Evotec's Rally Faces Scrutiny as Activist and Financial Pressures Mount

Evotec stock surges on a major Gilead deal, but faces a pivotal shareholder vote in June as activist investor MAK Capital demands a spin-off of its high-value biologics unit.

Evotec SE shares have rocketed by nearly 25% in a single week, making the German drug discovery firm a top performer in the TecDAX and SDAX indices. This surge, however, is unfolding against a backdrop of deep internal division and escalating pressure from an activist investor, setting the stage for a pivotal shareholder meeting in June.

The recent gains have a tangible financial catalyst. The company anticipates a significant cash injection from the sale of its stake in Tubulis to Gilead Sciences. A $100 million upfront payment is expected in the second quarter of 2026, with potential milestone payments adding up to another $58 million. This comes as Evotec reported a halving of its net loss to approximately €104 million for the past year, down from over €196 million. Its adjusted operating result also improved sharply, reaching €41 million.

Beneath these headline figures, the company's operational picture is split. The biologics segment, which includes the US-based Just Biologics unit, saw revenue jump 39% to €259 million. In stark contrast, the traditional research services business slid into an operating loss of €12 million, a victim of persistent market weakness in that sector.

This divergence is central to the demands of activist fund MAK Capital. Led by Michael A. Kaufman, the investor is pushing for an initial public offering of the Just Biologics subsidiary. MAK Capital argues the unit alone could be worth more than €1 billion, a provocative figure given Evotec's current total market valuation of around €796 million. The fund has called for a supervisory board meeting, a spin-off of the biologics division, and measurable operational improvements by year-end. It has nominated Wolfgang Hofmann as a candidate for the supervisory board.

Management is pursuing its own transformation plan, dubbed "Horizon," which aims to consolidate global sites to ten and reduce the cost base by approximately €75 million annually by the end of 2027. For the current transition year of 2026, Evotec forecasts group revenue between €700 million and €780 million, with adjusted EBITDA ranging from zero to €40 million. Analysts at Berenberg project a sales decline to around €737 million for 2026 and do not foresee a return to profitability until 2027.

The upcoming annual general meeting on June 11 in Hamburg is poised to be a critical event. Shareholders are expected to approve Dieter Weinand as the new supervisory board chairman, while also confronting the activist campaign. Before that, Evotec will present its first-quarter figures on May 6, offering an early progress report, and will present at the German Biotech Days in Leipzig on April 21-22.

Despite the powerful rally, the stock closed the week at €5.64, still about 32% below its 52-week high and slightly beneath its 200-day moving average of €5.86. The wide disparity in analyst price targets underscores the uncertainty; Deutsche Bank sees a fair value of €4.50, while Berenberg Bank's target is €9.70. The second half of 2026 will be decisive in proving whether the promised operational improvements, combined with the Gilead windfall, can sustainably rebuild investor confidence.