On Wednesday, Evotec (ETR:EVTG) shares tumbled over 10 per cent in early trade in Frankfurt as the German pharma firm turned to a loss in the first nine months of the year. The loss can be attributed to heavy investment costs, increasing energy bills and a big impairment charge on its UK investment, Exscientia (NASDAQ:EXAI).

The pharma company maintained its profit guidance for the full year. However, it depended mainly on the euro’s depreciation. Full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) are at €105 – €120 million. At constant exchange rates, this year’s earnings would stand between €85 – €100M (€1 = $1.0059).

The bottom line revealed a net loss of €148M, compared to a profit of €247M a year ago. This is mainly due to inflated energy costs, high expenses for investment in capacity expansion, and lower contributions from milestones, upfronts and licenses. Also, the writedown of its stake in Exscientia, the Oxford-based AI specialist, generated a non-cash charge of €120M.

While the adjusted EBITDA declined to €45M from €70M a year earlier, the pharma company still forecasts annual EBITDA of over €300M by 2025.

By 04:00 ET (09:00 GMT), Evotec shares were down 10.2 per cent. The biotech company is off nearly 40 per cent from its 2021 peak this year.