PR Newswire | Nov 18, 2020 07:01AM EST

11/18 06:00 CST

Evogene Reports Third Quarter 2020 Financial ResultsConference call and webcast: today, November 18th, 9:00 a.m. ET REHOVOT, Israel, Nov. 18, 2020

REHOVOT, Israel, Nov. 18, 2020 /PRNewswire/ -- Evogene Ltd. (NASDAQ: EVGN), (TASE: EVGN), a leading computational biology company targeting to revolutionize life-science product development across several market segments, announced today its financial results for the third quarter ended September 30, 2020.

Ofer Haviv, Evogene's President and CEO, stated:"We continue to be very pleased with the progress being achieved by our subsidiaries, which has been very rapid, and in certain areas even exceeding our plans, despite the ongoing COVID-19 pandemic. This progress wasone of the factors in Evogene's decision to raise additional funds, to further support its collective ambitious business targets.

"The company recentlycompleted two rounds of fundraising, for a total of $22 million. The leading investors that participated in these deals are strategic and long-term focused investors, and we are very grateful fortheir confidence and support.

"We are confident that the net proceeds from our recent fundraisings, combined with our existing cash resources, will provide the funding required to achieve a number of key objectives in the further development of the promising product pipelines of our subsidiaries, and to continue to enhance and expand our unique computational predictive biologyplatform.

Our key objectives include the following:

* In Biomica, to support pre-clinical and anticipated proof-of-concept clinical trials next year in the immuno-oncology program. * In Canonic, to support development of unique varieties as well as cultivation for anticipated commercialization in 2022 of medical cannabis products in Israel. * In AgPlenus, to support its herbicide development towards the stage of an "Optimized Lead", as well as expand the insecticide program. * In Lavie Bio, to support the route to anticipated commercialization of a wheat bio-stimulant in 2022, as well as to support product development in the bio-pesticide program. * Within Evogene, the expansion of our capabilities in genome editing, including the leveraging of our legacy seed traits activities. * Within Evogene, the enhancement and expansion of our CPB product solutions, MicroBoost AI, ChemPass AI and GeneRator AI, adding further to our technological and computational competitive edge.

"We intend for these capital raises, combined with our existing cash resources, to provide the support our subsidiaries require in order to reach attractive positions for Evogene to potentially capitalize on their achievements and to unlock their value.

"To summarize, I am extremely proud of the progress we are achieving and am confident of our subsidiaries' ability to continue to advance their product pipelines and execute on their business targets. Therefore, we enthusiastically look forward to reporting on our continuing progress and achievements to our investors, both long-term and new." concluded Mr. Haviv.

Recent Subsidiary Developments:

Biomica (subsidiary focused on human-microbiome based therapeutics)

* Immuno-Oncology Program - Biomica recently announced positive pre-clinical, in-vivo results, for its leading product candidate, live bacterial product (LBP) BMC128, which consists of four live bacterial strains aimed to enhance the efficacy of immunotherapy (immune checkpoint inhibitors - ICI). These results demonstrated that treatment with BMC128, both prior to and in combination with ICI, significantly improved anti-tumor activity in mice. The best responding group's improvement (receiving BMC128 prior to the combination treatment) was approximately 50% higher in comparison to the group that only received the ICI therapy.

Also in this program, Biomica contracted the services of Biose Industrie, a leading French contract manufacturing organization (CDMO), and announced that it has initiated scale-up processes for GMP production of BMC128 in preparation for the expected initiation of first-in-man proof-of-concept clinical trials in 2021.

Biomica is currently in discussions with a number of leading medical centers in Israel regarding conducting this proof-of-concept, pilot study.

* Inflammatory Bowel Disorders (IBD) program - Biomica is advancing in the pre-clinical phase, having initiated new pre-clinical studies at the University of North Carolina (UNC), at the lab of Professor Balfour Sartor. Prof. Sartor is a leading researcher and thought leader in IBD in the United States and a member of Biomica's Scientific Advisory Board. * Irritable Bowel Syndrome (IBS) program - Biomica is progressing according to plan, currently concluding the discovery phase, with the computational identification of microbes with desired functionality.

Canonic (wholly owned subsidiary focused on medical cannabis)

* Propagation license - Canonic recently announced that it has received approval from the Israeli Medical Cannabis Agency for the propagation of medical cannabis seedlings, which will allow the company to proceed with the execution of its commercialization plan. The company intends to deliver its first batch of seedlings to third-party cultivation farms during 2021, and aims to release its first product in Israel in 2022.

AgPlenus (subsidiary focused on ag-chemicals)

* During the quarter, Mr. Douglas Eisner joined AgPlenus as its new CEO. Mr. Eisner brings over 20 years of versatile business and legal experience, previously holding various senior leadership roles, and leading successful fundraising rounds and a company acquisition. Mr. Eisner is located in North Carolina, United States.

Lavie Bio (subsidiary focused on ag-biologicals)

* Bio-fungicide Program - Lavie Bio recently announced positive trial results for two of its leading bio-fungicide product candidates, LAV311 and LAV 312. These candidates target Bunch rots, devastating diseases that severely impact crop output. These vineyard trials, conducted in target locations in Europe and the United States, resulted in significantly better efficacy and consistency than existing comparable commercial biological benchmarks, reducing crop damage by 60%-70% in comparison to the control tested in these trials.

Consolidated financial results for the quarter ended September 30, 2020:

Equity Offerings:On September 3, 2020, the company raised $10 million in equity, and on November 4, 2020, raised an additional $12 million in equity. Both offerings were to leading institutional investors.

Cash position

: As of September 30, 2020, Evogene had approximately $43.5 million in consolidated net cash, cash related accounts and short-term bank deposits. This included the $10 million equity investment received in September. Approximately $13.6 million of Evogene's consolidated cash is attributed to its subsidiary, Lavie Bio. After the end of the quarter, the company received an additional investment of $12 million.

During the first nine months of 2020, the company's consolidated net cash usage amounted to $13.4 million. Excluding the cash usage of Lavie Bio, the company's net cash usage amounted to $9.3 million during the first nine months of 2020. During the third quarter of 2020, the company's consolidated net cash usage amounted to $4.6 million. Excluding the cash usage of Lavie Bio, the company's net cash usage amounted to $3 million during the third quarter of 2020.

For the full year of 2020, the company estimates that its net cash usage, excluding cash usage of Lavie Bio, will be within the range of $13-15 million.

Evogene does not have bank debt.

Revenues for the third quarter of 2020 were approximately $0.3 million, in comparison to approximately $0.1 million in the same period the previous year.

R&D expenses for the third quarter of 2020 were approximately $4.0 million, in comparison to approximately $3.6 million. R&D expenses were mainly attributed to pre-clinical trials in Biomica, field trials for Lavie Bio and strengthening of Evogene's technology with new capabilities.

Business Development expenses for the third quarter of 2020 were approximately $0.6 million, in comparison to approximately $0.5 million in the third quarter of 2019.

G&A expenses

for the third quarter of 2020 were approximately $1.2 million, in comparison to approximately $0.9 million in the third quarter of 2019. This increase is mostly attributed to an increase in the cost of the company's D&O insurance.

Operating lossfor the third quarter of 2020 was approximately $5.6 million, in comparison to approximately $4.9 million in the third quarter of 2019. The increase in loss is attributed to the aforementioned operating expenses.

Net financing income for the third quarter of 2020 was approximately $0.1 million, in comparison to net financing income of approximately $0.4 million in the third quarter of 2019.

Loss for the third quarter of 2020 was approximately $5.4 million, in comparison to a loss of approximately $4.5 million during third quarter of 2019. The increase in loss is attributed to the increase in operating expenses and a decrease in net financing income.

Conference Call & Webcast Details:

Date: November 18, 2020

Time: 9:00 a.m. EST; 16:00 Israel time

Dial-in: 1-888-281-1167 toll free from the United States, or +972-3-918-0609 internationally

Webcast: Available at www.evogene.com.

You may submit a question for management to address during the call until 8:00 am EST; 15:00 Israel time to IR@evogene.com.

Replay Information: A replay of the conference call will be available approximately three 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 November 20, 2020, and an archive of the webcast will be available on the company's website for the following 30 days.

About Evogene Ltd.:

Evogene (NASDAQ: EVGN), (TASE: EVGN) is a leading computational biology company targeting to revolutionize product development for life-science based industries, including human health, agriculture, and industrial applications. Incorporating a deep understanding of biology and leveraging Big Data and Artificial Intelligence, Evogene established its unique technology, the Computational Predictive Biology(CPB) platform. The CPB platform is designed to computationally discover and develop life-science products based on microbes, small molecules and genetic elements as the core components for such products. Evogene holds a number of subsidiaries utilizing the CPB platform, for the development of human microbiome-based therapeutics, medical cannabis, ag-biologicals, ag-chemicals, seed traits and ag-solutions for castor oil production.

For more information, please visit www.evogene.com

Forward Looking Statements:

This press release contains "forward-looking statements" relating to future events. These statements may be identified by words such as "may", "could", "expects", "intends", "anticipates", "plans", "believes", "scheduled", "estimates" or words of similar meaning. For example, Evogene is using forward-looking statements in this press release when it discusses its (and its subsidiaries') targets, objectives, pipeline and goals and the expected timing thereof, its support of its subsidiaries, the sufficiency of its funding to achieve key objectives and to continue to enhance and expand its computational predictive biology platform, its estimated cash usage for 2020, capturing the value of its technologies and subsidiaries, entering into collaboration agreements, its upcoming milestones and potential alternatives to capitalize on Evogene's subsidiaries' achievements. Such statements are based on current expectations, estimates, projections and assumptions, describe opinions about future events, involve certain risks and uncertainties which are difficult to predict and are not guarantees of future performance. Therefore, actual future results, performance or achievements of Evogene and its subsidiaries may differ materially from what is expressed or implied by such forward-looking statements due to a variety of factors, many of which are beyond the control of Evogene and its subsidiaries, including, without limitation, the global spread of COVID-19, or the Coronavirus, the various restrictions deriving therefrom and those risk factors contained in Evogene's reports filed with the applicable securities authorities. In addition, Evogene and its subsidiaries rely, and expect to continue to rely, on third parties to conduct certain activities, such as their field-trials and pre-clinical studies, and if these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines (including as a result of the effect of the Coronavirus), Evogene and its subsidiaries may experience significant delays in the conduct of their activities. Evogene and its subsidiaries disclaim any obligation or commitment to update these forward-looking statements to reflect future events or developments or changes in expectations, estimates, projections and assumptions.

Evogene Investor Contact: US Investor Relations:



Rivka Neufeld Joseph Green

Investor Relations and Public Relations ManagerEdison Group

E: IR@evogene.com E: jgreen@edisongroup.com

T: +972-8-931-1940 T: +1 646-653-7030



Laine Yonker

Edison Group

E: lyonker@edisongroup.com

T: +1 646-653-7035

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

U.S. dollars in thousands (except share and per share data)

September 30, December 31,

2020 2019

Unaudited Audited

CURRENT ASSETS:

Cash and cash equivalents $ $ 34,748 41,494

Marketable securities - 2,128

Short-term bank deposits 2,000 10,000

Trade receivables 34 72

Other receivables and prepaid expenses 1,864 2,079

45,392 49,027

LONG-TERM ASSETS:

Long-term deposits 9 9

Operating lease right-of-use-assets 2,077 2,671

Property, plant and equipment, net 2,133 2,583

Intangible assets, net 16,374 17,074

20,593 22,337

$ $ 71,364 65,985

CURRENT LIABILITIES:

Trade payables $ $ 701 1,001

Employees and payroll accruals 1,730 2,079

Operating lease liability 789 895

Liabilities in respect of government grants 83 37

Deferred revenues and other advances 132 386

Other payables 1,204 1,348

4,639 5,746

LONG-TERM LIABILITIES:

Operating lease liability 1,672 2,076

Liabilities in respect of government grants 3,604 3,325

5,276 5,401

SHAREHOLDERS' EQUITY:

Ordinary shares of NIS 0.02 par value:

Authorized - 150,000,000 ordinary shares; Issued 177 142and outstanding - 31,645,083 at September 30, 2020and 25,754,297 at December 31, 2019

Share premium and other capital reserve 215,907 205,904

Accumulated deficit (171,154) (155,902)

Equity attributable to equity holders of the 44,930 50,144Company

Non-controlling interests 11,140 10,073

Total equity 56,070 60,217

$ $ 71,364 65,985

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS

U.S. dollars in thousands (except share and per share data)

Nine months ended Three months ended Year ended September 30, September 30, December 31,

2020 2019 2020 2019 2019

Unaudited Audited

Revenues $ 689 $ 637 $ 316 $ 97 $ 753

Cost of revenues 228 253 75 81 334

Gross profit 461 384 241 16 419

Operating expenses:

Research and development, net 12,476 10,627 3,998 3,603 15,791

Business development 2,002 1,420 564 450 2,029

General and administrative 3,620 2,622 1,232 876 3,765

Total operating expenses 18,098 14,669 5,794 4,929 21,585

Operating loss (17,637) (14,285) (5,553) (4,913) (21,166)

Financing income 858 2,517 215 647 2,630

Financing expenses (657) (655) (73) (265) (555)

Financing income, net 201 1,862 142 382 2,075

Loss before taxes on income (17,436) (12,423) (5,411) (4,531) (19,091)

Taxes on income (tax benefit) 7 - - (3) 24

Loss $ (17,443) $ (12,423) $ (5,411) $ (4,528) $ (19,115)

Attributable to:

Equity holders of the Company $ (15,252) $ (12,034) $ (4,786) $ (4,231) $ (18,112)

Non-controlling interests (2,191) (389) (625) (297) (1,003)

$ (17,443) $ (12,423) $ (5,411) $ (4,528) $ (19,115)

Basic and diluted loss per share, $ attributable to equity holders of the $ (0.58) $ (0.47) $ (0.17) $ (0.16) (0.70) Company

Weighted average number of sharesused in computing basic and diluted 26,161,932 25,754,297 26,977,201 25,754,297 25,754,297loss per share

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

Nine months ended Three months ended Year ended September 30, September 30, December 31,

2020 2019 2020 2019 2019

Unaudited Audited

Cash flows from operating activities

Loss $ (17,443) $ (12,423) $ (5,411) $ (4,528) $ (19,115)

Adjustments to reconcile loss to net cash used in operating activities:

Adjustments to the profit or loss items:

Depreciation 1,400 1,906 484 591 2,395

Amortization of intangible assets 700 194 234 194 374

Share-based compensation 3,482 802 691 355 1,578

Net financing income (223) (2,647) (154) (1,025) (2,414)

Loss from sale of property, plant & equipment - 12 - 12 12

Taxes on income (tax benefit) 7 - - (3) 24

5,366 267 1,255 124 1,969

Changes in asset and liability items:

Decrease in trade receivables 38 13 25 - 88

Decrease (increase) in other receivables 141 (600) (249) 56 (1,250)

Increase in long-term deposits - - - - (10)

Increase (decrease) in trade payables (151) (190) 83 71 (122)

Increase (decrease) in employees and payroll accruals (349) (250) 134 114 (33)

Increase (decrease) in other payables (93) (3) 136 75 375

Decrease in deferred revenues and other advances (254) (313) (426) (120) (45)

(668) (1,343) (297) 196 (997)

Cash received (paid) during the period for:

Interest received 291 692 125 637 803

Interest paid (182) (198) (64) (57) (302)

Tax received (paid) (7) - - 3 (24)

Net cash used in operating activities $ (12,643) $ (13,005) $ (4,392) $ (3,625) $ (17,666)

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

Nine months ended Three months ended Year ended September 30, September 30, December 31,

2020 2019 2020 2019 2019

Unaudited Audited

Cash flows from investing activities:

Purchase of property, plant and equipment $ (579) $ (518) $ (164) $ (321) $ (900)

Proceeds from sale of marketable securities 2,097 22,828 - 2,833 27,084

Purchase of marketable securities - (1,637) - - (1,637)

Proceeds from (investment in) bank deposits, net 8,000 (6,675) 5,000 (6,675) 12,592

Net cash provided by (used in) investing 9,518 13,998 4,836 (4,163) 37,139activities

Cash flows from financing activities:

Proceeds from exercise of options 13 - 13 - -

Proceeds from government grants 320 406 145 119 493

Repayment of operating lease liability (484) (536) (155) (173) (597)

Issuance of subsidiary's ordinary shares to - 10,000 - 10,000 10,000non-controlling interests

Issuance of ordinary shares 9,801 - 9,801 - -

Repayment of government grants (22) (586) (11) (11) (590)

Net cash provided by financing activities 9,628 9,284 9,793 9,935 9,306

Exchange rate differences - cash and cash 243 380 183 223 159equivalent balances

Increase in cash and cash equivalents 6,746 10,657 10,420 2,370 28,938

Cash and cash equivalents, beginning of the 34,748 5,810 31,074 14,097 5,810period

Cash and cash equivalents, end of the period $ 41,494 $ 16,467 $ 41,494 $ 16,467 $ 34,748

Significant non-cash activities

Acquisition of property, plant and equipment $ $ $ $ $ 17 130 17 47 216

Increase of operating lease right-of-use-assets -- -- -- -- $ 3,437

Acquisition of intangible assets from $ non-controlling interests against issuance of -- $ 17,448 -- $ 17,448 17,448subsidiary's ordinary shares

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SOURCE Evogene