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01/11 16:19
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a mixed but overall positive sentiment. Financial performance shows improvement in net loss and operating loss, though revenues slightly decreased. The AI ChemPass platform is gaining interest, with potential partnerships on the horizon. Management's enthusiasm for AI ChemPass and planned IR activities could boost investor confidence. Despite some unclear responses in the Q&A, the focus on strategic partnerships and financial health supports a positive outlook for stock price movement.
Operating Expenses Total operating expenses, net, were approximately $2.9 million in Q3 2025, compared to $6.6 million in Q3 2024, reflecting a significant reduction due to organizational changes and cost reduction measures.
Income from Discontinued Operations Income from discontinued operations net was approximately $7.9 million in Q3 2025, compared to a loss of $1.5 million in Q3 2024. This includes proceeds from the sale of Lavie Bio's assets and MicroBoost AI for Ag to ICL.
Revenues Revenues for the 9 months ending September 30, 2025, were approximately $3.5 million, compared to $4 million in the same period of 2024, a decrease primarily driven by lower revenue from AgPlenus' activity, including a one-time payment from Bayer in Q1 2024, partially offset by increased seed sales by Casterra.
Research and Development Expenses R&D expenses for the 9 months ending September 30, 2025, were approximately $5.9 million, compared to $9.8 million in the same period of 2024, primarily due to reduced activities in Biomica and the discontinuation of Canonic's operations.
Sales and Marketing Expenses Sales and marketing expenses for the 9 months ending September 30, 2025, were approximately $1.1 million, compared to $1.6 million in the same period of 2024, mainly due to headcount reductions across subsidiaries.
Operating Loss Total operating loss for the 9 months ending September 30, 2025, was approximately $8.8 million, compared to $15.3 million in the same period of 2024, mainly due to decreased activities in subsidiaries and Evogene.
Cash and Short-term Bank Deposits As of September 30, 2025, the company's cash and short-term bank deposit balance was approximately $16 million, reflecting proceeds from the sale of Lavie Bio's assets and MicroBoost AI for Ag to ICL.
Net Loss Net loss for the 9 months ending September 30, 2025, was approximately $2.5 million, compared to $18 million in the same period of 2024, a significant improvement due to reduced operating expenses, income from discontinued operations, and increased financial income.
ChemPass AI: Evogene's proprietary generative AI tech-engine designed to create novel small molecules for pharmaceutical and agriculture industries. It focuses on high potency, novelty, and multi-parameter excellence.
Agriculture Market: AgPlenus, a subsidiary of Evogene, targets the $79 billion agriculture market, focusing on herbicides, insecticides, and fungicides. Collaborations with Bayer and Corteva aim to develop new herbicides with novel modes of action.
Pharmaceutical Market: Evogene is leveraging ChemPass AI to target the $780 billion pharmaceutical market, focusing on small molecule-based drugs. The AI drug discovery market is expected to grow to $190 billion by 2034.
Cost Reduction: Evogene implemented a cost reduction plan, reducing operating expenses significantly. Total operating expenses decreased to $2.9 million in Q3 2025 from $6.6 million in Q3 2024.
Subsidiary Sales: Evogene sold the majority of Lavie Bio's activities and MicroBoost AI for Ag to ICL, generating $7.9 million in Q3 2025.
Strategic Shift: Evogene transitioned to focus on computational chemistry and generative AI for small molecule design in pharmaceuticals and agriculture. This includes organizational restructuring and cost reductions.
Impact of Israel-Hamas War: The ongoing war between Israel and Hamas poses significant risks to the company's operations in Southern Israel. This includes potential disruptions due to the calling up of reserve soldiers, economic instability caused by war-related debt, and uncertainties regarding the security of operations.
Revenue Decline: Revenues for the first 9 months of 2025 decreased to $3.5 million from $4 million in the same period of 2024, primarily due to lower revenue from AgPlenus' activity and reduced seed sales by Casterra.
Reduced R&D and Operational Activities: The company has significantly reduced R&D expenses and operational activities, including the discontinuation of Canonic's operations and reduced activities in Biomica. While this reduces costs, it may limit future innovation and growth.
Dependence on Strategic Collaborations: The company's strategy heavily relies on collaborations with major players like Bayer and Corteva. Any disruption or failure in these partnerships could adversely impact the company's progress and financials.
Market Challenges in Agriculture: The agriculture industry faces challenges such as increased pest resistance, stringent regulatory requirements, and a decreased rate of new pesticide discoveries, which could impact AgPlenus' ability to develop successful products.
Pharma Industry Risks: The development of small molecule-based drugs is expensive, lengthy, and has a low success rate (3%-10%). This poses a risk to the company's new strategy in the pharmaceutical sector.
Cash Flow and Financial Sustainability: The company reported a cash balance of $16 million as of Q3 2025, with a cash usage of $3.5 million in the quarter. This raises concerns about financial sustainability if revenue generation does not improve.
Expectation to start breaking business benefits of strategic shift: Evogene expects to start realizing the business benefits of its strategic shift towards computational chemistry and generative design of small molecules for pharmaceuticals and agriculture over the coming year.
ChemPass AI development: Evogene is advancing a multiyear development program for ChemPass AI, continuously adding new capabilities to improve precision and address more parameters. The system is expected to become smarter and more accurate with increased usage.
Collaboration with Google Cloud: Evogene plans to continue collaborating with major technology companies like Google Cloud to accelerate ChemPass AI development and explore making parts of its technology accessible to researchers.
AgPlenus' future plans: AgPlenus aims to strengthen and expand collaborations with existing partners, establish new partnerships, and broaden its internal development portfolio. These initiatives are expected to generate cash inflows through upfront payments, R&D reimbursements, milestone payments, and potential royalties.
Pharma division collaborations: Evogene's Pharma division plans to announce additional collaborations over the coming year, focusing on leveraging ChemPass AI for small molecule drug development. These partnerships aim to co-develop innovative products and generate revenue through R&D fees, milestone payments, and revenue-sharing mechanisms.
Expansion in agriculture and pharma: Evogene plans to expand collaborations with leading ag-chem companies and grow AgPlenus' internal crop protection pipeline. In pharma, the company aims to partner with biotech and pharmaceutical companies to develop small molecule-based drugs.
The selected topic was not discussed during the call.
The earnings call reveals a mixed but overall positive sentiment. Financial performance shows improvement in net loss and operating loss, though revenues slightly decreased. The AI ChemPass platform is gaining interest, with potential partnerships on the horizon. Management's enthusiasm for AI ChemPass and planned IR activities could boost investor confidence. Despite some unclear responses in the Q&A, the focus on strategic partnerships and financial health supports a positive outlook for stock price movement.
The earnings call highlights strong revenue growth, significant reductions in operating expenses, and promising developments in castor seed sales and field trials. The Q&A section reveals optimism about future collaborations and advancements, particularly in the ChemPass AI platform. Despite some vague responses, the focus on new strategies and partnerships suggests a positive outlook. The financial improvements and strategic plans indicate a likely stock price increase of 2% to 8% over the next two weeks.
The earnings call presents a mixed picture. While there are positive developments, such as the acquisition of Lavie Bio by ICL and reduced expenses, there are concerns over declining revenues, operational risks, and funding challenges. The Q&A session highlights management's reluctance to provide clear guidance, raising uncertainties. Despite reduced expenses and a cash inflow from asset sales, the reliance on subsidiaries for revenue and the lack of clarity on future orders temper optimism. Given these factors, the stock price is likely to remain stable, resulting in a neutral sentiment.
The earnings call reveals several concerning factors: a significant decline in revenue, a reduced cash position, and geopolitical risks. Despite some positive developments like the acquisition of Lavie Bio and reduced expenses, the dependency on collaborations and the absence of license fee payments pose substantial risks. Additionally, the financial sustainability is questionable due to decreased cash reserves and reliance on future funding. The analysts' sentiment is unclear, but the overall financial picture and risks suggest a negative market reaction.
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