Evotec SE and Sandoz AG have signed a non-binding term sheet for the potential sale of the Just-Evotec Biologics facility in Toulouse, France, in a transaction valued at approximately $300 million that marks a significant strategic shift for the German drug discovery company.
The proposed deal would transfer Evotec's biosimilar manufacturing capabilities to Sandoz, including access to the company's proprietary continuous manufacturing technology platform. Beyond the $300 million cash purchase price, the agreement includes additional technology-related considerations, future development revenues, milestones, and product royalties.
Strategic Asset-Light Transformation
The transaction represents a major milestone in Evotec's strategy to create an asset-lighter business model that leverages high-margin technology offerings. Dr. Christian Wojczewski, Chief Executive Officer of Evotec, emphasized the strategic importance of the deal: "Today's agreement marks a significant milestone in Evotec's new strategy to refocus on its core strengths and deliver sustainable profitable growth."
The planned transaction is expected to immediately improve Evotec's short-, mid-, and long-term revenue mix, profit margins, and capital efficiency. Under the proposed terms, Sandoz would assume full ownership of the Toulouse site while Evotec retains economic upside through various revenue streams and royalty arrangements.
Continuation of Strategic Partnership
The facility sale builds on an existing collaboration between the two companies. The Toulouse site has been customized and dedicated entirely to Sandoz since July 2024, following an agreement that granted Sandoz long-term commercial supply access to the facility. This transaction represents the natural next step in their multi-year strategic partnership.
Dr. Linda Zuckerman, EVP and Global Head of Just-Evotec Biologics, highlighted the technology validation aspect: "We are thrilled to see our technology and vision further validated through this transaction. Just-Evotec Biologics and Sandoz are united in our missions to broaden global access to life-changing biotherapeutics."
Advanced Manufacturing Technology
Central to the deal is Evotec's perfusion-based continuous manufacturing platform, which the company positions as unlocking greater efficiency, scalability, and agility in biologics production. Sandoz will gain access to this proprietary platform for integrated development and advanced continuous manufacturing of biologics through a technology license.
The transaction remains subject to completion of relevant information and consultation processes with employees and their representatives, final contractual agreements, and meeting regulatory requirements. Closing is expected in the fourth quarter of 2024, with further deal terms to be disclosed after successful contract signing.
This strategic move allows Evotec to maintain its core biologics business while transitioning to a more capital-efficient model that better leverages its technology and intellectual property assets. The company describes the agreement as testament to its ability to leverage technology advantages to shape a new segment in the fast-growing biologics manufacturing market.
