19 November 2021, Israel: Evogene Ltd., a leading computational biology company targeting to revolutionize life-science product discovery and development across multiple market segments, announced today its financial results for the first nine months and the third quarter of 2021, ended September 30, 2021.
Mr. Ofer Haviv, Evogene’s President and Chief Executive Officer, stated, “I am very pleased with the overall progress and achievement of milestones we see across the board in our subsidiaries and in Evogene itself. Our subsidiaries are progressing according to plan, and we expect to hit additional milestones in the coming months. With this rapid progress, we see significant inherent value developing within each of our subsidiaries.
“As stated previously, we believe that each subsidiary, valued independently, would result in a far greater combined market value for Evogene. In this regard, we wish to unlock the value of our subsidiaries and, as disclosed, are currently examining the possibility of turning one or more of our subsidiaries into public companies. This would allow investors access to the specific subsidiary of interest and the opportunity for the markets to assign it an independent value. We are currently undertaking the required preparations in our subsidiaries to support this process and are reviewing our options regarding investment banks to achieve this target.
“Of course, the decision, if when and how to spin out a subsidiary will depend on many considerations, including market conditions, the subsidiaries financial needs, pipeline maturity, valuation, applicable regulations and other relevant aspects.” Mr. Haviv concluded.
Immuno-Oncology program – Biomica recently signed an agreement with Rambam Health Care Campus for a clinical trial for its microbiome-based Immuno-Oncology Drug. Biomica expects to initiate its first-in-human, proof-of-concept clinical trials with Rambam later this year and is currently waiting for the approval of the Israeli Ministry of Health in order to begin.
MetaYield program – During October 2021, Canonic initiated commercial sales of G200 and G150, part of the G-nnovation series, following positive feedback from a pre-launch campaign, in which these products were marketed in Israel to a limited number of licensed patients.
Canonic’s G200 and G150 are cannabis inflorescence products marketed under the T20/C4 and T15/C3 categories, respectively. This commercial launch, which was originally scheduled for 2022, was moved forward following the aforementioned positive feedback in Israel.
Appointment of a new CEO – Dr. Brian Ember has been appointed as Chief Executive Officer of AgPlenus. Dr. Ember brings extensive experience in the ag-chemicals industry, holding various senior leadership roles, including Head of Global Portfolio Management and Head of Marketing and Business Development, Americas for Biotalys, an agricultural technology company focused on reinventing food protection with protein-based biocontrol solutions; Senior Director, Business Development for AgriMetis, an innovative crop protection company; and various management roles at BASF and Syngenta.
result™ inoculant (previously LAV.211) – Lavie Bio announced initial commercial launch of its first microbiome-based product for yield improvement – result™. This inoculant is being introduced for spring wheat following positive four-year field trials. The first phase of marketing, and initial market penetration, in the upcoming 2022 spring wheat season will be limited to target regions in North Dakota, which is estimated as an overall 6-million-acre spring-wheat market. This initial phase of marketing will be accomplished under a distribution agreement with United Agronomy, as recently announced. Initial sales are expected to be recorded in 2022.
Change in management – Mr. Ido Dor, Lavie Bio’s Chief Executive Officer, has announced that he is stepping down from his position. Evogene thanks Mr. Dor, who has been an integral part of the Evogene group over the past 10 years and significantly contributed to the activities and success over the years. Mr. Dor will continue to serve as a consultant of Lavie Bio. Lavie Bio is currently seeking a replacement for this position and during that period Mr. Ofer Haviv, Evogene’s President and Chief Executive Officer, will serve as an active chairman of Lavie Bio.
CRISPR-IL consortium – The Israeli Innovation Authority (IIA) informed Evogene of its decision to fund a second 18-month period of the CRISPR-IL consortium established last year. The consortium’s mission is to develop and validate an end-to-end artificial intelligence (AI) system – “Go-Genome” – for genome-editing in multi-species for applications in pharma, agriculture, and aquaculture.
Beyond activities within the consortium’s scope, companies participating in the consortium may use “Go-Genome” for their own product development activities. In this respect, Evogene is currently conducting various proof-of-concept experiments in plant tissue, examining the feasibility of increasing the production of ingredients such as natural colors and anti-aging agents for food or cosmetic purposes.
Appointment of a new board member – Mr. Dan Falk has been appointed to Evogene’s Board of Directors, commencing November 17, 2021. Mr. Falk has extensive experience of more than 20 years in serving as a financial expert on public and private company boards, most recently on the boards of Nice Ltd. (NASDAQ: NICE), Ormat Technologies Inc. (NYSE: ORA) and Innoviz Technologies Ltd. (NASDAQ: INVZ). Additionally, in the past Mr. Falk held various executive positions in Orbotech Ltd. and Sapiens International Corporation (NASDAQ: SPNS).
Consolidated Financial Results Summary
Cash position: Evogene maintains a strong financial position for its activities with $61.6 million in consolidated cash, cash related accounts, bank deposits and marketable securities as of September 30, 2021, of which $9.3 million of Evogene’s consolidated cash is appropriated to its subsidiary, Lavie Bio.
During the first nine months of 2021, the consolidated net cash usage was approximately $17.3 million, or $13.6 million, if excluding Lavie Bio. This is in comparison to the first nine months of 2020, during which the consolidated cash usage was $13.4 million, or $9.3 million, if excluding Lavie Bio. These sums in 2021 exclude $29.6 million net raised through Evogene’s at-the-market, or ATM, offerings (including $2.6 million raised under its current ATM, announced in March 2021) and excludes an additional $1.0 million in proceeds from grants received and exercises of options.
During the third quarter, the consolidated cash usage, was $6.0 million, or $4.6 million, excluding Lavie Bio. This is in comparison to the third quarter of 2020, during which the consolidated cash usage was $4.6 million, or $3.0 million, if excluding Lavie Bio.
The cash burn rate during the first nine months of 2021 and in the third quarter, was higher than during the same period in 2020, for the following reasons:
- During the second and third quarter of 2020, the burn rate was relatively low due to certain measures the company initiated to mitigate the impact of the COVID-19 pandemic on the Company.
- During the first nine months of 2021 Evogene’s subsidiaries significantly expanded product development activities, including:
- Biomica’s ongoing 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 supporting the commercial launch of its inoculant product branded as result™ in 2022.
- Canonic’s pre-launch campaign, initiated in September 2021, prior to product commercialization, which took place in Israel during the fourth quarter of 2021.
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.
Research and Development (“R&D”) expenses: R&D expenses for the third quarter of 2021, which are reported net of grants received, were $5.8 million, in comparison to $4.0 million in the third 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: BD expenses were $0.8 million for the third quarter of 2021, in comparison to $0.6 million in the third quarter of 2020. The increase was attributed mainly to Canonic’s and Lavie Bio’s preparations for commercialization.
General and Administrative (“G&A”) expenses: G&A expenses for the third quarter of 2021 were $2.0 million, in comparison to $1.2 million in the third quarter of 2020. The increase was mainly attributed to the increase of the costs of directors’ and officers’ insurance policies and a relative increase in salary expenses following a temporary reduction in such expenses in the corresponding quarter in 2020, due to steps taken to mitigate the financial impact of the COVID-19 pandemic on the Company
Operating loss: Operating loss for the third quarter of 2021 was $8.6 million in comparison to $5.6 million in the third quarter of 2020.
Net loss: The net loss for the third quarter of 2021 was $8.3 million in comparison to a net loss of $5.4 million during third quarter of 2020. The increase in loss is attributed to the increase in product development activities, an increase in commercialization and marketing expenses and an increase in directors’ and officers’ insurance cost.