On August 31, 2022 Evogene Ltd. (Nasdaq: EVGN) (TASE: EVGN), a leading computational biology company targeting to revolutionize life-science product discovery and development across multiple market segments, reported its financial results for the second quarter ended June 30, 2022 (Press release, Evogene, AUG 31, 2022, View Source [SID1234618807]).
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Mr. Ofer Haviv, Evogene’s President and Chief Executive Officer, stated, "We are very pleased with the two recent important developments that have taken place at the Evogene group: namely, the strategic collaboration and $10 million investment by ICL, a leading global specialty minerals company, into our subsidiary, Lavie Bio; as well as the launch of the Phase I first in human clinical trial, by our subsidiary, Biomica."
"The strategic collaboration between ICL and Lavie Bio and $10 million investment, combines Lavie Bio’s ag-biologicals expertise, built on Evogene’s Microboost AI tech engine, with ICL’s fertilizer experience, enabling the development of a pipeline of innovative bio-stimulant products for agriculture. Especially in a time of food scarcity, high prices, and macroeconomic uncertainty, Lavie Bio and ICL’s shared vision is to enhance global food quality, agricultural sustainability, and increased productivity. ICL will join Corteva, a major U.S. agricultural chemical and seed company, as well as Evogene, as a new shareholder of Lavie Bio and I am very proud that these two agricultural giants have a strong interest in what Evogene has built."
"From Evogene’s standpoint, this investment in our subsidiary Lavie Bio, is an additional key milestone that demonstrates the power of our business model, whereby we are leveraging the value of our tech engines through dedicated subsidiaries. It shows that our hard work in building, investing in and strengthening our subsidiaries, all of which are leveraging our underlying computational predictive biological tech engines, is the right strategy and bears fruit."
Continued Mr. Haviv, "The second important development was the launch by Biomica of its phase I clinical trial and the announcement that the first patient was dosed in its Phase I clinical trial for its microbiome-based immuno-oncology drug candidate, BMC128. The drug candidate is a consortium of microbes, which Biomica selected through a microbiome analysis via our MicroBoost AI tech engine."
"While Evogene has traditionally leveraged its platform and AI technology engines towards agriculture, Biomica is proof that we are uniquely positioned to play an important role in human health and is strong validation that our technology can be leveraged across multiple and massive industries."
"Finally, we continued to strengthen our management team, recently adding Eyal Ronen, as Executive Vice President of Business Development bringing us over 20 years of extensive business development experience with biotech companies. Eyal’s focus is to create and bring us additional value by building new partnerships or forming new subsidiaries, leveraging our technology engines and expanding our activities into new areas. I strongly believe that Evogene has significant untapped potential in its technology engines, and Eyal will focus on realizing some of that value."
Mr. Haviv added, "Evogene today is at a key inflection point, whereby we are meeting critical milestones and the inherent value of our subsidiaries is becoming increasingly obvious. Evogene’s goal in the near term, is to continue to bring high value-adding partners and investors at the subsidiary level, who understand and can value the potential from the products that our subsidiaries are developing. This we believe will demonstrate in a very public way, the significant untapped value contained within our activities."
"Our target is that each subsidiary will have its own financial resources to support its activities until its success, while we at Evogene, in addition to being a major shareholder, continue to play a major role in maintaining and building their competitive advantage through our tech-engines."
"In parallel, we are targeting and exploring the potential to establish new activities that can benefit from our technology. This is the main mission of our new EVP of Business Development, Eyal Ronen, and we are already starting to see some of his positive impact," concluded Mr. Haviv.
Consolidated Financial Results Summary
Cash position: Evogene continues to maintain a solid financial position for its activities with approximately $35.3 million in consolidated cash, cash related accounts and marketable securities as of June 30, 2022. Approximately $3.6 million of Evogene’s consolidated cash is appropriated to its subsidiary, Lavie Bio. The Company does not have bank debt. It is noted that these amounts do not include the recent $10 million investment of ICL in Lavie Bio, which was fully received in August 2022 and will be reflected in the financial statements of the Company for the third quarter.
During the second quarter of 2022, the consolidated cash usage was approximately $9.3 million, or approximately $6.4 million, excluding Lavie Bio. Out of the $9.3 million, $1.7 million is a non-cash charge related to foreign exchange expenses due to US Dollar and New Israeli Shekel exchange rate differences and a decrease in the market value of marketable securities on Evogene’s balance sheet.
As previously stated, Evogene’s full year net cash burn rate, excluding exchange rate impacts in 2022, is expected to be in the range of $26-28 million including Lavie Bio and $18-20 million excluding Lavie Bio, which manages its own cash position.
Revenues: Revenues for the second quarter were $312 thousand, in comparison to $135 thousand in the same period the previous year. Revenues were primarily due to the initial sales of Lavie Bio’s Thrivus product (previously branded as Result) and sales of Canonic products in the Israeli market.
R&D expenses for the quarter, which are reported net of non-refundable grants received, were $5.4 million, in comparison to $5.0 million in the same period the previous year. The increase in R&D expenses were primarily due to:
Biomica’s ongoing phase I trial of its first-in-human proof-of-concept study in its immuno-oncology program; and
Lavie Bio’s activities supporting the production and commercialization of its inoculant product;
Business Development expenses were approximately $1.0 million for the second quarter of 2022, in comparison to $0.7 million in the same period the previous year. The increase in the Business Development expenses was primarily due to recruitment of business development personnel supporting the commercialization activities of Evogene’s subsidiaries.
General and Administrative expenses remained stable, and for the second quarter of 2022 were $1.7 million, in comparison to $1.8 million in the same period in the previous year.
Operating loss: Operating loss for the second quarter of 2022 was $8.0 million in comparison to $7.4 million in the same period in the previous year.
Financing expenses for the second quarter of 2022 were $1.7 million in comparison to financing income of $0.6 million in the same period in the previous year. The increase in financing expenses was mainly due to the US Dollar and New Israeli Shekel exchange rate differences between periods and a decrease in marketable securities value as mentioned above.
Net loss: The net loss for the second quarter of 2022 was $9.8 million in comparison to a net loss of $6.9 million in the same period in the previous year. The increase in net loss was mainly due to the financing expenses as described above.
The Company’s investor presentation can be viewed at the above link, which is in the investor relations section of the company website.
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 +972-3-925-5901 internationally. The replay will be accessible following the call for three days. An archive of the webcast will be available on the Company’s website