Devgen business update: "nematicide path to market on track,
acquisition of a seed business in India executed, RNAi-technology
increasingly validated and path to focus the company on Agro
Webcast and conference call on Friday 16 November 2007 at 10.30 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 16, 2007. Devgen NV (Euronext Brussels: DEVG),
a leading European biotechnology company, today provided a business
update highlighting progress in its business activities and some key
financials. At the occasion of the recent publication in Nature
Biotechnology, Devgen gave more information on Devgen's RNAi-program.
Additionally, further information was given on its plans with the
recently hybrid rice, sunflower, sorghum and pearl millet seed
business in India.
Since the last business update, Devgen delivered several significant
milestones in its nematicide, seeds and biotech crop business. The
company furthermore set the first steps towards separating its Agro
and Pharma business activities to ultimately focus the company on its
Agro activities and to provide an independent growth opportunity to
the pharma unit.
On November 5, the international science journal, Nature
Biotechnology published work from Monsanto and Devgen scientists
demonstrating the potential of RNAi-technology to protect corn from a
major pest corn root worm. This is the first demonstration in the
scientific literature of the use of RNAi-technology to protect an
important crop from a major pest (the corn root worm is estimated to
cost the corn industry in the United States one billion dollar per
year due to pesticide costs and crop damage). This is an important
milestone for Devgen and heralds a new paradigm for crop protection.
In addition to the promising results presented in the article
generated with corn root worm on corn, Devgen has generated positive
results with its RNAi-technology on colorado potato beetle and other
pests. More information will be provided in the webcast.
On October 31, Devgen completed the acquisition of Monsanto's hybrid
rice, sunflower, sorghum and pearl millet business in India, thereby
delivering an important step in its strategy to become a fully
integrated seed and biotechnology business in rice and other
important Asian crops. Devgen paid US$ 26 million in cash. In a
separate transaction, Monsanto Company has subscribed to Devgen
shares for the amount of 18 million ¤ (US$ 25 million). The assets
include about 70 highly experienced staff, breeding, seed, and
production organizations and key brands such as Frontline, Mahalaxmi
The acquired business has a strong, high quality product portfolio
with substantial growth potential. Its profitability is at par with
* Devgen has 3 hybrid rice products in the market with substantial
growth potential. In hybrid rice, Devgen is a top 6 player with
an estimated 4% market share in a market which is today 1.2 - 1.5
million ha and is estimated by the Indian government to grow to
10 million ha by 2012. Devgen's flagship product RH257, that was
launched a few years ago, has unique quality characteristics and
agronomic properties, resulting in high demand and a good growth
* In sorghum, a 7 million ha market, Devgen is market leader with
an estimated 24% market share, with a substantial potential to
grow through new product introductions and an aggressive
* In pearl millet, a 7 million ha market, Devgen has ~6% market
share with a good potential for growth.
* In sunflower, Devgen has products with a superior oil content and
has an estimated 12% market share and good potential for growth.
In 2008, Devgen will focus on strengthening its Devgen India
organization and will consolidate and strengthen its market presence.
In addition Devgen will plan and prepare for aggressive sales growth
as of 2009.
The nematicide business is progressing according to plan. The
business and product development team was strengthened in EMEA
(Europe, Middle East, and Africa) and the US. Positive field trials
and an acceleration of the activities were reported in the last
quarter. More news will be announced in Q1, 2008 as more field trial
data become available.
The first steps towards separating the agro and pharma business have
been taken. A legal entity has been established to house Devgen's
pharma activities. Hilde Windels, CFO of Devgen, has been appointed
CEO designate of the pharma newco and is leading the effort to
structure and spin-out the pharma business with additional external
financing. This financing is required to initiate clinical trials
with Devgen's strong anti-inflammatory clinical drug candidates and
to enable this unit to grow to its full potential. As soon as a new
CFO is hired, Hilde Windels will concentrate full time on the pharma
activities (we will report on this in the near future).
Commenting on these announcements, Dr. Thierry Bogaert, CEO of
Devgen, said: "2007 has been one of the most transformational years
for Devgen. Critical technical milestones and business deals were
executed that brought the business from a pure biotech supplier of
technology, to a fully integrated seed and technology business with
product sales and (as of 2009) a supplier of nematicides in the US.
At the same time Devgen will complete the focusing on our Agro
activities in the first two quarters of 2008."
Key financials 30.09.07 (non audited)
| ¤ 000 | 30.09.07 | 30.09.06 |
| Revenue | 6.021 | 6.502 |
| EBITDA | -9.134 | -6.830 |
| Loss from operations | -9.747 | -7.569 |
| Net loss | -8.663 | -7.255 |
| Cash and cash equivalents | 45.771 | 25.961 |
Devgen is a top 10 public agro biotech company with agricultural
business units focused on developing and commercializing:
* a novel generation of biotech products to protect a wide spectrum
of crops from damage incurred from pests;
* biotech traits and germplasm to meet the growing needs for high
yielding, high quality hybrid rice and selected small grains in
India and S.E. Asia;
* safer and more environmentally friendly agro-chemical products to
protect crops from damage inflicted by plant parasitic nematodes.
Devgen's biopharmaceutical division develops a new class of
preclinical drug candidates, based on novel therapeutic concepts, for
treatment of a range of inflammatory and metabolic disease (diabetes,
obesity) and arrhythmia.
Devgen has entered into partnerships with industry leaders in
biotechnology and agro chemistry. Incorporated in 1997, Devgen has
offices in Ghent (Belgium), Singapore and Hyderabad (India), with a
total work force of about 160 people. Devgen is listed on Eurolist by
Euronext Brussels (ticker: DEVG) since June 2005. For more
information on Devgen, please visit the company's web site:
For more information please
Hilde Windels, CFO
Tel. +32 9 324.24.24 Tel. +32 9 324.24.24
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