Evogene Ltd. Reports Fourth Quarter and Year End 2010 Financial Results

March 15, 2011 |

14 min read

REHOVOT, ISRAEL--(Marketwire - March 15, 2011) -

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Evogene Ltd. (TASE: EVGN) announced today its financial results for the fourth quarter and year ended December 31, 2010.

Ofer Haviv, Evogene’s president and CEO, stated: “Although revenues for calendar year 2010 increased by more than 25% from 2009, clearly the key accomplishments from a strategic standpoint were those supporting our growing leadership position in the discovery and licensing of agbio traits to the industry. In this regard, during 2010 we were very proud to see greatly increased industry recognition, substantial enhancement and expansion of our discovery capabilities and further evidence of the quality of our results.”

Highlights during the year included:

The signing of a multiyear collaboration with Bayer CropScience AG, to improve wheat yield, drought tolerance and fertilizer use efficiency, utilizing a combination of advanced breeding and genetic modification methods. Evogene will receive approximately $20 million in the form of upfront fees and annual research payments over the term of the agreement and will additionally be entitled to milestone payments and royalties on product commercialization. In addition, Bayer CropScience made an equity investment of $12 million in Evogene equity.
Substantial enhancement of our discovery infrastructure and capacity, with the launch of ATHLETE 3.0 incorporating new computational capabilities as well as the introduction of two new computational discovery platforms, EvoBreed and RePack. These computational platforms will allow the introduction of novel products into the seed industry and open new commercial opportunities for Evogene.
The advancement to the next stage of development of an Evogene yield and drought tolerance trait for corn as part of Evogene’s collaboration agreement with Biogemma. This achievement follows a three year collaborative program and field trials.
Successful completion of a second year of our multiyear collaboration with Monsanto, covering key traits for corn, soybean, cotton in canola.
Continued progress in our Biofuel Program, including positive results in a pilot project conducted with NASA and UOP demonstrating that biojet produced from castor varieties under development by Evogene meets key international standards for alternative aviation fuels.

Mr. Haviv continued, “As we continue to partner on the basis of our core technology, we remain committed to our strategy of broadening its applicability to new areas in plant genomics. In this regard, we were pleased to see the introduction of our EvoBreed technology, applicable to advanced breeding, which will be utilized initially through our wheat collaboration with Bayer CropScience AG announced on December 2010. We enthusiastically look forward to the remainder of 2011 and the next few years as we continue to further build our unique offering to the Ag industry.”

Revenues for 2010 were $12.6 million, compared to $10 million for the same period in 2009. Revenues for the fourth quarter of 2010 were $4.7 million, compared to $2.6 million for the same period in 2009. Revenues for all such periods consist of research and licensing revenues generated under the company’s various collaboration agreements with seed companies.

Research & Development expenses for 2010 were $5.5 million, including non-cash financial expenses of $0.8 million for amortization of deferred compensation. This compares with $2.6 million for the same period in 2009, including such non-cash financial expenses of $0.2 million. Research & Development expenses for the fourth quarter of 2010 were $1.8 million, including non-cash financial expenses of $0.3 million for amortization of deferred compensation. This compares with $1 million for the same period in 2009, including such non-cash financial expenses of $0.1 million. These increases in Research & Development expenses relate to the development of new genomic technologies, the establishment of genomic and breeding infrastructure for wheat and to support our biofuel program. Research & Development expenses do not include expenses incurred in support of on-going collaborations, which are accounted for as Cost of Revenues.

Loss from ordinary operations for 2010 was $1.9 million, including non-cash financial expenses of $2.6 million for amortization of deferred compensation. This compares to a profit from ordinary operations of $0.3 million for the same period in 2009, including such non-cash financial expenses of $1 million. Profit from ordinary operations for the fourth quarter of 2010 was $0.2 million, including non-cash financial expenses of $0.8 million for amortization of deferred compensation. This compares to a loss from ordinary operations of $0.5 million for the same period in 2009, including such non-cash financial expenses of $0.4 million.

Financial expenses due to publicly traded warrants: As of December 31, 2010 Evogene had approximately 4.3 million publicly traded series 2 warrants outstanding which were issued in 2007 as part of its IPO on the Tel Aviv Stock Exchange. Such warrants will expire if not previously exercised on May 31, 2011. Although not impacting the actual financial status of the Company or its cash balances, as long as these warrants are outstanding, any change as of the end of a reporting period in the market price of the Company’s ordinary shares will result in non-cash financial income (expense) due to revaluation of warrants on our statements of comprehensive income and a corresponding decrease or increase in the non-cash liability related to traded warrants on our balance sheets.

Comprehensive loss for 2010 was $7 million, which includes $5.4 million of non-cash financial expenses due to publicly traded warrants, as described above, compared to a total comprehensive loss of $3.4 million, including $4.8 million of such non-cash financial expenses for the same period in 2009. Total comprehensive loss for the fourth quarter of 2010 was $3 million, which includes $3.2 million of such non-cash financial expenses, compared to a comprehensive loss of $0.4 million, which includes $0.1 million of such non-cash financial revenues for the same period in 2009.

Cash Status: As of December 31, 2010, Evogene had $35.8 million in cash, cash equivalents, cash deposits and short-term marketable securities, compared to $38.2 million as of December 31, 2009, not including $12 million received in January 2011 pursuant to the Bayer CropScience agreement signed in late 2010.

About Evogene

Evogene is a world leading developer of improved plant traits, such as yield and drought tolerance, for a wide diversity of key crops through the use of plant genomics. The company is offering a complete solution for plant trait improvement through combining state of the art biotechnology and advanced breeding methods, based on its computational genomic technologies: ATHLETE for gene discovery; RePack for gene expression optimization; and EvoBreed for breeding enhancement. Evogene’s technology also combines high throughput plant validation systems, field experiments and proprietary genomic data creation. Evogene is collaborating with world leading seed companies to introduce its technology into key commercial crops. Evogene’s headquarters are in Rehovot, Israel, and its stock is traded on the Tel Aviv Stock Exchange (TASE: EVGN).

For additional information, please visit Evogene’s website at www.evogene.com

This press release contains “forward-looking statements” relating to future events. These statements may be identified by words such as “may,” “expects,” “intends,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” or words of similar meaning. 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 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 Evogene’s control, including, without limitation, those risk factors contained in Evogene’s reports filed with the Israeli Securities Authority. Evogene disclaims any obligation or commitment to update these forward-looking statements to reflect future events or developments or changes in expectations, estimates, projections and assumptions.

BALANCE SHEETS

Dollar in thousands (except per share data) As of December 31 As of December 31 ----------------- ----------------- 2010 2009 Audited Audited ----------------- ----------------- Current assets Cash and cash equivalents 10,120 26,215 Short term bank deposits and marketable securities 25,729 12,024 Account receivables 2,142 558 Other account receivables and prepaid expenses 553 345 ----------------- ----------------- 38,544 39,142 ----------------- ----------------- Non-current assets Prepaid expenses 37 25 Property and equipment 4,120 3,440 Finance derivative - 57 Intangible assets 171 217 ----------------- ----------------- 4,328 3,739 ----------------- ----------------- Total Assets 42,872 42,881 ================= ================= Current liabilities Current maturities of other long- term liabilities 4,118 4,082 Trade payable 1,054 675 Liability related to traded warrants 9,199 - Other accounts payable and accruals 1,949 999 ----------------- ----------------- 16,320 5,756 ----------------- ----------------- Long-term Liabilities Liability related to finance lease - 117 Liability related to traded warrants - 4,349 Liability related to chief scientists grants 3,499 3,293 Deferred revenues 6,313 10,018 Accrued severance pay, net 9 9 ----------------- ----------------- 9,821 17,786 ----------------- ----------------- Shareholders’ Equity Share capital 82 80 Premium on shares 49,248 47,130 Other capital reserves 5,938 3,696 Put Option (4,433) (4,433) Accumulated deficit (34,104) (27,134) ----------------- ----------------- 16,731 19,339 ----------------- ----------------- Total Liabilities and Shareholders’ equity 42,872 42,881 ================= =================

STATEMENTS OF COMPREHENSIVE INCOME

Dollar in thousands (except per share data)

 For the Year For the Year For the Year ended on ended on ended on --------------- --------------- --------------- December 31 December 31 December 31 2010 2009 2008 Audited Audited Audited --------------- --------------- --------------- Revenues 12,563 9,993 3,426 Cost of revenues 5,811 4,962 1,414 --------------- --------------- --------------- Gross profit 6,752 5,031 2,012 --------------- --------------- --------------- Operating expenses: Research and development, net 5,544 2,569 4,078 Business development expenses 1,062 739 922 General and administrative 2,069 1,457 1,160 --------------- --------------- --------------- Profit (Loss) from ordinary operation (1,923) 266 (4,148) Other (expenses) income (54) 54 - Financial income 724 1,402 449 Financial expenses (10) (54) (73) Financial expenses due to revaluation of Options (5,393) (4,814) (247) Financial expenses due to revaluation of obligation to the OCS (314) (217) (675) Share of losses of an associate company - (46) (114) --------------- --------------- --------------- Net loss (6,970) (3,409) (4,808) --------------- --------------- --------------- Currency translation adjustment of financial statement - - 293 --------------- --------------- --------------- Total Comprehensive loss (6,970) (3,409) (4,515) =============== =============== =============== Basic loss per share (in dollar) (0.24) (0.13) (0.22) =============== =============== ===============