Evogene (EVGN) Q2 Earnings call transcript Aug 22, 2024

In the latest earnings call, Evogene, a leading biotechnology company, showcased its financial and operational highlights for the second quarter of 2024. The call was marked by a positive outlook, with strong financial performance and significant progress across its subsidiaries. Here are the key takeaways from the call.

Financial Performance

Evogene reported a notable increase in revenue for the first half of 2024, reaching approximately $5.1 million compared to $1.3 million in the same period last year. This growth was primarily driven by the licensing agreement with Corteva and the new collaboration with Bayer, both in the second quarter of 2024. The company anticipates continued revenue growth in the second half of 2024, with Casterra expected to initiate the supply of seeds, totaling over $8 million.

Financially, Evogene's loss decreased significantly, with a decline from approximately $14.8 million in the first half of 2023 to $9.8 million in the first half of 2024. This reduction in loss is attributed to increased revenues and decreased operating expenses. The projected cash usage for 2024 is expected to be around $8 million, marking a 36% decrease from approximately $12.5 million in 2023.

Subsidiary Highlights

Evogene's subsidiaries have made significant strides in their respective domains. Casterra, the company's fully owned subsidiary, announced a $440,000 purchase order to supply castor seed to a new African country, expanding its operations and strengthening its position in the biofuel market. Casterra's successful completion of the castor seed growing and harvesting season in Brazil, with seed shipments planned for the third quarter of 2024, is expected to enable the company to meet all its existing orders amounting to approximately $8.4 million.

Biomica, a subsidiary specializing in developing microbiome-based therapeutics for human health, reported promising preliminary results from its Phase I clinical trial of the microbiome-based therapeutic, BMC128, in combination with nivolumab for treating non-small cell lung cancer, melanoma, and refractory renal cell carcinoma. These results, presented at the ASCO 2024 Annual Meeting, indicate potential efficacy and safety, marking a crucial step forward in the development of this therapeutic.

Lavie Bio, a global leader in developing next-generation Agbiological products, achieved a significant milestone in developing biostimulant solutions for row crops facing extreme weather conditions. By leveraging AI, Lavie Bio identified over a dozen novel microbial candidates within 12 months, utilizing its PDD technology platform. The company also announced the commercial expansion of its bioin product Yalos to winter wheat following the successful trial.

Strategic Directions

Evogene's vision is to create groundbreaking life science products rooted in microbes, small molecules, and genomics to improve life, quality, and longevity. To achieve this, the company is merging life science knowledge with dedicated big data and cutting-edge computational technologies, resulting in the creation of three AI tech engines: MicroBoost AI, ChemPass AI, and GeneRator I. These tech engines provide effective discovery and optimization of life science products, increasing the probability of successfully reaching a breakthrough product within a competitive time frame and at a cost-efficient manner.

Evogene's business strategy is to target maximum potential with minimum risk by establishing diverse collaborative partnerships for life science product development. The company aims to maximize the potential of its tech engines while minimizing financial and development risk. Evogene's collaboration with leading companies such as Syngenta, Bayer, and The Kitchen Hub, a new company focused on protein production in plant, underscores this approach.

Challenges and Opportunities

The call highlighted the challenges and opportunities facing Evogene, particularly in the context of the ongoing war between Israel, Hamas, and Hezbollah, which could potentially impact the company's operations and financial performance. However, the company remains optimistic about its future prospects, citing the potential for continued revenue growth and the strategic partnerships that are driving innovation and sustainability in the industry.

In conclusion, Evogene's second quarter results demonstrate a strong financial performance and significant progress across its subsidiaries. The company's strategic focus on merging life science knowledge with cutting-edge technologies, coupled with its collaborative approach to product development, positions it well for future growth and innovation. Despite the challenges, Evogene remains committed to its vision of creating groundbreaking life science products to improve life, quality, and longevity.