Ladies and gentlemen, thank you for standing by. Welcome to Evogene's First Quarter 2023 Results Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded, May 18, 2023. Before we begin, I would like to caution that certain statements made during this earnings conference call by evidence management will constitute forward-looking statements that relate to future events, risks and uncertainties regarding business, strategy, operations and future performance and results of Evergene. I encourage you to review Evogene 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 they are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For example, Evogene is using forward-looking statements in this call when it discusses the results of Biomica Phase I clinical trial for its immuno-oncology microbiome drug candidates. BMC333's progress to Phase I clinical trials, BMC426-advance in its preclinical trials, Lavi bio's expansion sales into Canadian and European markets and introduction of new crops like small grains and oilseeds, registration of Lavi Bio on the side for fleet rock and powered with a U.S. EPA and LAV321, further field trials. Potential collaboration of AgPlenus’ with respect to its APH1 candidate, achievement of first milestone in AgPlenus' collaboration with Corteva, the nomination of new protein targets and achievement of greenhouse readout in its weak brnach fungicide program, Canonic goal to expand second-generation product sales and receipt of royalty payments from variety licensing, Cortera's territorial expansion and increased sales, the potential commercial value of the product of the AGC division's Grant Program. All forward-looking statements made herein speak only as of the date of the announcement of results. Many of the factors that impact web forward-looking statements will come true are beyond the control of Evogene and may cause actual results to differ materially from anticipated results. Avogene 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. That said, I would now like to turn over the call to Rachel Tamara, Evident's Head of Investor Relations. Rachel, please go ahead.

Welcome to Evogene's earnings call in the first quarter of 2023, and thank you all for joining us. My name is Rachel, and I'm the new Investor Relations Director at Eogene. I'm excited to join this innovative team and help drive growth through solid investor relationships and effective communication. Starting the call today is the President and CEO of Evogene Ofer Haviv who will provide insight into our business model and the significance of our technological engines and the life science industry. He will also provide updates on Evogene subsidiaries. Also joining Ofer on today's call are Dr. Nir Arbel, Evogene's Chief Product Officer, who will be discussing some of the recent improvements we have made to Evogene's AI tech engine. Dr. Elran Haber, the CEO of Biomica, Evogene's subsidiary, focusing on developing drugs based on the human microbiome will follow offers review and elaborate on Biomica's activity and achievement. Our CFO, Yaron Eldad will either provide a financial summary and update. But first, it is my pleasure to introduce our main speaker, the President and CEO of Evogene, Ofer Haviv.

Thank you, Rachel, and good day, everyone. Today, I will review Avogene's activities and recent accomplishments and provide you with an update on potential catalysts expected in the near future. I will also discuss some of our subsidiaries recent accomplishments, leveraging our technology and demonstrating the power of the value of our AI-driven tech engine underlying the product development process. As you know, Evogene has been using its Computational Predictive Biology platform, the CPB to divest and accelerate the discovery and development of lifestyle-based products. The CPB is the foundation of our 3 tech engines. Microbot AI supports the discovery and development of micro-based products, campus AI supports small mono-based products and generator AI support products based on genetic elements. Our AI-driven tech engine has addressed the main challenge in life science best product development, finding the winning candidate or candidates out of the vast number of possible projects that addresses a complex merit of criteria to reach successful commercial products. Many potential candidates exist when identifying a specific micro, gene or small molecules. Our AI tech engines helped to find that needed in higher in a way and within a time frame and cost that our competitors or partners may not be able to accomplish and most importantly, increase the provision of success. Around each of our 3 tech engines, Evogene has established a business ecosystem, including independent subsidiaries or strategic collaborations. This focus on developing products for specific life science market segment, benefiting from the tech engine as the main competitive advantage. I'm pleased to introduce Dr. Nir Arbel, Evogene's Chief Product Officer, who is leading the development of our AI tech engine to share with you more information and the latest AI tech engine development accomplishments. Nir?

Thank you, Ofer. As Ofer mentioned, our AI-driven tech engines are designed to serve as a powerful platform for directing and accelerating the discovery and development of life science-based products. During the past year, we invested significant efforts in creating a user-friendly dashboard as the tech engine's primary interface, facilitating seamless navigation across multiple applications within the discovery and development process and the tech engine supports. These apps are sophisticated software applications internally developed to serve 2 purposes. First, they enable predictive outcomes by leveraging advanced outdoor business, supporting the desired product definition to narrow an extensive range of options to a practical number of high potential candidates. Second, they integrate diverse data sources, both internal and from the public domain to facilitate informed decision-making in the R&D processes. We have recently invested in improving our AI tech engine infrastructure, enhancing their efficiency and appeal to prospective partners, and I'll now go into more detail. I will start by describing the improvements made in MicroBoost AI tech engines, which enables the discovery and development of micro-based products for various industries such as health care and active. We have expanded the engine's usability and statistical capabilities, mainly targeting to improve our ability to translate the microbial gene to its functions. For example, by revamping one of our apps, named [indiscernible], Lavi Bio quickly identified several new genes related to bacterial shelf enabling better prediction for commercial attributes early in the discovery process. Moving on to Compass AI tech engine, which facilitates the discovery and development of small molecule oriented products. Notable enhancements have been implemented. Campus AI has undergone a substantial upgrade predominantly focusing on augmenting its automation, scalability and speed. These improvements allow us to amplify the volume of projects undertaken annually, thereby enabling more efficient collaboration with potential partners. This aspect holds particular significance in light of anticipated upsurge in Aquinas project portfolio as well as Evogene's intention to expand the use of Compass AI into the pharma market segment. In conclusion, I look forward to updating you on our ongoing journey of continuous improvement, focusing on enhancing the robustness and attractiveness of our tech engines to cater the need of potential partners seeking to address a wide range of life science discoveries. Our dedicated efforts aim to refine and expand our capabilities, ensuring that we remain at the forefront of technological advancements and providing exceptional solutions for partners in the life science industry. Back to you, Ofer.

Thank you, Nir. Before I review the impressive recent achievements of our subsidiaries, I want to update on potential catalysts we see at the Evogene Group in the near future. Evogene aims to enter into business relationships in new areas of activity not covered through our subsidiaries for product development, leveraging our tech engines. Technological improvements in our AI tech engine strengthened our offering to potential partners and to our subsidiaries meeting the defined milestones by our subsidiaries as listed in the new Evogene presentation published today, thus demonstrating the impact of our AI tech engines and the value of the subsidiaries themselves and raising external funds at the subsidiary level to fund the subsidiary's activity and demonstrate their inherent value as well. With respect to our 5 subsidiaries, they have accomplished multiple achievements from the beginning of this year, and we have several upcoming milestones, which we believe are significant value creators. I want to start with Biomica, which focuses on developing microbiobased therapeutics for human health, leveraging MicroBoost AI. I'm delighted to announce that the $20 million financing round led by the $10 million investment function HAI Healthcare capital has closed. The deal was done at a post-money valuation of $15 million. This external and independent endorsement of Biomica validates our belief in Biomica's long-term potential. For more details on these investments and Biomica's activity and an achievement, we will later hear Dr. Elran Haber, Biomica's CEO. Let's now move to Lavi Bio. Lavi Bio leverages Evogene's MicroBoost AI tech engine to develop next-generation at vertical products. In addition to Evogene's majority ownership, we are happy to emphasize that Lavi Bio has 2 additional major shareholders, Corteva, a New York listed multinational Actic giant and ICL, a New York listed global minerals and active company, which last year…

Thank you, Ofer. I'm glad to update you that Biomica made significant progress last quarter with the closing of a substantial financing round led by Shanghai Halter Capita. FHC's investment is a vote of confidence in Biomica capabilities and the microbrand based therapeutics space. With Evogene, $20 million was invested in Biomica in this round, valuing gas at $50 million. Dr. Jing Bao, a partner at Shanghai Capital that received her PhD from the Whiting Institute of Science in Israel, joined Biomica's Board of Directors. The financing round was signed in December, and in April, it was officially closed after all regulatory approvals were obtained. This investment serves as an external and independent endorsement of Biomica and it marks a significant milestone for us and strategically positions us for growth in the years ahead. Last week, we had the privilege of integrating our new lab and office space. Establishing these facilities is essential to our company's growth and development. We're excited about their possibilities, enabling us to enhance our capabilities further and to support our research and development. Before moving forward, I want to update you on our recent programs and provide insights into our plans for the future. As you may know, Biomica is currently focused on 3 proprietary therapeutic programs. The most advanced program is in the immuno-oncology, BMC128. BMC128 is a rationally designed live therapeutic consorting product. Last June, we began our Phase I POC clinical trial in Israel for BMC128 to treat 3 types of solid tumors in humans. The Phase I trial is designed to evaluate safety and tolerability of BMC128 in combination with an anti-PD-1 checkpoint inhibitor, Opdivo, in refractory cancer patients. We have enrolled several patients in the study and aim to complete the trial later this year. We plan to file an IND with the FDA late 2023 or early 2024 and intending to begin our Phase Ib/IIa trial for BMC128 in the U.S. in the first half of 2024. Our second Microban therapeutic program focuses on inflammatory bowel disease or IBD, where the lead candidate is PMC Group 3, irrationally designed, optimized the consortium of 4 live bacterial strain. In several preclinical animal studies being significantly reduced inflammation and tissue damage we aim to start the scale-up development process and GMP production of this product as part of the preparation for our expected clinical trial in the U.S. in 2024. It is important for me to emphasize MicroBoost AI engine has been instrumental in supporting the discovery process for our LDP program, and we eagerly anticipate future improvements. A third program focused on IBS in which we completed the discovery phase for BMC426, which is now beginning being evaluated in preclinical studies. The preclinical results are encouraging, and we will update you as we advance. That ends my summary and Yaron Eldad will now provide the financial update. Yaron.

I will now give the financial overview. Evogene maintained a solid financial position of approximately $28.8 million in consolidated cash, cash equivalents and marketable securities as of March 31, 2023. This amount does not include the $10 million investment in Biomica by SHC that was received during April this year. Approximately $8.2 million of Evogene's consolidated cash as of March 31, 2023, is appropriated to its subsidiary, Lavi Bio. We do not have any bank debt. During the first quarter of 2023, the consolidated net cash usage was approximately $6.6 million or approximately $5.1 million, excluding Lavi Bio. Looking ahead to 2023, excluding any impact from foreign exchange differences and the change in market value for marketable securities, we expect our consolidated cash burn rate to be between $27 million to $29 million. Excluding the use of cash by Biomica or Lavi Bio, we expect our consolidated cash burn usage during 2023 to be between $12 million to $14 million. I want to highlight some specific items on the P&L. Revenues for the first quarter were $641,000 compared to $237,000 in the same period the previous year. The revenue increase was primarily due to revenues recognized with the collaboration agreement of Evogene's subsidiary, AgPlenus, with Corteva and from sales of Cononics medical cannabis products in Israel. R&D expenses for the first quarter of 2023, which are reported net of nonrefundable grants received were $4.8 million compared to $5.6 million in the same period in the previous year. The decrease is primarily due to decreased R&D expenses in Lavi Bio due to the commercialization of its inoculant product and a decrease in economic personnel expenses. Sales and marketing expenses were approximately $800,000 for the first quarter of 2023. I compared to $908,000 in the same period last year. The main contributor to this decrease in expenses was a reduction in personnel expenses at Canonic. General and administrative expenses were $1.5 million in the first quarter of 2023 compared to $1.6 million in the same period in the previous year. Operating loss for the first quarter of 2023 was $6.8 million compared to an operating loss of $8.1 million in the same period in the previous year. The decrease in the operating loss was due to the above mentioned. Net loss for the first quarter of 2023 was $7 million compared to a net loss of $9.1 million in the same period in the previous year. With that, Ofer and I would like to open the call for any questions you may have. Operator?

[Operator Instructions]. The first question is from Brian Wright of ROTH.

A couple of questions. I wanted to start off with just you mentioned on Biomica that there were a couple of patients enrolled in BMC128. Just wanted to be a little more -- does that mean like 2 or 3? Or it's just a little more parity on that.

Erlan, can you take this question?

Yes, sure. So thank you for the question. Yes, as I mentioned, we involved a few patients already. Keep in mind that the entire Phase I study is estimated to be around 12 patients. So we have enrolled approximately a handful of patients so far. As you may remember from previous reports, our main objective is to enroll patients that are progressing on pre-type of poly tumors, either non-multi lung cancer, RCC patients or melanoma, all of them previously failed with immunotherapy and just after failing previous treatments taken be enrolled into our study.

Okay. Great. So I handleful of that. Okay. Sounds like you really kind of on track there. We -- just one quick question on the driver. Given the supply demand dynamics, is that something you considered maybe increasing the price up? Or is it just a matter of move to the market with the prices or price and even winning test next year?

The sun wasn't very good, and I'm not sure that we understand the question, but with respect to drivers, we are producing the product for the sales campaign a few months before the sales season started. And in a way, we are captured with the quantity we can sell according to the quantity that we produced. And what I can share is that as we mentioned, we go through some challenges in struggles with the production process this year, but still, it's a much higher quantity compared to previous year. And the good news is that what we see is that there is a more more demand to -- compared to what we supply. And I think that the next year, with all the experience we gained this year, we are going to produce a significant higher quantity compared to what we are going to sell this year. It will be a quite significant demand compared to previous year. But I think that the big job is going to be introduced next year. And we are planning not just to sell in the U.S., like this year. Next year, we hope also to start to sell in Canada. We are waiting for the Canadian approval to start to sell this product, which we are hope to receive it in the near future. Assuming that we receive it, of course, we will announce it at 12. And the sales are progressing better than what we expected this year, and there is high expectations for next year.

Great. And just genomics, I wondered with the recent announcements with the licensing agreement, how should we think about that for the split, like is more of your revenue now going to come from licensing-based sales or from your direct payout?

What is nice about Canonic, which is very different from many other companies in this field in Israel, is that we have the engine that produces varieties. And what we are doing is that usually we are conducting a variety and in potential cultivators because we don't have the facility to cultivate to grow the product itself. We hold only greenhouses for research activities. So when we conduct a variety tests, so we choose the most promising one, and we decided that it can to be our product. But in doing so, we are -- the company that cultivates for us, the variety of conductors, the test, they are exposed to the quality of our variety. And then in some cases, there is a situation where they opt to have a license to some of our -- the varities that we decided not to commercialize because still they believe that this is a high quality compared to what exists in the market. So we feel very positive on the situation that more and more varieties that maybe we decided that we are not going to take all the way to commercialization. If we can still benefit from this variety through other companies that will grow the crop and we will be responsible on the marketing, and we will get royalty. And we don't see a direct competition between those products. So I think that this could be a very interesting additional business model for Cononic activity. And of course, the revenue we are going to generate will be lower, but there is no risk, and there is no cost of goods sold. So every dollar that we are going to get from this avenue, it will be in addition to the net profit. And because as I said, it's not variety that you develop for a partner. It's a variety that we developed already, and we decided not to commercialize it, but they believe that there is still a significant commercial value and then we'd have to take it all the way to the market. So I think that through the years, as we have more and more this type of opportunity, and there will be a company that they have faith that they can grow at cannabis, but they don't have a high-quality variety. So if they will approach us, we will be more than happy to capture this opportunity and generate more revenue for Canonic.

The next question is from Ben Klieve of Lake Street Capital.

I'd like to start with Castera. Ofer, I appreciated your comment on emphasizing the subsidiary and I have a couple of questions on this specifically. So my first question is in your updated presentation you referred to having -- to expecting a few hundred tons a year as of 2024 production. Can you provide a bit of context to this is a few hundred tons a year in 2024 expected, is that speed inventory? Or is that grain production that your end customers will be producing for their customers?

So we are talking about sales that we are planning to sell to our partners. We are building the inventory. We have one group that go for us seeds in Brazil, and we have another group that can grow for us seed in Africa. And numbers, if we are referring to the same figure. So we're talking about a few tens of tons that we are generating as a seed for sale.

Okay. So that few hundred tons a year in 2024 as a few hundred tons of seeds for sale?

Yes.

Okay. That's great. And then you also mentioned the benefit of cash sale from the perspective of marginal land and negligible irrigation requirements. In the context of the EU recent deforestation legislation, are you expecting that door products will be broadly applied on land that is considered deforestation free. And if so, are you going to be able to really validate that to the degree that the EU regulators would like. That's something that you're going to be able to prove to those regulators? Or is that something you're still working through?

On what products you are talking about, sorry?

Yes, on for capture.

Okay. So at least from my understanding in the area where we are growing our crop, there is no any limitation. It's really the farmer decision what you want to grow. All of our variety are registered and we can start the selling process. I don't think that we need -- a least to my understanding, I mean I can check it once again, but I don't think that we need any regulatory permission to sell the product in South America or in Africa. Actually, we are -- we start in doing so last -- we are doing it already for a few years in a small quantity. And now we are expecting to see significant growth, especially in Africa. And I think as we publish, we engage with a very big energy company that we sold them grains, which -- we saw them receive, which we start to shift those quantity only this year, and we are expecting to start to recognize revenue from this activity in next quarter.

Great. Got it. Okay. Very helpful. One more for me on Lavi Bio and then I'll pass it on. You also have noted and as reiterated in your presentation, additional biopesticides programs that are coming online you note that this is the large multinational company expected in 2024. I know you can't name names, but can you clarify if this is what one of the existing collaborators that you have? Or is it what potentially a new multinational partner?

With the second Lavi Bio and we're talking about bio-pesticide. So there is more than one program that we are managing in this other decile. I'm more than happy to share that there is more than one program that we are having ongoing discussions with the potential partners and I can assure you that we are not talking just with our current shareholders. There is an interest coming from other companies as well. And we are free -- there is some limitation on what we can do, but here we have enough freedom to work with other companies. And I really hope and believe that there will be some positive announcements in this direction in 2024 and hopefully maybe even in 2023.

[Operator Instructions]. There are no further questions at this time. Before I ask Mr. Ofer Haviv to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the U.S., please call 1-888-326 9310. In Israel, please call 903-9255-901. Please call. Internationally, please call 972-9255-901. Mr. Haviv would you like to make your concluding statement?

Well, we actually have -- I think we have one other person who wanted to ask a question as far as I can see. Operator.

Yes. [Operator Instructions]. The next question is from Brett Reiss of Janney Montgomery Scott.

My question is probably for Rachel. The company has been doing a lot of the right things and yet the stock prices, it's a penny stock below $1, which limits institutions that can buy even my own firm frowns on buying this type of stock. I'm just wondering if there's an opportunity for Rachel to reach out to the key opinion leaders in the Reddit named stock crowd. And yes, I'm aware of the pajority of reputation that some of these folks have. But they are enthusiastic. They possess creative thinking and you see they have a lot of power. And the problem is they sometimes marry themselves to economically challenged entities with Evogene, you have a company with sexy products on the right side of history, no debt, cash and a limited float. I'm just wondering if that's something that could be considered.

Thank you for your question. Is that all right with you, I will let Ofer answer it. Thank you.

So I think that since Rachel just joined the company, I will prefer that she will address this type of question, and we will do so starting from the next quarter. So I think the fact that we decided to recruit an internal IR manager, I think it's sends a clear message that we believe that we need to invest much more in IR activity also in the public relationship activity. I think that maybe we didn't spend enough resources and attention in this direction, probably it was minus stake. And my expectation is that together with Racheal we are going to change it. We start to see in the news more and more articles about Evogene. There is more actually because even article informs and believe there will be more this type of articles. And yes, I'm planning to start to meet with investors. And now when I have all of these amazing great news, as you described it, thank you for this. And there is more to come. And I think that I really hope that in the next few quarters, we'll start to see also the P&L start to reflect those good news through a milestone payment these upfront payments from collaborations our subsidy are going to conduct. I think this is assuming that all of this will happen. I think that then with a meeting with investors and with the right complication and additional IR and PR work, I hope thus you start to have also the understanding of the market of what Evogene is doing and what our subsidiary are doing. We'll start to have also -- will -- and if you into the capital market, and we will start to see changing momentum and direction in our shares. So yes, we are aware to this. Yes, we start to put now more resources and attention. And yes, and probably the most important thing, we start to start to see, I guess, a stronger news from our own activity and our subsidiary activity. And I hope the same, we will be able to communicate all of these good staff into the capital market. So let's see next quarter and quarter after. And I hope the next Racheal will be able to address this question, and she will do it with a big smile.

Welcome aboard Racheal.

Thank you so much.

Thank you so much. Mr. Haviv, would you like to make a concluding statement?

Thank you all for joining the call today. I look forward to updating you on our progress in our next call, and I believe that there will be much to tell about. Thank you very much.

Thank you. This concludes Evogene's First Quarter 2023 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.