Evogene Ltd. Q1 FY2026 earnings call

Core Strategy

• Refocused all operations on two high-impact core markets (pharma small molecule discovery and agricultural next-gen ag-chemicals) to leverage the proprietary Campus AI generative molecular design engine
• Operates with a dual business model: strategic collaborations with industry/academic partners to reduce scientific/financial risk, and internally funded pipeline advancement to secure stronger future partnership terms
• Scaled down or exited non-core legacy businesses (microbiome therapeutics, agricultural microbiology, castor cultivation) to concentrate resources on core AI-driven molecule design

Core Technology Platform

• Follow-up collaboration with Google announced in Q1 2026 to develop advanced AI agents that automatically extract insights from scientific publications and build proprietary, high-accuracy datasets for molecular design
• The first 2025 Google collaboration produced a breakthrough generative engine that designs novel molecules that are easier to synthesize and aligned with product requirements

Pharma Division Highlights

• Announced three new collaborations in Q1 2026:
  • Collaboration with Systasy Bioscience and Ludwig Maximilian University Hospital (supported by a Eureka grant) for neutrophil-driven hyperinflammatory diseases (including IBD), integrating AI design, patient-specific functional validation, and clinical expertise
  • Collaboration with Unravel Biosciences to develop brain-penetrant therapies for demyelinating disorders (including multiple sclerosis) targeting a newly discovered target
  • Collaboration with Queensland University of Technology to develop small molecule inhibitors targeting a cellular detoxification pathway that drives chemotherapy resistance across multiple cancer types
• Pharma division now has four ongoing collaborations, building a growing pipeline of early-stage small molecule candidates

Ag-Chem Division (AgPlenus) Highlights

• Amicably terminated the Bayer herbicide discovery collaboration: the partnership successfully validated the platform's molecule optimization capabilities, but candidates could not progress due to inherent issues with the target protein; the parties are exploring future collaboration opportunities
• Significant iterative progress on the internal novel septoria fungicide program (targeting a $1.2 billion annual market, where existing products face growing resistance): AI-driven design, paired with experimental validation, increased hit rates from ~4% in the first screen to ~56% in the latest round of custom-synthesized novel compounds, producing a focused high-quality lead set

Financial Update

• As of March 31, 2026, consolidated cash, cash equivalents and short-term deposits totaled $13.1 million, with cash burn of $2.8 million in Q1 2026
• Completed a warrant inducement transaction in Q1 2026 that generated $3.4 million in gross proceeds before fees
• Non-core subsidiaries: Lavie Bio was acquired by ICL in 2025, with remaining cash distribution ongoing; Biomica licensed its lead oncology candidate to Collision Pharmaceuticals and is distributing remaining cash to shareholders; Costera is scaling operations to focus solely on Brazil, with commercial field trials ongoing to prepare for 2027 seed sales

1. Pharma Small Molecule Drug Discovery: This is a new core segment launched in early 2025, with no separate reported Q1 2026 revenue. All operational expenses for the division are included in consolidated corporate R&D and G&A costs.
2. Agricultural Ag-Chemicals (via subsidiary AgPlenus): Q1 2026 revenue for this segment is not broken out separately in the consolidated results. The terminated Bayer collaboration successfully produced novel active compounds, but no further revenue will be generated from that partnership.
3. Non-Core Discontinued/Scaled Subsidiaries (Lavie Bio, Biomica, Costera): Total consolidated company revenue for Q1 2026 was $0.3 million, down from $2.3 million in Q1 2025. The 87% revenue decrease is primarily attributable to the absence of $2 million in Costera seed sales that were recorded in Q1 2025. Cost of revenues for Q1 2026 was $0.1 million, down from $1.5 million in the year-ago quarter, consistent with lower revenue. Net R&D expenses for the consolidated company were $1.8 million (down $0.7 million year-over-year), driven by lower expenses at discontinued non-core subsidiaries.

• Management expects continued meaningful progress across all three core areas (Campus AI technology, pharma pipeline, ag-chem pipeline) to reinforce the company's growth trajectory and long-term value creation
• For Campus AI: The company will continue expanding strategic technological collaborations to enhance innovation capabilities and sustain its competitive market advantage
• For pharma: Management expects advancement of existing pipeline to key value-creating milestones, new strategic collaborations with biotech and academic partners, deepened relationships with global pharma, and continued evaluation of opportunities to build an internal pharma pipeline
• For ag-chem: Management expects continued advancement of the internal fungicide pipeline, new collaborations with leading ag-chemical companies, and continued evaluation of opportunities to expand the internal ag-chem pipeline
• Costera non-core segment expects to complete commercial field trials in Brazil to support the launch of seed sales for the 2027 growing season

• Forward-looking statements are subject to material risks that could cause actual results to differ materially, including geopolitical instability from ongoing conflict in Israel and neighboring Middle Eastern territories, which is beyond the company's control
• Early-stage product discovery and development carries inherent scientific risk: even successfully validated platforms can produce candidates that fail due to unresolvable target biology issues, as seen in the terminated Bayer collaboration
• The company relies on external partnership for pipeline advancement, and there is no guarantee that new collaborations or strategic transactions will be completed on favorable terms or at all
• The company has a relatively small cash position and ongoing operating losses, creating financing dependence on successful external transactions to fund continued operations and pipeline development
• New therapeutic and ag-chemical product development has high failure rates and long development timelines, which can delay value creation and create extended cash burn

Q: The question asks when Evogene can expect to complete a strategic partnership (with an equity investment component) across its ag, tech, or pharma segments. / A: Management notes it cannot predict an exact timing, as it depends on achieved progress and results across segments. It identifies ag as the most likely segment for a near-term strategic transaction that could include an equity investment, given existing strong results from the internal fungicide program and prior partnership experience. Technology is seen as the next most likely area, as Evogene already has an existing collaboration with Google and is in discussions with other large technology companies that could lead to a significant transaction. For pharma, which only launched in early 2025, management notes that while the rapid growth to four ongoing collaborations and existing early discussions with large pharma is encouraging, a large strategic transaction with equity investment will take more time (not many years, but not within the next few quarters) until initial results from existing collaborations are generated.