Following lower-than-expected profits, Evotec plans to cut costs, completes CEO search

Evotec announced a “reset” to its business plan as it reported financial results Wednesday, following a year in which many contract drug manufacturers have struggled.

Mario Polywka

The German company also announced that Christian Wojczewski will join as its new CEO at the start of July. Wojczewski, who was previously the CEO of Dutch healthcare company Mediq, will replace Evotec’s interim leader Mario Polywka. Polywka served as Evotec’s chief operating officer for 13 years until 2018, and took the interim CEO role in January, when longtime Evotec head Werner Lanthaler resigned.

While Evotec’s 2023 sales were in line with expectations, profits were lower than what Wall Street projected because of higher-than-anticipated costs, according to Jefferies analyst Benjamin Jackson. However, the company’s biologics unit did better than anticipated.

Evotec’s stock $EVO fell more than 30% on Wednesday after the announcement.

The company also cut costs with the goal of improving margins by more than €40 million a year.

Evotec said it plans to review its financial guidance once its new CEO joins and provide an update with its earnings report for the first half of 2024.

Market challenges 

Evotec said 2023 was challenging for several reasons, including lackluster market conditions and a cyberattack that hit the company last April.

Matthias Evers

When asked about signals that suggest the market could be recovering in 2024, chief business officer Matthias Evers said during a call with investors that while there has been some reason for optimism, the company is remaining cautious. “Because we also sometimes hear a little bit of wishful thinking on very early signals, and that’s the last thing we want to do,” Evers said.

Evotec is a competitor to WuXi, and could potentially benefit from the Biosecure Act, which would ban US companies from working with the Chinese life sciences contractor.

“We are ready to serve partners with our global footprint, with our footprint in the US and Europe,” Evers said, echoing comments he previously made to Endpoints News.

“We see a shift in discussions,” Evers said. “I think more pronounced on our Evotec Biologics front, where I think we get more [requests for information], interest, exploration — so it’s early days, but we see a markable shift.”