Evotec acquires metabolic diseases specialist DeveloGen for €14M

Acquisition

Evotec AG is to acquire DeveloGen, which is developing treatments for metabolic and endocrine disorders, for up to €14 million in shares, plus performance-related deferred payments.

The acquisition of DeveloGen, a spin-out from the Max-Planck-Institute of Biophysical Chemistry, in Göttingen, broadens Evotec’s portfolio of alliances, bringing in a collaboration with Boehringer Ingelheim on small molecules to treat Type II diabetes. Evotec is eligible to receive ongoing research funding and may earn potential milestone payments of up to €237 million for the lead compound, plus royalty payments on sales of any product.

The acquisition also brings Evotec a development partnership with Andromeda on DiaPep277, a synthetic peptide immunomodulator to treat Type I diabetes, which is in Phase III clinical development. Evotec is eligible to receive royalties upon commercialisation of DiaPep277 products, plus other milestone payments.

The acquisition complements Evotec’s drug discovery platform and capability, bringing in target discovery, validation and in vivo/in vitro pharmacology expertise and adding core disease biology know-how in metabolic diseases.

DeveloGen’s growth factor targeting beta cell regeneration for treating both Type I and Type II diabetes is in lead optimisation. The product, which has been funded by the Juvenile Diabetes Research Foundation, forms part of the transaction. The most advanced lead, DG770, triggers beta cell proliferation and neogenesis and has demonstrated efficacy and safety in various preclinical models.

“Through the acquisition of core DeveloGen assets and its disease biology know-how in metabolic disorders, Evotec broadens its portfolio of high-value partnerships and adds substantial potential for milestone payments over the next years,” said Werner Lanthaler, Chief Executive Officer of Evotec AG.

“Importantly, we are acquiring this value potential for our shareholders without assuming many of the risks associated with such transactions. Of the initial purchase price almost half will only be released following the achievement of defined company goals and an earn-out component secures that the additional consideration will only be paid if the programmes acquired generate revenues.”