Halozyme Provides Update on Non-Binding Proposal to Combine with Evotec
Would establish an innovative pharma services company with capabilities spanning drug discovery and development, biologic manufacturing and drug delivery technologies
Would meaningfully diversify, scale and extend
All-cash transaction would be funded by cash on hand and new debt with expected pro forma net leverage less than 2x two years post close
The presentation highlights include:
The acquisition of Evotec would be a logical extension and diversification of
- De-risked business: Evotec has a large, diverse revenue base with expected future revenue and margin expansion opportunities.
- Structurally similar business model: Evotec has a proprietary and innovative platform of technologies in drug discovery, development and biologic manufacturing.
- Strong biopharma partnerships: Evotec partners with more than 500 biopharma companies globally.
- Potential for durable long-term revenue growth: Evotec has platform opportunities and a pipeline that would be additive to future potential revenue streams.
The combination would create a unique B2B global innovative pharma services company with complementary and leverageable platforms and cross-selling opportunities:
- Drug discovery: Evotec's Shared R&D platform is an established and comprehensive continuum of innovative discovery platform tools with a strong track record of success and more than 500 partners and 140+ partnered and unpartnered asset opportunities.
- Continuous biologics manufacturing: Just – Evotec Biologics is a pioneer in end-to-end continuous manufacturing, a breakthrough biologic manufacturing capability with 10 products in late-stage development and clinical manufacturing and more than 50 products in CMC development/IND enabling.
- Drug delivery:
Halozyme's ENHANZE® drug delivery technology is the leading, commercially-validated solution to facilitate the subcutaneous delivery of large volume injected biologic drugs, currently approved in eight products in more than 100 global markets, with expected near-term approvals, a robust pipeline in development and new deal opportunities.
The combination would
meaningfully diversify, scale and extend
- Establishes a diversified pharma services portfolio with approximately
$2 billion in annual revenue projected in 2025. - Enhances long-term growth profile and maintains 15-20%+ 2023A – 2028E revenue CAGR while extending and accelerating growth into the next decade and beyond.
- Delivers robust long-term margin profile with a pro forma 45- 50% adjusted EBITDA margin by 2026 and significant cash flow generation over time.
The all-cash transaction would be supported by an existing lender group with a clear path to less than 2x net leverage within two years post-close.
-
Halozyme has significant cash reserves on-hand and a strong balance sheet with cash projected to be more than$800 million at year-end 2024.The transaction would not be subject to a financing condition. -
Halozyme is working with financing relationship partners on optimal financing structure and confirms equity will not be used to finance the transaction. - Assuming a transaction is consummated, net debt on balance sheet at close would be approximately
$3 billion , with a significant portion prepayable, and net leverage for funding at transaction close projected to be less than 4.75x. - Net leverage is expected to decrease to less than 2x within two years post-close and quickly reducing meaningfully below that level through debt paydown and adjusted EBITDA growth, with additional multiple levers to further accelerate debt paydown over time.
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Forward-Looking Statements
In addition to historical information, the statements set forth in this press release include forward-looking statements including, without limitation, statements concerning the Company's and Evotec's expected future financial performance and growth rates, including expectations for future total revenues, gross margin expansion, and adjusted EBITDA margin, as well as the Company's future plans, objectives, expectations and intentions relating to a potential transaction concerning Evotec, such potential transaction's expected impact and contributions to the Company's and the combined group's operations and financial results, the financing and closing of such potential transaction, as well as the expected timing and benefits of such potential transaction, the Company's and Evotec's future product development and regulatory events and goals, product collaborations, the Company's business intentions and financial statements and anticipated results. These forward-looking statements are typically, but not always, identified through use of the words "expect," "believe," "enable," "may," "will," "could," "can," "durable," "growth," "innovate," "potential," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in these forward-looking statements as a result of several factors, including uncertainties concerning future matters such as market conditions, changes in domestic and foreign business changes in the competitive environment in which the Company and Evotec operate, discussions with Evotec and its board of directors, and financing a potential transaction, inability of the parties to successfully or timely enter into or consummate a transaction, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined group or the expected benefits of a transaction, unexpected levels of the combined group's revenues, expenditures and costs, unexpected results or delays in the growth of the combined group's business, or in the development, regulatory review or commercialization of the combined group's partnered or proprietary products, regulatory approval requirements, unexpected adverse events or patient outcomes and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the
Non-GAAP Financial Measures:
These materials contain certain non-GAAP financial measures and projections. The Company reports Adjusted EBITDA, Adjusted EBITDA Margin and non-GAAP diluted earnings per share and expectations of those measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company does not provide reconciliations for forward-looking adjusted measures to GAAP, including as to the projected benefits of the potential transaction concerning Evotec, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation.
Halozyme Contacts
Investors
Tram Bui
Halozyme VP, Investor Relations and Corporate Communications
609-359-3016
tbui@halozyme.com
Teneo
917-826-3804
andrea.calise@teneo.com
Teneo
646-531-2882
christina.coronios@teneo.com
German Media
Teneo
+49 69 867906054
Press-halo@teneo.com
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