Evotec falls as U.K. writedown, expansion costs drive 9-month loss

By Geoffrey Smith 

Investing.com -- Evotec (ETR:EVTG) stock fell over 10% in early trade in Frankfurt on Wednesday after the German pharma company swung to a loss in the first nine months of the year, due to heavy investment costs, rising energy bills and a big impairment charge on its U.K. investment Exscientia (NASDAQ:EXAI).

The group maintained its profit guidance for the full year but depended largely on the euro's depreciation for that. Full-year earnings before interest, taxes, depreciation and amortization are still seen at €105 - €120 million (€1 = $1.0059), roughly in line with 2021's €107M. However, at constant exchange rates, this year's earnings would fall to between €85 - €100M.

The bottom line showed a net loss of €148M, compared to a profit of €247M a year earlier, due to high expenses for investment in capacity expansion, as well as wihat it called "significantly inflated energy costs" and "lower contribution from milestones, upfronts and licenses."

In addition, the writedown of its stake in Oxford-based AI specialist Exscientia generated a non-cash charge of €120M. 

The picture looked better at the basic operating level, although Adjusted EBITDA for the first nine months of the year also fell to €45M from €70M a year earlier, while the group still forecasts annual EBITDA of over €300M by 2025.

By 04:00 ET (09:00 GMT), Evotec stock was down 10.2%. The biotech company is off nearly 40% from its 2021 peak this year as growth stocks have fallen out of favor with investors in an environment of sharply rising interest rates.