Acquisition of Vidac Pharma and Evotec? USD 400 billion at stake for Pfizer, Merck & Co!

Pfizer, Merck, & Co.: The clock is ticking on billions in losses

Shares in the major pharmaceutical companies have not been a source of joy for investors in recent months. Big Pharma is facing significant challenges - perhaps even a perfect storm. On the one hand, the US government under Donald Trump is exerting massive pressure. Drug prices in what has been the industry's most profitable market are to be significantly reduced, and at the same time, billions are to be invested in the US; otherwise, the tariff hammer could fall. At the same time, billions in sales are at risk as patents on numerous blockbuster drugs expire in the coming years, often with insufficient pipeline replacements.

A prominent example is Merck's flagship immuno-oncology drug Keytruda, a sales driver with global revenues of over USD 29 billion. Its patents are expected to expire in 2028, opening the door to biosimilars. Merck is attempting to counter this with a subcutaneous variant and additional patent extensions, but the potential revenue loss remains enormous. Other Merck blockbusters, such as Lenvima (2025), Lynparza (2027), and Gardasil (2028), are also approaching patent expiration.

Pfizer faces similar pressures. Drugs such as Eliquis, Ibrance, and the pneumococcal vaccine Prevnar are nearing the end of patent protection. In a scenario described by the Company as a "patent cliff," annual revenues are threatened with a decline of up to USD 20 billion. Pfizer has responded in recent years with a frenzied shopping spree, funded by billions in COVID-19 vaccine revenue - though not all investments have succeeded.

These examples are just the tip of the iceberg. Experts estimate that between 2025 and 2030, around 200 blockbuster drugs will lose their patents, putting a cumulative total of over USD 400 billion in pharmaceutical sales at risk. Therefore, the recent acquisitions by Big Pharma are likely to be just the beginning. In the coming years, we are likely to see many more acquisitions of young biotech companies, targeted licensing agreements, or aggressive life cycle strategies (e.g., new dosage forms, combinations, "evergreening"). As a result, small- to mid-sized biotech companies are likely to outperform large corporations on the stock market in terms of pharmaceutical investments. Are Vidac Pharma and Evotec among the potential takeover candidates?

Vidac Pharma: Analysts see multiplication potential

While many biotech stocks in oncology have been in the spotlight recently, Vidac Pharma has largely flown under the radar - which may be precisely what makes it attractive to larger pharmaceutical companies. The development pipeline is now entering a critical phase, and with a market capitalization of less than EUR 30 million, Vidac represents a real bargain. Analysts at Sphene Capital believe Vidac shares could reach a price of EUR 4.30, while the stock is currently trading at EUR 0.47.

The Company is developing a new generation of cancer therapies that do not rely on existing treatment approaches, but instead focus on targeted manipulation of tumor cell metabolism. The aim is to disrupt the energy metabolism of malignant cells, causing them to lose their ability to divide rapidly and survive.

Vidac's leading drug candidate, VDA-1102, targeting skin cancer, is currently in clinical trials. Initial results show a favorable tolerability profile and promising effects on tumor tissue. Important milestones were achieved in September, including the submission of an application for a Phase 2 clinical trial to the European Medicines Agency (EMA), which is set to be conducted in Germany. Most recently, the granting of a US patent was announced. It protects the underlying technology platform, which is designed to induce cell death in tumors. This patent enables Vidac to commercially exploit various classes of active ingredients and enhances the Company's value with a view to a takeover.

The combination of an innovative approach to oncology, clear intellectual property protection, and moderate valuation suggests that Vidac is increasingly coming into focus amid the biotech acquisition wave.

Evotec: Attractive, but...

Evotec is repeatedly mentioned as a potential takeover candidate in Germany. The biotech company boasts an impressive database and a broad patent portfolio. In addition, it invested early on in a digital research platform, which could be highly attractive to buyers in the AI era.

For years, there have been rumors of a takeover, some more credible than others, from the pharmaceutical industry or the private equity sector. Last year, an offer from the US company Halozyme Therapeutics caused a stir. However, the billion-dollar proposal proved to be non-binding. Other interested parties, such as Triton Partners, also ultimately held back. The reasons for the hesitation are likely to lie primarily in internal issues.

The Hamburg-based company, once a flagship player in contract research and drug development, is struggling with declining margins, project cancellations, and cost pressure. As part of a restructuring program, around one-third of development projects were discontinued, sites were closed, and loss-making business areas such as gene therapy were abandoned. The management aims to reduce expenses and increase profitability. But the austerity measures come at a price: the pipeline is shrinking, and potential buyers are finding it more challenging to assess the Company's growth potential. The latest quarterly figures also show that Evotec is still a long way from its former strength.

In addition, organizational issues and leadership questions are weighing on confidence in the Company. The departure of long-time CEO Werner Lanthaler following irregularities in stock transactions caused unrest and damaged the Company's image. The new management still has to earn trust.

Before a takeover, Evotec will likely first need to consolidate internally and prove that its realignment is effective. With Vidac Pharma, things could move faster than expected. Even without a takeover, analysts see the potential for multiplication. Pfizer, Merck, and other pharmaceutical giants must demonstrate that they can continue to generate healthy margins in the future.