Evotec Gains as Fund Invests $40 Million: Frankfurt Mover

Evotec AG rose the most in more than a year after Biotechnology Value Fund LP invested 30 million euros ($40 million) in the drug development company as its partnerships promise growth.

Evotec advanced as much as 14 percent to 2.98 euros, the biggest intraday gain since July 10, 2012. The stock traded 10 percent higher at 12:40 p.m. in Frankfurt, valuing the company at 342 million euros. Trading volume was more than four times the three-month daily average.

The Biotechnology Value Fund, and other affiliates of the U.S. investor BVF Partners LP, acquired 11.8 million shares in Evotec at a price of 2.55 euros each, Hamburg-based Evotec said in a statement two days ago. The investors also purchased an option from venture capitalist firm TVM capital GmbH giving them the right to acquire a further 11.8 million shares at 4 euros each in the next 30 months.

“The option to buy the shares at 4 euros has clearly created fantasy in the market,” Tim Kruse, a Hamburg-based analyst at Montega AG, said by telephone today.

Evotec has shifted its business focus to very early-stage development, shuttling prospective treatments from academic research to pharmaceutical companies. Within the EVT Innovate unit, Evotec seeks to accelerate innovative drug development ideas by teaming up with universities and research institutes with upfront payments, premium research fees, milestone payments and royalties.

Evotec is “unique in this area,” Kruse said. “This early approach is risky but also yields higher payments.”

Scientists from Harvard University, with whom Evotec is cooperating, have discovered a hormone that holds promise as a novel diabetes treatment, they said at the end of April in the journal Cell.

“The announcement of this target by the scientists might have been the trigger for investors to buy into the company now,” Kruse said.

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