Evogene Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 21, 2024

There are 5 speakers on the call.

Operator

Welcome to Evogene's Third Quarter 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 questions via chat. Please type your name and company before your question.

Operator

As a reminder, this conference is being recorded November 21, 2024. This presentation contains forward looking statements relating to future events and Evogene Ltd. May from time to time make other statements regarding our outlook or expectations of 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 words of similar meaning. We are using forward looking statements in this presentation when we discuss Evogene's strategy and vision, Evogene's value proposition and ability to identify and optimize candidates, enhance the likelihood of achieving breakthrough products within competitive timelines and in a cost effective way, Evogene's partnerships and Evogene's ability to harness value and leverage, Kempass AI, the expected timing of and ability of Castera to supply purchase orders, the expected timing of LaVie Bio's sale, AgPlanas pipeline, Biomica's BMC 128's future activity and Evogene's projected cash usage for 2024 and Evogene anticipated continued revenue growth in for 2024. 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 by 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 mobilizations or escalation in the northern border of Israel, 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 securities 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 part of any invitation to 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 any information or any part of it or the fact of its distribution from the basis of or be relied on in connection with any connection, contract, commitment or relating thereto or to the securities of Evogene or the company.

Operator

With us on the line will be Yaron El Dad, CFO of Evogene and Ofer Haviv, President and CEO of Evogene. Now, I will turn the call over to Ofer Haviv. Mr. Haviv, please go ahead.

Speaker 1

Good day, everyone. In today's conference call, I will begin with a review of the financial and business highlights for the Q3, followed by an overview of Evogene's activities. I will then conclude with recent achievements by our subsidiaries since the last analyst call. After my remarks, Yaron El Dad, Evogene's CFO, will provide a financial update on Q3 activities. We will then open a Q and A session.

Speaker 1

Let us begin with the financial and business highlights. In the 1st 9 months of 2024, total revenues reached approximately $6,900,000 compared to approximately $5,100,000 in the 1st 9 months of 2023. In Q3 2024, total revenues reached approximately $1,800,000 compared to approximately $3,800,000 in Q3 2023. The revenues in Q3 2024 are mainly based on Tastera's seeds sales. The revenues in Q3 2023 included a license fee payment of $2,500,000 received by Levi Bio.

Speaker 1

For the full year 2024, Evogene anticipates continued revenue growth compared to the previous year, mainly due to Castera's supply of existing seed orders. G and A expenses in Q3 2024 included expenses of approximately $1,400,000 resulting from Evogene's fundraising and an allowance for doubtful debt from 1 of Astera's seed suppliers. The remaining G and A expenses in Q3 2024 amounted to approximately $1,500,000 unchanged compared to Q3 2023. In the 1st 9 months of 2024, operating loss was approximately $17,600,000 which included the G and A expenses of approximately $1,500,000 due to Evogene Fundraising and allowance for debtful debt mentioned above, and other expenses of approximately $500,000 compared to approximately $18,900,000 in the 1st 9 months of 2023. In the 1st 9 months of 2024, financing expenses net were approximately $380,000 compared to financing income of $2,300,000 in the 1st 9 months of 2023.

Speaker 1

The financing expenses in the 1st 9 months of 2024 net included $880,000 expenses related to accounting treatment of warrants issued as part of Evogene's fund raising. Projected cash yield for 2024 without Viammekai and Labibayo is approximately $8,000,000 to $10,000,000 compared to $12,500,000 in 2023. In August 2024, Evogene completed a fundraising totaling of $5,500,000 in gross proceeds including ordinary shares and 2 shares of warrants. The company has taken measures to strengthen its cash position by reducing its expenses, including a reduction of 16% in its headcount and is exploring additional business opportunities to inject fund into the Company and its subsidiaries. Now, I would like to highlight the main achievements made by Evogene Groups this quarter and up to date.

Speaker 1

Starting with Evogene. In October, Evogene announced a unique collaboration with Google Cloud to pioneer a generative AI foundation model for novel small molecule design. This collaboration aimed to positioning Campus AI Tech Engines in the forefront of generating and optimizing novel small molecules structure with specific desired properties. I will elaborate on the collaboration later in the presentation. In addition, with respect to collaborations for product development with external parties, we received a grant approval from the Israel Innovation Authorities for the 2nd year in the collaborations with Watershed and Ben Goyon University to improve crosscutian trait using CRISPR technology.

Speaker 1

This technology is embedded in our generator AI tech engine. Now, let's move to Castera. The Q3 marked a significant milestone for Castera, with the solidification of a reliable seed production infrastructure in Kenya and Brazil. In July, Castera announced the completion of growing and harvesting season in Brazil and seed shipments have already been initiated. With respect to the seed production in Africa, Castera achieved a key milestone in its operational expansion and completed its first shipment of over 100 tons of its castor seeds, which were growing and processed in Kenya.

Speaker 1

It is now harvesting season in Africa, with completion expected by the Q1 of 2025. This current season will support existing and future seed demands. Castera is expected to supply significant portion of its existing seed orders by the end of 2024. Castera and its business partner are currently discussing the supply schedule quantity and zinc varieties of the remainder of the orders and future orders for 2025. Continuing with Lavie Bio.

Speaker 1

In recent months, the company presented an impressive expansion with its first commercial product, Yalos, a bionicolent used as seed treatment. In July, Lavie Bio announced the commercial expansion of Yalos to winter wheat, with initial sales this passing quarter, and in November to soybean, with initial sales expected in spring 2025. Additionally, La Vie BioAdvanced Lab 321, a bioforticite targeting Downy Media, to a pre commercialization following successful field trials results. Moving to AgPlans. The main achievement of the passing quarter was in the Company's internal pipeline, which is separated from its collaboration with external parties, Bayer's and Corteva.

Speaker 1

AgPlans initiated a new fungicide program, focusing on septoria, a fungi affecting crop worldwide. 3 proteins predicted by Campus AI as targets were verified to be essential in septoria. Additionally, Aclenus identified in silico around 1,000 compounds that are predicted to be effective in the protein targets and are now being tested. I will end this part with Biomica's highlights. The Phase 1 clinical study for microbiome based therapeutics BMC 128 is new completion with prolonged positive response of 5 patients.

Speaker 1

Biogen had a pre IND meeting earlier this year with positive feedback from the FDA and is continuing with the preparation for the IND submission. I will provide more details on the achievement of its subsidiary later in the presentation. Moving on to the review of Evogene. Our vision is to positioning Evogene as a pioneering company in the development of groundbreaking life science products rooted in microbes, small molecules and genomics. To realize this vision, we have concentrated on integrating life science expertise with advanced big data and state of the art computational technologies.

Speaker 1

This approach led to development of our 3 proprietary AI tech engines, each designed to drive the effective discovery and optimization of life science product. Microboost AI directs and accelerates the development of micro based products. Campus AI for small molecule based products and generator AI for products based on genetic elements. Our AI driven tech engines offer strong value proposition by efficiently identifying and optimizing the most promising candidates. This enhances the likelihood of achieving breakthrough products within competitive timelines and in cost effective way.

Speaker 1

To maintain the competitive advantage of our AI tech engines, Evogene continuously invests in enhancement and the addition of new applications and capabilities. This commitment is exemplified by our recent collaboration with Google Cloud to develop an advanced generative AI foundation model for small molecules design. The collaboration leverages Evogene's deep expertise in computational predictive biology and chemistry alongside Google Cloud's leadership in AI and Machine Learning. Building on the successful integrating of Campus AI into Google Cloud, this collaboration will now focus on expanding the value of our tech engine by creating a cutting edge foundation model. This model will be designed to generate and optimize innovative small molecule structures with better specific desired properties by extending the training set for the model from 6,000,000 molecules to 40,000,000,000 molecules.

Speaker 1

The primary objective of this initiative is to improve and accelerate the discovery and development of new small molecules for drug developments, sustainable crop protection and other innovative applications across various life science sectors. The significant expansion of the model training set will lead to the following key benefits: innovative molecules more accurately addressing the specific product requirements shorting development timelines and hence cost efficiency. I want to emphasize that the Foundation model, which will be integrated into Campus AI, will remain the exclusive property of Evogene, Our proven track record in computational biology and chemistry, combining with Google Cloud's AI expertise, create compelling value proposition for companies aiming to improve their R and D and gain a competitive edge in the market. Our 3 AI Tech Engines were strategically designed to align with the fast potential across multiple market segments rather than being confined to a single area. While this technology holds exceptional promise, each market segment demands specialized expertise for product development alongside significant financial resources and advanced development and production infrastructure.

Speaker 1

To effectively harness the value embedded in our technology, considering the mentioned requirements, we have implemented a targeted business strategy tailored to address those needs. Our business strategy is designed to maximize potential while minimizing risk. This by establishing a diverse network of collaborative partnership for life science product development. We partner with experts in complementary fields, forming licensing or collaboration agreement with companies that bring domain specific knowledge, such as in Pharmaceuticals or AgriTech. Through this strategic alliance, we aim to co develop innovative products, the Upset for Evogene's teams, from revenue sharing mechanism 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 model. Evogene currently owns 4 subsidiary companies, each focused on a specific market segment. In market segments not covered by our subsidiaries, we have established collaboration with external companies. Starting this past quarter, we have increased our efforts to establish partnership with companies specializing in small molecule drug development, leveraging the unique capabilities of Campus AI. To support this strategic focus, we have strengthened the business development team with a dedicated business development manager with the clear objective of generating new business opportunity for Evogene in this segment.

Speaker 1

Additionally, as part of our collaborative initiatives in areas behind the focus of our subsidiaries, we recently announced, alongside Water Shade AC and Ben Gurion University, the approval of a 2nd year grant to advance our joint project aimed to enhancing prosthetic traits through gene editing technology. In the 2nd year, the collaboration will focus on scanning up CRISPR technology for the industrial production of Gen crowns with plans to extend this advancement to additional sequestration species. This slide highlights the commercial and financial partners engaged with the Evogene Group. We are proud of the progress and achievements we have made today. Now, I will review our subsidiaries' activity and achievements.

Speaker 1

I would like to begin with Costera, Evogene's wholly owned subsidiary focused on developing an integrated solution for the large scale commercial cultivation of castor, leveraging its unique ellipseed varieties. Castera's solution is designed to meet the global demand for a stable castor oil supply, mainly for the biofuels and bio best products. The Company is utilizing the Generator AI tech engine to drive and accelerate the development of its distinct elite castor seed varieties. The Q3 marked a significant milestone for Castera, as its investment and efforts to establish a reliable seed production infrastructure in Kenya and Brazil began to show positive results. In July, the Company successfully completed the growing and harvesting season in Brazil.

Speaker 1

More recently, Castera finalized the establishment of a seed production facility in Kenya, which now supports the processing of seeds grown and harvested in Africa to meet the Company's needs. Castera is now in a mid harvesting season in Africa. Due to the extended rain season, the Company expected the harvest to be completed by early next year. The seed being produced during this cycle will support both current and future demand. Castera is expected to supply a significant portion of its existing seed orders by the end of 2024, mainly through the seed production operations in Kenya.

Speaker 1

Currently, Castera and its business partners are discussing the supply schedule, quantity and seed varieties of the remainder of their orders and future orders for 2025. Continuing with Lavie Bio, a global leader in developing next generation unbiological products powered by the Micro Boost AI Tech engine. Since our last call, Lavie Bio has achieved 2 significant milestones with its first commercial product, Yalos, a bioequivalent for raw crops. First, the product has expanded to winter wheat, with initial sales to growers starting this past quarter. More notably, recent positive results have been obtained for Yalos as a seed treatment for soybean, one of the most important crops in agriculture.

Speaker 1

Initial sales to soybean growers in North America are expected to begin in the spring of 2025. Another key development in Lavie Bio's product pipeline is the advancement of LAV321, a biofungicide targeting downy mildew, which has now reached the pre commercialization stage following successful field trial results, this for the 3rd consecutive year. I was also very pleased when LabickBio announced, in July, a major milestone in their collaboration with ICL. Within just 12 months, the team identified over a dozen novel microbes aimed at developing a biostimulant solution to help crops withstand extreme weather conditions. These microbes are currently undergoing validation in diverse field trials.

Speaker 1

This is a strong example of the power and efficiency of LAVIP Bio technology to deliver promising candidates in a relatively short time frame. Finally, Lavie Bio has received a grant from Israel Innovation Authority to advance the development of micro fermentor, a groundbreaking technology with the potential to transform the economics of ag biologicals. This ground underscores the value and uniqueness of ReviBio's offering and innovative culture. Next, I would like to discuss AgPlenus, a company specializing in the development of novel and sustainable crop protection products, utilizing Evogene Campus AI Tech Engines. As previously presented, AgPlenus is engaged in 2 key collaborations with Bayer and Corteva.

Speaker 1

I'm pleased to report that both collaborations are progressing as planned, according to the agreed work scheduled. Regarding AgPlenus pipeline, which is independent of the mentioned collaborations, the Company's primary focus is on developing fungicide to address septoria fungi, a significant threat to crop worldwide. I would like to highlight 2 important achievements that took place in the past quarter. 3 proteins predicted by Campus AI as potential target for septoria treatment have been confirmed as essential in the fungi's lifecycle. The second milestone, using Campus AI, the Company identified approximately 1,000 small molecule compounds predicted to be effective against these 3 protein targets.

Speaker 1

These compounds are currently undergoing testing with at least one target already showing high rates of in vitro hits. This advancement marked significant progress in AgPlenu's missions to develop innovative solutions for global crop protection. Now, turning to Bionica, which specialize in developing microbiome based therapeutics for human health, powered by the Micro Boost AI Tech Engine. At present, Biomica is primarily focused on advancing its immune oncology program with its lead candidate, PMC-one hundred and twenty eight. The Phase 1 clinical study is nearing completions, with positive results observed in 5 patients showing prolonged response.

Speaker 1

Earlier this year, the Company conducted a pre IND meeting with the FDA, receiving positive feedback. BIOMICA is now continuing with the preparation for the IND submission. In preparation for the Phase 2 IND clinical study, Biomita is also in the process of manufacturing additional clinical batch of BMC 128. Additionally, following extensive evaluation of numerous potential indications, BIOMICA has initiated 2 new programs focused on obesity and longevity. The Company has obtained and partially analyzed relevant datasets to support these new programs, making an exciting expansion of its therapeutic pipeline.

Speaker 1

Now, Evogene CFO, Yaron El Dad, will provide a review of the financial results for the Q3.

Speaker 2

Thank you, Ofer. As of September 30, 2024, Evogene had held consolidated cash, cash equivalents and short term bank deposits of approximately $20,000,000 This amount does not include approximately $1,400,000 of payments due from customers regarding deliveries made in September 2024. The consolidated cash usage during the Q3 of 2024 2024 was approximately $5,700,000 excluding Lavie Bio and Biomica. Evogene and its other subsidiaries used approximately $3,100,000 in cash during the Q3 of 2024. Projected cash usage for 2024, excluding Navi Bio and Biomica, is expected to be around $8,000,000 to $10,000,000 marking a notable 20% to 36% decrease from approximately $12,500,000 in 2023.

Speaker 2

Revenues for the 1st 9 months of 2024 were approximately $6,900,000 a increase from approximately $5,100,000 in the same period the previous year. This growth was primarily driven by revenues recognized from AgPlenus' new collaboration with Bayer and increased Castera's revenues from the supply of custo seeds during the period. Revenues for the Q3 of 2024 were approximately $1,800,000 compared to approximately $3,800,000 in the same period in the previous year. The decrease was mainly attributable to revenue of $2,500,000 recognized in Navi Bio in the Q3 of 2023 by the licensing agreement with Corteva, partially offset by the increased revenues recognized in Castera and AgPlenus during the Q3 of 2024. Evogene anticipates continued growth in the Q4 of 2024 compared to the previous year, mainly based on Castera's forecast for seal order supply.

Speaker 2

Research and development expenses, net of non refundable grants for the 9 months of 2024, were approximately $13,200,000 a significant decrease from approximately $15,200,000 in the 1st 9 months of 2023. The decrease in expenses is mainly due to the session of Canonic's activity and a decrease in certain development expenses in Biomica as compared to the same period the previous year. Research and development expenses, net of nonrefundable grants for the Q3 of 2024, were approximately $4,400,000 and decreased as compared to approximately $5,100,000 in the same period in the previous year. The decrease is mainly attributable to decreased expenses in Canonic and Vionica, as mentioned above. Sales and marketing expenses for the 1st 9 months of 2024 were approximately $2,800,000 a slight increase from approximately $2,600,000 in the same period in the previous year.

Speaker 2

The increase is mainly attributable to increased sales and marketing activities in Castera during the 1st 9 months of 2024 as compared to the same period in 2023. Sales and marketing expenses for the Q3 of 2024 were approximately $900,000 and remained stable as compared to approximately $900,000 in the same period in the previous year. General and administrative expenses for the 1st 9 months of 2024 increased to approximately $6,100,000 from approximately $4,800,000 in the same period of the previous year. General and administrative expenses for the Q3 of 2024 increased to approximately $2,900,000 compared to approximately $1,500,000 in the same period of the previous year. The increase during the 1st 9 months period and the Q3 of 2024 were mainly attributable to expenses recorded in Castera due to a provision on doubtful debt of 1 seed supplier and transaction costs related to the Evogene's fundraising that occurred in August 2024, totaling approximately $1,400,000 Total other G and A expenses in Q3 2024 amounted to approximately $1,500,000 unchanged compared to Q3 2023.

Speaker 2

The decision to cease Canonic's operations in the first half of twenty twenty four resulted in other expenses of approximately $500,000 for the 9 months period ended September 30, 2024, mainly due to impairment of fixed assets in the Q1 of 2024. The operating loss for the 1st 9 months of 2024 was approximately $17,600,000 a decrease from approximately $18,900,000 in the same period of the previous year, mainly due to increased revenues as mentioned above. The operating loss for the Q3 of 2024 was approximately $7,500,000 an increase from approximately $4,200,000 in the same period of the previous year, mainly due to decreased revenues and increased G and A expenses, as mentioned above. Financing expenses, net, for the 1st 9 months of 2024 was $378,000 compared to financing income net of $234,000 in the same period of the previous year. Financing expenses net for the Q3 of 2024 was $757,000 compared to financing income net of $320,000 in the same period of the previous year.

Speaker 2

The increase in financial expenses net during the 9 months period and the Q3 of 2024 as compared to the respective periods of 2023, was mainly associated with accounting treatment of pre funded warrants and warrants issued in August 2024 fundraising. Pre funded warrants and warrants were classified as a liability on the consolidated statement of financial position, were initially recorded at fair value and subsequently re measured at each reporting period using the Black and Shorts auction pricing model. As a result, during the Q3 of 2024, the company recorded net financial expenses related to warrants of approximately $882,000 The net loss for the 1st 9 months of 2024 was approximately $18,000,000 compared to approximately $18,600,000 in the same period of the previous year. The net loss for the Q3 of 2024 was approximately $8,200,000 compared to approximately $3,900,000 in the same period of the previous year. The $4,300,000 increase in net loss for the Q3 of 2024 as compared to the Q3 of 2023 was primarily due to decreased revenues, increased general and administrative expenses and increased financial expenses, as mentioned above.

Speaker 2

This decrease in net loss was impacted by an amount of approximately $1,500,000 due to transaction costs and the financial expenses related to warrants issued in that transaction. Operator?

Operator

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. The first question from Ben Klee of Lake Street Capital Markets. On the 2nd quarter call, you said you expected a material update on a follow on order for 2025 deliveries at Castera by today's call. This did not happen.

Operator

Why did this not materialize?

Speaker 1

Hi. This is Ofer speaking. Thank you, Ben, for joining to this call. Yes, in previous analyst call, we were expected to receive orders from our partners. But to our shareholders, we still didn't receive it not because there is a complication.

Speaker 1

It's mainly because there are still in their internal discussion based on the performance that they are receiving in their bills. So since we didn't receive the final decision, which we hope that it will receive it almost every day for now, so this is the reason that we couldn't give such an update for today's meetings. But it's not because there is any specific complication in the discussion or the ongoing relationship with our partners.

Operator

Another question from Ben Cleave. Have Casteras continued delayed deliveries of the initial order placed in mid-twenty 23 compromised its ability to secure a follow on order?

Speaker 1

So with respect to this question, I'm just returning from almost 3 days in Kenya, where we visit our seed production site together with Joach, the CEO of Kacera. And yesterday, we published we reached a stage that I think that we solved the seed production issue for in Africa. Our partners are quite happy about it. Actually, we are planning to bring some of them to our sites so they can see and impress from what we do there. And I believe that we are we will continue to stay an important seed supplier to our partners in Africa.

Speaker 1

As we disclosed, there was some delays in the harvesting season because of the expansion of the rain in Kenya. But now we are moving very fast. Probably we'll put some nice pictures and short movies from our visit in Kenya, which in my opinion are quite impressive. And we are reaching to the stage that we can generate 10 and even close to 100 of tons of seats every month. So I think that we are in a good position with the future seed supplies to our partners.

Speaker 1

So yes, there were some delays. And yes, some of the seed producers that we engaged in 2023 disappoint us from their performance. But the thing that now we are behind this complication, and we are looking forward to a much better performance future with respect to seed production.

Operator

Another question from Ben Cleave. Is Evogene contributing any cash to the collaborations announced with Google and Ben Gurion University? If so, how much?

Speaker 1

So with respect to the Ben Gurion University collaboration, actually we are covering through the grant all of our expenses. So there is no additional cost for Evogene in participating in this collaboration. With respect to collaboration. With respect to Google, so each side is covering its own expenses. From our perspective, this is part of our ongoing product development process.

Speaker 1

So it's already part of the budget. And Google were very excited to join forces with us, and they are contributing to this collaboration a significant amount of resources and employee to help us to build this amazing fundamental model that can accelerate our progress. So as I said, it don't have an effect on our budget compared to what we planned, while actually the end product is worth much more than what we contribute due to the Google involvement in this project.

Operator

The next question, how much cash at parent company level as of the 30th September, 2024, what is the remaining cash usage for the balance of 2024? Why do you carve out Biomica and LaVibio in saying what your cash usage will be if you deliver the seeds, how long does the customer have to pay? Could you give us more detail on what additional opportunities to inject funds are available?

Speaker 1

Yaron, can you take this answer? Yes, sure. So I'm Brett. Thanks for the question. In Evogene and the Noni

Speaker 3

owned subsidiaries had $8,000,000 in cash as of September 30. We had another $2,000,000 of seats that were delivered during the end of September beginning of October. A part of the spending is already in and the rest should arrive shortly. In addition to that, we expect to deliver by the end of the current quarter seats in the amounts of $2,000,000 So I feel comfortable to say that we have enough cash going forward for a year and more.

Speaker 1

And with respect to the second part of the question, so first, I hope that you get the answer to your question. So in a way, we have close to $10,000,000 just for Evogene, and we are expecting to receive additional fund in the next few months. So I think that we are in a quite stable financial position. And I think probably from here and on, we will start to put more information on how much money we have for Evogene and for Payonica and Castera and La Vivaio. Please remember that apart from the money that these two companies hold, they are paying it's going to be used in the future to pay for Evogene for the use of our technology and for receiving different type of services.

Speaker 1

So apart from the money that you see, which belong to Lavi and to Vionica, Evogene is going to use to cover its own expenses. And usually, when we deliver seed, the amount of money that we receive, you ask, it's around from the time when we see that we send the seed, sales and we will send the money, it's up to 45 days. So it's not that we need to wait for too long and even though that we're talking about big numbers. And what additional opportunity to generate revenue for the company. So I think I mentioned in the past that one of the options is a fund raising for our subsidiary level.

Speaker 1

This is something that we are working on it now and much more intensively. And in addition, we're also exploring opportunities to sell parts from our holding in our subsidiaries or even maybe to sell completely one of our subsidiaries to potential strategic partners or companies that show interest in what those companies are doing. So I think that there is few avenues that we can bring additional cash to turn our financial position. And if this event will happen, so then I think that this will be a really nice addition to our cash balance and to the stability of the company. So I hope that they address these questions.

Operator

The next question from Brett Reiss of Jenny Montgomery Scott. Where do you think the sales level for Yalos can be in 2 years? What is your base case target? I'm not looking for quarters guidance, but what is realistic sales run rate a few years out?

Speaker 1

Amit, the CEO of Glanbiaio, will take this answer, please. David's question, please.

Speaker 4

Yes. Thanks, Brett, for the question. What makes us optimistic about the Yavo sales are 2 factors that happened this year. One is even though we're still in penetration mode, we received very good feedback from the farmers using the product, which came back and are planning to expand next year. This is one of the biggest KPIs we put to ourselves as returning customers that are actually growing.

Speaker 4

And the second is the proof that

Speaker 3

we did that Yallis works on soybean. Soybean is a much more

Speaker 4

prime crop for biosimilians. 100% almost 100% of soybeans seeds are treated. And the acres are 4x the acres of what we do currently in terms of wheat. So soybean is a very, very big win for us and a very big potential. And

Speaker 1

that's the

Speaker 4

we anticipate that in 2 years, sales will start being significant and you'll see them as material in Evogene's revenues that will be reported.

Operator

The next question from Scott Henry of AGP. How has the early feedback been on the Yalo's launch? How should we think about peak annual revenues for Yalo's? Thanks.

Speaker 4

So as I said, the feedback has been good. Wheat is a more challenging crop. Soybean is a much more relevant crop. But also in the wheat growers, we see very good results and very satisfied growers that are planning to expand their use of the product. So this is in terms of the feedback.

Speaker 4

In terms of sales, as I said, in the next 2 years, it will already start to be significant. In the peak sales, we're looking at significant double digit millions of dollars of sales for Yamas.

Operator

A further question from Scott Henry of AGP. How should we think about Castera revenues in 2025? Any color relative to 2024? Thanks.

Speaker 1

So as I mentioned earlier, Ken disclosed much information about the forecast for 2025 because we are still discussing these matters with our partners. In addition, there is some significant opportunity that we are evaluating that materialize can have relatively significant effect on our on Castera revenue for next year. So I believe that next year looks better than this year. And the fact that we saw the issue of seed production and seed production capacity in Kenya and we also showed a very nice performance in Brazil with respect to seed production this year. I And it's a very important method.

Speaker 1

Think about it as quantity, we are the only seed producer of Castor in Africa. This has put us in a very strong competitive position compared to other companies that are located in other place. There are not many, by the way. There are only few, and they are located outside of Africa. So shipping and delivery time is a major issue, while we saw this challenge by locating our seed production facility in the heart of Africa in Kenya.

Operator

The next question is from Stefano D'Ororazio, an investor. Could you provide insight into the current level of insider ownership in the company and how management is aligned with shareholders' interests.

Speaker 1

Thank you, Stefano, for joining to this analyst call. I don't have to hear the information in front of me with respect to insider ownership. We can deliver this information after this analyst call. You can contact me directly. But with respect to management, significant portion from Evogene management compensation is based on equity through an option.

Speaker 1

This is the same thing also with Evogene Group CEOs in our subsidiaries. The average salary in our group is lower than what you might expect for companies in our size and where we are. And we compensate on this through an equity holding company in an option mechanism. So for us, there is a very and I think that this mechanism really creates a strong link between management interest and shareholder interest. And we put a lot of thinking how we can generate value to our shareholders because at the end of the day, we, in a personal level, will benefit as well.

Operator

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

Speaker 1

Yes, thank you. I would like to thank everybody for joining to this analyst call, and we're looking forward to continue to update you on the progress of Evogene in subsidiaries. I believe that next year is going to be a very promising year for Evogene, and we're looking forward to achieve our targets. Thank you very much.

Operator

Thank you. This concludes Evogene's Q3 2024 quarterly results conference call. Thank you for your participation. You may go ahead and disconnect.

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Earnings Conference Call
Evogene Q3 2024
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