On May 26, 2021 Evogene Ltd. (NASDAQ: EVGN, TASE: EVGN), a leading computational biology company targeting to revolutionize life-science product discovery and development across several market segments, reported its financial results for the first quarter of 2021 (Press release, Evogene, MAY 26, 2021, View Source [SID1234580612]).
Mr. Ofer Haviv, Evogene’s President and CEO, stated, "A major corporate target for this year and the year following is value creation and its recognition by the capital markets, through Evogene’s subsidiaries. Two main paths to achieve this target in life-science based companies, such as our subsidiaries, are: product advancement and commercialization, and demonstration of their underlying technological advantage.
With respect to product advancement, in 2021-2022, all our subsidiaries have significant milestones for pipeline advancement, and some of them are even expected to reach first product launches. We believe that announcing the achievement of such milestones, as they are reached, will enable the capital markets to properly appreciate the value created by the subsidiaries and will also be reflected in Evogene’s value recognition.
With respect to demonstration of the advantage of the underlying technology, we believe that it can be recognized through the rapid progress of our subsidiaries’ discovery and development pipelines. Moreover, any strategic collaboration entered into by a subsidiary, such as between AgPlenus and Corteva, or equity investment in a subsidiary by a strategic partner, such as Corteva’s investment in Lavie Bio, is a vote of confidence in the unique advantages of our technology.
As previously disclosed, some of our subsidiaries are targeting to achieve additional strategic collaborations during 2021-2022. We expect that such collaborations will enable the capital markets to further recognize the unique technological value of our subsidiaries, thus reflecting on Evogene’s value, as well.
I am pleased to report that both Evogene and our subsidiaries have been progressing in accordance with their plans during the first quarter of 2021. Each of our subsidiaries has a very promising product pipeline, and their activities are aiming to advance the products towards commercialization."
Q1 2021 main achievements
Biomica
Received additional positive pre-clinical results in its immuno-oncology program demonstrating efficacy of its live biotherapeutic product consortium BMC128 in combination with immune-checkpoint-inhibitors, this time in melanoma.
Canonic
Entered into agreements for the production and distribution in Israel of Canonic’s medical cannabis products with Tikun Olam-Cannbit Pharmaceuticals to enable the planned launch of Canonic’s first product in 2022.
Lavie Bio
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Recently appointed Mr. Russ Putland as Vice President Commercial, bringing significant commercial experience to the Lavie Bio management team in preparation for its anticipated product launches starting 2022.
Evogene’s Ag-Seed division
Entered a collaboration agreement with a U.S. company, Plastomics, whereby Evogene’s insect control genes, demonstrating new modes of action, will be introduced into soybean, utilizing Plastomics’ disruptive new technology.
"We enthusiastically look forward to continuing our progress, achieving our defined targets, entering into new collaborations, and expanding the use of our technology into new fields of activity," Mr. Haviv concluded.
Consolidated financial results for the first quarter ended as of March 31, 2021:
Cash position: Evogene maintains a strong financial position for its activities with approximately $70.1 million in consolidated cash, cash related accounts, bank deposits and marketable securities as of March 31, 2021. Approximately $11.8 million of Evogene’s consolidated cash is appropriated to its subsidiary, Lavie Bio.
During the first quarter of 2021, our consolidated net cash usage, excluding $27.1 million of net proceeds raised through an "At the Market Offering" ("ATM") initiated in January 2021 and concluded during February 2021, was approximately $5.2 million, or $4.0 million, if excluding Lavie Bio. The Company has no bank debt.
In March 2021 we announced a new "ATM" and we had not sold any shares under this offering as of the end of the quarter.
Research and Development ("R&D") expenses: R&D expenses, which are reported net of grants received, were approximately $4.3 million for the first quarter of 2021 (including a non-cash expense of $0.3 million for amortization of share-based compensation), in comparison to $4.6 million (including a non-cash expense of $0.9 million for amortization of share-based compensation) in the first quarter of 2020. In the first quarter of 2021 the actual R&D expenses slightly decreased, mainly due to a decrease in share-based compensation expenses.
Business Development ("BD") expenses: BD expenses were approximately $0.6 million for the first quarter of 2021 (including a non-cash expense of $0.1 million for amortization of share-based compensation), in comparison to $1.0 million (including a non-cash expense of $0.7 million for amortization of share-based compensation) in the first quarter of 2020.
General and Administrative ("G&A") expenses: G&A expenses for the first quarter of 2021 were $1.5 million (including a non-cash expense of $0.1 million for amortization of share-based compensation), in comparison to $1.3 million (including a non-cash expense of $0.3 million for amortization of share-based compensation) in the first quarter of 2020. The increase is mainly attributed to the increase of the costs of directors’ and officers’ insurance, partially offset by a decrease in non-cash expenses of amortization of share-based compensation.
Operating loss: Operating loss for the first quarter of 2021 was $6.3 million, in comparison to $6.9 million for the first quarter of 2020. The decrease in operating loss during the first quarter is attributed to the increase in revenues from collaboration agreements compared to the first quarter of 2020 and due to the decrease in aforementioned amortization of share-based compensation expenses.
Loss: The loss for the first quarter of 2021 was $7.1 million in comparison to a loss of $7.2 million for the first quarter of 2020. The slight decrease in the loss for the first quarter is attributed to the reduction in operating loss, partially offset by an increase in financing expenses mainly attributed to exchange rate differences and revaluation of pre-funded warrants
Replay Information: A replay of the conference call will be available approximately two hours following the completion of the call.
To access the replay, please dial 1-888-326-9310 toll free from the United States, or +972-3-925-5904 internationally. The replay will be accessible through May 28, 2021, and an archive of the webcast will be available on the Company’s website.