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.
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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
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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: 177 142
Authorized - 150,000,000 ordinary shares; Issued
and outstanding - 31,645,083 at September 30, 2020
and 25,754,297 at December 31, 2019
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 Three months ended
Year ended
September 30, September 30, 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, $(0.58) $(0.47) $(0.17) $(0.16) $(0.70)
attributable to equity holders of the
Company
Weighted average number of shares 26,161,932 25,754,297 26,977,201 25,754,297 25,754,297
used in computing basic and diluted
loss per share
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
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U.S. dollars in thousands
Nine months ended Three months ended
Year ended
September 30, September 30, 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 Three months ended Year ended
September 30, September 30, 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
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SOURCE Evogene
