Evogene Ltd. Reports Third Quarter 2011 Financial Results

REHOVOT, ISRAEL--(Marketwire - November 22, 2011) -

Evogene Ltd. (TASE: EVGN) announced today its financial results for the third quarter ended September 30th, 2011.

Ofer Haviv, Evogene’s President and CEO, stated, “We are very proud of our continuing achievements under our collaborations with major seed companies. These achievements, such as the recent milestone reached under the collaboration with Bayer CropScience for wheat and the successful completion of the third year of our five-year collaboration with Monsanto, are providing further evidence of Evogene’s position as a world leader in discovering genes targeted at improving yield and environmental stress traits. In addition to our activities in these key areas of abiotic stress, we are allocating significant resources to both expanding our plant genomic technologies to address additional challenges in product development, and to leveraging these capabilities into other major commercial areas, where they can provide the basis for successful new products.”

Mr. Haviv continued, “With respect to the expansion of our genomic technologies, we believe that the addition of our recently announced Gene2Product™ technology will add significant value to our gene discovery capabilities both in our current areas of focus and in new areas. One such area of focus relates to plant diseases and other biotic stress resistance, as demonstrated by the expansion of our collaborative work with Pioneer Hi-Bred to address rust resistance in soybean, which was announced yesterday.”

Mr. Haviv concluded, “We look forward to reporting additional achievements in these and other areas as we further develop and expand our unique company.”

Highlights for this quarter with respect to our collaborations include:

• Expansion of our relationship with Pioneer Hi-Bred, a DuPont Business, addressing important soybean traits, by the signing of a new multiyear collaboration, for improving resistance to soybean rust, one of the most devastating fungal diseases in this important crop.
• Milestone achievement under our five-year wheat collaboration with Bayer CropScience AG, signed in December 2010, which includes identification of over 200,000 single-nucleotide polymorphisms (“SNP’s”) in the wheat genome.
• Joint announcement of the successful completion of the third year of collaboration with Monsanto, covering yield and environmental stress in corn, soybean, cotton and canola.

Revenues for the first nine months of 2011 were $10.2 million, compared to $7.9 million for the same period in 2010. Revenues for the third quarter of 2011 were $3.4 million, compared to $2.6 million for the same period in 2010. At present, revenues consist primarily of research and licensing revenues generated under the company’s various collaboration agreements.

Research & Development expenses for the first nine months of 2011 were $4.6 million, compared to $3.7 million for the same period in 2010. Research & Development expenses for the third quarter of 2011 were $2.0 million, compared to $1.5 million for the same period in 2010. These increases mainly relate to the development of the Gene2Product™ computational technology, increased efforts focused on additional traits, mainly biotic tolerance traits, and the biofuel program.

In addition, Cost of Revenues consists primarily of certain research and development expenses allocated to deliverables under our various collaborations. Such Cost of Revenues for the first nine months of 2011 were $5.5 million, compared to $4.2 million for the same period in 2010. Cost of Revenues for the third quarter of 2011 were $2.0 million, compared to $1.5 million for the same period in 2010.

Loss from ordinary operations for the first nine months of 2011 was $2.4 million, compared to loss from ordinary operations of $2.1 million for the same period in 2010. Loss from ordinary operations for the third quarter of 2011 was $1.3 million, compared to loss from ordinary operations of $1.2 million for the same period in 2010.

Financial expenses due to publicly traded warrants: Evogene had approximately 4.5 million publicly traded warrants outstanding, which were issued as part of its IPO on the Tel Aviv Stock Exchange in May 2007, 99.9% of which were exercised by May 31, 2011 (the warrant expiry date). While these warrants were outstanding, any change as of the end of a reporting period in the market price of the Company’s ordinary shares results in non-cash financial income (expense) due to their revaluation on our statements of comprehensive profit or loss.

Total Comprehensive profit for the first nine months of 2011 was $1.6 million, which includes $3.7 million of non-cash financial income due to publicly traded warrants, as described above, compared to a total comprehensive loss of $4.0 million, including $2.2 million of such non-cash financial expenses, for the same period in 2010. Total comprehensive loss for the third quarter of 2011 was $2.3 million, compared to a total comprehensive loss of $3.6 million, which includes $3.1 million of such non-cash financial expenses for the same period in 2010. Also as explained above, these non-cash financial income and/or expense amounts due to publicly traded warrants will not be applicable for future quarterly results.

As of September 30, 2011, Evogene had approximately $60 million in cash and cash equivalents, marketable securities and short-term deposits, compared to approximately $36 million as of December 31, 2010. The September 30, 2011 amount includes $16.6 million from the exercise of the previously outstanding publicly traded warrants and $12 million from an equity investment in the Company by Bayer CropScience pursuant to a wheat collaboration agreement signed in December 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 focuses on utilizing its proprietary computational genomic technologies to provide a complete solution for plant trait improvement through combining state of the art biotechnology and advanced breeding methods. Evogene is collaborating with world leading seed companies to introduce its improved plant traits into key commercial crops under milestone and royalty bearing agreements. 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.” These statements include words like “may,” “expects,” “believes,” “scheduled” and “intends,” and they describe opinions about future events. These forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of Evogene Ltd. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

CONSOLIDATED BALANCE SHEETS ---------------------------------------------------------------------------- Dollar in thousands (except per share data) As of December 31 As of September 30 ------------ -------------------------- 2010 2011 2010 Audited Unaudited Unaudited ------------ ------------ ------------ Current assets Cash and cash equivalents 10,120 7,726 10,654 Marketable securities 21,229 38,053 23,568 Short term deposits 4,500 13,787 1,650 Account receivables 2,142 1,280 563 Other account receivables 553 732 304 ------------ ------------ ------------ 38,544 61,578 36,739 ------------ ------------ ------------ Non-current assets Prepaid expenses 37 49 33 Property and equipment 4,120 5,809 3,709 Intangible assets 171 145 183 ------------ ------------ ------------ 4,328 6,003 3,925 ------------ ------------ ------------ Total Assets 42,872 67,581 40,664 ============ ============ ============ Current liabilities Trade payable 1,054 998 645 Liability related to chief scientists grants 400 487 438 Deferred revenues 3,718 4,311 3,700 Liability related to traded warrants 9,199 - 6,478 Other accounts payable and accruals 1,949 1,651 1,354 ------------ ------------ ------------ 16,320 7,447 12,615 ------------ ------------ ------------ Long-term Liabilities Liability related to chief scientists grants 3,499 3,287 3,408 Deferred revenues 6,313 5,780 7,154 Accrued severance pay 9 9 9 ------------ ------------ ------------ 9,821 9,076 10,571 ------------ ------------ ------------ Shareholders’ Equity Share capital 82 100 81 Premium on shares 49,248 80,498 47,728 Other capital reserves 5,938 7,446 5,219 PUT Option (4,433) (4,433) (4,433) Accumulated deficit (34,104) (32,553) (31,117) ------------ ------------ ------------ 16,731 51,058 17,478 ------------ ------------ ------------ Total Liabilities and shareholders’ equity 42,872 67,581 40,664 ============ ============ ============ CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME --------------------------------------------------------------------------- Dollar in thousands (except per share data) For the Year For the period of For the period of ended on three months ended on nine months ended on ---------- ---------------------- ---------------------- December September September September September 31 2010 30 2011 30 2010 30 2011 30 2010 Audited Unaudited Unaudited Unaudited Unaudited ---------- ---------- ---------- ---------- ---------- Revenues 12,563 3,352 2,589 10,168 7,905 Cost of revenues 5,811 1,951 1,486 5,507 4,213 ---------- ---------- ---------- ---------- ---------- Gross profit 6,752 1,401 1,103 4,661 3,692 ---------- ---------- ---------- ---------- ---------- Operating expenses: Research and development 5,544 1,952 1,499 4,642 3,691 Business development 1,062 240 274 727 715 General and administrative 2,069 527 506 1,650 1,375 ---------- ---------- ---------- ---------- ---------- Loss from ordinary operation (1,923) (1,318) (1,176) (2,358) (2,089) Other expenses (54) (5) - (5) (54) Financial income 724 329 789 1,035 614 Financial expenses (10) (1,308) (3) (732) (7) Financial income (expenses) due to revaluation of Options (5,393) - (3,126) 3,729 (2,222) Financial expenses due to revaluation of obligation to the OCS (314) (37) (109) (118) (225) ---------- ---------- ---------- ---------- ---------- Net Profit (Loss) (6,970) (2,339) (3,625) 1,551 (3,983) ========== ========== ========== ========== ========== Total Comprehensive Profit (Loss) (6,970) (2,339) (3,625) 1,551 (3,983) ========== ========== ========== ========== ========== Basic Profit (Loss) per share (in dollar) (0.24) (0.074) (0.12) 0.05 (0.14) ========== ========== ========== ========== ========== Diluted Profit (Loss) per share (in dollar) (0.24) (0.074) (0.12) 0.05 (0.14) ========== ========== ========== ========== ==========