Evogene Ltd. Q2 FY2026 earnings call

• Board Response to Dissident Shareholder Campaign

  • A group of dissident shareholders has demanded replacement of the entire current board. Management notes the company has already completed a full strategic transformation over the past 18 months, and disrupting this momentum would destroy value creation.
  • The dissident group rejected an offer to add its representatives to the board and has not presented any alternative comprehensive strategic or operational plan.
  • If the current board prevails in the September contested election, two new independent industry experts will be added to the board to strengthen expertise for the next growth phase.
  • Large shareholder and board member Leon Recanati recently made a significant additional investment, demonstrating confidence in the current strategy.

• Corporate Transformation Achievements

  • Streamlined operations, reduced headcount from 117 to 38, and lowered annual cash burn from ~$20.5 million in 2024 to an expected $8.5-$9.5 million in 2026, with further reductions planned for 2027.
  • Raised ~$11.1 million in new capital to secure operating runway, monetized non-core asset LaviBio to ICL for $15.25 million, licensed Biomica's Phase 1 asset to Lishan Biotech, refocused Castera exclusively on the Brazil SAF market, and advanced ActPlanis novel fungicide discovery.

• Core Technology and Operational Progress

  • Upgraded the core Kempass AI generative small molecule foundation model platform, integrating autonomous AI agents via a Google Cloud partnership. AI agents now automate complex tasks that previously took researchers weeks/months to complete in minutes.
  • Added new predictive models (including the APP antifungal potency predictor) and expanded the company's scannable virtual chemical space from 36 billion to 110 billion molecules.
  • Pharma: Two collaborations have completed initial Kempass AI workflow steps with results exceeding partner expectations; the internal drug discovery program has completed step 2 (hit-to-lead) and moved to step 3 (lead optimization). All programs target multi-billion dollar commercial markets, and Evergen retains significant commercial rights to joint program outputs.
  • Ag: The novel Septoria fungicide program is nearing completion of lead optimization, with testing of synthesized molecules underway.

Evergen operates two core product segments (Pharma and Ag/Crop Protection) plus non-core discontinued business segments. No specific segment revenue breakdown was provided. Core segment performance highlights: 1) Pharma Division: 4 new drug development agreements added in H1 2026, bringing total active collaborations to 6. 2) Ag/Crop Protection Division: Lead optimization is nearly complete for a novel Septoria-targeting fungicide program, with advanced biological assay testing underway ahead of greenhouse and field trials. Discontinued/non-core segments (LaviBio, Biomica, Castera) generated lower revenue year-over-year: H1 2026 total company revenue was $0.7 million, down from $2.9 million in H1 2025, primarily due to $2 million in castor seed sales included in H1 2025 Castera revenue. Q2 2026 total company revenue was $0.3 million, down from $0.5 million in Q2 2025, following the conclusion of a collaboration agreement with Bayer.

• Full-year 2026 consolidated cash burn is projected to remain in the range of $8.5 million to $9.5 million, maintaining the prior guidance range.
  • Management expects that at least one internal drug candidate could enter preclinical trials in the second half of 2027, following completion of lead optimization.
  • Additional cash burn reduction is targeted for 2027 as part of the company's disciplined capital strategy.

• A contested board election scheduled for September creates operational and strategic disruption risk: replacing the entire board would dismantle current transformation momentum and eliminate alignment on the existing strategic plan.
  • Forward-looking statements are subject to material risks from ongoing regional instability in the Middle East following the recent war between Israel and regional militant groups, which could materially impact actual results compared to projections.
  • The company's early-stage AI platform and pipeline carry inherent uncertainty around candidate success, regulatory approval, and future commercial monetization that could lead to results different from management expectations.
  • Past underperformance of the company's share price has created shareholder frustration, and there is no guarantee that value creation efforts will result in near-term share price improvement.

Q: Can you monetize your Kempass AI platform with a major strategic partner in the near term? / A: Evogen is a differentiated player in AI-driven small molecule discovery with limited competition in the agricultural crop protection space. In less than a year of focused commercial activity, the company has already signed 6 collaboration agreements and is now in discussions with additional partners, including major pharmaceutical companies. Many current discussions include R&D funding from partners, which will support future revenue growth, putting Evogen in a strong competitive position.

Q: Can the company expand investor outreach to showcase the underappreciated value of Kempass AI? / A: Management agrees that Evogen needs to present its story to a broader investor audience. Now that the 18-month strategic transformation is complete and initial operational results are proven (not just a future vision), the company is preparing to launch expanded outreach with multiple investment banks and an IR firm, starting immediately after summer. Management believes the proven results will support a re-rating of the company's share price.

Q: Why has the share price dropped so much, and what will management do to address this? / A: The board and management share long-term shareholders' frustration with the share price. The company has refocused on the differentiated Kempass AI platform, which has already garnered 6 partnerships and has clear differentiated value versus competing offerings. Management is focused on delivering tangible results and adding larger partnerships, which it believes will eventually translate to higher share value, while running a lean operation to extend runway and deliver on value creation.

Q: What is the status of the APTH1 herbicide program, and can it be licensed to other agrochemical companies? / A: The APTH1 program was stopped in H1 2026 because the target protein itself was found to be non-essential for weed survival – weeds recovered after initial weakening, even though Evogen successfully delivered active molecules that hit the target as planned. Management does not expect to license this specific target, but the positive outcome of the collaboration left Bayer impressed with Evogen's technology, and management expects this positive relationship to lead to new future projects with Bayer.