Conference call and webcast, today at 9:00 am Eastern
Time
Evogene Ltd. (NASDAQ, TASE: EVGN), a leading
biotechnology company developing novel products for life science
markets, announced today its financial results for the third
quarter ending September 30, 2018.
As outlined in the 2018 CEO letter to the
shareholders, Evogene is in the process of implementing its new
business strategy and supporting corporate structure, which is
based on stand-alone companies, each focused on a distinct field,
with access to Evogene's unique CPB (Computational Predictive
Biology) platform for their field. This standalone structure is
expected to accelerate commercialization efforts, making product
development more efficient and reduce time to market. Today,
Evogene’s subsidiaries and dedicated divisions are focused in the
following distinct fields: (i) Agriculture –
Ag Chemicals, Ag-Biologicals and Seed Traits; (ii) Human
Health – microbiome based human therapeutics; (iii)
Industrial Applications – castor oil.
Each of these subsidiaries, with its own
management and R&D team, has three main objectives:
(i) advance its product pipeline; (ii) establish
its go-to-market strategy based on collaborations and/or direct
sales; (iii) enhance the creation of its internal value and secure
its own financial resources.
Evogene is rapidly advancing in the execution of
its new strategy, the implementation of its new corporate structure
and the achievement of the subsidiaries’ and divisions’ defined
objectives; as is illustrated in the following highlights from the
last quarter:
Agriculture:
- The incorporation of Evogene's broad Ag-Chemicals division's
activities to a stand-alone company is expected to be completed by
year end.
- A significant milestone was achieved in the Ag-Chemicals
division’s next generation herbicide pipeline. Biological proof was
demonstrated in lab assays of the binding of predicted molecule
families to two novel target proteins, representing a new
Mode-of-Action. These next generation herbicide candidates have the
potential to overcome growing weed resistance with a high standard
of safety as they address target proteins not present in
humans.
Human Health:
- Biomica recently announced the addition of internationally
renowned experts in the fields of Gastroenterology and the Human
Microbiome to its Scientific Advisory Board. This addition to
Biomica’s scientific expertise will support the company’s upcoming
steps towards its clinical development and is an important step in
the creation of the required infrastructure for Biomica’s success
as a stand-alone company.
Industrial Applications:
- Evofuel is currently in a rebranding and renaming process to
better reflect its new strategy. Evofuel has realigned its strategy
in light of changes in the biofuel industry and initiated a change
in its targeted market from the biofuel industry to the castor oil
market for industrial uses and a change in business model – from
generating revenues from seed sales, to mainly focus on partnering
with castor oil producers on a revenue-sharing basis from oil and
other final product sales.
- Evofuel recently announced together with Fantini, an
agricultural equipment manufacturer, a breakthrough in mechanical
harvesting for castor bean. Mechanical harvesting is a major
bottleneck in the conversion of castor bean to a fully modernized
commercial crop and the combination of Fantini’s harvester with
Evofuel proprietary seeds has demonstrated significant improvement
in yield loss in field trials.
Ofer Haviv, Evogene's President and CEO,
stated: “I am very happy with the progress achieved to
date in the implementation of our overall strategy and we are
expecting to complete the new corporate structure in the first half
of 2019. As you recall the CPB platform is at the core of our
activities and their main competitive advantage. During the third
quarter of 2018 we completed the development of the PRISM platform,
exclusively dedicated to our activities in Human Health. With these
abilities in place, they are expected to greatly accelerate
Biomica’s product pipeline.
“We look forward to sharing with you the
progress in our diverse activities and expect the remainder of 2018
to be a further demonstration of the CPB platform's capabilities.”
- Concluded Mr. Haviv.
Financial results for the period ending
September 30, 2018:
Cash position: As of
September 30, 2018, the Company had approximately $58.2 million in
cash, short-term bank deposits and marketable securities,
representing a net cash usage of approximately $13.5 million for
the first nine months of 2018 and approximately $4.0 for the third
quarter of 2018. The Company does not have bank debts.
Evogene expects its cash burn rate for 2018 to
increase to the range of $16-$17 million, from $14 - $16 million,
assuming the company continues to operate according to the current
course of business and assuming no significant change in the
Dollar/ILS exchange rate. This increase is mainly due to a
significant reduction of approximately $1 million in the company's
forecast for its financing income for the year. Additional details
are provided below in the review of the net financing
expenses.
Revenues primarily consist of research and
development payments, reflecting R&D cost reimbursement under
our various collaboration agreements, as reflected in our cost of
revenues. The majority of these agreements also provide for
development milestone payments and royalties or other forms of
revenue sharing from successfully developed products.
Gross profit for the first nine
months of 2018 was approximately $0.3 million in comparison to
approximately $0.4 million during the first nine months of 2017.
Gross profit for the third quarter of 2018 was approximately $0.1
million in comparison to approximately $0.2 million reported for
the third quarter of 2017.
R&D expenses for the first
nine months of 2018 were approximately $10.8 million in comparison
to approximately $12.3 million in the first nine months of 2017.
R&D expenses for the third quarter of 2018 were approximately
$3.9 million in comparison to approximately $4.3 million in the
third quarter of 2017. R&D expenses decreased following
operating efficiencies achieved as a result of the new corporate
structure initiated at the beginning of 2018.
Operating loss for the first
nine months of 2018 was approximately $14.7 million in comparison
to approximately $15.9 million in the first nine months of 2017.
Operating loss for the third quarter of 2018 was approximately $5.1
million in comparison to approximately $5.5 million in the third
quarter in 2017. The decrease in operating loss was mainly due to
the decrease in R&D expenses as described above and a decrease
in G&A expenses, which was partially offset by an increase in
the business development expenses.
The net financing expenses for the first nine
months of 2018 were approximately $0.2 million in comparison to net
financing income of approximately $1.3 million in the corresponding
period in 2017. The net financing income for the third quarter of
2018 was approximately $0.3 million in comparison to net financing
income of approximately $0.5 million in the comparable quarter in
2017. This decrease in the first nine months of 2018 is mainly due
to re-evaluation of marketable securities following the increase in
the US treasury bonds interest rate.
Loss for the first nine months
of 2018 was approximately $15.0 million compared to a loss of
approximately $14.6 million in the first nine months of 2017. Loss
in the third quarter of 2018 decreased to approximately $4.8
million compared to approximately $5.0 million in the third quarter
in 2017. Conference Call & Webcast
Details:
Evogene’s management will host a conference call
to discuss the results at 09:00 AM Eastern time, 16:00 Israel time.
To access the conference call, please dial 1-888-668-9141 toll free
from the United States, or +972-3-918-0609 internationally. Access
to the call will also be available via live webcast through the
Company’s website at www.evogene.com.
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 16, 2018, and an archive
of the webcast will be available on the Company’s website through
November 18, 2018.
About Evogene Ltd.:
Evogene (NASDAQ, TASE: EVGN) is a leading
biotechnology company developing novel products for major life
science markets through the use of a unique computational
predictive biology (CPB) platform incorporating deep scientific
understandings and advanced computational technologies.
Today, this platform is utilized by the Company
to discover and develop innovative products in the following areas
(via subsidiaries or divisions): ag-chemicals, ag-biologicals, seed
traits, integrated castor oil ag-solutions and human microbiome
based therapeutics. Each subsidiary or division establishes its
product pipeline and go-to-market, as demonstrated in its
collaborations with world-leading companies such as BASF, Corteva,
Bayer and ICL. For more information, please visit
www.evogene.com
Forward Looking StatementsThis
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. 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 beyond Evogene's
control, including, without limitation, those risk
factors contained in Evogene’s reports filed with the
appropriate 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.
Evogene Investor
Contact: Nir ZalikIR
DirectorIR@evogene.com972-8-931-1900
US Investor Relations:Vivian
Cervantes PCG Investor
Relationsvivian@pcgadvisory.com646-863-6274
|
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION |
U.S. dollars in thousands (except share and per share
data) |
|
|
|
As of September 30, |
|
As of December 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Unaudited |
|
Audited |
CURRENT
ASSETS: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
5,710 |
|
|
$ |
3,435 |
|
Marketable securities |
|
|
40,001 |
|
|
|
59,940 |
|
Short-term bank deposits |
|
|
12,500 |
|
|
|
8,380 |
|
Trade
receivables |
|
|
236 |
|
|
|
132 |
|
Other
receivables and prepaid expenses |
|
|
1,566 |
|
|
|
904 |
|
|
|
|
|
|
|
|
|
60,013 |
|
|
|
72,791 |
|
LONG-TERM ASSETS: |
|
|
|
|
Long-term
deposits |
|
|
21 |
|
|
|
19 |
|
Property,
plant and equipment, net |
|
|
3,632 |
|
|
|
4,792 |
|
|
|
|
|
|
|
|
|
3,653 |
|
|
|
4,811 |
|
|
|
|
|
|
|
|
$ |
63,666 |
|
|
$ |
77,602 |
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Trade
payables |
|
$ |
784 |
|
|
$ |
1,110 |
|
Other
payables |
|
|
2,652 |
|
|
|
2,934 |
|
Liabilities in respect of government grants |
|
|
1,028 |
|
|
|
104 |
|
Deferred
revenues and other advances |
|
|
598 |
|
|
|
516 |
|
|
|
|
|
|
|
|
|
5,062 |
|
|
|
4,664 |
|
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
Liabilities in respect of government grants |
|
|
2,761 |
|
|
|
3,438 |
|
Deferred
revenues and other advances |
|
|
36 |
|
|
|
89 |
|
Severance
pay liability, net |
|
|
32 |
|
|
|
33 |
|
|
|
|
|
|
|
|
|
2,829 |
|
|
|
3,560 |
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
Ordinary
shares of NIS 0.02 par value:Authorized - 150,000,000 ordinary
shares; Issued and outstanding – 25,754,297 and 25,750,547 shares
at September 30, 2018 and December 31, 2017, respectively |
|
|
142 |
|
|
|
142 |
|
Share
premium and other capital reserve |
|
|
187,349 |
|
|
|
186,268 |
|
Accumulated deficit |
|
|
(131,989 |
) |
|
|
(117,032 |
) |
|
|
|
|
|
Equity
attributable to equity holders of the Company |
|
|
55,502 |
|
|
|
69,378 |
|
|
|
|
|
|
Non-Controlling interests |
|
|
273 |
|
|
|
- |
|
|
|
|
|
|
Total
equity |
|
|
55,775 |
|
|
|
69,378 |
|
|
|
|
|
|
|
|
$ |
63,666 |
|
|
$ |
77,602 |
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF PROFIT OR
LOSS |
U.S. dollars in thousands (except share and
per share data) |
|
|
|
Nine months endedSeptember
30, |
|
Three months endedSeptember
30, |
|
Year ended December 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2017 |
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
1,112 |
|
|
$ |
2,647 |
|
|
$ |
367 |
|
|
$ |
748 |
|
|
$ |
3,381 |
|
Cost
of revenues |
|
|
825 |
|
|
|
2,211 |
|
|
|
276 |
|
|
|
546 |
|
|
|
2,845 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
287 |
|
|
|
436 |
|
|
|
91 |
|
|
|
202 |
|
|
|
536 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
|
10,828 |
|
|
|
12,319 |
|
|
|
3,883 |
|
|
|
4,301 |
|
|
|
16,987 |
|
Business development |
|
|
1,610 |
|
|
|
1,264 |
|
|
|
526 |
|
|
|
443 |
|
|
|
1,686 |
|
General and administrative |
|
|
2,571 |
|
|
|
2,781 |
|
|
|
785 |
|
|
|
960 |
|
|
|
3,810 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
|
15,009 |
|
|
|
16,364 |
|
|
|
5,194 |
|
|
|
5,704 |
|
|
|
22,483 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(14,722 |
) |
|
|
(15,928 |
) |
|
|
(5,103 |
) |
|
|
(5,502 |
) |
|
|
(21,947 |
) |
|
|
|
|
|
|
|
|
|
|
|
Financing income |
|
|
1,196 |
|
|
|
1,769 |
|
|
|
328 |
|
|
|
563 |
|
|
|
2,125 |
|
Financing expenses |
|
|
(1,423 |
) |
|
|
(444 |
) |
|
|
(35 |
) |
|
|
(85 |
) |
|
|
(1,005 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss
before taxes on income |
|
|
(14,949 |
) |
|
|
(14,603 |
) |
|
|
(4,810 |
) |
|
|
(5,024 |
) |
|
|
(20,827 |
) |
Taxes
on income |
|
|
34 |
|
|
|
11 |
|
|
|
18 |
|
|
|
- |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss |
|
$ |
(14,983 |
) |
|
$ |
(14,614 |
) |
|
$ |
(4,828 |
) |
|
$ |
(5,024 |
) |
|
$ |
(20,838 |
) |
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
Equity holders of the Company |
|
|
(14,957 |
) |
|
|
(14,614 |
) |
|
|
(4,802 |
) |
|
|
(5,024 |
) |
|
|
(20,838 |
) |
Non-controlling interests |
|
|
(26 |
) |
|
|
- |
|
|
|
(26 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(14,983 |
) |
|
$ |
(14,614 |
) |
|
$ |
(4,828 |
) |
|
$ |
(5,024 |
) |
|
$ |
(20,838 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per share, attributable to equity holders of the
parent |
|
$ |
(0.58 |
) |
|
$ |
(0.57 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.81 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing basic and
diluted loss per share |
|
|
25,753,111 |
|
|
|
25,647,266 |
|
|
|
25,754,297 |
|
|
|
25,745,887 |
|
|
|
25,673,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
U.S. dollars in thousands |
|
|
|
Nine months
endedSeptember 30, |
|
Three months endedSeptember
30, |
|
Year ended December 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2017 |
|
|
|
Unaudited |
|
Audited |
Cash
flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss |
|
$ |
(14,983 |
) |
|
$ |
(14,614 |
) |
|
$ |
(4,828 |
) |
|
$ |
(5,024 |
) |
|
$ |
(20,838 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to the profit or loss items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,507 |
|
|
|
1,624 |
|
|
|
506 |
|
|
|
533 |
|
|
|
2,145 |
|
Share-based compensation |
|
|
1,371 |
|
|
|
1,648 |
|
|
|
650 |
|
|
|
682 |
|
|
|
2,244 |
|
Net
financing expense (income) |
|
|
150 |
|
|
|
(1,579 |
) |
|
|
(347 |
) |
|
|
(490 |
) |
|
|
(1,454 |
) |
Taxes
on income |
|
|
34 |
|
|
|
11 |
|
|
|
18 |
|
|
|
- |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,062 |
|
|
|
1,704 |
|
|
|
827 |
|
|
|
725 |
|
|
|
2,946 |
|
Changes in asset and liability items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease
(increase) in trade receivables |
|
|
(104 |
) |
|
|
(799 |
) |
|
|
(107 |
) |
|
|
95 |
|
|
|
37 |
|
Decrease
(increase) in other receivables |
|
|
(621 |
) |
|
|
177 |
|
|
|
131 |
|
|
|
127 |
|
|
|
221 |
|
Increase
in long-term deposits |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
- |
|
|
|
(1 |
) |
|
|
(6 |
) |
Decrease
in trade payables |
|
|
(417 |
) |
|
|
(381 |
) |
|
|
(313 |
) |
|
|
(62 |
) |
|
|
(86 |
) |
Increase
(decrease) in other payables |
|
|
(294 |
) |
|
|
(122 |
) |
|
|
211 |
|
|
|
177 |
|
|
|
138 |
|
Increase
(decrease) in deferred revenues and other advances |
|
|
29 |
|
|
|
5 |
|
|
|
(227 |
) |
|
|
(1 |
) |
|
|
(500 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,409 |
) |
|
|
(1,121 |
) |
|
|
(305 |
) |
|
|
335 |
|
|
|
(196 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash
received (paid) during the period for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest received |
|
|
1,139 |
|
|
|
1,682 |
|
|
|
318 |
|
|
|
561 |
|
|
|
2,173 |
|
Taxes
paid |
|
|
(23 |
) |
|
|
(14 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in operating activities |
|
|
(12,214 |
) |
|
|
(12,363 |
) |
|
|
(3,994 |
) |
|
|
(3,406 |
) |
|
|
(15,929 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
U.S. dollars in thousands |
|
|
|
Nine months endedSeptember
30, |
|
Three months endedSeptember
30, |
|
Year ended December 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2017 |
|
|
|
Unaudited |
|
Audited |
Cash
flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
$ |
(256 |
) |
|
$ |
(442 |
) |
|
$ |
(103 |
) |
|
$ |
(157 |
) |
|
$ |
(590 |
) |
Proceeds from sale of marketable securities |
|
|
33,434 |
|
|
|
13,812 |
|
|
|
12,337 |
|
|
|
2,697 |
|
|
|
22,737 |
|
Purchase of marketable securities |
|
|
(14,401 |
) |
|
|
(6,208 |
) |
|
|
(11,246 |
) |
|
|
(881 |
) |
|
|
(11,659 |
) |
Proceeds
from (investment in) bank deposits, net |
|
|
(4,120 |
) |
|
|
3,620 |
|
|
|
(6,000 |
) |
|
|
(1,500 |
) |
|
|
4,757 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used in) investing activities |
|
|
14,657 |
|
|
|
10,782 |
|
|
|
(5,012 |
) |
|
|
159 |
|
|
|
15,245 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of options |
|
|
9 |
|
|
|
682 |
|
|
|
- |
|
|
|
12 |
|
|
|
683 |
|
Proceeds from government grants |
|
|
221 |
|
|
|
266 |
|
|
|
68 |
|
|
|
- |
|
|
|
339 |
|
Repayment of government grants |
|
|
(65 |
) |
|
|
(208 |
) |
|
|
(21 |
) |
|
|
(64 |
) |
|
|
(208 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used in) financing activities |
|
|
165 |
|
|
|
740 |
|
|
|
47 |
|
|
|
(52 |
) |
|
|
814 |
|
|
|
|
|
|
|
|
|
|
|
|
Exchange
rate differences - cash and cash equivalent balances |
|
|
(333 |
) |
|
|
62 |
|
|
|
(62 |
) |
|
|
(2 |
) |
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents |
|
|
2,275 |
|
|
|
(779 |
) |
|
|
(9,021 |
) |
|
|
(3,301 |
) |
|
|
199 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents, beginning of the period |
|
|
3,435 |
|
|
|
3,236 |
|
|
|
14,731 |
|
|
|
5,758 |
|
|
|
3,236 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents, end of the period |
|
$ |
5,710 |
|
|
$ |
2,457 |
|
|
$ |
5,710 |
|
|
$ |
2,457 |
|
|
$ |
3,435 |
|
|
|
|
|
|
|
|
|
|
|
|
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