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Evogene Ltd.
3/6/2025
Welcome to Evigen's fourth 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. As a reminder, this conference is being recorded March 6th, 2025. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evigen's management will constitute forward-looking statements that relate to future events. This presentation contains forward-looking statements relating to future events. And Evigen LTD, the company, may from time to time make other statements regarding our outlook or expectations for future financial or operating results and or other matters regarding or affecting us that are considered forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. And other securities laws as amended 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 our value drivers, commercialization and production efforts, and timing product development, and launches, estimated market sizes and milestones, pipelines as well as our capabilities and technology. 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. Therefore, actual future results, performance, or achievements and trends in the future may differ materially from what is expected 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 and those risks described in greater detail in Evagen's annual report on Form 20F and in other information Evagen files and furnishes with the Israel Securities Authorities and 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 or offer to sell or any solicitation of any invitation or offer to purchase or subsidize for any securities of Evagen or the company, nor shall the information or any part of it or the fact of its distribution form, the basis of, or be relied on in connection with any action, contract, commitment, or relating thereto or to the securities of Evagen or the company. The trademarks included herein are property of the owners hereof and are used for reference purposes only. Such use should not be construed as an endorsement of our products or services. With us on the line will be Yaron Eldad, CFO of Evagen and Ofer Chaviv, President and CEO of Evagen. Now I will turn the call over to Ofer Chaviv. Mr. Chaviv, please go ahead.
Good day, everyone. In today's conference call, I would like to begin by welcoming Neerle Mordi as Evagen's new chairman of the board. I will continue with a review of the financial and business highlights for the first quarters and the entire year 2024, followed by an overview of Evagen's current activities. I will then conclude with our subsidiaries' targets for 2025. After my remarks, Yaron Eldad, Evagen's CFO, will provide financial update on Q4 and the entire year 2024. We will then open a Q&A session. Today, Evagen formally announced a change in the chair position in which Neerne Mordi, who served as a board member for the past two and a half years, will now serve as an active chairperson, replacing Sarit Firon, who will now act as a board member. I warmly welcome Neerne Mordi as Evagen's new chairman of the board, and I'm looking forward to closely working alongside him. I would like to use this opportunity to thank Sarit Firon for guiding Evagen's board and management over the last three and a half years, and I'm looking forward to have continued support of the company as a board member. Neerne Mordi is here with us, and I ask him to say some introductory words.
Thank you, Ofer. I'm honored to assume the role of chairman and would like to thank Sarit for her valuable contributions. I'm happy she will continue in her capacity as a board member. I'm really excited about the opportunities that lie ahead for Evagen. We believe that the company holds several assets and subsidiaries with potential to generate significant value for both Evagen and its shareholders. I would like to emphasize this last remark again. We're committed to unlocking this value within this year and anticipate achieving it in a capital-efficient manner. Evagen has been at the forefront of leveraging advanced computational capabilities to drive product innovation for the past two decades. With the growing potential of AI, we plan to further expand our expertise to accelerate the drug discovery process and maximize the value we bring to this field. Lastly, I have spent the last 25 years in the life science space and was instrumental in generating significant shareholder's value in both public and private companies. I'm eager to get started to do the same with Evagen's team. Thank you. Thank you, Neerne, and I wish
us great success. I would now like to focus on the financial and business highlights of 2024 and the beginning of 2025. In the year 2024, total revenues reached approximately $8.5 million compared to $5.6 million in the year 2023. The increase in revenues in 2024 is mainly due to an increase in Act Planus, revenues from its collaboration with Bayer, and an increase in Castera's seed sales. In Q4 of 2024, total revenues reached approximately $1.6 million compared to $0.6 million in Q4 2023. The increase in revenues in Q4 2024 is mainly due to the increase in Castera's seed sales. The main reason for the lower revenue in Q4 2024 compared to expectation is the change in the delivery schedule of Castera's seeds from 2024 to 2025. In the entire Q4 2024, Castera delivered only 76 tons, while in February 2025 alone, the company already delivered 250 tons of cassow seeds. In entire 2024, Castera delivered approximately 215 tons of cassow seeds in total, while as stated, just in February this year, company delivered already 250 tons, which reflects solving the bottleneck in seed production the company previously faced. That caused a delay in the delivery schedule and consequently a price adjustment. Castera is expected to continue delivering cassow seed, many from its existing inventory, which currently consists of 400 tons, to its partner throughout 2025, based on a new schedule and new orders to be received, some replacing previous 2023 orders, following discussion with our partners. In year 2024, total R&D expenses were approximately $16.6 million compared to $20.8 million in year 2023. In Q4 of 2024, total R&D expenses were approximately $3.4 million compared to $5.5 million in Q4 2023. These decreases are mainly due to the end of Canonic's activity in Q2 2024 and a decrease in Biomica's and LaVie Bio's R&D activity mainly in Q4 2024. During Q4 2024 and the beginning of 2025, Evogen established an expense reduction plan that led to a reduction in headcount, which will be completed by Q1 2025 of approximately 30%. The effect of this plan will be reflected starting Q1 2025. In year 2024, total G&A expenses were approximately $7.4 million compared to $6.1 million in year 2023. G&A expenses in 2024 included one-time expenses of approximately $1.5 million resulting from Evogen's fundraising and an allowance for debtful debt of one of Castella's seed suppliers. Operating expenses in 2024 includes other expenses, totaling of $0.5 million occurring in Q1 due to the end of Canonic's activity. Now, I would like to highlight the main achievements made by the Evogen Group in 2024 and up to date. Starting with Evogen, in October 2024, Evogen collaborated with Google Cloud to pioneer a generative AI foundation model for novel small molecule design. This is a reflection of the evolution of our efforts to advance campus AI for drug discovery. Now, let's move to Castella. During 2024, Castella delivered to its partner approximately 215 tons of Castle Seed with 76 tons delivered in Q4 2024. In February 2025, as I mentioned, Castella already delivered to its partner approximately 250 tons of Castle Seeds. Castella expects to continue supplying Castle Seeds during the coming month for new orders receiving in 2025, replacing some of the orders from 2023, many from existing seed inventory, currently amounting to approximately 400 tons. With regard to seed production in Africa, in October 2024, the company reported achieving a key milestone in its operational expansion with the completion of first shipment of over 100 tons of Castle Seeds grown and processed in Kenya. In February 2025, it complete the current harvest season supporting current and future demands. Continuing with seed production in Brazil, in July 2024, the growing and harvesting season was completed, the seed shipment from Brazil was initiated in 2024 and will continue into 2025. In Q1 2025, Castella initiated proof of concept trial for Castella grain farming in Africa and Brazil using new commercial growth protocol. The grain will be used for oil production, which can open a new commercial horizon for Castella as a provider of grain to the Castella oil industry, in addition to its current activity as a seed supplier. Continuing with LaVeb Bio, in February 2024, LaVeb Bio signed a new collaboration agreement with Syngenta to discover and develop novel bio insecticides. In July 2024, ICN and LaVeb Bio achieved a significant milestone in their collaboration developing yield increasing bio stimulants for row crops, for seed production, under extreme weather conditions. The company reported on the commercial expansion of Yalos to winter wheat in July 2024 and to soybean in November 2024. Initial sales for soybean are expected in spring 2025. In November 2024, LaVeb Bio reported the advancement of LaVeb 321, a bio fungicide targeting downy media to pre-commercialization following successful field trial results. Moving to ACPLANUS, in February 2024, a new collaboration agreement was signed with Bayer to develop a new sustainable weed control solution. In March 2024, ACPLANUS achieved a myosin-wisc corteva in an existing collaboration agreement for novel herbicides. In February 2025, ACPLANUS announced the discovery of a new mode of action for fungicides against Sectoria in wheat. I will end this part with Biomica's highlights. Phase one of the clinical study for microbes-based therapeutics, BMC 128, which started with 11 patients, is nearing completion with a prolonged positive response of five patients, four of whom are still active in the study. Biomica received positive feedback from the FDA following a pre-IND meeting at the beginning of 2024. The IND submission is expected in Q3 2025. I will provide more details on the target for 2025 for each subsidiary later in the presentation. I would like now to focus on Evogen's overview and our main targets for 2025. Our vision is to position Evogen 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 -the-art computational technologies. This approach led the development of our three proprietary tech engines, each designed to drive the effective discovery and optimization of life science products. Our AI-driven tech engines offer a strong value proposition by effectively identifying and optimizing the most promising candidates. This increases the potential for the future in developing successful products within competitive timeline and in cost-effective manner. Our tech engines were strategically designed to align with the best potential across multiple market segments, rather than being confined to a single area. While this technology holds exceptional promise, each market segment demand specialized expertise for product development alongside significant financial resources and advanced development and production infrastructure. 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 agreements with companies that bring domain-specific knowledge. Through those strategic alliance, we aim to co-develop innovative products. The upside for Evogen steams from revenue sharing mechanism of the end product or through equity holding in the company developing the end product. Here is a current snapshot of our business model. Evogen currently owns four subsidiaries companies, each focused on a specific market segment. In market segment not covered by our subsidiary, we have established collaborations with external companies. This slide highlights the commercial and financial partners engaged with the Evogen group. We are very proud of the progress and achievement we have made to date. I would like to share with you Evogen's prospects for the near future. As mentioned earlier by Neil, we now intend to direct our efforts to develop a more capital efficient model to generate greater value by focusing further on the use of our campus AI in the field of AI powered drug discovery. Accordingly, we intend to focus on enhancing campus AI tech engines competitive advantage for the farmer market segment. An example of such efforts is the development of the foundation model in collaboration with Google Cloud. In the near term, we expect those efforts to manifest in collaborations with mid-size biotech companies and academic institutions for small molecules drug discovery. I hope we will be able to enhance such collaboration later this year. With respect to microboost AI and generator AI, we intend to continue the support and development of those tech engines based on the needs of our subsidiaries with their funding. With respect to Evogen subsidiaries, our intention is to focus on creating exit events for Evogen with respect to part of our subsidiaries. Such an event is expected to inject funds to support Evogen's activities. Strains Castella's position as a profitable world leader in the cluster oil market. Since Evogen holds 100% of the company, we intend to use its profits to support Evogen's activities as well. Evogen will also support subsidiaries' efforts in their strategic fundraising activities. Part of the fund will be used by the subsidiaries to finance the development of Evogen tech engines according to their needs. These strategic guidelines are expected to strengthen Evogen financial position. Through focus on a single tech engine and implementation of our expenses reduction plan, we expect to substantially lower expenses and through exit events, dividend and technology license payment, we anticipate enhancing Evogen's financials. As stated earlier, in the near future, we intend to invest significant resources and efforts in developing campus AI for the drug discovery based on small molecules for the pharma industry. In the following slides, I will elaborate on our motivation. We believe that now is the time to invest in small molecules drug discovery, utilizing computational technology with a focus on AI for the following reason. First, discovering the right small molecules that can serve as a drug is like finding a needle in a haystack. This has been a major challenge facing the pharmaceutical industry for decades. Second, addressing this challenge has the potential for a significant financial impact on the company that offers a solution. Today, we are on the brink of technological singularity. Advancement in computational technology enabled the discovery and optimization of small molecules candidates, addressing multiple development requirement for a successful drug. The latest development in AI allow for the generation of innovative small molecules that can address the urgent need for novel drugs in the pharmaceutical industry. The pharmaceutical industry is willing to invest in novel breakthrough technology that could potentially provide solution to its pain point. To summarize, from Ibojen's perspective, given its two decades of computational biology expertise, its natural evolutions to use its existing and new available computational tools to impact the drug discovery field. Here I present just a few of the recent examples for multi-millions agreements between competition companies and global pharma. We are now targeted to showcase our differentiated technology offering in this space to attract meaningful collaboration with biotech and pharma companies. In the past, we have shown our ability to partners with global ag leaders, such as Bayer and Corteva. We will now turn our focus to the drug discovery space and we expect that the convergence of our existing campus AI engine and new computational tools will prove rewarding. If you ask yourself if Ibojen can be a significant player in this market of AI for pharma, the answer is clearly yes. Over the years, we have established internal advanced AI capabilities to develop proprietary machine learning and deep learning algorithms, enabling us to create a cutting edge AI applications that drive our tech engines. Our highly skilled algorithms teams consistently develop innovative and successful AI solution reinforcing our leadership in the field. Everything we develop for campus AI in the past years, which until now was successfully implemented in agriculture alone, is relevant and applicable for small molecule drug discovery. In this slide, we listed the main capabilities and differentiators of campus AI for drug discovery, uniquely positioning Ibojen to initiate discussion with potential partners. I would like to focus on one of our exciting technology differentiators, the foundation model we are developing in collaboration with Google Cloud. This proprietary AI model will provide a solution to the need for novel small molecules, as I mentioned earlier. After training on 14 billion data points, this model will generate brand new undiscovered chemical entities with properties that address product requirements. At present, Ibojen has established an internal business development team focused on creating partnerships with biotech and pharma companies to support their development efforts of small molecules based drugs. The map points to origin countries of companies we are currently in initial contact with. We expect some of these to materialize into collaboration agreements, and I will be happy to disclose such information when it matures. Let's move on to review our subsidiaries' main targets for 2025. I would like to begin with Kastera, Ibojen's wholly owned subsidiary focused on developing an integrated solution for the large scale commercial farming of Kaster, leveraging its unique elitist varieties. Kastera's solution is designed to meet the global demand for a stable Kaster oil supply, primarily for biofuels and bio-based products. The company is utilizing the Generator AI tech engine to drive and accelerate the development of its distinct elite Kaster seed varieties. The company's main target for 2025 includes increased in Kaster seeds revenue in Africa and initial sales in Brazil and other territories, initiation of proof of course trials for grain farming with a tier one partner in Kenya or Brazil. These trials will allow Kastera to explore a new commercial horizon as a provider of grain to the Kaster oil industry in addition to its current activity as a seed supplier. Kastera will develop new varieties and advance at least two new lines to the pre-commercial phase. It also aimed to develop a solution for using rising quantity in milk to be used as organic fertilizer. Kastera also expects to strengthen and improve seed production facility in Kenya and Brazil. It is clear that year 2024 was very significant for Kastera and we are looking with anticipation to its continued expansion in 2025. Continue with LaviBio, a global leader in developing next generation agbiological product powered by the Microboost AI tech engines. LaviBio main targets for 2025 include a new collaboration agreement for fungicide and increase in the sets of YALOS, its commercial bioinequivalents and in its existing collaboration with ICL for biostimulant and with Corteva for biopesticides, the company is expected to reach R&D milestones. Next, I would like to review the main targets for 2025 of AgPlanus, a company specializing in the development of novel and sustainable crop protection products, utilizing Evogen campus AI tech engine. Targets include milestone achievement in the collaboration with Corteva for herbicides, execution of the work plan in the collaboration with Bayer, discovery of small molecules with new mode of action in the Soptoria program and a new collaboration agreement for fungicide in same program. AgPlanus is benefiting from the progress Evogen made in 2024 in its campus AI tech engines and will continue to leverage Evogen investment in this engine in the future to accelerate company growth. Now, turning to Biomica, which specialize in developing microbiome-based therapeutics for human health, powered by the Microboost AI tech engine. At present, as already stated, Biomica is primarily focused on advance its immune oncology program with its lead candidate, BMC 128. The phase one clinical study is nearing completion with positive results observed in the five patients showing prolonged response. The main targets for Biomica for 2025 are to complete phase one study in the oncology program, obtain full results and additional supporting clinical data, submit IMD application to the US FDA, and obtain FDA approval for the phase two study. In addition, the company initiated in 2024 two new programs, obesity and longevity. The main target for these programs is to complete discovery and in vitro validation and seek partners for collaboration. This concludes my part in this call. And now, Yaron will continue with the CFO update. Yaron?
As of December 31, 2024, Evogen held consolidated cash, cash equivalents, and short-term bank deposits of approximately $15.3 million. The consolidated cash usage during the fourth quarter of 2024 was approximately $4.6 million. Excluding LVBio and Biomica, Evogen and its other subsidiaries used approximately $1.5 million in cash during the fourth quarter of 2024. Cash usage for 2024, excluding LVBio and Biomica, was approximately $10.4 million, marking a notable 17% decrease from approximately $12.5 million in 2023. Revenues for the 12 months of 2024 were approximately $8.5 million, an increase from approximately $5.6 million in the same period the previous year. This growth was primarily driven by revenues recognized from AgPlanis' new collaboration with Bayer and increased Castera's revenues for the supply of Castor seeds during the period. Revenues for the fourth quarter of 2024 were approximately $1.6 million, compared to approximately $0.6 million in the same period the previous year. The increase was mainly attributable to the increase in Castera's seed sales and the collaboration with Bayer, as mentioned above. Research and development expenses net of non-refundable grants for the 12 months of 2024 were approximately $16.6 million, a significant decrease from approximately $20.8 million in the 12 months of 2023. The decrease in expenses is mainly due to the cease of Canonic's activities and a decrease in certain development expenses in Biomeca, Evergen, and Lavee Bio, as compared to the same period the previous year. Research and development expenses net of non-refundable grants for the fourth quarter of 2024 were approximately $3.4 million and decreased as compared to approximately $5.5 million in the same period in the previous year. The decrease is mainly attributable to decreased expenses in Lavee Bio, Biomeca, Evergen, and the cease of Canonic's operations, as mentioned above. Sales and marketing expenses for the 12 months of 2024 were approximately $3.4 million, a slight decrease from approximately $3.6 million in the same period in the previous year. Sales and marketing expenses for the fourth quarter of 2024 were approximately $0.7 million, a slight decrease from approximately $1 million in the same period in the previous year. The decrease is mainly due to the cease of Canonic's activities. General and administrative expenses for the 12 months of 2024 increased to approximately $7.4 million from approximately $6.1 million in the same period of the previous year. The increase is mainly attributable to expenses recorded in Castara due to a provision on a doubtful debt of a SIP supplier and transaction costs related to Evergen's fundraising that occurred in August 2024, totaling approximately $1.5 million. General and administrative expenses for the fourth quarter of 2024 increased slightly to approximately $1.4 million compared to approximately $1.2 million in the same period of the previous year. The decision to cease Canonic's operation in the first half of 2024 resulted in other expenses of approximately $0.5 million, mainly due to impairment of fixed assets in the first quarter of 2024. The operating loss for the 12 months of 2024 was approximately $22.2 million, a decrease from approximately $26.5 million in the same period of the previous year, mainly due to increased revenues and decreased research and development expenses offset by increased general and administrative expenses and other expenses as mentioned above. The operating loss for the fourth quarter of 2024 was approximately $4.6 million, a decrease from approximately $7.6 million in the same period of the previous year, mainly due to increased revenues and decreased research and development expenses as mentioned above. Financing income net for the 12 months of 2024 was approximately $4.2 million compared to approximately $0.5 million in the same period of the previous year. Financing income net for the fourth quarter of 2024 was approximately $4.6 million compared to approximately $0.3 million in the same period of the previous year. The increase in financial income net during the 12 months period and the fourth quarter 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 statements of financial position were initially recorded at fair value and subsequently remeasured at each reporting period using the Black and Schultz option pricing model. As a result, during 2024, the company recorded net financial income related to pre-funded warrants and warrants of approximately $3.4 million. The net loss for the 12 months of 2024 was approximately $18.1 million compared to approximately $26 million in the same period of the previous year. The net loss for the fourth quarter of 2024 was approximately $5,000 compared to approximately $7.3 million in the same period of the previous year. The $7.9 million decrease in net loss for the 12 months of 2024 as compared to the 12 months of 2023 was primarily due to increased revenues, decreased research and development expenses, and increased financial income, net related to warrants, offset by increased general and administrative expenses as mentioned above. The $7.3 million decrease in net loss for the fourth quarter of 2024 as compared to the fourth quarter of 2023 was primarily due to increased revenues, decreased research and development expenses, and increased financial income, net related to warrants, as mentioned above. Operator.
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please use the chat button located at the bottom of your screen. Please type your full name and your company's name before the question. The first question is from Ben Cleve of Lake Street Capital Markets. You typically release cash burn guidance, but did not do so today. What is your expected cash burn for 2025? And if you are not able to disclose, can you please explain why?
Hi, Ben. This is Yaron. We're happy to have you on the score with us. And thank you for your question. Our expected cash burn for 2025 from operations is expected to be between six to $7 million. This amount does not include any cash that will come in from selling one or more of our subsidiaries.
The next question, also from Ben Cleve. You describe exit efforts for your subsidiaries more today than you commonly do. How advanced are these efforts? And how many subsidiaries are under consideration for an exit?
Ben, hi, this is Ofer. And of course, like Yaron said, we are very happy to have you with us. I can't disclose much about where we are standing in the process, but I think from the fact that both Neon and Brody, our new chairman, and me are putting a lot of focus on this aspect, on how we're going to fund the company in the future. I think this is very clear that we are putting a lot of efforts and emphasis in advancing to achieve those targets. I'm very happy that our subsidiaries create a real interest in the ag industry. The current situation in the industry is not great, but still, because of the quality of our subsidiaries, we see a nice level of interest in what these companies are doing, definitely for collaboration, but also maybe for more strategic opportunity. So again, I can't disclose much, but probably we won't mention it the way we mentioned it if we didn't feel that something like this might happen in the reasonable future.
A further question from Ben Cleave. You noted an expectation for initial sales in Brazil at Castara in 2025. Please elaborate on, one, this expected to be from sale of seed or oil, and two, what line of business your potential customer is in? Refiner, grain, processor, other.
So with respect to this question, as we disclosed in the past, we have two seed production sites, one in Brazil and one in Kenya. No doubt that during 2025, most of our efforts was focusing on Kenya, and this is where today we hold the majority of our seed inventory and where we are doing most of the activity. Still, we have seed production sites in Brazil, and we also have seeds, as part of our inventory, it's currently located in Brazil. And what we are planning for 2025 is both seed sales, and we have a sales team on site, but we also are planning to conduct POC field trials to demonstrate the quality of our variety in advanced gross protocol, and we believe that this could generate, I don't know if this year, but definitely next year, can generate revenue from selling of grain. Currently, the market in Brazil and also in Kenya, there is a huge demand for castor grain, so almost everything that you can grow, you can sell, but of course the question is, you need to compare the amount of money you need to invest in growing the crop compared to the price of the grain. And this is the challenge, we believe that our variety with the gross protocol that we develop can generate a nice margin for everybody in this process. So to answer your question, this year, yes, definitely we are focusing on seed sales, but also we start activity with respect to grain sales, and here we are talking with Crashing Factory, there is few of them in Brazil, and we are in good relationship with all of them.
The next question from Brett Reese of Jenny Montgomery Scott, what is the base case sales goal for Yalos spring wheat and soybeans?
We didn't disclose this information. What I can say is that we see growing interest from previous year with respect to spring wheat, but what we are even more feeling positive about is that selling Yalos for soybean grower, it seems to be easier from selling it to the wheat grower, mainly because the margin on soybean is much higher compared to wheat, and the enthusiasm of the grower to use a different type of product to increase yield is higher compared to wheat. So I can't disclose more because we are really in the penetration period, and we feel that it will be, it's hard to predict, but it will be better than previous year.
The next question from Scott Henry of AGP, how should we think about the magnitude of caster sales in 2025? Would you expect Q125 to be the largest quarter? How long is the shelf life of caster seeds?
I will start with the last question. The shelf life of caster seed is three, few years, and this is why we feel comfortable to produce caster or the inventory. So the 400 tons, we can keep them for quite a while, but of course we are hoping to sell most of it during this year or the beginning of next year. With respect to how should we expect to queue for Q1 2025, again, there is always the question, are we referring just to castara or are we referring to all of the important group? Because we have other subsidiaries that generate revenue, and this is a little bit hard to address because there could be, and we are targeting, and generate additional revenue through the other subsidiaries. But with respect to castara, first quarter, it will be definitely, as we already disclosed, that we deliver 250 tons, so it will be a nice quarter for castara, but I'm not expecting this will be the strongest quarter for the company till the end of the year. So there is more to expect coming from castara in 2025.
A further question from Scott Henry, for the agricultural line, what should we expect for milestones in 2025? Can you add color to the magnitude of the timing?
So I think that I was trying to disclose the answer to this question through a very detailed the targets of each subsidiary for 2025. So I think that we try to emphasize what we expecting from castara for 2025, and we already start to disclose part from the achievement in the first quarter. We just now finished February, which is really the beginning of the year, but still we start this year in a positive way with castara. And we have some expectation also from the other subsidiaries in the field segment, in the ag segment, Labibio and Ag Planos. I think that we have a very strong pipeline, and as I mentioned earlier, they succeed to create a very nice interest based on their performance during 2024. And I think that they are some ongoing discussion already on potential future collaborations. And as I said, you can see almost everything in the very detailed target for 2025 as we release today.
The next question, a follow-up from Brett Reese. What do you think the structure of the relationship between your possible joint venture partner in producing oil, 50-50, or do they take the risk of financing and execution and we take back a royalty?
So currently when we are talking about using our seeds in order to grow cast or per grain, so we are taking the responsibility on the seed production and the cultivation itself, the farming itself. And then we are selling the grain and we grow under an off-take agreement. We are not growing just because we already know to who we are going to sell the grain. And we also agreed on what's going to be the price. So we know exactly how much we are going to get for every ton of cast or grain that we are going to get. We don't take any obligation or responsibility on the seed, on the crashing of the grain into oil. This is definitely not during 2025. So, and this year it's going to be a proof of concept. We are targeting, we already initiate, as we disclosed, the first season in Kenya and we might, and based on the result that we are going to get, we might expand this activity in the second season, started in September this year. So I hope that I disclose a little bit more about the structure that we are targeting, but this is just the beginning. I can imagine in the future, many different structure, but the risk on Castella slash Evogen is very limited.
The next question, a further question from Scott Henry. Expense items SG&A and R&D were lower in Q4 2024. Are these levels reflective for what we should expect in 2025 or is there another step down?
First, I would like to say, and I'm just mainly focusing on answering the question. So I'd like to thank, of course, to Scott and Rhett in joining to this call. So once again, thank you for your interest in Evogen. With respect to the following question, so I would like to say the following. Putting aside Biomica, that this company, because of the structure of activity that if they initiate a clinical trial or they start to produce their product for clinical trial, which then it's have a quite significant effect on the P&L, the consolidated P&L. So I think that what we saw in Q4, it's going to present what we are going to see also in 2025 and might even be an additional decline in the company expenses. So yes, and I think that we also disclose this information in our press release today that we start a process of reducing our head count, that it will be completed in Q1, at the end of Q1. So we are going to see continue in expense reduction in Q1 compared to Q4 2024, and maybe even more in Q2 2025.
There are no further questions at this time. Mr. Khabib, would you like to make your concluding statement?
Yes, I would like to thank everybody for joining to this call. We finish year 2025, 2024, it wasn't an easy year, but the thing that still the numbers show that the company continue with its progress. You can see it in the increase in the revenue. You can see that in the decline in the expenses. I think that our subsidiary is now in a great position so it can allow us to do the next step and capture the value on our investment in this subsidiary. And I'm looking forward to continue our discussion and continue to share with you our progress in the upcoming analyst call.
Thank you. This concludes Evogen's fourth quarter 2024 results conference call. Thank you for your participation. You may go ahead and disconnect.