Evogene Ltd. — FY2022 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2022; audited consolidated financial statements prepared under IFRS as issued by the IASB. Although the request identifies 2022 Q4, this filing is an annual report and does not provide standalone fourth-quarter financial results. The filing’s table of contents contains a reference to fiscal 2021, but the cover and financial statements identify the reporting year as 2022.
Business context
Evogene is an Israel-based computational biology company whose CPB platform supports businesses in agriculture, human health and industrial applications. Its activities include ag-biologicals (Lavie Bio), ag-chemicals (AgPlenus), microbiome therapeutics (Biomica), medical cannabis (Canonic), castor seeds (Casterra) and seed traits. The business remains primarily research- and collaboration-driven, with limited product sales and no reported royalty revenue.
Key financial metrics
| Metric (USD millions, except percentages and per-share data) | FY2022 | FY2021 | Change / context |
|---|---|---|---|
| Revenue | $1.675 | $0.930 | Increase of $0.745 million; the filing states 88.9%, although the displayed figures imply approximately 80.1%. |
| Cost of revenue | $0.909 | $0.767 | Up approximately 18.5%. |
| Gross profit / gross margin | $0.766 / 45.7% | $0.163 / 17.5% | Margin improved; revenue mix and cost changes contributed. |
| Operating loss | $(26.941) | $(30.953) | Loss narrowed by approximately 13.0%; includes $3.5 million Bayer payment recorded as other income. |
| Net loss | $(29.844) | $(30.445) | Loss narrowed by approximately 2.0%. |
| Basic and diluted loss per share | $(0.65) | $(0.69) | Based on weighted-average shares of 41.2 million and 40.4 million, respectively. |
| Net cash used in operating activities | $(23.678) | $(24.716) | Cash burn remained substantial. |
| Cash and cash equivalents | $28.980 | $32.325 | Down $3.345 million. |
| Marketable securities | $6.375 | $18.541 | Cash plus marketable securities totaled approximately $35.4 million at year-end. |
| Working capital | $32.1 | Not stated here | Company-reported figure at December 31, 2022. |
FY2022 revenue by segment was agriculture $0.876 million, human health $0.513 million, industrial applications $0.072 million and unallocated $0.214 million. Agriculture revenue included collaboration-related activity; human health revenue included Canonic cannabis sales. The filing says revenues were concentrated: two customers accounted for 48% and 26% of total revenue.
At year-end, liabilities included $4.744 million for government grants, $1.816 million in lease liabilities, and a $10.114 million Lavie Bio SAFE liability. The SAFE is a convertible financing instrument accounted for as a liability under IFRS, not conventional bank debt. Total assets were $56.126 million and total equity was $34.790 million.
Material changes versus FY2021
- Revenue rose, driven primarily by AgPlenus collaboration revenue and Canonic product sales; gross profit increased to $0.766 million.
- Research and development expense decreased slightly to $20.792 million. Sales and marketing expense increased 44.4% to $3.933 million, while general and administrative expense fell 11.0% to $6.482 million.
- The $3.5 million Bayer payment related to restructuring and release of patent filing, prosecution and maintenance obligations; it is a significant, non-recurring item affecting the operating-loss comparison.
- Financing turned from $0.521 million net income in 2021 to $2.813 million net expense in 2022, mainly reflecting currency movements and marketable-securities revaluation.
- Financing included $10 million invested in Lavie Bio by an ICL affiliate under a SAFE. The company’s cash-flow statement reported $9.343 million net cash provided by financing activities.
- Employee headcount declined from 141 to 137. Evogene also implemented cost reductions and a workforce reduction during 2022, and stated it was considering longer-term options for Canonic.
Outlook, risks and contingencies
- Management stated that year-end cash and marketable securities were expected to fund projected requirements for at least 12 months. It also cited potential collaboration receipts, product sales, grants and additional financing; additional capital may still be needed, and may dilute shareholders or constrain operations.
- For 2023, management expected R&D expense to increase as pipelines advance; sales and marketing and general and administrative expenses were expected to remain around current levels.
- Key development milestones include Biomica’s goal to complete the BMC128 Phase I study in the latter part of 2023; plans to prepare BMC333 for a Phase I trial; and EPA review of Lavie Bio’s LAV.311 bio-fungicide registration submission, with an estimated 18–24-month review period. These are plans, not assured outcomes.
- Biomica signed a $20 million financing agreement, including a $10 million investment by Evogene and $10 million led by Shanghai Healthcare Capital; completion was subject to customary conditions, including Chinese regulatory clearance. The filing describes potential dilution of Evogene’s Biomica ownership.
- Major risks include recurring losses and negative operating cash flow, early-stage and uncertain product development, reliance on a limited number of collaborators, funding and dilution risk, regulatory and commercialization hurdles, production scale-up and distribution dependence, intellectual-property and cybersecurity risks, and currency exposure. The company does not hedge its principal USD/NIS exposure.
- Evogene reported that it believed it was a PFIC for U.S. tax purposes in 2022 and that there was significant risk of PFIC status in 2023. It also disclosed a Nasdaq minimum-bid-price deficiency notice in October 2022, with a stated compliance deadline of May 1, 2023.
- Government-grant obligations include approximately $4.744 million of recognized liabilities at year-end and restrictions on transferring certain IIA-funded know-how or manufacturing outside Israel. The filing notes uncertainty about the effect of replacing LIBOR with SOFR on grant-related interest.
- The company reported no material pending claims. Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2022; the external auditor did not provide an internal-control attestation.
Important facts for investors to verify
- Reconcile the filing’s stated 88.9% revenue growth with the reported revenue figures, which imply approximately 80.1% growth.
- Assess cash runway against the $23.678 million FY2022 operating cash outflow, the $35.4 million year-end cash-and-securities balance, and management’s at-least-12-month liquidity statement.
- Separate recurring operating performance from the $3.5 million Bayer payment and evaluate whether collaboration and product revenue can grow beyond the low FY2022 base.
- Check the status and final terms of the conditional Biomica financing, Evogene’s cash contribution, and resulting ownership dilution; also monitor ICL SAFE conversion terms and Lavie Bio ownership dilution.
- Track clinical, regulatory and commercial milestones, including BMC128, BMC333, LAV.311 and product uptake, and confirm the timing and funding required for each.
- Verify subsequent ATM share issuance, Nasdaq listing compliance, government-grant repayment or transfer obligations, and the company’s PFIC status with appropriate advisers.