Evogene Ltd. (NASDAQ:EVGN) (TASE:EVGN), a leading company for the
improvement of crop productivity and economics for food, feed and
fuel, announced today its financial results for the first quarter
ended March 31, 2017.
Ofer Haviv, Evogene's President and CEO,
stated: “Important progress continues in all three of our
core business areas, Ag-Biologicals, Seed Traits and
Ag-Chemicals. This progress includes an overall key corporate
initiative to expand our capabilities and activities past the
discovery phase and into early, and even advanced, product
development phases. We expect our efforts will result in both new
opportunities for various types of collaborations and the ability
to obtain an increased share of future revenues from products based
on our unique capabilities.
“In our internal bio-stimulant product program
within our Ag-Biologicals area, we have obtained
positive field trial results showing increased efficacy and
stability in corn under drought conditions and now advancing 20
promising microbial strains in second year corn validation field
trials. Additionally, moving downstream past discovery, we
have added key product development activities, including microbe
seed coating formulation and microbe culture fermentation.
“In the area of bio-pesticides, we recently
announced that our partner, Marrone Bio Innovations (MBI), is
advancing certain novel bacteria related to Evogene-identified
proteins into MBI's bio-insecticide product development
pipeline.
“In Seed Traits, progress
continues under our yield and environmental stress collaboration
with Monsanto, with Evogene gene candidates that have demonstrated
positive results for yield enhancement in corn and soybean being
further optimized and evaluated in Monsanto’s pipeline.
“Also within Seed Traits, our
insect control program is focused on bringing next-generation
seed-trait solutions to market through the discovery of novel
toxins. Following the demonstration last year of insecticidal
activity for a set of predicted toxins on a representative insect
from the Lepidopteran family, a sub-set of these toxins
demonstrated insecticidal effect when recently tested on additional
insects of the same family. This is a strong indication for the
potential of broad applicability for these toxins on this entire
insect family. The next step is for selected toxins to be
introduced into target plants for crop testing. Furthermore,
with respect to the Coleopteran family of insects - an insect
family that poses a widespread worldwide threat to corn - other
Evogene discovered toxins have recently demonstrated initial
insecticidal activity.
“In Ag-Chemicals, we are
focused on the biology-driven predictive discovery of candidate
chemical molecules for the development of next-generation
herbicides with novel mode of action. Such discovery capability
provides the foundation for both our collaboration with BASF and
our internal novel herbicide pipeline. In Evogene's internal
herbicide program, a subset of 10 previously validated Evogene
chemical compounds have now demonstrated initial positive results
in greenhouse evaluation. These compounds were computationally
predicted to impact six Evogene discovered targets for their
herbicidal activity. In parallel, we continue our work aimed at
establishing biological proof of the novel mode-of-action for those
10 chemical compounds. We have also integrated certain early
product development activities, including the establishment of a
computational infrastructure addressing key parameters for molecule
optimization such as efficacy, toxicity, and safety.
“With respect to our unique predictive discovery
infrastructure, we are now incorporating 'genome editing'
technology, a novel revolutionizing technology which will initially
be utilized in our internal yield and environmental stress
resistance programs for soybean and wheat. We are also actively
examining other potential market areas, beyond the core areas of
our work in the agricultural sector, where our broadly applicable
discovery infrastructure and know-how can create additional value
for our stakeholders.
“In summary, we believe that only through the
leveraging of our unique predictive discovery infrastructure have
we been able to address, with such potentially novel solutions, the
diverse key unmet needs in our three core ag-bio market
areas. We enthusiastically look forward to our continuing
growth and development as our current programs move further towards
product development and we continue to identify additional areas to
apply our unique capabilities,” added Mr.
Haviv.
Financial results for the period ended
March 31, 2017
Cash Position: At March
31, 2017, the Company had $83.4 million in cash, short-term bank
deposits and marketable securities, as compared to $88.2 million at
December 31, 2016. Evogene continues to expect that its net cash
usage for full-year 2017 will be in the range of $16 to $18
million.
Revenues primarily consist
of research and development payments, reflecting R&D cost
reimbursement under certain of our collaboration agreements. The
majority of these agreements also provide for development milestone
payments and royalties or other forms of revenue sharing from
successfully developed products.
Revenues for the first quarter of 2017 were $0.7
million, compared to $2.0 million for the first quarter of 2016.
The decline in revenues reflects the net decrease in research and
development cost reimbursement, in accordance with the work plans
under Evogene's various collaboration agreements. This decline is
mainly due to the advancement of our collaboration agreement with
Monsanto, from gene discovery to pre-development efforts, resulting
in reduction of activity scope. As we look forward, we expect this
revenue trend to continue.
Cost of revenues consist of
collaboration related R&D expenses. Cost of revenues for the
first quarter of 2017 were $0.6 million, compared to $1.5 million
for the first quarter of 2016. The decrease primarily related to
the change in the scope and type of activities preformed under
Evogene’s collaboration with Monsanto, as noted above.
R&D expenses for the first
quarter of 2017 were $4.0 million, compared to $3.7 million for the
first quarter of 2016. This increase was primarily due to increased
funding of our internal pipeline in bio-stimulants and herbicide
discovery.
In order to address the shift in activity scope
of our collaboration with Monsanto, and the change in composition
of our activities, we have increased our staffing needs in certain
areas and functions, and decreased in others. As a result, by end
of the quarter, there has been an approximately 8 percent net
reduction in total headcount for the company since year end
2016.
Operating loss for the
first quarter of 2017 was $5.3 million, compared to $4.6 million in
the comparable quarter in 2016. The increase in our operating loss
was primarily due to the decrease in revenues, which was partially
offset by a net decline in other expense categories.
The net financing income for the first quarter
of 2017 reached $0.4 million in comparison to $1.2 million in the
comparable quarter in 2016. This decrease is due to relatively high
capital gains derived from the company's marketable securities in
the first quarter of 2016. Net Loss for the first
quarter of 2017 was $4.8 million, compared to a net loss of $3.4
million for the same period in 2016. The increase in the net loss
was primarily due to the decrease in revenues and a decrease in net
financing income, which was partially offset by a net decline in
other expense categories.
Conference Call & Webcast
Details:Evogene management will host a conference call to
discuss the results at 09:00 AM Eastern time, 16:00 Israel time. To
access the conference call, please dial 1-888-668-9141 toll free
from the United States, or 972-3-918-0610 internationally. Access
to the call will also be available via live webcast through the
Company’s website at www.evogene.com.
A replay of the conference call will be
available approximately three hours following the completion of the
call. To access the replay, please dial 1-888-295-2634 toll free
from the United States, or 972-3-925-5937 internationally. The
replay will be accessible through May 19, 2017, and an archive of
the webcast will be available on the Company’s website through May
28, 2017.
About Evogene Ltd.:Evogene
(NASDAQ:EVGN) (TASE:EVGN) is a leading biotechnology company for
the improvement of crop productivity for the food, feed and fuel
industries. The Company operates in three key target markets:
improved seed traits (addressing yield increase, tolerance to
environmental stresses and resistance to insects and diseases);
innovative ag-chemicals (developing novel herbicide solutions for
weed control); and ag-biologicals. Evogene has collaborations with
world-leading seed and ag-chemical companies. For more information,
please visit www.evogene.com or contact the Company at
info@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 may
differ materially from what is expressed or implied by such
forward-looking statements due to a variety of factors, many of
which beyond Evogene's control, including, without limitation,
those risk factors contained in Evogene’s reports filed with the
appropriate securities authority. Evogene disclaims 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) |
|
|
|
|
|
|
|
As of March 31, |
|
As of December
31, |
|
|
|
2017 |
|
2016 |
|
|
|
2016 |
|
|
|
Unaudited |
|
Audited |
CURRENT
ASSETS: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
3,290 |
|
|
$ |
3,985 |
|
|
$ |
3,236 |
|
Restricted cash |
|
|
47 |
|
|
|
47 |
|
|
|
47 |
|
Marketable securities |
|
|
68,014 |
|
|
|
74,187 |
|
|
|
71,738 |
|
Short-term bank deposits |
|
|
12,017 |
|
|
|
20,603 |
|
|
|
13,137 |
|
Trade
receivables |
|
|
625 |
|
|
|
625 |
|
|
|
169 |
|
Other
receivables |
|
|
1,886 |
|
|
|
1,852 |
|
|
|
1,163 |
|
|
|
|
|
|
|
|
|
|
|
85,879 |
|
|
|
101,299 |
|
|
|
89,490 |
|
LONG-TERM ASSETS: |
|
|
|
|
|
|
Long-term
deposits |
|
|
4 |
|
|
|
16 |
|
|
|
13 |
|
Property,
plant and equipment, net |
|
|
6,017 |
|
|
|
7,716 |
|
|
|
6,483 |
|
|
|
|
|
|
|
|
|
|
|
6,021 |
|
|
|
7,732 |
|
|
|
6,496 |
|
|
|
|
|
|
|
|
|
|
$ |
91,900 |
|
|
$ |
109,031 |
|
|
$ |
95,986 |
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
Trade
payables |
|
$ |
778 |
|
|
$ |
1,161 |
|
|
$ |
1,330 |
|
Other
payables |
|
|
3,161 |
|
|
|
2,335 |
|
|
|
2,803 |
|
Liabilities in respect of government grants |
|
|
696 |
|
|
|
252 |
|
|
|
125 |
|
Deferred
revenues and other advances |
|
|
1,033 |
|
|
|
816 |
|
|
|
967 |
|
|
|
|
|
|
|
|
|
|
|
5,668 |
|
|
|
4,564 |
|
|
|
5,225 |
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
Liabilities in respect of government grants |
|
|
2,766 |
|
|
|
2,944 |
|
|
|
3,303 |
|
Deferred
revenues and other advances |
|
|
128 |
|
|
|
161 |
|
|
|
138 |
|
Severance
pay liability, net |
|
|
32 |
|
|
|
26 |
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
2,926 |
|
|
|
3,131 |
|
|
|
3,472 |
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
Ordinary shares of NIS 0.02 par value: Authorized
− 150,000,000 ordinary shares; Issued and outstanding – 25,626,809,
25,436,862 and 25,480,809 shares at March 31, 2017 and 2016
and December 31, 2016, respectively |
|
141 |
|
|
|
140 |
|
|
|
141 |
|
Share
premium and other capital reserve |
|
|
184,206 |
|
|
|
181,170 |
|
|
|
183,342 |
|
Accumulated deficit |
|
|
(101,041 |
) |
|
|
(79,974 |
) |
|
|
(96,194 |
) |
|
|
|
|
|
|
|
|
|
|
83,306 |
|
|
|
101,336 |
|
|
|
87,289 |
|
|
|
|
|
|
|
|
|
|
$ |
91,900 |
|
|
$ |
109,031 |
|
|
$ |
95,986 |
|
CONSOLIDATED STATEMENTS OF PROFIT OR
LOSS |
U.S. dollars in thousands (except share and per share
data) |
|
|
|
|
|
|
|
Three Months EndedMarch,
31 |
|
Year endedDecember
31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
2016 |
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
Revenues |
|
$ |
721 |
|
|
$ |
2,016 |
|
|
$ |
6,540 |
|
Cost of revenues |
|
|
647 |
|
|
|
1,515 |
|
|
|
5,639 |
|
|
|
|
|
|
|
|
Gross profit |
|
|
74 |
|
|
|
501 |
|
|
|
901 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
|
4,004 |
|
|
|
3,725 |
|
|
|
16,405 |
|
Business development |
|
|
451 |
|
|
|
362 |
|
|
|
1,696 |
|
General and administrative |
|
|
878 |
|
|
|
998 |
|
|
|
3,889 |
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
5,333 |
|
|
|
5,085 |
|
|
|
21,990 |
|
|
|
|
|
|
|
|
Operating loss |
|
|
(5,259 |
) |
|
|
(4,584 |
) |
|
|
(21,089 |
) |
|
|
|
|
|
|
|
Financing income |
|
|
722 |
|
|
|
1,334 |
|
|
|
2,424 |
|
Financing expenses |
|
|
(302 |
) |
|
|
(122 |
) |
|
|
(891 |
) |
|
|
|
|
|
|
|
Loss before taxes on income |
|
|
(4,839 |
) |
|
|
(3,372 |
) |
|
|
(19,556 |
) |
Taxes on income |
|
|
8 |
|
|
|
- |
|
|
|
36 |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4,847 |
) |
|
$ |
(3,372 |
) |
|
$ |
(19,592 |
) |
|
|
|
|
|
|
|
Basic and diluted net loss per share |
|
$ |
(0.19 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.77 |
) |
CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY |
U.S. dollars in thousands |
|
|
|
Sharecapital |
|
Share premium and other capital
reserve |
|
Accumulated deficit |
|
Total |
|
|
|
|
(Unaudited) |
|
|
Balance
as of January 1, 2017 (audited) |
|
$ |
141 |
|
$ |
183,342 |
|
$ |
(96,194 |
) |
|
$ |
87,289 |
|
Net
loss |
|
|
- |
|
|
- |
|
(4,847 |
) |
|
(4,847 |
) |
Exercise
of options |
|
*) - |
|
|
348 |
|
- |
|
|
348 |
|
Share-based compensation |
|
|
- |
|
|
516 |
|
- |
|
|
516 |
|
|
|
|
|
|
|
|
Balance
as of March 31, 2017 |
|
$ |
141 |
|
$ |
184,206 |
$ |
(101,041 |
) |
$ |
83,306 |
|
*) Represents an amount lower than $1
|
|
|
Sharecapital |
|
Share premium and other capital
reserve |
|
Accumulated deficit |
|
Total |
|
|
|
|
(Unaudited) |
|
|
Balance
as of January 1, 2016 (audited) |
|
$ |
140 |
|
$ |
180,214 |
|
$ |
(76,602 |
) |
|
$ |
103,752 |
|
Net
loss |
|
|
- |
|
|
- |
|
(3,372 |
) |
|
(3,372 |
) |
Exercise
of options |
|
*) - |
|
|
85 |
|
- |
|
|
85 |
|
Share-based compensation |
|
|
- |
|
|
871 |
|
- |
|
|
871 |
|
|
|
|
|
|
|
|
Balance
as of March 31, 2016 |
|
$ |
140 |
|
$ |
181,170 |
$ |
(79,974 |
) |
$ |
101,336 |
|
*) Represents an amount lower than $1
|
|
|
Share capital |
|
Share premium and other capital
reserve |
|
Accumulated deficit |
|
Total |
|
|
|
|
(Audited) |
|
|
Balance
as of January 1, 2016 |
|
$ |
140 |
|
$ |
180,214 |
|
$ |
(76,602 |
) |
|
$ |
103,752 |
|
Net
loss |
|
|
- |
|
|
- |
|
|
(19,592 |
) |
|
|
(19,592 |
) |
Exercise
of options |
|
|
1 |
|
|
185 |
|
|
- |
|
|
|
186 |
|
Share-based compensation |
|
|
- |
|
|
2,943 |
|
|
- |
|
|
|
2,943 |
|
|
|
|
|
|
|
|
|
|
Balance
as of December 31, 2016 |
|
$ |
141 |
|
$ |
183,342 |
|
$ |
(96,194 |
) |
|
$ |
87,289 |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
U.S. dollars in thousands |
|
|
|
|
|
|
|
Three Months endedMarch,
31 |
|
Year endedDecember
31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
2016 |
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4,847 |
) |
|
$ |
(3,372 |
) |
|
$ |
(19,592 |
) |
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to the profit or loss items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
545 |
|
|
|
591 |
|
|
|
2,279 |
|
Share-based compensation |
|
|
516 |
|
|
|
871 |
|
|
|
2,943 |
|
Net financing income |
|
|
(565 |
) |
|
|
(1,294 |
) |
|
|
(1,688 |
) |
Loss from sale of property, plant and equipment |
|
|
- |
|
|
|
- |
|
|
|
39 |
|
Taxes on income |
|
|
8 |
|
|
|
- |
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
504 |
|
|
|
168 |
|
|
|
3,609 |
|
Changes in asset and liability items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in trade receivables |
|
|
(456 |
) |
|
|
2,050 |
|
|
|
2,506 |
|
Increase in other receivables |
|
|
(720 |
) |
|
|
(768 |
) |
|
|
(100 |
) |
Decrease in long-term deposits |
|
|
9 |
|
|
|
6 |
|
|
|
9 |
|
Decrease in trade payables |
|
|
(429 |
) |
|
|
(295 |
) |
|
|
(215 |
) |
Increase (decrease) in other payables |
|
|
357 |
|
|
|
(756 |
) |
|
|
(303 |
) |
Increase in severance pay liability, net |
|
|
1 |
|
|
|
- |
|
|
|
5 |
|
Increase (decrease) in deferred revenues and other
advances |
|
|
56 |
|
|
|
119 |
|
|
|
(81 |
) |
Increase in liabilities in respect of government grants |
|
|
- |
|
|
|
115 |
|
|
|
115 |
|
|
|
|
|
|
|
|
|
|
|
(1,182 |
) |
|
|
471 |
|
|
|
1,936 |
|
|
|
|
|
|
|
|
Cash received (paid) during the period for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest received |
|
|
671 |
|
|
|
679 |
|
|
|
2,360 |
|
Taxes paid |
|
|
(11 |
) |
|
|
- |
|
|
|
(6 |
) |
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(4,865 |
) |
|
|
(2,054 |
) |
|
|
(11,693 |
) |
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(198 |
) |
|
|
(383 |
) |
|
|
(808 |
) |
Proceeds from sale of marketable securities |
|
|
6,286 |
|
|
|
3,490 |
|
|
|
23,926 |
|
Purchase of marketable securities |
|
|
(2,704 |
) |
|
|
(5,285 |
) |
|
|
(24,561 |
) |
Proceeds from (investment in) bank deposits, net |
|
|
1,120 |
|
|
|
(2,000 |
) |
|
|
5,466 |
|
Proceeds from sale of property, plant and equipment |
|
|
- |
|
|
|
- |
|
|
|
5 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
|
4,504 |
|
|
|
(4,178 |
) |
|
|
4,028 |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
U.S. dollars in thousands |
|
|
|
|
|
|
|
Three Months endedMarch,
31 |
|
Year endedDecember
31, |
|
|
|
2017 |
|
|
2016 |
|
|
2016 |
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from exercise of options |
|
|
348 |
|
|
|
85 |
|
|
|
186 |
|
Proceeds
from government grants |
|
|
101 |
|
|
|
108 |
|
|
|
802 |
|
Repayment of government grants |
|
|
(94 |
) |
|
|
(199 |
) |
|
|
(333 |
) |
|
|
|
|
|
|
|
Net cash
provided by (used in) financing activities |
|
|
355 |
|
|
|
(6 |
) |
|
|
655 |
|
|
|
|
|
|
|
|
Exchange
rate differences - cash and cash equivalent balances |
|
|
60 |
|
|
|
2 |
|
|
|
25 |
|
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents |
|
|
54 |
|
|
|
(6,236 |
) |
|
|
(6,985 |
) |
|
|
|
|
|
|
|
Cash and
cash equivalents, beginning of the period |
|
|
3,236 |
|
|
|
10,221 |
|
|
|
10,221 |
|
|
|
|
|
|
|
|
Cash and
cash equivalents, end of the period |
|
$ |
3,290 |
|
|
$ |
3,985 |
|
|
$ |
3,236 |
|
|
|
|
|
|
|
|
Significant non-cash transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment |
|
$ |
56 |
|
|
$ |
76 |
|
|
$ |
150 |
|
|
|
|
|
|
|
|
Contact:
Alex Taskar
Chief Financial Officer
E: IR@evogene.com
T: (+972)-8-931-1963
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