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- **Landmark Sandoz Deal**: EUR 350 million upfront + EUR 650 million+ future payments for JEB's continuous manufacturing tech, shifting to high-margin licensing.
- **Cost Efficiency**: EUR 60 million+ cost cuts in 2025, with 33% R&D spending reduction to EUR 27.7 million.
- **Pipeline Momentum**: 4 Phase II assets in 2026, EUR 16 billion+ milestone potential, and 100+ partnered projects.
- **AI/Science Leadership**: 90%+ predictive accuracy in safety tox, expanded molecular database, and J.POD licensing to Sandoz.
- **Mixed Market**: JEB non-Sandoz growth 105%, but D&P&D faces softness with cautious biotech spending.

**【CEO Summary Section】**
- Group revenues for the first 9 months of 2025 were EUR 535.1 million, a 7% decline year-over-year, driven by a 12% decline in D&P&D (Drug Discovery and Preclinical Development) business. However, Just-Evotec Biologics (JEB) grew 11% to EUR 143.2 million.
- The company announced a landmark deal with Sandoz, including a EUR 350 million upfront payment and potential future revenues of over EUR 650 million from technology licensing, development, and royalties.
- Cost-cutting initiatives aim to achieve EUR 60 million in 2025 and an additional EUR 50 million in future years. Negative change orders in D&P&D normalized in Q3, with proposals up 20% over the past two quarters.
- The partnered asset pipeline now includes 4 molecules expected to enter Phase II clinical trials in 2026, with a non-risk-adjusted milestone potential of over EUR 16 billion.

**【CFO Financial Commentary】**
- Adjusted EBITDA for the first 9 months was negative EUR 16.0 million, reflecting weaker D&P&D revenues and fixed costs. Free cash flow improved 14% year-over-year despite one-time payments.
- JEB's non-Sandoz and non-DoD (Drug Optimization) business grew 105%, outpacing Sandoz's low-single-digit growth. The transaction with Sandoz is expected to strengthen liquidity post-closure.
- R&D spending decreased 33% to EUR 27.7 million, redirected to strategic partnerships. The company reaffirmed 2025 guidance of EUR 760-800 million revenue and EUR 30-50 million EBITDA.

**【CSO Scientific Update】**
- Evotec's AI-enabled platforms (e.g., E.INVENT, AE safety tools) achieved predictive accuracies of over 90% for liver and cardiotoxicity, driving partnerships and pipeline growth.
- The molecular patient database expanded into kidney, obesity, and immunological diseases, supporting strategic deals and milestone payments.
- The J.POD continuous manufacturing platform was licensed to Sandoz, with potential for further cell line and media licensing. Over 100 partnered assets, 60% in strategic collaborations, target EUR 500 million in returns by 2028.

**【Q&A Highlights】**
- **Sandoz Deal Impact**: The transaction reduces manufacturing CAPEX, shifting to high-margin licensing. 2/3 of future payments will be development-related, with 1/3 from milestones and royalties.
- **D&P&D Outlook**: While green shoots (20% increase in proposals) suggest stabilization,2026 growth remains uncertain, with cautious spending from biotech customers.
- **NAMs Adoption**: Pharma interest in early-stage NAMs is rising, but revenue acceleration is expected in 12-24 months as platforms industrialize.
- **2028 Trajectory**: Mid-term targets of 8-12% revenue CAGR and >20% EBITDA margin are achievable, with JEB leading growth and D&P&D recovery.


Evotec SE (EVO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

EVO

EVO fundamentals

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