Evogene Reports Third Quarter 2020 Financial Results

 

REHOVOT, Israel, Nov. 18, 2020 /PRNewswire/ -- Evogene Ltd.. (NASDAQ: EVGN), (TASE: EVGN), a leading computational biology company targeting to revolutionize life-science product development across several market segments, announced today its financial results for the third quarter ended September 30, 2020.

Evogene Logo

Ofer Haviv, Evogene's President and CEO, stated: "We continue to be very pleased with the progress being achieved by our subsidiaries, which has been very rapid, and in certain areas even exceeding our plans, despite the ongoing COVID-19 pandemic. This progress was one of the factors in Evogene's decision to raise additional funds, to further support its collective ambitious business targets.

"The company recently completed two rounds of fundraising, for a total of $22 million. The leading investors that participated in these deals are strategic and long-term focused investors, and we are very grateful for their confidence and support. 

"We are confident that the net proceeds from our recent fundraisings, combined with our existing cash resources, will provide the funding required to achieve a number of key objectives in the further development of the promising product pipelines of our subsidiaries, and to continue to enhance and expand our unique computational predictive biology platform.

Our key objectives include the following:   

  • In Biomica, to support pre-clinical and anticipated proof-of-concept clinical trials next year in the immuno-oncology program.
  • In Canonic, to support development of unique varieties as well as cultivation for anticipated commercialization in 2022 of medical cannabis products in Israel.
  • In AgPlenus, to support its herbicide development towards the stage of an "Optimized Lead", as well as expand the insecticide program.
  • In Lavie Bio, to support the route to anticipated commercialization of a wheat bio-stimulant in 2022, as well as to support product development in the bio-pesticide program.
  • Within Evogene, the expansion of our capabilities in genome editing, including the leveraging of our legacy seed traits activities.
  • Within Evogene, the enhancement and expansion of our CPB product solutions, MicroBoost AI, ChemPass AI and GeneRator AI, adding further to our technological and computational competitive edge.

 

"We intend for these capital raises, combined with our existing cash resources, to  provide the support our subsidiaries require in order to reach attractive positions for Evogene to potentially capitalize on their achievements and to unlock their value.

"To summarize, I am extremely proud of the progress we are achieving and am confident of our subsidiaries' ability to continue to advance their product pipelines and execute on their business targets. Therefore, we enthusiastically look forward to reporting on our continuing progress and achievements to our investors, both long-term and new." concluded Mr. Haviv.

 

Recent Subsidiary Developments:

Biomica (subsidiary focused on human-microbiome based therapeutics)

  • Immuno-Oncology Program - Biomica recently announced positive pre-clinical, in-vivo results, for its leading product candidate, live bacterial product (LBP) BMC128, which consists of four live bacterial strains aimed to enhance the efficacy of immunotherapy (immune checkpoint inhibitors – ICI). These results demonstrated that treatment with BMC128, both prior to and in combination with ICI, significantly improved anti-tumor activity in mice. The best responding group's improvement (receiving BMC128 prior to the combination treatment) was approximately 50% higher in comparison to the group that only received the ICI therapy.

Also in this program, Biomica contracted the services of Biose Industrie, a leading French contract manufacturing organization (CDMO), and announced that it has initiated scale-up processes for GMP production of BMC128 in preparation for the expected initiation of first-in-man proof-of-concept clinical trials in 2021.

Biomica is currently in discussions with a number of leading medical centers in Israel regarding conducting this proof-of-concept, pilot study.

  • Inflammatory Bowel Disorders (IBD) program - Biomica is advancing in the pre-clinical phase, having initiated new pre-clinical studies at the University of North Carolina (UNC), at the lab of Professor Balfour Sartor. Prof. Sartor is a leading researcher and thought leader in IBD in the United States and a member of Biomica's Scientific Advisory Board.
  • Irritable Bowel Syndrome (IBS) program - Biomica is progressing according to plan, currently concluding the discovery phase, with the computational identification of microbes with desired functionality.

Canonic (wholly owned subsidiary focused on medical cannabis)

  • Propagation license - Canonic recently announced that it has received approval from the Israeli Medical Cannabis Agency for the propagation of medical cannabis seedlings, which will allow the company to proceed with the execution of its commercialization plan. The company intends to deliver its first batch of seedlings to third-party cultivation farms during 2021, and aims to release its first product in Israel in 2022.

AgPlenus (subsidiary focused on ag-chemicals)

  • During the quarter, Mr. Douglas Eisner joined AgPlenus as its new CEO. Mr. Eisner brings over 20 years of versatile business and legal experience, previously holding various senior leadership roles, and leading successful fundraising rounds and a company acquisition. Mr. Eisner is located in North Carolina, United States.

Lavie Bio (subsidiary focused on ag-biologicals)

 

  • Bio-fungicide Program - Lavie Bio recently announced positive trial results for two of its leading bio-fungicide product candidates, LAV311 and LAV 312. These candidates target Bunch rots, devastating diseases that severely impact crop output. These vineyard trials, conducted in target locations in Europe and the United States, resulted in significantly better efficacy and consistency than existing comparable commercial biological benchmarks, reducing crop damage by 60%-70% in comparison to the control tested in these trials.

Consolidated financial results for the quarter ended September 30, 2020:

 

Equity Offerings: On September 3, 2020, the company raised $10 million in equity, and on November 4, 2020, raised an additional $12 million in equity. Both offerings were to leading institutional investors.

Cash position

: As of September 30, 2020, Evogene had approximately $43.5 million in consolidated net cash, cash related accounts and short-term bank deposits. This included the $10 million equity investment received in September. Approximately $13.6 million of Evogene's consolidated cash is attributed to its subsidiary, Lavie Bio. After the end of the quarter, the company received an additional investment of $12 million.

 

During the first nine months of 2020, the company's consolidated net cash usage amounted to $13.4 million. Excluding the cash usage of Lavie Bio, the company's net cash usage amounted to $9.3 million during the first nine months of 2020. During the third quarter of 2020, the company's consolidated net cash usage amounted to $4.6 million. Excluding the cash usage of Lavie Bio, the company's net cash usage amounted to $3 million during the third quarter of 2020.

For the full year of 2020, the company estimates that its net cash usage, excluding cash usage of Lavie Bio, will be within the range of $13-15 million.

Evogene does not have bank debt.

Revenues for the third quarter of 2020 were approximately $0.3 million, in comparison to approximately $0.1 million in the same period the previous year.

R&D expenses for the third quarter of 2020 were approximately $4.0 million, in comparison to approximately $3.6 million. R&D expenses were mainly attributed to pre-clinical trials in Biomica, field trials for Lavie Bio and strengthening of Evogene's technology with new capabilities.

 

Business Development expenses for the third quarter of 2020 were approximately $0.6 million, in comparison to approximately $0.5 million in the third quarter of 2019.

G&A expenses

 for the third quarter of 2020 were approximately $1.2 million, in comparison to approximately $0.9 million in the third quarter of 2019. This increase is mostly attributed to an increase in the cost of the company's D&O insurance.

 

Operating loss for the third quarter of 2020 was approximately $5.6 million, in comparison to approximately $4.9 million in the third quarter of 2019. The increase in loss is attributed to the aforementioned operating expenses.

Net financing income for the third quarter of 2020 was approximately $0.1 million, in comparison to net financing income of approximately $0.4 million in the third quarter of 2019.

Loss for the third quarter of 2020 was approximately $5.4 million, in comparison to a loss of approximately $4.5 million during third quarter of 2019. The increase in loss is attributed to the increase in operating expenses and a decrease in net financing income. 

Conference Call & Webcast Details:

Date: November 18, 2020

Time: 9:00 a.m. EST; 16:00 Israel time

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

Webcast: Available at www.evogene.com.

You may submit a question for management to address during the call until 8:00 am EST; 15:00 Israel time to IR@evogene.com.

Replay Information: A replay of the conference call will be available approximately three 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 through November 20, 2020, and an archive of the webcast will be available on the company's website for the following 30 days. 

About Evogene Ltd.:

Evogene (NASDAQ: EVGN), (TASE: EVGN) is a leading computational biology company targeting to revolutionize product development for life-science based industries, including human health, agriculture, and industrial applications. Incorporating a deep understanding of biology and leveraging Big Data and Artificial Intelligence, Evogene established its unique technology, the Computational Predictive Biology (CPB) platform. The CPB platform is designed to computationally discover and develop life-science products based on microbes, small molecules and genetic elements as the core components for such products. Evogene holds a number of subsidiaries utilizing the CPB platform, for the development of human microbiome-based therapeutics, medical cannabis, ag-biologicals, ag-chemicals, seed traits and ag-solutions for castor oil production.

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", "intends", "anticipates", "plans", "believes", "scheduled", "estimates" or words of similar meaning. For example, Evogene is using forward-looking statements in this press release when it discusses its (and its subsidiaries') targets, objectives, pipeline and goals and the expected timing thereof, its support of its subsidiaries, the sufficiency of its funding to achieve key objectives and to continue to enhance and expand its computational predictive biology platform, its estimated cash usage for 2020, capturing the value of its technologies and subsidiaries, entering into collaboration agreements, its upcoming milestones and potential alternatives to capitalize on Evogene's subsidiaries' achievements. 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, the global spread of COVID-19, or the Coronavirus, the various restrictions deriving therefrom and those risk factors contained in Evogene's reports filed with the applicable securities authorities. 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 (including as a result of the effect of the Coronavirus), 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:

US Investor Relations:

   

Rivka Neufeld

Joseph Green

Investor Relations and Public Relations Manager

Edison Group

E: IR@evogene.com

E: jgreen@edisongroup.com

T: +972-8-931-1940

T: +1 646-653-7030

   
 

Laine Yonker

 

Edison Group

 

E: lyonker@edisongroup.com

 

T: +1 646-653-7035

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

U.S. dollars in thousands (except share and per share data)

 
   

September 30,

 

December 31,

   

2020

 

2019

   

Unaudited

 

Audited

CURRENT ASSETS:

       

Cash and cash equivalents

 

$          41,494

 

$             34,748

Marketable securities

 

-

 

2,128

Short-term bank deposits

 

2,000

 

10,000

Trade receivables

 

34

 

72

Other receivables and prepaid expenses

 

1,864

 

2,079

         
   

45,392

 

49,027

LONG-TERM ASSETS:

       

Long-term deposits

 

9

 

9

Operating lease right-of-use-assets

 

2,077

 

2,671

    Property, plant and equipment, net

 

2,133

 

2,583

Intangible assets, net

 

16,374

 

17,074

         
   

20,593

 

22,337

         
   

$          65,985

 

$             71,364

CURRENT LIABILITIES:

       

Trade payables

 

$               701

 

$               1,001

Employees and payroll accruals

 

1,730

 

2,079

Operating lease liability

 

789

 

895

Liabilities in respect of government grants

 

83

 

37

Deferred revenues and other advances

 

132

 

386

Other payables

 

1,204

 

1,348

         
   

4,639

 

5,746

LONG-TERM LIABILITIES:

       

Operating lease liability

 

1,672

 

2,076

Liabilities in respect of government grants

 

3,604

 

3,325

         
   

5,276

 

5,401

SHAREHOLDERS' EQUITY:

       

Ordinary shares of NIS 0.02 par value:

Authorized - 150,000,000 ordinary shares; Issued
and outstanding - 31,645,083 at September 30, 2020
and 25,754,297 at December 31, 2019

 

177

 

142

Share premium and other capital reserve

 

215,907

 

205,904

Accumulated deficit

 

(171,154)

 

(155,902)

         

Equity attributable to equity holders of the Company

 

44,930

 

50,144

         

Non-controlling interests

 

11,140

 

10,073

         

Total equity

 

56,070

 

60,217

         
   

$          65,985

 

$             71,364

         

         

 

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS

U.S. dollars in thousands (except share and per share data)

 
   

Nine months ended
September 30,

 

Three months ended
September 30,

 

Year ended
December 31,

   

2020

 

2019

 

2020

 

2019

 

2019

   

Unaudited

 

Audited

                     

Revenues

 

$           689

 

$           637

 

$           316

 

$             97

 

$               753

Cost of revenues

 

228

 

253

 

75

 

81

 

334

                     

Gross profit

 

461

 

384

 

241

 

16

 

419

                     

Operating expenses:

                   
                     

Research and development, net

 

12,476

 

10,627

 

3,998

 

3,603

 

15,791

Business development

 

2,002

 

1,420

 

564

 

450

 

2,029

General and administrative

 

3,620

 

2,622

 

1,232

 

876

 

3,765

                     

Total operating expenses

 

18,098

 

14,669

 

5,794

 

4,929

 

21,585

                     

Operating loss

 

(17,637)

 

(14,285)

 

(5,553)

 

(4,913)

 

(21,166)

                     

Financing income

 

858

 

2,517

 

215

 

647

 

2,630

Financing expenses

 

(657)

 

(655)

 

(73)

 

(265)

 

(555)

                     

Financing income, net

 

201

 

1,862

 

142

 

382

 

2,075

                     

Loss before taxes on income

 

(17,436)

 

(12,423)

 

(5,411)

 

(4,531)

 

(19,091)

Taxes on income (tax benefit)

 

7

 

-

 

-

 

(3)

 

24

                     

Loss

 

$   (17,443)

 

$   (12,423)

 

$     (5,411)

 

$     (4,528)

 

$       (19,115)

                     

Attributable to:

                   

Equity holders of the Company

 

$   (15,252)

 

$  (12,034)

 

$     (4,786)

 

$     (4,231)

 

$       (18,112)

Non-controlling interests

 

(2,191)

 

(389)

 

(625)

 

(297)

 

(1,003)

                     
   

$   (17,443)

 

$   (12,423)

 

$     (5,411)

 

$     (4,528)

 

$       (19,115)

                     

Basic and diluted loss per share,
 attributable to equity holders of the
 Company

 

$       (0.58)

 

$       (0.47)

 

$       (0.17)

 

$       (0.16)

 

$           (0.70)

                     

Weighted average number of shares
used in computing basic and diluted
loss per share

 

26,161,932

 

25,754,297

 

26,977,201

 

25,754,297

 

25,754,297

                     

 

 

CONDENSED 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,

   

2020

 

2019

 

2020

 

2019

 

2019

   

Unaudited

 

Audited

Cash flows from operating activities

                   
                     

   Loss

 

$   (17,443)

 

$   (12,423)

 

$     (5,411)

 

$     (4,528)

 

$      (19,115)

                     

Adjustments to reconcile loss to net cash
 used in operating activities:

                   
                     

Adjustments to the profit or loss items:

                   
                     

Depreciation

 

1,400

 

1,906

 

484

 

591

 

2,395

Amortization of intangible assets

 

700

 

194

 

234

 

194

 

374

Share-based compensation

 

3,482

 

802

 

691

 

355

 

1,578

Net financing income

 

(223)

 

(2,647)

 

(154)

 

(1,025)

 

(2,414)

Loss from sale of property, plant & equipment

 

-

 

12

 

-

 

12

 

12

Taxes on income (tax benefit)

 

7

 

-

 

-

 

(3)

 

24

                     
   

5,366

 

267

 

1,255

 

124

 

1,969

Changes in asset and liability items:

                   
                     

Decrease in trade receivables

 

38

 

13

 

25

 

-

 

88

Decrease (increase) in other receivables

 

141

 

(600)

 

(249)

 

56

 

(1,250)

Increase in long-term deposits

 

-

 

-

 

-

 

-

 

(10)

Increase (decrease) in trade payables

 

(151)

 

(190)

 

83

 

71

 

(122)

Increase (decrease) in employees and payroll accruals

 

(349)

 

(250)

 

134

 

114

 

(33)

Increase (decrease) in other payables

 

(93)

 

(3)

 

136

 

75

 

375

Decrease in deferred revenues and other advances

 

(254)

 

(313)

 

(426)

 

(120)

 

(45)

                     
   

(668)

 

(1,343)

 

(297)

 

196

 

(997)

                     

Cash received (paid) during the period for:

                   
                     

Interest received

 

291

 

692

 

125

 

637

 

803

Interest paid

 

(182)

 

(198)

 

(64)

 

(57)

 

(302)

Tax received (paid)

 

(7)

 

-

 

-

 

3

 

(24)

                     

Net cash used in operating activities

 

$   (12,643)

 

$   (13,005)

 

$     (4,392)

 

$    (3,625)

 

$      (17,666)

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 
   

Nine months ended
September 30,

 

Three months ended
September 30,

 

Year ended
December 31,

   

2020

 

2019

 

2020

 

2019

 

2019

   

Unaudited

 

Audited

Cash flows from investing activities:

                   
                     

Purchase of property, plant and equipment

 

$      (579)

 

$      (518)

 

$       (164)

 

$      (321)

 

$          (900)

Proceeds from sale of marketable securities

 

2,097

 

22,828

 

-

 

2,833

 

27,084

Purchase of marketable securities

 

-

 

(1,637)

 

-

 

-

 

(1,637)

Proceeds from (investment in)  bank deposits, net

 

8,000

 

(6,675)

 

5,000

 

(6,675)

 

12,592

                     

Net cash provided by (used in) investing activities

 

9,518

 

13,998

 

4,836

 

(4,163)

 

37,139

                     

Cash flows from financing activities:

                   
                     

Proceeds from exercise of options

 

13

 

-

 

13

 

-

 

-

Proceeds from government grants

 

320

 

406

 

145

 

119

 

493

Repayment of operating lease liability

 

(484)

 

(536)

 

(155)

 

(173)

 

(597)

Issuance of subsidiary's ordinary shares to non-controlling interests

 

-

 

10,000

 

-

 

10,000

 

10,000

Issuance of ordinary shares

 

9,801

 

-

 

9,801

 

-

 

-

Repayment of government grants

 

(22)

 

(586)

 

(11)

 

(11)

 

(590)

                     

Net cash provided by financing activities

 

9,628

 

9,284

 

9,793

 

9,935

 

9,306

                     

Exchange rate differences - cash and cash equivalent balances

 

243

 

380

 

183

 

223

 

159

                     

Increase in cash and cash equivalents

 

6,746

 

10,657

 

10,420

 

2,370

 

28,938

                     

Cash and cash equivalents, beginning of the period

 

34,748

 

5,810

 

31,074

 

14,097

 

5,810

                     

Cash and cash equivalents, end of the period

 

$    41,494

 

$    16,467

 

$     41,494

 

$    16,467

 

$       34,748

                     

Significant non-cash activities

                   
                     

Acquisition of property, plant and equipment

 

$           17

 

$         130

 

$           17

 

$           47

 

$            216

Increase of operating lease right-of-use-assets

 

--

 

--

 

--

 

--

 

$         3,437

Acquisition of intangible assets from non-controlling interests against issuance of subsidiary's ordinary shares

 

--

 

$    17,448

 

--

 

$    17,448

 

$       17,448

                     
                     

 

 

Cision View original content:http://www.prnewswire.com/news-releases/evogene-reports-third-quarter-2020-financial-results-301175709.html

SOURCE Evogene

 
 
Company Codes: TelAviv:EVGN, NASDAQ-NMS:EVGN
 

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