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Evogene(EVGN) - 2024 Q3 - Earnings Call Transcript
EVGNEvogene(EVGN)2024-11-21 18:46
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Financial Data and Key Metrics Changes - Total revenues for the first nine months of 2024 reached approximately 6.9million,upfromapproximately6.9 million, up from approximately 5.1 million in the same period of 2023 [11] - Q3 2024 total revenues were approximately 1.8million,downfromapproximately1.8 million, down from approximately 3.8 million in Q3 2023, primarily due to a 2.5millionlicensefeepaymentreceivedinQ32023[11][46]−Operatinglossforthefirstninemonthsof2024wasapproximately2.5 million license fee payment received in Q3 2023 [11][46] - Operating loss for the first nine months of 2024 was approximately 17.6 million, a decrease from approximately 18.9millioninthesameperiodof2023[12][52]−Netlossforthefirstninemonthsof2024wasapproximately18.9 million in the same period of 2023 [12][52] - Net loss for the first nine months of 2024 was approximately 18 million, compared to approximately 18.6millioninthesameperiodofthepreviousyear[54]BusinessLineDataandKeyMetricsChanges−Casterra′srevenuesincreasedduetoseedsales,withsignificantmilestonesachievedinseedproductioninfrastructureinKenyaandBrazil[17][34]−LavieBiolauncheditsfirstcommercialproduct,Yalos,withinitialsalesinwinterwheatandexpectedsalesinsoybeanbyspring2025[19][36]−AgPlenusinitiatedanewfungicideprogramtargetingSeptoria,withthreeproteintargetsconfirmedandaround1,000compoundsidentifiedfortesting[21][40]MarketDataandKeyMetricsChanges−CasterraispositionedasaprimaryseedsupplierinAfrica,withdiscussionsongoingforfutureseedordersfor2025[18][78]−LavieBio′sexpansionintosoybeanmarketsisexpectedtosignificantlyincreasesalespotential,assoybeanisaprimecropforbio−stimulants[73]CompanyStrategyandDevelopmentDirection−ThecompanyaimstopositionitselfasaleaderindevelopinglifescienceproductsthroughadvancedcomputationaltechnologiesandAI[22][23]−Strategicpartnershipsarebeingestablishedtoco−developinnovativeproducts,enhancingrevenue−sharingmechanisms[28][30]−ThecollaborationwithGoogleCloudaimstodevelopagenerativeAImodelforsmallmoleculedesign,expandingthetrainingsetfrom6millionto40billionmolecules[24][25]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedoptimismforcontinuedrevenuegrowthin2024,primarilydrivenbyCasterra′sseedsupply[12][46]−Thecompanyisexploringadditionalbusinessopportunitiesandhastakenmeasurestostrengthenitscashposition,includingareductioninheadcount[14][66]−ManagementhighlightedtheimportanceofresolvingseedproductionissuesinAfricatosecurefutureordersandmaintaincompetitiveadvantage[60][78]OtherImportantInformation−Thecompanycompletedafundraisingof18.6 million in the same period of the previous year [54] Business Line Data and Key Metrics Changes - Casterra's revenues increased due to seed sales, with significant milestones achieved in seed production infrastructure in Kenya and Brazil [17][34] - Lavie Bio launched its first commercial product, Yalos, with initial sales in winter wheat and expected sales in soybean by spring 2025 [19][36] - AgPlenus initiated a new fungicide program targeting Septoria, with three protein targets confirmed and around 1,000 compounds identified for testing [21][40] Market Data and Key Metrics Changes - Casterra is positioned as a primary seed supplier in Africa, with discussions ongoing for future seed orders for 2025 [18][78] - Lavie Bio's expansion into soybean markets is expected to significantly increase sales potential, as soybean is a prime crop for bio-stimulants [73] Company Strategy and Development Direction - The company aims to position itself as a leader in developing life science products through advanced computational technologies and AI [22][23] - Strategic partnerships are being established to co-develop innovative products, enhancing revenue-sharing mechanisms [28][30] - The collaboration with Google Cloud aims to develop a generative AI model for small molecule design, expanding the training set from 6 million to 40 billion molecules [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued revenue growth in 2024, primarily driven by Casterra's seed supply [12][46] - The company is exploring additional business opportunities and has taken measures to strengthen its cash position, including a reduction in headcount [14][66] - Management highlighted the importance of resolving seed production issues in Africa to secure future orders and maintain competitive advantage [60][78] Other Important Information - The company completed a fundraising of 5.5 million in August 2024, which is expected to support ongoing operations [14] - Cash usage for 2024 is projected to be approximately 8millionto8 million to 10 million, a decrease from 12.5 million in 2023 [13][45] Q&A Session Summary Question: Why did the expected follow-on order for 2025 deliveries at Casterra not materialize? - Management indicated that internal discussions among partners are ongoing, which has delayed the final decision [56] Question: Have Casterra's delayed deliveries compromised its ability to secure a follow-on order? - Management reported that seed production issues have been resolved, and partners are satisfied with the current performance [60] Question: Is Evogene contributing any cash to the collaborations with Google and Ben-Gurion University? - Management confirmed that expenses for the collaboration with Ben-Gurion University are covered by a grant, while costs for the Google collaboration are part of the existing budget [63] Question: What is the current cash position at the parent company level? - As of September 30, 2024, the company had approximately 20 million in cash, with additional seed deliveries expected to enhance cash flow [66] Question: What are the sales expectations for Yalos in two years? - Management expressed optimism for significant sales growth, particularly in the soybean market, which is expected to contribute materially to revenues [73][76] Question: How should Casterra revenues be viewed in 2025? - Management indicated that 2025 is expected to show better performance than 2024, with resolved seed production issues enhancing capacity [78] Question: What is the current level of insider ownership in the company? - Management stated that a significant portion of compensation is based on equity, aligning management interests with those of shareholders [80]