Evogene Ltd. — FY2023 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone Q4 filing; Q4-only financial results are not provided in the supplied filing text. Financial statements are prepared under IFRS as issued by the IASB and presented in U.S. dollars.
Business context
Evogene uses its Computational Predictive Biology platform and three technology engines to develop life-science products through subsidiaries and collaborations. Activities span agriculture, human health and industrial applications, including ag-biologicals, ag-chemicals, microbiome therapeutics and castor seeds. The company remains at an early commercial stage, with revenue principally from collaborations, licensing and product sales.
Key financial metrics
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $5.640 million | $1.675 million |
| Gross profit / gross margin | $3.948 million / 70.0% | $0.766 million / 45.7% |
| Research and development expense, net | $20.777 million | $20.792 million |
| Sales and marketing expense | $3.611 million | $3.933 million |
| General and administrative expense | $6.068 million | $6.482 million |
| Operating loss | $26.508 million | $26.941 million |
| Net loss | $25.954 million | $29.844 million |
| Basic and diluted loss per share | $0.52 | $0.65 |
| Net cash used in operating activities | $21.577 million | $23.678 million |
- At December 31, 2023, cash and cash equivalents were $20.772 million and short-term bank deposits were $10.291 million. Working capital was approximately $27.5 million.
- Total assets were $51.101 million; total equity was $28.685 million. Liabilities included a $10.368 million convertible SAFE, $4.814 million of government-grant liabilities and $1.138 million of lease liabilities. The filing cites approximately $4.4 million of long-term indebtedness related to government grants.
- Cash and cash equivalents declined by $8.208 million during 2023. Financing cash inflows of $18.152 million included $8.449 million net proceeds from ordinary-share issuance and $9.523 million from subsidiary preferred shares issued to non-controlling interests.
Material changes versus FY2022
- Revenue rose 229% to $5.640 million, mainly reflecting Lavie Bio’s Corteva collaboration and Casterra castor-seed sales. Agriculture revenue increased to $3.791 million from $0.876 million; industrial-application revenue increased to $1.075 million from $0.072 million.
- Gross profit increased to $3.948 million from $0.766 million. Despite the improvement, revenue remained well below operating expenses and the company continued to record substantial operating losses.
- Net loss narrowed by $3.890 million. Lower financing expense and higher financing income contributed; FY2022 also included $3.5 million of other income from Bayer related to a seed-traits collaboration restructuring.
- Evogene issued 8.5 million ordinary shares at $1.00 each in a July 2023 registered direct offering, generating $8.5 million gross proceeds. Outstanding shares increased to 50,584,888 at year-end from 41,260,439.
- Biomica completed a $20 million financing round, including $10 million from Shanghai Healthcare Capital and $10 million from Evogene; Evogene’s reported fully diluted ownership fell to approximately 67%. Customer concentration remained high: one major customer accounted for 62% of 2023 revenue and another for 17%.
Outlook, commentary and risks
- Management believes available cash at year-end 2023 is sufficient for projected requirements for at least 12 months. It also says future funding may be needed and describes discussions with potential strategic and financial investors, including at subsidiary level.
- Management expects R&D expense to increase in 2024 as subsidiary pipelines advance; sales and marketing and general and administrative expenses are expected to remain at 2023 levels. No quantified revenue or earnings guidance is provided.
- Canonic’s medical-cannabis activity is being wound down; its licenses were cancelled and its workforce reduced. A transfer of operations to a third party remained uncertain as of the filing.
- Subsequent developments included AgPlenus collaboration and licensing agreements with Bayer, a Lavie Bio discovery and development agreement with Syngenta, and receipt by Lavie Bio in March 2024 of the second $2.5 million installment under its Corteva license. These are post-year-end developments, not FY2023 results.
- Key risks include continuing losses and cash burn, dependence on collaborations and external financing, possible shareholder dilution, long and uncertain product-development and regulatory cycles, and reliance on third-party manufacturing and distribution. The filing also highlights Israel-related conflict and operational disruption, currency exposure to the NIS, and potential subsidiary dilution.
- Evogene said it was a PFIC for U.S. tax purposes in 2023 and identified significant risk of PFIC status in 2024. Nasdaq granted an extension through September 16, 2024 to regain compliance with its minimum bid-price requirement.
- The independent auditor issued an unmodified opinion on the IFRS financial statements. Management reported effective disclosure controls and internal control over financial reporting as of December 31, 2023; the auditor did not provide an internal-control attestation.
Important facts for investors to verify
- Review the audited statements and notes for cash availability, operating cash burn, grant obligations, the SAFE’s fair-value assumptions and the timing of subsidiary funding needs.
- Confirm whether the large Casterra orders and Corteva license payments convert into recurring revenue, and assess customer concentration, order fulfillment and revenue-recognition timing.
- Track 2024 financing, including the new ATM capacity, potential subsidiary fundraising, share-count changes and dilution to Evogene’s subsidiary ownership.
- Monitor Canonic’s wind-down or transfer, the status and economics of the Bayer and Syngenta agreements, and progress in Biomica and Lavie Bio programs.
- Assess Nasdaq bid-price compliance, Israel-related operating impacts, PFIC status and applicable U.S. shareholder tax consequences.