San Diego biotech firm Halozyme Therapeutics is walking back its proposed $2.1 billion acquisition of Evotec, saying the German drugmaker doesn’t want to be bought.
The local company announced Friday morning at 5:35 a.m. that it was withdrawing its bid to buy Evotec for about $11.52 per share. Halozyme’s change of plans comes only a week after the proposal was announced.
Halozyme’s CEO, Helen Torley, explained in the latest announcement that the company did months of external research prior to engaging with Evotec about a takeover. Then the local company said it tried to meet with Evotec’s board chair, but “multiple requests to meet were not accepted.”
“We continue to believe that a combination of Halozyme and Evotec would create a leading, differentiated, global pharma services company, benefitting shareholders, patients and employees,” Torely said. “However, to date, Evotec has been unwilling to engage with us to explore a potential combination and a company spokesperson has publicly commented that its goal is to remain an independent company.”
She continued to say that after the meetings were denied, “a formal bona fide proposal to the CEO was the only way to convey that our interest in exploring a potential transaction was strong, credible and well informed.”
“It has now become evident that there is no interest at this time on the part of Evotec’s Supervisory and Management Boards to engage constructively with Halozyme and explore a potential transaction,” Torley said.
The Carmel Valley biotech develops biopharmaceutical technology, such as its lead product Enhanze, to deliver medicines faster to patients via intravenous drips or shots. Halozyme’s business is centered on licensing this technology to major drugmakers such as Roche, Bristol-Meyers Squibb and Eli Lilly.
Torely concluded her statement by reiterating Halozyme’s growth strategy, which includes aiming for 10 approved products with Enhanze next year and $1 billion of royalty revenue in 2027.
Evotec focuses on drug discovery and manufacturing, and it also partners with hundreds of big pharmaceutical companies.
On Monday, Torley was speaking with national business outlet Bloomberg about why Halozyme wanted to pursue the deal. At the time, she said it would allow her company to increase revenue through the next decade, expand big pharma partnerships and attract new customers through Evotec.
When the $2.1 billion takeover bid made headlines last week, Evotec issued a statement acknowledging it received Halozyme’s letter addressed to shareholders of the company and dated Nov. 13, “without prior .”
The Hamburg, , company said it would “carefully analyze this expression of interest, decide on next steps, and inform the capital market in accordance with the legal requirements.”
In response to Halozyme’s withdrawal Friday, Evotec issued another statement saying it has been in the process of accessing the non-binding proposal with its advisers.
“The Management Board and Supervisory Board continue to have strong conviction in the company’s standalone strategy, which is expected to accelerate growth, strengthen the long-term profitability of the company and deliver significant value to shareholders,” Evotec said in the statement.
Investors were reluctant about the transaction from the get-go, worrying it would dilute Halozyme’s stock value and deplete cash on hand. Halozyme’s stock closed at $58.61 on Nov. 13, before the deal was announced, and closed Thursday at $45.70. That’s about a 22% decline within one week.
Following the news that Halozyme would not move forward with the deal, its stock closed at $49 per share, up about 7% from Thursday.
