Evotec SE (NASDAQ:EVO) shares plunged 9.3% in premarket trading Wednesday after the German biotech firm reported a decline in revenue and widening losses, as ongoing weakness in its early-stage drug discovery business offset gains in biologics.
For the first nine months of the year, Evotec posted revenue of €535.1 million, down 7.1% year over year, as its Discovery & Preclinical Development unit saw a 12.3% decline, while its Just – Evotec Biologics division grew 11.3%.
The company reported an adjusted EBITDA loss of €16.9 million, compared to a €6.0 million loss in the same period a year earlier, largely due to underutilization and elevated fixed costs within its discovery operations.
“Evotec remains firmly on track in delivering against its strategic objectives, demonstrating strong execution for future sustainable and profitable growth,” said Dr. Christian Wojczewski, CEO of Evotec. “Despite a continued softness in the early drug discovery market, we are seeing first signals of improvement in our base business.”
Evotec also announced a major post-quarter transaction with Sandoz, potentially valued at over $650 million plus royalties. Under the deal, Sandoz will acquire Evotec’s biologics facility in Toulouse and obtain a license for its continuous manufacturing platform technology.
The company reaffirmed its 2025 guidance, projecting full-year revenue between €760 million and €800 million and adjusted EBITDA of €30 million to €50 million. Management highlighted ongoing progress in strategic collaborations, including $95 million in performance-based milestone payments from Bristol Myers Squibb so far this year.
Evotec said its cost-cutting program is ahead of schedule, with expected savings of over €60 million in 2025, double its original target. Looking ahead, the company maintained its 2028 outlook, forecasting revenue growth of 8–12% CAGR and an adjusted EBITDA margin above 20%.