Evogene reports first quarter of 2019 financial results
Date:05-29-2019
Evogene Ltd. (NASDAQ, 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.
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.
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