Evogene Ltd. Q1 FY2025 earnings call

Ofer Haviv began by reviewing Q1 2025 financial and business highlights. Key achievements included: ChemPass-AI advancement for pharma with refined value proposition and progress with Google Cloud collaboration. Lavie Bio's acquisition by ICL for $15.25 million, with ICL also acquiring MicroBoost AI for ~$3.5 million, expected to close in Q2 2025. Casterra delivered 250 tons of castor seeds in 2025, strengthened sales teams in Brazil, and initiated proof-of-concept trials for grain. AgPlenus discovered a new mode of action for fungicides against Septoria in wheat and plans to engage licensing partners by year-end. Biomica's Phase I clinical study of BMC128 progressed, and it has an expense reduction plan. Evogene focuses on ChemPass-AI for drug discovery and value generation through subsidiaries.

In the first quarter of 2025, total revenues were approximately $2.4 million compared to approximately $4.2 million in the first quarter of 2024. The decrease was due to no large license fees like in 2024. R&D expenses in Q1 2025 were approximately $3.2 million vs $4.8 million in 2024, mainly due to decreased R&D activity in Biomica and Lavie Bio. Sales and marketing expenses were approximately $0.6 million vs $1 million in 2024, driven by reduced Lavie Bio activity. Operating expenses net were approximately $5 million vs $8 million in 2024, due to decreased activity in Lavie Bio and Biomica. Cash and short-term bank deposit balance as of end of Q1 2025 was approximately $9.8 million, including ~$5.5 million from Biomica.

Lavie Bio acquisition by ICL expected to close in Q2 2025. Casterra expects initial results from grain proof-of-concept trials in Q3 2025. AgPlenus plans to initiate discussions with licensing partners by year-end. Biomica needs additional funding to progress to Phase II of BMC128 clinical study.

Uncertainties related to antitrust approvals and other customary closing conditions for the ICL deal. Dependence on successful execution of growth engines and collaborations for revenue generation. Risks associated with completing clinical studies and securing funding for Biomica.

Q: With the 250 tons of castor seeds delivered in the first quarter, does this complete the initial order from any place in mid-2023 or do you expect additional sales from this order later this year?

A: Every year there are two sowing seasons in Africa and certain seasons in Brazil. Current shipment relates to past orders, and expecting additional orders for the 2025 season as interest in castor oil grows. We have inventory to supply if orders are received, and expect to deliver till end of 2025.

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

A: $3.5 million from selling Evogene MicroBoost for Ag, $15.25 million from Lavie Bio activity. Need to deduct ICL's SAFE investment, and expect revenue from other agreements and potential dividends from Lavie Bio remaining assets.

Q: Scott Henry at AGP. Casterra sales were strong in the first quarter of 2025. How should we think about the rest of 2025 and what should the cadence look like?

A: Depends on partners' performance and success in growing grain. Expecting additional orders, with inventory to supply, able to deliver till end of 2025 as interest in castor oil continues to grow.

Q: At close of asset sale, how much cash will you receive?

A: Answered earlier, including $3.5 million from MicroBoost AI sale and $15.25 million from Lavie Bio activity, plus potential revenue from other agreements.

Q: What are the customary closing condition for the ICL deal? Is there any danger for not closing the agreement?

A: Customary conditions include antitrust approval, Israeli Innovation Center approval, etc. No current reason to think the deal won't close, advancing with discussions with relevant agencies.

Q: Brett Reiss of Janney Montgomery Scott. Of the $18.75 million consideration in selling Lavie 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?

A: Answered earlier regarding net cash. On the oil company narrative, demand for castor oil is there, but bottleneck is educating farmers to grow castor for grain. Interest in castor oil grows, but need to progress cultivation education.

Q: Brett Reiss. With your reduced expenses, how long will the cash last for you?

A: Comfortable till end of 2026 with conservative assumptions, and potential for additional revenue/cash injection, with option to cut expenses further if needed