Bristol Myers' German Partner Evotec Plans Layoffs, Cites 'Challenging Revenues, Profitability'

Wednesday, Evotec SE EVO reported sales of $201.12 million (182.12 million euros), up from 170.28 million euros reported a year ago.

The German drug maker reported an EPS loss of 54 cents, down from 8 cents a year ago.

Also Read: German Drug Developer Evotec Seeks Adviser Input As Takeover Concerns Mount.

“However, H1 2024 revenues and profitability have been more challenging for the company than expected. We are operating in a more difficult market environment, most notably the slowdown of early-stage R&D spending,” said Christian Wojczewski, CEO of Evotec.

“This has required us to accelerate our transformation towards sustainable profitable growth, leveraging better on our strengths, driving productivity, reducing complexity, and making the organization stronger for its next growth phase,” he added.

The company said the reset for profitable growth is on track to achieve the expected annualized adjusted EBITDA improvement of over 40 million euros starting in the second half of 2024

The company has identified a headcount reduction potential of approximately 400 roles (7% of the workforce) across the global footprint and a reduction of the physical footprint by surrendering certain lease agreements.

The company plans to exit gene therapy and close a site in Orth, Austria. It’s also shutting down chemistry activities in Lyon, France, and separating a manufacturing facility in Halle/Westphalia, Germany.

On Tuesday, Evotec announced further progress in its strategic partnership with Bristol Myers Squibb & Co BMY to build a molecular glue-based pipeline. Performance-based and program-based achievements trigger payments of $75 million to Evotec.

Outlook: Evotec expects 2024 revenues of 790 million euros-820 million euros, with adjusted EBITDA of 15 million euros-35 million euros.

Price Action: EVO stock is down 0.60% at $3.30 at last check Wednesday.

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