On August 11, 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 half and the second quarter of 2021, ended June 30, 2021 (Press release, Evogene, AUG 11, 2021, View Source [SID1234586339]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Mr. Ofer Haviv, Evogene’s President and Chief Executive Officer, stated, "As Evogene’s subsidiaries continue to advance and mature, we feel that now is the time to introduce our strategy of how we will bring increased shareholder value in the near term from our subsidiaries.
Our starting point is that each of our subsidiaries contains substantial internal value, created through its rapidly developing pipelines powered by Evogene’s unique computational predictive biology technology, the CPB platform. Our technology is available to each of our subsidiaries for their fields of focus and provides a substantial advantage for dealing with the challenges normally faced by life-science companies, such as high failure rates and long time to market.
We now see significant inherent value developing within each of our subsidiaries and believe that valued separately, these companies would result in a far greater combined market value for Evogene. We believe that one way to achieve this in a manner that will be beneficial to our shareholders is to turn one or more of our subsidiaries into public companies that will trade independently of Evogene. Among the paths that we are exploring, is the distribution of a portion of Evogene’s holdings in one or more of those subsidiaries to our shareholders.
Of course, the decision if, when, and how, to spin-off a subsidiary company will depend on many considerations, including our goal of ensuring maximum value creation for shareholders as well as market conditions, the subsidiary’s financial needs, pipeline maturity, valuation, applicable regulations, etc."
Concluded Mr. Haviv, "2021 is turning out to be a key strategic year for unlocking value at Evogene and its subsidiaries and I look forward to providing further updates as we advance on our strategy."
Main Activities, Advancements and Upcoming Milestones
Biomica
1st half of the year
Impressive pre-clinical data released for its microbiome therapeutic candidate BMC128 in immuno-oncology. BMC128, in combination with Immune Checkpoint Inhibitors (ICI), in a breast cancer mouse model, demonstrated pronounced anti-tumor activity as manifested in an increase of almost 50% in Objective Response Rate, in comparison to ICI alone.
Additional positive pre-clinical results for BMC128, this time in melanoma, significantly increasing anti-tumor activity in combination with ICI, which could indicate the potential of BMC128 to become a best-in-class treatment of various cancer tumors.
In preparation for its first-in-human proof-of-concept clinical trial in its immuno-oncology program, Biomica has initiated the scale-up processes, moved to GMP production of BMC128 and applied for regulatory approval.
2nd half of the year
Expect to initiate its first-in-human proof-of-concept clinical trial in its immuno-oncology program.
Expect results for the pre-clinical trial in its IBD program.
Canonic
1st half of the year
Production and distribution agreements in place for expected commercialization of first product in the MetaYield program in Israel in 2022.
Announced the joint development of novel medical cannabis products with Cannbit-Tikum Olam, as part of Canonic’s Precise product program.
2nd half of the year
Continue preparation, including selection of the final varieties, towards commercialization of first generation MetaYield premium products.
Focused R&D efforts on next generation MetaYield products.
Expect to identify lines that exhibit distinct effect in model systems for reducing pain or inflammation, a milestone in the Precise product program.
AgPlenus
1st half of the year
Considerable progress made in the collaboration with Corteva to develop novel herbicides.
Continued development and testing of additional compounds in the internal herbicide program.
Positive results in a Proof-of-Concept experiment for developing a resistance trait for a herbicide candidate targeting APTH1 (AgPlenus Target Herbicide 1), its leading novel Mode-of-Action for herbicides. Results demonstrate the ability to generate in target crops a resistance trait to herbicides targeting APTH1. This is a significant milestone, as resistance traits enable farmers to kill weeds without damaging the commercial crop.
2nd half of the year
Advance strategic collaboration with Corteva.
Expand product pipeline with an aim to achieve a lead phase for additional candidates targeting APTH1.
Advance commercialization efforts for APTH1.
Lavie Bio
1st half of the year
Product pipeline advancement with LAV. 211, bio stimulant for spring wheat and LAV. 311/312 bio-fungicide for grapes, at its core.
Commercial trials for lead bio-stimulant, LAV.211, towards expected launch in 2022. Advancement of formulation and product readiness.
Commercial team expansion with the appointment of a VP Commercial, building the path to market in North America.
2nd half of the year
Continue preparations towards expected commercial launch of lead bio-stimulant LAV.211 in 2022, which is expected to include engagement with a distribution partner.
Advance an additional season of multi-location field trials in Europe and U.S. for lead bio fungicide, LAV.311/312. In addition, conduct trials for testing potential expansion of the use of this bio fungicide to additional lucrative crops.
Added Mr. Haviv, "We look forward to the continued success and developments of our subsidiaries, while implementing our very exciting strategy in the coming months."
Consolidated Financial Results Summary
Cash position: Evogene maintains a strong financial position for its activities with $65.4 million in consolidated cash, cash related accounts, bank deposits and marketable securities as of June 30, 2021, of which $10.6 million of Evogene’s consolidated cash is appropriated to its subsidiary, Lavie Bio.
During the first half of 2021, the consolidated net cash usage was approximately $11.3 million, or $8.9 million, if excluding Lavie Bio. These sums exclude $28 million net raised through Evogene’s at-the-market, or ATM, offerings and exclude $0.5 million in proceeds from exercise of options.
During the second quarter the consolidated cash usage, was $5.7 million, or $4.5 million, excluding Lavie Bio. These sums exclude $0.8 million net raised through the current ATM as detailed below.
During the first half of 2021 and in particular during the second quarter, the cash burn rate was higher than during the same period in 2020, for the following reasons:
– First, during the second quarter of 2020, the burn rate was relatively low due to certain measures the company took to mitigate the impact of the COVID-19 pandemic on the Company, including a temporary reduction in salary and salary-based expenditures and a cut back in secondary activities.
– Second, during the second quarter of 2021, Evogene’s subsidiaries increased their investment in advancing their product development pipelines, including:
Biomica’s continued preparations for the initiation of its first-in-human proof of concept study in the immuno-oncology program later this year,
Lavie Bio’s activities towards expected commercial launch of its lead bio-stimulant in 2022, and
Canonic’s establishment of its production and marketing infrastructure in preparation for expected product launch in Israel in 2022.
Management continues to estimate that the cash usage for the full year of 2021 will be within the anticipated range of $20-$22 million. These guidelines exclude the cash usage of Evogene’s subsidiary Lavie Bio.
Under the current ATM, initiated in March 2021, Evogene raised $0.8 million net, at a weighted average price of $4.70 per share.
Research and Development ("R&D") expenses: R&D expenses for the second quarter of 2021, which are reported net of grants received, were $5.0 million, in comparison to $3.9 million in the second quarter of 2020. The increase in R&D expenses was mainly attributed to the product development activities of the Company and its subsidiaries, as mentioned above.
Business Development ("BD") expenses: Business Development expenses were $0.7 million for the second quarter of 2021, in comparison to $0.5 million in the second quarter of 2020. The increase was attributed mainly to Canonic’s and Lavie Bio’s preparations towards expected launch of their first products in 2022.
General and Administrative ("G&A") expenses: General and Administrative expenses for the second quarter of 2021 were $1.8 million, in comparison to $1.1 million in the second quarter of 2020. The increase was attributed to the increase of the costs of directors’ and officers’ insurance policies.
Operating loss: Operating loss for the second quarter of 2021 was $7.4 million in comparison to $5.2 million in the second quarter of 2020.
Net loss: The net loss for the second quarter of 2021 was $6.9 million in comparison to a net loss of $4.8 million during second quarter of 2020.
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 through August 13, 2021, and an archive of the webcast will be available on the Company’s website.