Biotech firm Evotec’s shares plummet in Frankfurt following a shock cut in its targets

Against this backdrop, Evotec now expects turnover for the financial year to be between 570 and 610 million euros, whereas the previous target was between 700 and 780 million, and analysts had forecast an average of 730 million euros.

Adjusted operating profit (EBITDA) is now expected to be a loss of between 70 and 105 million euros, whereas a profit of up to 40 million euros had previously been forecast. Essentially, the downward revision is due to delays in payments for the achievement of interim targets and the fact that new partnerships are taking longer than expected to be finalised. Consequently, the revenue expected from ongoing collaborations will not be received before 2027. As this revenue generally commands a higher profit margin, “the impact on operating profit is disproportionate”, explained CFO Claire Hinshelwood.

CEO Christian Wojczewski said that “as expected, the preliminary results for the first half of the year reflect a difficult start to the year”, adding, however, that the core business is gaining momentum and the current cost-cutting programme is proceeding as planned, and therefore expressing confidence in the business’s future performance.

Analysts, however, remain sceptical.

The second quarter marks a significant deterioration, according to the Canadian bank RBC. “Although management is convinced that the ongoing strategic programmes and the pipeline are merely behind schedule rather than lost, we believe it will be difficult to convince the market,” the experts explained.

Evotec had already announced in March the loss of around 800 jobs and the closure of four sites. This restructuring is expected to reduce costs by around 75 million euros a year by the end of 2027.

Evotec on the stock market.