BioWorld Today Correspondent

Evotec AG is adding £31.5 million (US$64 million) to its balance sheet by selling off its chemical development business to Aptuit, Inc. in an all-cash deal that is expected to close within 75 days. The transaction will boost Evotec's cash reserves to between €93 million and €98 million by year-end.

Greenwich, Conn.-based Aptuit is gaining Evotec's active pharmaceutical ingredient facilities in Oxford, UK, and a fill/finish parenterals facility in Glasgow, Scotland. Aptuit is retaining all 210 Evotec staff at the UK sites, including Paul McGee, Evotec's senior vice president of chemical development in Oxford, and Sandy Allan, Evotec's senior vice president of formulation sciences in Glasgow.

The move is part of a wider strategy on the part of Hamburg, Germany-based Evotec to focus on higher value drug discovery and development activities.

Last year, it completed two other deals as part of the same process, selling its single molecule detection technology and associated intellectual property to Tokyo-based Olympus Corp. for around €7.5 million and, later in the year, the rest of its Evotec Technologies GmbH subsidiary to Wellesley, Mass.-based PerkinElmer Inc. for approximately €23 million.

Evotec said it would continue to enter into collaborative research partnerships using its drug discovery capabilities, which include high throughput screening, fragment-based drug discovery and medicinal chemistry, but that it would seek to capture a greater share of the downstream value generated by the research.

The assets Aptuit is acquiring contributed €26.8 million in third-party revenue during 2006, or around 40 percent of Evotec's total turnover, excluding the previously discontinued operations.

"I would like to make a clear statement here; we have finished divesting," Evotec president and CEO, Jörn Aldag, said during a conference call Tuesday. "The next thing we need to focus on is a deal on EVT.201," he said.

The company last week reported that data from a Phase II clinical trial of the compound in patients with insomnia were even more positive than a top-line analysis indicated in June.

"We think that we're in a very strong position to license this," Aldag said.

The company's stock (FRANKFURT:EVT) closed Tuesday at €3.30, unchanged from its previous close, after peaking at €3.39 during the day's trading.