Evogene Reports First Quarter of 2019 Financial Results

REHOVOT, Israel, May 28, 2019 /PRNewswire/ -- Evogene Ltd. (NASDAQ: EVGN) (TASE: EVGN), a leading biotechnology company developing novel products for life science markets, announced today its financial results for the first quarter ending March 31, 2019.

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Ofer Haviv, Evogene's President and CEO, stated: "In 2019 we have completed the transition, as planned, to our new corporate structure consisting of Evogene, the company, as a technology hub for multiple divisions and subsidiaries in different life-science markets, each with an exclusive access to the CPB platform, our core technology, for its specific field. We currently apply the CPB platform in three general life-science markets: agriculture, human health and life-science based industrial applications."

"Looking forward, we expect Evogene's value will stem from the activities and the derived value of its divisions and subsidiaries. When substantial milestones in their product development pipeline are achieved, or strategic collaboration agreements are announced, these should be reflected in the valuations of our divisions' and subsidiaries' and subsequently in Evogene's as well, as a major shareholder. Moreover, since one of the tasks of our subsidiaries is to secure external financial resources in addition to the potential revenue they will generate through collaborations, third-party investments could provide color on our subsidiaries' valuation as well."

"A key motivation in the establishment of our subsidiaries is to enable increased management focus and a more efficient path to product development and an important parameter in their success is the quality of their leadership. Most of our CEO's have been with Evogene for several years, previously filling the position of general manager of our internal divisions that were the basis of our subsidiaries' activities. I am confident that under these subsidiaries' current leadership, each company is paving its independent path to success."

Recent Developments:

Corporate Structure:

    --  Establishment of Lavie Bio Ltd., a subsidiary focused on ag-biologicals,
        aiming to improve food quality, health and sustainability, led by Mr.
        Ido Dor.
    --  Establishment of Canonic Ltd., a subsidiary focused on developing next
        generation medical cannabis products, led by Dr. Arnon Heyman, who will
        participate in this quarterly call. The company's presentation can be
        accessed at:
        http://www.evogene.com/investor-relations/presentations-and-webcasts/
    --  Evofuel was rebranded as Casterra to better reflect its change in
        business focus from the castor growers for the alternative fuel industry
        to castor oil for industrial uses. This subsidiary is led by Mr. Assaf
        Dotan.

Pipeline advancement included:

    --  Biomica announced the initiation of pre-clinical studies in its
        immuno-oncology program, aiming to augment current cancer therapies by
        altering patients' gut microbiome to improve response
    --  AgPlenus:
        --  Herbicide pipeline: a leading molecule family demonstrated in-planta
            proof of new Mode-of-Action (MoA) and demonstrated activity on a
            broad panel of important weeds in greenhouse assays.
        --  Insecticide pipeline: computational identification of a new target
            representing a new MoA in insect pests has been achieved. Efforts
            are now focused on the computational prediction of molecule families
            that should inhibit this target.

"I expect the achievements during the coming months will begin to reflect the existing value and potential represented by each of our divisions and subsidiaries, all powered by the CPB platform." - Mr. Haviv concluded

Consolidated financial results for the period ending March 31, 2019:

Cash position: As of March 31, 2019, Evogene had approximately $50 million in cash, short-term bank deposits and marketable securities, representing a net cash usage of approximately $4.5 million during the first quarter of 2019.

Assuming that no external financial resources are secured, such as through collaborations or external fund raising, the Company estimates that its net cash usage in 2019 will be in the range of $16 to $18 million dollars. The Company does not have bank debts.

Revenues primarily consist of research and development payments. These revenues represent R&D cost reimbursement and milestone payments under our various collaboration agreements. The majority of these agreements also provide for royalties or other forms of revenue sharing from successfully developed products.

Gross profit for the first quarter of 2019 was approximately $0.3 million in comparison to approximately $0.1 million for the first quarter of 2018.

R&D expenses for the first quarter of 2019 remained stable at approximately $3.5 million in comparison to the first quarter of 2018. This stability in R&D expenses reflects increased expenses due to advancement in the Company's activities to later stages of product development, including field trials and pre-clinical studies provided by third parties, which was offset by operating efficiencies achieved with the new corporate structure.

Operating loss for the first quarter of 2019 was approximately $4.7 million in comparison to approximately $4.9 million in the first quarter of 2018.

The net financing income for the first quarter of 2019 was approximately $0.9 million in comparison to net financing expenses of approximately $0.4 million in the first quarter of 2018. This increase in the first quarter is due to translation of Israeli Shekel nominated cash and marketable securities to US Dollars, revaluation of the Company's marketable securities and interest income on bank deposits.

Loss for the first quarter of 2019 decreased to approximately to $3.8 million in comparison to a loss of $5.4 million during first quarter of 2018.

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.

Dr. Arnon Heyman, CEO of Evogene's cannabis subsidiary, Canonic, will join the conference call to discuss the company's activity with highlights from Canonic's presentation, which can be found on Evogene's website under the investor relations section.

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 +972-3-925-5904 internationally. The replay will be accessible through May 28, 2019, and an archive of the webcast will be available on the Company's website through June 8, 2019.

About Evogene Ltd.:

Evogene (NASDAQ: EVGN) (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, human microbiome-based therapeutics and medical cannabis. Each subsidiary or division establishes its product pipeline and go-to-market, as demonstrated in its collaborations with world-leading companies such as BASF, Bayer, Corteva and ICL. 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. 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 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.



     
              CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



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




                                                      
            
              As of March 31,    
       
       As of December 31,


                                                                                        2019                              2018



                                                         
            
              Unaudited         
       
          Audited




     CURRENT ASSETS:



     Cash and cash equivalents                                                       $6,588                            $5,810



     Marketable securities                                                           20,828                            26,065



     Short-term bank deposits                                                        22,592                            22,592



     Trade receivables                                                                   38                               160


      Other receivables and prepaid
       expenses                                                                        1,795                               861




                                                                                      51,841                            55,488




     LONG-TERM ASSETS:



     Long-term deposits                                                                                                   19


      Operating lease right-of-use-
       assets                                                                          3,050


      Property, plant and equipment, net                                               2,744                             3,187




                                                                                       5,794                             3,206





                                                                                     $57,635                           $58,694




     CURRENT LIABILITIES:



     Trade payables                                                                    $641                            $1,015


      Employees and payroll accruals                                                   1,690                             2,095



     Operating lease liability                                                          673


      Liabilities in respect of
       government grants                                                               1,008                               988


      Deferred revenues and other
       advances                                                                          373                               412



     Other payables                                                                     862                               921





                                                                                       5,247                             5,431




     LONG-TERM LIABILITIES:


      Liabilities in respect of
       government grants                                                               3,138                             2,898



     Operating lease liability                                                        2,454


      Deferred revenues and other
       advances                                                                            9                                28


      Severance pay liability, net                                                        32                                31





                                                                                       5,633                             2,957




     SHAREHOLDERS' EQUITY:


      Ordinary shares of NIS 0.02 par
       value:                                                                            142                               142


      Authorized - 150,000,000 ordinary
       shares; Issued and outstanding
       -25,754,297 shares at March 31,
       2019, and December 31, 2018


      Share premium and other capital
       reserve                                                                       187,884                           187,701



     Accumulated deficit                                                          (141,499)                        (137,790)





      Equity attributable to equity
       holders of the Company                                                         46,527                            50,053





     Non-controlling interests                                                          228                               253






     Total equity                                                                    46,755                            50,306





                                                                                     $57,635                           $58,694



       
                CONSOLIDATED STATEMENTS OF PROFIT OR LOSS



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






                                                                   Three months ended Year ended


      
          
                March 31,                                   December 31,

                 ---                                           ---

                                                                                 2019        2018        2018



                                                                        Unaudited      Audited






       Revenues                                                                 $348        $366      $1,747



       Cost of revenues                                                           71         284       1,452






       Gross profit                                                              277          82         295





        Operating expenses:




        Research and development,
         net                                                                    3,544       3,485      14,686


        Business development                                                      493         598       2,084


        General and administrative                                                909         945       3,514




        Total operating expenses                                                4,946       5,028      20,284






       Operating loss                                                        (4,669)    (4,946)   (19,989)





       Financing income                                                        1,199         533       1,413


        Financing expenses                                                      (282)      (970)    (2,206)





        Financing income
         (expenses), net                                                          917       (437)      (793)




        Loss before taxes on income                                           (3,752)    (5,383)   (20,782)



       Taxes on income                                                             2           3          30






       Loss                                                                 $(3,754)   $(5,386)  $(20,812)






       Attributable to:


        Equity holders of the
         Company                                                             $(3,709)   $(5,386)  $(20,758)


        Non-controlling interests                                                (45)                  (54)





                                                                             $(3,754)   $(5,386)  $(20,812)





                                                                              $(0.15)    $(0.21)    $(0.81)



        Basic and diluted
         loss per share




        Weighted average number of
         shares used in computing
         basic and diluted loss per
         share                                                             25,754,297  25,750,673  25,753,411



       
                CONSOLIDATED STATEMENTS OF CASH FLOWS


                     U.S. dollars in thousands






                                                           Three months ended Year ended


                             March 31,                        December 31,

                    ---

                                                                         2019        2018       2018



                                                                Unaudited      Audited





                     Cash
                      flows
                      from
                      operating
                      activities:

    ---



        Loss                                                         $(3,754)   $(5,386)          $(20,812)





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




         Adjustments
         to the
         profit
         or loss
         items:




        Depreciation                                                      638         496      2,020


        Share-
         based
         compensation                                                     203         346      1,731


        Net
         financing
         expense
         (income)                                                     (1,013)        411        694


        Taxes on
         income                                                             2           3         30




                                                                        (170)      1,256      4,475






       Changes in asset and liability items:




        Decrease
         (increase)
         in trade
         receivables                                                      122        (57)      (28)


        Decrease
         (increase)
         in other
         receivables                                                    (758)      (622)        95


        Decrease
         in trade
         payables                                                       (318)      (230)     (114)


        decrease
         in
         employees
         and
         payroll
         accruals                                                       (405)      (551)     (182)


        Increase
         (decrease)
         in other
         payables                                                        (52)       (37)       233


        Increase
         (decrease)
         in
         severance
         pay
         liability,
         net                                                                1         (1)


        Increase
         (decrease)
         in
         deferred
         revenues
         and
         other
         advances                                                        (58)        170      (165)




                                                                      (1,468)    (1,328)     (161)





        Cash
         received
         (paid)
         during
         the
         period
         for:




        Interest
         received                                                          34         533      1,360


        Taxes
         paid                                                                        (7)      (23)




        Net cash
         used in
         operating
         activities                                                   (5,358)    (4,932)  (15,161)





                     Cash
                      flows
                      from
                      investing
                      activities:

    ---



        Purchase
         of
         property,
         plant
         and
         equipment                                                       (83)       (48)     (374)


        Proceeds
         from
         sale of
         marketable
         securities                                                     6,229       7,222     63,639


        Purchase
         of
         marketable
         securities                                                              (2,204)  (31,700)


        Proceeds
         from
         (investment
         in) bank
         deposits,
         net                                                                       1,880   (14,212)




        Net cash
         provided
         by
         investing
         activities                                                     6,146       6,850     17,353



       
                CONSOLIDATED STATEMENTS OF CASH FLOWS


                     U.S. dollars in thousands






                                                           Three months ended Year ended


                           March 31,                          December 31,

                  ---

                                                                         2019        2018   2018



                                                                Unaudited      Audited





                     Cash flows
                      from
                      financing
                      activities:

    ---



        Proceeds from
         exercise of
         options                                                                       9      9


        Proceeds from
         government
         grants                                                           197          57    354


        Repayment of
         lease
         liability                                                      (234)


        Repayment of
         government
         grants                                                          (29)       (44)  (66)





        Net cash
         provided by
         (used in)
         financing
         activities                                                      (66)         22    297





        Exchange rate
         differences -
         cash and cash
         equivalent
         balances                                                          56        (22) (114)





        Increase in
         cash and cash
         equivalents                                                      778       1,918  2,375




        Cash and cash
         equivalents,
         beginning of
         the period                                                     5,810       3,435  3,435





        Cash and cash
         equivalents,
         end of the
         period                                                        $6,588      $5,353        $5,810







                      Significantnon-
                      cash
                      activities

    ---

        Acquisition of
         property,
         plant and
         equipment                                                        $14         $70           $80


                   Evogene Investor Contact
                      
                  :      
     
                US Investor Relations:



     Nir Zalik                             
     Vivian Cervantes



     IR Director                           
     PCG Investor Relations


                   IR@evogene.com           
     
                vivian@pcgadvisory.com



     972-8-931-1900                        
     646-863-6274

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SOURCE Evogene