Activist Investor MAK Capital Pushes for Evotec Biologics Spin-Off as Losses Mount and AGM Looms

MAK Capital, holding 7% of Evotec, demands spin-off of its €1B+ biologics unit amid widening losses, a €116M convertible bond, and restructuring efforts.

Activist hedge fund MAK Capital, which holds roughly 7% of Evotec’s stock, is demanding the German drug discovery firm spin off its fast-growing US-based biologics subsidiary, Just – Evotec Biologics. The fund values the unit at more than €1 billion — a figure that outstrips the entire current market capitalisation of the parent company. Evotec’s biologics arm posted revenue of nearly €260 million last year, after expanding at almost 40%, making it the standout performer in a group that is otherwise wrestling with red ink.

The activist push lands at a fraught moment for the Hamburg-based company. Evotec’s first-quarter 2026 revenue slumped by about a fifth to €156.6 million, while the net loss ballooned to nearly €122 million, partly distorted by the absence of a licence fee that boosted the prior-year quarter. The adjusted operating result swung to a loss of €21.9 million, which management blamed on one-off items and currency effects. Still, the board reaffirmed its full-year forecast, promising a recovery in the second half.

To underwrite its turnaround, Evotec issued a €116.1 million convertible bond in mid-May, carrying a 2.625% coupon and maturing in 2033. The initial conversion price is around €6.53, and existing shareholders were excluded from subscription rights, raising the risk of dilution should bondholders eventually convert. At the same time, the sale of its Tubulis stake to Gilead is expected to bring in roughly $100 million. These moves, together with existing cash, left Evotec with total liquidity of €445 million at the end of March.

The cash is earmarked for the Horizon restructuring programme, which involves closing sites, cutting hundreds of jobs, and achieving permanent cost savings of €75 million a year. At the bank’s dbAccess European Champions Conference in Frankfurt earlier this month, executives faced pointed questions about capacity utilisation and cost control, according to attendees. The company also used the platform to highlight bright spots: a preclinical candidate reached with partner Almirall, and fresh Gates Foundation funding for tuberculosis research.

Investors have so far responded favourably to the combination of activist pressure and restructuring action. Evotec’s share price has climbed nearly 12% over the past week to €5.26, reclaiming its 50-day moving average. Year to date, however, the stock is still down roughly 38%. If management’s communication at the conference or at the forthcoming annual general meeting falls short, analysts warn the shares could test the 52-week low of €4.14.

The June AGM in Hamburg will serve as a stage for the clash between MAK Capital and the existing board. Evotec has already agreed to cooperate with the activist fund, and it has nominated Dieter Weinand as the new supervisory board chairman. The spin-off demand will be a central item on the agenda, and the vote will signal whether shareholders back the radical break-up or prefer to give the existing turnaround plan more time.

For now, Evotec’s management is walking a tightrope: executing Horizon’s cost cuts without strangling the growth that makes the biologics unit so attractive. If the second-half recovery proves elusive, pressure to slice off the group’s most valuable asset will only intensify.