Evogene reports first quarter 2024 financial results

Financial and Business Highlights:

• Q1 2024 revenue: $4.2M vs. $0.6M in Q1 2023; anticipating continued growth in 2024.

• Q1 2024 net loss: $3.8M vs. $7.0M in Q1 2023.

• Projected 2024 cash usage, excluding Lavie Bio and Biomica: $8.0M, down 36% from $12.5M in 2023.

• Ceasing Canonic‘s operations results in annualized savings of approximately $1.5 million.

• Casterra‘s new agreements with African and Brazilian castor seed growers secure 900 tons of castor seeds, expected to fulfill all standing orders by end of 2024.

• Biomica to present preliminary Phase 1 clinical trial results for BMC128 at the 2024 ASCO conference on June 3.

• Lavie Bio received $2.5M, the second half of advanced payment from Corteva; announced new collaboration with Syngenta for bio insecticides; extended trials with Bayer for bio fungicides. Marketing and sales for Yalos™ are expanding in the US and Canada, with more crops added.

• AgPlenus announced a new collaboration with Bayer, including an upfront payment, research funding, milestone payments, and future royalties; achieved a milestone with Corteva in an existing collaboration agreement.

Evogene Ltd. (Nasdaq: EVGN, TASE: EVGN), a leading computational biology company aiming to revolutionize the development of life-science-based products, announced its financial results for the first quarter period ended March 31, 2024.

Mr. Ofer Haviv, Evogene’s President and CEO, stated: ″Evogene’s mission is to direct and accelerate the development of life-science based products. During the past years we developed three innovative AI tech-engines addressing the main development challenges of 3 life-science based product categories:

• MicroBoost AI – for the development of microbe-based products,

• ChemPass AI – for small-molecule-based products, and

• GeneRator AI – for products based on genetic elements.

Our AI tech-engines were structured to be compatible with the tremendous potential of various market segments and not limited to only one specific segment.

In order to capture the value of our AI tech-engines, our business strategy is to establish diverse collaborative partnerships through licensing or collaboration, with expert partners in specific fields that complement our technology. Together, we’ll develop novel products, aiming for full or partial ownership upon project completion.

This approach maximizes the potential of our AI tech-engines, while reducing financial and development risks. We believe this strategy holds the potential for groundbreaking innovations and significant financial gains for Evogene.

Today, Evogene has 4 subsidiary companies, and diverse engagements with leading companies in additional market segments, not covered by our subsidiaries.

I am very pleased to share with you the main achievements made by Evogene and its subsidiaries from the beginning of the year.″

Evogene Updates:

• Ceasing Canonic’s operation – Evogene has decided to cease its subsidiary Canonic, which specialized in customized medical cannabis products, following challenging market conditions in the medical cannabis sector. This decision results in annualized savings of approximately $1.5 million. Resources will be reallocated to areas with greater growth potential, such as funding Casterra’s needs for on-going capital.

  
  

• Establishment of Finally Foods – In March 2024, Evogene and The Kitchen FoodTech Hub by Strauss Group, established Finally Foods Ltd., an AI-driven company focused on sustainable protein production in plants, for the food sector. Finally Foods will leverage Evogene’s AI technology to modify plants for efficient protein production. The company has secured pre-seed funding from TKH and the Israeli Innovation Authority. Evogene holds approximately 40% stake in the company.

  
  

• Collaboration with Verb Biotics – In February 2024, Evogene and Verb Biotics entered into a collaboration agreement to advance probiotic innovation by developing new strains of probiotic bacteria that produce sustainable quantities of microbial metabolites, which enhance human health and vitality. The partnership will leverage Evogene’s MicroBoost AI tech-engine and Verb Biotics’ expertise in microbiome health.

Subsidiaries Updates:

Casterra Ag Ltd. – focuses on developing an integrated solution to enable large-scale commercial cultivation of castor to address the global demand for stable castor oil supply, mainly for the biodiesel industry. Casterra is utilizing GeneRator AI tech engine to direct and accelerate the development of its unique elite castor seed varieties.

• Under the supervision of Casterra’s new CEO, the company has recently engaged with castor seed growers in Africa and Brazil. These engagements are expected to yield approximately 900 tons of castor seeds in 2024, fulfilling all existing purchase orders and providing additional inventory later this year. The balance of the existing purchase orders is anticipated to be delivered in the second half of 2024.

Biomica Ltd. – a clinical-stage biopharmaceutical company developing innovative microbiome-based therapeutics, utilizing Evogene’s MicroBoost AI tech-engine.

• In January, 2024, Biomica reached a significant milestone by completing Phase I trial enrollment for its microbiome-based immuno-oncology drug BMC128 – a rationally designed consortia of 4 bacteria. Biomica recently announced that it will be presenting preliminary Phase 1 study data of BMC128 in a poster presentation at the 2024 ASCO Annual Conference, on June 3rd.

• Biomica is now preparing for advancing to Phase 2 of BMC128 clinical trial, and already conducted a pre-IND meeting with the FDA, aiming to initiate Phase 2 in 2025.

• Results from Biomica’s pre-clinical study in the IBS program, conducted in collaboration with NYU’s medical school, were presented at the Digestive Disease Week 2024 Annual Conference in May 2024.

Lavie Bio Ltd. – a leading ag-biologicals company that develops microbiome-based, computational-driven novel bio-stimulant and bio-pesticide products, utilizing Evogene’s MicroBoost AI tech-engine.

• In February, 2024, Lavie Bio announced that it had met the requirements of its licensing agreement for LAV311 & LAV312 with Corteva. This achievement enabled the successful receipt of the second half of an advanced payment, amounting to $2.5 million, bringing the total to $5 million.

• In February, 2024, Lavie Bio signed an agreement with Syngenta for the development of new biological insecticidal solutions.

• Lavie Bio has extended its joint validation trials with Bayer for its bio-fungicides, following successful laboratory and greenhouse testing. This joint effort, aimed at combating diseases affecting fruits and vegetables globally, has moved to field experiments for further validation.

• In March, 2024, Lavie Bio partnered with Ceres Global Ag Corp. to integrate its bio-inoculant, YalosTM, into regenerative agriculture programs across North America. This announcement and other marketing and sales efforts support the penetration of YalosTM in US and Canada markets with additional crops being added for treatment. Based on initial orders and sales projections, 2024 revenues are anticipated to increase compared to the previous year.

AgPlenus Ltd. – a global leader in computational design and development of novel sustainable crop protection products, utilizing Evogene’s ChemPass AI tech-engine.

• In February, 2024, AgPlenus announced a licensing and collaboration agreement with Bayer to develop a novel mode of action broad-spectrum herbicide targeting the APTH1 protein. The agreement entitles AgPlenus to an upfront payment, which was received on March 2024, ongoing research funding, milestone payments, and royalties based on future product sales. Bayer will have the exclusive license for developing and commercializing products resulting from this collaboration.

• In March, 2024, AgPlenus announced achieving a milestone under its existing collaboration with Corteva to develop new herbicides through a novel mode of action, APCO12, discovered by AgPlenus. The next phase of this collaboration will focus on optimizing the herbicide candidates towards a commercial-level product.

Financial Highlights:

Cash Position: As of March 31, 2024, Evogene held consolidated cash, cash equivalents, and short-term bank deposits of approximately $26.6 million, compared to approximately $31.1 million as of December 31, 2023. The consolidated cash usage during the Q1 2024 was approximately $4.5 million. Excluding Lavie Bio and Biomica, Evogene and its other subsidiaries used approximately $3.4 million in cash. Projected cash usage for 2024, excluding Lavie Bio and Biomica, is expected to be around $8.0 million, marking a notable 36% decrease from approximately $12.5 million in 2023.

Revenue: Revenues for the first quarter of 2024 were approximately $4.2 million, a significant increase from approximately $0.6 million in the same period the previous year. This growth was primarily driven by revenues recognized from Lavie Bio’s licensing agreement with Corteva and AgPlenus’s new collaboration with Bayer. Evogene anticipates continued revenue growth in 2024 compared to the previous year, mainly in the second half of 2024 based on Casterra’s forecast for seed-order supply.

R&D Expenses: Research and development expenses for the first quarter of 2024 were stable at approximately $4.8 million, net of non-refundable grants, consistent with the same period in the previous year.

Sales and Marketing Expenses: These expenses increased to $992 thousand in the first quarter of 2024 compared to $800 thousand in the same period of the previous year. The increase was driven by heightened sales and marketing activities for Casterra’s elite seed varieties and Lavie Bio’s first commercial product, YalosTM.

General and Administrative Expenses: General and administrative expenses rose to approximately $1.7 million in the first quarter of 2024, compared to approximately $1.5 million in the same period of the previous year, mainly due to non-cash compensation for subsidiary CEOs.

Other Expenses: The decision to cease Canonic’s operations resulted in recording other expenses of approximately $0.5 million, mainly due to impairment of fixed assets.

Operating Loss: The operating loss for the first quarter of 2024 was approximately $4.1 million, a decrease from $6.8 million in the same period of the previous year, mainly due to increased revenues.

Financing Income: Financing income net for the first quarter of 2024 was $241 thousand, compared to financing expenses net of $230 thousand in the same period of the previous year. This improvement was primarily due to increased interest income and revaluation of convertible SAFE.

Net Loss: The net loss for the first quarter of 2024 was approximately $3.8 million, compared to approximately $7.0 million in the same period last year. The $3.2 million decrease in net loss was primarily due to increased revenues and financial income, partially offset by the one-time $519 thousand other expenses related to ceasing Canonic’s operations.

For the financial tables click here.