German life science company Evotec is cutting 400 jobs as the company continues to deal with ‘a more difficult market environment'.”
The company’s CEO Christian Wojczewski has announced an accelerated transformation programme for the company, designed to produce cost savings of at least €40m ($44m) next year, he said.
One of the reasons cited by Evotec for this challenging environment includes a high fixed cost base for weaker profitability. Nonetheless, the business outlook for FY 2024 involves a slight rise in revenue projections, increasing from €790m to €820m. This is compared to €781m in FY 2023.
In May, the company shut down its gene therapy business after its Q1 2024 group revenues were down by 2%. Evotec said its site in Austria will be closed down as part of the restructuring, which affected 40 employees. The company ventured into the gene therapy arena in April 2020, when it teamed up with Takeda to utilise its gene therapy approaches.
In the 14 August announcement, the company announced that it will also close chemistry activities in Lyon, France, and is considering the manufacturing business in Halle/Westphalia, Germany as a non-core activity.
During the H1 2024 webcast accompanying the results, Evotec’s CEO Christian Wojczewski said: “2024 has been a particularly challenging year, both in terms of growth and profitability. We are now focusing on preparing ourselves for the next stage in the company’s growth journey, in order to make Evotec stronger for the next chapter, we will conduct a strategic review, and accelerate our transformation towards sustainable profitable growth.”
Despite the tough market environment, Evotec has entered several partnerships this year. In January, the company teamed up with the Crohn’s & Colitis Foundation to advance drug discovery and develop new therapies for Crohn’s disease and ulcerative colitis. Additionally, an April agreement with Variant Bio aims to detect a treatment for ailments caused by fibrosis.
Moreover, a significant deal came through last month, when Evotec and Pfizer entered a multi-year partnership that will focus initially on early discovery research of metabolic and infectious diseases. Evotec will benefit from research support funding from Pfizer and may receive potential milestones and royalty payments contingent on the success of the programmes. Earlier this month, Evotec also secured a $25m milestone payment triggered by its neuroscience partnership with Bristol Myers Squibb.
In the 14 August announcement. Wojczewski highlighted that he is confident in the future success of the company: “I have deep conviction in our ability to successfully reposition Evotec, to grow the company and deliver superior value for all stakeholders.”
