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Mubadala Acquires €200 Million Shares in German Pharmaceutical

Evotec has continuously expanded its operations internationally. WAM
Evotec has continuously expanded its operations internationally. WAM
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Mubadala Acquires €200 Million Shares in German Pharmaceutical

Evotec has continuously expanded its operations internationally. WAM
Evotec has continuously expanded its operations internationally. WAM

Mubadala Investment Company has announced that it is pumping 200 million euros into Evotec SE, a German pharmaceutical company that specializes in drug discovery solutions.

Evotec SE said that it resolved a capital increase from its authorized capital without pre-emptive rights against cash. Evotec will issue a total of 11,478,298 new shares to Mubadala Investment Company and Novo Holdings A/S, increasing Evotec’s cash reserves by €250 million in total.

In this private placement capital increase, Mubadala Investment Company, a sovereign investor with an entrepreneurial mind-set and a long-standing history of strategic investments in the healthcare sector, will invest €200 million to subscribe for approx. 5.6 % of outstanding Evotec shares.

Evotec’s existing shareholder Novo Holdings A/S also will invest €50 million to support Evotec’s accelerated growth ambition and to reinforce its ownership in the company of approx. 11.0% of outstanding shares.

Evotec has developed a unique strategy to become the global leading platform company for the modality-agnostic development of innovative first-in-class and best-in-class therapeutic approaches resulting in a large co-owned pipeline.

Evotec has continuously expanded its operations internationally with more than 3,400 employees at 14 global sites in Germany, USA, France, Italy, UK, and Austria.

By leveraging its proprietary platforms within a comprehensive network of high-value partnerships, Evotec aims to improve global access to more precise and effective medicines. Future investments will accelerate Evotec’s underlying business strategy and enable the company’s next strategic growth phase.

"We welcome Mubadala to our group of strategic investors. There is no reason for us to slow down our mission in spite of the ongoing pandemic. We can and want to grow even faster and see a lot of positive momentum in our business strategy,” said Dr. Werner Lanthaler, Chief Executive Officer of Evotec.

“We are delighted that Mubadala has chosen to invest in Evotec with a long-term view. Also, we are pleased to see that Novo Holdings A/S continues to support our strategy. This investment allows us to further accelerate our strategy to create the world-leading "R&D Autobahn to Cures" from discovery to commercial manufacturing,” Emirates News Agency (WAM) quoted him as saying.

Chief Financial Officer of Evotec Enno Spillner said that with this commitment by existing and new investors, “our liquidity reserves will total more than €500 m.”

“This placement will generate a net cash position of more than €150 m (excluding IFRS 16) with Evotec’s net-debt leverage turning negative (excluding IFRS 16). Our equity ratio will strengthen to above 50%. While maintaining our business outlook for 2020, the very positive impact of this transaction on our balance sheet structure will increase our flexibility and makes us even better prepared for our accelerated global expansion steps."

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China: Consumer Prices Rise in August, PPI Stuck in Deflation

A woman shops in a supermarket, Beijing, China, Sept. 9, 2024 (EPA)
A woman shops in a supermarket, Beijing, China, Sept. 9, 2024 (EPA)
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China: Consumer Prices Rise in August, PPI Stuck in Deflation

A woman shops in a supermarket, Beijing, China, Sept. 9, 2024 (EPA)
A woman shops in a supermarket, Beijing, China, Sept. 9, 2024 (EPA)

China's consumer inflation accelerated in August to the fastest pace in half a year but the uptick was due more to higher food costs from weather disruptions than a recovery in domestic demand as producer price deflation worsened.

A sputtering start in the second half is mounting pressure on the world's second-largest economy to roll out more policies amid a prolonged housing downturn, persistent joblessness, debt woes and rising trade tensions.

The consumer price index (CPI) rose 0.6% from a year earlier last month, versus a 0.5% rise in July, data from the National Bureau of Statistics (NBS) showed on Monday, but less than a 0.7% increase forecast in a Reuters poll of economists.

Extreme weather this summer from deadly floods to scorching heat has pushed up farm produce prices, contributing to faster inflation, Reuters reported.

China's affected crops due to various natural disasters totaled 1.46 million hectares in August, state media reported on Monday.

“The higher CPI in August was due to high temperatures and the rainy weather,” NBS statistician Dong Lijuan said in a statement.

Food prices jumped 2.8% on year in August from an unchanged outcome in July, while non-food inflation was 0.2%, easing from 0.7% in July.

“But the rebound was softer than expected and did little to ease deflation concerns. Much of the improvement has been food reflation, which is susceptible to fluctuating weather conditions and capacity changes,” said Junyu Tan, North Asia Economist at Coface.

Core inflation, excluding volatile food and fuel prices, was 0.3% in August - the lowest in nearly three and a half years - down from 0.4% in July.

The consumer inflation gauge was up 0.4% month-on-month, compared with a 0.5% increase in July and missing economists' expectations of a 0.5% gain.

In unusually strong comments, China's ex-central bank governor Yi Gang urged efforts to fight deflationary pressure at the Bund Summit in Shanghai last week.

A national campaign to earmark $41 billion in ultra-long treasury bonds to support equipment upgrades and trade-in of consumer goods has proven lukewarm in spurring consumer confidence, with domestic car sales extending declines for a fourth month in July.

“These policies will take time to filter through, so a demand-led reflation is obviously not yet on the horizon,” Tan said.

Meanwhile, the producer price index (PPI) in August slid 1.8% from a year earlier, the largest fall in four months. That was worse than a 0.8% decline in July and below a forecast 1.4% fall.

“The ongoing deflationary pressures boil down into a broader problem of production surplus, which is still outstripping demand,” said Tan.

China's yuan dipped against the dollar on Monday as long-dated yields hit record lows after monthly inflation data added to economic worries and calls for fresh easing.