Evogene Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Evogen's third quarter 2020 results conference call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded November 18, 2020. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evogen's and Evagen Subsidiaries Management will constitute forward-looking statements that relate to future events, risks and uncertainties regarding business strategy, operations and future performance and results of Evagen. These statements may be identified by words such as may, could, expects, intends, anticipates, plans, believes, scheduled, estimates or words of similar meaning. For example, Evagen is using forward-looking statements in this earnings conference call When it discusses its and its subsidiaries' targets, objectives, pipeline, and goals, and the expected timing thereof, its support of its subsidiaries, the sufficiency of its funding to achieve key objectives, and to continue to enhance and expand its computational predictive biology platform, its estimated cash usage for 2020, capturing the value of its technologies and subsidiaries, entering into collaboration agreements, It's Upcoming Milestones and Potential Alternatives to Capitalize on the Company's Subsidiary's Achievements. I encourage you to review Evagen's filings with the U.S. Securities and Exchange Commission and read the note regarding forward-looking statements in their earnings releases, which states that statements made in those earnings releases and in a similar way on this earnings conference call that are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements made herein speak only as of the date of the announcement of results. Therefore, actual future results, performance or achievements of Evagen and its subsidiaries 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 the control of Evagen and its subsidiaries, including, without limitation, the global spread of COVID-19 or the coronavirus, the various restrictions deriving therefrom and those risk factors contained in Evagen's reports filed with the applicable securities authorities. In addition, Evagen and its subsidiaries rely and expect to rely on third parties to conduct certain activities, such as their field trials and preclinical studies, and if these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, including as a result of the effect of the coronavirus, Evagen and its subsidiaries may experience significant delays in the conduct of their activities. Evagen and its subsidiaries are under no obligation to update publicly or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as otherwise required by law. Evagen and its subsidiaries expressly disclaim any obligation to do so. More detailed information about the risk factors potentially adversely impacting our performance can be found in our reports filed with the U.S. Securities and Exchange Commission. That said, I would now like to turn over the call to Ofer Haviv, Avigin's CEO. Ofer, please go ahead.

Thank you and good day, everyone. We appreciate you joining us today to our third quarter 2020 conference call. Joining me today is Ms. Dorit Kreiner, our CFO, and Dr. Eran Hever, CEO of our subsidiary, Biomica. I will begin my comments today by providing an overview of the company's various activities, some context to our recent fundraising, and discussing our plans to unlock the value of our subsidiaries. I will then hand the call over to Elran to discuss Biomica's activity in more detail, focusing specifically on its Immune Oncology program and the recent progress. Following Elran's comments, The week will summarize Evogen's financial results for the third quarter of 2020. We will then open the call for your questions. Before I begin my comments, I would like to address the impact of the COVID-19 pandemic on Evogen's operations. I am pleased to say that to date, the impact has been minimal. As of today, the company has resumed full activity. While we are fully operational, I want to ensure our shareholders that the company and its employees are working in compliance with the restrictions and guidelines provided by the Israeli health authorities and other applicable governmental authorities and will continue to do so. So let's start. I would like to begin by taking this opportunity to thank our shareholders, new and old, for the continuous support of the company. As the company enters a new era, Advancing its technological platform through three product solutions, MicroBoost AI, Campus AI, and Generator AI, and with its subsidiaries progressing towards the development of valuable assets and commercialization, we hope to continue to earn your confidence. For our new investors, I would like to give a brief overview of our company's activities. As you know, Avogen's vision is to revolutionize life science product development by utilizing computational biology technologies. With so many complex challenges associated with the development of biological-based products, including high development cost, low development time, and most importantly, low probability of success, we believe that now is the right time to leverage the revolution in the computational world to biology. Over the last decades, At an investment of tens of millions of dollars, incorporating deep scientific understandings together with big data and artificial intelligence, Avogen has developed a unique computational predictive biology platform. This proprietary technology is called the CPB platform. Today, building on this technology, Avogen has three product solutions that we believe will help to accelerate and direct life science product development based on the following core components, microbes, small molecules, and genetic elements called MicroBoost AI, Campus AI, and Generator AI, respectively. We aim to capture the value of these three solutions through two avenues, product development through partnerships at the parent company level, and product development through our subsidiaries. Throughout Evogen's early years, We focused largely on the first avenue, partnered with leading companies for defined products using Avogen technology, while later stage development and commercialization of the product was typically undertaken by the partners. This avenue was our main business model until about 2014. During those years, Avogen was engaged with leading ag companies including Bayer, DuPont, Monsanto and Syngenta, mainly for the development of new GMO seed traits. Looking forward, we aim to engage in partnerships along this business model in additional market segments. The second avenue for capturing the value of Evogen's technology is product development through its subsidiaries. Evogen established subsidiaries to focus on the defined commercial field with an exclusive license to use the CPB platform in their respective field of activity. I would like to emphasize that these subsidiaries may commercialize their future products either independently or with partners according to the product type and end market. Some of the strategic partnerships Evogen subsidiaries currently have are with world-leading companies such as BASF and Corteva. Today, Abogen has several main subsidiaries under this business model as follows. In the area of human health, we have Biomica, which aims to provide therapeutics based on microbes that exist in the human gut. Currently, Biomica has three main product programs based on microbes. The first to improve the efficacy of immune therapy, the second to provide therapeutics for IBD and the third to provide therapeutics for IBS. The latter two of which are GI-related disorder. Avogen holds approximately 90% of Biomica. During the quarter, Biomica announced positive preclinical results in its immune oncology program. These results showed that Biomica live biotherapeutic drug candidate BMC-128 given prior to and in combination with immune checkpoint inhibitor significantly improved anti-tumor activity. This program was further strengthened by the initiation of scale-up and GMP batch production of BMC-128, which we also announced during the quarter, in order to support Biomica's anticipated first-in-men proof-of-concept and clinical trial to be initiated next year. Elran, who will be speaking in few moments, will give more information on this program and other programs Biomica is advancing. The second company in the area of human health is Canonic, active in the area of medical cannabis. Canonic aims to develop two types of product. The first is meta-yield, cannabis varieties with overall increased yield and the second is precise. Increased yield of specific compounds in the plant to address medical indications such as inflammation and pain. Avogen holds 100% of Canonic. Canonic recently announced that it has received approval from the Israeli Medical Cannabis Agency for the propagation of medical cannabis seedlings This will allow Canonic to proceed with the execution of its commercialization plan. As you might recall, Canonic aims to release its first product in Israel in 2022. Moving on to agriculture, the first company in this area is Agplanus, which is active in the development of other chemicals. Agplanus is focused on the development of two main types of crop protection products. Novel mode of action herbicide and new type of action insecticide. Avogel holds approximately 98% of Agplanus. I would like to take this opportunity to congratulate Doug Eisner for joining Agplanus in September as its new CEO. Doug brings over 20 years of versatile business and legal experience, previously holding various senior leadership roles, and leading successful fundraising grants and accompanying acquisitions. I have no doubt that DAG will have an important contribution to the success of this company and achieving its targets in the next few years, focusing on advancing our strategic relationship with Corteva and BSS and advancing our internal novel herbicide pipeline. The second company in agriculture is LaviBio, focused on agri-biologicals. Within this field, the company is focused on two main types of live microbial products. The first is biosimulants, which when applied to the plant, improve its performance. The second is biopesticides, which when applied to the plant, protect it from pests such as fungi and insects. Avogen holds approximately 72% in NaviBio, with Coteva, a world-leading ag company, holding the remaining 28% following its investment in the company in 2019. La Vie Bio recently announced positive results in its bio-fungicide program for Lab 311 and Lab 312. These positive results were achieved in a series of vineyard trials for Banshrath disease conducted in Europe and the United States and show that Winiard treated with each of Lab 311 and Lab 312 demonstrated 60-70% reduction in crop damage in comparison to the control. I would like to note that this was only a short overview of the company and its subsidiaries. We have prepared some great informational materials on each of these subsidiaries. and I urge you to view the presentation section on our website to view these materials. Moving on, I would like to provide some more information on Evogen's recent fundraising activity. I would like to start by emphasizing that over the years, Evogen has taken a very disciplined approach to its capital allocation and the company has made significant developmental progress over the years with the resources it had. During the past year, the subsidiary's advancement was very rapid and in certain areas even exceeded plans. Therefore, we decided to raise additional funds in order to support their ambitious business targets. I'm pleased to say that Avogen recently completed two rounds of fundraising totaling $22 million. I'm also pleased to say that the investors that took part in those fundraisings are top-tier institutional investors, including ARK Invest. I would like to note, for those of you who are not familiar, that ARK is one of the world's leading innovation funds investing in the technologies of tomorrow, and we are honored to be part of their distinguished portfolio. As published, Evergen Intend to use the net proceeds from the fundraising to further develop its subsidiaries' product pipeline, to enhance and expand its computational predictive biology platform, and for working capital and general corporate purposes. Looking forward as a whole, we intend to continue to be capital efficient while working toward our business targets, which include the following. In Biomica, We intend to support preclinical and clinical trials. In canonics, we intend to support development of unique varieties as well as cultivation and commercialization of its medical cannabis products. In ag planus, we intend to support herbicide development towards the stage of optimized lead as well as expand the insecticide program. In LaviBio, we intend to support the route to commercialization of wheat biostimulants, as well as support the product development in its biopesticide programs. Evogen also intends to enhance and expand its product solutions, microboost AI, campus AI, generator AI, in order to maintain its technological and computational competitive advantage. Evogen expects to extend its efforts in genome editing and to capitalize on its legacy seed trade activities. With both these rounds of fundraising, we believe that Evogen and its subsidiaries have the funds to support their near-term business objectives, including reaching important milestones, such as initial sales in Labibio and Canonic, and valuable assets in Atlantis and Biomica's product pipelines. I also would like to mention that these capital raises bring us closer to the opportunity to unlock the value of our subsidiaries. Reaching the important development milestone we outlined in our company presentation could put our subsidiaries in an attractive situation on capitalized owner achievements, such as in the form of investment of a strategic or financial partner, M&A, or even an IPO. To summarize, it has been a very productive quarter for Evogen and we are pleased with the advancements made in our subsidiaries despite the objective difficulties COVID-19 has presented. I would like to once more thank our investor community for their support in the company. I will now turn the call over to Dr. Elran Hever, CEO of Biomica. Elran?

Thank you, Ofer. I'm happy to be on the call today. Let's start with a short introduction on Biomica. Biomica is an emerging biopharmaceutical company developing innovative microbiome-based therapeutics for the treatment of cancer, immune-mediated and infectious disease. Biomica's underlying premise is that our gut microbiome, or basically the microbes that live in our gut, has an impact on our health and play a significant role in a wide area of illnesses. This has been well documented in scientific literature and is supported by an increasing body of clinical evidence. The main question that most of the microbiome companies are now facing is to know how to identify the microbes that provide the desired effect. Biomeca aims to answer this question through the use of computational biology. At Biomica, we aim to discover and develop novel therapies for microbiome-related human disorders using a rationally-based design approach enabled by computational predictive biology. In this regard, Biomica has exclusive access to Evagen's proprietary technology, the CPB platform, which was developed over the past decade into an investment of tens of millions of dollars. The potential of the microbiome is clear to the big pharma. and virtually every company now is taking stake in this space. Since 2014, more than $4 billion has been invested in microbiome companies. Rapidly growing with a projected 70% of compound annual growth rate, according to recent market reports, the microbiome market space provides a multi-billion dollar market opportunity. Biomeca is focused on the unmet high-value clinical programs, including three domains. The first is immunooncology, immunotherapy. The second are GI-related disorders, gastrointestinal-related disorders. And the third are antimicrobial resistance. In our call today, I would like to focus mainly on our immunooncology program. It has been shown in various studies published in the scientific literature that one of the key reasons that some patients may not respond to immunotherapies is due to the differences in their patients' microbiome. One example of this, which you might have heard of, is the use of FMT. FMT stands for fecal microbiota transplantation, in which out of two groups described, some patients who initially did not respond to immunotherapy drugs show positive response after receiving a stool donation from patients for whom drugs worked. The main unresolved question is exactly which microbes help to obtain the desired immune activity. Our program's initial target is to identify the microbes which can improve the efficacy of immune checkpoint inhibitors, or ICI shortly, that are the leading therapy today for cancer patients. Using Biomedica's computational biology platform, PRISM, that is powered by Evagen's MicroBoost AI, we were able to rationally design two live bacterial products each comprised of four unique bacterial strains which are naturally inhibitors of the human intestinal tract. These strains harbor specific functional capabilities which have the potential to enhance immunological therapeutic responses and facilitate anti-tumor immune activity through multiple biological processes. Rational Design's bacterial consortia are multi-strained products designed to restore diversity and specific functionality to the host microbial community. These drug candidates were tested together with immune checkpoint inhibitors in a preliminary preclinical trial in 2019 and presented positive results with improved anti-tumor activity in mice. After careful analysis of these results, we decided to focus on four strains right from our initial two drug candidates with the highest functionality. This led to the design of our leading drug candidate, BMC128. In 2020, we continued with a broader preclinical trial, testing our drug candidate in various dosing protocol Not only in addition to immunotherapy, but also as a pre-treatment or prior to the immune checkpoint inhibitor therapy. In this trial, the animals were divided into various treatment groups and BMC-128 was administered to mice bearing cancer tumors prior and during ICI therapy. In September of this year, we announced the positive results of these trials demonstrating that the treatment with BMC-128 prior and in combination with administration of immune checkpoint inhibitors significantly reduced the tumor volume and increased animal survivor compared to immune checkpoint therapy alone. It seems that Biomica's bacterial consortia administered prior to immune checkpoint inhibitor therapy primed the immune system for an efficient and well-orchested anti-tumor response ultimately leading to the most reduced tumor volume and the best survival rate out of all groups. The response to the combination treatment was 50% higher in comparison to the group that received only immune checkpoint inhibitors therapy. Looking forward in 2021, the company aims to enter proof of concept clinical trials in Israel. For this purpose, Biomica contracted the services of BIOS industry, a leading France CDMO, for a scale-up production of our microbes according to GMP standards. The large-scale production of our leading drug candidate, BMC128, has been initiated following the successful completion of the initial R&D stage of the drug product development and manufacturing. Now, I would like to update you that we are currently in discussions with a number of leading medical centers in Israel regarding conducting this proof of concept study, pilot study, in 2021. In regards to our other programs, just a quick note. We are currently advancing our IBD program in the preclinical phase, having initiated new preclinical studies at the University of North Carolina at Chapel Hill. at the lab of Professor Balfour Sartor, who is a Biomedical Scientific Advisory Board member and is one of the leading researchers and thought leaders in IBD in the US. In regards to our IBS program, this is progressing according to the plans and we are currently concluding the discovery phase with the computational identification of microbes with the desired functionality to address this disorder. I would like to end by mentioning that we have recently been seeing an announcement of companies in the microbiome space regarding positive phase 3 clinical data. These announcements provide strong validation for the utilization of microbiome therapeutics and help to validate biomical science and clinical approach and demonstrate the potential value proposition of biomica. With that, I would like to turn over the call to Dorit.