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Classified in: Health, Science and technology, Business
Subjects: ERN, CCA

Evogene Reports Third Quarter 2019 Financial Results


REHOVOT, Israel, Nov. 13, 2019 /PRNewswire/ -- Evogene Ltd. (NASDAQ: EVGN) (TASE: EVGN), a leading biotechnology company developing novel products for life science markets, announces today its financial results for the third quarter, ending September 30, 2019.

Evogene Logo (PRNewsfoto/Evogene)

Ofer Haviv, Evogene's President and CEO, stated, "During the third quarter of 2019, we reached an important milestone with the investment in our subsidiary, Lavie Bio, by Corteva. This investment represents the first major, third party, financial and commercial implementation of our corporate strategy, as we outlined in our 2019 letter to the shareholders. The core of this strategy is to create shareholder value within Evogene by leveraging our unique Computational Predictive Biology 'CPB' platform through specific market-focused subsidiaries where the platform provides a significant competitive advantage. As our subsidiaries gain traction and begin to attract investor interest, the intrinsic value of Evogene will continue to increase."

"Looking ahead, we will continue to provide our subsidiaries with exclusive access to our unique 'CPB' technology platform, which accelerates the product pipeline development within each subsidiary.  In addition, Evogene will continue to leverage its strong cash position to provide financial support to each subsidiary until it reaches the point whereby its progress and assets warrant an attractive valuation. At such a stage, as demonstrated by the recent Lavie Bio investment, Evogene intends to bring in value-adding and strategic partners, while still remaining a major shareholder." Mr. Haviv concluded

Recent Highlights:

AgPlenus:

Biomica:

Canonic:

Casterra:

Lavie Bio:

Evogene has initiated a revised policy regarding the filing of announcements made by its subsidiaries. All of such announcements will continue to be distributed by press release to the wire services and uploaded to Evogene's website. However, Evogene will only re-file the announcement if the news is considered to have material impact, not just for such subsidiary, but for all of Evogene as a whole, by reporting it on an Evogene Form 6-K to the US Securities and Exchange Commission's EDGAR platform and making a corresponding report to the Israeli Securities Authority's MAGNA platform. Evogene encourages investors to follow the development of its subsidiaries via the Evogene website and mailing list.

Consolidated financial results for the period ending September 30, 2019:

Cash position:  As of September 30, 2019, Evogene had $52.1 million in consolidated net cash, short-term bank deposits and marketable securities. The Company cash usage amounted to $12.3 million during the first nine months of 2019 and $3.7 million during the third quarter of 2019. Evogene's consolidated cash includes a $10 million investment in its subsidiary, Lavie Bio, received from Corteva during the third quarter of 2019.

The Company continues to estimate that its cash usage for the whole of 2019 will be in the range of $16 to $18 million dollars. During the fourth quarter of 2019, the Company made the payment of the directors' and officers' liability insurance policies, which was substantially higher than in previous years due to changes in D&O insurance market conditions, in accordance with the approval of the general shareholders on September 26, 2019

Evogene's consolidated cash use is mostly appropriated to its subsidiaries, primarily Lavie Bio, AgPlenus, and Biomica, with funds also used for the establishment of infrastructure and greenhouses for Canonic.

Evogene does not have bank debt.

The Company intends to provide information with regard to its expected burn rate for 2020 in its press release for the fourth quarter of 2019.

Revenues for the third quarter of 2019, were $0.1 million versus $0.4 million in the same period last year. Revenues primarily consist of third-party 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 third quarter of 2019 was $16 thousand in comparison to $91 thousand in the third quarter of 2018.

R&D expenses for the third quarter of 2019 were $3.6 million in comparison to $3.9 million in the third quarter of 2018.

R&D expenses mostly represent product development activities of the Company and its subsidiaries, which include computational work, lab & greenhouse assays, field-trials and pre-clinical studies provided by third parties.  Evogene's consolidated R&D expenses were mostly attributed to its subsidiaries, primarily Lavie Bio, AgPlenus, and Biomica.

Operating loss for the third quarter of 2019 was $4.9 million in comparison to $5.1 million in the third quarter of 2018.

Net financing income for the third quarter of 2019 was $0.4 million in comparison to net financing income of $0.3 million in the third quarter of 2018.

Loss for the third quarter of 2019 was $4.5 million in comparison to a loss of $4.8 million during third quarter of 2018.

Conference Call & Webcast Details:
Date: November 13th, 2019
Time: 9:00am EST; 16:00  Israel time
Dial-in: 1-888-668-9141 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 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 +972-3-925-5900 internationally. The replay will be accessible through November 15, 2019, and an archive of the webcast will be available on the Company's website through November 28, 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 their 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 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 beyond the control of Evogene and its subsidiaries, including, without limitation, those risk factors contained in Evogene's reports filed with the appropriate securities authority. 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.


 

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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




September 30,


 

December 31,



2019


2018



Unaudited


Audited

CURRENT ASSETS:





Cash and cash equivalents


$          16,467


$           5,810

Marketable securities


6,386


26,065

Short-term bank deposits


29,268


22,592

Trade receivables


147


160

Other receivables and prepaid expenses


1,560


861








53,828


55,488

LONG-TERM ASSETS:





Long-term deposits


8


19

Operating lease right-of-use-assets


2,963


-

    Property, plant and equipment, net


2,389


3,187

Intangible assets, net


17,255


-








22,615


3,206








$          76,443


$         58,694

CURRENT LIABILITIES:





Trade payables


$               820


$           1,015

Employees and payroll accruals


1,848


2,095

Operating lease liability


960


-

Liabilities in respect of government grants


79


988

Deferred revenues and other advances


118


412

Other payables


904


921








4,729


5,431

LONG-TERM LIABILITIES:





Operating lease liability


2,273


-

Liabilities in respect of government grants


3,270


2,898

Deferred revenues and other advances


9


28

Severance pay liability, net


28


31








5,580


2,957

SHAREHOLDERS' EQUITY:





Ordinary shares of NIS 0.02 par value:

Authorized - 150,000,000 ordinary shares; Issued
and outstanding - 25,754,297 at September 30,
2019 and December 31, 2018, respectively


142


142

Share premium and other capital reserve


205,772


187,701

Accumulated deficit


(149,824)


(137,790)






Equity attributable to equity holders of the Company


56,090


50,053






Non-controlling interests


10,044


253






Total equity


66,134


50,306








$          76,443


$         58,694

 

 

 

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

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




Nine months ended
September 30,


Three months ended
September 30,


Year ended
December 31,



2019


2018


2019


2018


2018



Unaudited


Audited












Revenues


$           637


$       1,112


$             97


$         367


$            1,747

Cost of revenues


253


825


81


276


1,452












Gross profit


384


287


16


91


295












Operating expenses:






















Research and development, net


10,627


10,828


3,603


3,883


14,686

Business development


1,420


1,610


450


526


2,084

General and administrative


2,622


2,571


876


785


3,514












Total operating expenses


14,669


15,009


4,929


5,194


20,284












Operating loss


(14,285)


(14,722)


(4,913)


(5,103)


(19,989)












Financing income


2,517


1,196


647


328


1,413

Financing expenses


(655)


(1,423)


(265)


(35)


(2,206)












Financing income (expenses), net


1,862


(227)


382


293


(793)












Loss before taxes on income


(12,423)


(14,949)


(4,531)


(4,810)


(20,782)

Taxes on income (tax benefit)


-


34


(3)


18


30












Loss


$   (12,423)


$   (14,983)


$     (4,528)


$    (4,828)


$       (20,812)












Attributable to:











Equity holders of the Company


$  (12,034)


$   (14,957)


$     (4,231)


$    (4,802)


$       (20,758)

Non-controlling interests


(389)


(26)


(297)


(26)


(54)














$   (12,423)


$   (14,983)


$     (4,528)


$    (4,828)


$       (20,812)












Basic and diluted loss per share,
attributable to equity holders of the
Company


$       (0.47)


$       (0.58)


$       (0.16)


$      (0.19)


$           (0.81)












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


25,754,297


25,753,111


25,754,297


25,754,297


25,753,411

 


 

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




 

Nine months ended
September 30,


Three months ended
September 30,


Year ended
December 31,



2019


2018


2019


2018


2018



Unaudited


Audited

Cash flows from operating activities






















   Loss


$   (12,423)


$   (14,983)


$     (4,528)


$     (4,828)


$      (20,812)












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






















Adjustments to the profit or loss items:






















Depreciation


1,906


1,507


591


506


2,020

Amortization of intangible assets


194


-


194


-


-

Share-based compensation


802


1,371


355


650


1,731

Net financing expense (income)


(2,647)


150


(1,025)


(347)


694

Loss from sale of property, plant &
equipment


12


-


12


-


-

Taxes on income (tax benefit)


-


34


(3)


18


30














267


3,062


124


827


4,475

Changes in asset and liability items:






















Decrease (increase) in trade receivables


13


(104)


-


(107)


(28)

Decrease (increase) in other receivables


(600)


(621)


56


131


95

Increase in long-term deposits


-


(2)


-


-


-

Increase (decrease) in trade payables


(190)


(417)


71


(313)


(114)

Increase (decrease) in employees and
payroll accruals


(247)


(206)


113


114


(182)

Increase (decrease) in other payables


(3)


(88)


75


97


233

Increase (decrease) in severance pay
liability, net


(3)


-


1


-


-

Increase (decrease) in deferred revenues
and other advances


(313)


29


(120)


(227)


(165)














(1,343)


(1,409)


196


(305)


(161)












Cash received (paid) during the period for:






















Interest received


692


1,139


637


318


1,360

Taxes paid


-


(23)


3


(6)


(23)












Net cash used in operating activities


(12,807)


(12,214)


(3,568)


(3,994)


(15,161)

 

 


 

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




Nine months ended
September 30,


Three months ended
September 30,


Year ended
December 31,




2019


2018


2019


2018


2018



Unaudited


Audited


Cash flows from investing activities:






















Purchase of property, plant and equipment


$      (518)


$      (256)


$      (321)


$      (103)


$            (374)

Proceeds from sale of marketable securities


22,828


33,434


2,833


12,337


63,639

Purchase of marketable securities


(1,637)


(14,401)


-


(11,246)


(31,700)

Investment in bank deposits, net


(6,675)


(4,120)


(6,675)


(6,000)


(14,212)












Net cash provided by (used in) investing
activities


13,998


14,657


(4,163)


(5,012)


17,353












Cash flows from financing activities:






















Proceeds from exercise of options


-


9


-


-


9

Proceeds from government grants


406


221


119


68


354

Repayment of operating lease liability


(734)


-


(230)


-


-

Issuance of subsidiary's ordinary shares to
non-controlling interests


10,000


-


10,000


-


-

Repayment of government grants


(586)


(65)


(11)


(21)


(66)












Net cash provided by financing activities


9,086


165


9,878


47


297












Exchange rate differences - cash and cash
equivalent balances


380


(333)


223


(62)


(114)












Increase (decrease) in cash and cash
equivalents


10,657


2,275


2,370


(9,021)


2,375












Cash and cash equivalents, beginning of the
period


5,810


3,435


14,097


14,731


3,435












Cash and cash equivalents, end of the period


$    16,467


$      5,710


$    16,467


$      5,710


$            5,810












Significant non-cash activities






















Acquisition of property, plant and equipment


$         130


$         130


$           47


$         130


$                 80












Acquisition of intangible assets from non-
controlling interests against issuance of
subsidiary's ordinary shares


$    17,449


$              -


$    17,449


$             -


$                    -

 

Evogene Investor Contact: 
Rivka Neufeld
Investor Relations and Public Relations Manager
E: IR@evogene.com   
T: +972-8-931-1940

US Investor Relations:
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

SOURCE Evogene


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