Earnings Call Transcript - EVGN Q3 2024

Operator, Operator

Welcome to Evogene's Third Quarter Results Conference Call. All participants are in listen-only mode. After the management's presentation, we will open the floor for questions. This conference is being recorded on November 21, 2024. This presentation includes forward-looking statements concerning future events, and Evogene LTD may periodically make additional statements regarding our outlook or expectations for future financial or operational results and other related matters that are defined as forward-looking statements under the US Private Securities Litigation Reform Act of 1995 and other amended securities laws. Statements that are not historical facts may be considered forward-looking. These statements may include terms such as believe, expect, anticipate, should plan, estimate, intend, and potential among others. We include forward-looking statements in this presentation when discussing Evogene's strategy and vision, value proposition, and capacity to identify and optimize candidates which could enhance the chances of achieving groundbreaking products within competitive timelines cost-effectively. This encompasses Evogene's partnerships and its ability to leverage ChemPass AI, expected timing and capability of Casterra in completing purchase orders, anticipated timing of Lavie Bio sale, future activity of AgPlenus Pipeline by Biomica’s BMC128, Evogene's expected cash usage for 2024, and anticipated continued revenue growth for 2024. These statements rely on current expectations, estimates, projections, and assumptions, and they involve certain risks and uncertainties that can be challenging to predict and do not guarantee future performance. Important factors can affect the company's actual results and may cause significant differences from any forward-looking statements made in this presentation. Therefore, actual results in the future could differ from what has been expressed or implied due to various factors, many beyond our control, including the ongoing conflict involving Israel, Hamas, and Hezbollah, and any deterioration of the situation in Israel, such as further escalation along the northern border. These factors are described in detail in Evogene's Annual Report on Form 20-F and other materials filed with both the Israel Securities Authority and the US Securities and Exchange Commission, including under the heading Risk Factors. Unless required by applicable securities laws, we have no obligation to update any information in this presentation or to publicly disclose the outcomes of any revisions regarding statements that may reflect future events or changes in expectations, estimates, projections, and assumptions. The information provided does not constitute a prospectus or offering document and should not be considered as an invitation to buy or sell any Evogene securities. Joining us today are Yaron Eldad, CFO of Evogene, and Ofer Haviv, President and CEO of Evogene. Now, I’ll turn the call over to Ofer Haviv. Please go ahead.

Ofer Haviv, CEO

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 nine months of 2024, total revenues reached approximately $6.9 million compared to approximately $5.1 million in the first nine 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 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 2024, Evogene anticipates continued revenue growth compared to the previous year, mainly due to Casterra's 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 doubtful debt from one 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 nine months of 2024, operating loss was approximately $17.6 million, which included the G&A expenses of approximately $1.5 million due to average fundraising and allowance for doubtful debt mentioned above, and other expenses of approximately $0.5 million compared to approximately $18.9 million in the first nine months of 2023. In the first nine months of 2024, financing expenses net were approximately $0.38 million compared to financing income of $2.3 million in the first nine months of 2023. The financing expenses in the first nine months of 2024 net, included $0.88 million in expenses related to the accounting treatment of warrants issued as part of Evogene’s fundraising. Projected cash usage 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 fundraising totaling $5.5 million in gross proceeds, including ordinary shares and two sets of warrants. The company has taken measures to strengthen its cash position by reducing its expenses, including a reduction of 16% in its headcount 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 this 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 novel small molecule design. This collaboration aims to position our AI tech engine at 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 Authority for the second year in the collaboration with Watershed and Ben-Gurion University to improve 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 solidification of a reliable seed production infrastructure in Kenya and Brazil. In July, Casterra announced the completion of the growing and harvesting season in Brazil and seed shipments have already been initiated. With respect to the seed production in Africa, Casterra achieved a key milestone in its operational expansion and completed its first shipment of over 100 tons of its seeds which were grown and processed in Kenya. It is now the 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 varieties of the remainder of the orders and future orders for 2025. Continue with Lavie Bio. In recent months, the company presented an impressive expansion with its first commercial product, Yalos, a bio-inoculant used as seed treatment. In July, Lavie Bio announced the commercial expansion of Yalos to winter wheat with initial sales this past quarter, and in November to soybean with initial sales expected in spring 2025. Additionally, Lavie Bio advanced LAV321, a bio-fungicide targeting downy mildew to pre-commercialization 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 and Casterra. AgPlenus initiated a new fungicide program focusing on Septoria affecting crops worldwide. Three proteins predicted by ChemPass AI as targets were verified to be essential in Septoria. Additionally, AgPlenus identified 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 now complete with prolonged positive responses in five patients. Biomica had 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 achievements of this subsidiary later in the presentation. Moving on to the core of Evogene. Our vision is to position 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 computational technologies. This approach led to the development of our three proprietary AI tech engines, each designed to drive the effective discovery and optimization of life science products. MicroBoost AI directly accelerates the development of micro-based products, ChemPass AI is for small molecule-based products, and GeneRator AI is for products based on genetic elements. Our AI-driven tech engines offer a strong value proposition by efficiently identifying and optimizing the most promising candidates. This enhances the likelihood of achieving breakthrough products within competitive timelines and in a cost-effective way. To maintain the competitive advantage of our AI tech engines, Evogene continuously invests 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 molecule design. The collaboration leverages Evogene's deep expertise in computational predictive biology and chemistry alongside Google Cloud's leadership in AI and machine learning. Building on the successful integration 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 shortening development timelines, and hence cost efficiency. I want to emphasize that the foundation model, which will be integrated into ChemPass AI, will remain the exclusive property of Evogene. Our proven track record in computational biology and chemistry, combined with Google Cloud's AI expertise, creates a compelling value proposition for companies aiming to improve their R&D and gain a competitive edge in the market. Our three 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 demands specialized expertise for product development alongside 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 by establishing a diverse network of collaborative partnerships for life science product development. We partner with experts in complementary fields forming licensing or collaboration agreements with companies that bring domain-specific knowledge such as in pharmaceuticals or Agritech. Through this strategic alliance, we aim to co-develop innovative products, benefiting 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 model; Evogene currently owns four 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 partnerships with companies specializing in small molecule drug development, leveraging the unique capabilities of ChemPass AI. To support this strategic focus, we have strengthened the business development team with a dedicated business development manager with the clear objective of generating new business opportunities for Evogene in this segment. Additionally, as part of our collaborative initiatives in areas beyond the focus of our subsidiaries, we recently announced alongside Watershed AC, formally Colors Farms and Ben-Gurion University, the approval of a second year grant to advance our joint project and to enhance traits through gene editing technology. In the second year, the collaboration will focus on scaling up CRISPR technology for the industrial production of giant prawns with plans to extend this advancement to additional crustacean 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 to date. Now I will review our subsidiaries' activities and achievements. I would like to begin with Casterra, Evogene's 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 biofuels and biobased products. The third quarter marked a significant milestone for Casterra, as its investment and efforts to establish a reliable seed 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 seed production facility in Kenya, which now supports the processing of seeds grown and harvested in Africa to meet the company's needs. Casterra is now in the mid-harvesting season in Africa. Due to the extended rainy season, the company expects the harvest to be completed by early next year. The seed 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 of 2024, mainly through the seed production operations in Kenya. Currently, Casterra and its business partners are discussing the supply schedule, quantity, and seed varieties of the remainder of the orders and future orders for 2025. Continuing with Lavie Bio, a global leader in developing next-generation ag-biological products powered by the MicroBoost AI tech engine. Since our last call, Lavie Bio has achieved two significant milestones with its first commercial product, Yalos, a bio-inoculant for row crops. First, the product has expanded to winter wheat with initial sales to growers starting this past quarter. More notably, recent positive results have been obtained for Yalos as a seed 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 downy mildew, which has now reached the pre-commercialization stage following successful field trial results for the third consecutive 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 microbes and is developing a 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 candidates in a relatively short time frame. Finally, Lavie Bio has received a grant from the Israel Innovation Authority to advance the development of MicroFermentor, a groundbreaking technology with the potential to transform the economics of ag-biologicals. This grant underscores the value and uniqueness of Lavie Bio's offering and innovative culture. Next, I would like to discuss AgPlenus, 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 two 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 fungicides to address Septoria fungi, a significant threat to crops worldwide. I would like to highlight two important achievements that took place in the past quarter; three proteins predicted by ChemPass AI potential targets for Septoria treatment have been confirmed as essential in the fungi’s life cycle. The second milestone using ChemPass AI, the company identified approximately 1,000 small molecule compounds that are predicted to be effective against these three protein targets. These compounds are currently undergoing testing with at least one target already showing high rates of in vitro hits. This advancement marked significant progress in AgPlenus' mission to develop innovative solutions for global crop protection. Now turning to Biomica, which specializes in developing microbiome-based therapeutics for humans powered by the MicroBoost AI tech engine. At present, Biomica is primarily focused on advancing its immuno-oncology program with a lead candidate, BMC128. The Phase I clinical study is nearing completion with positive results observed in five patients showing prolonged responses. 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 an additional clinical batch of BMC128. Additionally, following extensive evaluation of numerous potential indications, Biomica has initiated two new programs focused on obesity and longevity. The company has obtained and partially analyzed relevant data sets to support these new programs, marking 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.

Yaron Eldad, CFO

Thank you, Ofer. As of September 30, 2024, Evogene had 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 nine months of 2024 were approximately $6.9 million, an increase from approximately $5.1 million in the same period in 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 from 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 non-refundable grants, for the nine months of 2024 were approximately $13.2 million, a significant decrease from approximately $15.2 million in the first nine months of 2023. The decrease in expenses is mainly due to the cessation of Canonic’s activities and a decrease in certain development expenses in Biomica as compared to the same period the previous year. Research and development expenses, net of non-refundable 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 nine 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 nine 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 compared to approximately $0.9 million in the same period in the previous year. General and administrative expenses for the first nine 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 nine months period and the third quarter of 2024 was mainly attributable to expenses recorded in Casterra due to a provision for doubtful debt of one seed supplier and transaction costs related to 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 cease Canonic’s operations in the first half of 2024 resulted in other expenses of approximately $0.5 million for the nine-month period ended September 30, 2024, mainly due to impairment of fixed assets in the first quarter of 2024. The operating loss for the first nine 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 discussed above. Financing expenses net for the first nine 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 nine-month period and the third quarter of 2024, compared to the respective periods of 2023, was mainly associated with the 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 and were initially recorded at fair value, and subsequently measured at each reporting period using the Black – Scholes option 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 nine 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, 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

Ladies and gentlemen, at this time we will begin the question-and-answer session. The first question comes from Ben Klieve of Lake Street Capital Markets. In the second quarter call, you mentioned you anticipated a significant update regarding a follow-on order for 2025 deliveries at Casterra by today’s call. This update did not occur. Can you explain why?

Ofer Haviv, CEO

Hi. This is Ofer speaking, thank you, Ben, for joining this call. Yes, in the previous earnings call, we expected to receive orders from our partners. But, to our surprise, we still didn't receive it. Not because there is a complication. It's mainly because they are still in their internal discussions based on the performance they are receiving in their trials. So since we didn't receive the final decision, which we hope to receive almost every day for now. That is the reason that we couldn't provide such an update for today's meeting. But it’s not due to any specific complications in the discussion or the ongoing relationship with our partners.

Operator, Operator

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?

Ofer Haviv, CEO

With respect to this question. I'm just returning from the past three days in Kenya, where we visited our seed production site, together with Yoash, the CEO of Casterra. I believe that we have reached a stage where I think we have solved the seed production issue in Africa. Our partners are quite happy about it. Actually, we are planning to bring some of them to our site so they can see and be impressed by what we've achieved there. I believe that we will continue to be an important seed supplier to our partners in Africa. As we disclosed, there were some delays in the harvesting season because of the extended rain in Kenya. But now, we are moving very fast. Probably, we'll put some nice pictures and short videos from our visit in Kenya, which I find quite impressive. I believe we are in a good position regarding future seed supplies to our partners. So, yes, there were some delays, and, yes, some seed producers that we engaged in 2023 disappointed us with their performance. However, I believe we have moved beyond those complications, and we are looking forward to much better performance in the future regarding seed production.

Operator, Operator

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

Ofer Haviv, CEO

With respect to the Ben-Gurion University collaboration, we are covering through the grant all of our expenses. So, there are no additional costs for Evogene in participating in this collaboration. Regarding Google, each side is covering its own expenses. From our perspective, this is part of our ongoing product development process, so it's already part of our budget. Google was very excited to join forces with us, and they are contributing a significant amount of resources and employees to help us build this foundational model that can accelerate our progress. So as I said, this doesn’t have an effect on our budget compared to what we plan, while the end product is worth much more than what we contribute due to Google's involvement in this project.

Operator, Operator

The next question is about the cash level at the parent company as of September 30, 2024, and the remaining cash usage for the rest of 2024. Why do you exclude Biomica and Lavie Bio when discussing your cash usage after delivering the seeds? How long does the customer have to pay? Can you provide more details on the additional funding opportunities that are available?

Yaron Eldad, CFO

Yeah. Sure. So Hi Ben. Thanks for the question. Evogene and the only one subsidiary had $8 million in cash as of September 30. We had another $2 million of seeds that were delivered during the end of September beginning of October. A part of the spending 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 amounts of $2 million. So, I feel comfortable to say that we have enough cash going forward for a year and more.

Ofer Haviv, CEO

With respect to the second part of the question; I hope that I have answered your question. Therefore, we have close to $10 million just for Evogene, and we are expecting to receive additional funds in the next few months. I think that we are in quite a stable financial position. From here onward, we will start to provide more information on how much money we have for Evogene and for Biomica and Lavie Bio. Please remember that part of the money that these two companies hold will be used in the future to pay for Evogene for the use of our technology and for receiving different types of services. So, apart from the money that you see which belongs to Lavie and Biomica, Evogene is going to use to cover its own expenses. Usually, when we deliver sales, the amount of money that we receive, as you asked, is around, from the time we send the seed to when we receive the money, it takes 30 to 45 days. So, we won't have to wait too long, and even though that we are talking about big numbers. Regarding additional opportunities to generate revenue for the company, one of the options is fundraising at our subsidiary level. This is something we are working on much more intensively now. Additionally, we are exploring the opportunity to sell part of our holding in our subsidiaries or even possibly sell completely one of our subsidiaries to potential strategic partners or companies that show interest in what those companies are doing. I think there are a few avenues that we can take to bring additional cash to strengthen our financial position. If these events do materialize, it would indeed be a significant addition to our cash balance and stability.

Operator, Operator

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

Amit Noam, CEO of Lavie Bio

Yeah. Thanks, Brett, for the question. What makes us optimistic about Yalos sales are two 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, who came back and are planning to expand next year. This is one of the biggest KPIs we set for ourselves as returning customers who are actually growing. The second is proof of the efficacy of Yalos on soybean, which is a much more prime crop for bio-stimulants. All soybean seeds are treated, and the acreage is four times that of what we currently do in terms of wheat. So soybean is a very big win for us with significant potential, and we anticipate that in two years, sales will start being significant, and you'll see them materialize in Evogene's revenues that will be reported.

Operator, Operator

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? Thanks.

Amit Noam, CEO of Lavie Bio

As I said, the feedback has been good. Wheat is a more challenging crop. Soybean is a much more relevant crop. However, we see very good results and very satisfied growers who are planning to expand their use of the product. In terms of sales, we anticipate that in the next two years it will start to be significant. For peak sales, we are looking at significant double digits, not in the millions of dollars for Yalos.

Operator, Operator

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

Yaron Eldad, CFO

As I mentioned earlier, we can’t disclose much information about the forecast for 2025 because we are still discussing these matters with our partners. In addition, there are some significant opportunities that we are evaluating that, if materialized, could have a relatively significant effect on Casterra's revenue next year. So, I believe that next year looks better than this year. The fact that we solved the issue of seed production capacity in Kenya, and we also showed a very nice performance in Brazil with respect to seed production this year, is very important. Think about it; we are the only seed producer of Castor in Africa. This gives us a strong competitive position compared to other companies that are located in other places.

Operator, Operator

The next question is from Stefano Dora Razio, an investor. Could you provide insight into the current level of insider ownership in the company and how management is aligned with shareholders' interests.

Ofer Haviv, CEO

Thank you, Stefano, for joining this analyst call. I don't have the information in front of me regarding insider ownership. We can provide this information after this analyst call. You can contact me directly. In terms of management, a significant portion of Evogene's management compensation is based on equity through options. This arrangement also applies to the CEOs of our subsidiaries. The average salary in our group is lower than what you might expect for companies of our size and where we are at this stage. We compensate for this through equity holding in the company through an option mechanism. Therefore, this mechanism creates a strong link between management interests and shareholder interests. We put a lot of thought into generating value for our shareholders because, at the end of the day, we personally benefit as well.

Operator, Operator

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

Ofer Haviv, CEO

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

Operator, Operator

Thank you. This concludes Evogene's Q3 2024 quarterly results conference call. Thank you for your participation. You may go ahead and disconnect.