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Evogene Reports First Quarter 2021 Financial Results

·11 min read

Conference call and webcast: today, May 26, 2021, 9:00 am ET

REHOVOT, Israel, May 26, 2021 /PRNewswire/ -- Evogene Ltd. (NASDAQ: EVGN) (TASE: EVGN), a leading computational biology company targeting to revolutionize life-science product discovery and development across several market segments, announces today its financial results for the first quarter of 2021.

Evogene logo
Evogene logo

Mr. Ofer Haviv, Evogene's President and CEO, stated, "A major corporate target for this year and the year following is value creation and its recognition by the capital markets, through Evogene's subsidiaries. Two main paths to achieve this target in life-science based companies, such as our subsidiaries, are: product advancement and commercialization, and demonstration of their underlying technological advantage.

With respect to product advancement, in 2021-2022, all our subsidiaries have significant milestones for pipeline advancement, and some of them are even expected to reach first product launches. We believe that announcing the achievement of such milestones, as they are reached, will enable the capital markets to properly appreciate the value created by the subsidiaries and will also be reflected in Evogene's value recognition.

With respect to demonstration of the advantage of the underlying technology, we believe that it can be recognized through the rapid progress of our subsidiaries' discovery and development pipelines. Moreover, any strategic collaboration entered into by a subsidiary, such as between AgPlenus and Corteva, or equity investment in a subsidiary by a strategic partner, such as Corteva's investment in Lavie Bio, is a vote of confidence in the unique advantages of our technology.

As previously disclosed, some of our subsidiaries are targeting to achieve additional strategic collaborations during 2021-2022. We expect that such collaborations will enable the capital markets to further recognize the unique technological value of our subsidiaries, thus reflecting on Evogene's value, as well.

I am pleased to report that both Evogene and our subsidiaries have been progressing in accordance with their plans during the first quarter of 2021. Each of our subsidiaries has a very promising product pipeline, and their activities are aiming to advance the products towards commercialization."

Q1 2021 main achievements

Biomica

  • Received additional positive pre-clinical results in its immuno-oncology program demonstrating efficacy of its live biotherapeutic product consortium BMC128 in combination with immune-checkpoint-inhibitors, this time in melanoma.

Canonic

  • Entered into agreements for the production and distribution in Israel of Canonic's medical cannabis products with Tikun Olam-Cannbit Pharmaceuticals to enable the planned launch of Canonic's first product in 2022.

Lavie Bio

  • Recently appointed Mr. Russ Putland as Vice President Commercial, bringing significant commercial experience to the Lavie Bio management team in preparation for its anticipated product launches starting 2022.

Evogene's Ag-Seed division

  • Entered a collaboration agreement with a U.S. company, Plastomics, whereby Evogene's insect control genes, demonstrating new modes of action, will be introduced into soybean, utilizing Plastomics' disruptive new technology.

"We enthusiastically look forward to continuing our progress, achieving our defined targets, entering into new collaborations, and expanding the use of our technology into new fields of activity," Mr. Haviv concluded.

Consolidated financial results for the first quarter ended as of March 31, 2021:

Cash position: Evogene maintains a strong financial position for its activities with approximately $70.1 million in consolidated cash, cash related accounts, bank deposits and marketable securities as of March 31, 2021. Approximately $11.8 million of Evogene's consolidated cash is appropriated to its subsidiary, Lavie Bio.

During the first quarter of 2021, our consolidated net cash usage, excluding $27.1 million of net proceeds raised through an "At the Market Offering" ("ATM") initiated in January 2021 and concluded during February 2021, was approximately $5.2 million, or $4.0 million, if excluding Lavie Bio. The Company has no bank debt.

In March 2021 we announced a new "ATM" and we had not sold any shares under this offering as of the end of the quarter.

Research and Development ("R&D") expenses: R&D expenses, which are reported net of grants received, were approximately $4.3 million for the first quarter of 2021 (including a non-cash expense of $0.3 million for amortization of share-based compensation), in comparison to $4.6 million (including a non-cash expense of $0.9 million for amortization of share-based compensation) in the first quarter of 2020. In the first quarter of 2021 the actual R&D expenses slightly decreased, mainly due to a decrease in share-based compensation expenses.

Business Development ("BD") expenses: BD expenses were approximately $0.6 million for the first quarter of 2021 (including a non-cash expense of $0.1 million for amortization of share-based compensation), in comparison to $1.0 million (including a non-cash expense of $0.7 million for amortization of share-based compensation) in the first quarter of 2020.

General and Administrative ("G&A") expenses: G&A expenses for the first quarter of 2021 were $1.5 million (including a non-cash expense of $0.1 million for amortization of share-based compensation), in comparison to $1.3 million (including a non-cash expense of $0.3 million for amortization of share-based compensation) in the first quarter of 2020. The increase is mainly attributed to the increase of the costs of directors' and officers' insurance, partially offset by a decrease in non-cash expenses of amortization of share-based compensation.

Operating loss: Operating loss for the first quarter of 2021 was $6.3 million, in comparison to $6.9 million for the first quarter of 2020. The decrease in operating loss during the first quarter is attributed to the increase in revenues from collaboration agreements compared to the first quarter of 2020 and due to the decrease in aforementioned amortization of share-based compensation expenses.

Loss: The loss for the first quarter of 2021 was $7.1 million in comparison to a loss of $7.2 million for the first quarter of 2020. The slight decrease in the loss for the first quarter is attributed to the reduction in operating loss, partially offset by an increase in financing expenses mainly attributed to exchange rate differences and revaluation of pre-funded warrants.

Conference Call & Webcast Details:

Date: May 26, 2021

Time: 9:00 am EST; 16:00 Israel time

Dial-in number: 1-888-281-1167 toll free from the United States, or +972-3-918-0609 internationally

Webcast: Available at www.evogene.com

Replay Information: A replay of the conference call will be available approximately two 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, 2021, and an archive of the webcast will be available on the Company's website.

About Evogene Ltd.:

Evogene (NASDAQ: EVGN, TASE: EVGN), is a leading company in leveraging computational biology to design novel products for life-science-based industries including human health, agriculture, and industrial applications. Leveraging Big Data and Artificial Intelligence while incorporating a deep understanding of biology, Evogene established its unique technology, the Computational Predictive Biology (CPB) platform, to computationally design microbes, small molecules and genes as the core components for life-science 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 statement in this press release when it discusses its expected paths to value creation, its and its' subsidiaries expected trials, studies, product advancements, commercializations, launches, pipelines, milestones, potential collaborations and other plans for 2021 and 2022, the potential advantages of its technology and its anticipated entry into new fields of activity. 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, those risk factors contained in Evogene's reports filed with the applicable securities authority, as well as a result of the impacts of the COVID-19 pandemic. 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 COVID-19 pandemic), 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:



Aviva Banczewski / Rivka Neufeld

Investor Relations and Public Relations Manager

E: IR@evogene.com

T: +972-8-931-1900

Joseph Green
Edison Group
E: jgreen@edisongroup.com
T: +1 646-653-7030




Laine Yonker

Edison Group

E: lyonker@edisongroup.com

T: +1 646-653-7035

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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




As of March 31,


As of December 31,



2021


2020



Unaudited


Audited

CURRENT ASSETS:





Cash and cash equivalents


$ 38,642


$ 46,229

Marketable securities


19,948


-

Short-term bank deposits


11,500


2,000

Trade receivables


219


222

Other receivables and prepaid expenses


2,584


3,372








72,893


51,823

LONG-TERM ASSETS:





Long-term deposits


10


9

Right-of-use-assets


1,882


1,872

Property, plant and equipment, net


2,084


2,072

Intangible assets, net


15,909


16,139








19,885


20,092








$ 92,778


$ 71,915

CURRENT LIABILITIES:





Trade payables


$ 993


$ 863

Employees and payroll accruals


2,397


2,535

Operating lease liability


758


777

Liabilities in respect of government grants


144


72

Pre-funded warrants


-


4,144

Deferred revenues and other advances


26


47

Other payables


1,024


1,238








5,342


9,676

LONG-TERM LIABILITIES:





Operating lease liability


1,592


1,663

Liabilities in respect of government grants


3,740


3,694








5,332


5,357

SHAREHOLDERS' EQUITY:





Ordinary shares of NIS 0.02 par value:


230


200

Authorized − 150,000,000 ordinary shares; Issued and
outstanding – 40,414,229 shares as of March 31, 2021
and 35,600,088 shares as of December 31, 2020

Share premium and other capital reserve


257,184


225,121

Accumulated deficit


(185,878)


(179,276)






Equity attributable to equity holders of the Company


71,536


46,045






Non-controlling interests


10,568


10,837






Total equity


82,104


56,882








$ 92,778


$ 71,915

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

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




Three months ended

March 31,


Year ended
December 31,



2021


2020


2020



Unaudited


Audited








Revenues


$ 333


$ 75


$ 1,040

Cost of revenues


271


39


574








Gross profit


62


36


466








Operating expenses:














Research and development, net


4,297


4,587


17,287

Business development


570


970


2,672

General and administrative


1,454


1,337


5,321








Total operating expenses


6,321


6,894


25,280








Operating loss


(6,259)


(6,858)


(24,814)








Financing income


52


137


1,591

Financing expenses


(905)


(487)


(2,951)








Financing expenses, net


(853)


(350)


(1,360)








Loss before taxes on income


(7,112)


(7,208)


(26,174)

Taxes on income


8


6


32








Loss


$ (7,120)


$ (7,214)


$ (26,206)








Attributable to:







Equity holders of the Company


(6,602)


(6,228)


(23,374)

Non-controlling interests


(518)


(986)


(2,832)










$ (7,120)


$ (7,214)


$ (26,206)








Basic and diluted loss per share


$ (0.17)


$ (0.24)


$ (0.83)








Weighted average number of shares used in
computing basic and diluted loss per share


38,959,623


25,754,297


28,158,779

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




Three months ended

March 31,


Year ended
December 31,



2021


2020


2020



Unaudited


Audited









Cash flows from operating activities:














Loss


$ (7,120)


$ (7,214)


$ (26,206)








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














Adjustments to the profit or loss items:














Depreciation


330


420


1,792

Amortization of intangible assets


230


233


935

Share-based compensation


531


1,934


4,097

Pre-funded warrants issuance expenses


-


-


211

Decrease in accrued bank interest


12


25


64

Net financing expense


886


376


967

Taxes on income


8


6


32










1,997


2,994


8,098

Changes in asset and liability items:














Decrease (increase) in trade receivables


3


11


(150)

Decrease (increase) in other receivables


719


(157)


(1,300)

Increase in long-term deposits


(1)


-


-

Increase (decrease) in trade payables


123


(274)


(29)

Increase (decrease) in employees and payroll accruals


(138)


(639)


456

Decrease in other payables


(255)


(212)


(87)

Decrease in deferred revenues and other advances


(21)


(41)


(339)










430


(1,312)


(1,449)








Cash received (paid) during the period for:














Interest received


69


112


294

Interest paid


(57)


(50)


(238)

Taxes paid


(8)


(6)


(13)








Net cash used in operating activities


(4,689)


(5,476)


$ (19,514)








Cash flows from investing activities:














Purchase of property, plant and equipment


(183)


(291)


(682)

Proceeds from sale of marketable securities


201


1,044


2,097

Purchase of marketable securities


(20,281)


-


-

Proceeds from (investments in) bank deposits, net


(9,500)


2,500


8,000








Net cash provided by (used in) investing activities


$ (29,763)


$ 3,253


$ 9,415

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




Three months ended

March 31,


Year ended
December 31,



2021


2020


2020



Unaudited


Audited








Cash flows from financing activities:














Proceeds from issuance of ordinary shares, net of issuance
expenses


27,108


-


18,658

Proceeds from issuance of pre-funded warrants


-


-


1,989

Proceeds from advances for pre-funded warrants


-


-


9

Proceeds from exercise of options


445


-


59

Repayment of lease liability


(167)


(177)


(639)

Proceeds from government grants


123


175


320

Repayment of government grants


(20)


-


(22)








Net cash provided by (used in) financing activities


27,489


(2)


20,374








Exchange rate differences - cash and cash equivalent
balances


(624)


(512)


1,206








Increase (decrease) in cash and cash equivalents


(7,587)


(2,737)


11,481








Cash and cash equivalents, at the beginning of the period


46,229


34,748


34,748








Cash and cash equivalents, at the end of the period


$ 38,642


$ 32,011


$ 46,229















Significant non-cash activities







Acquisition of property, plant and equipment


$ 64


$ 17


$ 57








Increase (decrease) of right-of-use asset recognized
with corresponding lease liability


$ 162


$ -


$ (41)








Exercise of options


$ -


$ -


$ 57








Ordinary shares issuance expenses


$ 50


$ -


$ -








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SOURCE Evogene