On March 10, 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 fourth quarter and full year of 2021, ended December 31, 2021 (Press release, Evogene, MAR 10, 2022, View Source [SID1234609897]).
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Mr. Ofer Haviv, Evogene’s President and Chief Executive Officer, stated, "With 2022 well on its way and our subsidiaries successfully advancing on their developmental activities, we believe that we are progressing to significant value enhancing milestones. Moreover, we are very proud that our subsidiaries, Lavie Bio and Canonic, recently began commercializing their products in target markets. The rapid advancement from concept to marketable product indicates the invaluable contribution Evogene’s technological engines MicroBoost AI, ChemPass AI and GeneRator AI have on life-science product development.
"As the activities of our subsidiaries mature, we continue to develop our engines with the goal of further improving their offering and potential, as engines underpinning and empowering the development of life-science products. In the years to come we intend to expand the eco-system of each of our technological engines, with the goal of expanding into new areas and new product types. Over the year, we hope to discuss this in more detail.
"It is important for us to state that we believe that our strong cash position of approximately $54 million is a demonstration of financial strength, which is particularly important in current times of instability in the financial markets. Still, to support our subsidiaries’ growth and to strengthen their position as independent companies, we are currently evaluating different funding options for the group and are in different levels of discussions with potential strategic and financial investors," – Mr. Haviv concluded.
2021 Achievements & 2022 Milestones:
Biomica Ltd.
Immuno-oncology program – Biomica recently received clearance from the Israeli Ministry of Health to proceed to a first-in-human phase I study, which is set to be held at the Rambam Healthcare Campus in Israel, following the completion of a series of pre-clinical trials with BMC128 given in combination with Immune Checkpoint Inhibitors immunotherapy, indicating significant improvement in anti-tumor activity. Biomica is currently advancing towards the initiation of the study.
Milestone for 2022 – readout from proof of concept, first in human study.
Inflammatory Bowel Disease (IBD) program – During 2021, Biomica achieved positive results from a series of pre-clinical studies, indicating reduction of intestinal tissue damage resulting from inflammation. These results provided the evidential groundwork to proceed to the scale up development process of BMC333.
Milestone for 2022 – initiate scale-up for GMP production of BMC333 as preparation for clinical trials.
Canonic Ltd.
MetaYield program – During October 2021, Canonic began initial commercial sales in Israel of G200 and G150, cannabis inflorescence products marketed under the T20/C4 and T15/C3 categories, respectively[1].
Milestone for 2022 – commercial launch of second-generation products in Israel and preparations towards commercialization in Europe in 2023.
Precise program – During 2021, Canonic conducted pre-clinical trials, identifying cannabis varieties with pain relief and anti-inflammatory properties, for which Canonic recently filed a patent application.
Milestone for 2022 – collect user data for clinical indications to support commercial launch in 2023 in Israel.
AgPlenus Ltd.
New Mode-of-Action (MoA) herbicides – In 2021, the company gathered additional information regarding its leading new MoA target protein, APTH1, for herbicide development and reached proof-of-concept regarding a seed trait presenting crop resistance to APH1 (a chemical compound that is the basis for the development of a herbicide).
The collaboration with Corteva, which is focused on other modes-of-action, is progressing according to plan.
Milestones for 2022 –
– enter an additional collaboration agreement.
– expand data package for APTH1, AgPlenus’ leading new MoA protein for the development of novel herbicides.
Lavie Bio Ltd.
Inoculant (bio-stimulant) for spring wheat – During late 2021, Lavie Bio began the commercialization of its inoculant result aiming at the improvement of yield based on microbes. The product’s initial market penetration for spring wheat is planned for the upcoming 2022 sowing season and will be limited to target regions in North Dakota.
Milestone for 2022 – build infrastructure for scale-up in result sales in 2023.
Bio-fungicide fruit rot program – Following the completion of three consecutive years of vineyard trials, conducted in Europe and in the U.S., Lavie Bio has prioritized LAV311 as its lead candidate for final development and submission of a regulatory dossier, expected to be filed with the federal U.S. Environmental Protection Agency (EPA) and California EPA during 2022.
Milestone for 2022 – file for regulatory approval for leading product candidate LAV311 targeting fruit rot, as preparation for commercialization in 2024.
Consolidated Financial Results Summary
Cash position: Evogene maintains a strong financial position for its activities with $53.9 million in consolidated cash, cash related accounts, bank deposits and marketable securities as of December 31, 2021, of which $7.8 million is appropriated to its subsidiary, Lavie Bio.
During 2021, the consolidated cash usage was approximately $25.8 million, or $20.6 million, excluding Lavie Bio. These sums in 2021 are before giving effect to $29.6 million net raised through Evogene’s at-the-market, or ATM, programs and exclude $1.8 million of proceeds from non-refundable grants and exercises of options. This is in comparison to 2020, during which the consolidated cash usage was $19.3 million, or $14.7 million, excluding Lavie Bio. The cash usage in 2020 was unusually low due to certain measures, regarding salary expenses, that the Company initiated to mitigate the impact of the COVID-19 pandemic during that year.
During the fourth quarter of 2021, the consolidated cash usage was approximately $8.4 million, or $7.0 million, excluding Lavie Bio. This is in comparison to the fourth quarter of 2020, during which the consolidated cash usage was approximately $6.1 million, or $5.1 million, excluding Lavie Bio.
The cash burn rate during 2021 and in the fourth quarter was higher than during the same periods in 2020, for the following reasons:
– During the second and third quarters of 2020 the burn rate was significantly lower due to certain measures the Company initiated to mitigate the impact of the COVID-19 pandemic, as mentioned above.
– During 2021, Evogene’s subsidiaries significantly expanded product development activities, including:
Biomica’s ongoing preparations, including the GMP production of microbes, for the initiation of its first-in-human proof-of-concept study in the immuno-oncology program,
Lavie Bio’s activities supporting the commercial launch of its inoculant product branded as result in 2022,
Canonic’s product commercialization in Israel during the fourth quarter of 2021.
– Expenses related to accelerating and expanding Evogene’s technological engines.
The Company’s management estimates that the cash usage for the full year of 2022 will be within the range of $26-$28 million. These guidelines include the cash usage of Evogene’s subsidiary Lavie Bio, which is estimated at approximately $8 million.
Research and Development ("R&D") expenses:
R&D expenses for the fourth quarter of 2021, which are reported net of non-refundable grants received, were $6.0 million, in comparison to $4.8 million in the fourth quarter of 2020. For the full year 2021, these expenses were $21.1 million, in comparison to $17.3 million in 2020.
The increase in R&D expenses was mainly attributed to an increase in expenses due to an expansion in product development activities of the Company and its subsidiaries, as mentioned above.
Business Development ("BD") expenses:
BD expenses were approximately $720 thousand for the fourth quarter of 2021, in comparison to $670 thousand in the fourth quarter of 2020. Such expenses remained stable for the full year 2021 in comparison to 2020 and were approximately $2.7 million.
General and Administrative ("G&A") expenses:
G&A expenses for the fourth quarter of 2021 were $2.0 million, in comparison to $1.7 million in the fourth quarter of 2020. G&A expenses for the full year 2021 were $7.3 million, in comparison to $5.3 million in 2020. The increase was mainly attributed to the increase of the costs of directors’ and officers’ insurance policies, an increase in salary-based expenses and an increase in other professional services.
Operating loss:
Operating loss for the fourth quarter for the full year 2021 was $8.7 million in comparison to $7.2 million in the fourth quarter of 2020. Operating loss for 2021 was $31.0 million in comparison to $24.8 million in 2020. The operating loss increased due to an increase in overall operating expenses, as described above, as well as due to an increase in salary-based expenses in comparison to 2020, mainly for the following reasons:
– relatively low salary-based expenses in 2020 due to measures taken by the company to mitigate the impact of the COVID-19 pandemic; and
– an increase in salaries in 2021 due to an increase in the market demand for highly skilled workers.
Loss:
The loss for the fourth quarter of 2021 was $8.1 million in comparison to a loss of $8.8 million during the fourth quarter of 2020. The loss for the full year 2021 was $30.4 million in comparison to a loss of $26.2 million for 2020. The increase in loss is attributed mainly to the increase in operating expenses, as described above, which was partially offset by net financing income for 2021 in comparison to net financing expenses for 2020.
Conference Call & Webcast Details:
Date: March 10, 2022
Time: 9:00 am EST; 16:00 Israel time
Dial-in number:1-888-281-1167 toll free from the United States, or +972-3-918-0609 internationally
Webcast: Link available at View Source
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 March 11, 2022, and an archive of the webcast will be available on the Company’s website.
The Company filed an updated presentation which can be viewed here: View Source