Evogene Ltd (NYSE:EVGN), a plant genomics firm focused on enhancing crop performance and productivity, raised 73.75 million in its secondary offering today. The Revohot, Israel firm offered 5.0 million shares at $14.75 per share. Evogene now commands a market value of over $400 million.
EVGN filed on September 23, 2013
Lead Underwriter: Credit Suisse Securities LLC, Deutsche Bank Securities
Underwriters: Piper Jaffray & Co, Oppenheimer and Co
EVGN is a plant genomics company that enhances seed traits underlying crop performance and productivity through the use of biotechnology and advanced breeding techniques. The firm focuses on essential crops including corn, soybean, wheat, rice, and cotton, which account for over 70% of the value of the global seeds market. The firm also is developing work on agriculture chemicals and seeds focusing on second generation feedstock for biodiesel, though neither of these projects has yet generated revenue.
EVGN currently generates revenue through research and milestone payments, though it expects to receive royalty revenues in the future. The firm collaborates with numerous seed and agriculture chemical firms, including Monsanto Company (NYSE:MON), Bayer AG, DuPont (NYSE:DD), and Syngenta AG (NYSE:SYT).
EVGN offers the following figures in its F-1 balance sheet for the nine months ending September 30, 2013:
Net Loss: ($4,661,000)
Total Assets: $59,665,000
Total Liabilities: $13,257,000
Stockholders' Equity: $46,408,000
EVGN identifies three major groups of competitors. Seed and agriculture chemical companies, including some of EVGN's collaborators, often have internal research and development branches comparable to EVGN. These include firms like Monsanto, DuPont, Syngenta, Bayer, Biogemma, BASF, Dow, and KWS. EVGN more directly competes with biotech firms specializing in plant trait development, including Mendel Biotechnology, Targeted Growth, Hexima and Keygene. Finally, EVGN must compete with academic and agricultural research institutions.
President and CEO Ofer Haviv has served in his current roles since December 2004; he joined EVGN in January 2002 as CFO. Mr. Haviv serves as Chairman of the Board of Directors of each of Evogene Inc. and Evofuel Ltd., both subsidiaries of EVGN. Mr. Haviv is a CPA and holds a B.A. in Accounting and Economics from Tel Aviv University.
Though EVGN is not yet generating a profit, we are optimistic on this secondary offering mostly due to the firm's links to high-profile agriculture companies (Monsanto, Syngenta, etc). We would recommend that growth oriented investors consider owning EVGN.
The firm is likely to generate significant profits through royalties once it can commercialize staple crop products.