Evogene Ltd (EVGN) 2022 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Evogene's Fourth Quarter and Full Year 2022 Results Conference Call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. For operator assistance during the conference, please press Star 0. As a reminder, this conference is being recorded. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evogene'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 Evogene. I encourage you to review Evogene'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, Evogene is using forward-looking statements in this call when it discusses its expected path to value creation, including potential fundraisings at the subsidiary level, its and its subsidiaries, expected trials and their expected results, studies, product advancements, commercialization, launches, pipelines, milestones, potential collaborations and other plans for 2023 and beyond, expected burn rate, the potential advantages of its technology and its anticipated entry into new fields of activity. 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 Evogene and may cause actual results to differ materially from anticipated results. Evogene 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 Ofer Haviv, Evogene's CEO. Ofer, please go ahead.

Thank you for joining Evogene's Fourth Quarter Earnings Call and full year 2022 results. I would like to welcome all of you. I want to review Evogene's achievements in 2022 and provide you with an update on our activities as well as potential catalysts during the next 12 months. Following my review, Evogene's Executive Vice President of Business Development, Eyal Ronen, who also served as CEO of our subsidiary, Casterra, who will give an update on Casterra's activity. Evogene's CFO, Yaron Eldad, will provide a financial summary and update. After that, we will open the Q&A session. Evogene has been using its AI-driven computation and predictive biology platform to divest and accelerate the discovery and development of life science-based products ranging from Microbiome therapeutics in humans to wide range of agriculture applications to medical cannabis. Our AI-driven competition reality tech-engine support product development in our 5 main subsidiaries.

In addition, Evogene has an internal fixed rate division. And recently, on December 8, we announced that we would receive a $3.5 million payment from Bayer relating to Evogene's patent portfolio under its trade collaboration with Bayer. Evogene is focusing on developing 3 AI-driven tech-engines. MicroBoost AI, supporting micro-based products, ChemPass AI, supporting small molecules based products and GeneRator AI, supporting products based on modifying genetic elements. [Develop] our tech-engines is to identify the most promising candidate or mix of candidates that meet a specifically desired life science product criteria and to support the candidate development process leading to a commercial product. By doing so, we are solving an urgent biological or chemical problem, providing a solution that will address a substantial need and hopefully create significant commercial value.

I would like to emphasize that whenever we are identifying a specific microbe, genes or small molecule, there is always a huge multitude of potential candidates. Our AI and big data has driven computational biology platform, helps find that needle in a haystack in a way and in a time frame that our competitors or partners may not be able to accomplish. This enables reduced development time, saving a significant cost and most importantly, increased probability of success in developing a commercial life science-based product. 

Each of our 3 AI-driven tech-engine has helped Evogene established a business ecosystem that includes either independent subsidiaries or strategic collaborations focused on developing products for specific life science market segment or product type. In a few moments, I will review the interesting recent accomplishment of our 5 subsidiaries, which demonstrate the power and the value of our AI-driven tech-engine underlying the product development process. Looking ahead, we intend to continue to invest and improve our AI tech-engines addressing more potential life science discoveries and provide better and novel solutions to development challenges. It's important to me to emphasize that Evogene is actively looking to increase shareholder value by entering into value business relationship with leading multinational companies for product development using our engines, generating revenue by commercializing and selling products, meeting all its milestones, including those under various collaboration agreements, raising external funds at the subsidiary level that demonstrate their value and working hard to provide shareholders with a greater understanding of our business and subsidiaries achievements. As we mentioned, Evogene [Ag] subsidiary had reached multiple achievements this past year and had multiple upcoming milestones in the year ahead, which we believe will create value through each of the subsidiaries and for Evogene shareholders. 

I would like now to review them separately, and I will start with Evogene's subsidiary, Lavie Bio, leveraging Evogene's MicroBoost AI tech-engine as part of its biology-driven design platform to develop next-generation Ag-biological product. In addition to our majority ownership, Lavie is partially owned by multinational [Astec] giant Corteva listed on the new stock exchange with a $45 million market cap. On August 17, 2022, Lavie Bio announced that ICL, a leading multibillion-dollar New York-listed global minerals and Astec company was making a $10 million investment into Lavie Bio under a state agreement. ICL investment and collaboration agreement with Lavie Bio, will strongly broaden Lavie Bio product pipeline. Combining Lavie Bio Ag-Biological experience and cutting edge technology with ICL's knowledge of fertilizer and farmers [mean] we have facilitated the development of new and innovative products for Lavie Bio and the agriculture industry.

Lavie Bio's product pipeline now includes its first commercially launched product, Thrivus. [A little bio-based, bio inoculant] for Spring Wheat. Lavie Bio won regulatory approval in the USA and commercially launched the product initially in North Dakota in the second quarter of 2022 as a fixed treatment to improve yield for Spring Wheat. In the second quarter of 2022, Lavie Bio fully sold out of Thrivus and its initial cells in North Dakota, USA. Now in the second quarter of 2023, Lavie Bio targeting the 10 million acre spring wheat market in the U.S. area and expecting significantly increased sales. Our product Thrivus, potentially contribute an additional 3 to 4 bushels per share, [the yield] improvement compared with industry benchmarks. Looking ahead, we are aiming to broaden sales of Thrivus beyond USA and into Canada and Europe in market. We are also working to expand our level for Thrivus to include additional crops such as small grains and oil field with potential increased target market covering approximately 500 million.

Lavie Bio is continuing to advance its bio-pesticide program, including bio-fungicide and bio-insecticides. In October, Lavie Bio submitted the registration package to the United States Environmental Protection Agency for LAV311, its novel bio-fungicide product, targeting fruit rot and powdery mildew, the final step prior to commercialization, which is targeted for a commercial launch in 2024, assuming all goes well. The initial product market type for LAV311 is over $200 million in the treatment of [this], and there is a potential room to expand the target market to over $800 million, once it includes targeting additional fruit and vegetable. In the coming year, we plan to expand the potential addressable market for LAV311 by broadening its applications to additional costs while optimizing the product and manufacturing costs. Lavie Bio second bio-fungicide product, LAV321, which also advanced in last year 2022 has the potential to solve what is becoming expanding challenge for growers as the traditional chemicals used in agriculture against downy mildew are increasingly being banned globally. In the coming year, we are planning additional field trials that will also include additional diseases for this product. Lavie Bio's achievement to date demonstrates the power of Evogene's technology and tech-engine, Microbot AI, which is very much proof of the validity of the Evogene business model. 

Evogene second subsidiary is Biomica, focusing on developing microbio best therapeutic targeting human health, leveraging Evogene's MicroBoost AI. Biomica also had a very successful and active year in 2022. Most recently, on December 21, Biomica announced a $20 million financing round led by a $10 million investment for [inaudible] high health care capital and still subject to chain regulatory approval anticipated later this month and $10 million from Evogene. The deal was done at a post-money valuation of $50 million. Following the expected close, Evogene will own 67% of Biomica, and CHC will hold 20%. This external and independent endorsement of Biomica validates our belief in Biomica's long-term potential. Biomica's currently focused on its 3 proprietary therapeutic products programs. The most advanced program is in immuno-oncology.

Using our competition analysis and predictive capabilities, Biomica identified BMC128, rationally designed live bio-therapeutic product Consortia. Last June, Biomica began its Phase I clinical trial in Israel for BMC128 in the treatment of various [sacks] of poly tumors in humans and dosed its first patient in July. The Phase I trial is expected to enroll 12 patients. The Phase I trial is designed mainly to evaluate the safety and tolerability of Biomica BMC128 in combination with an anti-PD-1 checkpoint inhibitor, Opdivo, in breast cancer patients. Biomica's goal is to successfully complete the Phase I BMC128 trial in Israel this year. In parallel, Biomica plans to file an IND with the FDA in late 2023 or early 2024. With a view to beginning a Phase I B2 trial for BMC128 in the U.S. in the first half of 2024. Biomica's second microbiome therapeutic program is focusing on inflammatory bowel disease, or IBD, where the lead candidate is BMC333, a rationally designed, optimized consortia of 4 live bacterial training. In several pre-clinical animal studies, BMC333 was shown to significantly reduce inflammation and tissue damage in targeting GI-related disorders.

Biomica intends to start producing the macros in a quantity that will allow for a Phase I clinical trial in the U.S. in 2024. Biomica's program is focusing on Irritable Bowel Syndrome or IBS, where the lead candidate, Microbiome Therapeutics Consortia is BMC426. Biomica has completed the discovery phase of BMC426 and is now into a pre-clinical phase. The result Biomica has received from BMC426 in experimental models of IBS are encouraging, and we look forward to updating you as this program advances.

I want to highlight that Biomica's strong progress is a testament to the technological capabilities of Evogene's MicroBoost AI tech-engine. Evogene's third subsidiary is AgPlenus, which is developing a net generation sustainable crop protection product by leveraging computational algorithm and a target-based approach. AgPlenus's goal is to discover and bring to commercial stage new Mode-of-Action for protection products, including herbicide, insecticide and fungicide, leveraging Evogene's ChemPass AI tech-engine Globally in agriculture, there is a major problem with herbicide resistance flourishing. There has not been a new commercial herbicide with a novel Mode-of-Action for over 30 years. AgPlenus is addressing that need and developing new herbicides with novel Modes-of-Action which are much more environmentally friendly than existing products. The crop protection industry is dominant by a few metal [activities] companies, including Bayer, [BASF] or Teva-Syngenta.

These large multinational Ag-tech players often look to a smaller active companies like AgPlenus to develop new small molecule candidates. This is precisely what is happening with our plans now. AgPlenus product pipeline included its most advanced candidate, APH1, a herbicide with a novel Mode-of-Action, which provides a broad spectrum with control at commercial [dose] rates. During the past year, AgPlenus successfully worked on expanding the data package for APH1. As a result, AgPlenus is seeing a lot of interest in APH1 from major adtech companies as well as other products in AgPlenus's pipeline in addition to great interest in AgPlenus's AI-driven completion tools and technological capabilities. AgPlenus already worked closely with Corteva to develop new Mode-of-Action herbicides to target resistant weed. Under this agreement, AgPlenus recovered and optimized the Herbicide candidate and Corteva conducts testing and product development.

Corteva received license to this product subject to AgPlenus being paid, research fees, milestone and royalty upon commercialization. The AgPlenus-Corteva collaboration has been ongoing since March 2020. From the logical standpoint, in the past year, Evogene and AgPlenus have completed 2 Proofs of Concept for 2 of its major AI computational tools, pointed and active search. [Portet] allowed the screening of a mega database of over 30 billion small molecules to identify the most promising that bind to the new Mode-of-Action target protein.  Active search is an important optimization tool to identify promising purchasable similar molecule to the lit candidate, aiming to increase probity of meeting product criteria. This Proof of Concept was completed with good results, which we believe will improve AgPlenus's workflow and ongoing pipeline going forward. In the past year, AgPlenus have further leveraged our computational platform to expand its pipeline to include fungicide candidates. AgPlenus has now completed the first stage of computational work fungicide target selection and are now entering the Proof of Concept stage for these potential targets.

We hope in the coming year to further advance the fungicide pipeline and initiate new collaborations with leading global Ag companies in this new potential field. 

Moving on to Evogene's fourth subsidiary, Canonic. It is focused on developing best-in-class medical cannabis products, leveraging Evogene's generator AI tech-engines. Despite 2022 being a challenging year for the medical cannabis industry in Israel and worldwide, Canonic's main achievement was the recent successful launch of 6 new second-generation products in Israel. These new products all contained high level of TSC above 23%, while maximum percentage of TSC legally allowed in Israel is 24.4. Since its launch, we have already seen positive traction for these second-generation products in the Israeli market. This second-generation cannabis products were developed using genetic markers, which GeneRator AI tech-engine identified. In the meantime, Canonic's main goal for 2023 are to grow second-generation cannabis [cells] while reducing company expenses.

At the same time, as I mentioned, the global Cannabis market has become increasingly competitive during the past year, and we don't expect that situation to change in the near term. While we are continuing to support Canonic growth, we have made some recent structural changes to lower expenses, and we are considering various longer-term options. Evogene's fifth subsidiary, Casterra, focuses on developing complete solutions to growing castor plants used for production of castor oil on a commercial scale. [Utilizing] Evogene GeneRator AI tech-engine to develop its unique castor plants varieties. In previous analyst call, we had not emphasized Casterra activity, but in recent months, we have seen an increase in interest in castor oil as a source for biodiesel in Europe. On January 19, Casterra announced sending on an agreement to sell a large quantity of castor field and provide technical support to a world-leading European energy company to launch its cultivation of castor plants in various countries in Africa.

This follows our announcement of Casterra on November 15, signing of a production and distribution agreement with Tita Castor Farm, a Zambian cultivator and distributors of castor oil. Casterra is now gaining strong momentum and attention from others wanting to benefit from growing castor oil for biodiesel. We believe it has the potential to serve as a major value creator for Evogene shareholders. Additional information about the [tail] will be provided by Eyal Ronen, our VP of Business Development shortly. 

In summary, the activities of Evogene and its subsidiaries are advancing nicely. During 2022, the external investment in Lavie Bio and Biomica provides independent validation of the significant value inherent within our subsidiaries, each one by itself, inaudible to the value originally created by Evogene's AI tech-engine. With respect to additional fundraising for the subsidiaries, we continue to work hard to identify and bring value-adding partners and investors. In parallel, we are pursuing collaborations for both Evogene and its subsidiaries that will inject additional funds for our activities. Our business success in 2022 showed that our hard work in building investing in and strengthening our subsidiaries, all of which are leveraging our underlying computational predictive biology tech-engine is the right strategy and is creating value, which we expect will ultimately be reflected in Evogene's shareholders' value. Our [mix] target is that each subsidiary will have its own financial resources to support its activity until its success. While Evogene, in addition to being a major shareholder, we will continue to play a major role in maintaining and building our tech-engine serving as the subsidiary competitive advantage. We hope to announce many more success in the coming quarters. And now I would like to turn over this call to Eyal Ronen, our VP, Business Development and CEO of Casterra, after which, Evogene, CFO, Yaron Eldad will provide a financial review for Evogene. Eyal?

Thank you, Ofer. First, I would like to start by saying how excited I am to have joined the Energen Group, and I'm very pleased to take part in this call. Prior to my review of Casterra's activity and recent achievements, I would like to emphasize Casterra is offering for our clients' future. The increased use of fossil fuels with high-carbon footprint in the rest of the world significantly contributes to long-term global warming, ultimately leading to harsher weather conditions and increasing the risk to human sustainability. Furthermore, the significant growth in emerging economies leading to increases in demand for energy will also pose increased challenges. Biofuels and biopolymers a part of the solution, helping to reduce the carbon footprint by reducing greenhouse gas emissions and supporting the growing need for sustainable renewable energy and polymers. Casterra is a subsidiary of Evogene and as mentioned by Ofer, focuses on developing a complete solution to growing castor on a commercial scale. The company was established in 2008 initially by the main [end of fuel], which later changed to Casterra to reflect the focus on the promising crop of faster as a resistor bio-based materials, whether for biofuels or biopolymers.

As enrollment to replace fossil fuels with biological friendly and sustainable source, we foresee an increase in the market for castor oil. Castor beans represents the highest energy return to gold as they have high oil content, approximately 50% can go on marginal land, meaning that they pose no competition on land which can support other edible crops and support environmentally-friendly cultivation practices. From a regulation perspective, the crop aligns with the recent EU regulation supported replacement of Palm oil to low indirect land use change or ILUC crops, such as castor. Castor oil and its derivatives are estimated at $1.36 billion market worldwide today and expected to reach $1.61 billion by 2028 based on market [gross] report from February 2023. Casterra's competitive advantage is that it provides an end-to-end industrial solution for cultivating high-yield castor oil. The first solution is [able] to optimize all parts of the process from seed to green. 

The key source for value of Casterra's ability to develop proprietary and vast superior castor seed varieties using Evogene plant genomic applicative capabilities, [Bob], genetic library and GeneRator AI tech-engine. Casterra has built its castor genetic library asset based on broad collection of over 300 castor lines from 40 different geographics and climatic regions. In addition to the above, Casterra has many years of unparalleled experience with cultivation practices given its technical support. To promise high yield with minimal losses Casterra has developed a custom-built specifically chemical harvesting machine in collaboration with Italian specialty machine making [inaudible]. In addition, the company developed a proprietary high-capacity dehulling machine. We are welcome to visit Casterra's site for additional details. In the past few months, Casterrla has extended its production capabilities to meet the market demand in different geographies and today's produces its seeds in three countries; Israel, Brazil and Zambia. In the biopolymer space, Casterra inaudible market leader and explore new territories to support high quality and stable supplies to the growing castor oil derived biopolymers industry.

And finally, the most important development was the recent agreement for sale of large amount of castor fields and providing technical support to European oil major to launch its cultivation of Castor in Africa. And we build a close business relations with these key customers and others, I expect our business to grow and to receive additional orders for seeds and equipment. I look forward to sharing more information with you in the coming quarters. That ends my summary, and Yaron will now provide the financial update. Yaron?

Thank you, Eyal. I will now provide the financial summary. Evogene continues to maintain a solid financial position for its activity with approximately $35 million in consolidated cash, cash equivalents and marketable securities as of December 31, 2022. This amount does not include the $10 million investment in Biomica by SHC that is expected to be closed in the coming weeks. Approximately $9.7 million of Evogene's consolidated cash is appropriated to a subsidiary [buyer]. We do not have any [bandmate]. During the fourth quarter of 2022, the consolidated cash usage was approximately $2.6 million or approximately $400,000, excluding Lavie Bio. For 2022, our consolidated cash burn [rate] was $28.5 million or approximately $20 million, excluding Lavie Bio. The consolidated cash [usage] for 2022 included financing expenses in the amount of $2.3 million due to the U.S. dollar net exchange rate differences and a decrease in the market value of marketable securities in the amount of $800,000.

Looking ahead to 2023, excluding any impact from foreign exchange differences and the change in market value for marketable securities, we expect a consolidated cash burn rate to be in the range of $27 million to $29 million. I would like now to highlight some specific items on the P&L. Revenues for the fourth quarter were $660,000 in comparison to $311,000 in the same period the previous year. Revenues for 2022 were $1.7 million in comparison to $900,000 in 2021. The increase in revenues was primarily due to revenues recognized [inaudible] the collaboration agreement of evident subsidiary out planning with Corteva as well as revenues from the sales of Canonic's medical cannabis products in Israel. R&D expenses for the fourth quarter of 2020, which are reported net of nonrefundable brands [supreme] were $4.8 million in comparison to $6 million in the same period in the previous year. For the full year 2022, [being] expenses were $20.8 million in comparison to $21.1 million in 2021. The main contributors to R&D expenses will Lavie Bio activities supporting the production and commercialization of its inoculant product, Thrivus, Evogene's ongoing development of its technology engine and Biomica's microbiome-based therapeutics development efforts. 

Sales and marketing expenses were approximately $1.2 million for the fourth quarter of 2022 in comparison to $700,000 in the same period the previous year. For the full year 2022, these expenses were $3.9 million in comparison to $2.7 million in 2021. The increase was mainly due to Lavie Bio increased business development personnel and commercial trials of a inoculant product, Thrivus. Performed during 2022 and increased business development personnel in Canonic. General and administrative expenses were $1.7 million in the fourth quarter of 2022 in comparison to $2 million in the same period in the previous year. For the full year 2022, these expenses were $6.5 million in comparison to $7.3 million in 2021. The decrease was mainly attributed to the decrease of cost of directed and [Africa's] insurance and to the decrease of the share-based compensation expenses.

Other income was $3.5 million in the fourth quarter of 2022 and for the full year of 2022. This was received from Bayer under the joint seed trait collaboration agreement with Evogene, as part of our restructuring and release of the patent filing, execution and maintenance obligation under the collaboration. Operating loss for the fourth quarter of 2022 was $3.8 million in comparison to an operating loss of $8.7 million in the same period in the previous year. Operating loss for the full year 2022 of $26.9 million in comparison to $31 million in 2021. The decrease in operating loss is mainly due to the other income received from Bayer as described above. Net loss for the fourth quarter of 2022 was $3.8 million and comparing into a net loss of $8.1 million in the same period in the previous year. Net loss for the full year 2022 was $29.8 million in comparison to a loss of $30.4 million for 2021. With that, both Ofer, Eyal and I would now like to open the call for any questions you may have. Operator?

(Operator Instructions) The first question is from Kristen Kluska of Cantor Fitzgerald.

Two from me. First question is, which subsidiaries do you think there is the greatest potential for external validation through partnerships and collaborations this year? And then for Lavie Bio, you cited in the print your expectation that sales could be significantly expanded in the 2023 spring season. So what gives you confidence in that statement? And just that expectations do you have a range or any color you could provide about how you're thinking internally on goals for sales here?

Kristen, this is Ofer, and thank you for participating in our analyst call. So I think that the Lavie Bio is probably the company that I would expect that I can engage with a significant licensing agreement. They have a nice and very promising product pipeline, which some of it used to partner through [maturity] stage. And I can also mention that even with [inaudible] the market, there will be interest from big distributors to engage in a long-term relationship with Lavie Bio around this area [of product]. I think that the revalue is probably the company that --- I think that entering to this type of agreement. The other company is probably Agplenus that made quite a significant jump during last year. So these are the 2 companies that are fair to say that they can engage in long-term collaboration, but there could obviously [postomat] other companies can enter into such relationship. With respect to Lavie Bio, we didn't disclose numbers, but we're assuming that last year, the number was for the soft launch. So this year, we are talking about a number that is going to be material, it'll be [biomaterial] to Evogene company but pre-materials with Lavie Bio. And still it will be probably what I can say, a full promotion here now, which will put us in a great position from next year it could be  even more than what we are going to see this year. So to summarize, it will be material for Lavie Bio, maybe not for the whole company. We are now probably going to initiate the active sales process in the next few weeks. [We do negotiate].

(Operator Instructions) The next question is from Brett Reiss of Janney Montgomery Scott.

Question is on the castor seed. As I understand that you make the mother line of seed in Israel and then you transfer these embryonic seeds to your 2 subsidiaries that actually grow out the seed. Have you actually shipped the mother line of seed to these subsidiaries and when did you ship them?

So before I let Eyal to answer the question, I'll make a small correction. We don't have subsidiaries that are producing for us the seed. The seed producer is a company that we are working with them, one in Brazil and one in Africa. So that's [a use for Afroca] but they are not a subsidiary with Evogene, for Casterra. Eyal, maybe you can take the lead on it.

Jeff, I would like to refer to your first , as Ofer also said correctly, we do the bridging in Israel. And the production is obviously after the proprietary seeds are being sent to those territories, the production is done on site. So we have a production site in Brazil and another one in Zambia. We do also produce [measure], but that's a minor quantities mainly we have site for bridging all the other productions are located in the center where they could distribute it in the surrounding environment. So that's in Latin America and in Africa.

And the way that we protect ourselves, so in the sites, we have what is called [bridging line] where we are meaningful genomic profile of our variety in the relevant territories that people to not just start to sell different types of sites like us. So this is one protection. The second protection is that the farmers that we are selling them the seed. We also signed on an agreement, they have the right to use the seed only for 1 season. And the last is that what we are offering to our partners, to the farmers, and we're working with big farmers. [inaudible] It's also the full package, which includes also technical support in the dehulling machine, the harvesting machine. And of course, that we are all the time focusing on developing new variety that are going to [replace] the existing one in a better performance with respect to yield or any other [tweight], which are important for the farmers.

Just circling back because I didn't frame the question in the best way. The 2 independent contractors in Brazil and Zambia that you have the relationship where they grow out the seed. Have you, in fact shipped some of the mother line of seed to them? And if so, when did you ship it? When has the clock ticking on the development of these seeds?

Each one of those partners already received the original -- What is called the -- I don't know what is the name of [the seed], but the regional seed in order to start to produce the seed themselves and both of them already produced during 2022, actually, they already produced seed that some of them or [a big part of them] then we sold to the world lead energy company as we disclosed at the end of 2022.

The next question is from Brian Wright of Roth Capital.

Just a real quick question. [And I hope as if I missed this,] but I was wondering if you could help with kind of sizing the sequential growth between the [previous compare versus Canonic], if you could kind of give us some help understanding the scale of the drivers.

Can you repeat your question because it wasn't very clear.

Sure. I wanted to understand, when you look at the sequential growth in revenue, if you want to kind of wait-- Kind of what was the bigger driver on sequential growth? Was it the [key mix] in there? Or was it the growth from just [Canonic].

So the [BARE] it's 3.5%, and it's completely in a separate line. If you look at the operating expenses, you will see that there is one line that actually is an income, and this is the $3.5 million. And this is separate from the revenue. The revenue is coming mainly from [Canonic] activity and from [ex lenoc] licensing agreement. Only a small portion is from Lavie Bio. And this is why I said that this year, if we will reach our forecast. This year, it will be a material number for Lavie Bio. So it was the [mortgage] number last year, this year is going to be much more significant.

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 2 hours after the conference. In the U.S., please call 1 (888) 326-9310. In Israel, please call (03) 9255-901. Internationally, please call 972-3-9255-901. Mr. Haviv, would you like to make your concluding statements?

Yes. Thank you all for joining the call today. We look forward to updating you with our progress in our next call. Thank you very much.

Thank you. This concludes Evogene's Fourth Quarter 2022 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.