Evogene Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 21, 2025

There are 5 speakers on the call.

Operator

Welcome to Evogene's First Quarter twenty twenty five Results Conference Call. All participants are present in listen only mode. Following management's formal presentation, we will open the question and answer session. You may send your questions via chat. Please type your name and company before your question.

Operator

As a reminder, this conference is being recorded 05/21/2025. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evogene's management will constitute forward looking statements that relate to future events. This presentation contains forward looking statements relating to future events and Evogene may, from time to time, make other statements regarding our outlook or expectations for future financial or operating results and or other matters regarding or affecting us that are considered forward looking statements as defined in The U. S. Private Securities Litigation Reform Act of 1995 and other securities laws as amended.

Operator

Statements that are not statements of historical fact may be deemed to be forward looking statements. Such forward looking statements may be identified by the use of such words as believe, expect, anticipate, should, planned, estimated, intend and potential or other words of similar meaning. We are using forward looking statements in this presentation when we discuss our value drivers, commercialization efforts and timing, product development and launches, estimated market sizes and milestones, pipeline as well as our capabilities and technology. Such statements are based on current expectations, estimates, projections and assumptions, describe opinions about future events, involve certain risks and uncertainties, which are difficult to predict and are not guarantees of future performance. Readers are cautioned that certain important factors may affect the company's actual results and could cause such results to differ materially from any forward looking statements that may be made in this presentation.

Operator

Therefore, actual future results, performance or achievements and trends in the future may differ materially from what is expressed or implied in such forward looking statements due to a variety of factors, many of which are beyond our control, including, without limitation, the current war between Israel Hamas and Hezbollah and any worsening of the situation in Israel, such as further mobilization or escalation in the northern border of Israel, and those described in greater detail in Evogene's annual report on Form 20 F and in other information Evogene files and furnishes with the Israel Securities Authority and the U. S. Securities and Exchange Commission, including those factors under the heading Risk Factors. Except as required by applicable security laws, we disclaim any obligation or commitment to update any information contained in this presentation or to publicly release the results of any revisions to any statements that may be made to reflect future events or developments or changes in expectations, estimates, projections and assumptions. The information contained herein does not constitute a prospectus or other offering document nor does it constitute or form any part of any invitation or offer to sell or any solicitation of any invitation or offer to purchase or subscribe for any securities of Evogene or the company, nor shall the information or any part of it or the fact its distribution from the basis of or be relied on in connection with, any action, contract, commitment or relating thereto or to the securities of Evogene or the company.

Operator

The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of our products or services. With us on the line will be mister Ofar Haviv, president and CEO of Evogene and Johan El Dadd, CFO of Evogene. Now we'll turn the call over to mister Ofar Haviv. Mister Haviv, please go ahead.

Speaker 1

Good day, everyone. In today's conference call, I would like to begin with a review of the financial and business highlights for the first quarter of twenty twenty five and up to date, followed by an overview of Evogene's current activities and activities of its subsidiaries. After my remarks, Yaron El Dadd, Evogene's CFO, will provide a financial update on the first quarter of the year. We will then open a Q and A session. Let's start with the financial and business highlights.

Speaker 1

In the first quarter of twenty twenty five, total revenues were approximately $2,400,000 compared to approximately $4,200,000 in the first quarter of twenty twenty four. The reason for the difference is that in the first quarter of twenty twenty four, revenues included license fee payment totaling of $3,500,000 which were $2,500,000 from the LaVeBayot license fee under its collaboration with Corteva and $1,000,000 from AgPlanos license fee under its collaboration with Bayer. The primary driver of revenues in the first quarter of twenty twenty five was an increase in seat sales by Castera. During the fourth quarter of twenty twenty four and the beginning of twenty twenty five, Evogene established an expense reduction plan, which will be completed by the second quarter of twenty twenty five. This reduction in expenses is already partially reflected in the financial results of the first quarter of twenty twenty five.

Speaker 1

In the first quarter of twenty twenty five, total R and D expenses were approximately $3,200,000 compared to approximately $4,800,000 in the first quarter of twenty twenty four. This decrease is mainly due to the decrease in Biomica's and La Vie Bio's R and D activity. In the first quarter of twenty twenty five, total sales and marketing expenses were approximately $600,000 compared to approximately $1,000,000 in the first quarter of twenty twenty four. This decrease is mainly due to the decrease in La Vie Bio's sales and marketing activity. In the first quarter of twenty twenty five, total operating expenses net were approximately $5,000,000 compared to approximately $8,000,000 in the first quarter of twenty twenty four.

Speaker 1

This decrease is mainly due to the decrease in La Vie Bio's and Biomica operating activity. As of the end of the first quarter of twenty twenty five, the company's cash and short term bank deposit balance was approximately $9,800,000 including approximately $5,500,000 attributed to BioBica. This cash balance does not reflect approximately $2,000,000 due from Castera's outstanding customers, the majority of which were received in the second quarter of twenty twenty five. It also excluded the expected proceeds from the sale of Laviv Bio's assets and the MicroBoost AI for AgTech engine to ICL, which we announced in April. This transaction is expected to close in the second quarter of twenty twenty five.

Speaker 1

I would now like to highlight key achievements of the Evogene Group in Q1 twenty twenty five and to date. Starting with Evogene itself. In relating to Campus AI for Pharma, I'm pleased to report substantial advancement on the following areas. We have refined the Campus AI value proposition, clearly articulating its distinct competitive advantages for the pharmaceutical and biotech sectors, the design of novel compounds that are both highly potent and meet multiple critical development criteria. Considerable progress has been made in developing the foundation model application as part of our collaboration with Google Cloud.

Speaker 1

This model constitutes the core of our campus GPT lead optimization package. Moving on to our subsidiaries, starting with Lavie Bio. As I stated in our previous call, Evogene is focusing on creating exit events with respect to part of our subsidiaries. Such events will generate value and cash to Evogene and its shareholders. The transaction between Laviv Bio and ICL is the first result of such efforts.

Speaker 1

On 04/21/2025, we announced the acquisition of most of the activity of Laviv Bio by ICL for an aggregate value of $15,250,000 In addition, ICL will acquire Evogene's MicroBoost AI tech engine for the agriculture field for approximately $3,500,000. As part of the transaction, ICL SAFE investment in LabiBio is being redeemed. The acquisition is expected to be completed during the second quarter of twenty twenty five following the completion of certain customary and regulatory closing conditions. We can also envision long term upside for Evogene from certain existing assets, which remain with Laviv Bio and are not part of the transaction with ICL. More details on the transaction will be provided later in the presentation.

Speaker 1

Now let's move to Castera. Since the beginning of the year, Castera has delivered two fifty tons of castor seeds to its partner in Africa, already surpassing the 215 tons delivered through all of 2024. In Brazil, Castera strengths its sales teams and started the execution of a new marketing and sales strategy. I'm pleased to report that Castera initiated proof of concept trials for grain, not seed, to be sold to caster crashing factories in partnership with one collaborator in Kenya and one in Brazil. Trials are already underway in all location and the company expected initial results in the third quarter of twenty twenty five.

Speaker 1

Moving to ACT LANUS. In February 2025, ACT LAMUS announced the discovery of a new mode of action for fungicides against Septoria in wheat. The company made significant headway in the discovery phase with the identification of several promising candidate compounds targeting the new mode of action. Agplanus intends to commence formal discussion with prospective licensing partners by year end. I will end this part with Biomica's highlights.

Speaker 1

The Phase one clinical study of BMC-one hundred and twenty eight is progressing. New data has shown early signs of BMC one hundred twenty eight monotherapy effectiveness through immune activations observed within fourteen days of treatment. Regarding the newly launched obesity and longevity programs, initial computational analysis indicates that micro microbiome based solution can be effectively designed and developed to target those areas. Early stage discussions are currently underway to evaluate potential partnerships opportunities. It is important to highlight that additional funding is necessary to advance to phase two of the clinical study.

Speaker 1

Meanwhile, Biomica established an expense reduction plan, which will be completed by the third quarter of twenty twenty five. This reduction in expenses is already reflected in Biomica's financial results of the first quarter of twenty twenty five. I will provide more details for each subsidiary later in the presentation. I will now continue with short overview of Evogene and its growing focus on utilizing and improving its campus AI tech engine, specifically for drug discovery based on small molecules. As you all know, our vision is to position Evogene as a pioneering company in the development of groundbreaking life science products rooted in microbes, small molecules, and genomics.

Speaker 1

To realize this vision, we have concentrated on integrating life science expertise with advanced big data and state of the art computational technologies. This approach led the development of our three proprietary AI tech engine. Each designed to drive the the effective discovery and optimization of life science products. Our AI driven tech engines offer a strong value proposition by efficiently identifying and optimizing the most promising candidates. We believe that this enhance the likelihood of achieving innovative products within competitive timelines and in cost effective way.

Speaker 1

To capture the value of the tech engine's offering, we established a business strategy that designed to maximize potential while minimizing risk. This through a diverse network of collaborative partnership for life science product development. We partner with experts in complementary field forming licensing or collaborations agreement with companies that bring domain specific knowledge. Through this strategic alliance, we aim to co develop innovative products. The upside for Evogene's teams from revenue sharing mechanisms of the end product or through equity holding in the company developing the end product.

Speaker 1

Here is a current snapshot of our business achievements to date. Evogene currently owns four subsidiary companies, each focused on a specific market segment. As I previously presented, ICL, Laviv Bio, and Evogene signed a definitive definitive agreements in April under which ICL will acquire most of the activity of La Vie Bio, closing its is expected by the end of the second quarter of the year. In our last call, I presented this slide to clarify the guidelines directing Evogene's efforts in the near future to develop a more capital efficient model to generate greater value. This, by focusing further on the use of our campus AI in the field of AI powered drug discovery and generating value and cash flow from our subsidiaries.

Speaker 1

In today's call, I would like to focus on the first items in each section highlighted in bold and elaborate on relevant achievement. Let's start with our increased focus on enhancing Campus AI value proposition for the pharma market segment. In recent months, we have refined and assessed the value proposition of Campus AI, highlighting its unique competitive advantage for the pharmaceutical and biotech industry. We aim to tackle a key challenge in small molecule drug development, discovering and designing novel compounds that are not only highly potent, but also met multiple critical parameters. Our solution empowers drug development companies to develop breakthrough therapies while securing robust and broad intellectual property protection.

Speaker 1

At the heart of our offering is Campus AI, our proprietary computational platform built on in house developed generative AI. Designed to explore uncharted chemical space, Campus AI produces precisely optimized molecules that meet complex product requirement with high potency. In the following three slides, I will review Campus AI offering for the pharma industry. This is a typical drug discovery and development pipeline starting with identification of a protein target, continuing with the small molecule screening and optimization phases, then validation in preclinical assays, and ending with clinical studies. Campus AI uniquely enable the discovery and design of highly potent novel compounds optimized across multiple parameters and tailored to a specific target protein, boosting the likelihood of success in preclinical and clinical studies and holding strong commercial value.

Speaker 1

In each of the screening and optimization phases, Campus AI offers unique computational capabilities developed by the Evogene team that support the researchers' efforts to discover and optimize the most promising candidates. In the next slides, I would like to present how our foundation model, which is being developed in collaboration with Google Cloud, announced in October 2024, enhance both novelty and the ability to address multi parameters optimization challenges. This foundation model is at the core of our campus GPT lead optimization package. Traditional generative AI models in drug discovery often struggle with small training dataset, which frequently results in the generations of molecules lacking the desired properties. Evogene's proprietary campus GPT foundation model trained on extensive chemical space of 38,000,000,000 molecules in design to overcome these limitations dramatically expanding the boundaries of molecular discovery.

Speaker 1

By exploring previously untapped chemical territories, our model enable us to generate novel, diverse, and valid molecular structures, enhance predictions of efficacy, optimize complex multiparameters profiles with greater precision and flexibility. This unprecedented scale and depth of chemical understanding will uniquely position Evogene at the forefront of next generation AI driven drug discovery. We expect to update on our progress in the near future. I will now move on to the second item, our efforts to create meaningful exit event for Evogene through certain subsidiaries. As mentioned earlier, in April of this year, we announced the acquisition of the majority of LaVeBayo's activity and assets by ICL.

Speaker 1

This transaction is expected to generate value for Evogene in two ways, directly through the sales of MicroBoost AI for Ag and indirectly through future dividends as Evogene remains a major shareholders in LaVeBio. In addition, more value may be generated from assets that are kept with Laviv Bio after the transaction. I will provide additional details in my overview of Evogene's subsidiaries. We remain committed to pursuing and updating you on further milestones that unlock value or generate cash from Evogene's subsidiaries. We will now continue with an overview of Evogene's subsidiaries.

Speaker 1

I would like to begin with LabiBio, a global leader in developing next generation and biological products powered by MicroBoost AI for ag tech engines. On 04/21/2025, we announced the acquisition of most of the activity of LaVeBayo by ICL for an aggregate value of $15,250,000. In addition, ICL will acquired Evogene's MicroBoost AI tech engine for the agriculture field for approximately $3,500,000. As part of the transaction, ICL safe investment in Lavie Bio is being redeemed. Key assets to be transferred to ICL include Lavie Bio's core team and selected Evogene's employees, the BDD technology platform, Lavie Bio's microbials bank and data assets, and most of its development programs.

Speaker 1

As I noted earlier, Lavie Bio's existing agreements with its current partners, Corteva and Syngenta, will not be transferred to ICL and may generate future revenue for Lavie Bio and indirectly to Evogene. The acquisition is expected to be completed during the second quarter of twenty twenty five following the satisfactory completion of certain customary closing conditions. I would like to emphasize that this transaction followed more than two years of close collaborations between ICL and LaVe Bio for developing innovative biostimulant solutions for row crops facing various abiotic stresses. The integration of Flaviv Bio's activities into ICL and to significantly advance the global ag biological field and drive impactful innovation in agriculture. This transaction reflects Evogene ongoing strategy to unlock the value of its assets for the benefit of its shareholder.

Speaker 1

Continuing with Castera, ever than wholly owned subsidiary dedicated to developing an integrated solution for large scale commercial castor farming, leveraging its unique elite seed varieties. Castera's comprehensive approach is the designed to address the growing global demand for stable and sustainable castor oil supply, preliminary for use in bio based products and biofuels. The company is utilizing Evogene generator AI tech engine to drive and accelerate the development of its proprietary's elite cast of seed varieties. Castero began 2025 with strong momentums, achieving meaningful progress toward all of its annual targets. Today, I would like to highlight achievements related to the first three.

Speaker 1

Increase in castor seeds revenue in Africa. Since the beginning of the year, Castera has delivered two fifty tons of castor seeds to its partner in Africa, already suppressing the two fifteen ton delivered through all of 2024. We anticipate receiving additional orders for delivery later this year. In Brazil, we have strengthened our sales teams and launched the executions of a new marketing and sales strategy, initiating of proof of concept trials for grain cultivation in Kenya and Brazil. I'm pleased to report that we have initiated POC trials for grain not seeds to be sold to caster crushing factories in partnership with one collaborator in Kenya and one in Brazil.

Speaker 1

Trial are already underway in all locations, and we expect initial results in the third quarter of twenty twenty five. With respect to development of new varieties, Castera's third target, currently significant multilocation field trials are taking place in Kenya and Brazil. I look forward to providing further updates on these initiatives and additional milestones as the year progress. Next is AgPlanos, a company dedicated to developing innovative and sustainable crop protection solution powered by Evogene's campus AI tech engine. Since the start of 2025, AgClient has focused primarily on advancing its strategic collaboration with Bayer and on progressing its Septoria program.

Speaker 1

The collaboration with Bayer targeting the development of broad spectrum herbicide is progressing according to plan and remains aligned with the agreed work plan. Meanwhile, in its Septoria program, in February 2025, AgPlanos announced the discovery of new mode of action for fungicide against Septoria in wheat. Additionally, AgPlanos has made significant headway in the discovery phase, identifying several promising candidate compounds targeting the new mode of action. The company plans to initiate engagement with potential licensing partners by year end. Importantly, we expect that AgPlan's activity will be funded primarily through strategic collaborations with leading tier one companies.

Speaker 1

This object objective is the focal point for AgPlan's management and a key area of support from Evogene. We believe that Evogene's substantial investment in its campus AI or pharma will significantly enhance and accelerate these efforts. Now turning to Biomica, a company focused on developing microbiome based therapeutics for human health, leveraging Evogene Micro Boost AI tech engine. As discussed in previous calls, Biomica's primary focus remains on advancing its immune oncology program led by its lead candidate, BMC one hundred and twenty eight. The ongoing phase one clinical study is progressing toward completion with the majority of enrolled patients demonstrating prolonged clinical benefits.

Speaker 1

Since the beginning of the year, Biomica has shown progress toward both in its first and third annual targets. The phase one study is advancing in accordance with the clinical protocol. Importantly, new data collected this year have provided additional mechanistic insights. Clinical response outcomes are now reinforced by immunooncological analysis, which show activations of multiple immune cell types following administration of BMC-one hundred and twenty eight. These findings serve as early proof of the candidate effectiveness observed as soon as fourteen days after initiating BMC one hundred twenty eight monotherapy.

Speaker 1

Regarding the newly launched obesity and longevity program, initial finding from computational analysis suggested that microbiome based solution could be effectively designed to address these areas. Early state discussion are underway to explore potential partnership. I would like to emphasize that in order to proceed to Phase two of the clinical study for BMC-one hundred twenty eight, additional funding will be required. This will require substantial effort from Biomica's management with Evogene's support. Additionally, Biomica established an expense reduction plan, which will be completed by the third quarter of twenty twenty five.

Speaker 1

This concludes my section of the call, and I will now hand it over to Yaron for the CFO update. Thank you.

Speaker 2

Thank you, Ofer. As of 03/31/2025, Evogene held consolidated cash, cash equivalents and short term bank deposits of approximately $9,800,000 compared to approximately $15,300,000 as of 12/31/2024. This cash balance does not reflect approximately $2,000,000 due from Castera's outstanding customers, the majority of which were received in the second quarter of twenty twenty five. Excluding the vBio and Biomica, Evogene and its other subsidiaries used approximately $3,000,000 in cash during the first quarter of twenty twenty five. Revenues for the first quarter of twenty twenty five were approximately $2,400,000 a significant decrease from approximately $4,200,000 in the same period of the previous year.

Speaker 2

This decline was primarily due to revenues recognized in 2024 from AgPlanis' licensing agreement with Bayer and Laviv Bio's licensing agreement with Corteva. In 2025, where revenues were mainly driven by Castera's increased seed sales. Research and development expenses for the first quarter of twenty twenty five were approximately $3,200,000, a significant decrease from approximately $4,800,000 in the same period the previous year. The decrease in expenses was mainly due to lower research and development expenses in Biomica and LaVibio compared to the same period the previous year as well as a closure of Canonic's operation during the first half of twenty twenty four. Sales and marketing expenses decreased to approximately $645,000 in the first quarter of twenty twenty five compared to approximately $992,000 in the same period last year.

Speaker 2

The decrease was primarily driven by a reduction in the vBio sales and marketing activities. General and administrative expenses decreased to approximately $1,300,000 in the first quarter of twenty twenty five compared to approximately $1,700,000 in the same period last year. The decrease was primarily attributable to reduced expenses related to Laviv Bio and Evogene as well as a closure of Canonic's operation during the first half of twenty twenty four. Other income of approximately $191,000 was recorded in the first quarter of twenty twenty five as part of the accounting treatment relating to a sublease agreement. The decision to cease economics operations in the first half of twenty twenty four resulted in other expenses of approximately half a million dollars, primarily due to the impairment of fixed assets recorded in the first quarter of twenty twenty four.

Speaker 2

Operating loss for the first quarter of twenty twenty five remained stable at approximately $4,100,000 similar to the operating loss reported in the first quarter of twenty twenty four. Net financing expense income for the first quarter of twenty twenty five was approximately $1,100,000 compared to net financing income of approximately $241,000 in the same period last year. The increase was primarily due to the accounting treatment of prefunded warrants and warrants issued in the August 2024 fundraising. These instruments were classified as liabilities on the consolidated statements of financial position, initially recorded at fair value and subsequently remeasured at each reporting period using the Black and Scholes option pricing model. As a result, in the first quarter of twenty twenty five, the company recorded net financing income of approximately $1,500,000 related to the remeasurement of these prefunded warrants and warrants.

Speaker 2

The net loss for the first quarter of twenty twenty five was approximately $3,000,000 compared to approximately $3,800,000 in the same period last year. The the $800,000 decrease in net loss was primarily due to reduced operating expenses and increased net financing income, partially offset by decreased revenues as noted above. Operator?

Speaker 3

Thank you. Ladies and gentlemen, at this time, we'll begin the question and answer session. In order to send the question, please use the chat button located at the bottom of your screen. Please type your full name and your company's name before the question. Please stand by while we poll for some questions.

Speaker 3

The first question is from Ben Cleave with Lake City Lake Street Capital Markets. With the two fifty tonnes of caster seeds delivered in the first quarter, does this complete the initial order from any placed in mid-twenty twenty three? Or do you expect additional sales from this order later this year? Question two, you noted a belief that you would receive additional orders at Castera this year relative to the initial orders from 2023, which totaled at 11,000,000 point $11,100,000. Do you expect a follow on order to be in a to be an increase or decrease?

Speaker 3

And do you expect additional orders to be still delivered in 2025, or will this be the delivery in 2026 and beyond?

Speaker 4

Hi, Ben. This is Ofer, and thank you for this question, and I will try to disclose as much as I can. So let's start with a a short explanation that the every year, there are two starting season in Africa. And in Brazil, there is, in certain area, only one season, and there is certain area that two season, but the majority is only one season. And the orders that we receive are usually at least six months ahead of the sowing season, sometimes even more because it take us time to produce the seeds.

Speaker 4

So the the current shipment that we sent, it was still related to the was based on the same terms like the the first the order that we received in 02/2013. But we are talking now with our partners with respect to the second season this year and how much seed that they need for the next season. So we yes. We are still waiting to receive additional order for this year. Now we expect to when we are delivering the seed to our partners.

Speaker 4

Of course, it's very important to deliver the seed until the specific season that this seed are expected to be sown sown in in in in the different location. And the good news is that if in the past, we receive the orders, then we started to produce the seed. So now in the state is that when we have a a nice quantity of inventory that in case that we receive an orders during this year for the next season, we will be able to deliver additional seed even this year. And what we are expecting from our partners to give us the forecast on how much they believe they will need for a a for the future. Our expectation is that, again, I can't I can't disclose much because it's all I'm I'm by doing so, also reflect what's going on in our partners' activity in this area.

Speaker 4

But I believe that there is a that that the interest in a customer is if they keep growing. I'm talking about castor oil is sold for bio polymers and for biofuel. We see a nice increased activity actually more in Brazil these days rather than Africa. And we are now and I think I mentioned this in my presentation that we are expanding our marketing activity in Brazil in addition to to what we have what what we built already in in Canada. I also would like to track your intention, and I think that we I discussed it in the past, and and we started to put more emphasis on it.

Speaker 4

What what we see is that the demands for castor oil is is is huge. Actually, we hear from more and more company that crash castor grain into oil, that they are willing to buy almost every quantity available because the the demand for oil is is much more than what what does the factory get supplied. And the the main problem is to find farmers which can really grow the at least the variety that we develop in a way that can really capture the value of our genetics. And what we are doing now is, actually, we are conducting a field trial in a commercial level both in Kenya and also in Brazil to demonstrate and and bring farmers big farmers to see how we are really capturing the value in in in in utilizing our seed variety. And this is what we are expecting to see as a as a significant growth driver to our sales in the future.

Speaker 4

So I think that the yes. Then we continue to see growing an interest in a caster and oil, which led to an increase in demand for caster grain, which can lead to an increase in the demand of caster steel. Still, the bottleneck is really to educate farmers how to benefit from the genetic that we developed. And by the way, it's not just with, like, we would also other comp and there are not too many companies that sell seed, but even in other case, I think that the education is a very important piece in in the story. And now we are putting more emphasis on this area, and I'm expecting to see a nice growth definitely maybe in the second half of this year and even more in year 2026 where more and more farmers, hopefully, hopefully, will be impressed from the performance of our variety and in in using the based on the growth protocol that we develop, and they can really generate a nice margin, a nice revenue from growing the customer rate range using our variety.

Speaker 3

An additional question from Ben. What is the net cash inflow Evogene will be receiving from the ICL for the Levy Bio transaction?

Speaker 4

So what I can share is the in this following, the the the amount of money we're going to receive directly is 3.5 from selling Evogene Microboost for Ag. In addition, LaVibayo is going to receive $15,250,000. From this, you need to deduct the the investment of ITL through SAFE. You need we need you need to add also the fund already exist in the big value, and then we're going to get our share from this portion while and the only shareholders is the Evogene, Castera, and just a little bit also employee. In addition, we are expecting to see revenue coming from our two collaboration agreement in a that are let's say, as far from Libby Bio, one with Syngenta and the other one with Corteva.

Speaker 4

We have at least for one of them, we have high expectation that then it will lead to a a commercial product that can generate enough a nice value for Evogene. By the way, in addition, maybe we need to add and and this is why I can't give you the exact number. Any third of that will be conduct till the the closing date, we it's also will add to the cash that the the the value will be able to distribute as a dividend to its shareholders. So most of the money that will stay in the value after the hectic will be delivered to Evogene, which definitely strength our financial our financial position and and and can help us, you know, to continue our operation according to plan through the whole year and definitely next year as well.

Speaker 3

The next question is from Scott Henry at AGP. Castero sales was was strong in the first quarter of twenty twenty five. Should we think about the rest of 2025, and what should the cadence look like?

Speaker 4

So I I can't give a projection because it also depends on the performance of our partners that are buying from us to see. And I'm not talking about the quality of this is important. I'm talking also about, you know, the the succeed in in growing grain in the different territory, and this is exactly what we are talking with them. As I said, I see a continue growing interest. And, actually, and as I said, we are quite excited from what we see also, not just in Africa, but also in Brazil.

Speaker 4

And what I'm also feel comfortable is that assuming we will get additional orders, so we also already have the inventory to supply those specific orders. So we will be able to deliver the seats and until the end of this year.

Speaker 3

The next question is, at close of asset sale, how much cash would you receive?

Speaker 4

So I think that I already answered this question that will be up by a bank line.

Speaker 3

The next question is what are the customary closing condition for the ICL deal? Is there any danger for not closing the agreement?

Speaker 4

So, usually, what you expect is the approval from the antitrust user and other approval you need is from the the Israeli innovation center and the other technical closing condition. At least for now, we don't see any reason why we won't be able to close the deal. In some cases, we already received the needed approval, and we are advancing in discussion with the the other governmental agency in this respect. So we hope to be able to close the deal as we stated till the end of this quarter.

Speaker 3

Additional question from Scott Henry of AGP. The sale of La Vie Bio should solidify the balance sheet. Combining this with reduced expenses, how should we be how should we think how should we be thinking about the strength of the balance sheet for the foreseeable future in terms of duration?

Speaker 4

So, of course and and I think that we also disclose and and we disclose this information is that we are not just transferring the big bioactivity to ICL, but also three pure employee moving from Evogene to ICL. And I also mentioned that we are going through some expense reduction plan. So I believe that as we we are safe from a financial perspective till the end of twenty twenty six, assuming a very, very conservative analysis, assuming good things will happen, which, you know, this is exactly what we are working on. I believe that we can see a significant improvement. And, again, we can always decided to redact to cut our expenses even more than what we are doing now.

Speaker 4

But, definitely, it's really put us in a very much better position compared to where we were before this transaction.

Speaker 3

The next question is from Brett Reyes of Janney Montgomery Scott. Of the 18.75 consideration in selling LaVe Bio assets, what net cash to the parent was realized? What happened to the narrative that there would be multiple oil companies lining up to buy castor seeds to replace palm oil as the biodegradable component in diesel fuel?

Speaker 4

So with respect to the first question, I already answered the answered it in response to Brent Lyte question. And with respect to the second question, I think and I I must I think that I already discussed it in one of my previous analyst call, if not, it's I'm also connected to what I mentioned earlier. What we see is that the demand for oil is there, and the demand for customer oil is there. But the willingness of additional big oil company to to adapt the e and I model where they bind seed, distribute it to farmers, helping them to grow the the caster and produce grain, then to take the grain and trash it. And and and they built a fashion factory in Africa, and they are also in the processing to build a refinery factory in Africa.

Speaker 4

Currently, we don't see this approach adopted by additional oil company. So if if we will if there will be a more oil crashing factory, they will be able to sell more additional oil because the demand in there. As I and I'm returning to the same statement, where we see today the bottleneck is more in the cultivation moving from seed to grade. And and and we need to educate the the the farmer how to do it. As I said, and I will repeat it again, we hear more and more from one pressures and and and company that have crashing factory.

Speaker 4

We are willing to buy, actually, a very nice stack price. Almost every quantity you will bring us of grain because the we we there is a demand for it. And and we are there now to start to work hard in order to bring more and more farmers to use our variety and to start to grow Hasbro for brain. I think it's a process that I hope that we'll start to see it generate fruits in the next year or two.

Speaker 3

Final question, also from Brett Rice. With your reduced expenses, how long will the cash last you?

Speaker 4

So I think I I answered this question earlier. I feel quite I I we feel very comfortable till the end of twenty twenty six assuming a conservative a very conservative approach, which we hope, first, that there will be additional extend additional revenue or cash injection to the company from a company sales or and strategic collaboration agreement. And and and if something like this won't happen, we can always decide to cut our expenses even more to increase the length of, you know, the the company life without being able raise additional money.

Speaker 3

There are no further questions at this time. Mr. Javier, would you like to make your concluding statement?

Speaker 4

Yes. Thank you, everybody, for participating in our analyst call. We are continue to move forward in almost all front. Yes. We we had to cut our expenses.

Speaker 4

It's it's not in the easy period for a company in life science industry. But I think that the plan that we built and including with all the growth engines that we have, I'm really looking forward to continue to update you and to see the company prosper. It's about time. Thank you, everybody.

Speaker 3

Thank you. This concludes Evogene's first quarter twenty twenty five results conference call. Thank you for your participation. You may now go ahead and disconnect.

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Key Takeaways

  • In Q1 2025, Evogene reported revenues of $2.4 million versus $4.2 million a year ago, driven by the lapse of prior license fees, while implementing an expense reduction plan that cut operating expenses by roughly 38 percent year-over-year.
  • Evogene agreed to sell most of La Vie Bio’s assets to ICL for $15.25 million and its MicroBoost AI engine for $3.5 million, with the transaction expected to close in Q2 and generate immediate cash and future dividends.
  • Former subsidiary Castera delivered 250 tonnes of castor seed in Q1—exceeding all of 2024—and has begun proof-of-concept trials for castor grain in Kenya and Brazil, with initial results anticipated in Q3 2025.
  • Evogene’s Campus AI platform, in collaboration with Google Cloud, advanced a foundation model trained on 38 billion molecules to enhance multi-parameter small-molecule drug discovery and lead optimization.
  • Biomica’s lead candidate BMC-128 in its Phase 1 trial showed early immune activation and monotherapy responses within 14 days, though additional funding is needed to progress to Phase 2 studies.
A.I. generated. May contain errors.
Earnings Conference Call
Evogene Q1 2025
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