Evogene Reports Third Quarter 2022 Financial Results


Ryan Allway

November 17th, 2022

News, Top News


Conference call and webcast: today, November 17, 20229:00 am ET

 

REHOVOT, IsraelNov. 17, 2022 /PRNewswire/ — Evogene Ltd. (Nasdaq: EVGN) (TASE: EVGN), a leading computational biology company targeting to revolutionize life-science based product discovery and development utilizing cutting edge computational biology technologies, across multiple market segments, announced today its financial results for the third quarter, ended September 30, 2022.

 

Evogene Logo
Evogene Logo

Mr. Ofer Haviv, Evogene’s President and Chief Executive Officer, stated, “Reviewing our developments in 2022, the activities of Evogene and our subsidiaries are advancing well, and we have met important milestones. Each one, whose technology leverages Evogene’s AI tech engines, is generating significant value for the Evogene Group, and I am very pleased with our progress.

 

“An example for such milestone progress can be seen in our clinical trial for subsidiary Biomica’s microbiome-based immuno-oncology drug candidate, which was launched earlier this year and developed using Evogene’s MicroBoost AI tech engine. In recent weeks, we progressed to our third patient out of twelve, and we aim to have our first data readout in spring 2023, as these first few patients conclude their treatment programs. Another important milestone achieved recently by our subsidiary Lavie Bio, was the submission of the registration package to the U.S. Environmental Protection Agency in October, for its novel bio-fungicide product, developed using Evogene’s MicroBoost AI tech engine. We expect this process to take around 18 months. Our goal is a soft launch for the 2024 growing season, pending the regulatory approval.”

 

Continued Mr. Haviv, “In these challenging times in the capital markets, it’s important to emphasize that we maintain a strong consolidated cash position of approximately $38 million, which based on our business plan, we expect will be enough to take us towards late 2024. Furthermore, with the strategic steps we continue to pursue, the fundraising at our subsidiary level, as well as the collaborations with non-dilutive payments, we believe we will extend this runway out further.

 

“The strategic collaboration and $10 million investment in the quarter by ICL, a leading specialty minerals company, into our subsidiary, Lavie Bio, is a great example of the successful execution of this strategy. It brought a new and additional source of capital to that subsidiary, it brought a value-adding partner to the subsidiary, which has a strong share in the ultimate success and upside in that subsidiary, and it also demonstrated the inherent financial value of the subsidiary and ultimately Evogene’s share in it. We continue to work hard in identifying additional value-adding partners and investors and bringing them into our subsidiaries.”

 

Added Mr. Haviv, “In parallel, we continue to pursue collaborations which can add new revenue streams for both Evogene and its subsidiaries, built upon the successful products all developed using Evogene’s underlying AI tech-engines. A recent example for this strategy was the announcement made by our subsidiary Casterra, focusing on castor seed technology development. They signed a royalty agreement with Zambian company, Titan, for sales of castor oil  produced by Titan, which are based on Casterra’s castor seeds and developed using Evogene’s GeneRator AI tech engine.

 

“Another collaboration we are proud of was announced by our subsidiary Canonic, developing cannabis products, leveraging Evogene’s GeneRator AI tech engine. They announced a new licensing and royalty agreement signed with GroVida, a Portuguese cannabis cultivation company, in European markets for two of our new cannabis lines. Europe is a first and key target market for Canonic beyond our local market in Israel, with total medical cannabis market sales estimated at approximately €400 million.”

 

Concluded Mr, Haviv, “These represent some of the initial fruits of our focus on this strategy and I look forward to further such deals in the coming months.”

 

Consolidated Financial Results Summary

Cash position: Evogene continues to maintain a solid financial position for its activities with approximately $38 million in consolidated cash, cash equivalents and marketable securities as of September 30, 2022.  Approximately $11.9 million of Evogene’s consolidated cash is appropriated to its subsidiary, Lavie Bio.

 

During the third quarter, the consolidated cash usage was approximately $7.3 million, or approximately $4.7 million, excluding Lavie Bio.

 

Revenues: Revenues for the third quarter of 2022 were $466 thousand, in comparison to $151 thousand in the same period the previous year and were primarily due to revenues recognized per the collaboration agreement of Evogene’s subsidiary AgPlenus with Corteva.

 

R&D expenses for the third quarter of 2022, which are reported net of non-refundable grants received, were $5.0 million, in comparison to $5.8 million in the same period the previous year. The main contributors to R&D expenses were Lavie Bio’s activities supporting the production and commercialization of its inoculant product and Evogene’s ongoing development of its technology engines.

 

Business Development expenses were approximately $0.9 million for the third quarter of 2022, in comparison to $0.8 million in the same period the previous year.

 

General and Administrative expenses were $1.6 million in the third quarter of 2022, in comparison to $2.0 million in the same period in the previous year.

 

Operating loss: Operating loss for the third quarter of 2022 was $7.1 million in comparison to $8.6 million in the same period in the previous year.

 

Financing expenses for the third quarter of 2022 were $61 thousand, in comparison to financing income of $221 thousand in the same period in the previous year. The difference between periods was mainly due to U.S. Dollar and New Israeli Shekel exchange rate differences between periods and a change in the value of marketable securities.

 

Net loss: Net loss for the third quarter of 2022 was $7.2 million, in comparison to a net loss of $8.3 million in the same period in the previous year.

 

Conference Call & Webcast Details:

Date: November 17, 2022

Time: 9:00 am ET; 16:00 Israel time

Dial-in numbers:1-888-281-1167 toll free from the United States, or +972-3-918-0609 internationally

 

Webcast & Presentation link available at:

https://www.evogene.com/investor-relations/presentations-and-webcasts/

The Company’s investor presentation can be viewed at the above link, which is in the investor relations section of the company website.

 

Replay Information: A replay of the conference call will be available approximately two hours following the completion of the call.

 

To access the replay, please dial 1-888-326-9310 toll free from the United States, or +972-3-925-5901 internationally. The replay will be accessible following the call for three days. An archive of the webcast will be available on the Company’s website.

 

About Evogene Ltd.:

Evogene (Nasdaq: EVGN, TASE: EVGN) is a computational biology company aiming to revolutionize the development of life-science based products by utilizing cutting edge technologies to increase probability of success while reducing development time and cost. Evogene established three unique technological engines – MicroBoost AI, ChemPass AI and GeneRator AI – leveraging Big Data and Artificial Intelligence and incorporating deep multidisciplinary understanding in life sciences. Each technological engine is focused on the discovery and development of products based on one of the following core components: microbes (MicroBoost AI), small molecules (ChemPass AI), and genetic elements (GeneRator AI). Evogene uses its technological engines to develop products through subsidiaries and with strategic partners. Currently, Evogene’s main subsidiaries utilize the technological engines to develop human microbiome-based therapeutics by Biomica Ltd., medical cannabis products by Canonic Ltd., ag-chemicals by Ag Plenus Ltd. and ag-biologicals by Lavie Bio Ltd.  For more information, please visit: www.evogene.com.

 

Forward Looking Statements

This press release contains “forward-looking statements” relating to future events. These statements may be identified by words such as may”, “could”, “expects”, “hopes” “intends”, “anticipates”, “plans”, “believes”, “scheduled”, “estimates” or words of similar meaning. For example, Evogene is using forward-looking statement in this press release when it discusses its expectations with respect to value creation and potential funding options, including through its subsidiaries, untapped potential and value, including the potential to establish new activities that can benefit from Evogene’s technology, its and its subsidiaries’ expected timing for trials and studies, expected product advancements, pipelines, commercializations, collaborations and value-adding partners, sales, launches, milestones, target markets and their sizes, the sufficiency of its cash runway to meet its business plan and strategic goals through late 2024 or further, and the potential advantages of its technology. Such statements are based on current expectations, estimates, projections and assumptions, describe opinions about future events, involve certain risks and uncertainties which are difficult to predict and are not guarantees of future performance. Therefore, actual future results, performance or achievements of Evogene and its subsidiaries may differ materially from what is expressed or implied by such forward-looking statements due to a variety of factors, many of which are beyond the control of Evogene and its subsidiaries, including, without limitation, those risk factors contained in Evogene’s reports filed with the applicable securities authority. In addition, Evogene and its subsidiaries rely, and expect to continue to rely, on third parties to conduct certain activities, such as their field-trials and pre-clinical studies, and if these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, Evogene and its subsidiaries may experience significant delays in the conduct of their activities. Evogene and its subsidiaries disclaim any obligation or commitment to update these forward-looking statements to reflect future events or developments or changes in expectations, estimates, projections and assumptions.

 

Evogene Investor Contact
Kenny Green

Email: [email protected]

Tel: +1 212 378 8040

 

 

 

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands (except share and per share data)
September 30, December 31,
2022 2021
Unaudited Audited
CURRENT ASSETS:
Cash and cash equivalents $          31,860 $         32,325
Marketable securities 6,090 18,541
Short-term bank deposits 3,000
Trade receivables 452 281
Inventories 165 92
Other receivables and prepaid expenses 2,205 2,651
40,772 56,890
LONG-TERM ASSETS:
Long-term deposits 21 25
Right-of-use-assets 1,639 2,109
    Property, plant and equipment, net 2,571 2,073
Intangible assets, net 14,385 15,207
18,616 19,414
$          59,388 $         76,304
CURRENT LIABILITIES:
Trade payables $               977 $           1,463
Employees and payroll accruals 2,324 2,662
Lease liability 884 974
Liabilities in respect of government grants 94 89
Deferred revenues and other advances 360 175
Other payables 944 1,519
5,583 6,882
LONG-TERM LIABILITIES:
Lease liability 1,043 1,695
Liabilities in respect of government grants 4,464 4,307
Convertible SAFE 10,000
15,507 6,002
SHAREHOLDERS’ EQUITY:
Ordinary shares of NIS 0.02 par value:

Authorized − 150,000,000 ordinary shares; Issued
and outstanding – 41,215,944 shares as of
September 30, 2022 and 41,170,168 shares as of
December 31, 2021

234 234
Share premium and other capital reserves 261,052 260,488
Accumulated deficit (230,709) (207,069)
Equity attributable to equity holders of the Company 30,577 53,653
Non-controlling interests 7,721 9,767
Total equity 38,298 63,420
$          59,388 $         76,304

 

 

CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS
U.S. dollars in thousands
Nine months ended

September 30,

Three months ended

September 30,

Year ended December 31,
2022 2021 2022 2021 2021
Unaudited Audited
Revenues $      1,015 $         619 $         466 $        151 $              930
Cost of revenues 545 500 120 101 767
Gross profit 470 119 346 50 163
Operating expenses:
Research and development, net 16,039 15,109 4,996 5,826 21,125
Business development 2,765 2,018 895 776 2,738
General and administrative 4,825 5,253 1,552 2,004 7,253
Total operating expenses 23,629 22,380 7,443 8,606 31,116
Operating loss (23,159) (22,261) (7,097) (8,556) (30,953)
Financing income 679 997 194 380 1,935
Financing expenses (3,498) (1,078) (255) (159) (1,414)
Financing income (expenses), net (2,819) (81) (61) 221 521
Loss before taxes on income (25,978) (22,342) (7,158) (8,335) (30,432)
Taxes on income 45 19 5 8 13
Loss $  (26,023) $   (22,361) $   (7,163) $   (8,343) $      (30,445)
Attributable to:
Equity holders of the Company (23,640) (20,422) (6,544) (7,610) (27,793)
Non-controlling interests (2,383) (1,939) (619) (733) (2,652)
$  (26,023) $   (22,361) $   (7,163) $  (8,343) $      (30,445)
Basic and diluted loss per share,
attributable to equity holders of the
Company
$     (0.57) $      (0.51) $     (0.16) $      (0.19) $          (0.69)
Weighted average number of shares
used in computing basic and diluted
loss per share
41,202,049 40,184,407 41,215,944 40,847,117 40,433,303

 

 

 

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
 

Nine months ended

September 30,

Three months ended

September 30,

Year ended
December 31,
2022 2021 2022 2021 2021
Unaudited Audited
 Cash flows from operating activities
   Loss $   (26,023) $   (22,361) $   (7,163) $     (8,343) $    (30,445)
Adjustments to reconcile loss to net cash
used in operating activities:
Adjustments to the profit or loss items:
Depreciation 1,117 985 400 313 1,302
Amortization of intangible assets 822 697 245 235 932
Share-based compensation 895 1,872 65 783 2,609
Pre-funded warrants issuance expenses 212
Net financing expenses (income) 3,128 (363) (11) (346) (884)
Decrease in accrued bank interest 7 15 5 11
Loss from derecognition of property, plant
and equipment
121
Taxes on income 45 19 5 8 13
6,014 3,437 704 998 4,104
Changes in asset and liability items:
Decrease (increase) in trade receivables (171) 71 (341) 57 (59)
Decrease (increase) in other receivables 443 1,428 (20) 421 637
Increase in inventories (73) (3) (92)
Increase (decrease) in trade payables (600) 987 (428) 632 625
Increase (decrease) in employees and
payroll accruals
(338) (174) (60) 144 127
Increase (decrease) in other payables (586) 24 7 302 290
Increase (decrease) in deferred revenues
and other advances
185 (47) 344 (26) 128
(1,140) 2,289 (501) 1,530 1,656
Cash received (paid) during the period for:
Interest received 118 245 38 100 297
Interest paid (356) (225) (129) (87) (315)
Tax paid (34) (19) (5) (8) (13)
Net cash used in operating activities $  (21,421) $  (16,634) $     (7,056) $     (5,810) $     (24,716)

 

 

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months ended

September 30,

Three months ended

September 30,

Year ended
December 31,
2022 2021 2022 2021 2021
Unaudited Audited
Cash flows from investing activities:
Purchase of property, plant and equipment $     (972) $      (587) $   (225) $       (180) $       (847)
Proceeds from sale of marketable securities 12,352 1,017 203 611 4,395
Purchase of marketable securities (659) (21,404) (414) (23,114)
Withdrawal from (investment in)  bank deposits 3,000 (1,600) (1,600) (1,000)
Net cash provided by (used in) investing activities 13,721 (22,574) (22) (1,583) (20,566)
Cash flows from financing activities:
Proceeds from issuance of ordinary shares, net of issuance expenses 29,582 1,660 29,582
Proceeds from exercise of options 7 476 16 484
Repayment of lease liability (366) (437) 126 (121) (580)
Proceeds from government grants 89 792 59 412 824
Repayment of government grants (31) (34) (17) (14) (34)
Convertible SAFE 10,000 10,000
Net cash provided by financing activities 9,699 30,379 10,168 1,953 30,276
Exchange rate differences – cash and cash equivalent balances (2,464) 233 (97) 318 1,102
Increase (decrease) in cash and cash equivalents (465) (8,596) 2,993 (5,122) (13,904)
Cash and cash equivalents, beginning of the period 32,325 46,229 28,867 42,755 46,229
Cash and cash equivalents, end of the period $   31,860 $   37,633 $   31,860 $    37,633 $     32,325
Significant non-cash activities
Acquisition of property, plant and equipment $        146 $         59 $         80 $          17 $  32
Increase (decrease) of right-of-use asset recognized with corresponding lease liability $         19 $           775 $     (11) $           775 $         841
Exercise of pre-funded warrants $           4,365

 

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About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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