Halozyme Therapeutics (HT) is a biopharmaceutical company based in California that specialises in developing disruptive drug delivery technologies and oncology therapies designed to target the tumor microenvironment. The acquisition of Evotec aims to strengthen HT’s drug discovery and development portfolio and complement HT’s overall market position as a leader in rapid subcutaneous drug delivery. A spokesperson from the German-based company Evotec after the initial offering stated, ‘’We will carefully analyse this expression of interest, decide on next steps, and inform the capital market of the legal requirements’’. The financial advisor that is acting on this deal is Centerview Partners, serving Halozyme.
Halozyme differentiates itself with its top consumer choice offering called Enhanze, which enables biologic drugs to be administered as subcutaneous injections that are extremely quick, taking a few minutes. As compared to previous products, other biological medicines are used as intravenous infusions that go into the patient’s body and can take more than an hour to fully utilise. As both companies combine their innovative technologies and market presence (both in the US/Europe ecosystem), a stronger pipeline of consumers is created. Evotec’s consumers include Bristol Myers Squibb, Sanofi and Novartis.
Evotec has had a poor year, with shares falling towards 59% and investors seeing the stock as ‘unreliable’. They were the target of a cyberattack last year that temporarily shut down operations and they are now looking to cut out more than 400 employees. Moreover, their share price has declined from $11.40 to $4.13, and they have looked towards a business reset, exiting the gene therapy space, and selling an active pharmaceutical ingredient place. This has attracted interest from private equity buyout companies such as Triton Partners, which has recently increased its stake in Evotec to close to 10%.
Regarding the key financials, Halozyme has formed a non-binding proposal to buy all shares in Evotec at a 27.5% premium to Evotec’s last close price. Furthermore, each share will be purchased at $11.60, and the deal will be an all-cash transaction. As there will be no debt contributed to the deal, shareholders will be boosted in the capital structure of the newfound company. As part of the post-deal transaction, US-listed shares of Evotec were up 6.3%, while those of Halozyme were down 5.1% in aftermarket trade. This has led to Halozyme’s market value falling to $6.9bn.
Overall, the deal is extremely innovation-centred, with both companies having the ambition to accelerate the discovery and development of new leading-edge medicines that can improve patient success in combating illness and disease. The expected synergies related to this deal would diversify and extend Halozyme's revenue and EBITDA growth for a much longer-term reach. The deal was announced on 14th November 2024.
Sources: FierceBioTech, MedCityNews, Reuters, MergerLinks
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