GENT-ZWIJNAARDE, BELGIUM -- 11/14/08 --
Webcast and conference call on Friday 14 November 2007 at 12.00 am.
A link is available on Devgen's home page www.devgen.com and
participation in the conference call is possible via the number +32
(0)2 290 14 07.
Zwijnaarde, November 14, 2008. Devgen NV (Euronext Brussels: DEVG), a
public agricultural biotech and seed company, today reports on the
successful conclusion of its first full sales season and on the
establishment of a solid base for growth in India in 2009. In
addition Devgen reports on its entry with rice into Indonesia and the
Philippines.
Devgen Seed and Crop Technologies
India
Sales on target
Product sales are in line with expectations and amount to 5.8 mio EUR
at the end of Q3 2008.
Devgen successfully established itself in the market as a producer
and supplier of premium seed products for hybrid rice, sorghum, pearl
millet and sunflower. 18 hybrid products were introduced into the
market and successfully positioned under the Frontline and Mahalaxmi
brand names.
Devgen experienced strong demand for its hybrid rice products thereby
realizing high net sales prices in the premium market segment. The
sorghum sales season was concluded early for reason that stocks for
these products were already sold out during the Kharif (April to
July) season. Pearl Millet sales were impacted by low rainfall
witnessed in Maharashtra. Sunflower sales were accomplished during
Q1. Follow-up sales for sunflower are mainly planned for Q1 2009.
Solid base for growth
In the first year of business in India, Devgen integrated the various
components, acquired during the previous year, into a solid
organisation, ready to meet the challenges of the future.
* A full management team is now in place in India with industry
professionals in charge of sales, marketing, legal, finance,
technical development and production;
* All key functions were strengthened. Starting off with 59
employees on November, 1st 2007, today 141 people are employed
by Devgen India. About 70 additional people will be hired between
now and year-end, mainly for production and sales;
* Production acreage under contract for the 2009 season triples the
acreage under cultivation during the previous production cycle.
Furthermore a second seed processing plant is under construction
assuring capacity for the next 3 years. Devgen is currently
building its own parental seed production facility, including QC
lab facilities and cold storage for parental seed;
* Close to 4500 demonstration plots were used in new and existing
markets to demonstrate to the farmers Devgen's existing and
pipeline products;
* Marketing activities in function of the coming season are
intensified in order to meet 5 times more end customers/farmers
compared to previous season. In total more than 1,000,000 farmers
were reached through the organisation of field days, field visits
and farmer meetings;
* Products were distributed by 300 distributors during this season
reaching the farmers through over 10,000 dealers. For the next
season the number of distributors will be increased to 726
reaching over 21,000 dealers.
Excellent performance of our current and pipeline products in the
field combined with positive customer and distributor feedback form
the basis for substantial growth in 2009.
Research and development
Devgen's pipeline was evaluated through extensive product testing.
2500 candidate new products were tested in 700 trials across India.
The breeding team and infrastructure was strengthened and breeding
activities are now globally integrated across sites in India, Kenya,
Indonesia and the Philippines. All sites are supported by our marker
technology team, the IT and IP department, all based in Ghent
(Zwijnaarde), Belgium. The stewardship team assists in managing the
processes.
Devgen in Indonesia and the Philippines
Devgen has completed its first year of field trials in Indonesia.
Product testing for registration purposes was organised at 9
different locations. The Devgen Indonesia subsidiary is under
incorporation.
A field station for seed production has been built in the Philippines
to support the scale up of parental seed that was acquired from
Monsanto Company in the Philippines. The scaling up of the parental
seed is required for local testing and commercialisation purposes in
the local market in the Philippines and in the Indonesian and Indian
markets.
An implementation plan to address the Indonesian and the Philippines
markets is being developed.
RNAi and traits
Significant progress was made on improvements of the RNAi technology
and the development of a pipeline for our biotech traits in Devgen's
crops of interest.
Nematicides
In line with the previously announced strategic development plan,
Devgen is currently finalizing the compilation of the first
registration dossiers of its candidate nematicide product in key
territories being the USA, southern Europe and South Africa. Target
date for the completion of the dossiers is still set by year end.
Further news will be provided in due course.
Focus on the agro business
Devgen has decided to restructure its pharma division to fully focus
on its agro activities. We expect to complete this process in a
timely manner in close cooperation with the employees, the unions and
the management team. We expect no further burn rate for these
activities as of 2009.
Key financials 30.09.2008
+----------------------------------------------------+
| EUR 000 | 30.09.08 | 30.09.07 |
|------------------------------+----------+----------|
| Revenue | 8,299 | 6,020 |
|------------------------------+----------+----------|
| EBITDA | (15,513) | (9,183) |
|------------------------------+----------+----------|
| Loss from operations | (17,436) | (9,955) |
|------------------------------+----------+----------|
| Net loss | (16,881) | (9,133) |
|------------------------------+----------+----------|
| Cash and cash equivalents[1] | 30,410 | 43,863 |
+----------------------------------------------------+
Revenues amount up to EUR 8,299 ('000) compared to EUR 6,020 ('000)
by the end of Q3 2007. Total revenues are mainly related to sales of
goods, totalling EUR 5,836 ('000) which offset the lower revenues out
of R&D collaborations and grants.
EBITDA amounts to EUR -15,513 ('000) compared to EUR -9,183 ('000)
for the first 3 quarters of 2007. EBITDA is impacted by higher costs
which could not be fully offset by higher revenues. Higher cost are
related on the one hand to the cost of goods sold related to the
product sales and the operational expenses involved in these
activities, in total amounting to EUR 5.667 ('000). On the other
hand, R&D expenditure amounted to EUR 17,047 ('000) compared to EUR
12,266 ('000) during the same period last year, representing an
increase of EUR 4,781 ('000) in line with guidance given with regard
to accelerated investments in the nematicide program in 2008 and
acceleration of the breeding activities to bring new hybrid seeds to
market.
Loss from operations amounts to EUR -17,436 ('000) compared to EUR -
9,955 ('000) for the same period last year. Net loss amounts to EUR
-16,881 ('000) compared to EUR -9,133 ('000) for the same period last
year. The increase in R&D expenses (to prepare for revenue growth
through product sales) in combination with the decrease in funding of
these activities through research collaborations and research grants
explains the higher losses compared to previous year.
Cash and cash equivalents1 at the end of the third quarter amounted
to EUR 30,410 ('000) compared to EUR 43,863 ('000) at the end of
2007. Net decrease in cash and cash equivalents during the first 3
quarters amounts to EUR 13,453 ('000) of which EUR 13,029 ('000) is
relating to cash used in operating activities.
Shareholder notification
Devgen NV received this week a shareholder notification from BIOVEST
ComVa, a Belgian Investment company. In total BIOVEST ComVa acquired
1.082.574 shares with accompanying voting rights representing 6.05%
of the total voting rights.
About Devgen
Devgen is a public agricultural biotech and seed company focused on
developing and commercializing:
* biotech traits and hybrid seeds to meet the growing needs
for high yielding, high quality hybrid rice, sorghum, millet and
sunflower of the Indian and other south-east Asian markets;
* a novel generation of biotech products to protect a wide
spectrum of crops incurred from pests; to render crops more
tolerant against stress factors such as drought and salty soils and
to decrease the need for fertilizer use by optimizing nitrogen
uptake;
* a new generation of agrochemical products to protect crops
from damage inflicted by plant parasitic nematodes.
Incorporated in 1997, Devgen has offices in Ghent (Belgium),
Singapore, Hyderabad (India) and Delaware (US) and employs more than
200 people worldwide. Devgen is listed on Euronext Brussels (ticker:
DEVG) since June 2005.
For more information please contact:
Thierry Bogaert, CEO Wim Goemaere, CFO
Tel. +32 9 324.24.24 Tel. +32 9324.24.24
Thierry.Bogaert@devgen.com Wim.Goemaere@devgen.com
or visit: www.devgen.com
This press release may contain forward-looking statements containing
the words "anticipates", "expects" , "intends", "plans", "estimates",
"may" and "continues" as well as similar expressions. Such forward
looking statements may involve known and unknown risks, uncertainties
and other factors which might cause the actual results, performance
or achievements of Devgen to be materially different from any future
results or achievements expressed or implied by such forward-looking
statements. These forward looking statements speak only as of the
date of publication of this document. Devgen disclaims any obligation
to update such forward looking statements in this document to reflect
any change in its expectations, conditions or circumstances on which
such statement is based, unless required by law or regulation.
[1] Including restricted cash for an amount of EUR 4,840 ('000),
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
Copyright © Hugin AS 2008. All rights reserved.
