Evotec, Nyxoah, Carl Zeiss Meditec – Biotech and medtech stocks with potential

Evotec – Light at the end of the tunnel

It was a turbulent year for Evotech shareholders, with the share price losing more than 70%. The surprising resignation of long-standing CEO Werner Lanthaler caused the first shock. Lanthaler, whose contract was supposed to run until 2026, was the architect of the Company's success and enjoyed a high level of trust among investors. In addition to personnel changes, Evotec also had to drastically lower its business forecasts for 2024. Revenues are now expected to grow to only EUR 790–820 million, while adjusted EBITDA could fall to EUR 15–35 million. These unexpectedly weak expectations were caused by a decline in revenues in the discovery segment and high investments in the expansion of biologics production at the subsidiary Just-Evotec Biologics.

The state-of-the-art biologics manufacturing facility was opened in Toulouse, France, on September 20. The new facility, J.POD® Toulouse, uses innovative, scalable technology to produce biotherapeutics cost-effectively, reducing bottlenecks in European biologics production. With a construction time of only 18 months and significantly reduced costs compared to conventional facilities, Evotec is driving a paradigm shift in bioproduction. The facility promotes the availability of vital medicines and strengthens Europe's position in the field of biopharmaceuticals. The plant was financed by the French government and regional funds.

This month has seen further positive news. Evotec announced a partnership with Novo Nordisk to develop advanced cell therapies. This collaboration includes financial support from Novo Nordisk and options for exclusive rights for certain therapeutic applications. In addition, a collaboration with X-Chem to accelerate drug discovery was announced. Such partnerships and projects could help to restore confidence in Evotec in the long term and open up new growth opportunities. The share price recovered from its yearly low of EUR 5.06 and currently stands at EUR 6.285.

Nyxoah – Solving the problem of sleep apnea

Nyxoah, an emerging medtech company, is revolutionizing the treatment of obstructive sleep apnea (OSA) with its Genio® system. This innovative device stimulates the hypoglossus nerve and thus prevents the upper airway from being blocked. Genio® consists of a tiny implantable neurostimulator and an external wearable component, the activation chip, and offers a comfortable alternative to conventional therapies such as CPAP. The implantable part of Genio® is lead- and battery free and scores with full 1.5T and 3T MRI compatibility. With high patient acceptance and promising study results, Nyxoah is positioning itself as an important player in a growing market with millions of people affected.
The Company attended three major investor conferences in New York City in September to report on the latest operative developments. The Genio® system for the treatment of OSA showed impressive results in the recently published DREAM study. The data were presented at the International Surgical Sleep Society 2024 Educational Update end of September, and showed an average reduction of 71% in the apnea-hypopnea index (AHI) after 12 months. In addition, 82% of patients achieved an AHI below 15, indicating a significant improvement in quality of life. These results underscore the effectiveness of the Genio® technology.

On August 29, 2024, Nyxoah SA celebrated a milestone: the ringing of the closing bell at NASDAQ highlighted the Company's progress and the imminent launch of the Genio® system in the United States. FDA approval is expected at the end of 2024, followed by a commercial launch in the US early 2025. A sales team for the US has been established. This expansion is supported by over EUR 85 million in fresh capital. BlackRock, Inc. was among the larger investors, with a 3.25% stake. However, the Company recently announced that this stake is now back below 3%. The share price, which climbed from USD 4 to USD 20 on the NASDAQ at the beginning of the year, has recently consolidated and is currently trading at USD 9.70. With the FDA approval, the year's highs should be targeted again.

Carl Zeiss Meditec – Bottom found

Carl Zeiss Meditec AG, based in Jena and founded in 2002, is a leading medical technology company and part of the Carl Zeiss Group. It offers innovative solutions for ophthalmology and minimally invasive surgery, including eye examination equipment, surgical microscopes, medical lasers, and intraocular lenses. The Company is divided into the divisions of Ophthalmic Devices and Microsurgery. With sales of around EUR 2.1 billion and 4,823 employees in 2023, it is listed on the MDAX and TecDAX indices. The Company is represented worldwide, including in the US, Japan, and Europe.

In mid-March, the share was still trading at EUR 123.80. Then, a profit warning followed on June 17. The quarterly figures for the first nine months showed a slight decline in sales. A difficult investment environment and weak consumer sentiment weighed on business performance. Sales fell by 1.5% to EUR 1.48 billion, while operating profit (EBIT) declined significantly to EUR 162.7 million. Weaker sales of consumables, particularly in China, and a reluctance to invest in North America had a negative impact. The Company is planning cost-cutting measures and medium-term transformation projects to increase profitability. The annual forecast predicts revenue of approximately EUR 2.1 billion.

Next year, the figures are expected to improve. New innovative products that are being launched on the market should help. Zeiss presented some of them at the ESCRS 2024 in Barcelona. There are numerous innovations in cataract and refractive surgery, including new surgical microscopes and AI-supported solutions such as the AI IOL Calculator or the CIRRUS PathFinder. The Company is uniquely positioned to benefit from structural and demographic trends. In particular, the ageing population and the increasing prevalence of myopia will further increase the demand for vision correction services. The share is currently trading at EUR 70.85 and has thus reversed the downward trend.

The biotech and medtech industries currently offer interesting investment opportunities. Evotec, which is investing in the future through collaborations and innovative production facilities, could see an upturn after a weak year. Nyxoah is revolutionizing sleep apnea treatment with its Genio® system and FDA approval is expected soon, which could further drive growth. Carl Zeiss Meditec is positioned to benefit over the long term from innovative products and favourable demographics, despite recent challenges. In summary, these three companies offer attractive potential for investors interested in technological and medical advances.