Evogene (NASDAQ:EVGN) Q4 2021 Earnings Call

0:00 Ladies and gentlemen, thank you for standing by. Welcome to Evagen's fourth quarter 2021 results conference call. All participants are 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 zero. As a reminder, this conference is being recorded March 10, 2022. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evogen'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 Evogen. I encourage you to review Evogen'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.

1:05 For example, Evagen 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, commercializations, launches, pipelines, milestones, Potential collaborations and other plans for 2021 and 2022, 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 the results. Many of the factors that impact whether forward-looking statements will come true are beyond the control of Evogen and may cause actual results to differ materially from anticipated results. Evagen 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.

2:09 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 the call over to Ofer Haviv, Avogen CEO. Ofer, please go ahead.

2:29 Thank you and good day, everyone. We appreciate you joining us today for our fourth quarter 2021 conference call. Joining me today is Ms. Dorit Breiner, our CFO. I will begin the call with sharing the company's plans for the coming years, what we aim to achieve, and how our three tech engines are the driving force behind our activities and serve as the main competitive advantage of our subsidiaries. I will then go on to present the achievements in each of our subsidiaries and how Evogen's tech engines have supported those achievements. I will then turn the call over to Dorit, who will summarize the Evogen financial results for the fourth quarter and whole year of 2021.

3:20 We will then open the call for your questions. As you know, InvoGen aims to revolutionize the development of novel products for life science-based industries by utilizing cutting-edge computational biology technologies. Why is it so important to instill this revolution? In general, life science product development is characterized by astronomic development costs requiring very long development periods and the most frustrating part is the local virtue of actually reaching a successful commercial product. The reason for this reality is the challenge in finding the winning candidates which are the core of life science products microbes, small microbes or genetic elements out of a vast number of possible prospects that need to address a complex myriad of criteria to reach successful products.

4:21 It is the ultimate case of finding a needle in high-tech. We in Avogen see a unique opportunity in harnessing an advanced computational technology, including proprietary database and sophisticated algorithms, together with deep understanding of biology, that have the potential to address the multiple development challenges toward the development These increase the probability of success while reducing time and cost. So, to achieve our mission, we established our unique computational predictive biology, the CPB platform, which is the basis for three tech engines, each focused on accelerating and directing the discovery and development of products based on one of the following core components.

5:16 microbes via microboost AI, small molecules via campus AI, and genetic elements via generator AI. Our tech engines provide rationally designed computational and experimental end-to-end discovery and development solutions for life science based products. What is really unique in these engines are the proprietary elements of our databases and even more so, the multidisciplinary interconnection between the databases. This makes each tech engine an invaluable tool in the hands of researchers who can now visualize and reach novel insights through the tech engine's interactive work environment.

6:12 In our vision, We see each of these tech engines as the core of an ecosystem that powers the development of products in a wide range of life science industries based on either microbes, small molecules, or genetic elements. Each ecosystem will provide an interactive work environment in which the more projects we embark on, the more enriched our database and Analysis Capabilities, BCAM, contributing to better predictions and improved probability of success for each product on its own. Our Chief Product Officer, Dr. Neil Arabell, together with his team, have designed these engines to provide access to multiple users and partners to the enhanced discovery and development experience Avogen can provide.

7:15 For example, this vision has already began to materialize with MicroBoost AI, which serves two of our subsidiaries as driving force in two very distinct life science areas. Agriculture, where LaviBio is developing agbiological, and Pharma, where Biomica is developing microbiome pest therapeutics. The company's business model to capture the value of our three tech engines rely on supporting product development efforts of our dedicated subsidiaries, which we expect will generate value through our equity tech or through co-development of design products through strategic partnerships, which are expected to include R&D and success-based payments from our partners.

8:10 In the coming years, in order to support the future growth of the company, We expect to see Evogen's activities focus on the following three pillars. First, Evogen intends to increasingly invest in the capacity of its three tech engines. We intend to address more discovery and development challenges and to improve the existing solution with new algorithms and datasets. We will continue our journey to support our partners in their efforts to develop innovative products with the best computational biology support. Second, we expect advancement in our subsidiaries' development pipeline and the establishment of each company as a leading company in its field.

9:00 Of course, we will continue to update on the progress to success. And third, Evogen intends to be more active in expanding its tech engine offerings to additional areas to support the development of new product types. I will now move on to discuss our subsidiaries and how Evogen's technological engines supported their achievements over the past year and what we can expect looking forward. I will start with Biomica, our subsidiary focused on the development of drugs based on the human microbiome. Biomica utilized Evogen's MicroBoost AI tech engines to support its activities.

9:46 Over the past year, we have seen Biomica reach positive preclinical results in its immunotherapy program, which may indicate a back-in-class drug candidate. In a series of preclinical studies, BMC-128, given in a combination with immune checkpoint inhibitors, immunotherapy, significantly improved anti-tumor activity. BMC-128 is a combination of four microbes that were identified and rationally designed according to their functionality using Prism powered by MicroBoost AI.

10:35 Biomica recently received clearance from the Israeli Ministry of Health to proceed to a first in human phase one study, which is set to be held at the Ramban Healthcare Campus, the largest healthcare center in the northern part of Israel, serving a population of approximately two million people. Biomeca is currently advancing towards the initiation of the study. This phase one study will evaluate the safety and vulnerability of BMC128 in combination with BMS Optibo in patients with non-small cell length cancer, melanoma, or renal cancer.

11:26 BMC128 will be offered to oncology patients who have been found to be non-responsive to current treatments. So if BMC128 shows any clinical Signals that would be a wonderful additional outcome. In parallel, Biomica's IBD program is also proceeding nicely. During 2021, we received positive preclinical results that gave the company the confidence to proceed in 2022 to the scale-up development process of BMC-333 which was also rationally designed according to micro functionality by Prism powered by MicroBoost AI.

12:21 Moving on to the second company in the field of human health, Canonic. Our subsidiary focused on the development of medical cannabis products. Canonic utilized Evogen's generator AI tech engine to achieve this mission. I am particularly happy with the rapid advancement in this company. Focusing on the genetics of cannabis is one of the best things we could have done. The cannabis plant was such an overlooked plant that even relatively simple genetic steps make a huge impact on the plant. Of course, you have to know what you are doing, even to make relatively simple changes. and that is the purpose of the generator AI technological engine.

13:14 In October 2021, Canonic moved ahead with full commercialization in Israel of its two first products from the MetaYield family. Over these past few months, we have seen our brand awareness increase and we hope that the quality of Canonic's products and marketing efforts will support market penetration over the coming year. As of today, the sale we expect to see in 2022 in Israel will still be modest and represent the beginning of market penetration, while we see Europe as the company's main target market. During 2022, Tehonic expects to work on the go-to market for the European expansion.

13:59 In parallel, it intends to bring to market in Israel additional products from these families. To this end, Canonic employed generator AI to design several genetic markers, including for increased THC levels. And the company has recently shown statistically significant increase of more than 20% in THC concentration in its target cannabis population. Canonic is also developing products from its precise family, aiming to bring to market products that target specific medical indications. Over the past two years, Canonic conducted preclinical trials which have identified cannabis varieties with pain relief and anti-inflammatory properties and it intends to gather clinical information over the course of 2022 to support the commercial launch of such products in 2023.

15:06 The use of Evergel's tech engine is particularly valuable in this program through the ability to map and characterize the functionality of active ingredients within the plant and to connect it to a clinical data. I will now move to Agplanus, our first subsidiary in the ag industry segment. Agplanus' mission is the target-based design of novel and sustainable crop protection products based on small molecules. ActLan will utilize Evogen's Campus AI tech engine to achieve this mission. Following the appointment of ActLan's new CEO, Dr.

15:53 Brian Ember, the company will continue to advance its new mode of action herbicide development program through its internal pipelines and as part of its collaboration with Vorteva and expand its activity in other crop protection segments. ActLanus will also focus its effort on streamlining the predictive biology and chemistry tools according to user requirements and branding them as a full solution platform. In 2021, the company gathered Additional information regarding its leading new mode of action, APTH1, the target protein for the development of novel herbicides, and rich proof of concept for a seed trait presenting crop resistance to APTH1, a chemical compound that could serve as a basis for a novel herbicide.

16:59 In parallel, the collaboration with Coteva In 2022, Agplanus intends to further expand the data surrounding APTH1, which should position it well for engaging in discussions with potential partners. Moving to La Vie Barrio, our second subsidiary in the ag industry, aiming to improve agriculture productivity and sustainability, through microbio-based agri-logical products. LaviBio utilized Evogen's MicroBoost AI tech engine to achieve this mission.

17:44 During late 2021, LaviBio launched its inoculant results toward the 2022 spring season. The product's initial market penetration is planned for the upcoming 2022 Thank you very much. The company expects to increase its production capacity through tall manufacturers toward a significant increase in market penetration in the 2023 spring season. In parallel, Labibio's biopharmacide food trust program is continuing to expand, and during 2022, the company expects to submit a regulatory dossier with the federal U.S.

18:57 and California EPA for its leading candidate Lab 311. Both results in Lab 311 were discovered and developed through the use of microbus AI, taking into account both microbe functionality and plant genetics. So, as you can understand, we are very pleased with the advancement we see across the board Thank you very much. Our consolidated cash, cash-related accounts, bank deposits, and marketable securities is approximately $54 million, which we believe sends a clear message of our financial stability.

20:11 Still, in order to accelerate our subsidiary growth and to strengthen their position as independent companies, we are in different levels of discussions with potential strategic and financial investors If and when we can update further, we will do so. With that, I would now like to turn the call over to Dorit. Dorit, please go ahead.

20:41 Thank you, Ofer. I will begin by reviewing our cash balance. Evogen continues to maintain a strong financial position for its activities with approximately 54 million dollars in consolidated cash, cash-related accounts, bank deposits, and marketable securities as of December 31, 2021. Approximately $7.8 million of Evogen's consolidated cash is appropriated to its subsidiary, LaVie Bio. During 2021, the consolidated cash usage was approximately $25.8 million, lower than the estimated cash usage range of 26 to 28 million provided by the company at the beginning of 2021.

21:30 The consolidated test usage excluding LaviBio was approximately 20.6 million in 2021. These sums in 2021 are before giving effect to approximately 29.6 million net raised through our ex-demanded equity offering program and 1.8 million proceeds from non-refundable funds and exercise of options. During the fourth quarter, Evogen did not raise additional funds through its ATM program. During the fourth quarter of 2021, the consolidated cash usage was approximately 8.4 million or approximately 7.0 million, excluding LaviBio.

22:18 This is in comparison to the fourth quarter of 2020 during which the consolidated test usage was 6.1 million or 5.1 million if excluding LaVie Bio. The burn rate during 2021 and in the fourth quarter was higher than the same period in 2020 for the following reasons. First, during the second and third quarter of 2020, the burn rate was relatively low Due to certain measures, the company initiated to mitigate the impact of the COVID-19 pandemic. Second, during the second half of 2021, Evogen subsidiary significantly expanded product development activities, including Biometer's ongoing preparation, including GMP microproduction for the initiation of its first in-human proof-of-concept study, in the Immuno-Oncology Program at the Rambam Healthcare Campus, Lavi Bios Activities supporting the commercial launch in 2022 of its inoculant product branded as Result, Canonix product commercialization in Israel during the fourth quarter of 2021, and expenses relating to accelerating and expanding Evogen's technological engines.

23:43 As Ofer mentioned, we estimate that our net cash usage for the full year of 2022 will be within the range of $26 to $28 million. These guidelines include cash usage of our subsidiary LaviBio, which is expected to be approximately $8 million. The company does not have bank cash. Let's now turn to the Statement of Operations. Revenues for the fourth quarter of 2021 were $311,000 in comparison to $351,000 in the same period for the previous year. Revenues for the full year of 2021 were $0.9 million in comparison to $1.0 million in 2020. R&D expenses for the fourth quarter of 2021 which are reported net of non-refundable 200 teams were 6.0 million in comparison to 4.8 million in the fourth quarter of 2020.

24:51 R&D expenses for the full year of 2021 were 21.1 million in comparison to 17.3 million in 2020. The increase in R&D expenses was mainly attributed to expansion in product development activities of the company and its subsidiaries as mentioned earlier. Business development expenses were approximately $720,000 for the fourth quarter of 2021 in comparison to $670,000 in the fourth quarter of 2020. Business development expenses remained stable in 2021 in comparison to 2020 and were approximately $2.7 million. General and administrative expenses for the fourth quarter of 2021 were $2.0 million in comparison to $1.7 million in the fourth quarter of 2020.

25:51 General and administrative expenses for the full year of 2021 were The increase is attributed mainly to the increase of the cost of directors' and officers' insurance and an increase in salary-based expenses, as I will now describe, and an increase in other professional services. Overall operating expenses increased among other reasons, Due to an increase in salary-based expenses in 2020, due to measures taken by the company to mitigate the impact of the COVID-19 pandemic, and an increase in salaries in 2021 due to an increase in market demand for highly skilled workers. The loss for the fourth quarter of 2021 was 8.1 million in comparison to a loss of 8.8 million during the fourth quarter of 2020.

27:02 The loss for 2021 was 30.4 million in comparison to a loss of 26.2 million during 2020. The increase in loss is attributed mainly to the increase in operating expenses which was partially offset by net financing income for 2021 in comparison to net financing expenses for 2020. With that said, we would now like to open up the call for any questions you may have. Operator? Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. If you have a question, please press star 1. If you wish to cancel your request, please press star 2. If you are using speaker equipment, kindly lift the hands up before pressing the numbers.

27:48 Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. The first question is from Brian Wright of Roth Capital Partners. Please go ahead.

28:00 Thanks. Good morning and congrats on the progress. I wanted to start out with, could you give us a little granularity, and maybe I just missed it, on the revenue drivers in the quarter between kind of just Hi, this is Ofer.

28:18 I can't disclose the exact number, but what I can say is that a significant portion from the revenue in the last quarter is based on revenue coming from Canonic Activity, where they introduced their two-product During mid-October, and even though it was a really early launch, the market was very positive, and I personally think the revenue is based on this activity.

29:05 Great. I was hoping you would say that. Thanks so much. And then, could you tell us, you know, give us maybe a little more granularity on the timing of the enrollment and maybe the observation period for the BMC human trials?

29:21 So, we are now in the final stage of production, the microbes of the bases for BMS-128. I hope that the production, which took place in Europe and France, will end in the next few days. and they will ship the material to Israel. So, assuming this will happen according to plan, I expect to initiate the clinical trial in the Rambam Hospital at the beginning of next quarter.

29:53 Great, great. And then, last one, if I can squeeze one last one in there. We just wanted to kind of think about just, you know, what are some of the enhanced qualities or improvements for the second generation of the meta-yield products?

30:10 So the second meta-yield product is mainly focusing on two parameters. The first one, which this is the main between these two, is increasing the concentration of ATC. This is what the market is really looking at today. The maximum you can get according to the regulation here is up to 24% and our product was around 21%. So we are targeting to increase the THC concentration and in addition we are putting a lot of focus on the and you know what is called the consumer trade.

30:56 You know, like the colors of the flowers, the smells, the structure, the number of trichomes, but the main focus is increasing the THC concentration.

31:13 Great. Thank you so much. The next question is from Kristin Kleskov, Cantor Fitzgerald. Please go ahead. Hello, this is Rick on for Kristin. Thank you for taking our questions. As we're getting into the spring wheat season in the US and consumers have been noticing increased costs due to inflation on different goods including food, what could you say about how producers including in the initial target region of North Dakota are looking at new technologies such as result in which you are looking at starting commercialization And are you at all thinking about how macroeconomic factors could affect the launch?

31:56 So please remember that the first product that we are going to launch is increasing yield. And this is something that farmers are always, always looking for. And they're eager to increase yield, usually increase when the price of the yield of the crop The market price is going up. So we are now in the ultimate positive situation because the result is targeting to increase yield for wheat. And currently the price for wheat, which because of said reason was going on in Ukraine, the price of wheat is going up. So the interest of the farmers to increase yield is going up according to the price of the wheat.

32:58 And when you are investing a lot in your crop, in crop protection and the cost of feed and everything, so if you can increase the probability that your yield will increase as well, it's something that will always be interesting. So bottom line, I think that the product can increase yield for wheat during this year and probably also next year. It's very positive. And this is why one of the things we are now evaluating is production capacity for next year because if we will see the same trend for wheat price due to what's going on in the world, So, I think that we should try to increase our production capacity for the year 2023.

33:49 I believe that it could lead to a nice demand for products that can improve yield performance or improve such yield, such as wheat. Sorry. All right. Thank you. Maybe just one more question. You mentioned Ag Plenis looking at potential additional partnerships. In addition to the ongoing Corteva partnership, so could you talk a little bit in general and perhaps give us a little bit of color on perhaps the different factors that Ag Plenis could be weighing and looking for in a potential partnership?

34:24 First, I would like to take advantage on this question and say once again that we are very excited to have Dr. Brian Pember as the new CEO of the company. From the short time of working with him, I'm quite excited and looking forward to see how he's going to take the company to the next phase. He already started to think about how to expand the activity in addition to what we are doing in the area of herbicides. So, I'm really looking forward to see how the progress of the company under his guidance. I will take to your question. In the previous presentation of AgPlanus, we shared our pipeline in the area of herbicides and we listed a few targets in our pipeline. A few targets, which means a few proteins that we looked at as the target for developing of herbicides.

35:24 And some of them are today part from our relationship with Corteva. and we can't disclose much what's going on in this pipeline except that we are advancing according to plan and we need of course to respect our partners' expectations not to share this type of information. In addition to the targets that are apart from the relationship with Coteva, we have additional targets which we are managing in our internal pipeline. Among them is a APTH-1 in which we gather a lot of information around it. When we gather information, and this is something actually that we learn, and this is something that, again, when we start to talk with big companies, is that we are not looking just on a specific group of molecules that shows an indication that they are abiding to the target.

36:22 They are more looking to a package of information around the target and they are looking for different types of chemistry that are abiding to this protein. So this is the type of information that now we are gathering around our leading target protein and this is the type of information we are now sharing with different world leading alchemical companies and based on some of the requests we are generating additional information and data on these specific targets and the specific chemistry that we are validating for this target. And I believe that this could lead to a collaboration with one of these companies, assuming that the information that we generate will create enough interest to enter into this type of relationship.

37:14 And I think that what is very interesting in what ActDance is doing, this is something that we emphasize again and again, is that we are focusing on a new mode of action Thank you very much. Thank you very much for answering our questions.

38:05 The next question is from Nathan Weinstein of Aegis Capital. Please go ahead.

38:11 Hi, Ofer and EvoGene team. Thanks for taking my questions. So, maybe I could just start out on biomica. Checkpoint inhibitors have shown efficacy in a broad range of solid tumor types. Just curious if the inclusion criteria for the upcoming study of BMC-128 would specify certain types of cancer or all comers?

38:35 Your question is what type of cancer that we are going to validate the BMC-128?

38:39 Yes, exactly.

38:42 Yes, so I think that if I'm not wrong in my script, I mentioned that it's a lung, kidney, and skin, melanoma.

38:55 Okay, thanks. So I must have missed that in the prepared remarks, but thanks for reminding me. And then the second question, just shifting gears to Canonic, you know, looking beyond revenue at the early stage of this launch, maybe what other metrics should we be considering to track the progress of the first, you know, products in Israel? And for example, could you speak to the consumer awareness trends so far in 2022?

39:18 Okay, so I think that at least in 2022, Thank you very much. I think that the second product in the material family, but my expectation is that the main growth for Canonic will come from Europe.

40:05 I think that the second family, product family, which we are expecting to launch in 2023, I think that this is the type of product that could be more relevant to European markets, where here you're talking about We will start to see the revenue going up in a significant way. Yes, we probably should see a reasonable revenue from this activity in Israel.

40:52 But what I think, what I see a canonic future really making in a big way is mainly when the precise family will be available in the market and when we will introduce those products not just to the Israeli market but also to Europe. The thing that could change in the Israeli market will meet you, and the definition won't be just CH3 and CBD, and it will include additional parameters, and then I think that we can differentiate ourselves from the other companies with our products. So, to shorten my answer, due to 2022, we will focus on the Israeli market with the meta-yield products, The second wave of product with higher THC is expected to capture their market share in Israel, but the main growth, I believe, will come from Europe and from the Perthite family.

41:58 Okay, great. Thank you, Ofer, and looking forward to an eventful year ahead for Imogene. Thank you very much. The next question is from Stephen Goldman. Please go ahead.

42:12 Good morning, Ofer. How are you? I'm okay, thank you. Very briefly, I have some questions generally about your financial plans, a question about your CRISPR program, and then I have a couple questions about each of your four main subsidiaries. So with respect to the financial aspect, we've heard that you have $54 million approximately as of December 31, and that there are plans to raise money. In the past, you've discussed unlocking shareholder value by doing one or more IPOs of your subsidiaries.

42:58 I know the biotech market as a whole has...

43:03 I think that at the current stage, our main focus is on a private fund with a strategic partner or with private investors. It could be a VC, venture capital, or financial institution. and I believe that this economy should be the next step at the current market condition and only then we will start when the capital market will stabilize. Then I think that we should start to look into the direction of a public offering. With this regard, of course, at this stage we prefer to look for I think that from my perspective, especially these days when When the world is starting to show a more understanding to the importance of the issue of food supply stability, I think that the

44:34 potential for companies like Labib Bio to advance and to increase their awareness to their activity is in a positive trend. and I'm really looking forward to see how it will impact the progress of this company. And so this is essentially a big value. The second company I think that they are really in that event is Biomica. And, you know, when you're talking about health, it's always when you have, if you have some achievement and interesting results coming from the clinical trial, this could be also a very interesting point to evaluate the opportunity to take the company public.

45:20 But still, I believe to reach to this point, when we start again to look into the opportunity to send this company to the public market, we would like in between to raise money in the private funds, as I described earlier.

45:36 Right. Now, when you say that, are you talking about raising money at the subsidiary level? Yes. Okay. All right. Because that would be presumably less dilutive. Is it your view, certainly my view, that the value of each of the subsidiaries could actually be higher than the value of Abigene itself? Any comment on that?

46:02 You know, I'm not sure that I can comment on something like this. You can imagine that the company CEO, I believe that each one of our subsidiaries, in our presentation, that we published today, which I highly recommend everybody in this call to review. There is one slide that we put where we did some comparison between our leading forest subsidiary to company in the same segment and what is the current valuation, if they are public or what was their valuation in the last time they raised money. And I think this could send a message on what could be the valuation of our subsidiary.

46:51 Of course, you need to make sure that you compare between our subsidiary to the companies that are in the same stage like where our subsidiary are. but it still can give you an indication on what could be or maybe what should be the value of our subsidiary if we raise money. No doubt that the current market cap of Ivogen is not something that helps the subsidiary to capture the real value but it can give an indication what it could be if it will be completely independent and this is what we are focusing now on.

47:26 Okay, well thank you. Briefly on Evagene's role with the CRISPR, I know that you have press release, including a press release in November, your involvement in the CRISPR-IL consortium. And specifically, I understand that Dr. Emanuel, who's your VP of New Directions at Evagene, is actually chairman of that consortium. and there has been discussion by you in the past of using CRISPR in the development of some new products. Can you shed any light on what is happening with that?

48:11 First, everything that you describe now is correct. Evogen is involved in actually leading a lot of big... The largest consortium of companies and academic institutions here in Israel, which are focusing on developing innovative and breakthrough technology in the area of genome editing. This consortium is called CRISPR-IL, and it's funded by the Israeli government. I think all the leading clinical institutions in Israel are part of this consortium. and we are developing in this consortium mainly using AI machine what is called guided RNA which this is a very very important piece to ensure the accuracy and the efficiency of genome editing in human or in plants or in animals So it's a very important work that we are doing.

49:22 And we, at Epogen, we have the right, not necessarily an exclusive right, but we have the right to all the technology that we are involved in developing it, and it's almost everything that the consortium is doing. And it's really advancing nicely. And we just think that... In the last quarter of previous year, we also announced that the Israeli government approved the extension of this consortium by another year and a half. So this is what we are doing there, and all of this activity is part from Generator, our tech engine. How we are going to commercialize the value of this activity, this is something that we are now You know, evaluating. I'm sure that we can use it in the ag world for developing unique products for the agriculture and the food industry.

50:32 You can take it also to other industries to a different type of medical treatment. And one of the questions that we ask ourselves, if we would like to Thank you very much. Thank you. I'll move on to biomica. I think a little bit has been touched on this, but

51:45 We haven't yet seen the trial design for BMC-128, although you have disclosed that you've entered into a supply agreement with Bristol Myers for their PD-1 checkpoint inhibitor, Opdevo. But when do you expect to release the details of your trial design? And secondly, when do you expect to dose your first patients?

52:12 So this is the type of questions probably Elran, the CEO of Biomica, is the right person to ask. I'm not sure that we are going to disclose all of this information. I don't know if we need to do so. In high level, what we are planning to do is... to recruit between 12 to 15 patients that didn't respond positively to the treatment by a checkpoint inhibitor and they will enter to this trial while they are going to go to a second cycle of treatment but this time it will include the DMC-128 together with the Optivo and I think that what we also disclose is that They will receive the PMC-128 10 days or something like this before the joint treatment, and then they will receive the joint treatment. And honestly, I even, in a personal level, I don't know, I don't have all the initial information with respect to how I'm going to, you know, the other specifications.

53:27 Maybe you can discuss it, you know, directly with Bionica if you would like to do so. I think this was your question or there was another thought?

53:41 Oh yes, when do you expect the dosing of the first patient? I believe that it will be in the first quarter.

53:50 In the second quarter, at the beginning of the second quarter, yes.

53:54 Okay, all right. That's great. Recently, I guess a few months ago, you announced that Dr. Aaron Siegel has joined your scientific advisory committee. I had coincidentally been following Dr. Siegel on Twitter because of his work. He's become a science star in Israel, but he's got a real specialty in microbiome therapeutics. So my question is, Will he be, or his lab, be playing an active role in biomica?

54:32 So, first, yes, you're right. Professor Eran Segal, which is a world leader in the field of computational genomics and really many properties on the microbial world. He joined to our scientific advisory board and I think it's very important evidence to the quality of what we are doing in Abogen. And yes, he's really interesting in what Biomeca is doing and I know that there is the ongoing discussion between Biomeca and his lab and if there are areas where we can work together, I think that what is unique and what What Eran Segal's lab is focusing on is mainly on the discovery phase, while in Evogen we are, yes, we are very strong in the discovery phase, but we are also focusing a lot of our effort on the optimization and the development phase.

55:38 But I think that could be here a very nice synergy between his lab and the biome activity. And, you know, I give green light for both sides. To discuss and hopefully to find ways that we can work together, it will be amazing. I mean, to work with his lab, you know, we are already working with Ada Yonat's lab together, and Ada Yonat, she's a Nobel Prize winner. So to work also now with Iran's Pega Lab, it will be another opportunity. Very nice accomplishment and a compliment to Biomica on quality and how serious this company is in the way of the people that we're working

56:28 with. Well, thank you. That's great. He's quite an impressive gentleman. Let me move on to Lavi Beal. Currently, I understand you're looking for a new CEO and I'm wondering how that search is going and when you expect to announce the appointment of a new CEO.

56:51 One of the questions that we are hesitating is should we look for a CEO in Israel or abroad, so we decided to look in both places. and we are now working with headhunters and we are starting to conduct interviews. I believe that when we will find the right person, we will announce it. Currently, I'm acting as the... My role is acting chairman and we have done... The Chief Business Officer, but also a temporary CEO. And I think that we are really managing the company according to plan and to its targets, but no doubt we need to bring the right CEO to the company, and I believe that it's something that they should take in the next few months. So I really want to bring the right person that can take the company to the next phase and one of the steps is going to be also to take the company hopefully to the public market.

58:06 So we are looking for somebody that has the right experience also for this type of task.

58:17 Okay, well we look forward to hearing the results of the successful search. So you had mentioned, I guess, with your last speaker, the price of wheat. And I understand because of the unfortunate Russian invasion of the Ukraine, and Ukraine being such a major wheat exporter, that the price of wheat has actually skyrocketed. My understanding is that it's pretty much doubled in price since last year. So is this a... What is affecting the way you're now marketing results? I know last fall you were talking about results increasing net revenues per acre by about $20 per acre.

59:10 Is that figure now doubled to $40? How is this affecting you on the ground and in your marketing campaign?

59:20 For this year, because we started the marketing process in 2021, to the events that took place in the last month, it won't have an effect. On the pricing and the quantity that we produce and going to sell. This is something that you made the preparation at least six months before. So I think that if you're going to see an effect, it will be more on the next season. And we shouldn't underestimate this challenge because the production capacity It's a significant issue because we are talking about a live microbe and you need to find the right surfalcy that can produce for you the microbes. And I think that this is one of the main tasks of the Big Bio operational team is to make sure that for the year 2023, assuming which product will be where it is, We should increase the capacity, the production capacity, the sales force, and then probably it could also have an effect on the price of our product.

1:00:48 Because if the value it can generate increase in parallel to the increasing the wheat grain price. So, first, We need to make sure that we have the right capacity that can also have an effect if the wheat grain price will stay where it is now.

1:01:10 Okay, well that makes sense. So with respect to the launch, I know 2022 you're launched only in North Dakota or parts of North Dakota. And according to your presentation, it looks like you're expanding next year for 2023 in Montana. and the three western Canadian provinces, Manitoba, Alberta and Saskatchewan. First of all, is that still your plan? And the next question is, are you planning to expand beyond those two states and three provinces in Canada? For example, are you going to expand into Europe?

1:01:56 The initial plan, the original plan is as you presented, which means we were planning to expand mainly in the United States and also to Canada. But now we would like to accelerate the penetration and we submit an application to start to market our product also to European markets. But over there it might take a little bit longer because the regulatory process in Europe is different from the U.S. and Canada. But maybe it will change and there will be a way to accelerate the approval due to what's going on these days in the world.

1:02:42 So let's see. Let's see.

1:02:45 Okay. And then with respect to LAV-311, You've indicated that you are doing regulatory filings in 2022 in anticipation of a 2024 commercial launch, but you've only mentioned the filings in the United States and California, but in your presentation you talk about your markets being North America and Europe. So will you be doing regulatory filings

1:03:20 We might initiate the regulatory process in more than one place, but based on previous experience, the probability to receive an approval to market such a product in the U.S. is much shorter than the time needed in Europe. So we believe that launching the product in the commercial level, we will initiate in the US and probably in California or in another state in the West Coast in the US. But of course, our target is also Europe. Actually, all the field trials that we are conducting for this product We started in Europe and in Italy, and we extend to the US. So yes, we would like to see this product in these two continents and other continents as well, but probably the first country that will be able to start the marketing process, it will be the US, mainly because of the regulatory process.

1:04:33 Okay. So what's interesting about Labid Bio compared to your other subsidiaries is that 28% of Labibio is actually owned by Corteva, which is a multinational agricultural company, I guess, a spinoff of Dow DuPont. So how involved is Corteva in the operations of Labibio, and would they be willing to provide additional financing?

1:05:12 Corteva has a representative in the Labibbio board. He is leading the agri-biological activity in Corteva. So he really has huge knowledge in this field. And I find I really enjoy working with him. and I see a lot of positive things having him as a board member. We have ongoing collaboration with Corteva in three different types of our products. and it's really advancing nicely and I think that there is a high appreciation from both teams, one to each other.

1:06:22 I believe there will be products coming from this activity and you know, and definitely if you are working on corn and soybean, so there is only two companies in the world, The tag you probably would like to work with, one of them is Bayer and the second one is Corteva. We are working with Corteva and we are very, very proud working with them together. Their involvement is in two directions. In the board level, which is really great, and also as a commercial partner in the R&D level, which I hope will materialize

1:07:10 Thank you. Let me move on to Agplenis. In the past, but not today, you've referred to APTH1 attaining a LEED status, and I think you announced that in November of 2020, and I had Your company has always talked about the next stage of the molecule becoming an optimized lead, but I guess there's different language being used. Is the plan still that it becomes an optimized lead sometime in 2022? Okay.

1:07:58 Thank you for this question, and I will elaborate a little bit about it. But Stephen, I think that probably I would like to let other people also to ask some questions. If there are some more people still on the call, and we can definitely have, you know, later on an offline discussion, and I will be more than happy to address all of your other questions. So with respect to Ag Planus, so one of the things that we learned When you're talking with the big chemical company, is that their interest on a specific molecule, it does. But they are much more interesting on a target.

1:08:45 The package they are looking at is on a target, target meaning a protein. It's a new protein that currently there is no commercial product that is focusing on this specific protein and they would like to see a few scaffold, a few groups of chemistry that show evidence that when they link to it improves its blockage activity which leads to the death of the weeds. and not necessarily they would like to see a specific molecule that have a nice performance and this is the only information that you have. So think about the following, they would like to see a new mode of action, a new protein, but they would like to see a few groups of chemistry that are vying to show that they have some efficacy with respect to this specific protein. So what we are doing these days is really trying to build this type of package in order to move to the next phase with this collaboration that we are interested in. So, yes, we are still advancing APH-1.

1:10:01 This was the leading group of chemistry. But now, these days, we are also advancing and focusing and spending our resources to advance more groups of chemistry to reach to the lead phase or even to pass the lead phase and they are all binding to the same protein. And why is it so important? Because from what we learned from the big company experience is that the degree of success when you have such a package to reach to at the end of the day a commercial product is much higher than you have only one scaffold or only one product We change our focus from a single molecule to a protein and clouds of chemistry that are binding to this protein because this is what the industry is more interested in.

1:11:02 This is why we changed the terminology and we are more focusing today on how to build a package around the protein rather than a specific chemistry.

1:11:13 Okay, thank you. And I thank you for taking all that time and answering my myriad of questions, and I appreciate it.

1:11:22 Actually, it's my pleasure. I mean, I enjoy talking with you. I just want to make sure that, you know, we're going in the time frame for the end analyst call. Sure. So, I won't ask any more questions. Thank you very much. Thank you, Stephen. We can have an offline discussion. Thank you. The next question is from Brett Rice of Janie Montgomery Scott. Please go ahead.

1:11:53 Hi, Ofer. How are you? I'm okay. Thank you. The patients that start to use the G150 and G200 cannabis product, is that a kind of Repeat prescription, you know, once they start using it, you know, they use it for quite some time or is it a kind of one and done prescription use?

1:12:23 So usually a patient that are receiving prescription, they are receiving it every month again and again and again. Usually it's a chronic pain, chronic disease. They continue to buy cannabis products. And the good news is that what we saw, especially with respect to G150, is that patients that bought our product for the first time, they continue to buy it again and again. Still, and I would like to be precise, The prescription that they receive from the doctor is not for a specific product.

1:13:13 It's for a product type, meaning they can go and buy one of the brands available that are in the category, which is called T20, T4. So there could be few products in each category. So the patient, yes, they will buy, Thank you for that.

1:14:07 Then with respect to spring wheat, I'm just interested in the feedback that you're getting from your distributor in North Dakota. I mean, I suppose, you know, they've shown it to a lot of farmers and not every farmer decides to use it. The farmers that do not use it, you know, what is the typical... Sales resistance points. Is it price? Is it they just want to see that it works with maybe a fellow farmer's crop before they try it? Are they afraid it hurts their crop in any way? What's the typical sales resistance and what is your salespeople counter argument to that?

1:15:00 So currently we still don't have this information. What I can tell you is that all the quantity that we were planning to produce this year, it wasn't huge because we wanted to make sure that we are going to have a full control on all the sales and health departments that are going to use our products in the first year because we want to make sure that we are building the right reputation to our products. So I don't have the information if and what was the reason not to use our product. I will tell you how do I see the situation. The first one, you need to educate the people that such a product can make a difference.

1:15:50 I think this is the main obstacle. It's not that they need to replace a product. They just need to buy and try it for the first time. And then usually what farmers are doing, they are buying a quantity that can give them enough information on the effects of this product, and they are using it only on a portion from the field. And if they saw in this specific part of the field that it had a positive effect, so the year after, they are going to buy it for a much significant portion from their farm, and then they start to buy it in a regular basis for all the farm. So what I'm saying is that it's hard for me to see that people will have a problem to sell our initial quantity. I think that what is very important is that we have a good impression on their validation activity, and then you will see a significant growth the year after.

1:16:57 This is how you usually introduce a new product to the market and especially when you're talking about an archaeological which is based on living microbes.

1:17:10 Right. Okay. Ofer, is the window open for I check it with our attorney and currently we can do it now. We just can't. Some of the retail type holders of the stock, their morale is bolstered up when they see insider purchases. I just lay that out there for you.

1:18:05 Okay.

1:18:07 Thank you very much for taking my questions. I appreciate it.

1:18:10 You're more than welcome.

1:18:11 Thank you. 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 in two hours after the conference. In the U.S., please call 1-888-326-9310. In Israel, please call 03-9255-901. Internationally, please call 972-3255. 9255-901. Mr. Haviv, would you like to make your concluding statement?

1:18:53 Yes, thank you. I would like to thank everybody for participating in this analyst call. I'm really looking forward for urgent progress, and of course, we will be more than happy to continue to update you on our achievement. And thank you once again. Thank you. This concludes Avigin's fourth quarter 2021 results conference call. Thank you for your participation. You may go ahead and disconnect.