Evogene Ltd (EVGN) 2025 Q1 法說會逐字稿

Ladies and gentlemen, welcome to Evogene's first-quarter 2025 results conference call. (Operator Instructions) As a reminder, this conference is being recorded, May 21, 2025.

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. This presentation contains forward-looking statements relating to future events and Evogene 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 other words of similar meaning. We are using forward-looking statements in this presentation when we discuss our value drivers, commercialization efforts and timing, product development and launches, estimated market sizes and milestones, pipeline as well as our capabilities and technology.

Such statements are based on current expectations, estimates, projections and assumptions, described 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 expressed or implied in 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 mobilization or escalation in the northern border of Israel and those described in greater detail in Evogene's annual report on Form 20-F and in other information Evogene files and furnishes with the Israel Securities Authority and the US Securities and Exchange Commission including those factors under the heading Risk Factors.

Except as required by applicable security 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 statement 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 any part of any invitation or offer to sell or any solicitation of any invitation or offer to purchase or subscribe for any securities of Evogene or the company nor shall the information or any part of it or the fact its distribution from the basis of or be relied on in connection with any action, contract commitment or relating thereto or to the securities of Evogene or the company. The trademarks included herein are the property of the owners thereof 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 Mr. Ofer Haviv, President and CEO of Evogene; and Yaron Eldad, CFO of Evogene. Now I'll turn the call over to Mr. Ofer Haviv. Mr. Haviv, please go ahead.

Good day, everyone. In today's conference call, I would like to begin with a review of the financial and business highlights for the first quarter of 2025 and up to date, followed by an overview of Evogene's current activities and the activities of its subsidiaries. After my remarks, Yaron Eldad, Evogene's CFO, will provide a financial update on the first quarter of the year. We will then open the Q&A session.

Let's start with the financial and business highlights. In the first quarter of 2025, total revenues were approximately $2.4 million compared to approximately $4.2 million in the first quarter of 2024. The reason for the difference is that in the first quarter of 2024, revenues included license fee payment totaling $3.5 million, which were $2.5 million from the Lavie Bio's license fee under its collaboration with Corteva and $1 million from AgPlenus' license fee under its collaboration with Bayer. The primary driver of revenues in the first quarter of 2025 was an increase in seed sales by Casterra.

During the fourth quarter of 2024 and the beginning of 2025, Evogene established an expense reduction plan, which will be completed by the second quarter of 2025. This reduction in expenses is already partially reflected in the financial results of the first quarter of 2025. In the first quarter of 2025, total R&D expenses were approximately $3.2 million compared to approximately $4.8 million in the first quarter of 2024. This decrease is mainly due to the decrease in Biomica's and Lavie Bio's R&D activity.

In the first quarter of 2025, total sales and marketing expenses were approximately $0.6 million compared to approximately $1 million in the first quarter of 2024. This decrease is mainly due to the decrease in Lavie Bio's sales and marketing activity. In the first quarter of 2025, total operating expenses net were approximately $5 million compared to approximately $8 million in the first quarter of 2024. This decrease is mainly due to the decrease in Lavie Bio's and Biomica's operating activity.

As of the end of the first quarter of 2025, the company's cash and short-term bank deposit balance was approximately $9.8 million, including approximately $5.5 million attributed to Biomica. This cash balance does not reflect approximately $2 million due from Casterra's outstanding customers, the majority of which were received in the second quarter of 2025. It also excluded the expected proceeds from the sale of Lavie Bio's assets and the MicroBoost AI for Ag tech-engine to ICL, which we announced in April. This transaction is expected to close in the second quarter of 2025.

I would now like to highlight key achievements of the Evogene Group in Q1 2025 and to date. Starting with Evogene itself. In relating to ChemPass AI for pharma, I'm pleased to report substantial advancement on the following areas. We have refined ChemPass AI value proposition clearly articulating its distinct competitive advantages for the pharmaceutical and biotech sectors, the design of novel compounds that are both highly potent and meet multiple critical development criteria.

Considerable progress has been made in developing the foundation model application as part of our collaboration with Google Cloud. This model constitutes the core of our ChemPass GPT lead optimization package.

Moving on to our subsidiaries starting with Lavie Bio. As I stated in our previous call, Evogene is focusing on creating exit events with respect to part of our subsidiaries. Such events will generate value and cash to Evogene and its shareholders. The transaction between Lavie Bio and ICL is the first result of such efforts.

On April 21, 2025, we announced the acquisition of most of the activity of Lavie Bio by ICL for an aggregate value of $15.25 million. In addition, ICL will acquire Evogene's MicroBoost AI tech-engine for the agriculture field for approximately $3.5 million. As part of the transaction, ICL's SAFE investment in Lavie Bio is being redeemed. The acquisition is expected to be completed during the second quarter of 2025 following the completion of certain customary and regulatory closing conditions.

We can also envision long-term upside for Evogene from certain existing assets, which remain with Lavie Bio and are not part of the transaction with ICL. More details on the transaction will be provided later in the presentation.

Now let's move to Casterra. Since the beginning of the year, Casterra has delivered 250 tons of castor seeds to its partner in Africa already surpassing the 215 tons delivered through all of 2024. In Brazil, Casterra strengthened its sales teams and started the execution of a new marketing and sales strategy. I am pleased to report that Casterra initiated proof-of-concept trials for grain not seed to be sold to castor crushing factories in partnership with one collaborator in Kenya and one in Brazil. Trials are already underway in all locations and the company expected initial results in the third quarter of 2025.

Moving to AgPlenus. In February 2025, AgPlenus announced the discovery of a new mode of action for fungicides against Septoria in wheat. The company made significant headway in the discovery phase with the identification of several promising candidate compounds targeting the new mode of action. AgPlenus intends to commence formal discussion with prospective licensing partners by year-end. I will end this part with Biomica's highlights.

The Phase I clinical study of BMC128 is progressing. New data has shown early signs of BMC128 monotherapy effectiveness through immune activations observed within 14 days of treatment. Regarding the newly launched obesity and longevity programs, initial computational analysis indicates that microbiome-based solution can be effectively designed and developed to target those areas. Early-stage discussions are currently underway to evaluate potential partnerships opportunities.

It is important to highlight that additional funding is necessary to advance to Phase II of the clinical study. Meanwhile, Biomica established an expense reduction plan, which will be completed by the third quarter of 2025. This reduction in expenses is already reflected in Biomica's financial results of the first quarter of 2025. I will provide more details for each subsidiary later in the presentation.

I will now continue with a short overview of Evogene and its growing focus on utilizing and improving its ChemPass AI tech-engine specifically for drug discovery based on small molecules. As you all know, our vision is to position Evogene 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 state-of-the-art computational technologies. This approach led to the development of our three proprietary AI tech-engine, each designed to drive the effective discovery and optimization of life science products.

Our AI-driven tech-engines offer a strong value proposition by efficiently identifying and optimizing the most promising candidates. We believe that this enhances the likelihood of achieving innovative products within competitive timelines and in cost effective way. To capture the value of the tech-engines offering, we established a business strategy designed to maximize potential while minimizing risk. This through a diverse network of collaborative partnership for life science product development.

We partner with experts in complementary field forming licensing or collaboration agreement with companies that bring domain-specific knowledge. Through this strategic alliance, we aim to codevelop innovative products. The upside for Evogene stems from revenue sharing mechanisms of the end product or through equity holding in the company developing the end product.

Here is a current snapshot of our business achievements to date. Evogene currently owns four subsidiary companies, each focused on a specific market segment. As I previously presented, ICL, Lavie Bio and Evogene signed a definitive agreement in April under which ICL will acquire most of the activity of Lavie Bio. Closing is expected by the end of the second quarter of the year.

In our last call, I presented this slide to clarify the guidelines directing Evogene's efforts in the near future to develop a more capital efficient model to generate greater value. This by focusing further on the use of our ChemPass AI in the field of AI-powered drug discovery and generating value and cash flow from our subsidiaries. In today's call, I would like to focus on the first items in each section highlighted in bold and elaborate on relevant achievement.

Let's start with our increased focus on enhancing ChemPass AI value proposition for the pharma market segment. In recent months, we have refined and assessed the value proposition of ChemPass AI highlighting its unique competitive advantage for the pharmaceutical and biotech industry. We aim to tackle a key challenge in small molecule drug development, discovering and designing novel compounds that are not only highly potent, but also met multiple critical parameters.

Our solution empowers drug development companies to develop breakthrough therapies while securing robust and broad intellectual property protection. At the heart of our offering is ChemPass AI, our proprietary computational platform built on in-house developed generative AI. Designed to explore uncharted chemical space, ChemPass AI produces precisely optimized molecules that meet complex product requirement with high potency.

In the following three slides, I will review ChemPass AI offering for the pharma industry. This is a typical drug discovery and development pipeline starting with identification of a protein target, continuing with the small molecule screening and optimization phases, then validation in preclinical assays and ending with clinical studies. ChemPass AI uniquely enable the discovery and design of highly potent novel compounds optimized across multiple parameters and tailored to a specific target protein, boosting the likelihood of success in preclinical and clinical studies and holding strong commercial value.

In each of the screening and optimization phases, ChemPass AI offers unique computational capabilities developed by the Evogene team that support the researchers' efforts to discover and optimize the most promising candidates. In the next slide, I would like to present how our foundation model, which is being developed in collaboration with Google Cloud announced in October 2024, enhance both novelty and the ability to address multiparameter optimization challenges.

This foundation model is at the core of our ChemPass GPT lead optimization package. Traditional generative AI models in drug discovery often struggle with small training data set, which frequently results in the generation of molecules lacking the desired properties. Evogene's proprietary ChemPass GPT foundation model trained on extensive chemical space of 38 billion molecules being designed to overcome these limitations dramatically expanding the boundaries of molecular discovery.

By exploring previously untapped clinical territories, our model enables us to generate novel, diverse and valid molecular structures, enhance predictions of efficacy, optimize complex multiparameters profiles with greater precision and flexibility. This unprecedented scale and depth of chemical understanding will uniquely position Evogene at the forefront of next-generation AI driven drug discovery. We expect to update on our progress in the near future.

I will now move on to the second item, our efforts to create meaningful exit event for Evogene through certain subsidiaries. As mentioned earlier, in April of this year, we announced the acquisition of the majority of Lavie Bio's activity and assets by ICL. This transaction is expected to generate value for Evogene in two ways, directly through the sales of MicroBoost AI for Ag and indirectly through future dividends as Evogene remains a major shareholder in Lavie Bio. In addition, more value may be generated from assets that are kept with Lavie Bio after the transaction.

I will provide additional details in my overview of Evogene subsidiaries. We remain committed to pursuing and updating you on further milestones that unlock value or generate cash from Evogene's subsidiaries. We will now continue with an overview of Evogene's subsidiaries. I would like to begin with Lavie Bio, a global leader in developing next generation biological products powered by MicroBoost AI through Ag tech-engines.

On April 21, 2025, we announced the acquisition of most of the activity of Lavie Bio by ICL for an aggregate value of $15.25 million. In addition, ICL will acquire Evogene's MicroBoost AI tech-engine for the agriculture field for approximately $3.5 million. As part of the transaction, ICL SAFE investment in Lavie Bio is being redeemed. Key assets to be transferred to ICL include Lavie Bio's core team and selected Evogene employees, the BDD technology platform, Lavie Bio's microbial bank and data assets and most of its development programs.

As I noted earlier, Lavie Bio's existing agreement with its current partners, Corteva and Syngenta, will not be transferred to ICL and may generate future revenue for Lavie Bio and indirectly to Evogene. The acquisition is expected to be completed during the second quarter of 2025 following the satisfactory completion of certain customary closing conditions.

I would like to emphasize that this transaction followed more than two years of close collaborations between ICL and Lavie Bio for developing innovative biostimulant solutions for row crops facing various abiotic stresses. The integration of Lavie Bio's activities into ICL aim to significantly advance the global ag biological field and drive impactful innovation in agriculture. This transaction reflects Evogene's ongoing strategy to unlock the value of its assets for the benefit of its shareholders.

Continuing with Casterra, Evogene wholly owned subsidiary dedicated to developing an integrated solution for large scale commercial castor farming, leveraging its unique elite seed varieties. Casterra's comprehensive approach is designed to address the growing global demand for stable and sustainable castor oil supply preliminary for use in bio-based products and biofuels. The company is utilizing Evogene GeneRator AI tech-engine to drive and accelerate the development of its proprietary elite castor seed varieties. Casterra began 2025 with strong momentum, achieving meaningful progress towards all of its annual targets.

Today, I would like to highlight achievements related to the first three. Increase in castor seed revenue in Africa. Since the beginning of the year, Casterra has delivered 250 tons of castor seeds to its partner in Africa, already surpassing the 215 tons delivered through all of 2024. We anticipate receiving additional orders for delivery later this year. In Brazil, we have strengthened our sales teams and launched the execution of a new marketing and sales strategy, initiating of proof of concept trials for grain cultivation in Kenya and Brazil.

I'm pleased to report that we have initiated POC trials for grain not seeds to be sold to castor crushing factories in partnership with one collaborator in Kenya and one in Brazil. Trials are already underway in all locations, and we expect initial results in the third quarter of 2025. With respect to development of new varieties, Casterra's third target, currently significant multi-location field trials are taking place in Kenya and Brazil. I look forward to providing further updates on these initiatives and additional milestones as the year progress.

Next is AgPlenus, a company dedicated to developing innovative and sustainable crop protection solutions powered by Evogene's ChemPass AI tech-engine. Since the start of 2025, AgPlenus has focused primarily on advancing its strategic collaboration with Bayer and on progressing its Septoria program. The collaboration with Bayer targeting the development of broad-spectrum herbicide is progressing according to plan and remains aligned with the agreed work plan.

Meanwhile, in its Septoria program, in February 2025, AgPlenus announced the discovery of new mode of action for fungicide against Septoria in wheat. Additionally, AgPlenus has made significant headway in the discovery phase, identifying several promising candidate compounds targeting the new mode of action.

The company plans to initiate engagement with potential licensing partners by year-end. Importantly, we expect that AgPlenus' activity will be funded primarily through strategic collaborations with leading Tier 1 companies. This objective is the focal point for AgPlenus management and a key area of support from Evogene. We believe that Evogene's substantial investment in its ChemPass AI for pharma will significantly enhance and accelerate these efforts.

Now turning to Biomica, a company focused on developing microbiome-based therapeutics for human health leveraging Evogene MicroBoost AI tech-engine. As discussed in previous calls, Biomica's primary focus remains on advancing its immune oncology program led by its lead candidate, BMC128. The ongoing Phase I clinical study is progressing towards completion with the majority of enrolled patients demonstrating prolonged clinical benefits.

Since the beginning of the year, Biomica has shown progress toward both its first and third annual targets. The Phase I study is advancing in accordance with the clinical protocol. Importantly, new data collected this year have provided additional mechanistic insights. Clinical response outcomes are now reinforced by immuno-oncological analysis which show activation of multiple immune cell types following administration of BMC128.

These findings serve as early proof of the candidate effectiveness observed as soon as 14 days after initiating BMC128 monotherapy. Regarding the newly launched obesity and longevity program, initial findings from computation analysis suggested that microbiome-based solution could be effectively designed to address these areas. Early-stage discussions are underway to explore potential partnership.

I would like to emphasize that in order to proceed to Phase II of the clinical study for BMC128, additional funding will be required. This will require substantial effort from Biomica's management with Evogene support. Additionally, Biomica established an expense reduction plan, which will be completed by the third quarter of 2025.

This concludes my section of the call, and I will now hand it over to Yaron for the CFO update. Thank you.

Thank you, Ofer. As of March 31, 2025, Evogene held consolidated cash, cash equivalents, and short-term bank deposits of approximately $9.8 million compared to approximately $15.3 million as of December 31, 2024. This cash balance does not reflect approximately $2 million due from Casterra's outstanding customers, the majority of which were received in the second quarter of 2025. Excluding Lavie Bio and Biomica, Evogene and its other subsidiaries used approximately $3 million in cash during the first quarter of 2025.

Revenues for the first quarter of 2025 were approximately $2.4 million, a significant decrease from approximately $4.2 million in the same period of the previous year. This decline was primarily due to revenues recognized in 2024 from AgPlenus' licensing agreement with Bayer and Lavie Bio's licensing agreement with Corteva. In 2025, revenues were mainly driven by Casterra's increased seed sales.

Research and development expenses for the first quarter of 2025 were approximately $3.2 million, a significant decrease from approximately $4.8 million in the same period the previous year. The decrease in expenses was mainly due to lower research and development expenses in Biomica and Lavie Bio compared to the same period the previous year as well as the closure of Canonic's operation during the first half of 2024.

Sales and marketing expenses decreased to approximately $645,000 in the first quarter of 2025 compared to approximately $992,000 in the same period last year. The decrease was primarily driven by a reduction in Lavie Bio sales and marketing activities. General and administrative expenses decreased to approximately $1.3 million in the first quarter of 2025 compared to approximately $1.7 million in the same period last year. The decrease was primarily attributable to reduced expenses related to Lavie Bio and Evogene as well as the closure of Canonic's operation during the first half of 2024.

Other income of approximately $191,000 was recorded in the first quarter of 2025 as part of the accounting treatment relating to a sublease agreement. The decision to cease Canonic's operations in the first half of 2024 resulted in other expenses of approximately $0.5 million primarily due to the impairment of fixed assets recorded in the first quarter of 2024. Operating loss for the first quarter of 2025 remained stable at approximately $4.1 million, similar to the operating loss reported in the first quarter of 2024.

Net financing expense income for the first quarter of 2025 was approximately $1.1 million compared to net financing income of approximately $241,000 in the same period last year. The increase was primarily due to the accounting treatment of prefunded warrants and warrants issued in the August 2024 fundraising. These instruments were classified as liabilities on the consolidated statements of financial position initially recorded at fair value and subsequently remeasured at each reporting period using the Black & Scholes option pricing model.

As a result, in the first quarter of 2025, the company recorded net financing income of approximately $1.5 million related to the remeasurement of these prefunded warrants and warrants. The net loss for the first quarter of 2025 was approximately $3 million compared to approximately $3.8 million in the same period last year. The $0.8 million decrease in net loss was primarily due to reduced operating expenses and increased net financing income, partially offset by decreased revenues as noted above.

Operator?

(Operator Instructions) The first question is from Ben Klieve with Lake Street Capital Markets.

With the 250 tons of castor seeds delivered in the first quarter, does this complete the initial order from any placed in mid-2023 or do you expect additional sales from this order later this year? Question two, you noted a belief that you would receive additional orders at Casterra this year relative to the initial orders from 2023, which totaled at $11.1 million.

Do you expect a follow-on order to be an increase or decrease, and do you expect additional orders to be still delivered in 2025 or will this be a delivery in 2026 and beyond?

Ben, this is Ofer and thank you for this question and I will try to disclose as much as I can. So let's start with a short explanation that every year, there are two sowing seasons in Africa, and in Brazil, there is in certain area only one season and in certain area there are two seasons, but the majority is only one season. And the orders that we receive are usually at least six months ahead of the sowing season, sometimes even more because it takes us time to produce the seeds.

So the current shipment that we sent, it was still related to the -- it was based on the same terms like the first order that we received in 2013. But we are working now with our partners with respect to the second season this year and how much seed they need for the next season. So yes, we are still waiting to receive additional order for this year.

Now with respect to when we are delivering the seed to our partners. Of course, it's very important to deliver the seed until the specific season that the seeds are expected to be sown in the different location. And the good news is that in the past when we received an order, then we started to produce the seed. So now the state is that we have nice quantity of inventory that in case we receive an order during this year for the next season, we will be able to deliver additional seed even this year.

And what we are expecting from our partners is to give us the forecast on how much they believe they will need for the future. Our expectation is that, again, I can't disclose much because it's all (inaudible) I also reflect what's going on in partners at least in this area. But I believe that the interest in castor oil is keep growing, I'm talking about castor oil sold for biopolymers and for biofuel. We see nice increased activity actually more in Brazil these days rather than in Africa and we are now -- and I think I mentioned this in my presentation, that we are expanding our marketing activity in Brazil in addition to what we have or what we built already in Kenya.

I also would like to draw to your attention, and I think that I discussed it in the past and we started to put more emphasis on it, what we see is that the demand for castor oil is huge. Actually, we hear from more and more company that crush castor grain into oil that they are willing to buy almost every quantity available because the demand for oil is much more than what is compared to supply. And the main problem is to find farmers, which can really grow the variety that we develop in a way that can really capture the value of our genetics.

And what we are doing now is actually we are conducting a field trial in a commercial level both in Kenya and also in Brazil to demonstrate and bring big farmers to see how we are really capturing the value and utilizing our seed variety. And this is what we are expecting to see as a significant growth driver to our sales in the future. So I think that yes, we continue to see growing interest in castor oil, which led to increasing demand for castor grain, which can lead to increase in the demand of castor seed. Still, the bottleneck is really to educate farmers how to benefit from the genetics that we develop.

And by the way, it's not just for Evogene. There are not so many companies that sell castor seed, but even for others, I think that the education is a very important piece in the story. And now, we are putting more emphasis on this area and I'm expecting to see a nice growth definitely maybe in the second half of this year and even more in the year 2026 where more and more farmers hopefully will be impressed from the performance of our variety and using -- based on the growth protocol that we develop and that can really generate a nice margin and a nice revenue from growing the castor grain using our variety.

An additional question from Ben. What is the net cash inflow Evogene will be receiving from the ICL for the Lavie Bio transaction?

So what I can share is the following. The amount of money we're going to receive directly is $3.5 million from selling Evogene MicroBoost for Ag. In addition, Lavie Bio is going to receive $15.25 million. From this, we need to deduct the investment of ICL through SAFE. We need to add also the fund already exists in Lavie Bio and then we're going to get our share from this portion while the only shareholders is Evogene, Casterra and just a little bit also employee.

In addition, we are expecting to see revenue coming from our two collaborations agreement from Lavie Bio, one with Syngenta and the other one with Corteva. At least for one of them, we have expectation that it will lead to a commercial product that can generate a nice value for Evogene.

By the way in addition, maybe we need to add and this is why I can't give you the exact number. Any (inaudible) that will be conduct till the closing date also will add to the cash that Lavie Bio will be able to distribute as a dividend to its shareholders. So most of the money that will stay in Lavie Bio after they exit will be delivered to Evogene, which definitely strengthens our financial position and can help us to continue our operation according to plan through the whole year and definitely next year as well.

The next question is from Scott Henry at AGP.

Casterra sales were strong in the first quarter of 2025. How should we think about the rest of 2025 and what should the cadence look like?

So I can't give a projection because it also depends on the performance of our partners that are buying from us the seed. I'm not talking about the quality of the seed, I'm talking also about the success in growing grain in the different territory and this is exactly what we are talking with them.

As I said, I see a continued growing interest and actually, as I said, we are quite excited from what we see also not just in Africa, but also in Brazil. And I also feel comfortable that assuming we will get additional orders, so we already have the inventory to supply those specific orders. So we will be able to deliver the seeds till the end of this year.

The next question is at close of asset sale, how much cash will you receive?

So I think that I already answered this question that was asked by Ben Klieve.

The next question is, what are the customary closing condition for the ICL deal? Is there any danger for not closing the agreement?

So usually what you expect is the approval from the antitrust user, another approval you need is from the Israeli Innovation Center and other closing condition. At least for now, we don't see any reason why we won't be able to close the deal. In some cases, we already received the needed approval, and we are advancing in discussion with the other governmental agency in this respect. So we hope to be able to close the deal as we stated in the end of this quarter.

Additional question from Scott Henry of AGP.

The sale of Lavie Bio should solidify the balance sheet. Combining this with reduced expenses, how should we be thinking about the strength of the balance sheet for the foreseeable future in terms of duration?

So of course, and we disclosed this information is that we are not just transferring Lavie Bio activity to ICL, but also few employees are moving from Evogene to ICL, and I also mentioned that we are going through some expense reduction plan. So I believe that we are safe from a financial perspective till the end of 2026 assuming a very, very conservative analysis.

Assuming good things will happen, which this is exactly what we are working on, I believe that we can see a significant improvement. And again, we always decided to cut our expenses even more than what we are doing now. But definitely, it really puts us in a much better position compared to where we were before this transaction.

The next question is from Brett Reiss of Janney Montgomery Scott. Of the $18.75 million consideration in selling Lavie Bio assets, what net cash to the parent was realized? What happened to the narrative that there would be multiple oil companies lining up to buy castor seeds to replace palm oil as the biodegradable component in diesel fuel?

So with respect to the first question, I already answered it as a response to Ben Klieve's question. And with respect to the second question, I think that I already discussed it in one of my previous analyst call, but if not, it's also connected to what I mentioned earlier. What we see is that the demand for castor oil is there, but the willingness of additional big oil company to adapt the E&I model where they are buying seed, distribute it to farmers helping them to grow the castor and produce grain, then to take the grain and crush and they built a crushing factory in Africa and they are also in the processing to build a refinery factory in Africa.

Currently, we don't see this approach adopted by additional oil company. So if there will be more oil crushing factory, they will be able to sell additional oil because the demand is there. And I'm coming to the same statement where we see today the bottleneck is more in the cultivation moving from seed to grain and we need to educate the farmer how to do it.

As I said, and I will repeat it again, we hear more and more from 1 company that has a crushing factory, we are willing to buy at actually a very nice price almost every quantity you will bring us of grain because there is a demand for it. And we are there now to start to work hard in order to bring more and more farmers to use our variety and to start to grow castor grain. I think it's a process that I hope that we start to see it generates fruits in the next year or two.

Final question also from Bret Reiss. With your reduced expenses, how long will the cash last you?

So I think I answered this question earlier. We feel very comfortable till the end of 2026 assuming a very conservative approach, which we hope first that there will be additional revenue or cash injection to the company from company sales or strategic collaboration agreement. And if something like this won't happen, so we can always decide to cut our expenses even more to increase the length of the company life without needing to raise additional money.

There are no further questions at this time. Mr. Haviv, would you like to make your concluding statement?

Yes. Thank you, everybody, for participating in our analyst call. We are continuing to move forward in almost all fronts. Yes, we had to cut our expenses. It's not an easy period for companies in life science industry. But I think that the plan that we built and including with all the growth engines that we have, I'm really looking forward to continuing to update you and to see the company growth curve. It's about time.

Thank you, everybody.

Thank you. This concludes Evogene's first-quarter 2025 results conference call. Thank you for your participation. You may now go ahead and disconnect.