Evotec (NASDAQ:EVO) reported a narrower adjusted EBITDA loss for the third quarter of 2026 and reaffirmed its full-year guidance, saying it expects revenue and earnings to finish toward the upper ends of their respective ranges.
The company said stronger commercial execution in its drug discovery and development business helped lift quarterly revenue above first- and second-quarter levels. It also confirmed that Vertex Pharmaceuticals had selected its biologics unit to manufacture investigational drug povetacicept commercially at Evotec’s Redmond facility.
Chief Executive Officer Christian Wojczewski said the results showed progress following a difficult first half, though nine-month revenue and profitability remained below year-earlier levels.
Quarterly Loss Narrows as Costs Fall
Third-quarter group revenue rose to €164.9 million from €163.9 million a year earlier. Adjusted EBITDA was a loss of €1.6 million, compared with a loss of €15 million in the prior-year quarter, as both business segments improved and the company operated with a lower cost base.
Drug discovery and development, or D&PD, revenue fell 2.3% to €120.1 million in the quarter. Revenue at Just – Evotec Biologics, or JEB, rose 9.4% to €44.8 million.
For the first nine months, group revenue declined 13.1% to €465 million, while the adjusted EBITDA loss widened to €44.3 million from €16.9 million. Chief Financial Officer Claire Hinshelwood attributed the revenue decline partly to slower conversion of D&PD sales into revenue, delayed JEB program activity and a $25 million Sandoz license sale recognized in the first quarter of 2025.
Hinshelwood said the third quarter included approximately €30 million in milestone revenue associated with ongoing work, with a substantially smaller contribution expected in the fourth quarter. Responding to an analyst’s clarification, she said there were no clinical development milestone payments without associated work in the third quarter and none were expected in the fourth.
Total liquidity stood at €401 million at Sept. 30, down from €466 million at the end of June.
Guidance Reaffirmed, With Fourth-Quarter Variability
Evotec maintained its reported 2026 revenue forecast of €570 million to €610 million and its adjusted EBITDA forecast of a loss of €105 million to €70 million. At constant exchange rates, it expects revenue of €595 million to €635 million and an adjusted EBITDA loss of €90 million to €60 million.
Wojczewski said revenue and adjusted EBITDA were expected to land toward the upper ends of their respective ranges. Management cautioned, however, that results vary by quarter. Hinshelwood said the lower expected milestone contribution would affect fourth-quarter revenue and profitability compared with the third quarter.
In the D&PD base business, which includes standalone and integrated programs, net sales rose 24% year over year in the first nine months. Wojczewski said stronger sales were beginning to convert into revenue in shorter-cycle work, particularly in discovery and Cyprotex.
He described 2025 as the likely trough for net sales and 2026 as the likely trough for revenue, reflecting the delay between orders and recognized sales. Hinshelwood said some previously delayed conversion was contributing to this year’s outlook, with the remainder expected to flow into 2027.
Vertex Manufacturing and Cost Reductions
Evotec plans to add a third manufacturing train at its J.POD Redmond facility in 2027. The expansion is intended to support Vertex and other customers, though installation will require a temporary pause in manufacturing. Hinshelwood said the associated revenue impact is included in the company’s mid-range plan.
Some capital spending on the project occurred in 2026, with the remainder expected in 2027. Hinshelwood said total capital expenditure next year should remain broadly in line with 2026. Wojczewski said the investment did not represent a change in strategy and that Evotec was not contemplating another manufacturing expansion through 2030.
Separately, the company said its Horizon restructuring program had delivered more than 20% of its targeted €75 million in annual run-rate savings by the end of September, ahead of its plan to deliver 20% to 30% during 2026. About 400 of a planned 800 workforce reductions had been implemented. Three of four planned site closures are expected by year-end, with the fourth following in the first quarter of 2027.
Path to 2030
Evotec reiterated its ambition to generate approximately €1 billion in annual group revenue by 2030 and reach a 20% adjusted EBITDA margin by the end of 2028, rising above 20% by the end of 2030.
Management outlined a projected 2030 revenue mix of approximately €400 million from the D&PD base business, €200 million from strategic partnerships and innovation, and €400 million from JEB. The company said its strategic partnership assumptions are risk-adjusted and do not include future royalty income through 2030.
Wojczewski also said Evotec was generating work and revenue with AI-focused drug discovery companies, including through data generation. Asked about the company’s separate strategic review, he said it remained ongoing.
About Evotec (NASDAQ:EVO)
Evotec SE is a Germany-based biotechnology company that provides drug discovery and development services to pharmaceutical, biotechnology and academic research organizations. The company combines scientific expertise, proprietary technologies and integrated research platforms to identify and advance potential medicines across multiple therapeutic areas, including neuroscience, oncology, metabolic disease, infectious disease and inflammation.
Evotec’s activities span early-stage target identification, compound screening, medicinal chemistry, pharmacology, preclinical research and selected clinical development services.
