Evotec's Biologics Unit Becomes Focal Point Amid Activist Pressure and Transition Year

Activist investor MAK Capital pushes for strategic review as Evotec's biologics unit grows 40% while core business contracts. Company forecasts a challenging 2026 transition year.

The strategic value of Evotec's fastest-growing division is now at the center of a shareholder debate. Activist investor MAK Capital has increased its stake in the German biotech firm to 7.0% and is publicly pushing for a strategic review, including a potential separate listing for the Just – Evotec Biologics subsidiary on the Nasdaq. This move highlights the growing external pressure on management as it steers the company through a challenging period.

While Evotec met its 2025 targets, reporting group revenue of 788 million euros and an adjusted EBITDA of 41 million euros, the underlying performance was split. The core Discovery & Preclinical Development business contracted by 9% to 529 million euros and operated at a loss. In stark contrast, the Just – Evotec Biologics unit surged 40% to 259 million euros, contributing the bulk of the group's adjusted EBITDA. This stark divergence is fueling MAK Capital's argument that the biologics arm is undervalued within the current corporate structure.

Management's guidance for the current year is tempering any optimism. The company has officially classified 2026 as a transition year, forecasting revenue between 700 and 780 million euros, potentially below 2025's level. Adjusted EBITDA is projected to land between 0 and 40 million euros. Executives cite persistent softness in the early-stage drug discovery market and the absence of one-time payments as key reasons for the cautious outlook. They anticipate the first half will remain challenging before benefits from new partnerships and efficiency gains materialize in the latter part of the year.

This sobering forecast continues to weigh on the stock. After a brief rally, shares recently traded down approximately 3.8%, extending a year-to-date decline of nearly 19%. The stock closed at 4.50 euros, languishing almost 46% below its 52-week high of 8.32 euros.

Parallel to managing these operational headwinds, Evotec is executing its multi-year "Horizon" transformation plan. The initiative aims to consolidate the company's footprint into ten core sites by the end of 2027, targeting annualized savings of approximately 75 million euros. The long-term ambition is to achieve revenue exceeding one billion euros by 2030 and an adjusted EBITDA margin around 20% by 2028.

Funding this restructuring is supported by a solid liquidity position of about 476 million euros. A significant near-term cash injection is expected from the pending sale of Evotec's stake in Tubulis to Gilead Sciences. That deal, slated to close in the second quarter, includes an upfront payment of roughly 100 million US dollars.

Leadership changes are also underway to guide this complex transition. Industry veteran Dieter Weinand, with over three decades of global pharma experience, has been nominated as the new Chairman of the Supervisory Board. His official election is scheduled for the Annual General Meeting on June 11, 2026, where he will succeed Prof. Dr. Iris Löw-Friedrich. Market observers view his appointment as an effort to strengthen commercial execution and steer the group back toward profitability.

The confluence of activist demands, a pivotal leadership change, and the critical execution phase of the Horizon plan sets the stage for a decisive period. The company's ability to demonstrate tangible operational improvement, particularly in the second half of 2026, will be the key test for restoring investor confidence and validating its strategic direction.