Halozyme Therapeutics

Halozyme Therapeutics offers €2 billion to acquire Evotec SE, aiming to combine Halozyme’s drug delivery expertise with Evotec’s drug discovery capabilities, accelerating biologic drug development and expanding global access to affordable treatments. The acquisition, backed by Halozyme’s strong financial position, targets faster market delivery of breakthrough therapies and addresses unmet medical needs in oncology, neurology, and infectious diseases.

Evotec, a dual-model biotech company facing financial struggles, has attracted acquisition interest from Triton Partners and Halozyme Therapeutics. Despite Evotec's preference for independence, the company's unique position as both a service provider and asset developer raises concerns about its future role in the biotech industry if acquired.

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Merck's subcutaneous Keytruda, combined with chemotherapy, proved as effective as the IV version in a late-stage trial, crucial as patent protection nears expiration. Keytruda's $25 billion in sales last year made it the bestselling drug, representing over 41% of Merck's total sales. Competition heats up with Roche's subcutaneous Tecentriq Hybreza and Bristol Myers Squibb's potential subcutaneous Opdivo. Merck's shares rose 2% following the subcutaneous data release.

Merck's subcutaneous Keytruda showed similar characteristics to IV formulation in a Phase 3 trial. The company plans to discuss trial data with FDA and other regulators. Keytruda's U.S. patent expires in 2028, opening the door to biosimilar competitors. Rival Roche has FDA approval for subcutaneous Tecentriq, while Bristol Myers awaits FDA decision on subcutaneous Opdivo. Merck aims to sustain Keytruda's revenue, which reached nearly $22 billion in the first nine months of 2024, by transitioning to a more convenient subcutaneous shot.

Halozyme offers €2 billion cash for Evotec, aiming to create a $2 billion revenue company by 2025 with complementary platforms and growth potential.

Halozyme proposes to acquire Evotec for €11.00 per share, creating a leading global pharma services company with capabilities in drug discovery, biologic manufacturing, and drug delivery technologies, diversifying and scaling Halozyme's revenue and EBITDA into the next decade. The all-cash transaction would be funded by cash on hand and new debt, with expected net leverage less than 2x two years post-close.

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