Workforce reductions for the first half of August outpace May, June and July’s monthly totals.
German biotech Evotec will potentially cut 400 roles globally, the company announced on Wednesday. It’s the latest in a string of biopharma layoffs that BioSpace has reported this week. We’ve noted 10 workforce reductions so far, tied with the week of Feb. 26 for the most layoffs in a single week in 2024. The new announcements bring August’s total to 17 companies so far announcing layoffs, already outpacing May, June and July’s monthly totals, and we’re only halfway through the month.
If layoffs don’t slow in the next two weeks, August will reach levels seen earlier this year. BioSpace reported at least 20 companies announcing workforce reductions each month from January through April, with a high of 27 in January.
The numbers likely won’t surprise biotech and pharma professionals, as nearly half (43%) of those surveyed are unemployed, according to a BioSpace job trends report released last month. The report also noted that almost a quarter of surveyed companies (21%) anticipated making layoffs in the second half of this year.
Potential Evotec Layoffs Reflect Challenging First Half
According to a Wednesday SEC filing, there are more than 5,000 employees at Evotec, which offers pipeline co-creation partnerships and contract research organization/contract development and manufacturing services for drug discovery and development. If the company cuts 400 roles, that would amount to around 8% of its workforce, which includes employees at Evotec’s U.S. headquarters in Princeton, N.J.
In its Wednesday announcement, Evotec reported that total shared R&D revenue for the first six months of 2024 was down 7% year over year. It dropped from 324.8 million euros ($357.6 million) for the first half of 2023 to 302.4 million euros ($332.9 million) for the same period this year.
Evotec CEO Christian Wojczewski noted in the announcement that revenue and profitability have been more challenging than expected for the first six months of 2024.
“We are operating in a more difficult market environment, most notably the slowdown of early-stage R&D spending,” he said. “This has required us to accelerate our transformation towards sustainable profitable growth, leveraging better on our strengths, driving productivity, reducing complexity and making the organisation stronger for its next growth phase.”
Some of the challenges of the first half came in the first three months of the year, according to a May announcement. The company reported that first-quarter total shared R&D revenue decreased by 23% compared to the same period last year due to a tough market environment for transactional business. It also noted it had finished closing chemistry activities in Marcy (Lyon), France, and would shut down its Orth, Austria, site, exiting gene therapy.
That said, Evotec has reported positive financial results this year. In its Wednesday announcement it noted that for the first half of 2024, Just-Evotec Biologics revenue increased by 50% year over year, hitting 88.5 million euros ($97.4 million). Group revenue rose 2% year over year, reaching 390.8 million euros ($430.2 million).
Also of note, Evotec announced on Tuesday progress in its strategic partnership with Bristol Myers Squibb relating to building a molecular glue–based pipeline. The company noted that performance- and program-based achievements have triggered $75 million in payments to Evotec.
