Why Did Evogene Plunge 11.05% Despite AI Breakthrough?

On June 12, 2025, Evogene's stock experienced a significant drop of 11.05% in pre-market trading.

Evogene has recently made significant strides in the field of generative AI, announcing the completion of its first-in-class foundation model for small molecule design. This model, developed in collaboration with Google Cloud, achieves approximately 90% precision in designing novel molecules, a substantial improvement over conventional AI models which only reach about 29% accuracy.

The new model addresses a critical challenge in the pharmaceutical and agricultural industries: identifying novel small molecules that meet multiple product criteria. This advancement is expected to enhance the company's capabilities in small molecule discovery and optimization, potentially leading to the development of more effective and sustainable products.

Evogene's proprietary foundation model is built on a large dataset of approximately 38 billion molecular structures and is trained and deployed using Google Cloud's advanced AI infrastructure. The company is already working on version 2.0 of this model, focusing on enhanced flexibility for multi-parameter optimization.

Ofer Haviv, President and CEO of Evogene, highlighted the significance of this milestone, stating that it unlocks new frontiers for ChemPass AI, enabling the generation of novel molecules that not only perform well but also create new intellectual property space. This advancement is crucial for overcoming long-standing challenges in life-science R&D, including reducing late-stage failure in pharmaceuticals and developing effective, sustainable, and proprietary agricultural chemicals.