Can Milestone Payments Offset Evotec's (XTRA:EVT) Sales Decline in Its Neuroscience Collaboration?

Evotec SE reported its third-quarter 2025 results, showing quarterly sales of €163.89 million and a net loss of €43.09 million, alongside news that it received a US$25 million payment from Bristol Myers Squibb for progress within their neuroscience collaboration. While sales declined year-over-year in the quarter, Evotec’s ongoing partnership achievements underscore the company’s ambitions in innovative drug discovery for neurodegenerative diseases. We'll examine how milestone payments for R&D collaborations, such as Evotec’s neuroscience partnership with Bristol Myers Squibb, influence its investment narrative.

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Evotec Investment Narrative Recap

To be a shareholder in Evotec, you need conviction in its long-term vision of expanding value through major pharma partnerships and innovative drug discovery platforms, despite ongoing losses and market uncertainties. The latest neuroscience milestone payment from Bristol Myers Squibb supports Evotec’s collaboration-driven approach, but it is not a material short-term catalyst and does little to offset the key near-term risk, persistent headwinds in early-stage biotech funding, which continue to pressure core revenue streams.

Among recent announcements, October’s US$25 million payment from Bristol Myers Squibb stands out for illustrating Evotec’s dependence on partnership-driven milestone revenues to fund future R&D and offset earnings volatility. This highlights that the success of large collaborations plays an outsized role in shaping Evotec’s pipeline progress and financial resilience relative to sector peers.

However, against the promise of new science and recurring payments, investors should not overlook the risk that relies heavily on a handful of large partners...

Read the full narrative on Evotec (it's free!)

Evotec's narrative projects €988.4 million revenue and €53.9 million earnings by 2028. This requires 8.3% yearly revenue growth and a €209.4 million earnings increase from the current earnings of €-155.5 million.

Uncover how Evotec's forecasts yield a €9.47 fair value, a 63% upside to its current price.

Exploring Other PerspectivesXTRA:EVT Community Fair Values as at Nov 2025

Simply Wall St Community members have estimated Evotec's fair value between €9.47 and €51.09 across five analyses. This wide range reflects the significant impact that major partner dependence and milestone variability can have on performance, so it's worth comparing several viewpoints.

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Explore 5 other fair value estimates on Evotec - why the stock might be worth just €9.47!

Build Your Own Evotec Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

A great starting point for your Evotec research is our analysis highlighting 2 key rewards that could impact your investment decision. Our free Evotec research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Evotec's overall financial health at a glance.

No Opportunity In Evotec?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include EVT.DE.

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