Evogene (EVGN) 17 Aug 232023 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Evogene's Second Quarter 2023 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on August 17, 2023.

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, risks and uncertainties regarding business strategy, operations and future performance and results of Evogene. I encourage you to review Evogene's filings with the U.S. a and release, note made XXXX. are which earnings Private and, Reform Commission in forward-looking in Litigation not Exchange this Securities the release earnings on meaning be today's states in statements historical and facts read call of deemed regarding the statements the earnings may Securities conference way, forward-looking that within similar Act the the statements of

the from farmers establishment of the sales and example, activity, call payments reducing discusses use BMCXXX trials, For in future Evogene's novel to visceral in effectiveness is when Lavie the companies innovative plans leading the and statements royalties using TargetSelector for IBS TargetSelector the for milestone use products, needed and identify of the resources of of new collaboration this in timely ability of effectively and pain and investment who Evogene due products, forward-looking to a on company's to mechanisms target domains and with and execute applications. proteins identify treatment studies to for AgPlenus' BMCXXX pesticide agreements it new Thrivus, enhancement return Bio's fashion, Corteva's ability related

results beyond All are the the forward-looking the will control impact differ that herein Evogene Many from to as of factors materially true date only of announcement may of statements made speak of the results. anticipated statements actual cause of whether come results. and forward-looking

reports the in so. potentially More any performance impacting law, as publicly with and U.S. information, by factors we disclaim events risk Securities whether a our the new as can to Commission. adversely required be is Exchange future Evogene to detailed statements, under Except information otherwise. result our do obligation or expressly alter forward-looking update our about no or found of filed otherwise obligation

CEO and Eldad; is Amit of Starting of Casterra, the the Ofer Ronen; Yaron CFO, President Eyal CEO joined Noam. by CEO Evogene's Evogene, today Lavie of call Haviv, Bio,

That CEO would now to turn go like President over and Evogene. the of Haviv, said, please call Haviv, I Mr. to Ofer ahead.

good Thank everyone. you, day, and

review will will an you subsidiaries' accomplishments, I some I potential update the future. also recent and which provide Today, leverage achievements our catalysts discuss activities expected tech end underlying on near stability. advantage demonstrate financial recent of my Evogene's with the fundraising as AI-driven Evogene's in engines Evogene's I and process. power improves it main would and Evogene's the reviewing our product competitive part of development their technology, how recent our and

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start therapeutics of subsidiaries, and value our microbiome-based I milestones of significant health. have to creation. developing Biomica, accomplished that reviewing potential for Evogene they to like human would achievements a is respect several by multiple have With upcoming subsidiary

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Canonic, activities Casterra advantage. tech will as their GeneRator I the and now AI subsidiaries utilize review of that our main engine Evogene's technological

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its Casterra's and will Ronen. from activities achievements, impressive Eyal hear on we details Casterra's more CEO, later For

developing Moving which medical focuses on cannabis on engine. GeneRator products best-in-class to Canonic, Evogene's AI tech using

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will CFO, Evogene's hear For we Yaron Eldad. more financials, on Evogene's details from later

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In the continued programs we in pipeline, six quarter, progress. to our additional advance second satisfactory showing

competitive development the consistently products superior company of strategy bringing goal a market leading We are high-quality synthetic also chemical but repeatedly sustainability the in refined being the ag-biological the company's ag-biological product to performance of with and benefits. solutions, to commercially-viable that in their

sales we're our future programs go-to-market cutting-edge will licensing direct commitment product Bio collaboration Thrivus; farmers with we've Corteva. Lavie These support Bio and supporting I'm which two and about the with of with one like signed solutions. doing strategies: excited the like our worldwide and by to agreement Lavie

progress continued support, to future. forward for I on in you your you Thank and look our updating the

CEO Casterra's Evogene's Development, Eyal Thank And update. Business now, you his provide Ronen, will all. and EVP,

today overview of recent provide call to the you, future. join a and Thank for and our Casterra's plans activities delighted the everyone. Hello, I'm Amit. brief

performance. clear, industrial by castor the consistent an ensuring the grains industry providing value transform agro and of a profound continuous of committed best crop knowledge technical chain. for creating solution a the is integrated we single-season our castor to cultivation, holistic for solution Through to industry's mission genetics industrialized for oil supply innovative Our are and solutions, high-quality

to purchase castor high-yield, castor activities. In million Casterra on for totaling for would proprietary to achievement. biofuel. quarter's of of milestones last like produce of oil this $XX.X plants review quarter the Let's achieved orders seeds sustainable the the XXXX, significant supply elaborate high-oil with second cultivation for to I our

oil to of the $X.X the company, purchase cultivated and initial we territories. gas June, African specific agreement with for seeds announced million a castor framework a worth supply securing our orders signing prominent of In in be

valued in additional at July, engaged Africa. territories million we Additionally, one order purchase more for $X.X in

Research fossil currently XXXX. X% market, for is site, non-fossil standout oil or to to in Castor the oils in due other review non-fossil without oil at and to growth edible X% from rise to and The Now, XXXX, billion biodiesel an lands with the diesel The is its biodiesel of competing oil $XXX expected Precedence candidate XX% non-fossil market, to Biodiesel at or consist to short increase which with is sources. could non-fossil biodiesel a XX% plants global by I'd like $XX reach X% and give in the billion of biodiesel demand valued of oil components. Casterra. a carbon-neutral market thriving properties, segment's marginal was in value crops.

are to note I these our orders, advanced significant to confirm development this sustainable like computational thrilled that to using castor which for varieties. high-yield value develop we proposition Casterra the industry. biology technologies receive purchase would Spearheading is biodiesel

orders renewable hope ongoing delivering future, solutions exceptional global eagerly we more our to meet energy. eco-friendly reinforce accomplishments secure the in to As to ever-growing commitment the these for demand

and than SAF Casterra feed. dollars spend plans the now in Casterra that more of this gas investment develop sustainable trusted underlying market. space, and decade millions varieties proud its After and market a activity expand in and of in of we a our global invest reliable unique and to companies its technology, growing developing targets supplier increase to varieties its in [indiscernible] virtually to is fuel, R&D animal aviation additionally, are work hard more for oil and

Evogene's to have. your look for to Eldad, colleague, and attention, you to mic the Thank And any CFO. addressing now questions my I Yaron? forward I want you pass may Yaron

Thank you, Eyal.

include securing we As the were emphasize any warrant previously $X.X successfully of stock issued this must in total in completed million. not round, and mentioned securities common round that July, it fundraising a I Ofer, proceeds by did only coverage. gross

from $XX.X Evogene position with aggregate $X.X a million. provides strengthens Evogene, equivalents resources fashion. an of $XX.X Of million. holds execute approximately together and financial short-term future Lavie June of us last possessed sum, timely in Bio in million $XX and of our for injection and Casterra, consolidated bank AgPlenus, XX, The cash the had with cash, Biomica to accounted cash. July Canonic and this deposits million of this XXXX, funds effectively Evogene's in and plans round needed As

of need seeds fulfill capital to An in the in the received orders such months, to subsidiary, significant purchase of million. in Casterra, $XX.X required wholly-owned is the produce castor the example needed our order totaling increase financial last the working

cash purchase $XX raised the next the Evogene funds by in include are the and to important to July balance and the during Evogene, Canonic supplied and due the reflected in by do It together at Casterra, of the that not the Casterra of any AgPlenus, orders note is year. received million with to which beginning expected in few last of year months, second be half amount

licensing Further note was reflected Lavie be agreement cash upfront that of an with Corteva balance does include Bio as the the in from the expected the $X $X.X payment million not million July. received to announced in that

usage quarter, the $X.X approximately million Biomica. the million, cash consolidated During second $X.X excluding and approximately Lavie was Bio or

will Corteva product. were the approximately to for main to The by Revenues of with sales in recognized $XXX,XXX agreement the Thrivus Evogene's second $XXX,XXX P&L Lavie same approximately and of was items. from subsidiary collaboration compared AgPlenus revenues period increase revenue review due the the the quarter now I Bio's of XXXX primarily previous year.

previous to million expenses of million are in non-refundable compared year. the as and net stable were same the R&D which grants period approximately approximately $X.X in second $X.X received, for the reported XXXX, quarter remained of

approximately at expenses a period in contributor to the approximately slightly in was compared the year. second decreased decrease same in this The were for expenses main Sales Canonic. and expense of previous personnel in XXXX to the reduction quarter $XXX,XXX marketing $XXX,XXX as and

in period compared compensation. share-based in administrative the The to approximately approximately quarter due million related is were the second $X.X and increase General XXXX to same in mainly of year. the million previous expenses expenses $X.X to

in an Operating the $X previous loss of operating of the year. to approximately quarter for the XXXX approximately was second million same million, $X.X compared in period loss

due decrease $X.X quarter U.S. $X.X of second difference was second the and quarter in marketable the to the the an previous Shekel securities interest dollar in XXXX quarter was of increase in the rate periods, during period XXXX. for This expenses million income exchange differences to of comparison income mainly the million value of and a Financing in in same year. between in XXXX second financing

XXXX net previous to year, a in Net approximately the quarter period the million differences the was loss of million expenses for approximately due to loss same above. $X.X mainly the financing compared in second as of mentioned $X.X

questions. to With that, would and Ofer open any I for Operator? like the call

Lake [Operator ahead. Instructions] first is Markets. of Capital from Klieve question go The Please Ben Street

I start have a Casterra. on I'd with to couple a like few.

is that contract already of order For can seed underway, be now hand inventory order? clarify by is this initial satisfy million that how that order you on is versus you that $XX going that had to much filled out to production

is I this will this Ben, address to ask Hi, Ofer. question. Eyal

the basically, we order Ben, Hi, that substantial in received are amounts amounts.

the us continue is what market. in additional are and months accomplish which which the was now required to are in deal. for submit that producing inventory not exists coming in will required we the the quantity were demand supply we is had producing all to and something So, inventory. capacity, our for doing The the The orders continue extra order. we more mainly that add in exactly that used common It's to to requiring this production,

Okay. Great. Thanks.

think, in one. possible certainly expecting was is I in here clearly -- so, what this And would excess I of year be

mean, what going farmers it the year? is for be you capacity to access -- available for Casterra limiting year? so next what you factor to it inventory? going do the kind you Is revenue is it help which partners? be do think be Is Casterra And in us fantastic to limiting going be kind to to seed? I'm of wondering know to understand the year. biofuel actually factor if plant for specifically, outlook be can going the see. And for next your I Is second to will of your

Eyal, can you continue?

are a see do the us clients any that at be limitation of preparations Yes. Based the from capacities will and in is on logistic from based having I one. received amounts substantial those the terms not restricting shifted producing the the main the we that land, required that client required. in estimations I The believe, challenge, moment on to

are improving preparing adjustment supply there to all kinds we the So, itself. over and of attend

don't are imitation. which quite is not that you a the are additions is we beyond I something any Whether amount, required From our see Land mainly see production this as whether or produce we perspective, in amount quantities. that available. reach. shift are it one another. the amount they Production-wise, and place be supply setting increasing a to challenge need logistics will down, the substantial to we from to dramatically, we able are that

prefer would to are that more need on next year, I little we strengthen our based the believe know And it. to a so will conservative. we could will be as to orders example. position Still, support we I a for infrastructure, say good bit in an it what that be

we will dehulling can and we thing have to is handle. that we that So, prepare a think additional need harvester, But I it machine, additional more need to land.

a can dramatic we if -- to be (ph) it it course, I expected, is [XX then more, something in that the it times] not address probably will which separately. be increase difficult currently something Of demand, think that's

we know night to even some believe in see that this and increase, able working we're this expecting to cases we very, would and address be day and to yes, we address in So hard, able are very in be we order to demand, increase challenge. what now,

have on quick I a Great. one Thank Casterra, and Lavie. last you. One on then one

your the fuel? to this partner if players additional partner sustainable in I with with to world market, other is of curious in Casterra, unnamed I'm in strike expected collaborations your about ambitions aviation world aviation fuel. your heard -- or for sustainable [going if So, this (ph) comment the looking be] you're energy end for this in space

move will with I aviation years jet ago, directly U.S. the maybe -- direction. The converting forward question. maybe fuel, biofuel there think decline again, where from oil a this really into we and castor XX the into company oil -- that a to because of of I we the had company with and because, evaluated an move put converting didn't it working. NASA take motivation into reduced the bit and an was on, ongoing probability it succeeded Very and XXXX it's price demonstrate So, some little the during in this interesting relationship Casterra to so project

demonstrated we already the big past really we NASA, that it a the collaboration had we So, have -- work. manufacturing with in already airplane of can and and one

talking the Now, new names, with advance I We before, -- we disclose faster think and partners. will can't, a bit companies, disclose. that we year, can there's course, maybe maybe new we we are advance even of that something but little next will hopefully but

results have and we in a did we But we think we we experience are we nice pretty what already In in nice field. I good are now, this stopped. in the past see way continuing soon. now -- are really the And what a position to

you're then I'll you of comment wondering performance this what versus when And to I'm then, doing accelerate Thanks, the Lavie, really get Thrivus' for so this kind in far of if queue. entered you year were revenues more your Okay, can out? product back shaking what XXXX? on in expectations about and One Ofer. Kind Thrivus' it's the how great. year.

I Bio, this to Lavie the this you address Thank for question. CEO Amit, of will question. ask

Hi.

able compared we're next So, the Thrivus' it We challenges continued last that One sales to main in produce entering in XXXX, for production just some limited product to we we've this fixed we've but were but the the year. year two year, again, year. we beginning growth encountered is, the of that amount this the saw of things. market,

the able we're supposed to to to be a lot grow year, produce be sales. to Next did able more year than this we

doing Canada. got we're thing is that approval Second we from regulatory

will Canada, in will crops. sell. our is adding enable additional we're that advancing us crops. to addition thing different trials And also the in country, to as us which sales. that is size to able the crops field others. sell that relevant we're add year, second the accelerate running addressable to We're we area additional year, the is and for in and next the U.S. be next in hopefully, So, durum triples that crops, another twice Canada And doing oats we'll land to, currently and like barley and

Great. taking back queue. the progress congratulations the Very I'll helpful. in on Thank you, questions. get year-to-date. and Thanks all for

Thank you.

next The question go Reiss Please ahead. Janney is from Montgomery from Brett Scott.

Thanks gentlemen. the two. or ask morning, a to for Good opportunity question

I question, of the cash part flow the the understand First management -- want seed business. of on castor just the to

you timing paid the to orders, seeds If lay once all get delivered producing the you on customer, the and get continued And large then the to to that? reimbursed. we of the out capital entities seeds. is have What are

this Okay. Eyal, can you question? take

are the Basically, in or port. to behalf. take and the America or in responsibility pathways Africa, for port, bring whether Latin the responsible deals. seeds many his to them Yes. We used client on normally taking that goods the is those from businesses there and conduct produce dispatching to And it's the those

terms recognition In some arrive revenue the of obviously of And advance of the port if we order once completion later are especially in substantial the it final the production, of about paid to of receiving -- client, goods in the payment. is income, we at the support on, and talk the production. the

cultivation the support in seed of provide terms that's of -- capital castor. the the of of to the So

little a Maybe more. I add will bit

to are the Africa, where partners, We smallest our selling the one we sites us much produce the which like Then product for order and is our the One other one is have its we is one would grow and When then producing from that the Israel. have we purchase in them Casterra to seeds purchase we in instruct three the how partners. support subcontractors seed, in different America. is we South orders. to is -- collect

especially exposed is some so of like such been but when there we increase have such based in course, can't demand the significant In some support inventory, this yes, seed cases, we in year, that existing have a we a quantity inventory. already on

using the our we using going So, to in are our season. partners. subcontractors And during that our of protocol, seeds we the our they and are these we networking start grow ask they subcontractors genomics, to course, growing locations to of are all our distribute to are

seeds, course, on the the when subcontractor our when the we the partners. we receive then we to at And four of goods the receive are rest, harvesting, them, arrives and a And seeds when doing the the customers. so transfer they're packaging and way, after our ready the portion is months, the seeds there our we seed to the coating shipped have And dehulling, we that then, harbor. certain to of -- it money the then

we So, with to there that our margins rewards the between after from amount the our and all money then is pay supply a of seeds, our to we needs. the the we get partner subcontractors produce gap

purchase receive, cancel. we the So, this [depends] something that -- are partners that order it's can And our they (ph). is not how it

supply a So, the is it's in a way, receive like, seeds of the on based again, guarantee period going time. to in we're a money there the that of certain

in to the feel why So, growing we this is invest seed. comfortable

from we our support And sometimes, to receive the And we will our receive seeds. in our will to money when the a we partners. a the subcontractors infrastructure seed then, order like the partners that strengthen in have guaranteed way, they to high-quality support

helpful. to explode. existing working have get the you we're come? paid capital the between are sales you But growth to robust Do seed that lag time future, we're orders hopeful is and and That get all enough since the hopeful there's going you all support that order really this looking was to going a in

that we'll demand don't current supply seed the will in to order might that to this million we our of support also of round So, we financial for purchase a working was loan even $XX in growing this money, the seed reasons order raised this after credit from estimation, through it that and with to will with According year, do we go need capital. position one And Evogene, if needed, the bank's based take on -- if I we production. we so, support can maybe capital. think additional the

to felt this to right we if that we think money year, believe use that or In I another maybe in have future, in I to working is to credit from raise or this do that enough will internal capital to need so. thing the needed. option believe some fund -- intend bank, the we our order I resources that the that order the from is that

you of the template with companies you're like? your share structure on you what kind have answer. not could you different Thank of by working question. and -- you covered us? in collaborations The these look Great. have of potential do collaborations with areas that subsidiaries, Do A deals will for a

ongoing meat. I protein we through are Yes. advancing a two today, producing that talking we have eating all can in area the examples. of that One we give actually in discussion you protein consume nicely is about here, tech. food plant, And

So, to are replace protein protein investors there's that mammalian all we consuming. like -- companies plant we field interested this that in of in production use a specific are and would to

can order to use proteins. So, this And the in mechanism certain ChemPass maybe we produce field. to technology AI here, one order also those you genes, to that you in a improve our way identify genomic like and is the that GeneRator imagine AI also would in can

problems as in can to others, example Another in MicroBoost chicken might our from tech treat that microbes related animal also also they cells. types and MicroBoost. microbes, identify suffer enter field to relationships you and maybe some using AI the that improve is such of we are can Animals engine that different using we them

is this example. another So

is are discussion, other few but a much just there is many under currently that more But pushing now we This there are that forward. opportunities.

very And questions. you Great. opportunity for Thank the ask sir. on, to carry much

I you Thank much. very appreciate it.

at [Operator Instructions] this further There no are questions time.

XX-XXXX-XXX. would statement? is like Haviv, after conference. remind ahead ask this with Haviv hours I statement, Internationally, X-XXX-XXX-XXXX. I replay the scheduled Mr. closing In make begin concluding your Israel, would Mr. XXXX-XXXX-XXX. call please please to Ofer call you go call the to of that please X his to call Before participants like a In U.S., to

you. Thank Yes.

for all It you progress call all our tremendous a We updating joining really today. forward on thank you. you next So, to quarter. was Thank look the in call. our

XXXX you. Thank Thank for your conference second you This participation. results call. Evogene's concludes quarter

go may disconnect. and You ahead