Halozyme, a biotech firm whose drug delivery technology is a key component of biologic medicines marketed by several big pharma partners, aims to expand its offerings to these customers through the proposed €2 billion acquisition of drug discovery and development services provider Evotec.
San Diego-based Halozyme disclosed the unsolicited offer after Thursday’s market close. It comes as a private equity firm builds up its stake in Evotec, a company that has weathered several business setbacks in the past two years, reflected in a stock price that has moved on a mostly downward trajectory.
Hamburg, Germany-based Evotec issued a statement acknowledging the offer, adding that the company “will carefully analyze this expression of interest, decide on next steps, and inform the capital market in accordance with the legal requirements.”
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Shares of Evotec have traded on the Frankfurt Stock Exchange since 1999. Evotec debuted on the Nasdaq in 2021, pricing its American depositary shares at $21.75 apiece. Evotec’s Thursday closing price on the Nasdaq was $5.10, which is on the low end of the stock’s 52-week range.
Halozyme submitted a non-binding proposal to buy Evotec for €11.00 (about $11.59) per share in cash. That price represents a 109% premium to Evotec’s stock price on Oct. 15, the day before Triton Partners began a series of stock purchases amounting to an equity stake of about 10% in the company. Halozyme’s offer represents a 77% premium to Evotec’s average stock price in the three months leading up to Oct. 15.
Evotec’s offerings include computational tools used in drug discovery and design. The company also offers manufacturing services. Evotec’s customers include Bristol Myers Squibb, Sanofi, and Novartis. Triton’s accumulation of Evotec shares comes as the German company works to put itself on a better course. In 2023, Evotec was the target of a cyberattack that temporarily shut down operations. The company earlier this year decided to exit the gene therapy business. At the beginning of November, Evotec sold a Hamburg manufacturing facility to private equity firm Monacum Partners. Throughout this year, Evotec has been working through a corporate restructuring that includes layoffs to the rank and file along with C-suite changes.
In terms of employees, Evotec is the larger company with a workforce of about 4,000 based mostly in Europe. Halozyme’s headcount of about 373 is based mostly in the U.S. Halozyme’s main offering to its customers is a drug delivery technology called Enhanze. Biologic medicines are typically administered as intravenous infusions that can take an hour or more. Enhanze enables biologic drugs to be administered as subcutaneous injections that take minutes. Companies that incorporate Enhanze in their products include Roche, Takeda Pharmaceutical, Eli Lilly, Pfizer, and AbbVie.
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Measured by revenue, Halozyme is the larger company of the two companies. For the first nine months of this year, Halozyme reported $717.3 million in total revenue. Evotec’s revenue through the first three quarters of this year was €575.7 million (about $607.4 million).
In a note sent to investors, Leerink Partners analyst David Risinger said Halozyme thinks now is an ideal time to acquire the German company. Halozyme believes Evotec’s cost-realignment measures position the company for a recovery, with market conditions expected to improve starting in 2025, he said.
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