Investing.com — shares tumbled as much as 32% on Tuesday after the German life sciences group slashed its 2026 outlook, reporting a wider-than-expected first-half loss and pushing back revenue from key strategic partnerships into 2027.
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Evotec said preliminary group earnings before interest, tax, depreciation and amortization (EBITDA) for the first six months of 2026 came in at a loss of 42.7 million euros, compared with a loss of 1.9 million euros a year earlier. Preliminary group revenue fell to 300.1 million euros from 371.1 million euros.
The company cut its full-year revenue guidance to a range of 570 million to 610 million euros, down sharply from its prior forecast of 700 million to 780 million euros, a cut of roughly 150 million euros, or 20%.
It also widened its expected annual EBITDA loss to between 70 million and 105 million euros, compared with a previous forecast ranging from a loss of 40 million euros to breakeven.
Evotec attributed the shortfall to delays in high-margin strategic partnerships rather than weakness in its core contract research business.
The company said 40% of the revenue gap stemmed from revised phasing and milestone schedules on existing partnerships, 45% from slower-than-expected progress in signing new strategic partnerships, and 15% from previously planned 2027 business that management now says was too ambitious to pull forward into 2026.
Chief executive Christian Wojczewski described a “challenging start to the year” but pointed to early signs of recovery, saying the company was in advanced discussions with “several well-established partners” across renal disease, oncology, women’s health and obesity programs.
Analysts at BofA Global Research, who maintained their “underperform” rating and $3 price objective on the stock, said the pre-announcement reflected clear execution challenges at the company rather than a broader downturn in outsourced drug development demand.
“We view the announcement as specific to EVO rather than indicative of a broader slowdown in CRO demand,” BofA analysts said, adding that Evotec’s own commentary on improving underlying market conditions was consistent with a healthier funding and booking backdrop the bank has observed elsewhere in the contract research sector.
The broker noted that Evotec’s Discovery & Preclinical Development segment, excluding strategic partnerships, grew net sales 28% in the first half and accelerated further in the second quarter, a trend management linked to broader improvement in market conditions.
The analysts also flagged strong capacity utilization and a growing customer base at Evotec’s Just-Evotec Biologics unit, though it said this pickup in commercial activity would not show up meaningfully in revenue until the fourth quarter and 2027.
BofA also pointed to Evotec’s ongoing “Horizon” cost-reduction program, which remains on track toward an annual run-rate savings target of 75 million euros by the end of fiscal 2027, with 20-30% of those savings expected to benefit 2026.
Even so, the analysts said Tuesday’s guidance cut demonstrated that “cost savings alone cannot offset revenue volatility.”