Evogene Ltd. (EVGN) CEO Ofer Haviv on Q2 2021 Results - Earnings Call Transcript
Aug. 11, 2021 1:55 PM ETEvogene Ltd. (EVGN)
Evogene Ltd. (EVGN) Q2 2021 Results Conference Call August 11, 2021 9:00 AM ET
Company Participants
Ofer Haviv – President and Chief Executive Officer
Dorit Kreiner – Chief Financial Officer
Sarit Firon – Chairperson of the Board
Conference Call Participants
Kristen Kluska – Cantor Fitzgerald
Ben Klieve – Lake Street
Nathan Weinstein – Aegis Capital
Geoff Gilbert – Inukshuk
Kenny Green – Edison Group
Operator
Ladies and gentlemen, thank you for standing by. Welcome to Evogene's Second Quarter 2021 Results Conference Call.
All participants are at present, in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. [Operator instructions] As a reminder, this conference is being recorded, August 11th, 2021. Before we begin, I would like to caution that certain statements made during this earnings conference call by Evogene 's management will constitute forward-looking statements that relate to future events, risks, and uncertainties regarding business strategy, operations, and future performance and results of Evogene.
I encourage you to review Evogene's filings with the U.S. Securities and Exchange Commission and read the note regarding forward-looking statements in today's earnings release, which states that statements made in the earnings release and in a similar way on this earnings conference call that is not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For example, Evogene is using forward-looking statements in this call when it discusses its expected halves-to-value creation and its belief that turning one or more of its subsidiaries into public companies will be beneficial to its shareholders.
Evogene and its subsidiaries expected trials, studies, product advancements, commercialization, launches, pipelines, milestones, potential collaborations, cash usage, and other plans for 2021 and 2022, the potential advantages of its technology, and its anticipated entry into new fields of activity. All forward-looking statements made herein speak only as of the date of the announcement of results. Many of the factors that impact whether forward-looking statements will come true are beyond the control of Evogene and may cause actual results to differ materially from anticipated results.
Evogene is under no obligation to update publicly or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as otherwise required by law. We expressly disclaim any obligation to do so. More detailed information about the risk factors, potentially adversely impacting our performance, can be found in our reports filed with the U.S. Securities and Exchange Commission. That said, I would now like to turn the call over to Ofer Haviv, Evogene 's CEO. Ofer, please go ahead.
Ofer Haviv
Thank you, and good day, everyone. We appreciate your joining us today for our second quarter 2021 conference call. Joining me today are, Ms. Sarit Firon, Evogene 's new Chairperson, and Ms. Dorit Kreiner, our CFO. Sarit will start the conference call with a short introduction and provide her vision of the Evogene group. I will then discuss our plan for unlocking the value of our subsidiaries and provide an overview of our recent achievements.
Dorit will summarize Evogene's financial results for the second quarter and the first half of 2021. We will then open the call for your questions. Before I hand over to Sarit, our new Chairperson, I would like to address Martin Gerstel, our former Chairman. As you know, in June this year, after two decades of chairing Evogene since our founding, Martin felt he should take a well-deserved retirement from Evogene.
I would like to take this opportunity to thank Martin wholeheartedly for his constant leadership and vision as our Chairperson and his ongoing invaluable contribution to Evogene 's development. And on a personal note, I would also like to thank him for his guidance and support of me in the role of a CEO. I would like to welcome Sarit as Evogene's new Chairperson. Sarit has been a highly effective member of our board since 2016 and knows Evogene and its subsidiaries very well, which will ensure a smooth transition into her new role as Chairperson of the Board.
Sarit brings to Evogene more than 27 years of global investments and operational experience across Silicon Valley, New York, and Tel Aviv. She's one of Israel's most accomplished investors and is well known for helping to build companies from their early-stage to successful IPO s and acquisitions. Sarit currently serves as a Managing Partner of the Team Eight Group and Managing Partner of the Team Eight Capital, the investment arm of the group. She has held numerous operational and leadership roles, serving as chairperson and board member, CEO, and CFO at prominent high-tech companies.
I cannot think of anyone better suited to assume the role of a chairperson at present and I'm truly excited that she has agreed to this role. On behalf of all the management, employees, and investors in Evogene, I would like to wish her much success. Sarit, please.
Sarit Firon
Thank you, Ofer, for your warm introduction. I'm honored to have the opportunity to lead Evogene as its new Chairperson. Evogene is an extraordinary Company with highly differentiated predictive discovery and development capabilities, and an impressive product pipeline suite subsidiary.
I look forward to working with my fellow directors, Ofer and Dorit Kreiner, senior management team. Together, we will take Evogene and its subsidiaries to the next level in value creation and subsequently gain recognition by the capital markets. I would like to join Ofer in thanking Martin for his significant contribution made to Evogene since its inception.
Martin should be extremely proud of Evogene 's journey from its establishment to where we are today. He's one of the key leaders that build the foundation for a promising future ahead. Our vision is to change the way life science companies are developing their products to substantially increase their probability of success and at the same time, reducing the time and cost of life-science product development.
To execute this vision, our strategy is to focus on utilizing the most advanced computational Biology with development. Over the last 2 decades, Evogene has developed a unique Computational Predictive Biology platform and an investment of tens of millions of dollars incorporating distinct scientific understanding, together with big data and artificial intelligence. We've then established subsidiaries, who had developed a strong product pipeline very rapidly, by utilizing these advanced technologies.
And now, our subsidiaries are reaching the level of maturity, with their underlying value is becoming a current. As Ofer stated in his introduction, throughout my career, I've taken companies to the next level, by realizing their value potential to IPO acquisition, or other financial transactions.
I'm excited to bring this experience to Evogene and its subsidiaries, to help in unlocking the inherent value in each subsidiary. We will ensure that each subsidiary is focused on its key strength. This will enable us to realize its unique value. Also, we'll elaborate on our strategy later in the call. So now, I would like to hand it over to Ofer, and I look forward to continually updating you about our progress and achievements in the future. Ofer, back to you.
Ofer Haviv
Thank you, Sarit. My remarks in today's call will focus on our strategy for unlocking the value created within the Evogene subsidiaries for the benefit of Evogene shareholders. In addition, I will describe the major achievements of our subsidiaries over the past six months, and an outlook for their continued operations this year.
To set the common ground for our discussion, I would like to recap the main topic I covered in our previous quarter's call. First, our broadly applicable Computational Predictive Biology platform, the CPB, and the three tech engines relying on this platform: MicroBoost AI, ChemPass AI, and GeneRator AI.
As stated, many times, we believe this technology engine provides a significant competitive advantage in the discovery and development of life-science-based products in multiple industries. Second, our proven ability to create subsidiaries in multiple life-science-based fields by utilizing the CPB platform and the SwedeTech engines with each subsidiary demonstrating its ability to rapidly discover and develop very promising product pipelines.
Lastly, I stated our intention to continue to initiate new activities in additional life-science-based fields. Moving now to what I would like to focus on today, that is, how do we intend to provide financial benefit to the Evogene shareholders in the near term for our subsidiaries? Our starting point is that each of our subsidiaries contains a substantial internal value that is created through its rapidly developing pipeline and the use of Evogene 's unique technology. I would like to elaborate.
As you know, investing in innovative lifestyle's best companies, such as those within the Evogene group, presents both financial advantage and risk for investors. The primary advantage is that, in general, its successful, innovative life-science-based product can be very profitable. In addition, and very importantly for investors, innovative companies with promising life-science-based products in their pipeline as Evogene 's subsidiaries, can have significant market value long before the products are commercialized.
On the other hand, the primary risk in investing in innovative life science-based companies is that such products typically have very high failure rates. Furthermore, those that are successful generally take a relatively long time to be commercialized. We believe that Evogene 's unique technology that is valuable to each of our subsidiaries for their field of focus, provides a substantial advantage concerning dealing with those challenges of high failure rate and time-to-market. As demonstrated in our subsidiary's recovery and early development pipelines.
So if our subsidiaries enjoyed the benefit of their rapidly developing pipeline, and their utilization of Evogene 's technology is expected to reduce time-to-market and increase the probability of success, why isn't our subsidiaries' potential fully reflected in Evogene 's market value? We think that Evogene group's current structure of a public Company with a variety of privately-held subsidiaries operating in different fields of activity creates difficulty for the capital markets to properly value each subsidiary.
Therefore, we believe that if our subsidiaries were valued separately, it would result in a far greater combined market value for the Evogene group. Based on these assumptions, our general strategy for unlocking the value of our subsidiaries for the benefit of Evogene 's shareholders is to facilitate an independent valuation of each of our subsidiaries, regardless of Evogene or the other subsidiaries and we are currently exploring ways to achieving these targets.
We believe that one way to achieve this in a manner that will be beneficial to our shareholders is to turn 1 or more of our subsidiaries into a public Company, that will trade independently of Evogene. In this regard, [Indiscernable] path that we are exploring is the distribution of a portion of Evogene's holding in one or more of those subsidiaries to our shareholders. Of course, the decision if, when, and how to spin off a subsidiary Company will depend on many considerations, including market conditions, the subsidiary financial needs, partner maturity, valuation, applicable regulations, etc.
However, as stated, our current intent is to facilitate an independent valuation of each of our subsidiaries in the near term and to do so in a manner that provides financial benefits to the Evogene shareholders. We look forward to providing additional information regarding the implementation of this very exciting strategy. I would now like to move on to an overview of our recent achievements.
I am pleased to report that both Evogene and our subsidiaries have been progressing. And I would like to highlight the following activities and advancements all made in the first half of 2021 and what can be expected for the second half of 2021. We will start with Biomica, focusing on the development of drugs based on the human microbiome utilizing Evogene's MicroBoost AI tech engine. In the first half of 2021, Biomica has continued to preparations for the initiations of its first-in-man proof-of-concept study in the immuno-oncology program and continued with its pre-clinical programs for gut disorders.
2 important announcements have been released by Biomica during the first half of the year. In Q1, Biomica released impressive pre-clinical data for its rationally-designed microbiome therapeutic candidate BMC128 in immuno-oncology. BMC 128 in combination with immune checkpoint inhibitors, ICI, in the breast cancer mouse model, demonstrated to announce anti-tumor activity as manifested in an increase of almost 50% in objective response rate in comparison to ICI alone.
In Q2, Biomica reported the BMC128 has significantly increased anti-tumor activity, in combination with ICI, but this time in melanoma. These positive pre-clinical results could indicate the potential BMC128 to become best-in-class in the treatment of various types of solid cancer tumors and support the validation of the Biomica computational-based drug designs approach.
As for the second half of 2021, Biomica expects to initiate its first-in-human proof-of-concept clinical trial in Israel later this year in its immuno-oncology program. As preparation for this milestone, Biomica initiated the scale-up processes and move to GMP production of its drug candidate, as well as submitted the relevant documents for regulatory approval. We also expect to receive clinical results for the IBD program.
Let's move to the second Company in the field of human health, Canonical. Canonic's vision is to become a world leader in developing and commercializing effective, precise, and stable medical cannabis products based on novel cannabis varieties.
To achieve this vision, Canonic utilized Evogene 's GeneRator AI tech engine. With eyes on the global market, the Company is making its first steps in the Israeli market with impressive progress indicating big potential. In the first half of this year, Canonic invest significant resources to establish its production and marketing infrastructure in preparation for product launch in Israel in 2022 as planned. Two important announcements have been released by Canonic during the first half of the year.
The first was signing a production and distributions agreement in anticipation of the commercialization of its first product in the MetaYield program in 2022. The second was announced an agreement for joint development of novel medical cannabis products with Cannbit Tikun Olam. This is part of Canonic's Precise Products Program. During the second half of 2021, Canonic will continue with preparation towards the selection and commercialization of its first-generation MetaYield Premium Products and will focus its research and development efforts on next-generation Metayield varieties.
In addition, Canonic expects to achieve its milestone for the Precise Product Program and identify a line that exhibits distinct effects in model systems for reducing pain or inflammation. Now, I will move to AgPlenus, our subsidiary in the Ag industry segments. genus ' mission is to develop and commercialize novel and safe crop protection products to control pests and produce higher yields, supporting the growing demand for high-quality food. To achieve this vision, AgPlenus utilized Evogene 's ChemPass AI tech engine.
During the first half of 2021, AgPlenus focused on 2 important activities; making considerable progress in its collaboration with Corteva to develop novel herbicides, and continuing to develop and test additional compounds in its internal herbicide program. AgPlenus recently announced it achieved positive results in a proof-of-concept experiment developing resistance trait for herbicide candidate targeting APTH1, AgPlenus Target Herbicide 1, its leading novel mode of action for herbicide in its internal program.
This POC demonstrates the ability to generate resistance traits in target crops to herbicide targeting the new mode of action, APTH1. This is a significant milestone as a resistant trait and able farmers to kill weeds without damaging the commercial crop. In the second half of 2021, AgPlenus will focus on three main targets. Advancing its strategic collaboration with Corteva, expanding its product pipeline to reach the lead phase for an additional candidate targeting APTH1, and lastly, advancing commercialization effort for APTH1.
Our second subsidiary to the Ag industry is Lavie Bio. Lavie Bio's mission is to improve food quality, sustainability, and agriculture productivity through microbiome-based and biological technology and products. To achieve this mission, Lavie Bio utilized Evogene 's MicroBoost AI tech engine.
The main focus of the Company in the first half of 2021 has been on advancing its product pipeline. At the core of its activity are the LAV211, biostimulant for spring wheat as the first target crop, and LAV311 /312, bio fungicide for grapes as its first target crop. We will lead biostimulant, LAV211, which is expected to be launched in 2022.
Commercial trials are continuing and there has been further advancement of formulation and product readiness. As part of the Company's preparation for commercialization, its commercial team expanded with the appointment of a VP commercial, building the path to market in North America, the initial target market for our biostimulants.
For the next 6 months, Lavie Bio will continue to prepare for the expected lead biostimulants LAV211 commercial launch in 2022, which we anticipate will include an agreement with a potential distribution partner. About our leader bio fungicide LAV311, LAV312, we are advancing an additional season of a multi-location field trial in Europe and the U.S., which are focused on advanced validations of an optimized and improved generation or formulation. In addition, trials for expanding the use of the bio fungicide into additional potential and lucrative crops are being conducted.
Concerning LAV311, LAV312, our lead bio fungicide, we expect to finalize the formulation protocol and initiate data generation for regulatory filing in 2022. Last but not least is our feed rate division. It aims to develop high-quality food based on improved seeds with high commercial value, leveraging computational genomics and biology. To achieve its targets, the division utilized the GeneRator AI tech engine.
In the first half of 2021, the focus of the seed trade division was on developing technology for seed improvement using genome-editing technologies, enabling deletion or modification of specific genomic regions, in the genome of the crop, without inserting foreign DNA into the plant. During this period, [Indiscernable] division completed the establishment of the first version of the computational and biological genome editing platform for the utilization of CRISPR technology in different crops, currently focusing on soybean and tomato.
In the frame of the division, genome-editing activity, Evogene participates in the CRISPR iron consortium with Dr. Ayalew Manuel (ph), Evogene 's VP in New Directions serving as the President of the Consortium. We were very pleased to announce at the beginning of 2021 the completion by this Consortium of the first version of the artificial intelligence-driven platform for genome editing.
During the second half of the year, the sea trade division aims to leverage the CRISPR technology for the development of disease-tolerant and high-quality trade-in soybean and tomato lines. Another important project the division is involved in targets improving the carbon stimulation by plants, reducing carbon pollution, which aims to slow the damage of global warming.
In this project, which is funded by the European Horizon 2020 program, our seed division collaborates with world-leading academic institutions, such as Max Planck Institute, the [Indiscernable] Institute, and Imperial College London. With that, I would now like to turn the call over to Dorit Kreiner, our CFO. Dorit?
Dorit Kreiner
Thank you, Ofer. I will begin by reviewing our cash balance. Evogene continues to maintain a strong financial position for its activities with approximately $65.4 million in consolidated cash, cash-related accounts, bank deposits, and marketable securities as of June 30, 2021. Approximately $10.6 million of Evogene's consolidated cash is appropriated to its subsidiary Lavie Bio. During the first half of 2021, the consolidated cash usage was approximately 11.3 million, or 8.9 million if excluding Lavie Bio.
These sums exclude 28 million net raised to our ATM offerings and exclude 0.5 million for sales for the micro size of options. During the second quarter, the consolidated cash usage was approximately 5.7 million, or 4.5 million if excluding Lavie Bio. These sums exclude 0.8 million net rates while the current ATM is detailed below. During the first half of 2021, and in particular, during the second quarter, the burn rate was higher than the same period in 2020 for the following reasons.
First, during the second quarter of 2020, the burn rate was unusually low due to certain measures the Company took to mitigate the impact of the COVID -19 pandemic on the Company, including a temporary reduction in salary-based expenditure and a cutback in secondary activities. Second, during the second quarter of 2021, Evogene 's subsidiary increased their investment substantially in advancing their product development pipelines, including; Biomica continued preparations [Indiscernable] of first-in-human proof-of-concept study in the immuno-oncology program later this year.
Lavie Bio's activities towards the expected commercialization launch of its lead biostimulant in 2022. and Canonic's establishment of its production and marketing infrastructure in preparation for expected product launch in Israel in 2022. We continue to estimate that our cash usage for the full year of 2021 will be within the anticipated range of 20 million to 22 million. These guidelines exclude cash usage of our subsidiary Lavie Bio.
Under our current ATM, which we announced in March 2021, we raised 0.8 million net with a weighted average price of approximately $4.7 per ordinary share. The Company does not have bank debt. Let's now turn to the statement of operation. Revenues for the second quarter of 2021 were 0.1 million in comparison to 0.3 million in the same period the previous year.
R&D expenses for the second quarter of 2021, which are reported net [Indiscernable] with 5.0 million in comparison to 3.9 million in the second quarter of 2020. The increase in R&D expenses in this quarter was mainly attributed to product development activities of the Company and its subsidiaries, as mentioned above.
Business development expenses were approximately 0.7 million for the second quarter of 2021 in comparison to 0.5 million in the second quarter of 2020. The increase is attributed mainly due to Canonic's and Lavie's preparation towards the expected launch of their first products in 2022. General and administrative expenses for the second quarter of 2021 were 1.8 million in comparison to 1.1 million in the second quarter of 2020. The increase is attributed due to the increase in the cost of directors' and officers' insurance. Operating loss for the second quarter of 2021 was 7.4 million in comparison to 5.2 million in the second quarter of 2020. The loss for the second quarter of 2021 was 6.9 million in comparison to a loss of 4.8 million during the second quarter of 2020. With that said, we would now like to open up the call for any questions you may have. Operator?
Question-and-Answer Session
Operator
Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. Ofer Haviv and Dorit Kreiner will be available to take your questions. [Operator Instructions] Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Kristen Kluska of Cantor Fitzgerald. Please go ahead.
Kristen Kluska
Hi. Good morning and good afternoon. Thank you for taking my question. So I'll start with one big picture question here. As you're nearing potential commercialization for your first 2 programs next year, MetaYield and LAV211, could you remind us how you view the initial market opportunities? And I would imagine that most of the customers, you or a partner would be looking to get in front of would-be perhaps looking to make a switch from another product that they currently use, so what are your view as the main selling points or advantages to get there?
Ofer Haviv
Hi, this is Ofer. Thank you for your question. We didn't disclose the specific numbers or guidelines with respect to potential revenue over the first product. But what I can share is that with respect to Lavie Bio's first product, we are talking now with a few local distributors that are going to -- will be responsible for the sales of our product in the target location. At least for the first year, we're not expecting to -- something significant.
The expectation is just from the second year then the numbers will be more material. And what is really nice is that the distributors we are working with them are the one that we are also using them to conduct a field trial experiment. They are the ones that really see the performance in their field. They are the ones that collect the data. In a way, they are our best ambassadors for the quality of our product.
It's not that we supply them the data, they actually generate together with us the data. And what is really nice, and this is something that we disclosed already, is that the performance of our products compared to existing commercial available product is better. So I think that our strength with the yield improvement, and compared to the competitor, this will be the key message that we are going to use in order to promote our products.
With respect to Canonic, over here, we are expecting to reach the market using a local distributor that we already spent time with them on the agreement. And we are expecting to reach the customers next year through a local pharmacy, pharmacy on the internet, and we are organizing a campaign -- a marketing campaign to drive the sales of our products for next year.
One thing we're planning to do is that our statement why to buy the able -- the economic product and not the -- our competitive product is the quality. And the quality will be based on the? cannabinoid? profile and how the crop looks in the -- protective of the consumer, the patients. What we learn is that the way that the flowers look is very important for the consumers, and our variety is showing a very high rate in this parameter.
During the growing season's selection, we brought to our farm potential customers, people that they are buying canna -- medical cannabis products. We show them our variety and we use their recommendation as part of the breeding process, as part of the selection process. And we feel that we have the type of product that will fall into the premium category. And this will be our main statement why our products are more suitable to the needs of the potential customers.
Kristen Kluska
Thank you. And then in terms of your announcement this morning regarding the strategy of potentially exploring the idea of turning one or more subsidiaries into public companies, could you talk about the timing as to why you believe now this is something that you are looking to consider? And generally speaking, since your subsidiaries range from the early preclinical stage to near commercialization, is there a certain point you're looking to make these changes?
Ofer Haviv
I think that at least a few of our companies are really advancing nicely to commercialization, and this is Canonic and Lavie Bio, and Biomica is advancing very nicely toward the clinical trial. They're all active in very -- in very hot spaces where investors are looking for an investment opportunity. I don't think that we are planning to take all of them into the public market, but probably we will evaluate them one by one.
And when the market condition and the development on these companies when we should just state that we're seeing this would be the right time. So this is what we are planning to do. But the thing that it's -- we are getting close to this stage. And I believe that this is -- will be for the benefit of Evogene's shareholders.
We are -- we can -- instead of investing the money that there was and invest as part form and promoting our subsidiary, we can do it as the art form in a public offering, or we can do it also as part in a private firm, together with additional financial investors. I think the main target is we would like to do is to give to each subsidiary -- what we'd like to do is to give to our -- the capital market the opportunity to evaluate each activity separately because we believe that when you will accumulate all the value of each subsidiary, you will get a much higher valuation than the current valuation of Evogene.
We will start with one we see and, hopefully, we will see the positive effects on Evogene share, and then we can start to move with the other companies. This is the main purpose of this strategy. And, of course, we need to make sure that we're going -- we're doing it for the benefit of our shareholders.
And this is why we also considered that in some cases, maybe, to distribute to our shareholders ' portion from our holding in these subsidiaries so they can benefit also from the growing value of our subsidiaries. And, as I stated, the main reason is to allow the capital market to evaluate this part from the Evogene group activity in an easier way since it will be isolated from the other activity.
Kristen Kluska
Thank you. And then the last question from me. I think each of these subsidiaries, has a pipeline beyond the main programs that you've discussed, particularly as validation has been achieved, do they looked at other avenues the CPB platform could be utilized. So there's this strategy, how do you think about each potential subsidiary exploring value beyond the initial focus and pipeline, if they should have added resources on-hand? And then how do some of the other spaces that you are considering like aquaculture and drug optimization fit into this strategy as well. Thanks again.
Ofer Haviv
Okay, so first, and this is somehow related to the reason that we want to spin out our subsidiary. We have currently four subsidiaries. And each one of them has a very, very promising product pipeline. And the product pipeline of our subsidiaries contained more than what we are disclosed in our press release and through the analysts call, just because we can't cover everything.
And I think this is really far from the reason why the market cannot really evaluate each subsidiary by itself. So, yes, in addition to the product -- in addition to the lead product of each subsidiary, that I emphasized in my speech, there are more candidates which are advancing very nicely, and I would like to recommend each one of the audience to visit our subsidiary website and really look into the pipeline because there is much other promising stuff than what I'm sharing with you mainly due to time constraints.
With respect to additional activity, the license that we are giving to our subsidiary through the Evogene technology is limited to a very specific scope and this is the area that they are focusing on. They cannot use the Evogene technology outside -- of their scope. And so if Evogene -- if they want to expand their focus to an additional area, they need to ask for Evogene to extend their license. So this is with respect to the subsidiary.
But with respect to Evogene, one of the reasons that we want to spin out those subsidiaries, because then it will give us -- will allow us to focus on a new opportunity and that we -- some of them we already start to explore, you mentioned a microbiome for the aqua agriculture. This is one of the areas that we are validated. And another area is using our technology to optimize direct candidates, which are based on small molecules.
And another area to validate is maybe using the generator technology for developing alternative protein from a veggie protein to replace mammalian protein. So I think that all of this area if you really want to start to explore and to start to expand into, I it will be relatively much easier if one or more of our subsidiaries will be completely independent of Evogene with their own financial resources when we are just supporting them through our technology and being a shareholder.
And this will allow us to expand our technology and we can do it then through a separate subsidiary, or through collaboration, or we can always decide it should be part of Evogene. But, probably, I believe, it will be through a subsidiary -- new subsidiaries or through collaborations.
Kristen Kluska
Thank you.
Ofer Haviv
Thank you.
Operator
The next question is from Ben Klieve of Lake Street. Please go ahead.
Ben Klieve
All right. Thanks for taking my questions. I've got a couple, but first a clarifying question on the launch of LAV211. Is your expectation that that launch is going to be with the crop -- the spring crop that gets planted in 7, 8 months, or is the expectation that the revenue of it is going to be wait '22 for the spring wheat crop in the spring of 2023?
Ofer Haviv
We expect to be able to use it in the next season, meaning that we can recognize the revenue during 2022.
Ben Klieve
Okay. Perfect. Thank you. Then, a couple of follow-up questions and -- given that. I wasn't aware that the distributor -- that you had a distributor working with you on the field trials that you're working with now had commercialization. That's great to hear. Can you characterize -- how field trials have expanded over the past couple of years? I know you have 20 events noted in a field trial in your presentation. This year, do you have 20 more field trials ongoing with the same distributor? Any context around how that -- how those trials have evolved would be great.
Ofer Haviv
I don't have in front me the numbers of the field trial, but I can tell you -- can share with you the following. The numbers of field trials that we conduct this year, I think it's almost, again, I hope that I am not mistaken, but the thing is we've doubled the size of the previous year. It's really in a very [Indiscernable]
And this is actually very, very important because this year, it wasn't a very easy -- it's still -- it's not an easy year to measure yield improvement because of the drought that really is very severe and not helps people that are trying to evaluate the performance of our biological. But because we conducted this experience in so many places, that seeing that we have enough statistics to allow us to make the final decision should we start the -- to launch the product next year. And I think that we have many good shapes with this aspect.
Ben Klieve
Got it. And that actually would have been my next question here around the drought -- -- how pervasive the drought conditions are especially in wheat acreage. How did your -- how is your distributor thinking about launching new products next year? How are they thinking about, potentially -- just -- the market is just a mess right now in spring wheat. And so I just -- I'm curious how they're thinking about going product next year versus last year's? One has been a bit more predictable.
Ofer Haviv
I think that this is a little bit too detailed question that I will prefer that maybe the CEO of Lavie Bio will address, but I think that -- the fact that we have results based on the last three years, coming from the last three years. And in all of these years, the performance of our product was better than our competitor.
And I really hope that this year we'll succeed to generate enough statistical data to demonstrate the performance of our product. I think it will be enough information for our distributor to start their marketing of the product in the local region. Agriculture is a very -- sometimes I think that it's almost like a gamble because of the weather conditions.
And every year you need to start and hope that this year things will be according to plan. And farmers are really doing their best. So next year, it will be a new game. Hopefully, the condition will be better for farmers. And I think this will make our distributor life easier. Maybe the last thing I would like to add, we choose the specific marker we are using mainly because we felt that they can address improved yield during a rough condition.
Actually, when -- if the weather is optimal, the effect of the microbes exists but it's not -- it won't be as good as when there is some drought or maybe the weather is not optimal. If there is concern that maybe next year there will -- there might be still some drought, again, if there is no rain, nothing can grow. But if it will be something in between, the efficacy of our product is actually one of the reasons to use it in order to address this challenging weather condition.
Ben Klieve
Got you. That makes sense. One more from me and I'll get back in the queue. Over at the end of your comments, you talked about the opportunities in developing seed technologies, I think you specifically mentioned tomato and soy, but I'm sure you're working on other things as well. I'm curious if you could classify how you think about going to market with that down the road? I mean, are you looking to develop unique trades and license those trades to the big ag players? Are you looking to potentially get into -- the sale of seed? How do you really see commercializing that opportunity down the road?
Ofer Haviv
It's a very good question. This is something that we are also evaluating. And is maybe one of the reasons why our seed activity is still under a division structure and not in a separate subsidiary. I intend to believe, and this will be my recommendation that we should find the field where we are focusing on the end product while the -- our competitive advantage, given the technology level of genomics.
And I'll give you exactly where we already implemented support. This is our subsidiary Canonic, which end product is medical cannabis. But the reason that we are operating in this field is because of our strength, the technology strength, in cannabis genomics. And in this case, we can even target all of our activity to reach the end product, which is the medical cannabis itself, and not just to support the cannabis growers or a Company that is focusing on -- that they are selling the end product.
Developing the technology that we're talking about, the most advanced genome editing technology that you can think of, yes, we can then use it for the big seed companies and enter into some licensing agreement. My preference will be, let's find the type of product, and as an example, it could be a tentative protein. And the Company that we''ll establish will focus on bringing to the market the end products and the -- our competitional -- and our competitive advantage over the Company will be the technology in the level of the crop genomics.
We can think about different types of tomato, you can think about maybe bananas with high protein content or a tomato with high vitamin, I mean, but really, I would prefer to focus on the end product and using the technology as the engine to drive the success. Is this the rest of your question?
Ben Klieve
Yeah, yeah. No. That's a -- it's a -- there are multiple directions that could certainly go, and that was very helpful. We'll stay tuned there. Thanks for taking my questions. That does it for me, and I'll get back in the queue.
Ofer Haviv
Thank you very much.
Operator
The next question is from Nathan Weinstein of Aegis Capital. Please go ahead.
Nathan Weinstein
Good morning, Ofer and Dorit. Thanks for taking my questions. If we could start with Canonic and specifically the market that you'll be launching into. Maybe you could speak broadly about the medical cannabis market in Israel, how it's trending? And then have any -- have there been any impacts on the pandemic in terms of the use patterns and behaviors with medical cannabis?
Ofer Haviv
So the medical cannabis market in Israel is Growth fast. We are talking about an I think 180,000 patients if I'm not wrong and if they keep going. It's regulated and -- by the Israeli government. But maybe one of the most important things that they would like to add to the discussion is that I think last week or two weeks ago, there's government approval for cannabis companies in Israel to export their product, or their variety or their seeds abroad.
And this is the open new market abroad for Canonic and Company in the cannabis field. I think that the cannabis market in Israel is third in size in the world; the first one in the USA, then Canada, and, I think, then Israel, so it's quite a significant market. And I think that in the last press release of Canonic, there are some details inside that cover this type of question.
Nathan Weinstein
Great. Thank you. And just one follow-up for me and switching gears to Biomica with the preclinical trials for the IBD program. Are results expected in the back half of the year? Maybe you could help us think about what to expect from that and what you'll plan to share at that time.
Ofer Haviv
Okay. In this program, we select few a sets of microbe. Each one of them contains around up to 4 microbes, which -- or including the type of function that I started to believe can address the IBD disease. And we are giving those sets of microbes to [Indiscernible]. We're doing it in a very well-known lab in the U.S. and we are waiting to receive the results.
And based on these results, assuming they will be positive as we all expected, we are planning to initiate clinical trials next year in this program, and, probably, this time we're planning to do it in the States, not 100% sure that we will do it in the States, but this will be the basis for a clinical trial. And then that could be a very interesting situation for Biomica that the end of next year this Company will have 2 programs in a clinical trial that validates microbes for a very, very important entity.
Nathan Weinstein
Thank you, Ofer. I appreciate you taking my question. That was very helpful.
Ofer Haviv
Thank you.
Operator
The next question is from Geoff Gilbert of Inukshuk. Please go ahead.
Geoff Gilbert
Hello, Ofer.
Ofer Haviv
Hi.
Geoff Gilbert
Thank you for taking my call. I just wanted to echo your thanks to Martin and wish him the best in retirement. As well I would like to thank you [Indiscernable] for taking the helm and look forward to her leadership. Additionally, Ofer, I thank you for -- and we welcome your strategic announcement this morning.
I know we've talked about that in the past few years, and look forward to seeing what comes from your investigation on the values and which subsidiaries you choose. I just had a couple of book-keeping questions on cash burn, if you expect next year. I know it's always off and also dependent on whether or not the IPO happens or not.
But if -- with any of the ramping of commercialization, do you expect the cash burn to significantly increase in 2022? And additionally, you mentioned upcoming milestones in a couple of subsidiaries, whether or not those are affiliated with any cash payments from partners, or they're just advancements in the pipelines. Thank you.
Ofer Haviv
Thank you for your wording with respect to Martin. It's a reason of course makes us highly appreciate these. I definitely seeing that in marketing contribution to Evogene is tremendous. I think that parting condition to the biotech industry usually, was quite significant. And I'm really excited to work with a rate that she presents and bringing in new energy to the Company.
And I'm sure that together, we are going to take Evogene to the next phase of development. With assess -- with respect to your question, I think that people that are following Evogene know that we are very cautious with our burn rates s and usually, we are trying to make sure that it will address our targets and needs. I think that one of the reasons that we want to take also our subsidiary to the public markets is to raise the money in the private placement.
In addition, to have a separate valuation process, it also will allow those companies to prosper faster compared to them based only on Evogene funding it on its own, especially Company that such as the Biomedical. Let's say, when you're entering into the clinical trials, the amount of money you need is quite significant and yet the valuation of course jumped significantly, but also the amount of money you need to invest.
So I think that we are also taking into consideration these items in total consideration, how to prioritize, and who is the Company that we are going to take to the market first. I think that the next year, yes, their awesome milestone is expected to be achieved. Some of them start from collaborations agreement, but not all of them.
And I think that where our programs are, especially in Biomica and AgPlenus, this is 2 Company that their program out in the stage is next year, they will allow us to enter into a significant collaboration agreement that, hopefully, we can also lead to payment to Evogene and they can help us in funding the rest of our activity.
In addition, yes, Lavie Bio, maybe the numbers won't be significant and we are expecting to see higher numbers coming during 2023, but seeing that the economic, the numbers could be a little bit more immaterial and it also will inject cash to the Company to cover its expenses. Dorit, would you like to add something about it?
Dorit Kreiner
No. I think you said summarized it correctly and we will give the full estimation with respect to the burn rate in our financial for the end of the year.
Geoff Gilbert
Thank you very much for taking my question.
Ofer Haviv
Thank you.
Operator
If there are any additional questions, [Operator Instructions]. Please stand by while we poll for more questions. There are no further questions at this time. I'd like to hand over the call to Kenny Green of Edison Group to address write-in questions. Please, go ahead.
Kenny Green
Thank you, Operator. We've had a lot of writing questions, but most of them have been answered over the course of the call. One question we haven't addressed is about CRISPR. What is Evogene's direction with CRISPR through the consortium or independently? And will we introduce it for testing in humans?
Ofer Haviv
What we are doing in CRISPR, apart from the consortium is really to improve the -- what is called the guided RNA. These are the DNA fragments that are actually responsible for where you do the modification and the DNA itself and you want to do the modification in the specific place that you were targeting, and only there. And this is one of the problems that people that are using this technology are facing today, that they edit is not necessarily in the place they were targeting it and this could be a very significant problem, especially when you're using this technology for humans.
There are a few directions where you can use this technology for humans. I I think that -- I hope that our audience is familiar with what is called TIKA, where you are -- for people that suffer from cancer, you're taking out certain cells, you do some modification on the cells and then you return them back to the patient and now these T cells can fight better against cancer. This is an example where you can use genome editing in order to achieve the target. And if you -- the system you have is much more accurate and much more -- with higher efficacy, this could be quite a significant improvement. The companies operating in this field will be more than happy to put their hands on it. And this is just 1 example where you can use gene [Indiscernible] for humans and seeing that what we are trying to solve using AI technology could be very beneficial for this type of Company.
Kenny Green
Okay. Ofer, thank you very much. The rest of the questions have already been addressed throughout the call, so I will hand them back to the Operator.
Operator
Thank you. Before I ask Mr. Ofer Haviv to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin 2 hours after the conference. In the U.S., please call 1-888-3269310. In Israel, please call 0-3925-5 901. Internationally, please call 9723-9255-901. Mr. Haviv, would you like to make your concluding statement?
Ofer Haviv
Yes. Thank you. Thank you all for joining the call today. We all look forward to updating you on our progress over the next few months. Thank you. And good day.
Operator
Thank you This concludes Evogene's Second Quarter 2021 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.
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