Evotec SE (NASDAQ: EVO), a Germany-based Contract Research and Development Organization (CRO/CDMO), has announced plans to lay off approximately 400 employees as part of a corporate restructuring, citing a general industry slowdown in early R&D activity.
During the company’s Q2 2024 earnings call, CEO Christian Wojczewski attributed the below-target revenue performance in the first half of the year to a “stagnation of early R&D spending in biotech,” compounded by geopolitical factors and slow economic growth that have led to more cautious decision-making in the pharmaceutical sector.
In H1 2024, Evotec reported a modest 2% year-on-year revenue growth, reaching EUR 390.8 million (USD 430.1 million), while EBITDA declined by 0.5% to EUR 33.9 million (USD 37.3 million). The firm primarily generates revenue through partnerships in drug discovery and development, with ‘shared R&D revenues’ falling 7% year-on-year to EUR 302.4 million. In contrast, its antibody-focused CDMO subsidiary, Just-Evotec Biologics, experienced a 50% revenue increase to EUR 88.5 million.
Wojczewski noted the lack of new signals for recovery in the market, stating, “We expect a broader recovery now earliest in 2025.” He highlighted that the slow pace of deals with biotech companies has resulted in workforce overcapacity in certain areas, exacerbated by an excess of unprofitable small-scale manufacturing projects and Evotec’s high fixed cost structure. The restructuring will also involve 100 job cuts in the US and UK, alongside the closure of its gene therapy and API development divisions. An additional 400 job reductions are planned later this year across Germany, Italy, and France, with expected gross savings exceeding EUR 40 million by 2025.- Flcube.com
