Evotec’s Activist Investor Puts a Billion-Dollar Price Tag on a Single Division

MAK Capital pushes Evotec to spin off its US biologics unit, valued at over €1B, exceeding the entire group's €950M market cap amid restructuring.

The gap between what Evotec is worth on paper and what one of its largest shareholders believes it could be worth is now impossible to ignore. MAK Capital, the US hedge fund that has built a roughly 7 percent stake in the Hamburg-based drug discovery company, is pushing hard for a radical restructuring that would see its US subsidiary Just – Evotec Biologics spun off as a standalone public company. The fund values that unit alone at over €1 billion — a figure that exceeds the entire group’s current market capitalisation of around €950 million.

That valuation gap has given the activist campaign unusual leverage. MAK Capital, led by Michael A. Kaufman, is not just making noise from the sidelines. The fund is demanding a seat on the supervisory board for Dr. Wolfgang Hofmann and wants management to accelerate the turnaround. So far, Evotec’s board has not committed to any concrete steps, but the pressure is mounting ahead of two critical dates in the coming weeks.

A Tale of Two Businesses

The logic behind the spin-off demand becomes clearer when you look at the numbers. Just – Evotec Biologics, the company’s US-based biologics manufacturing arm, has been the standout performer. Its revenue surged nearly 40 percent to roughly €260 million, while the traditional drug discovery business — the core of Evotec’s historical operations — has been shrinking. That divergence has created a structural problem that the activist investor believes can only be solved by separating the two.

The group’s overall financial picture remains strained. Evotec managed to halve its net loss to around €104 million, but the bottom line is still deep in the red. Analysts expect a loss per share of €0.46 for the full year 2026, making conventional valuation metrics all but useless. The share price reflects the uncertainty: at €5.25, the stock is still roughly 37 percent below its 52-week high of €8.32, though it has recovered from the March trough of €4.14.

New CFO Takes Over at a Tense Moment

The management team is in flux at exactly the wrong time. Paul Hitchin stepped down as chief financial officer at the end of April after just 14 months in the role, citing personal reasons. His replacement, Claire Hinshelwood, takes over on May 1 with more than three decades of financial leadership experience from Novartis and Syngenta. She will have little time to settle in: Evotec reports first-quarter results on May 6, just days after her appointment.

Hinshelwood inherits a company in the middle of a self-declared transformation year. The “Horizon” restructuring programme is closing four global sites and cutting hundreds of jobs, with annual savings in the double-digit millions targeted by the end of 2027. For the current year, management has guided for revenue between €700 million and €780 million, with adjusted operating profit at best reaching €40 million. The first half is expected to remain weak as the market for early-stage drug discovery continues to struggle.

Cash Injection and Analyst Divergence

There is some financial relief on the horizon. Evotec has struck a deal with Gilead Sciences to sell its stake in Tubulis, a move that should bring in an upfront payment of around $100 million in the second quarter, plus potential milestone payments. That cash will help fund the restructuring, but it does not address the fundamental strategic question MAK Capital is raising.

The analyst community is split on the stock’s prospects. RBC Capital Markets rates it “Outperform,” Berenberg has a “Buy” rating, Deutsche Bank sits at “Hold,” and BofA Securities is at “Underperform.” The lack of consensus reflects the difficulty of valuing a company with a negative price-to-earnings ratio and two very different businesses pulling in opposite directions.

The June Showdown

The next few weeks will be decisive. The May 6 first-quarter report will be the first test of whether the restructuring is gaining traction. But the real battleground is the annual general meeting in Hamburg on June 11, where shareholders will vote on MAK Capital’s demands. The meeting will also see Dieter Weinand expected to take over as chairman of the supervisory board.

For now, the stock is caught between the activist’s ambitious valuation and the operational reality of a company still bleeding cash. Whether management can convince MAK Capital that a spin-off is unnecessary — or whether the hedge fund will force their hand — will determine the next chapter for Evotec.