Halozyme Therapeutics has bid to buy Evotec for around 2 billion euros ($2.1 billion). Evotec confirmed it received an offer and said it is analyzing the proposal before deciding on the next steps.
News of the offer arrived days after Bloomberg reported that the private equity group Triton Partners, which has built an almost 10% stake in Evotec, was weighing a move to acquire the drug discovery shop. The flurry of interest follows a year in which Evotec’s share price has plummeted. That decline allowed Halozyme to offer a 27.5% premium over Evotec’s last close price and still barely break $2 billion.
Halozyme has built a business on Enhanze, the drug delivery technology that enables the subcutaneous administration of products including Johnson & Johnson’s Darzalex. The composition of matter patent on Enhanze expires in 2027.
Based on co-formulation patents, Halozyme expects to continue to receive royalties on products that use Enhanze for years after 2027. Some royalty streams will dry up by 2030 but Halozyme expects others to continue into the next decade and, in one case, beyond. Even so, the company has begun preparing for life after Enhanze.
Halozyme bought auto-injector specialist Antares Pharma for about $960 million in 2022 and said late last month that it was continuing to “evaluate opportunities to accelerate and extend revenue.” Buying Evotec would give Halozyme other revenue streams.
Helen Torley, Halozyme’s CEO, explained the offer in a statement. Buying Evotec would “diversify and extend Halozyme revenue and EBITDA growth and durability well into the next decade and beyond,” Torley said. Evotec's drug discovery platform would become a center of excellence, Halozyme said, and its manufacturing platform would complement Enhanze.
Germany’s Evotec has used its capabilities to build a pipeline of partnered programs. Halozyme said its cash generation would “support continued reinvestment into Evotec's earlier stage programs and new technologies.”
Evotec’s share price opened up almost 20% in Europe on Friday. At 10.30 euros, the stock is trading a little below Halozyme’s offer. There is scope for the share price to climb higher still, particularly if Triton or another party makes a move for Evotec. Halozyme said its offer represents a 109% premium over Evotec’s share price before Triton started buying stock.