The US biotech company Halozyme Therapeutics wants to buy the active ingredient developer EVOTEC.
A corresponding proposal had been sent to the company, the Americans announced on Thursday evening after the stock market closed. The price offered is 11 euros per share in cash and values EVOTEC SE at two billion euros. EVOTEC confirmed receipt of a corresponding expression of interest. The Bloomberg news agency had previously reported on it.
In a comment, analyst Charles Weston from the Canadian bank RBC blamed the complexity of EVOTEC’s business model, market pressure and mixed implementation of projects for the price development. However, EVOTEC has a lot of latent potential and opportunities for significant long-term growth. JPMorgan analyst Jessica Fye wrote that because of the differences between EVOTEC’s deals and those of Halozyme, it could take time for market players to understand what such an unexpected deal means for Halozyme.
EVOTEC announced that it had received a non-binding expression of interest in a takeover offer with an offer price of 11 euros per share. There was no prior contact. EVOTEC will analyze interest, decide on further steps and inform the capital market. In addition, the company could not immediately be reached for comment.
Halozyme wants to use the takeover to expand its position and secure sales and earnings growth until at least the next decade, as company boss Helen Torley said. Among other things, Halozyme is targeting the Just EVOTEC platform, which could make the mass production of biologics cheaper in the future. Biologics are drugs or vaccines that are produced biotechnologically or using genetically modified organisms. Among other things, they serve to replace the body’s own proteins.
For analyst Christian Ehmann from Warburg Research, Just EVOTEC is the clear target of the Americans in the planned takeover. The platform has already generated significant interest in the market and has received orders from generic drug manufacturer Sandoz and the US Department of Defense.
With the Americans’ interest, there could be a takeover battle for EVOTEC. At the beginning of the week it was announced that the financial investor Triton had increased its stake in the company from 5.6 percent to around 9.2 percent last week. According to a report to the US Securities and Exchange Commission at the end of last week, it is now almost 10 percent. Jefferies analyst Benjamin Jackson wrote that Halozyme Therapeutics’ offer highlights EVOTEC’s potential value to interested parties.
Bloomberg reported at the beginning of the week that Triton was exploring a takeover and had sought discussions with EVOTEC’s board of directors. A spokesman for the company subsequently said that there had been no discussion or negotiations beyond Triton’s entry.
In addition to Triton, according to EVOTEC, the Danish pharmaceutical company Novo Nordisk holds an 8 percent stake in the German company and the sovereign wealth fund of the Arab Emirate of Abu Dhabi, Mubadala Investment, holds a 7 percent stake in the German company.
EVOTEC from Hamburg researches and develops active ingredients for the pharmaceutical industry. The company has recently had to struggle with problems. In spring 2023 it fell victim to a hacker attack. Recently, he was faced with high costs for setting up two biologicals plants and a weak market environment. At the beginning of 2024, the previous CEO Werner Lanthaler unexpectedly left the company. The new CEO Christian Wojczewski is supposed to get EVOTEC back on track.
Jefferies leaves EVOTEC on ‘Hold’ – target 6.80 euros
In view of the purchase offer from the USA, the analysis house Jefferies has left the rating for EVOTEC at “Hold” with a price target of 6.80 euros. Apparently the company’s subsidiary Just-Evotec Biologics is the focus of prospective buyer Halozyme, wrote analyst Benjamin Jackson on Thursday evening. The offer sheds some light on the potential value of EVOTEC. His previous valuation may be conservative in the scenario of such strategic takeovers.
The EVOTEC share is on the rise
The possible takeover battle for EVOTEC boosted the drug researcher’s share price on Friday. >With a jump to 10.62 euros right at the start of trading, the EVOTEC shares continued their recovery rally on Friday, which had accelerated since Monday but had stalled at times. They were as expensive as they were last in mid-May. Most recently, the increase in XETRA trading was 19.47 percent to 10.31 euros. In contrast, the already weak Halozyme shares lost 5.50 percent to $50.99 in pre-market US trading on the NASDAQ on Friday. another 4.5 percent.
The latest development had already lifted the shares above important technical chart indicators for the short to medium-term trend in the past few weeks. Now they also made it above the 200-day line, which is important in the long term.
From the interim low of 5.105 euros, which was just over a month old, the EVOTEC share price has more than doubled. Nevertheless, given the previous decline, EVOTEC is still worth less than half as much as it was at the beginning of the year. The company is one of the biggest SDax losers and is therefore interesting as a takeover candidate. Especially since the record level of more than 100 euros reached at the turn of the millennium and even the interim high of over 45 euros, which was more than three years old, are still miles away.
The shares are currently lagging slightly behind the 11 euros per share offered by Halozyme. The offer is more than twice as high as the EVOTEC share price before Triton – as a possible takeover competitor – built up its stake in mid-October, writes Benjamin Jackson from the US analysis firm Jefferies.
According to a voting rights announcement on Monday, the German-Swedish financial investor Triton increased its stake in EVOTEC from 5.6 percent to around 9.2 percent last week. According to a report to the US Securities and Exchange Commission at the end of last week, it is now almost 10 percent.
Jefferies expert Jackson continues that the EVOTEC subsidiary Just EVOTEC Biologics is apparently in focus for prospective takeover Halozyme. His price target of 6.80 euros for EVOTEC as an independent company attributes a value of around 4.70 euros to the subsidiary alone and could rise to 14.60 euros in a long-term scenario.
The price targets of other companies for EVOTEC are already in the double digits. For analyst Christian Ehmann from Warburg Research, Americans are primarily interested in Just EVOTEC Biologics. The platform has already generated significant interest in the market and has received orders from generic drug manufacturer Sandoz and the US Department of Defense.
RBC expert Charles Weston pointed to a lot of dormant potential and opportunities for significant long-term growth for EVOTEC. He blamed the weak share price development until mid-October on the complexity of the business model, market pressure and mixed implementation of projects. However, because of the differences between EVOTEC’s deals and those of Halozyme, it could take a while for market players to understand what such an unexpected deal means for Halozyme, added expert Jessica Fye from US investment bank JPMorgan.
