We anticipate that programs may enter clinical trials in 2025, and we may collaborate such programs within the next 24 months.

EVOgenes—from genes to therapies

The formation of EVOgenes in 2020 signaled Evotec’s expansion into gene therapy and added one of the fastest growing and exciting modalities to our portfolio of capabilities. The establishment of a dedicated site for research and development of gene therapy-based projects in Orth/Donau, Austria, staffed with a highly experienced and cohesive gene therapy team, marked a significant step towards our long-term vision of becoming a fully modality-agnostic drug discovery and development company. Our goal is that EVOgenes becomes a fully developed gene therapy platform by 2025. We intend to become the partner of choice for biotechnology, pharmaceutical and academia with a comprehensive catalog ranging from capsids that are currently available to new technologies of viral, non-AAV gene therapy as well as non-viral gene therapy.

The team for the EVOgenes platform has deep expertise in rare genetic disease drug development. We believe this expertise, paired with the opportunity to leverage and fully exploit the breadth of experience and capabilities of the wider Evotec network, including biomarkers, analytical and manufacturing capabilities, should result in a very competitive offering for a number of innovation-driven partners.

Our EVOgenes platform is a toolbox comprising capsids, regulatory sequences, and production cell lines. We expect the EVOgenes platform will reach further than existing established techniques such as AAV and lentiviral gene transfer into the increasingly important area of RNA technologies or new proprietary cell lines and vectors. We see the future of EVOgenes as a platform for the development of new and disruptive technologies such as access to non-viral transduction technologies or access to regulated gene expression that may lead to the design of a small molecule based “on-off switch” for safe and efficient gene expression. We believe that possessing next generation gene therapy capabilities will position Evotec as the ‘partner of choice’ as biopharma companies look beyond first-generation gene therapies and will strengthen our intellectual property portfolio.

39

Table of Contents

Revenue models

“Fee-for-service model”

As an external innovation partner to the life science industry, we provide stand-alone or fully integrated drug discovery and development solutions to our partners using our industrialized, high quality and comprehensive infrastructure. Various capabilities can be grouped into an integrated service combining various steps along the drug discovery and development chain. The “fee-for-service model” usually applies where no intellectual property of Evotec is involved or no essential proprietary technology platforms (e.g., EVOpanOmics, EVOpanHunter, iPSC) are used.

Our solutions are capable of providing unparalleled breadth and depth to clients. We can support our partners’ programs at all phases of the chemical value stream (hit creation, expansion, hit-to-lead, lead optimization and development readiness) and from early target identification through to manufacturing of compounds for clinical and commercial purposes. We also possess capabilities across all modalities, target types, routes of administration and disease areas. Our services are made available through a number of well-defined work packages that are compensated at FTE-rates or fixed cost basis. Typical examples of fee-for-service work packages would include, without limitation, high-throughput screening campaigns, sample management, ADME-tox tests or certain chemistry development services. However, there is flexibility in structuring these work packages to cater to specific needs of clients – for example, synthesis and scale up chemistry is a typical work package that is compensated on a fee-for-service basis, but medicinal chemistry is predominantly compensated based on FTE rates as part of an integrated offering.

In 2021, 76% of our third-party revenues were derived from EVT Execute, which mainly includes fee-for-service and FTE-rates based revenues. These revenues are generated largely from EVOiR&D, EVOaccess and EVOgenes. Fee-for-service and FTE-rates based revenues are also a source for revenues within EVT Innovate, in addition to milestones and potential royalties. Driven by favorable market dynamics and robust demand for pharmaceutical outsourcing services, we expect the fee-for-service and FTE-rates based business to grow by mid to high single digits in the near-term. Fee-for-service and FTE-rates will continue to remain a key value driver going forward but as drug discovery and development evolves, we foresee certain work packages transitioning away from fee-for-service into more integrated alliances.

With an increase in demand for Evotec’s proprietary and premium platforms, (e.g., EVOpanOmics and EVOpanHunter and iPSC drug discovery), we have sought to enter contracts with customers for these services that expand beyond fee-for-service and FTE-rates to also include success-based components, such as milestones and potential royalties. As an example, target identification and validation services have historically been offered on a fee-for-service and FTE-rates basis. However, with transcriptomic and proteomic profiling across cells and tissues followed by bioinformatics-driven data mining and hypothesis building potentially becoming the new gold standard, these services now involve our proprietary and premium platforms. In connection with such platform, we seek to structure integrated alliances that will be recognized within our EVOroyalty business model pursuant to which we will generate FTE-based revenue from delivery of services, as well as potential milestones and royalties. The most prominent example for such an evolution is our alliance with BMS targeting neurodegenerative diseases, which has so far resulted in a first clinical phase I trial with additional assets being progressed in discovery and development stages.

Key Performance Metrics for our Fee-for-Service Business

1)       Share of Annual Repeat Business

We have demonstrated solid customer retention rates, as defined by the percentage of revenues from customers that we had a relationship within the prior year, above 90% in each of the last 3 years.

40

Table of Contents

2)       Customer Evolution and Contribution

The number of our customer alliances has expanded significantly in recent years, providing further validation of our services provided. During 2021, we added 337 new customers compared to 315 in 2020. The number of customer alliances that generate revenues of more than €1.0 million per year have continued to rise and reached 97 in 2021 (2020: 86), or 12% (2020: 10%) of total customers in the last two years, pointing to increasing entrenchment with each customer.

3)       Reduction of Customer Concentration

Our customer and revenue base have become more diversified over the last four years as revenues have grown significantly. Our top ten customers’ contribution to total revenues amounted to 42% in 2021 versus 47% in 2018, pointing towards a steady decrease in revenue concentration among top customers. The moderate increase versus 2020 (41%) is owed to a significant milestone payment from BMS after a successful transition into clinical trial stage. Our largest customers by revenue, BMS, Merck and Sanofi, accounted for 25% of group revenues in 2021. Other than BMS, no single customer contributed more than 10% of group revenues.

EVOroyalty—Co-own and Share products

We leverage our proprietary technology platforms to develop new drug discovery projects, assets and platforms, both internally and through collaborations. This approach allows us to create starting points for the later development of strategic partnerships through our EVOroyalty collaboration model with leading pharmaceutical and biotechnology companies. These collaborations generally involve a combination of upfront payments, ongoing research payments, and significant financial upside through milestones and royalties. They enable the sharing of cost and risk. The aim of these collaborations is to develop R&D projects faster and more efficiently and to generate faster returns on investments. With increasing demand for our proprietary technology platforms, we expect to enter into collaborations involving success-based milestone payments and royalties. Our goal is to increase revenue contribution from EVOroyalty through the maturation of our pipeline significantly by 2025.

Benefits to us from our EVOroyalty model include:

41

Table of Contents

We believe we possess one of the broadest and deepest pipelines in our industry. Since 2015, the number of our assets has more than doubled to more than 130 with 13 disclosed assets in clinical development and another 4 that have not been disclosed by our partners at the end of 2021. As of December 31, 2021 one of the clinical programs was in Phase III, five were in Phase II and eleven were in Phase I. Among our pool of nine Phase I programs, we count three planned indication extensions with the same asset in three different therapy area. We define our pipeline to include candidates that we wholly own and those for which we have the right to receive royalty or milestone payments. For candidates for which we have the right to receive royalty or milestone payments, we, in most cases, will have initially developed them and subsequently licensed or assigned to partners for continued pre-clinical and clinical development. They also include candidates that have been initially developed by our partners and that have become the subject of a joint research project pursuant to which we are eligible for royalty or milestone payments. We do not count among our pipeline, those candidates that are being developed by partners in whom we have solely an equity stake through EVOequity and no right to milestone or royalty payments with respect to their candidates in development.

Beyond therapeutic areas, we have also successfully expanded our pipeline across multiple modalities. In 2015, our therapeutic assets were exclusively small molecules. In contrast, in 2021, more than 10 assets were derived from cell and gene therapy, more than 20 from biologics, more than 90 from small molecules and more than 10 early-stage projects where several modalities are being investigated. Given the breadth and depth of our pipeline across therapeutic areas, modalities and stage of development, we believe that the risk-reward profile of our pipeline is unique in the industry. We expect the relative share of EVOroyalty revenues as a percentage of total revenue to increase as our EVOroyalty pipeline matures over time and as the revenue mix within EVOaccess and EVOgenes increasingly includes success-based components.

Evolution of Total Number of Programs within EVOroyalty

42

Table of Contents

The EVOroyalty “Iceberg” is Constantly Growing

The below table outlines our pipeline assets by therapeutic area and stage of development. Our partnered pipeline includes those assets we have developed and licensed or assigned to partners for clinical development and commercialization as well as the assets of our partners for which we are entitled to receive potential royalty or milestone payments. Our unpartnered pipeline consists of assets we have developed internally but have not yet collaborated. Our equity pipeline is comprised of the assets under development by companies in which we have made an equity contribution through EVOequity. We expect to realize returns on our equity pipeline both from successful exits and from fee-for-service and FTE-rate based revenues from these companies. Our BRIDGES pipeline represents the assets under development through our joint ventures with academic institutional partners as part of our project incubation program to promote early development of academic research. Note that the assets shown here as part of our equity and BRIDGEs pipelines are not included in the number of our pipeline assets described elsewhere in this annual report.

* At the beginning of February 2022 Bayer opted to discontinue the development of eliapixant (BAY1817080) pursuant to a former multi-target research collaboration.

43

Table of Contents

Overview of Disclosed Clinical Stage Pipeline Assets

The below table outlines the eleven clinical stage pipeline assets that have been publicly disclosed by our collaboration partners. We have licensed or assigned these pipeline assets to partners for clinical development and commercialization. Pursuant to the terms of our arrangements with our partners, our collaboration partners are fully responsible for the clinical development and potential commercialization of these assets, both financially and operationally. We bear no fiscal responsibility for their clinical development. Under these agreements, we have the right to receive development and milestone payments, as well as royalties from commercial sales, if our partners successfully develop these candidates. See “Risk Factors—Our business depends on our and our partners’ success in innovation and drug development, which is highly uncertain”.

* At the beginning of February 2022 Bayer opted to discontinue the development of eliapixant (BAY1817080) pursuant to a former multi-target research collaboration.

Overview of Key Platform Assets

44

Table of Contents

EVOequity

We facilitate the acceleration of innovation as an operational venture capital provider providing capital and access to our industrialized and integrated technology platforms, expertise and network. We make equity investments in products, technology platforms and companies through which we obtain early access to innovation and derive upside through our role as operational partner. We see significant potential for value creation from EVOequity over the coming years from new partnerships, clinical successes, and positive commercial developments because we expect to drive the valuation of individual portfolio companies. We expect to realize returns on investments both from successful exits from our portfolio companies and fee-for-service and FTE-rates based revenues with our portfolio companies.

As shown in the graphic below, we recognize various starting points to fuel our EVOequity portfolio. One of the key sources is risk-shared venture creation involving spinouts of our proprietary assets into separate legal entities or joint ventures with partners. We also invest in early-stage development companies that start out as our customers and engage us to conduct for them drug discovery work on our platforms. Investing in those companies helps us create long-term relationships and facilitates access to innovation in the treatment areas in which we specialize. These companies may originate from our BRIDGEs program, where Evotec collaborates with academic institutions to facilitate the acceleration of academic innovation without compromising precision or safety. We also identify investment opportunities by evaluating external opportunities.

EVOequity’s strategy started with the creation of Evotec’s spinouts of Topas Therapeutics in 2016. Since then, our portfolio of equity holdings has grown steadily, and as of December 31, 2021, we have 24 investments with 89 active projects in our EVOequity pipeline. Most projects are in oncology, immunology, and inflammation. Assets from Carrick Therapeutics, Topas Therapeutics and Exscientia are currently most advanced, with six projects having reached the clinical stage (Phase I and II). Our ownership ranges from 1% to 50% in equity per company, and we typically aim for an investment period of five to seven years. Investments with a share greater than 20% are recognized in our accounts “at equity”. As of December 31, 2021, we have invested €111.0 million into EVOequity and expect to accelerate those investments over the coming years.

Many of our portfolio companies have started out as our customers or have become customers either in parallel or subsequent to our equity investment. For example, Vifor Pharma has been a customer of Evotec for many years, and more recently, we have collaborated on early development in nephrology, which has led to the establishment of our joint venture, NephThera. With other equity holdings such as Forge and Aeovian, we have an operational relationship through signing a master service agreement in parallel to our investment into the company.

Typically, we support the development of our equity investors’ in-house projects from early discovery up to IND-enabling studies and chemistry, manufacturing, and control.

45

Table of Contents

The structural difference to conventional venture capital models is our operational relationship with the portfolio companies and that our investment decisions often benefit from robust datasets that we have generated in-house on our industrialized and scalable platforms. Because we believe that we can make better-informed decisions through this approach, we see realistic chances of investment returns that could exceed venture capital like returns. Our typical equity investment is structured in such a way that we typically aim to obtain control of material stakes between 20% and close to 50% in the first financing round. Subject to dilution in subsequent rounds, these holdings may vary. On a case-by-case basis, we may invest in subsequent financing rounds. In the case of spinouts, we contribute in kind to leverage our in-house capabilities and accelerate innovation.

BRIDGEs

We believe that academic settings serve as a major source and point of origination and development of drugs that are ultimately approved. For example, approximately 25% of drugs approved by the FDA originate from academia, according to a study published in Nature investigating the contribution of different types of organizations to drug innovation. Universities are a major source of current and future drugs targets. We seek to address the lack of funding and access to expertise for translational projects from academia, which is one of the main hindrances for efficient innovation. While there is a lot of support to initiate basic research projects, funding options tend to narrow down as the development of translational projects progress and there is often a lack of commercial understanding on how to advance assets to the next stage.

We have positioned ourselves as a leading company for the accelerated translation of academic assets by initiating “BRIDGEs,” our project incubation program designed to accelerate and promote early development of academic research. BRIDGEs stands for “Biomedical Research, Innovation and Development Generation Efficiency.” Through BRIDGEs, we utilize our technology platforms to facilitate the acceleration of academic innovation. The global rollout of BRIDGEs is currently underway with a geographic focus on North America and Europe. BRIDGEs provides us with access to a broad portfolio of first-in-class therapeutics across academic institutions. We serve as the exclusive technology partner to advance projects to the next value inflection points, which enable formation of spinout companies or collaborating with pharmaceutical companies. The entire process facilitates the decision-making process of investors trying to assess the quality of the respective projects. Through BRIDGEs, we have achieved a 75% reduction in average project evaluation time (from 8 to 2 months before decision), a 66% percent reduction in average weeks until the first experiment (from 24 weeks to 8 weeks) and a 50% reduction in average time until the conclusion of experiments (from 36 months to 18 months) in comparison to translational public grants.

To date, we have created seven BRIDGEs (LAB282, LAB150, Autobahn Labs, Argobio, beLAB2122, LAB1407 and Danube Labs) and a spinout from the University of Oxford named Dark Blue Therapeutics from this initiative. We outline selected BRIDGEs in further detail below:

LAB282

In November 2016, we announced the formation of LAB282, a research laboratory developed in partnership with Oxford University Innovation and Oxford Sciences Innovation (“OSI”). Housed at Oxford University, the lab is dedicated to accelerating the translation of basic biomedical research from Oxford University into new therapeutics across any therapeutic area or modality. Projects are sourced exclusively from Oxford University researchers and are aided by a drug discovery expert in residence seconded by Evotec to the lab. The goal is for LAB282 to generate and accelerate the achievement of pre-clinical proof of concept results for new drugs and to generate eventual spinout companies. To date, LAB282 is responsible for 38 active or completed projects. Pursuant to the partnership, we exclusively contribute our drug discovery expertise and platforms to select projects and develop them further. We will be entitled to equity in new LAB282 spinout companies together with Oxford University and its academic researchers and together with OSI will have the right to co-invest in seed financing rounds. The pipeline assets being developed pursuant to the partnership are in pre-clinical stages.

46

Table of Contents

Autobahn Labs

In June 2020, we announced the launch of Autobahn Labs, a novel virtual incubator developed in partnership with Samsara BioCapital, a leading life sciences investment firm and KCK Ltd., a family investment fund. Autobahn Labs operates out of the San Francisco area and partners with top academic and research institutions to catalyze early-stage drug discovery and development. Since launch, Autobahn Labs has established multiple strategic collaborations with leading research institutions, including a first-in-kind collaboration with the University of California Los Angeles to identify and advance patient therapies for a variety of indications and another collaboration with the University of California San Francisco to identify promising early science and form new joint-owned ventures. Autobahn Labs has two active or completed projects to date.

beLAB2122 / beLAB1407

In April 2021, we announced the launch of beLAB2122 and in May 2021, we announced the launch of beLAB1407. Both LABs are translational BRIDGEs funded with $20 million each, in collaboration with BMS. In collaboration with BMS, beLAB2122 brings together leading academic institutions from the Rhine-Main- Neckar region of Germany. Also, in collaboration with BMS, beLAB1407 brings together leading academic institutions from the Midlands in England and Scotland. Both BRIDGEs have the goal of efficiently advancing first-in-class therapeutic options across all therapeutic areas and formats into investable drug discovery and early development projects. In Germany, mediated and supported by BioRN, the Life Science Cluster Rhein Neckar, beLAB2122 brings together the European Molecular Biology Laboratory, the German Cancer Research Centre, the Goethe University Frankfurt, the University of Heidelberg, and the University of Tübingen in one collaboration with industry partners. beLAB1407 brings together the universities of Birmingham, Edinburgh, Nottingham, and Dundee in a collaboration with industry partners

47

Table of Contents

We seek to protect and enhance the value of our proprietary drug discovery programs as well as our technology platforms, including proprietary processes, technologies, inventions, and methods, and their application to the research and development of treatments for serious diseases and methods of manufacture through the filling of intellectual property. We pursue a multi-layered intellectual property strategy to protect our technology platforms and their application to the research and development of treatments for serious diseases. One focus of our intellectual property strategy is to provide protection for our platforms and pipeline assets currently in development. We also pursue intellectual property protection for assets that may be used in future development programs and/or that may be of interest to our partners, or otherwise may prove valuable in the field.

Patent filings protect various aspects of our technology platforms and our pipeline assets, while other aspects remain trade secrets. We also pursue other methods of protection, including seeking trademark registrations, as appropriate. Many of our intellectual property assets were developed and are owned solely by us, some have been acquired and are solely owned by us, some have been developed via collaboration and are jointly owned, and some have been licensed from third parties. We will continue to make additional patent application filings and pursue opportunities to acquire and license additional intellectual property assets, technologies, platforms, or pipeline assets, as developments arise or are identified.

As of December 31, 2021, our owned patent portfolio included more than 60 patent families, each of which includes at least one filing in the United States or Europe, and several of which are pending or granted in multiple jurisdictions.

Below, we provide a summary of the contours of our current intellectual property portfolio as it relates to different aspects of our business.

Discovery Platform

Our discovery platform is comprised of multiple integrated building blocks, including EVOiR&D, EVOpanOmics, EVOpanHunter, EVOaccess, EVOcells and EVOgenes. These combined platforms allow us to deliver operational efficiencies and advanced technological capabilities to drive rapid progress and successful outcomes in the early stages of the R&D process where innovation steps are the largest and most important. In support of our discovery platform, we own a patent estate for molecular detection and other platform technologies. In addition, we have developed a number of patent-protected biological assays, specifically, methods to measure the chemical or biological activity of any combination of targets and compounds.

In support of our discovery platform, we own proprietary trade secrets and methods for analyzing samples. EVOpanOmics is our proprietary approach to analyzing samples from human patients, rodents and in vitro cultures using genomics, transcriptomics, proteomics, and metabolomics. We have proprietary protocols, that we protect as trade secrets, which have been established and validated to allow for preparation of fully intact RNA, metabolites, and proteins from a number of tissues from both rodent models and human patient material that are in many cases unique to Evotec. We have primary and other cell types, and proprietary immortalized cell lines that we processed in a way to allow us to perform single cell and single nuclei sequencing as well as so-called ScreenSeq and ScreenPep analysis. Our proprietary ScreenSeq and ScreenPep technologies are process- optimized and fully validated high throughput transcriptomics and proteomics platforms, respectively. We have a growing proprietary database comprising diverse proprietary -omics data based on in vitro, in vivo, and human sample analysis.

In support of our discovery platform, we own and leverage proprietary software and datasets. EVOpanHunter is our proprietary software solution that enables exploratory insight analysis for researchers in a convenient, web-based environment. Our software may integrate some open-source software and openly available published algorithms with our proprietary modules and data. Our proprietary modules include an infrastructure to map and interlink meta information for e.g., genes, proteins, or targets within omics data and across species barriers, a framework to store, manage, and access omics data, and an architecture for storing, cleaning, managing, and providing access to clinical data. The software includes several tools to enhance analysis, including tools for differential analysis (e.g., used to compare diseased vs. healthy samples), statistical analysis tools, and a machine learning computing tool. The EVOpanHunter software leverages our proprietary datasets to create a prediction model for cell type annotation.

In support of our discovery platform, we have proprietary materials and cells. EVOcells is our proprietary cell lines platform and includes our proprietary iPSC platform. We expanded our iPSC platform through the acquisition of diverse assets including intellectual property from a third party.

48

Table of Contents

Pipeline Assets

We have used our proprietary research platform to generate and identify patentable drug candidates with the potential for collaboration. Numerous patent applications have been generated and filed because of such activities. In some cases, we have elected to retain the pipeline asset intellectual property, and in other cases, we have out-licensed our intellectual property to third parties or transferred ownership of the intellectual property to third parties in exchange for milestone payments, royalties, or equity in their business.

As with other biotechnology and pharmaceutical companies, our ability to establish and maintain our proprietary and intellectual property position for our technology platforms and pipeline assets will depend on our success in obtaining effective patent claims and enforcing those claims if granted. There can be no assurance that any of our current or future patent applications will result in the issuance of patents or that our future issued patents (if any) will provide meaningful protection of our pipeline assets or technology. For more information regarding the risks related to our intellectual property, see the section entitled “Risk Factors—Risks Related to Our Intellectual Property.”

Government Regulation

Government authorities in the European Union, the United States and other countries and jurisdictions extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, record-keeping, labeling, advertising, promotion, distribution, marketing, post- approval monitoring and reporting and import and export of pharmaceutical products. Compliance with applicable statutes and regulations and other requirements of regulatory authorities requires the expenditure of substantial time and financial resources.

Regulation of Drugs and Biologics

In the European Union, pharmaceutical products are subject to a comprehensive scheme of regulatory requirements mainly set out at EU level, but country-specific regulations at EU member state level remain essential in many respects. These regulations exercise oversight over all aspects of our operations including, but not limited to, research, development, testing, manufacturing, and quality control. They also govern all aspects of the operations of our customers and the partners with whom we co-own pipeline assets, including assessing safety and efficacy for purposes of marketing approval, labelling, storage, record keeping, commercialization, distribution, post-approval monitoring, advertising, pricing, and more.

The process governing approval of medicinal products in the United States generally mirrors the process in the European Union. In the United States, the FDA regulates pharmaceutical products. The Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and other federal and state statutes and regulations apply to us, our customers, and our partners who develop our pipeline assets. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending new drug applications (NDAs) or biologics license applications (BLAs), warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution. Any agency or judicial enforcement action could have a material adverse effect on our partners or us. Before a new drug or biologic may be marketed, it must undergo extensive testing and regulatory review to determine that it is safe and effective and be approved by the FDA or other regulatory authority.

Preclinical Research

Before testing any product candidate or therapy in humans, it must undergo extensive preclinical testing. Preclinical research involves in vitro (test tube) and animal studies to evaluate the chemistry formulation and toxicity of the drug over a wide range of doses and to detect whether the product is likely to cause any of a variety of adverse conditions or diseases, including birth defects and cancer. Initial preclinical studies are conducted before any clinical testing occurs, while longer-term testing is conducted in parallel with clinical studies.

49

Table of Contents

A robust package of preclinical data is required before clinical trials can begin. In the European Union, if preclinical results warrant continuing development of the product candidate, before a clinical trial may commence, applicants are required to submit a clinical trial application (“CTA”) to each country’s national health authority and an independent ethics committee. The CTA must include, among other things, a copy of the trial protocol and an investigational medicinal product dossier with supporting information, in particular preclinical data and information about the manufacture and quality of the medicinal product under investigation. In the United States, if preclinical results warrant continuing development of the product candidate the results of the studies are submitted to the FDA as part of an investigational new drug application, or IND. An IND includes, among other things, items such as preclinical data, manufacturing information, a proposed clinical protocol and an investigational plan and must be reviewed by the FDA and become effective before proposed clinical testing can begin.

Regulation of Testing Facilities

Our facilities are audited by regulatory agencies such as the FDA, MHRA, and similar foreign regulatory authorities as well as our customers to ensure compliance with requirements designed to ensure the quality and integrity of the testing process and data such as GLP and GMP and other requirements adopted by the EMA, the FDA, the Ministry of Health in the United Kingdom and by similar regulatory authorities in other countries, as applicable. GLPs and GMP require standardized procedures for all equipment, processes, and analytical tests, for recording and reporting data, and for retaining appropriate records.

Clinical Trials, MMA, NDA or BLA Preparation and Submission

In the European Union, all phases of clinical development are monitored and audited extensively by regulatory authorities of the relevant member states. Authorities scrutinize all clinical activities and data, and our partners must submit annual reports to the controlling authorities of the relevant member states detailing the progress of the trial. Our partners must also submit any information that suggests a significant risk to human patients or any clinically important increase in the rate of serious suspected adverse reactions to regulatory authorities as and when they discover such information. The United States has adopted a similar regulatory scheme to the European Union. Our partners typically carry out clinical development of our pipeline, including the conduct of human trials and interaction with regulatory authorities.

Clinical trials are typically divided into three phases. Phase I clinical trials include basic safety and pharmacology testing in approximately 20 to 80 human subjects per trial, usually healthy volunteers or stable patients, and include trials to evaluate the metabolic and pharmacologic action of the product in humans, how the drug or biologic works, how it is affected by other drugs, how it is tolerated and absorbed, where it goes in the body, how long it remains active, and how it is broken down and eliminated from the body. Phase II clinical trials include basic efficacy (effectiveness) and dose-range testing in a limited patient population (usually 100 to 200 patients per trial) afflicted with a specific disease or condition for which the product is intended for use, further safety testing, evaluation of effectiveness, and determination of optimal dose levels, dose schedules and routes of administration. If Phase II trials yield satisfactory results, Phase III trials can commence. Phase III clinical trials include larger scale, multi-center, comparative clinical trials conducted with patients afflicted by a target disease, designed to permit a valid statistical test of safety and effectiveness required by the EMA, the FDA and other regulatory authorities and to provide an adequate basis for product labeling. The FDA and similar foreign regulatory authorities receive reports on the progress of each phase of clinical testing and may require the modification, suspension, or termination of clinical trials if, among other things, an unreasonable risk is presented to patients or if the design of the trial is insufficient to meet its stated objective.

Upon completion of Phase III clinical trials, the drug sponsor will assemble the data from all phases of development, along with the chemistry and manufacturing and nonclinical data and the proposed labeling, among other things, into a single large document, the marketing authorization application, or MAA, and/or the NDA or BLA. Under EU law, marketing authorizations can be obtained through the centralized marketing authorization procedure from the European Commission (based on the opinion of EMA’s Committee for Medicinal Products for Human Use) or through the national, mutual recognition or decentralized marketing authorization procedures from the competent authorities of the relevant member states. Centralized authorization is compulsory for certain drug types. The EMA (or the relevant authorities of the member states) and the FDA carefully scrutinize data from all phases of development, as well as the facilities where the product is manufactured, to determine whether the manufacturer has complied with regulations and whether the drug or biologic is safe and effective for the specific use under study. The EMA (or the relevant authorities of the member states) or the FDA may refuse to accept the MAA, NDA or BLA for filing and substantive review if certain administrative and content criteria are not satisfied. Even after accepting the submission for review, the EMA (or the relevant authorities of the member states) or the FDA may require additional testing or information.

50

Table of Contents

Regulations require a manufacturer to collect and periodically report to the EMA, FDA and similar regulatory authorities in foreign countries additional safety data on the drug or biologic for as long as the manufacturer markets the product (post-marketing surveillance). These reports must include data from all countries in which the product is sold. Additional post-marketing trials (Phase IV) may be required as a condition of the product’s approval to assess safety or verify clinical benefit or may be undertaken voluntarily after initial approval to find new uses for the product, to test new dosage formulations or to confirm selected nonclinical benefits. Product approval may be withdrawn if compliance with regulatory standards is not maintained or if problems occur following initial marketing.

Data Privacy and Security Laws and Regulations

As a primarily business-to-business focused organization, we do not market, sell, or distribute products or services directly to patients or consumers. Accordingly, the personal information that we collect and process, including human tissues and patient samples, is generally limited to what is necessary to conduct business with other businesses within our industry.

Nevertheless, we hold confidential personal information relating to persons who have been and/or still are employed by the company. The possession, retention, use and disclosure of such information is highly regulated, particularly in the EEA. The GDPR controls how personal data must be handled and places significant restrictions on the export of personal data from within the EEA to other third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain. In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, including HIPAA, and federal and state consumer protection laws and regulations (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Other Environmental, Health and Safety Laws and Regulations

We may be subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

We maintain liability insurance (including, where applicable, workers’ compensation) to cover us for costs and expenses we may incur due to injuries to our employees, but this insurance may not provide adequate coverage against potential liabilities. We also tailored several continuity plans for different locations to mitigate serious environmental issues.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

Current or future environmental laws and regulations may impair our research, development, or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties, or other sanctions.

51

Table of Contents

Competition

The market for R&D services is competitive, based on modality-by-modality or technology-by-technology comparison. However, we believe we are well positioned to offer our partners an integrated solution that cannot be replicated by combining selected elements made available by other service providers. We believe our services are differentiated based on the degree of integration, the number of modalities, precision, relevance, agility, and capacity to generate new data and ability to exploit it with advanced computing.

We believe that Evotec is one of very few companies that has assembled such a seamlessly integrated precision medicine platform.

We compete in an industry characterized by rapidly advancing technologies, intense competition, and a complex intellectual property landscape. With respect to other players in specific fields in the industry, we consider our competition to be as described below:

Biotechnologies, and, in the field of data-driven precision medicine in oncology, Tempus.

Avid Bioservices.

Manufacturing

We currently operate two commercial manufacturing facilities, one of which is located in the United States (Redmond, large molecules) and the other in Europe (Abingdon UK, small molecules). A third manufacturing facility (for large molecules) will be constructed in Toulouse, France.

We have the capability to produce drug products to support the clinical development and commercialization of both our own and our partners’ assets. We apply our machine learning and integrated technology platform J.DESIGN to the manufacturing aspect of our

52

Table of Contents

business to bring further value to our partnerships and produce drug products in a cost-effective and efficient manner. Because we utilize J.DESIGN early in the drug discovery stage, by the time we reach the manufacturing stage of any given program we have already predicted and reduced the risk of most scaling problems that may occur. As a result, we are able to deliver flexible, right-sized manufacturing at lower costs and with faster turnaround times, without sacrificing the quality of the products.

In order to enhance our manufacturing capabilities further, we are currently constructing a J.POD® late- stage clinical and commercial manufacturing facility that uses single-use technology. Because the facility will contain clinical and commercial processes, both can be operated at the same scale to facilitate seamless transfer and eliminate scale up risk. Located in Redmond, Washington, the building is expected to be approximately 130,000 square feet and house approximately 200 employees at full capacity. The site, which will be able to produce on a large enough scale to meet most of our commercial needs in a single facility and will mainly supply markets in North America.

As global demand for flexible biologics capacity and for more affordable access to medicines increases, we intend to build a second J.POD® facility in Toulouse, France. Europe is the second largest biologics market and a strong desire for local capacity and security of supply is evident in this market. The decision to set up this infrastructure at our own site in Toulouse was a strategic one, as the Toulouse footprint creates operational efficiency and co-location for oncology and immunology expertise such as cell therapy adds further synergy with our strategic needs. We expect the second J.POD® to be completed by 2024.

We are committed to continually developing our manufacturing operations to support our clinical and commercial scale manufacturing needs. We expect to require an additional €20 million to €25 million of capital expenditure for the J.POD® facility in Redmond, Washington in 2022.

Certain of our operations are carried out under GMP and GLP regulations that are certified and periodically audited by regulatory agencies such as the FDA, MHRA, AISA and our customers. Further, we have established an internal quality assurance system that monitors our compliance with these regulations.

Evotec SE is a publicly listed European stock corporation operating under German law. Our headquarters are in Hamburg. We have operating sites in Hamburg, Cologne, Göttingen, and Munich (Germany), Lyon and Toulouse (France), Abingdon and Alderley Park (UK), Verona (Italy), Orth an der Donau (Austria), as well as in Branford, Princeton, Seattle and Watertown (USA). The group has been successful in creating both operational and technological synergies between the sites and geographical regions by way of organic growth and strategic acquisitions. A listing of our significant subsidiaries and their jurisdiction of incorporation is included in Exhibit 8.1 to this 20-F filing.

Our headquarters are in Hamburg, Germany, where we occupy office and laboratory space. We manage further laboratories and office facilities in Göttingen, Munich and Cologne in Germany, Toulouse and Lyon in France, Abingdon and Manchester in UK, Princeton, Watertown, Branford, Seattle and Redmond in US, Verona in Italy. Manufacturing areas are available in Verona, Abingdon, Seattle and Redmond sites. Some key steps to build this facilities setup were:

53

Table of Contents

​

We lease an aggregate of approximately 90,500 square feet, in Europe and the United States. Our leases expire on various dates from 2022 to 2043 (indicatively).

In order to facilitate the continued growth of our company, we regularly invest in upgrading and expanding our technology and infrastructure. For example, we have made major enhancements to our technology platform with regard to the areas of translational biology, high content imaging and proteomics. Additionally, we have made our scientific operations more efficient by adding additional state-of-the-art sample management technology. We continued our investments in the expansion and development of individual locations into 2021. Our acquisition of the Biopark by Sanofi will significantly expand our capacities at the Toulouse site in the short-to-medium term. Our completion in 2020 of a new building in Göttingen will help us expand the areas of cell therapy and EVOpanOmics. In addition, we commenced the expansion of our existing campus in Abingdon, Oxfordshire, UK in 2020, to create a major integrated R&D center. We plan to build new capacities for proteomics in Munich in the next two years, and a new building for the planned iPSC center in Hamburg in the next three years.

We have completed construction of our first J.POD^® facility in North America, an integral part of the J.DESIGN platform of Just—Evotec Biologics. We expect this facility will fulfil our production requirements for the coming years and strengthen our position as a major partner in drug discovery and development with pioneering technologies in the field of biologics. This new facility became operational in August 2021. In April 2021, we announced the construction of our second J.POD^® facility in Toulouse.

54

Table of Contents

We also continue to further upgrade and digitize our administrative tools and systems. We will continue to make capital expenditures in order to secure the further growth and scalability of our company, including €75-80 million in capital expenditure in 2022 for replacements and growth. We expect to require an additional €20-25 million of capital expenditure in 2022, respectively, for completing our first J.POD^® facility in Redmond, Washington and approximately €180 million for setting up our second J.POD^® facility in Toulouse, France. Planning of construction in France began in April 2021 and construction is expected to start in the second or third quarter of 2022 (supported by related funding from French authorities). The second J.POD^® is expected to be completed by 2024. For facility expansions at other sites, we expect to invest €45 million to €55 million in Alderley Park and Abingdon in the UK, in Toulouse in France, in Hamburg, Göttingen and Munich in Germany, in Verona in Italy as well as in Watertown and Princeton in the US.

We plan to fund additional capital expenditure through cash on hand and debt financing.

Environmental Issues

To the best of our knowledge, currently there are no foreign, federal, state or local environmental laws, rules or regulations that will materially affect our results of operations or our position with respect to our competitors. However, we can provide no assurance of the effect that any possible future environmental laws will have on our operating results.

55

Table of Contents

In the future, we expect EVT Innovate to generate more revenue from milestones and royalties as our pipeline assets mature. Revenue generated through our collaboration arrangements may contribute to either the EVT Execute or EVT Innovate segment, depending on the nature of the contract with our customer, the ownership of the intellectual property and the stage of the project. Expenses, such as labor and material expenses, arising from the work on contracts for which the customer owns the intellectual property are recorded as cost of revenues whereas expenses arising from pursuing internal R&D activities are recorded as research and development expenses. Additionally, when entering into customer contracts and partnership agreements based on internal R&D activities, the related costs, such as labor, materials and reimbursable overhead expenses, are also recorded within cost of revenues.

For the year ended December 31, 2021, we reported €618.0 million in revenue, representing growth of 23.0% from the year ended December 31, 2020, and €215.5 million in net income, representing an increase of €209.2 million compared to the year ended December 31, 2020. We also reported Adjusted EBITDA of €107.3 million for the year ended December 31, 2021, representing an increase of €0.6 million compared to the year ended December 31, 2020. Adjusted EBITDA is a measure that is not defined under IFRS. For further information about how we calculate Adjusted EBITDA, limitations of its use and its reconciliations to comparable IFRS measures, see “–Key Performance Metrics and Non-IFRS Measures.”

Key Factors Affecting Our Results

Factors affecting our results of operations and financial condition include the factors described below.

Market Demand for External Innovation

Our financial results are impacted by our partners and customers’ needs for external innovation through collaborating or outsourcing their R&D initiatives and/or highly innovative manufacturing activities and our ability to meet those needs. We will sustain growth only if our existing partners and customers continue to rely on our expertise and capacity and if additional companies select us as their partner of choice for drug discovery and development.

For the past decade, the global pharmaceutical industry has been struggling with declining efficiency in introducing new products to the market. As a result, pharmaceutical companies of all sizes have been and continue to be under pressure to re-evaluate and adjust their business strategies, in particular by accessing innovative technologies such as artificial intelligence and machine learning and pursuing innovative treatment modalities, such as personalized medicine, cell therapy and gene therapy. New companies have been formed to specifically develop these technologies and modalities. Moreover, there is an increased focus on early prediction parameters to determine the success or failure of new drugs. In order to access innovation in a capital efficient manner, industry players increasingly rely on external sources, such as our innovation hub, for innovative R&D and manufacturing expertise and capacity.

We believe that market demand for external innovation will continue to drive demand for our assets and services, facilitate additional collaboration opportunities and potentially improve the volume and terms of partnerships that we are able to secure. We believe this trend will increase the likelihood of strategic, integrated, long-term collaborations and drive our continued growth.

Efficiency and Scientific Excellence of our own R&D Activities

Our performance is dependent not only on the market’s need for external innovation, but also on our own ability to provide innovative solutions. For this reason, investing in technologies and platforms is a core part of our strategy. In 2020 and 2021, we invested €63.9 million and €72.2 million in R&D, respectively, and we intend to continue to dedicate a significant amount of financial resources to ensuring that our offering continues to meet the industry’s needs.

For example, we are allocating a significant amount of resources to improving our EVOpanOmics and EVOpanHunter platform, our capabilities for AI-driven development of biologics and our iPSC platform. Investments in maintaining and expanding our technological leadership increases our short-term expenses while opening possibilities for future revenue growth and sustainability.

56

Table of Contents

Scientific Results and Third-Party Decisions

An important pillar of our growth strategy is the shift of our business to EVT Innovate and to the generation of milestones and royalties. Our EVT Innovate pipeline currently includes more than 130 assets. We define our pipeline to include candidates that we wholly own and those for which we have the right to receive royalty or milestone payments. Pipeline assets with respect to which we have the right to receive royalty or milestone payments include those that we will have initially developed and subsequently licensed or assigned to partners for continued pre-clinical and clinical development as well as those that have been initially developed by our partners and that have become the subject of a joint research project. We do not count in our pipeline candidates being developed by partners in whom we have solely an equity stake through EVOequity and no right to milestone or royalty payments with respect to their candidates in development.

Our financial results depend on the success of our partners’ clinical development of our pipeline assets, receipt of regulatory approval and commercialization. A partner may choose to end the development of a specific program for scientific or commercial reasons and we typically have no ability to influence such decisions, which may be driven by factors such as pipeline prioritization and the ability to obtain additional required capital. Our future financial results therefore depend, in part, on the judgment and financial health of our partners. We mitigate this risk through diversification in our portfolio.

To the extent that our pipeline assets are recognized on our balance sheet in line with IFRS requirements, impairments directly affecting our results of operations may occur if our expectations for future cash flows change significantly. This may be due to our partners’ decision to discontinue a program for scientific or commercial reasons, or their inability to obtain adequate funding.

Revenue Mix and Gross Margin

We generate revenue either from fee-for-service and/or FTE-rates based contracts, by receiving milestones and royalties on assets or any combination thereof. Revenues can be further differentiated based on our technologies and platforms. Changes in the allocation of revenues between contract types and technologies mainly affect our cost of sales, gross profit and gross margin.

In each of the year ended December 31, 2020 and the year ended December 31, 2021, 79% and 76% of our third-party revenues were derived from EVT Execute, which mainly includes fee-for-service and FTE-rates based revenues. In the mid- to long-term, we are focused on generating an increasing share of our revenues from milestones and royalties on our assets. In some cases, especially in our EVT Innovate segment, we enter into contracts with short-term lower FTE rates in exchange for higher financial upside through future milestone or royalty payments. Our strategy is to share the risk and reward and collaborate our assets as early as possible in the preclinical or development process to generate subsequently substantial medium-term revenues from FTE-based research payments and development milestone payments and long-term revenues from sales milestones and royalties. In the initial discovery and development stage, we do not earn any revenue from these arrangements. In the long-term, however, we expect our gross margin to improve since no significant expenses will be incurred in relation to milestones and royalties because our partners typically absorb the costs of clinical development and commercialization.

Additionally, we have invested in our biologics manufacturing facilities (J.POD^®), which, once at full operational capacity, we expect to generate higher gross margins than our existing business.

Acquisitions and Disposals

Strategic acquisitions are part of our strategy for growth and strengthening our competitive position. We continually evaluate the market for attractive opportunities that are accretive to our business. We typically acquire companies that expand our value chain through access to new technologies or additional capacity, extend our offering and value chain, provide access to new customers or allow for extension of our geographical reach.

In July 2019, we completed the acquisition of Just Biotherapeutics, Inc., a U.S.-based technology company that integrates the design, development and manufacturing of biologics. The total consideration was €51.1 million in cash, increased by a possible performance-based component (earn-out) as contingent consideration valued at €3.9 million in cash as of the acquisition date.

57

Table of Contents

In July 2020, we acquired from Sanofi “Biopark by Sanofi,” a real estate company owning and managing the Toulouse site where we had been the major tenant since acquiring Sanofi’s Toulouse-based scientific operations in 2015. The transaction included the transfer of a team of facility-related employees to us, who continue to manage the site. The acquired land and buildings secure additional capacity and flexibility for long-term growth of our operations in Toulouse, France. In April 2021, we announced the planned construction of our second J.POD^® facility on the acquired land.

In addition, we have acquired, and may continue to acquire minority stakes in early-stage development companies through our EVOequity program, which is described in further detail under Item 4 of this annual report. These companies can either be entities with no prior relationship to spinouts or us from our other programs, such as our BRIDGEs program. The related transactions may result in significant influence over the acquired entity in line with the IFRS definition presented in IAS 28 (generally 20% or more of voting rights) and therefore require us to account for these investments using the equity method. In this case, in addition to the balance sheet impact, our share of the investee’s profit or loss will affect our results of operations under “share of the result of associates accounted for using the equity method,” but will have no effect on our Adjusted EBITDA. Fair value adjustments of our equity investments that are not accounted for using the equity method also affect our results of operations from time to time. For example, during the year ended December 31, 2021, we recognized €225.4 million from a measurement gain from our investment in Exscientia Ltd. Fair value adjustments of a similar magnitude may or may not occur in the future.

Foreign Currency Exchange Rates

Due to our international business operations, we are subject to both foreign exchange transaction and translation risks. Our reporting currency is the Euro; however, we also incur revenues and expenses in U.S. dollar and pound sterling. Other currencies are of less relevance.

Transactional risk arises when we and our subsidiaries execute transactions in a currency other than our respective functional currency. Our principal exposure to translation effects relates to pound sterling and the U.S. dollar. In 2019, 39% and 14% of our revenue and 9% and 26% of our cost of revenue was in U.S. dollars and pound sterling, respectively. In 2020, 45% and 14% of our revenue and 17% and 24% of our cost of revenue was in U.S. dollars and pound sterling, respectively. In 2021, 50% and 12% of our revenue and 22% and 20% of our cost of revenue was in U.S. dollars and pound sterling, respectively.

Where we are unable to match sales received in a foreign currency with expenses paid in the same currency, our results of operations are affected by currency exchange rate fluctuations. We also use derivatives such as currency futures and swaps to mitigate foreign exchange risk.

R&D Tax Credits

We receive R&D tax credits for qualifying research related expenses in France, the United Kingdom, Italy and Germany. The credits are recognized under other operating income. These credits amounted to €32.0 million in 2021 as compared to €25.3 million in 2020.

In general, the R&D tax credit policies in the countries where we operate have been stable in recent years, with some countries expanding their R&D tax credit policies to our benefit. However, there have been recent changes to Italy’s policies that significantly reduced our allowance in 2020. Due to changes to Italian tax laws, a new tax credit was granted in Italy for which we are eligible starting from June 2021. Further changes or full or partial expirations of these programs may affect our future financial performance.

COVID-19 Pandemic

As of the date of this annual report, the COVID-19 pandemic has had limited adverse impact on our financial results. Overall, in 2021, we exceeded our revenue target. During the year ended December 31, 2021, our milestone payments increased by €32.4 million when compared to the same period in the previous year. Furthermore, the introduction of temporary shiftwork resulted in fewer billable hours and we incurred minor costs related to protective equipment, such as the provision of masks or rapid tests. However, decreases in certain project-related costs from reduced spending on travel, training and conferences, have substantially offset any of the negative impact on our Adjusted EBITDA. The 2021 achievements contain a similar level of COVID-related impacts as in the previous year, with no adverse effect on demand and no severe disruptions either in business operations or in supply chain.

58

Table of Contents

The COVID-19 pandemic stimulated growth in the pharmaceutical and biotechnology sectors, which in turn benefits our company. Like other companies in our industry, we are contributing to combat COVID-19 through a number of activities. For example, in July 2020, our wholly-owned subsidiary Just— Evotec Biologics received an order from the U.S. Department of Defense for the development and manufacture of monoclonal antibodies (mAbs) for the treatment and prevention of COVID-19. In late December 2021, Evotec received a € 7.5 million grant from the German Federal Ministry of Education and Research for the development of a therapeutic against COVID-19.

As the COVID-19 pandemic continues, we may remain exposed to the changes and expenses outlined above or face challenges to our business. For more information, see “Risk Factors—Risks related to the COVID-19 pandemic.”

59

Table of Contents

Selling, General and Administrative Expenses

Our selling expenses mainly consist of personnel costs (including share-based compensation), social security, travel costs and consultancy expenses of our business development team. General and administrative expenses primarily consist of personnel related costs (including share-based compensation) for procurement and logistics, finance, legal, human resources, information technology, investor relations, risk management and other administrative functions, professional fees, accounting and legal services and facility costs related to space used by the support functions. These costs relate to the day-to-day administrative operation of the business and are unrelated to the R&D of any individual asset.

Impairment of Intangible Assets and Goodwill

Impairment of intangible assets and impairment of goodwill consist of the losses resulting from the differences between the carrying amount of related assets and their recoverable amount, which is the higher of the asset’s fair value less cost to sell or value in use. An impairment of goodwill may occur in case the expected performance of the underlying cash-generating unit falls below the expectation at the time of the acquisition of the relevant business. Impairments of intangible assets typically occur when scientific programs do not meet expectations in terms of scientific results or timelines for partnering, thereby impacting expectations for future cash flows.

Other Operating Income

Other operating income mainly consists of tax credits received from tax incentive programs in the context of qualifying R&D expenses in different jurisdictions and refunds from third parties for cost charges.

Tax credits can regularly be offset partially or fully from tax payments to fiscal authorities. We account for income from such R&D tax credit programs as other operating income instead of offsetting them from income tax expenses.

In addition, we recharge current costs incurred at the Toulouse and ID Lyon sites to Sanofi in connection to our agreements signed in 2015 and 2018, respectively. The Toulouse agreement ended in March 2020, while the ID Lyon agreement will continue until June 2023. The Toulouse site agreement included the reimbursement of certain costs related to administrative expenses and rent expenses, which were recognized under other operating expenses.

For the Lyon site agreement, Sanofi agreed to license to us most of its infectious disease research and early-stage development portfolio and transfer its operational infectious disease research unit to us, in addition to providing significant mid-term funding to ensure support and progression of the portfolio for which it retained certain option rights on the development, manufacturing, and commercialization of anti-infective products. We recognize these amounts in other operating income when they are a direct reimbursement of costs. There is no underlying direct exchange of these services for this income and therefore a recognition as revenue is not suitable. The related expenses are recognized under R&D expenses.

Other Operating Expenses

Our current other operating expenses mainly consist of the expenses that we recharge to our partners for specific projects, such as the Toulouse and ID Lyon agreement. These expenses include facility costs, consultancy expenses, personnel costs and incidental wage costs; outsourced services, materials consumed and depreciation. The related income is recognized under other operating income.

Interest Income and Expenses

Interest income consists of interest accrued or paid on cash deposits and short-term investments as well as other financial instruments.

Interest expenses consist primarily of interest from our Euro denominated short term and long terms loans and promissory notes. A small portion of our finance expenses are related to interest expense on our revolving credits, which we utilize at certain points in the year as needed. Interest expenses also arise from our lease obligations according to IFRS 16 as well as for the unwind of discounts of our earn-out liabilities.

60

Table of Contents

Measurement result from Investments

Our measurement result from investments includes fair value adjustments for investments measured in accordance with IFRS 9.

Share of the Result of Associates Accounted for Using the Equity Method

Share of the result of associates accounted for using the equity method consists of our participation in the profits or losses generated as well as fair value differences where applicable.

Foreign Currency Exchange Gain (Loss), Net

Our business and reported profitability are affected by fluctuations in foreign exchange rates mainly between the U.S. dollar, pound sterling and the Euro. A strengthening/weakening of these currencies as compared to each other and against other currencies, leads to foreign currency exchange gains or losses in our consolidated income statement.

Tax Income (Expense)

Tax income (expense) represents the tax charge or credit on our profit or loss for the year and includes both current and deferred taxation. Tax income (expense) is recognized in the income statement unless it relates to items recognized directly in equity, when it is recognized through the statement of comprehensive income. Deferred tax income (expense) consists of the tax impact of tax loss carryforwards and temporary differences. In the future, we expect to continue to benefit from certain tax loss carryforwards as we have incurred negative income in certain group entities including Evotec SE in the past, which is discussed in more detail under “Result of Operations—Income and deferred taxes” below. We expect our income taxes to continue to increase on an absolute Euro basis as we continue to grow.

Result of Operations

For a discussion of (i) our results of operations, including selected segment information, for the year ended December 31, 2020, including a year-over-year comparison between 2020 and 2019, and (ii) our liquidity and capital resources for the years ended December 31, 2020 and December 31, 2019, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our final prospectus filed pursuant to Rule 424(b)(4) ) (Registration Number 333-260143) on November 5, 2021.

61

Table of Contents

The following table summarizes our consolidated statements of operations for each period presented:

* Restated for the impacts of the IFRIC final agenda decisions of April 2021 of benefits to periods of service (IAS 19)

Revenues

Revenues increased by €117.1 million, or 23%, from €500.9 million in 2020 to €618.0 million in 2021. The increase is mainly due to the organic growth of our ongoing business from fee-for-service and FTE-rate based research services of €74.7 million, milestone revenues of €32.4 million and recharges of materials of €14.2 million. This increase was partially offset by a foreign exchange loss for €9.2 million.

Revenues from milestone and license payments increased by €32.4 million, or 189%, from €17.1 million in 2020 to €49.5 million in 2021 primarily due to the realization of milestone revenues in our BMS collaboration in September and October of 2021 and in our Takeda collaboration in November and December 2021.

Revenues from recharges of materials were €36.0 million and €21.8 million for the years ended December 31, 2021 and 2020, respectively.

62

Table of Contents

Total revenues in the EVT Execute segment increased by €100.3 million, or 20%, from €509.9 million in 2020 to €610.2 million in 2021. In particular, EVT Execute revenues from external customers increased by €77.0 million due to strong performance in fee-for-service and FTE revenue business, including an increase in revenues of €26.8 million by the pharmaceutical and pre-clinical services and €13.6 million from Just – Evotec Biologics. Revenue from external customers includes revenues from recharges of materials of €34.1 million in 2021 compared to €20.7 million in 2020. The increase in intersegment revenues amounted to €23.3 million (revenues for services performed by EVT Execute for projects accounted for within EVT Innovate) which totaled €139.1 million and €115.8 million in 2021 and 2020, respectively. The 20% increase in intersegment revenues resulted from the support of EVT Innovate’s growth in external collaborations as well as internal R&D projects. Milestone revenues amounted to €4.2 million and €5.1 million for 2021 and 2020, respectively.

Revenues in the EVT Innovate segment increased by €40.2 million, or 38%, from €106.8 million in 2020 to €147.0 million in 2021 primarily as a result of milestone revenues. Milestone achievements in the EVT Innovative segment increased from €12.0 million in 2020 to €45.2 million in 2021, due to three BMS neuro-related milestones aggregating €35.0 million and three Takeda mRNA related milestones aggregating €6.6 million. Revenue from fee-for-service and FTE-rate based research services increased by €5.9 million, or 6%, from €93.6 million in 2020 to €99.4 million in 2021.

Costs of Revenue

Costs of revenue increased by €91.3 million, or 24.3%, from €375.2 million in 2020 to €466.5 million in 2021. The increase in Costs of revenue is mainly volume-driven and due to capacity build-up of the J.POD^® 1 US facility in Redmond, Washington. Gross margin decreased to 24.5% in 2021 from 25.1% in 2020 primarily in connection with start-up costs for the J.POD^® 1 US facility, negative effects from foreign exchange rate fluctuations in the amount of €8.4 million and the end of payments from Sanofi for the Toulouse site which contributed €8.6 million during the first quarter of 2020. Higher milestone revenues reduced the decrease in gross margin.

Costs of revenue in the EVT Execute segment increased by €99.7 million, or 26.0%, from €382.9 million in 2020 to €482.6 million in 2021. Gross margin decreased from 24.9% for 2020 to 20.9% for 2021. The gross margin in 2021 was mainly a result of the capacity build-up prior to the start of J.POD^® 1 US, the loss of Sanofi revenues for the Toulouse site and adverse foreign exchange movements.

Costs of revenue in the EVT Innovate segment increased by €12.8 million, or 13.1%, from €97.6 million in 2020 to €110.4 million as a result of higher expenses for certain collaborations as well as license fees to partners. The gross profit in 2021 was significantly impacted by the €45.2 million in milestone payments received which resulted in an increased Gross margin of 24.9% in 2021 compared to 8.6% in 2020.

R&D Expenses

R&D expenses increased by €8.3 million, or 12.9%, from €63.9 million in 2020 to €72.2 million in 2021, primarily as a result of higher expenses for proprietary EVT innovative projects, including QRBeta. Proprietary innovative projects expenses increased from €51.0 million in 2020 to €61.5 million in 2021 and accounted for 85.2% and 79.7% of total R&D expenses for the years ended December 31, 2021 and 2020, respectively. Platform R&D expenses that can be attributed to EVT Execute decreased from €3.6 million in 2020 to €2.5 million in 2021. Indirect expenses (consisting of overhead expenses not specifically allocated to projects) decreased from €9.3 million in 2020 to €8.1 million in 2021. Indirect expenses represented 11.3% and 14.6% of the total R&D expenses for the years ended December 31, 2021 and 2020, respectively.

63

Table of Contents

The following table presents our R&D expenses by category for the periods shown:

​

Unpartnered R&D expenses increased by €11.7 million, or 25.1%, from €46.4 million in 2020 to €58.1 million in 2021. The increase is mainly due to the increased research investments into IPSC projects (Neuroscience), EVOcells (Oncology), QRbeta, EVOPanHunter projects and several other platform projects of EVT Innovate.

R&D expenses for partnered assets declined from €17.5 million in 2020 to €14.1 million in 2021 as the portion of projects in bacterial infections and global health funded by partners decreased in comparison to the prior year period. Partnered R&D expenses are fully assigned to EVT Innovate and refunds by our research partners in respect of such expenses are recorded under other operating income.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) increased by €28.2 million, or 37%, from €77.2 million in 2020 to €105.4 million in 2021, primarily due to higher personnel related expenses. Personnel related expenses increased by €21.1 million in 2021 from €44.2 million in 2020 to €65.3 million in 2021, mainly due to continued growth in employee headcount in all areas of the enabling functions including the build-up of J.POD^® 1 US and J.POD^® EU. Consultancy costs increased by €4.0 million, from €8.1 million in 2020 to €12.1 million in 2021, mainly due to the costs related to the public listing in the United States, ERP integration and other strategic projects. Audit, audit-related and tax consultancy fees increased by €4.1 million, from €1.0 million in 2020 to €5.1 million in 2021 and Insurance costs by €1.7 million from €2.0 million to €3.7 million, both because of the public listing in the United States. Furthermore, IT and license costs increased by €1.7 million from €6.0 million in 2020 to €7.7 million in 2021, due to significant investments in IT systems with related license costs.

The increase was partially offset by a decrease in costs from acquisitions of €6.6 million from €6.7 million in 2020 to nearly €0.1 million in 2021. The acquisition related costs in 2020 were due to acquisitions of Just—Evotec Biologics (July 2019), Evotec GT (April 2020) and Biopark by Sanofi SAS (July 2020). In 2021 SG&A costs of these integrated new entities were not separately traded.

64

Table of Contents

Impairment of Intangible Assets and Goodwill

Impairment of intangible assets decreased by €2.6 million, or 78.9%, from €3.2 million in 2020 to €0.7 million in 2021. Impairment losses of €0.7 million in 2021 were as a result of reduced pre-clinical activity related to DG070, a R&D project developed in the EVT Innovate segment which previously had been acquired. In 2020, rights and licenses were impaired in the amount of €3.2 million. This concerned the rights to future sales of Haplogen GmbH, Vienna, as the company lost a significant financing partner, so that the further development of the underlying projects was no longer assured. Impairment losses for both years were all allocated to the EVT Innovate segment.

There was no impairment losses from goodwill in either 2021 or in 2020.

Other Operating Income

Other operating income increased by €1.3 million, or 1.8%, from €72.2 million in 2020 to €73.5 million in 2021. This increase was primarily due to higher R&D tax credits accounted for in 2021 in the amount €32.0 million as compared to €25.3 million recorded in 2020 driven by a higher volume of eligible projects in France in 2021 and the new R&D tax credit scheme which Aptuit Verona site is eligible for in Italy from June 2021 onwards. Furthermore, the increase was due to the fair value adjustments made for the earn-out of Just in the amount of €2.6 million compared to €1.2 million in 2020.

This favorable variance was partly offset by a decrease totaling €8.0 million in reimbursement from Sanofi. Cost reimbursement from Sanofi for the ID Lyon site amounted to €35.8 million in 2021 compared to €39.8 million in 2020 due to reduced project spend in the areas of bacterial infections and global health. Cost reimbursement from Sanofi for the Toulouse site decreased to €0.4 million in 2021 compared to €4.7 million in 2020 because of the expiration of the site-related agreement in March 2020.

Other Operating Expenses

Other operating expenses increased by €0.7 million, or 14.6%, from €5.0 million in 2020 to €5.7 million in 2021 and resulted mainly from other accruals.

Interest Income

Interest income increased by €0.9 million, or 69.7%, from €1.3 million in 2020 to €2.3 million in 2021. This increase is due to the higher overall cash position, in particular after our US listing of ADSs from November 2021 as well as interest income earned in convertible loans provided to equity investments.

Interest Expense

Interest expense increased by €0.8 million, or 9.3%, from €8.5 million in 2020 to €9.3 million in 2021 due to a higher volume of long-term bank loans used in 2021 of € 0.3 million, a revaluation of interest rate swaps as a result of the interest yield curve of € 1.0 million and an increase in interest expense from lease liabilities of € 0.6 million. This was partly off-set by capitalized interest for the J.POD^® construction loan of € 1.2 million.

Measurement result from Investments

Measurement result from investments increased by €222.3 million, from €1.5 million in 2020 to €223.8 million in 2021 mainly due to the fair value increase of our investment in Exscientia Ltd. Exscientia Ltd. completed two significant financing rounds in the first half of 2021, in which Evotec did not participate. As a consequence of the dilution of our ownership percentage from 20.23% to 14.84%, the investment in Exscientia Ltd. is no longer accounted for using the equity method but is measured at fair value in accordance with IFRS 9. This change in accounting resulted in a fair value adjustment of €116.1 million. Another fair value adjustment of €131.1 million resulted from the initial public offering of Exscientia Ltd. in the United States on September 30, 2021. Again Evotec did not participate in this financing. The total fair value increase was reduced by €21.8 million due to share price volatility and foreign exchange rate impacts at year end. The review of investments resulted in a fair value adjustment of Leon Nanodrugs GmbH in the amount of €2.0 million). In addition, a measurement gain of €0.4 million was recorded for our investment in CureXsys GmbH.

65

Table of Contents

Share of the Result of Associates Accounted for using the Equity Method

Share of the result of associates accounted for using the equity method increased by €18.0 million, or 191.8%, from €10.4 million in 2020 to €28.4 million in 2021, reducing net income in both years. This increase was primarily due to increased net losses from several equity participations in the amount of €16.6 million. In addition, the review of equity participations resulted in an Impairment of investments using the equity method of €11.9 million, consisting of Celmatix Inc. in the amount of €7.4 million, Eternygen GmbH in the amount of €2.3 million and Facio Therapies in the amount of €2.2 million.

Foreign Currency Exchange Gain (Loss), net

Foreign currency exchange gains were €7.8 million in 2021 and foreign currency exchange losses were €6.9 million in 2020. The change in foreign exchange gains and losses in 2021 was a result of the increasing U.S. dollar and pound sterling exchange rates against the Euro by approximately 8% and 7%, respectively, through the year.

Income and Deferred Taxes

Income and deferred tax expense increased to €22.2 million for the year ended December 31, 2021 compared to €19.6 million for the year ended December 31, 2020 primarily due to higher current tax expenses. Income taxes increased with the improved profitability from €12.1 million in 2020 to €16.7 million in 2021. Deferred taxes decreased from €7.5 million in 2020 to €5.5 million in 2021.

The decrease in the effective tax rate between 2021 and 2020 is mainly impacted by the successful initial public offering of Exscientia Ltd. in the United States. Exscientia Ltd. was accounted for using the equity method and moved to investments in 2021. The value uplift resulted in significant tax free income in 2021. Taxable income not recognized in income before tax in 2020 was generated from revealing hidden reserves by contribution-in-kind of certain intangible assets.

We recognize deferred tax assets to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused carry forward tax losses and unused tax credits can be utilized. This judgment is made annually and based on budgets and business plans.

For a segment revenue analysis see “—Revenues.”

66

Table of Contents

Segment operating income in the EVT Execute segment decreased by €14.3 million, or 18%, from €77.4 million for the year ended December 31, 2020 to €63.1 million for the year ended December 31, 2021. Gross profit amounted to €127.6 million and remained at a similar level to previous year (€126.9 million). The business growth did not result in a higher gross profit due to significant start-up costs for the J.POD^® 1 US facility, negative effects from foreign exchange rate fluctuations and the end of payments from Sanofi for the Toulouse site, which contributed €7.5 million in 2020. Selling, general administrative expenses amounted to €84.0 million and increased by €22.2 million primarily due to higher personnel related expenses, IT expenses and consultancy expenses, also in connection with the US listing. R&D expenses decreased from €4.4 million in 2020 to €2.9 million in 2021. In addition, Other operating income increased by €5.9 million and Other operating expenses increased by €0.1 million (net increase of €5.8 million), both primarily impacted by the expiration in March 2020 of an agreement with Sanofi in relation to the Toulouse site that included the reimbursement of certain costs, but more than off-set by higher R&D tax credits in France and Italy.

Segment operating loss in the EVT Innovate segment decreased by €6.7 million, or 23%, from €(28.8) million for the year ended December 31, 2020 to €(22.1) million for the year ended December 31, 2021, primarily as a result of a €27.4 million increase in gross profit driven by higher milestone and license revenues. Furthermore, R&D expenses increased by €12.0 million primarily due to higher platform R&D expenses for proprietary innovative projects. Selling, general administrative expenses increased by €6.1 million, mainly due to higher personnel and related expenses. Other operating income and expenses (net) decreased by €5.2 million as a result of reduced reimbursements from Sanofi related to ID Lyon. Impairment of intangible assets decreased by €2.6 million. Impairment losses amounted to €0.7 million in 2021 and were as a result of reduced pre-clinical activity related to DG070, a R&D project developed in the EVT Innovate segment which was acquired in previous years. Impairment losses in 2020 amounted to €3.2 million and related to rights to future share in revenues of Haplogen GmbH, Vienna.

The following table provides the reconciliation of segment Operating income (loss) to Segment Adjusted EBITDA for the periods presented below:

The following tables detail our Segment Adjusted EBITDA for the years ended December 31, 2021, 2020 and 2019 for each segment:

​

​

67

Table of Contents

Segment Adjusted EBITDA in the EVT Execute segment decreased by €4.5 million, or 3%, from €129.3 million in 2020 to €124.8 million in 2021, primarily as a result of an increase in Selling, general administrative expenses of € 22.2 million supporting the general business growth and the US listing process. This was partly off-set by a higher gross profit excluding depreciation and a higher other operating income as described in the paragraph Operating result by segments above.

Segment Adjusted EBITDA in the EVT Innovate segment increased by €5.2 million, from €(22.7) million in 2020 to €(17.5) million in 2021, primarily as a result of a €27.4 million increase in gross profit driven by higher milestone and license revenues. This was partly off-set by higher investments in R&D activities, Selling, general administrative expenses a lower Other operating income as described in the paragraph Operating Result by segments.

In 2021, we implemented changes to our internal management reporting and now allocate amounts for recharges to the segments. We made retrospective adjustment to our segment results for the year 2020 and 2019.