Evotec Set for Windfall from Sale of Toulouse Plant to Sandoz

Biotech company Evotec has finalized the long-planned sale of its production facility in Toulouse to Swiss generics manufacturer Sandoz.

The transaction could potentially bring the Hamburg-based company more than $650 million, significantly exceeding initial estimates. According to a statement released by Evotec on Tuesday evening, the company aims to focus on its core competencies and reduce capital commitment through this move. The sale is expected to have an immediate positive impact on results, improving revenue mix, profit margins, and capital efficiency.

The agreement, now signed, includes a cash payment of approximately $350 million for the facility and a perpetual license for Evotec's proprietary biologics manufacturing technology. In addition, Evotec is entitled to license fees and milestone payments totaling more than $300 million over the coming years. Looking ahead, Evotec also anticipates revenue participation from a portfolio of up to ten biosimilars, targeting a market where the original products have net sales exceeding $90 billion.

Back in late July, the two companies had announced a non-binding letter of intent. At that time, the purchase price for the site was estimated at around $300 million, without specifying the total transaction volume including milestone payments. The deal is expected to close in the fourth quarter.

"This is a major milestone of great significance for Evotec," said CEO Christian Wojczewski. The company reaffirmed its guidance for the current fiscal year, forecasting consolidated revenues between 760 and 800 million euros (2024: 797 million euros) and adjusted operating earnings (Ebitda) of 30 to 50 million euros (22.6 million euros in the previous year).

In the first nine months of the current year, Evotec reported a decline in revenue and an operating loss. Group revenues fell by just over seven percent to 535.1 million euros. The adjusted operating loss rose to 16.9 million euros, compared to a negative six million euros in the same period last year. The company cited persistently weak demand in its early drug discovery services business as the reason. In contrast, the biologics manufacturing segment saw robust growth.

(Reporting by Patricia Weiß, edited by Myria Mildenberger. For questions, please contact our editorial team at [e-mail] (for politics and economy) or [e-mail] (for companies and markets).)