Evogene R&D expenses widen as it enters new areas of activity
* Q1 revenue flat at $3.8 million
* Operating loss widens to $2.6 million
TEL AVIV May 7 (Reuters) - Evogene, an Israel-based plant genomics company, reported unchanged revenue from research and development payments in the first quarter but its operating loss widened as self-funded R&D expenses grew.
Evogene seeks to improve crop productivity for food, feed and fuels by combining computational technology and plant genomics. It focuses on different crops such as corn, wheat rice and soybeans and a variety of traits to be improved such as yield and resistance to drought, pests and disease.
The company on Wednesday posted a first-quarter operating loss of $2.6 million compared with a loss of $600,000 a year earlier. Steady revenue of $3.8 million included payments for R&D services generated under collaboration agreements with seed companies, as well as up-front payments made under Evogene's agreements with collaborators.
R&D expenses grew 22 percent to $2.7 million. These relate to self-funded activities largely focused on the development of new computational genomics.
Evogene has $123.6 million in cash, after it raised almost $85 million in a public offering in New York in November.
"We are expanding our research efforts significantly. This is why we raised money," Evogene Chief Executive Ofer Haviv told Reuters, adding he did not expect the company to become profitable in the next year or two. "We want to use the money to enter additional areas of activity."
Assuming regular course of business and no new revenue sources, the company estimates its cash burn in 2014 will be $15 million to $18 million.
Evogene licenses out genes it identifies to seed companies such as Monsanto, Syngenta, Bayer, and DuPont and is also building its own seed activity.
Its subsidiary Evofuel said in March it would collaborate with SLC Agricola SA, one of Brazil's largest agriculture businesses, on the commercial production of castor beans in Brazil for the biofuel and other industrial markets. Sales are expected to start in 2016.
A second growth engine for the company is the area of ag-chemicals as weeds and insects develop resistance to chemicals on the market. Evogene seeks to identify new proteins that would form the basis for new herbicides and insecticides. (Reporting by Tova Cohen)
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