Evogene Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Evogen's second quarter 2023 results conference call. All participants are 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 on August 17, 2023. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evogen'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 Evogen. I encourage you to review Evogen's filings with the U.S. Securities and Exchange Commission and read the note regarding forward-looking statements in today's earnings release. which states that statements made in the earnings release 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. For example, Evagen is using forward-looking statement in this call when it discusses the establishment of collaboration agreements with leading companies in new domains of activity, target select, or ability to identify novel target proteins for innovative products, the BMC-426 and BMC-427 for IBS treatment effectiveness in reducing visceral pain and related studies and trials, future milestone payments, and royalties from Corteva's sales of LaVie Bio's products, the resources needed to execute the company's plans effectively and in a timely fashion, return on investment for farmers who use Thrivis, and the enhancement of AgPlanus' ability to identify new pesticide mechanisms due to the use of Evogen's target selector applications. All forward-looking statements made herein speak only as of the date of the announcement of results. Many of the factors that impact whether forward-looking statements will come true are beyond the control of Evogen and may cause actual results to differ materially from anticipated results. Evagen is 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, we 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. Starting the call today is the President and CEO of Evogen, Ofer Chaviv, joined by Evogen CFO Yaron Eldad, CEO of Castera, Eyal Ronen, CEO of LaviBio, Amit Noam. That said, I would now like to turn the call over to Ofer Chaviv, President and CEO of Evogen. Mr. Chaviv, please go ahead.

Thank you and good day, everyone. Today I will review Evogen's activities and recent achievements and provide you with an update on Evogen's potential catalyst expected in the near future. I will also discuss some of our subsidiaries' recent accomplishments, which leverage Evogen's AI-driven tech engines as their main competitive advantage and demonstrate the power of our technology underlying their product development process. I will end my part reviewing Evogen's recent fundraising and how it improves our financial stability. I would like to state that the second quarter of 2023 has been a remarkable one. We made significant achievements on all fronts, and I hope that you will share this view at the end of our call. As we have many new listeners on today's call, I would like to briefly review Evogen's core technology. Evergen has been using its computational predictive biology platform, the CPB, to direct and accelerate the discovery and development of life science-based products. The CPB is the foundation of our three tech engines. MicroBoost AI supports the discovery and development of micro-based products. Generator AI supports products based on genetic elements. And campus AI supports small molecules based products. Our AI driven tech engines aim to tackle the main challenges in life science product development. Identifying winning candidates from a vast number of prospects and meeting complex criteria for successful commercial products. Our AI driven tech engines efficiently find the needle in a high-tech. therefore increasing the probability of full success within a competitive timeframe and at a cost-efficient manner. On July, we unveiled the latest enhancement of our campus AI tech engines, TargetSelector, a groundbreaking application designed to streamline target protein discovery using predictive machine learning algorithms and genomic data. With this new technology, Researchers across various industries can efficiently identify novel target proteins for innovative products while significantly reducing research and development time and resources and increasing the likelihood of success. Proteins are crucial for developing therapeutics and life science solutions and play a pivotal role in biological processes across pharmaceuticals, agriculture, and environmental applications. As mentioned, Campus AI Tech Engine is a cutting-edge platform for the identification of small molecules. The addition of the target selector applications now enable a broader scope of finding the optimal target protein for those molecules. Our subsidiary, Agplanus, which focuses on developing ag chemicals, is the first to benefit from this new improvement applying it to identify novel mechanism of action for pesticides. We consider this significant advancement in Avogen Campus AI tech engine to strongly position us to forge strategic partnership with industry leaders, expediting product development and delivering novel solutions to pressing global needs, such as developing sustainable new pesticides and therapeutics. Evogen's business model is to establish a product development ecosystem around each tech engine through two main business structures. Independent subsidiaries focusing on specific life science market segments with a licensed used Evogen tech engine for product development or a joint development with leading companies for defined products utilizing Evogen tech engines. Typically, partners lead later stages of development and product commercialization. In recent years, our focus has been on the establishment of various subsidiaries that nowadays show impressive results, which I will soon discuss. I would like to emphasize that this year, Avogen increased its efforts to establish collaborations with leading companies in new areas of activities not covered by our subsidiaries for product development leveraging our tech engines. Those just recently initiated, the response we received to our unique offering is positive, and we hope some of those discussions will materialize into collaborations agreements in the near future. With respect to our subsidiaries, they have accomplished multiple achievements and have several upcoming milestones of significant potential value creation. I would like to start my review with Biomica, a subsidiary of Evogen that is developing microbiome-based therapeutics for human health. Biomica leverages Evogen's MicroBoost AI tech engine to identify and characterize microbes with therapeutic potential. In April 2023, Biomica completed a $20 million financing round, led by a $10 million investment from Shanghai Healthcare Capital. The transaction was done at a post-money valuation of $50 million. This external and independent endorsement of Biomica validates our belief in Biomica's long-term potential. Biomica's leading product candidate, BMC128, is for the treatment of immune oncology patients, now in phase one clinical trial. The trial, conducted in Israel at the Rambam Healthcare Campus, aimed to evaluate BMC128 safety and tolerability, alongside BMS Opdivo. Immune therapy for respiratory patients with NS-CLC, melanoma, or RCC. The trial is planned to include 10 to 12 patients, and until now, six have enrolled. In August, Biomica opened a second site in Israel at the Davidoff Cancer Center to open the trial to additional potential patients. In addition, this quarter, Biomica reported positive and trim results for its IBS program's preclinical studies. The studies were performed in a collaboration with the lab of Professor Kera Gross-Margolis at NYU and demonstrated the efficiency of Biomica's live bacterial consortia BMC426 and BMC427 in reducing visceral pain, a major IBS symptom. Given the limited options for IBS treatment, and a significant unmet need. These findings present promising new treatment possibilities. Biomeca intends to further assess BMC426 and BMC427's efficiency in additional preclinical studies in the near future in preparation for its clinical trials for IBS. The second subsidiary which is also using Evogen MicroBoost AI tech engine, is Labibio, developing next-generation ag-biological products. In addition to Evogen's majority ownership, we are happy to emphasize that Labibio has two additional major shareholders, Corteva, a public multinational ag-tech giant, and ICL, a public global mineral and an ag tech company, which last year made a $10 million investment into La Vie Bio under a safe agreement. In addition to equity investment, Corteva and ICL are also collaborating with La Vie Bio on the development of novel ag biologicals. In July, La Vie Bio announced that it entered into another licensing agreement with Corteva. The agreement grants Corteva exclusive rights to further develop and commercialize two of La Vie Bio's lead biofungicide product candidates, LAV311 and LAV312, targeting fruit rot. The agreement follows two years of independent field validation trials conducted by both companies. La Vie Bio is set to receive an initial payment of approximately $5 million into installment, and will also be eligible for additional future milestone payments and royalty from Porteva's sales of those future products. Stay tuned to hear directly from Levy Bio's CEO, Amit Noam, as he shares in-depth insights into this remarkable achievement and other ongoing activities. Now, I would like to review Act Plans. our subsidiary leveraging the KEMPATS AI tech engines. ActPlanus aims to discover next-generation innovative crop protection products, including herbicides, insecticides, and fungicides, and commercialize them through collaboration with world-leading partners. Major ag-chemical companies, such as BASF, Bayer, Corteva, and Syngenta, dominate today's crop protection industry. They look to smaller ag-tech companies like ACPLANUS to discover new target proteins and small molecules that inhibit such target proteins, serving as the active ingredient in commercial crop protection products. ACPLANUS is exactly the company that addresses this need, and it explores partnership with these major industry players. The need for new crop protection products is enormous. due to their growing resistance of pests and weeds to existing commercial solutions. Herbicide resistance weeds today are flourishing, and there has not been a new commercial herbicide with a novel mode of action for over 30 years. AgPlanus looks to change that. There is a growing interest in AgPlanus' product pipeline, especially in our lead target protein, APTH1, and the small molecules that bind to this protein as candidates for a novel herbicide with a broad weed control spectrum. We hope to update in the future on strategic collaboration based on APTH1. As I mentioned earlier, the new application, TargetSelector, that is now part of our campus AI tech engine, which serves as the infrastructure of ACK Planus' technology platform, We allow the company to accelerate and improve the identification of novel mechanism of actions for pesticides. I expect that this significant advancement will better position Act Planus to forge strategic partnerships with industry leaders. Lastly, I would like to congratulate Dr. Adrian Percy on joining the Act Planus Board of Directors. Dr. Percy is a highly accomplished agricultural scientist with over 20 years of experience in the industry. Dr. Percy also serves as a member of Evogen's board of directors since 2019. We wish all of us good luck. Before I move on, I would like to encourage you to review Agplanus' new presentation, available on Agplanus' and Evogen's websites. I will now review the activities of Castera and Canonic, our subsidiaries that utilize Evogen's generator AI tech engines as their main technological advantage. Starting with Castera, which reached a major milestone in the last quarter, Castera focused on developing an integrated solution to enable large-scale commercial cultivation of castor beans, through its unique elite seed varieties. The goal of Castera is to address the global demand for a stable cultural oil supply, mainly for the biodiesel industry. The past few months were pivotal to Castera. Our vision of becoming a major player in the biodiesel industry progresses with seed orders from a world-leading energy and gas company totaling $11.2 million for castor cultivation in Africa to support the growing demand for biodiesel. This is just the beginning. For more details on Castera's activity and its impressive achievements, we will later hear from Castera's CEO, Eyal Ronen. Moving on to Canonic, which focused on developing best-in-class medical cannabis products using Evogen's generator AI tech engine. As we disclosed in our previous analyst call, Canonix's main targets for the near term are to grow its cannabis sales in Israel, benefiting from its elite unique strains, while significantly reducing Canonix's expenses. As Canonix's go-to-market strategy includes out-licensing to third-party the commercial growth of the cannabis strain toward the final product, it is crucial to select subcontractors that have the right skills and expertise to maximize the genetic value of canonic strains meeting the premium market criteria. To this end, during the past month, the company has been evaluating and negotiating with various subcontractors, including growers outside Israel, and indoor growth facility. We hope to update on this matter in the coming months. I would now like to address the successful completion of Evogen's latest capital raise. On July 17th, we raised $8.5 million through a registered direct offering from institutional investors, including SilverArk Capital Management, Altium Capital Management, LP, and CVI investments. While within the whole Evogen group, we do have a substantial amount of funds, a significant portion is assigned to the subsidiaries. The additional funds raised for Evogen itself will now allow more financial flexibility, strengthen our position, and will ensure continued growth as planned. For more details on Evogen's financials, we will later hear from Evogen's CFO, Yaron Eldad. To wrap up, the second quarter of 2023 has been an exceptional period of achievement in the Evogen group. And in my view, it is a pivotal point in the transformation Evogen is going through, which started with the creation of our three AI tech engines. Announcing purchase order in the accumulated amount of $11.2 million for Castera's castor seeds. Licensing agreement between Labibayo and Corteva, which includes an upfront payment of $5 million, milestone and royalties. Closing a financial round for Biomica on the amount of $20 million. And last but not least, receiving the trust of high-quality investors demonstrated by purchasing 8.5 million ordinary Evogen shares in our recent financing round, all happening in a relatively short time, signals a clear message that Evogen is on the right path of success. I will now hand over to Amit Noam, Laveen Bio's CEO, who will be followed by Eyal Ronen, Castera's CEO, and finally, Yaron Eldad, Evogen's CFO, who will elaborate on the latest Evogen fundraising and our financial results for the second quarter. Amit?

Hello, everyone. I'm delighted to be joining Evogen's earnings calls for the first time. It has been an incredible journey over the past four months since I joined La Vie Bio as the company's CEO. I've had the pleasure of meeting a remarkable group of people and talents, and I'm confident that together we will drive La Vie Bio to new heights in our business endeavors. I want to express my gratitude to Evogen's CEO, Ofer, his management team, and the entire Levy Bio board of directors for their warm welcome and unwavering professionalism. Thank you all for your support. I would like to update you on three of Levy Bio's main achievements in the last quarter and provide some insights into our future plans. One, the commercial progress of our first product, Trivus. Second, the licensing agreement with Corteva for two of our leading biofungicide candidates. And the third, the advancement in our product pipeline. Back in May, the company updated that it had received regulatory approval from the Canadian Food Inspection Agency for its bioinoculant seed treatment, Trivus. This approval triples the product sales territory, expanding its global reach. Tribus, which increases hard red spring wheat production by enhancing soil nutrient availability and efficiency while mitigating environmental stresses, has already demonstrated its efficacy in the U.S., with an average of 3 to 4 bushels per acre yield increase, providing a 4x return on investment for farmers. La Vie Bio plans to extend tribal supplication to other crops in the near future. The product, developed using La Vie Bio's BDD platform, powered by Evogen's MicroBoost AI tech engine, exemplifies the company's commitment to sustainable agriculture and enhancing productivity for farmers worldwide. Recently, we announced that Plavib Bio successfully entered into a strategic licensing agreement with Corteva. This significant agreement grants Corteva exclusive rights subject to reaching certain commercial milestones to further develop and commercialize Love 311 and Love 312, our promising lead biofungicide candidates which target fruit rots. These candidates were originally discovered and developed by La Vie Bio, showcasing our commitment to innovative solutions in the ag biological industry. As Ofer mentioned, in the frame of this collaboration, La Vie Bio is set to receive an initial payment of approximately $5 million U.S., In addition, we are eligible for additional milestone payments in the future based on achieving certain patent rights and regulatory approvals. Most importantly, this mutually beneficial agreement also allows us to receive royalties from Corteva's sales of these future products. We are thrilled about this strategic partnership and confident that Corteva's proven capabilities in the ag-biological space will help propel our lead biofungicides, LAV311 and LAV312, towards commercial success. This agreement aligns perfectly with La Vie Bio's vision to provide farmers with environmentally friendly and sustainable tools that effectively combat fruit rot, a highly destructive disease causing substantial annual losses in the agriculture sector. In the second quarter, we continue to advance six additional programs in our pipeline, showing satisfactory progress. We also refined the company's strategy of being a leading ag-biological product development company with the goal of consistently and repeatedly bringing high-quality, commercially viable ag-biological products to the market that are competitive in performance to the synthetic chemical solutions but superior in their sustainability benefits. These product programs will support our two go-to-market strategies, direct sales by La Vie Bio, like we're doing with Trivis, and licensing agreement and collaboration, like the one we just signed with Corteva. I'm excited about the future of La Vie Bio and our commitment to supporting farmers worldwide with cutting-edge solutions. Thank you for your continued support, and I look forward to updating you on our progress in the future. Thank you all, and now Eyal Ronen, Castera's CEO and Evergen's EVP business development, will provide his update.