Evotec profit target in danger after drug trial halted

BERLIN (Reuters) - German biotechnology company Evotec may miss its profit target for 2014 after a trial involving a drug for which it expected to receive royalties was halted. The trial was terminated by Hyperion Therapeutics, which said on Sunday it would stop developing diabetes drug Diapep277 after discovering manipulation of trial data by employees of a recently acquired subsidiary, Andromeda Biotech. Evotec said on Monday it was due to receive 3.4 million euros from Hyperion and Andromeda, which it would need to meet its goal of keeping adjusted earnings before interest, tax, depreciation and amortization (EBITDA) at last year's level of 10.4 million euros. A spokeswoman for Evotec told Reuters that if it doesn't get the payment, which is a possibility, profit would fall from last year's level. "We are in talks about getting the payment and we are confident of getting it," she said. Evotec will also take a charge of 8.7 million euros, the company added in a statement. Evotec is not involved in the development or the trials of the drug itself but has the right to receive royalties from the development of the drug as part of a licensing deal concluded in 2007 by Devologen, a company it acquired in 2011. Diapep277 was the only drug in Evotec's portfolio at the final Phase III stage of trials and it had been expected to enter the market in 2016/17. Shares in Evotec dropped 23 percent in post-market trading on Monday evening. (Reporting by Victoria Bryan and Patricia Weiss; Editing by Mark Potter and David Evans)