Evogene reports fourth quarter and year end 2012 financial results

Date:03-25-2013

Evogene announced its financial results for the fourth quarter and year ended December 31, 2012.

Ofer Haviv, Evogene's president and CEO, stated: "Our position as a world leading discoverer and developer of improved plant traits was significantly strengthened during the past year. Included in our industry collaborations at year end were substantial collaborations with five of the seven leading seed companies in the world. These collaborations cover many important crops, including the four largest food and feed crops – wheat, corn, rice and soybean.”

Mr. Haviv continued, “In addition, major efforts were undertaken during 2012 to position us for continued growth and diversification through the further expansion of our unique integrated plant genomics capabilities. We believe that these broadly applicable capabilities provide each of our four operating divisions - yield and abiotic stress, biotic stress, ag-chemicals and seed development - with significant competitive advantages to address critical worldwide food, feed and fuel needs.”

Mr. Haviv explained, “Among our capabilities expansion achievements during the past year, included the completion of a pilot program for long non-coding RNA, launch of new computational platforms (including Gene2ProductTM), introduction of a new and unique model plant system (Brachypodium), and initial use of a new automated data collection and analysis platform (Phenomix). Combined with our past infrastructure investments and achievements, Evogene in 2013 has the team, the technical capabilities and the industry relationships to not only maintain, but also to enhance and broaden, its strong competitive position in the four markets that we are addressing worldwide."

Mr. Haviv concluded, “In addition, we continue to maintain a strong financial position, with increasing revenues and cash equivalents at yearend of over $55 million.”

Revenues for 2012 were approximately $17.1 million, representing an increase of approximately 15% compared to revenues of $14.9 million for the same period in 2011. This increase in revenues primarily relates to the November 2011 extension of our multi-year collaboration with Monsanto. Revenues for the fourth quarter of 2012 were $4.8 million, compared with $4.7 million for the same period in 2011. At present, revenues consist primarily of research and licensing revenues generated under the company's various collaboration agreements with seed companies.

Cost of Revenues includes expenses related to the support of our on-going activities under our various collaborations with seed companies, all of which provide for future potential milestone and royalty revenues. Cost of Revenues for 2012 was $9.6 million, compared with $8.2 million for 2011. This increase in Cost of Revenues results from the increase in activities under our various collaborations as demonstrated by the increase in Revenues for the period. Cost of Revenues expenses for the fourth quarter of 2012 were $2.6 million, compared with $2.7 million for the same period in 2011.

Research & Development expenses for 2012 were $7.3 million, compared with $6.4 million for the same period in 2011. Research & Development expenses do not include expenses incurred in support of on-going collaborations which, as stated above, are accounted for as Cost of Revenues. Research & Development expenses for the fourth quarter of 2012 were $2.1 million, compared with $1.7 million for the same period in 2011. This increase in R&D expenses relates mainly to development of new computational genomics and validation technologies in support of our four operating divisions and a significant increase in the company's R&D personnel.

Loss from ordinary operations for 2012 was $3.2 million, representing no change compared to the same period in 2011. Loss from ordinary operations for the fourth quarter of 2012 was $0.9 million, compared to a loss from ordinary operations of $0.8 million for the same period in 2011.

Financial income during 2011 due to publicly traded warrants: During the first two quarters of calendar 2011, Evogene had approximately 4.5 million publicly traded warrants outstanding, which were issued as part of its IPO on the Tel Aviv Stock Exchange in May 2007. As of May 31, 2011, the date of expiration of these warrants, over 99.9% had been exercised. While these warrants were outstanding, any change as of the end of a reporting period in the market price of the Company’s ordinary shares resulted in non-cash financial income or expense due to their revaluation on our statements of comprehensive profit or loss. Such accounting due to publicly traded warrants was no longer applicable after the second quarter of 2011.

Total Comprehensive loss for 2012 was $2.5 million, compared to a total comprehensive profit of $0.6 million for the same period in 2011. Total comprehensive loss for the fourth quarter of 2012 was $0.8 million, compared to a comprehensive loss of $0.9 million for the same period in 2011. As more fully explained in the preceding paragraph, total comprehensive profit for 2011 includes $3.7 million of non-cash financial income relating to publicly traded warrants expired on May 2011, whereas total comprehensive loss for 2012 does not include any such non-cash financial effects due to such warrants.

As of December 31, 2012, Evogene had approximately $55.1 million in cash, cash equivalents, cash deposits and short-term marketable securities, compared to approximately $58.8 million as of December 31, 2011.

Key highlights for 2012:

Business Development

•    Research and discovery activities continued on track under our on-going collaborations with world leading seed companies.
•    Activities initiated for our ag-chemicals division, focusing on finding new innovative chemical solutions for herbicides and crop enhancers.
•    Transfer of the Company’s seed activities to Evofuel, a newly formed wholly owned subsidiary, with activities and partnerships for development and commercialization of seed products, primarily for biofuels.
•    New collaborations:
o    Rasi Seeds, an Indian Seed Company, to increase yield and drought tolerance in hybrid rice in key and strategic markets for this crop.
o    T6 Industrial S.A., leading Argentinean biodiesel producer, to develop castor bean as a sustainable and cost competitive feedstock for biodiesel in Argentina.

Infrastructure and Technologies

•    Long non-coding RNA (lncRNA) - Completion of a pilot program to develop and validate a platform for identification of long non-coding RNA related genes. Evogene is now validating a new pool of lncRNA related genes under various growth conditions.

•    Phenomix - Establishment of a new platform enabling the advanced collection, storage and integrated analysis of enormous quantities of phenotypic data   directly from the field.

•    Computational technologies - Launch of new and advanced computational genomics technologies for improving plant performances: ATHLETE™ 4.0, a new version of our gene discovery technology; and Gene2Product™ 1.0, an integrated platform for optimizing gene function in target crops and increasing the probability of success of biotechnology seed products.

•    Brachypodium – Disclosure and initial use of our monocot model plant validation system for evaluation of genes for monocot crops, such as wheat, corn and rice. The validation system is utilized by Evogene for evaluation of genes discovered by us, and in certain case, those discovered by our partners.

•    Discovery and Validation Infrastructure - Completion of an expansion program of over 50% in the company's gene validation & plant growth capacity, including construction of new molecular and tissue culture laboratories and substantial expansion of our greenhouse facilities.