Evogene (EVGN) 21 Nov 242024 Q3 Earnings call transcript

Welcome to Evogene's Third Quarter Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded November 21, 2024. This presentation contains forward-looking statements relating to future events and Evogene LTD may, from time to time, make other statements regarding our outlook or expectations of future financial or operating results and/or other matters regarding or affecting us that are considered forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995 and other securities laws as amended.

Statements that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements may be identified by the use of such words as believe, expect, anticipate, should planned, estimated, intend and potential or words of similar meaning.

We are using forward-looking statements in this presentation when we discuss Evogene's strategy and vision, Evogene's value proposition and ability to identify and optimize candidates enhance the likelihood of achieving breakthrough products within competitive time lines and in a cost-effective way, Evogene's partnerships and Evogene's ability to harness value and leverage ChemPass AI, the expected timing of and ability of Casterra to supply purchase orders, the expected timing of [ Levi Bio's ] sale, AgPlenus Pipeline by Biomica BMC128 future activity and Evogene's projected cash usage for 2024 and Evogene anticipated continued revenue growth in for 2024.

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 by such forward-looking statements due to a variety of factors.

Many of which are beyond our control, including without limitation, the current war between Israel, Hamas and Hezbollah and any worsening of the situation in Israel, such as further mobilization or escalation in the northern border of Israel, those described in greater detail on Evogene's annual report on Form 20-F and in other information, Evogene files and furnishes with the Israel Securities Authority and the U.S. Securities and Exchange Commission, including those factors under the heading Risk Factors. Except as required by applicable securities laws, we disclaim any obligation or commitment to update any information contained in this presentation or to publicly release the results of any revisions to any statements that may be made to reflect future events or developments or changes in expectations, estimates, projections and assumptions.

The information contained herein does not constitute a prospectus or other offering document nor does it constitute or form part of any invitation to 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 any information or any part of it or the fact of its distribution from the basis of or be relied on in connection with any connection contract, commitment or relating there to or to the securities of Evogene or the company.

With us on the line will be Yaron Eldad, CFO of Evogene and Ofer Haviv, President and CEO of Evogene.

Now I will turn the call over to Ofer Haviv, Mr. Haviv, please go ahead.

Good day, everyone. In today's conference call, I will begin with a review of the financial and business highlights for the third quarter, followed by an overview of Evogene's activities. I will then conclude with recent achievements by our subsidiaries since the last analyst call. After my remarks, Yaron Eldad Evogene's CFO, will provide a financial update on Q3 activities.

We will then open a Q&A session.

Let us begin with the financial and business highlights. In the first 9 months of 2024, total revenues reached approximately $6.9 million compared to approximately $5.1 million in the first 9 months of 2023.

In Q3 2024, total revenues reached approximately $1.8 million compared to approximately $3.8 million in Q3 2023. The revenues in Q3 2024 are mainly based on the Casterra's seeds sales. The revenues in Q3 2023 included a license fee payment of $2.5 million received by Lavie Bio.

For the full year 2 Evogene anticipates continued revenue growth compared to the previous year, mainly due to Casterra supply of existing seed orders. G&A expenses in Q3 2024 included expenses of approximately $1.4 million, resulting from Evogene's fundraising and an allowance for [ Decode ] from 1 of Casterra's seed suppliers. The remaining G&A expenses in Q3 2024 amounted to approximately $1.5 million, unchanged compared to Q3 2023. In the first 9 months of 2024, operating loss was approximately $17.6 million, which included the G&A expenses of approximately of $1.5 million due to average and fundraising and allowance for debt full debt mentioned above and other expenses of approximately $0.5 million compared to approximately $18.9 million in the first 9 months of 2023.

In the first 9 months of 2024, Financing expenses net were approximately $0.38 million compared to financing income of $2.3 million in the first 9 months of 2023. The financing expenses in the first 9 months of 2024 net included $0.88 million expenses related to accounting treatment of warrants issued as part of Evogene pound rating. Projected cash unit for 2024 without Biomica and Lavie Bio is approximately $8 million to $10 million compared to $12.5 million in 2023. In August 2024 Evogene completed a fundraising totaling of $5.5 million in gross proceeds, including ordinary shares and 2 shares of warrants. The company has taken measures to strengthen its cash position by reducing its expenses, including a reduction of 16% in its head count and is exploring additional business opportunities to inject funds into the company and its subsidiaries.

Now I would like to highlight the many achievements made by Evogene Group's previuos quarter and up to date. Starting with Evogene, in October, Evogene announced a unique collaboration with Google Cloud to pioneer a generative AI foundation model for the -- for novel small molecule design. This collaboration aim to position in campus AI tech engine in the forefront of generating and optimizing novel small molecules structured with specific desired properties. I will elaborate on the collaboration later in the presentation.

In addition, with respect to our collaboration for product development with external parties, we received a grant approval from the Israel Innovation Authorities for the second year in the collaboration with water shade and Ben-Gurion University to improve prescription traits using CRISPR technology. This technology is embedded in our GeneRator AI tech engine.

Now let's move to Casterra.

The third quarter marked a significant milestone for Casterra with the codification of a reliable seat production infrastructure in Kenya and Brazil. In July, Casterra announced the completion of growing and harvesting season in Brazil and seed shipments have already been initiated. With respect to the seat production in Africa, Casterra achieved a key milestone in its operational expansion and completed its first shipment of over 100 tons of its Casterra seeds, which were growing and processed in Kenya. It is now harvesting season in Africa with completion expected by the first quarter of 2025. This current season will support existing and future seed demands. Casterra is expected to supply a significant portion of its existing seed orders by the end of 2024. Casterra and its business partners are currently discussing the supply schedule quantity and [indiscernible] varities of the remainder of the orders and future orders for 2025. In recent months, the company presented an impressive expansion with its first commercial product, Yalos, a [indiscernible] used as seed treatment. In July, Lavie Bio announced the commercial expansion of Yalos to winter wheat with initial sales passing quarter, and in November to soybean with initial sales expected in spring 2025.

Additionally, Lavie Bio advance LAV321, a biofuel targeting to precommercialization following successful field trial results.

Moving to AgPlenus. The main achievement of the passing quarter was in the company's internal pipeline which is separated from its collaboration with external parties, buyers and Casterra. AgPlenus initiated a new fungicide program focusing on Septoria a fully affecting crop worldwide. 3 protein predicted by campus AI as targets were very tied to be essential in Septoria.

Additionally, AgPlenus was identified in silico around 1,000 compounds that are predicted to be effective in the protein targets and are now being tested. I will end this part with Biomica's highlights. The Phase I clinical study for microbiome-based therapeutics, BMC128 is new completion with positive response of 5 patients. [indiscernible] a pre-IND meeting earlier this year with positive feedback from the FDA and is continuing with the preparation for the IND submission. I will provide more details on the achievement of this subsidiary later in the presentation.

Moving on to the reduced Evogene.

Our vision is to positioning Evogene as a primary 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 container technologies. This approach led to development of our 3 proprietary AI tech engines, is designed to drive the effective discovery and optimization of life science products. MicroBoost AI, direct and accelerates the development of micro-based products. ChemPass AI for small molecule-based products and GeneRator AI for products based on genetic elements.

Our AI-driven tech engines offer strong value proposition by efficiently identifying and optimizing the most promising candidates. This enhanced the likelihood of achieving breakthrough products within competitive time lines and in cost-effective way. To maintain the competitive advantage of our AI tech engines Epogen continuously invest in enhancement and the addition of new applications and capabilities. This commitment is exemplified by our recent collaboration with Google Cloud to develop an advanced generative AI foundation model for small molecules design. The collaboration leverages Evogene's deep expertise in competitional predictive biology and chemistry alongside Google Cloud's leadership in AI and machine learning. Building on the successful integrating of ChemPass AI into Google Cloud, this collaboration will now focus on expanding the value of our tech engine by creating a cutting-edge foundation model. This model will be designed to generate and optimize innovative small molecule structures with better specific desired properties by expanding the training set for the model from 6 million molecules to 40 billion molecules.

The primary objective of this initiative is to improve and accelerate the discovery and development of new small molecules for drug development, sustainable crop protection and other innovative applications across various life science sectors. The significant expansion of the model training set will lead to the following key benefits: innovative molecules, more accurately addressing the specific product requirements shorting development time lines, and hence cost efficiency. I want to emphasize that the foundation model, which will be integrated in ChemPass AI we remain the exclusive property of Imogen, our proven track record in competition biology and chemistry, combining with Google Cloud's AI expertise. Create compelling value proposition for companies aiming to improve their R&D and gain a competitive edge in the market.

Our 3 AI tech engines were strategically designed to align with the best potential across multiple market segments rather than being confined to a single area.

While this technology holds exceptional promise, each market segment demand specialized expertise for product development and long-side significant financial resources and advanced development and production infrastructure.

To effectively harness the value embedded in our technology, considering the mentioned requirements, we have implemented a targeted business strategy tailored to address those needs.

Our business strategy is designed to maximize potential while minimizing risk. This by establishing a diverse network of collaborative partnership for life science product development. We partner with experts in complementary fields forming licensing or collaboration agreement with companies that bring domain-specific knowledge such as in pharmaceuticals or Agritech.

Now this strategic alliance, we aim to codevelop innovative products, the uptake for Evogene's teams from revenue-sharing mechanism of the end product or through equity holding in the company developing the end product.

Here is a current snapshot of our business model, even currently own 4 subsidiary companies, each focused on a specific market segment.

In market segments not covered by our subsidiaries, we have established collaboration with external companies. Starting this past quarter, we have increased our efforts to establish partnership with companies specializing in small molecule drug development, leveraging the unique capabilities of ChemPass AI. To support this strategic focus, we have strength the business development team with a dedicated business development manager with the clear objective of generating new business opportunity for Evogene in this segment.

Additionally, as part of our collaborative initiatives in areas behind the focus of our subsidiaries, We recently announced alongside water shade AC, former League Color farm and Ben-Gurion University, the approval of a second year grant to advance our joint project and to enhancing [ protection ] traits through gene editing technology. In the second year, the collaboration will focus on scaling up CRISPR technology industrial production of [ Gen Crown ] with plans to extend this advancement to additional restriction species.

This slide highlights the commercial and financial partners engaged with the Evogene Group.

We are proud of the progress and achievements we have made today.

Now I will review our subsidiaries' activity and achievements. I would like to begin with Casterra, Evogene wholly owned subsidiary focused on developing an integrated solution for the large-scale commercial cultivation of [ castor ], leveraging its unique elite seed varieties. Casterra's solution is designed to meet the global demand for a stable castor oil supply, mainly for the biofuels and Biobase products. The company is utilized the generator AI tech engine to drive and accelerate the development of its distinct elite castor seed varieties.

The third quarter marked a significant milestone for Casterra as its investment and efforts to establish a reliable seat production infrastructure in Kenya and Brazil began to show positive results. In July, the company successfully completed the growing and harvesting season in Brazil. More recently, Casterra finalized the establishment of the city production facility in Kenya, which now supports the processing of seeds grown and harvested in Africa to meet the company's needs. Customer is now in the mid harvesting season in Africa. Due to the extended rain citizen, the company expected the harvest to be completed by early next year. The seat being produced during this cycle will support both current and future demand. Casterra is expected to supply a significant portion of its existing seed orders by the end 2024. Mainly through the seed production operations in Kenya. Currently, Casterra and its business partners are discussing the supply schedule, quality and seed varities of the remainder of the orders and future orders for 2025. Continuing with Lavie Bio, a global leader in developing next-generation unbiological product. Powered by the MicroBoost AI tech engine. Since our last call, Lavie Bio has achieved 2 significant milestones with its first commercial product, Yalos, a [ paloniquolent ] for [ rocks ].

First, the product has expanded to inter wet with initial serves to grower starting this past quarter. More notably, recent positive results have been obtained for Yalos treatment for soybean, one of the most important crops in agriculture. Initial sales to soybean growers in North America are expected to begin in the spring of 2025.

Another key development in Lavie Bio's product pipeline is the advancement of LAV321 a biofungicide targeting down in media, which has now reached the pre commercialization stage following successful field trial results is for the third consistative year.

I was also very pleased when Lavie Bio announced in July, a major milestone in the collaboration with ICL. Within just 12 months, the team identified over a dozen novel micros and at developing bio stimulant solution to help crops withstand extreme weather conditions. These microbes are currently undergoing validation in diverse field trials. This is a strong example of the power and efficiency of Lavie Bio technology to deliver promising candidate in a relatively short time frame.

Finally, Lavie Bio has received a grant from Israel Innovation Authority to advance the development of micro fermentor a groundbreaking technology with the potential to transform the economics of ag biologicals. This ground underscores the value and uniqueness of Lavie Bio's offering and innovative culture.

Next, I would like to discuss our plans a company specializing in the development of novel and sustainable crop protection products, utilizing Evogene ChemPass AI tech engines.

As previously presented, AgPlenus is engaged in 2 key collaborations with Bayer and Corteva. I'm pleased to report that both collaborations are progressing as planned according to the agreed work schedule.

Regarding AgPlenus pipeline, which is independent of the mentioned collaborations, the company's primary focus is on developing fungicide to address septoria funding a significant threat to crop worldwide. I would like to highlight 2 important achievements that took place in the past quarter, 3 proteins predicted by campus as potential target for septoria treatment have been confirmed as essential in the [ Fully's ] life cycle.

The second milestone using ChemPass AI the company identified approximately 1,000 predicted to be effective against these 3 protein targets. These compounds are currently undergoing testing with at least 1 target already showing high rates of in vitro hits. This advancement marked significant progress in AgPlenus missions to develop innovative solutions for global pro protection.

Now turning to Bermuda, which specialized in developing microbiome-based therapeutics for human has powered by the MicroBoost AI tech engine. At present, Biomica is primarily composed on advancing its immuno-oncology program with a lit candidate, BMC128. The Phase I clinical study is nearing completion. With positive results observed in 5 patients showing prolonged response. Earlier this year, the company conducted a pre-IND meeting with the FDA, receiving positive feedback. Biomica is now continuing with the preparation for the IND submission. In preparation for the Phase II IND clinical study, Biomica is also in the process of manufacturing additional clinical batch of BMC128.

Additionally, following extensive evaluation of numerous potential indications, Biomica has initiated 2 new programs focused on obesity and longevity. The company has obtained and partially analyzed relevant data sets to support these new programs, making an exciting expansion of its therapeutic pipeline.

Now Evogene's CFO, Yaron Eldad, will provide a review of the financial results for the third quarter.

Thank you, Ofer.

As of September 30, 2024, Evogene had held consolidated cash, cash equivalents and short-term bank deposits of approximately $20 million. This amount does not include approximately $1.4 million of payments due from customers regarding deliveries made in September 2024. The consolidated cash usage during the third quarter of 2024 was approximately $5.7 million, excluding Lavie Bio and Biomica Evogene and its other subsidiaries used approximately $3.1 million in cash during the third quarter of 2024. The projected cash usage for 2024, excluding Lavie Bio and Biomica is expected to be around $8 million to $10 million, marking a notable 20% to 36% decrease from approximately $12.5 million in 2023. Revenues for the first 9 months of 2024 were approximately $6.9 million, an increase from approximately $5.1 million in the same period the previous year.

This growth was primarily driven by revenues recognized from AgPlenus new collaboration with Bayer and increased Casterra revenues from the supply of castor seeds during the period. Revenues for the third quarter of 2024 were approximately $1.8 million compared to approximately $3.8 million in the same period in the previous year. The decrease was mainly attributable to revenue of $2.5 million recognized in Lavie Bio in the third quarter of 2023 by the licensing agreement with Corteva partially offset by the increased revenues recognized in Casterra and AgPlenus during the third quarter of 2024. Evogene anticipates continued growth in the fourth quarter of 2024 compared to the previous year, mainly based on Casterra's forecast for seed order supply. Research and development expenses, net of on refundable brands for the 9 months of 2024 were approximately $13.2 million. A significant decrease from approximately $15.2 million in the first 9 months of 2023.

The decrease in expenses is mainly due to the session of canonic activity and a decrease in certain development expenses in Biomica as compared to the same period the previous year. Research and development expenses, net of nonrefundable grants for the third quarter of 2024 were approximately $4.4 million and decreased as compared to approximately $5.1 million in the same period in the previous year. The decrease is mainly attributable to decreased expenses in Canonic and Biomica, as mentioned above. Sales and marketing expenses for the first 9 months of 2024 were approximately $2.8 million, a slight increase from approximately $2.6 million in the same period in the previous year. The increase is mainly attributable to increased sales and marketing activities in Casterra during the first 9 months of 2024, as compared to the same period in 2023.

Sales and marketing expenses for the third quarter of 2024 were approximately $0.9 million and remained stable as compared to approximately $0.9 million in the same period in the previous year. General and administrative expenses for the first 9 months of 2024 increased to approximately $6.1 million from approximately $4.8 million in the same period of the previous year. General and administrative expenses for the third quarter of 2024 increased to approximately $2.9 million compared to approximately $1.5 million in the same period of the previous year. The increase during the first 9 months period and the third quarter of 2024 were mainly attributable to expenses recorded in Casterra due to a provision on doubtful debt of 1 seed supplier and transaction costs related to the Evogene's fundraising that occurred in August 2024 totaling approximately $1.4 million.

Total other G&A expenses in Q3 2024 amounted to approximately $1.5 million, unchanged compared to Q3 2023. The decision to seize economics operations in the first half of 2024 resulted in other expenses of approximately [ $0.5 million ] for the 9 months period ended September 30, 2024, mainly due to impairment of fixed assets in the first quarter of 2024. The operating loss for the first 9 months of 2024 was approximately $17.6 million, a decrease from approximately $18.9 million in the same period of the previous year. Mainly due to increased revenues, as mentioned above. The operating loss for the third quarter of 2024 was approximately $7.5 million an increase from approximately $4.2 million in the same period of the previous year, mainly due to decreased revenues and increased G&A expenses as mentioned above.

Financing expenses net for the first 9 months of 2024 was $378,000 compared to financing income net of $234,000 in the same period of the previous year. Financing expenses net for the third quarter of 2024 was $757,000 compared to financing income net of $320,000 in the same period of the previous year. The increase in financial expenses net during the 9-month period and the third quarter of 2024, as compared to the respective periods of 2023, was mainly associated with accounting treatment of pre-funded warrants and warrants issued in August 2024 fundraising.

Pre-funded warrants and warrants were classified as a liability on the consolidated statement of financial position were initially recorded at fair value, and subsequently, we measured at each reporting period using the Black & [ Short ] auction pricing model.

As a result, during the third quarter, the company recorded net financial expenses related to warrants of approximately $892,000. The net loss for the first 9 months of 2024 was approximately $18 million compared to approximately $18.6 million in the same period of the previous year. The net loss for the third quarter of 2024 was approximately $8.2 million compared to approximately $3.9 million in the same period of the previous year. The $4.3 million increase in net loss for the third quarter of 2024, as compared to the third quarter of 2023 was primarily due to decreased revenues increased general and administrative expenses and increased financial expenses as mentioned above. This decrease in net loss was impacted by an amount of approximately $1.5 million due to transaction costs and the financial expenses related to warrants issued in that transaction. Operator?

[Operator Instructions] The first question from Ben Klieve of Lake Street Capital Markets.

On the second quarter call, you said you expected a material update on a follow-on order for 2025 deliveries at Casterra by today's call. This did not happen. Why did this not materialize?

This is Ofer speaking, that you -- thank you, Ben, for joining to this call. Yes, in previous earnings call, we were expected to receive orders from our partners. But to our [ server ], we still didn't see it not because there is a complication. It's many core there are still the internal discussion based on the performance that they are receiving in their bills.

So since we didn't receive the final decision, which we called it [indiscernible] almost every day from now.

So this is the reason that we couldn't give such an update for today's meetings. But it's not because there is any specific complication in the discussion or the ongoing relationship with our partners.

Another question from Ben Klieve. Have Casterra continued delayed deliveries. Of the initial order placed in mid-2023 compromised its ability to secure a follow on order?

With respect to this question. I'm just retaining from [ past ] 3 days in Kenya. Where we visit our our seed production site, together with [ Juha ], [indiscernible], we published and we reached to a stage that I think that we sold the production issue for in Africa.

Our partners are quite happy value. Actually, we are planning to bring some of them to our site to becoming extend impressed from what we achieved there. And I believe that we are -- we will continue to stay an important suppliers to our partners in Africa.

As we disclosed, there was some delays in the harvesting season because of the extension of the rain in Kenya. But now we are moving very fast. Tony will put some nice pictures and the short movies from our visit in Kenya, which might have been in quite impressive. And we are working to the stage that we can generate even close to hundreds of tons of the [ ANC ] seds every month.

So I think that we are in a good position with the future future seed supplies to our partners.

So yes, there were some delays. And yes, some seed producer's that we get in 2023 disappointed from their performance. But the thing that now we are behind this complication, and we are looking forward to a much better performance futures with specific production.

Another question from Ben Klieve. Is Evogene contributing any cash to the collaborations announced with Google and Ben-Gurion University. If so, how much?

So with respect to the Ben-Gurion University collaboration. Actually, we are covering through the grant.

All of our expenses -- so there is no additional cost for Evogene been participating in this collaboration. With respect to Google, so each site is covering it's on expenses. From our perspective, this is part of our ongoing product development process.

So it's already part of the budget. And Google were very excited to join forces with us, and they all contribute to this correction has a significant amount of resources and and the employee to help us to build this amazing fundamental model that can accelerate our progress.

So as I said, it doesn't have an effect on our budget compared to what we planned while actually the end product is more -- much more than what we continued due to the Google involvement in this project.

The next question how much cash at parent company level as of the 30 of September 2024, what is the remaining cash usage for the balance of 2024, why do you carve out Biomica and Lavie Bio in saying what your cash usage will be? If you deliver the seeds, how long how long does the customer have to pay? Could you give us more detail on what additional opportunities to inject funds are available?

Yaron, can you take this answer?

Yes, sure.

So [indiscernible], thanks for the question. In Evogene and the mono subsidiaries had $8 million in cash as of September 30. We had another $2 million of seeds that were delivered during the end of September and beginning of October. And part of the spend is already in and the rest should arrive shortly.

In addition to that, we expect to deliver by the end of the current quarter seeds in amount of $3 million.

So I feel comfortable to say that we have enough cash going forward for the year and more.

And with respect to the second part of the question, So first, I hope that you get the answer to your question.

So in a way, we have close to $10 million just for Evogene, and we are expecting to receive additional funds in the next few months.

So I think that we have quite a stable asset position. And I think that probably from here and on, we will start to put more information on how much money we have for Evogene and for Biomica and Casterra -- sorry, and Lavie Bio, please remember that apart from demand that these 2 company calls they are -- it's -- is going to be used in the future to pay for Imogen for the use of our technology and for receiving different type of services.

So part of the money that you see which belong to Lavie and to Biomica, Evogene going to use to cover it's on expenses. And usually, when we deliver the amount of money that we received is around from [indiscernible] when we send the sales to the money, it's up to 45 days.

So it's not that that we need to wait for too long. And even though we're talking about the big numbers. And additional opportunity to generate revenue for the company.

So I think I mentioned in the past that one of the options is a fund raising for our subsidiary level. This is something that we are working on it now, and we must now intensively. And in addition, we're also exploring an opportunity to sell a part from our holding in our subsidiaries or even maybe to sell completely one of our subsidiaries to potential strategic partners or companies that show interest in what those companies are doing.

So I think that there is a few avenues that we can bring additional cash to strength our finance profit position, and this event will happen.

So then I think that this will be a really nice addition to our cash balance and to the stability of the company.

So I hope that address these questions.

The next question from Brett Reiss of Janney Montgomery Scott. Where do you think the sales level for Yalos can be 2 years? What is your base case target? I'm not looking for quarter's guidance, but what is realistic sales run rate a few years out?

Amit, the CEO of Lavie Bio will take that answer, please question, please.

Yes. Thanks, Brett, for the question. What makes us optimistic about Yalos sales are 2 factors that happened this year? One is, even though we're still in penetration mode, we received very good feedback from the farmers using the product, which came back and are planning to expand next year, and this is one of the biggest KPIs we put to our service return to customers that are actually growing. And the second is the proof that we did that Yalos works on soybean.

Soybean is a much more prime crop for bio stimulants also 100% of soybeans seeds are treated. And the acres are 4 times the acres of what we do currently in terms of wheat.

So soybean is a very, very big win for us and a very big potential. And that's the -- we anticipate that in 2 years, sales will start being significant, and you'll see them as material in Evogene's revenues that will be reported.

The next question from Scott Henry of AGP.

How has the early feedback been on the Yalos launch. How should we think about peak annual revenues for Yalos?

So as I said, the feedback has been good. Wheat is a more challenging crops.

Soybean is a much more relevant crop -- but also in the wheat growers, we see very good results and very satisfied growers that are planning to expand their use of the product.

So this is in terms of the feedback.

In terms of sales, as I said, in the next 2 years, it will already start to be significant. And the big sales be at significant double-digit millions of dollars of sales.

A further question from Scott Henry of AGP. How should we think about Casterra revenues in 2025 any color relative to 2024?

So as I mentioned earlier, we can disclose much information about the forecast for 2025 because we are still discussing this method with our partners.

In addition, there is some significant opportunity that we are evaluating that the maturity that I can have a relatively significant effects on our -- on Casterra revenue for next year.

So I believe that next year will look better than this year. And the fact that we solved the issue of set production production capacity in Kenya, and we also showed a very nice performance in Brazil with respect to see production this year. And this is a very important message.

Think about it as currently, we are the only seed producer of castor in Africa. This has put us in a very strong competitive position compared to other companies that are located in other plays. There are not many, by the way. They are only few and they are located outside of Africa.

So shipping and delivery time is a major issue why we focus the challenge by locating our seat production facility in the heart of the Africa in Kenya.

The next question is from Stefano DuoraRazio, an investor.

Could you provide insight into the current level of insider ownership in the company and how management is aligned with shareholders' interests.

Thank you, Stefano, for joining to this analyst call. I don't have to hear the information in front of me with respect to insider ownership. We can deliver this information after this analyst call, you can contact me directly. But with respect to management, a significant portion from even management compensation is based on equity through an auction. This is the same thing also with Evogene, Group CEO in our subsidiary.

You just -- and the average salary is in our growth is lower than what you might expect for companies in our side in where we are. And we compensate on this through an equity on company in an auction mechanism.

So for us, there is a very -- and I think that this mechanism is really create a strong link between management interest and shareholder interest. And we put a lot of thinking how we can generate value to our shareholders because at the end of the day, we -- a certain level we invented as well.

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

Yes. Thank you. I would like to thank everybody for joining today's analyst call. And we're looking forward to continue to update you on the progress of Evogene subsidiaries. I believe that next year is going to be a very promising year for Imogen, and we're looking forward to achieve our targets. Thank you very much.

Thank you. This concludes Evogene's Third Quarter 2024 Early Results Conference Call. Thank you for your participation.

You may go ahead and disconnect.