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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."

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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.

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