We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.

The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.

These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.

When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?

Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.

Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.

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Friday, August 01, 2008

Evotec Announces Initiation of Phase I Clinical Trial of VR1 Antagonist under Partnership with Pfizer Inc.

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Aug 01, 2008 (Hugin via COMTEX) ----Corporate news announcement processed and transmitted by Hugin ASA. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- --------------

Hamburg, Germany - Evotec AG (Frankfurt Stock Exchange: EVT; NASDAQ: EVTC) announced today that dose escalation studies for a Phase I clinical trial of a small molecule VR1 (vanilloid receptor 1) antagonist is being progressed by Pfizer Inc. under the collaboration with Evotec. The Phase I study is a randomised, double-blind and placebo-controlled single ascending dose study in healthy volunteers to evaluate the compound's safety, tolerability and pharmacokinetic profile after oral administration.

The VR1 receptor is one of the best characterized members of the transient receptor potential (TRP) family of ion channel proteins. Ion channels mediate and influence cell signalling and are attractive targets for drug discovery. Antagonists of VR1, which prevent the activation of nerve cell signalling, are predicted to be useful in the treatment of pain, urinary incontinence and other diseases and disorders.

Michael G. Kelly, Ph.D., President, Renovis, Inc., Evotec's US subsidiary, commented: "We are extremely pleased that Pfizer has now initiated clinical Phase I with a VR1 antagonist resulting from our collaboration. Safe and effective antagonists of this receptor have the potential to improve treatment in multiple large indication areas where patients are poorly served by existing therapies. At the same time, this demonstrates the progress and productivity of our joint research effort."

In May 2005, Pfizer entered into this worldwide collaboration and license agreement with Renovis, now a wholly-owned subsidiary of Evotec, to research, develop and commercialize small molecules that target the VR1 receptor. Under the terms of the agreement, the two companies combined their VR1 research and development programs. Pfizer has exclusive worldwide rights to commercialize products that result from the collaboration. Additionally, Evotec is eligible to receive development and commercialisation milestones of greater than $170 million as well as double-digit royalties upon commercialisation of a product resulting from the collaboration.

Contact: Anne Hennecke, Senior Vice President, Investor Relations & Corporate Communications, Evotec AG, Phone: +49-40-56081-286, anne.hennecke@evotec.com

Forward-Looking Statements Information set forth in this press release contains forward-looking statements, which involve a number of risks and uncertainties. Such forward-looking statements include, but are not limited to, statements about our expectations and assumptions concerning regulatory, clinical and business strategies, the progress of our clinical development programs and timing of the results of our clinical trials, strategic collaborations and management's plans, objectives and strategies. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: risks that product candidates may fail in the clinic or may not be successfully marketed or manufactured; risks relating to our ability to advance the development of product candidates currently in the pipeline or in clinical trials; our inability to further identify, develop and achieve commercial success for new products and technologies; competing products may be more successful; our inability to interest potential partners in our technologies and products; our inability to achieve commercial success for our products and technologies; our inability to protect our intellectual property and the cost of enforcing or defending our intellectual property rights; our failure to comply with regulations relating to our products and product candidates, including FDA requirements; the risk that the FDA may interpret the results of our studies differently than we have; the risk that clinical trials may not result in marketable products; the risk that we may be unable to successfully secure regulatory approval of and market our drug candidates; and risks of new, changing and competitive technologies and regulations in the U.S. and internationally. The list of risks above is not exhaustive. Our Annual Report on Form 20-F, filed with the Securities and Exchange Commission, and other documents filed with, or furnished to the Securities and Exchange Commission, contain additional factors that could impact our businesses and financial performance. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

--- End of Message ---

Evotec AG Schnackenburgallee 114 Hamburg Germany

WKN: 566480; ISIN: DE0005664809 ; Index: Prime All Share, CDAX, HDAX, MIDCAP, TECH All Share; Listed: Geregelter Markt in Frankfurter Wertpapierborse, Prime Standard in Frankfurter Wertpapierborse, Freiverkehr in Borse Berlin, Freiverkehr in Bayerische Borse Munchen,

Freiverkehr in Borse Dusseldorf, Freiverkehr in Borse Stuttgart,

Freiverkehr in Hanseatische Wertpapierborse zu Hamburg, Freiverkehr in Niedersachsische Borse zu Hannover;

SOURCE: Evotec AG

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