Evotec’s Governance Reset and Convertible Bet: Can a Shrinking Balance Sheet Fund a Turnaround?

Evotec undergoes board overhaul with hedge fund backing and raises €116M in convertible debt, but Q1 revenue fell 21.67% and net loss tripled to €121.9M, casting doubt on its turnaround.

Evotec is entering a period of profound structural change, but the financial evidence of a turnaround remains elusive. While the company reshapes its boardroom with hedge fund backing, raises €116.1 million through convertible debt, and prepares to rejoin the MDAX, the first-quarter numbers paint a starkly different picture. Revenue slumped to €156.64 million, down 21.67% from a year earlier, and the net loss ballooned to €121.9 million, or €0.69 per share, compared with a loss of €0.18 per share in the prior-year period. The market has taken note: the stock, which traded at €4.92 on Thursday, has shed 11.25% since the start of 2026 and sits 34.76% below its 52-week high of €7.54.

The company’s leadership overhaul is arguably its most concrete signal of change. MAK Capital, which built a 7.1% stake through open-market purchases totaling €73.3 million, opted for cooperation rather than confrontation. In a pact signed on 29 April, Evotec nominated Dr. Wolfgang Hofmann as an independent supervisory board member and proposed Dieter Weinand as the new chairman, expanding the board from six to seven seats. MAK, led by Michael A. Kaufman, pledged to support the nominations, a move that gives Evotec a stable governance platform for its long-term transformation. Meanwhile, the return to the MDAX, expected in June, should boost visibility among institutional investors and ETF strategies, though so far the share price has barely responded.

Just as important is the financial runway Evotec is building. The sale of its Toulouse biologics site to Sandoz, completed in December, unlocked roughly $350 million in cash plus over $300 million in potential milestone payments and royalties on up to ten biosimilars. The company then turned to the capital markets in mid-May, issuing €116.1 million in senior unsecured convertible bonds due 2033, with a 2.625% coupon and repayment at 110%, implying a yield of 3.882%. The conversion price of €6.5313 represents a 37.5% premium over the reference price of €4.75. Existing shareholders were excluded from the rights offering, and the net proceeds are earmarked for Project Horizon, a program designed to strengthen the operating model and improve long-term value creation.

Yet the operating reality remains tough. The first-quarter loss of €0.69 per share — worse than the average analyst estimate of minus €0.672 for the full year — reflects both a tough comparison with the prior year’s Sandoz license sale and one-time restructuring charges. Evotec still stands by its full-year forecast of between €700 million and €780 million in revenue and adjusted EBITDA ranging from breakeven to €40 million, with management banking on a second-half recovery. The new CFO, Claire Hinshelwood, who replaced Paul Hitchin in May, brings over three decades of experience, most recently as group CFO of BMI Group, and will be central to executing Project Horizon.

Technically, the stock is in a no-man’s land. It hovers just above its 50-day moving average of €4.89 but remains 12.97% below the 200-day moving average of €5.66. The RSI of 60.6 indicates no immediate overbought or oversold condition, while the 30-day annualized volatility of 45.9% keeps the shares jittery. After touching a 52-week low of €4.14 in mid-March, the price has recovered about 19%, but the rally lacks conviction without better operational data. The 52-week high of €7.54 — set in June 2025 — is a distant memory.

Analyst opinions reflect the uncertainty. Deutsche Bank rates Evotec a “Hold”, while RBC Capital Markets is more optimistic with an “Outperform” rating. The split underscores the central question: can the governance and capital-raising moves translate into a sustainable earnings recovery? No dividend is expected for the current fiscal year, removing one traditional anchor for patient investors. All eyes are now on the annual general meeting in June, where the expanded supervisory board and the new chairman will be formally installed. That event could provide the clarity the market is waiting for — or underscore just how much heavy lifting remains.