Evogene turns to genetically enhanced wheat
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10 August 10 14:23, Shiri Habib-Valdhorn
Plant genetic engineering company Evogene Ltd. (TASE:EVGN) sees great potential in the soaring price for wheat over the past two years, and it has embarked on a program to use its technology to enhance the cereal crop.
"The potential of wheat is simply immense. It is the number one crop in the world in terms of area," said Evogene president and CEO Ofer Haviv. He added that the wheat seeds market was lagging and most large seed companies are now looking at the market. "The reason for the lag is that companies until now concentrated on food crops for cattle, such as corn, soy beans, and canola. What is mainly a food crop for people, and public is resistant to genetically enhanced crops," he said.
Haviv said that pressure is coming from farmers who want new technologies that will give them added value. "Given the extreme global weather, it is critical to maintain stable food supplies for people, and there will probably be a need for advanced technologies."
Haviv said that, in contrast to its work on crops for biofuels, Evogene was using two methods to enhance wheat. One includes genetic enhancement, and he called the other "classic smart fostering" of traits, using the company's EvoBreed platform. "There is great interest in the industry. In contrast to other crops, we have specific partner for wheat. This opens a lot of options for Evogene," he said.
Evogene posted $2.6 million revenue for the second quarter, up from $2.4 million for the corresponding quarter of 2009. First half revenue rose 10.1% to $5.3 million from $4.8 million in the first half of last year. Second quarter revenue included recognition of income from the company's cooperation agreement with Monsanto Company (NYSE: MON) signed in August 2008, as well as agreements with Bayer Schering Pharma AG, Syngenta Biotechnology Inc., and Biogemma SAS, all signed last year.
However, the company swung to an operating loss of $732,000 for the second quarter from an operating profit of $236,000 for the corresponding quarter. It nevertheless posted a net profit of $3.4 million ($0.12 per share) for the second quarter compared with a net loss of $3.7 million for the corresponding quarter. The company narrowed it net loss to $358,000 in the first half from $5.1 million in the first half of last year.
Evogene's share price rose 3.3% today to NIS 15.20, giving a market cap of NIS 453 million.