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Evotec (EVO) Rises 12% on $75M Milestone Payment From BMY

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Evotec (EVO - Free Report) achieved substantial progress in its strategic partnership with Bristol Myers Squibb (BMY - Free Report) relating to building a molecular glue-based pipeline. This triggered a performance-based and program-based payment of $75 million payable to the company. Shares rose nearly 12% on Aug 13, likely in response to this announcement.

The partnership was initially entered between Evotec and Celgene (acquired by Bristol Myers in 2019) in 2018 to discover and develop drugs in the field of molecular glue degraders targeting oncology indications. This partnership was further expanded in 2022 for an additional eight years to identify novel molecular glue degraders targeting non-oncology indications as well.

Unlike conventional small molecule therapeutics that require one or even several carefully dosed medications every day, a dose of molecular glue degraders can lead to long-lasting therapeutic effects. Small molecule therapeutics are restricted to the agonistic/antagonistic features of a protein. This restriction does not apply to molecular glues, which ‘massively expand the range of the druggable proteome.’

Year to date, Evotec’s stock has plunged 71.7% compared with the industry’s 4.7% fall.

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EVO and Bristol Myers also have another strategic partnership in place that relates to neuroscience, which has been triggering multiple milestone payments since the onset of 2024. The company earned milestone payments of $25 million, $20 million and $25 million under this partnership, which was announced in January, June and August, respectively. This partnership was initially entered between the two companies in 2016 and expanded last year in March.

Last month, Evotec entered into a multi-year collaboration deal with Pfizer (PFE - Free Report) . Per the deal terms, this partnership with Pfizer will focus on early discovery research for metabolic and infectious diseases that will be carried out at Evotec’s sites in France. However, neither Pfizer nor Evotec disclosed the financial terms of this transaction.

 

Zacks Rank & A Key Pick

Evotec currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the overall healthcare sector is Entrada Therapeutics (TRDA - Free Report) , which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have improved from 34 cents to 13 cents. Estimates for 2025 have improved from $4.06 to $3.21 during the same period. Year to date, shares of Entrada Therapeutics have increased 4.8%.

Earnings of Entrada Therapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. Entrada delivered a four-quarter average earnings surprise of 97.14%.

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