Evogene (NASDAQ:EVGN) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below.

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The full earnings call is available at https://www.veidan-conferencing.com/evogene

Summary

Evogene Ltd reported a decrease in revenue for Q1 2026 to $0.3 million, down from $2.3 million in Q1 2025, primarily due to lower seed sales from its subsidiary Castera.

The company is focusing on its proprietary AI engine, Campus AI, for drug discovery and agricultural chemical development, with strategic collaborations including Google and industry partners like Bayer and Corteva.

Evogene is streamlining its business to focus on high-impact markets and has discontinued or scaled down non-core activities, resulting in dividend distributions from subsidiaries Labibio and Biomica.

The company's financial position includes $13.1 million in cash and equivalents, with ongoing cash distribution processes expected to complete in Q2 2026.

Management highlighted significant progress in pharma and ag chemical divisions, despite terminating a collaboration with Bayer due to biological target issues.

Full Transcript

OPERATOR

Welcome to Evogene's First Quarter 2026 Results Conference Call all participants are at present in listen only mode. Following Management's formal presentation, we will open the question and answer session. You may send questions via chat. Please type your name and company before your question. As a reminder, this conference is being recorded May 20, 2026. Before we begin, I would like to caution that certain statements made during this earning conference call by Evogene's management will constitute forward looking statements that relate to future events.

This presentation contains forward looking statements relating to future events and Evogene Ltd. The Company may from time to time make other statements regarding our outlook or expectation for future financial or operating results and or other matters regarding or affecting us that are considered forward looking statements as defined in the U.S. private Securities Litigation Reform act of 1995, the PSLRA and other securities laws, as amended. Statements that are not statements of historical fact may be deemed to be forward looking statements.

Such forward looking statements may be identified by the use of such words as believe, expect, anticipate, should, planned and estimated, intent and potential or words of similar meaning. We are using forward looking statements in this presentation when we discuss our value drivers, commercialization effort and timing, product development and launches, estimated market size and milestones, pipeline as well as our capabilities and technology. Such statements are based on current expectations, estimates, projections and assumptions describe opinions Assumptions about future events involves certain risks and uncertainties which are difficult to predict and are not guarantees of future performance. Readers are cautioned that certain important factors may affect the Company's actual results and could cause such result to differ materially from any forward looking statement that may be made in this presentation. Therefore, actual future events, performance or achievements and trends in the future may differ materially from what is expressed or implied by such forward looking statements due to a variety of factors many of which are beyond our control, including without limitation the aftermath of the recent war between Israel and each of the terrorist groups Hamas and Hezbollah, Iran and other regional terrorist groups supported by Iran and any destabilizations in Israel, neighboring territories or the Middle east region and those described in greater detail in Evogene's annual report on Form 20F and in other information Evogene Files and furnished with the Israel securities authorities and the U.S. securities and Exchange Commission, including those factors under the heading Risk Factors. Except as required by the applicable security laws, we disclaim any obligation or commitment to update any information contained in this presentation or to publicly release the results of any revisions to any statement that may be made to reflect future events or development or changes in expectations, estimates projections and assumptions. The information contained herein does not constitute a prospectus or other offering document, nor does it constitute or form part of any invitation or offer to sell or any solicitation of any invitation or offer to purchase or subscribe for any securities of Evogene or the Company, nor shall the information or any part of it or the fact of its distribution from the basis of, or be relied on in connection with any action, contract, commitment or relating thereto or the securities of Evogene or the Company.

The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed and as an endorsement of our product or services. With us on the line will be Ofer Haviv, President and CEO of Evogene, and Polina Ravzin, VP Finance of Evogene. Now I would like to turn the call over to Ofer Haviv. Mr. Haviv, please go ahead.

Ofer Haviv (President & CEO)

Thank you for joining Evogene's first quarter 2026 analyst call. In today's call, I will focus on the significant progress Evogene has made over the past quarter and outline the Company's key objectives for this year. Joining me for this part of the presentation are Dr. Gabi Tarcik, the company's chief development officer, and Dr. Dan Gelvan, CEO of our subsidiary Ag Planus, which focuses on AG Chemical development. Following our remarks, our VP Finance, Polina Ravzin, will present the financial results.

Then we will open the call for questions. As I stated in our previous call, Evogene's mission is clear and focused to design novel, highly potent small molecules optimized across multiple parameters for drug development and agrochemicals by leveraging Chempas AI, our Computational Generative AI engine. This mission is guided by a strong objective to direct Evogene's resources toward areas where we believe we can create the greatest substantial value.

To execute this mission, we made two key strategic decisions. The first one was to focus all of our technology efforts on our proprietary computational engine, Chempas AI. In this context, I would like to emphasize that we strongly believe that technological collaborations are essential to advancing our core platform. This belief was clearly demonstrated in the partnership we announced with Google in 2025. In this collaboration, we successfully developed a breakthrough generative engine capable of designing entirely new molecular structure molecules that are not only highly novel but also easier to synthesize and better align with multiple product development requirements. The second strategic decision was to streamline our business activity to concentrate on two highly impactful markets where Chempas AI provides a strong competitive advantage. Pharma focused on small molecules drug discovery and agriculture focused on next generation ag chemicals. To maximize the value of our technology, we adapt a clear and consistent business model across both domains which is built on two complementary channels.

The first channel is establishing strategic collaborations with industry partners for early stage product development. Those collaborations help reduce both our scientific and financial risk while accelerating innovation. The second channel is the advancement of our own internally funded product pipeline. In this channel, our goal is to mature those programs further before entering partnerships, allowing us to secure stronger commercial terms with leading industry players.

These slides highlight the collaboration and internal programs Evogene was advancing at the end of 2025. In agriculture, we established two strategic collaborations for herbicide development, one with Bayer and another with Corteva. At the same time, we continue advancing our internally funded program focused on novel fungicide for Septoria. It is important to note that Evogene's chemical activities began in 2018 and are carried out through our subsidiary Ag Planus.

In parallel, our pharmaceutical activity focused on small molecules drug discovery was launched only at the beginning of 2025 as a division of Evogene. At the end of 2025, our first and only announced collaboration in this field was with Tel Aviv University targeting therapies for metabolic diseases linked to protein aggregation in blood vessels. Now I would like to present the company's achievement over the last quarter and to date across those three areas, our core technology platform, our pharma activities and our chemical activities.

We will begin by reviewing the achievements in the area of our core technology platform, Chempas AI. In February this year, we announced our second collaboration with Google aimed at integrating agents into Chempas. The collaboration is expected to enable capabilities that currently do not exist in the global small molecule discovery process. Our second collaboration with Google focused on developing advanced AI agents to solve complex scientific challenges.

Success in this project will enable Evogene to automatically extract valuable insights from scientific publications and create proprietary data sets. These datasets will help us build highly accurate computational models for characterizing specific scientific parameters. We will then use those models to support the development of new molecules designed in accordance with the requirements of our target product profiles. Overall, these new capabilities are expected to significantly strengthen Evogene's technological leadership and competitive advantage.

We will now proceed to reviewing the achievement and activities in the company's pharma division, where the most significant growth occurred this year. In the first quarter of the year, the company announced three new collaboration agreements, two with biotech companies and one with an academic institution. In the following slides, Dr. Gabi Tarsik, Evogene's CDO will elaborate on each collaboration. Gabi, thank you, Ofer.

Gabi Tarcik

I am excited to share with you the progress in the pharma division that has taken place since the beginning of the year. In February, we announced a new collaboration with Cystasis Bioscience and Ludwig Maximilian University Hospital in Germany. This collaboration focuses on a novel biological target involved in neutrophil driven hyper-inflammatory diseases such as inflammatory bowel disease, an area of significant unmet medical need. The collaboration, supported by the prestigious Eureka grant, brings together three complementary aspects: Evogene's Campus AI engine, Cystasis proprietary pathway profiler technology for high content functional validation in patient-specific models, and the clinical expertise of Ludwig Maximilian University Hospital. By integrating AI-driven molecular design, advanced functional biology, and clinical insights from the earliest stages, we aim to accelerate the identification of high-quality drug candidates while building strong long-term therapeutic and commercial value. In January this year, we announced a collaboration with Unravel Biosciences that focuses on a newly discovered target for demyelinating disorders such as multiple sclerosis to develop brain-penetrant therapies capable of restoring myelin and improving neurological function.

Here, by combining Evogene's Campus AI drug design engine with Unravel's patient-derived molecular profiling capabilities, we are accelerating the identification of drug candidates and addressing a major unmet medical need in a neurodegenerative market exceeding $26 billion, thereby creating significant long-term partnering and commercial opportunities. This collaboration exemplifies the strategic partnerships we are pursuing by bringing together deep biological insight and Evogene's advanced computational chemistry platform to create differentiated first-in-class therapeutic opportunities with strong pharmaceutical licensing potential.

In mid-February, we announced an additional collaboration that focuses on addressing chemotherapy resistance, one of the major challenges that limits the effectiveness of current cancer treatments. In collaboration with Dr. Mark Adams and the Queensland University of Technology in Australia, together we are targeting a newly identified cellular detoxification pathway that enables tumors to resist cancer therapy. The collaboration integrates Evogene's Campus AI generative molecular design engine with advanced cancer genomic expertise to develop novel small molecule inhibitors designed to restore treatment sensitivity by addressing a key resistance mechanism across multiple cancer types, including non-small cell lung cancer. This program has the potential to generate differentiated oncology candidates with strong clinical and commercial value. I am very proud to present for the first time the small molecules pipeline of Evogene's Pharma Division, a growing and highly promising portfolio that reflects the strengths of our technology innovation and strategic collaborations. We are encouraged by the advancement of the molecules generated in collaboration with our partners and we look forward to seeing these programs progress rapidly into more advanced pre-clinical and clinical stages.

At the same time, we expect additional high-potential projects to join this exciting pipeline, further expanding the opportunities ahead of us. Looking ahead, I am excited to continue sharing updates on meaningful progress we are making across these programs. With that, I would like to conclude my remarks and hand over the call back to Ofer.

Ofer Haviv (President & CEO)

Thank you Gabi we will conclude the update on the corporate core business activities with the status in the field of ag chemical development. Operations in this field are conducted through our subsidiary Ag Planus. I will ask Dr. Dan Gelvan, Ag Planus CEO, to elaborate on the company's activities.

Dan Gelvan

Thank you Ofer. I'm pleased to provide an update on the status of Ag Planus activities since the beginning of 2026. The main progress has been in our internal project aimed at developing a fungicide for Septoria and I will elaborate on this topic on the coming two slides, but first I would like to focus on an update regarding our collaboration with Bayer. While Ag Planus collaboration with Bayer has yielded significant novel active compounds, thereby thoroughly validating our ability to optimize active molecules, it has now become evident that these candidates cannot be further developed due to issues pertaining to the biology of the target protein.

As a result of this inherent target problem, we have amicably, together with Bayer, decided to terminate our research collaboration agreements. Based on the strong professional relationship established during this collaboration, we are now exploring potential opportunities for future collaborations that would leverage ecplanet's computational chemistry capabilities, discovery platforms and molecule optimization expertise as demonstrated throughout this collaboration.

I will be happy to update on the outcomes of these discussions in future updates within our internal development pipeline. We are making good progress in developing a new fungicide for wheat blotch as a disease caused by Zymoseptoria tritici. We are working to address a major problem representing an annual market value of over $1.2 billion. Approximately 70% of fungicides applied to wheat in Europe are aimed at fighting wheat blotch. Concurrently, many existing products such as strabilurins are experiencing diminished efficacy as the disease develops resistance.

This underscores the critical need for a new and effective solution. Our initial assessment was not promising as no structural data was available for the target protein, a common challenge in egg chemistry research aimed at overcoming resistance. We used homology modeling and structure based pharmacophore development to characterize the active site utilizing Pointhit, the initial phase of molecule screening employing Chempas AI, 440 candidates were selected for testing.

Of these, only 11 met the enzymatic inhibition thresholds and only 2 demonstrated antifungal activity from these two in vitro and in vivo validated compounds and incorporating the negative results. Utilizing active search, the subsequent phase of molecule screening that leveraged the data generated in the preceding Stage, we selected 164 off the shelf molecules for purchase. Subsequently, 38 of these showed enzymatic inhibition and 5 demonstrated antifungal activity, demonstrating a clear improvement over the initial screen.

Building on these insights, we moved to lead optimization phase and generated 27 novel compounds which were custom synthesized and tested over the past months. Of these, 25 met the enzymatic inhibition thresholds and 15 also showed the desired biological activity, which represents a dramatic improvement. This progression illustrates how the integration of iterative experimental validation with AI driven molecular design can transform limited early signals into a focused, high quality lead set.

We have high expectations for this program and I will be pleased to update you on the progress we make in the coming quarters. I am pleased to present an AD at Planus Pipeline to that of Evogen's Pharma Division. I believe that consolidating these two activities under a single technological platform will create strong synergy and mutual enrichment, thereby accelerating product development in both areas and strengthening our competitive advantage and value proposition across the two industries in in which we operate.

With that, I conclude my remarks and hand the presentation back to ofel.

Ofer Haviv (President & CEO)

Thank you Dan. Looking ahead, we anticipate meaningful progress across all three of the company's core areas of activity, reinforcing our growth trajectory and long term value creation. With respect to our technology engine, we continue to strengthen our competitive edge through the expansion of additional technological collaborations designated to further enhance our innovation capabilities and sustain our unique market advantage. Looking at our drug development activity for the pharmaceutical industry, we are expecting to advancing our existing pipeline toward key value creating milestone establishing new strategic collaborations with leading biotech companies and academic institutions, deepening relationships with global pharmaceutical companies and actively evaluating new opportunities to establish our internal drug development pipeline. With respect to our agrochemical development activity for the agriculture industry, we expect to continue the advancement of our existing pipeline assets, forming new collaboration with leading ag chem companies and ongoing evaluation of opportunities to expand and strengthen ag our internal pipeline.

Overall, we remain strongly focused on executing partnership expansion and pipeline development across all business areas, positioning the company for sustained growth and long term success. With this, I conclude my part and hand over the discussion to Polina. This is her first time participating in quarterly call and I would like to wish her great success as the Leeds Evogene's Finance Department. Good luck Polina.

Polina Ravzin (VP Finance)

Thank you, Ofer. Before I move on to the update regarding the first quarter financial statements, I would like to provide an update on the activities of Evogene's subsidiaries that, in line with our revised strategy, are no longer part of our core business focus. Three companies fall into this category: Lavie Bio, Biomica, and Castor. We will begin with an update regarding the companies whose activities we have decided to discontinue or significantly scale down.

Lavie Bio, Evogene's subsidiary in the field of ag biologicals, was acquired by ICL in 2025. The Lavie Bio's operations were discontinued at the end of the first quarter of 2026. We are distributing the remaining cash balance accumulated in the company as a result of the sale of its operations to ICL. The company expects to receive two additional payments under this transaction. With respect to Biomica, Evogene's subsidiary in the field of therapeutics based on the human microbiome, three significant events have occurred since the beginning of the year.

Biomica licensed its lead oncology candidate BMC128 to Lesion Pharmaceuticals in early 2026. Biomica is currently completing a phase 1 clinical trial for BMC128. Biomica has received approval to distribute the company's remaining cash to its shareholders. We will continue to provide updates on these three matters in the coming quarter. We will now move on to the update regarding Castor, our subsidiary in the Castor cultivation sector for oil production and alternative energy.

As previously noted, although this activity is not part of our core business, this activity is ongoing and we are evaluating its potential primarily in Brazil. I would like to note that Castor's operations have also undergone a significant reduction in recent months in order to align its activities with Brazil only. As we noted in the previous quarter, we are evaluating the potential inherent in Castor's operations in Brazil. As part of this activity, we were pleased to report two significant events.

In April, we reported strong results in terms of yielding agronomic performance of our varieties in commercial scale trials in Brazil. In May, we reported that the company is conducting approximately 13 field trials of our commercial and new varieties in seven target regions in Brazil under different cultivation regimes. We expect that this activity will form the basis for the commencement of sales in Castor seeds for the 2027 growing season. Now we will move on to present the company's financial statements for the first quarter of the year and will begin with the balance sheet.

Let's start with our cash position as of March 31, 2026, Evogene held consolidated cash, cash equivalents, and short-term bond deposits of approximately $13.1 million. The consolidated cash usage during the first quarter of 2026 was approximately $2.8 million. During the first quarter of 2026, Lavie Bio received court approval for the distribution of a $4.25 million dividend to its shareholders. In April 2026, Biomica received court approval for the distribution of a $2.7 million dividend to its shareholders.

Both distribution processes are expected to be completed in the second quarter of the year. In February 2026, Evogene entered into a warrant inducement agreement with an existing investor for the immediate exercise of all August 2024 Series A and Series B warrants resulting in gross proceeds of approximately $3.4 million before fees and expenses. As consideration for the exercise, the investor received in a private placement new unregistered Series A1 and Series B1 warrants to purchase up to an aggregate of 5,076,924 ordinary shares.

The new warrants are immediately exercisable at an exercise price of $1.25 per share. The Series A1 and Series B1 warrants were classified as a liability in the Consolidated Statements of Financial Position initially recorded at fair value and subsequently remeasured at each reporting date using the Black-Scholes option pricing model. As of March 31, 2026, the warrants liability totaled approximately $1.7 million. We will now focus on the income statement.

Revenues for the first quarter of 2026 totaled approximately $0.3 million compared to approximately $2.3 million in the same period of 2025, representing a decrease of approximately $2 million. The decrease is mainly attributable to lower revenue recognized by Castor, which in the first quarter of 2025 included significant seed sales of approximately $2 million. Cost of revenues for the first quarter of 2026 was approximately $0.1 million compared to approximately $1.5 million in the corresponding period of 2025.

The decrease in cost of revenues is consistent with the decline in revenues during the quarter. Research and development expenses net of non-refundable grants for the first quarter of 2026 were approximately.

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