A 30% increase in its workforce threw Evogene into an $821,000 operating loss in the fourth quarter of 2011, compared to a $166,000 operating profit in the fourth quarter of 2010, according to the financial statement issued by the company Tuesday.
Quarterly revenues were $4.7 million, barely changed from the parallel. The bottom line showed a quarterly net loss of $907,000 - a substantial improvement over the $3 million net loss Evogene reported for the final quarter of 2010.
Evogene develops computing technology to identify genes with potential to improve plant characteristics like resistance to drought. The company's revenues reflect the recognition of income from a technological joint venture agreement with Monsanto.
The venture centers on identifying genes contributing to resisting drought conditions and improving fertilizer use by corn, soy, cotton, and canola.
Evogene also has a joint venture agreement with Bayer for developing genes to improve rice yields.
In reference to Evogene's increased cash resources, totaling $59 million at the end of December resulting from raising $16 million by exercising series 2 options in May 2011, CEO Ofer Haviv said the company is considering the purchase of complementary technology to take full advantage of the potential for entering the field of the developing new generation of weed killers. This involves development based on finding new target proteins through the use of Evogene's Athlete technology and the development of new molecules to act in these proteins.
Haviv noted that the company intends to also be involved in developing the final product and thus to secure itself a larger share of marketing proceeds than the royalties it expects to receive from seed companies for improving characteristics through genes it identified for them. He also said Evogene may likely buy technology to help it go from finding target proteins to developing molecules that can affect them.
"The year 2012 will also be an interesting one for Evogene in the field of alternative fuel products," added Haviv. Evogene spawned a new company, Evofuel, to develop strains of castor plants containing enhanced oil for the biodiesel industry. The company formed Evofuel to accelerate the development and commercialization of castor strains following successful field testing on these strains in northeast Brazil in partnership with SLC Agricola, a leading Brazilian agribusiness company.
Evogene is expected to issue a private offering for strategic investors and, at a later stage, to conduct a public offering in the United States in an attempt to emulate the success of Ceres, an energy crop company that develops alternative fuels from sweet sorghum as an alternative to sugarcane, which is used in ethanol production. The U.S.-based company, which shifted from working with genetically engineered plants to the alternative energy sector, raised $65 million in capital at the end of February and has since gained 35% to reach a company value of $411 million.
Haviv's compensation costs were NIS 2.5 million in 2011, including NIS 1 million in salary, a NIS 263,000 bonus and share-based pay of NIS 1.25 million. Compensation costs for Evogene's Chief Technology Officer Hagai Karchi, and VP Strategy and Business Development Assaf Oron, were NIS 1.5 million each.
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