Q1 2022 Evogene Ltd Earnings Call
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Ladies and gentlemen, thank you for standing by welcome to <unk> first quarter 2022 results Conference call. All participants are at present in listen only mode. Following management's formal presentation instructions will be given for the question.
And answer session.
Operator assistance during the conference. Please press Star Zero as a reminder, this conference is being recorded on May 26, 2022, before we begin I would like to caution that certain statements made during this earnings conference call by evidence management all constitute forward looking statements that relate to future events risks and uncertainties regarding business strategy operations and future.
Performance and results of averaging I encourage you to review average in 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.
But Securities Litigation Reform Act of 1095 for example, Allergan is using forward looking statements in this call when it discusses effective path to value creation, including potential fundraisings at the subsidiary level and untapped value and its subsidiaries.
City areas as expected trials and their expected results studies product advancements commercialization launches pipelines milestones potential collaborations target markets other plans for 2020 two and beyond.
The cash 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 of the date of the announcement of the results.
Any of the factors that impact what that forward looking statements will come true are beyond the control of avid and may cause actual results to differ materially from anticipated results.
I have agenda is under no obligation to update policy 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.
I now hand over to <unk> CEO of imaging all fail.
And good day everyone.
We appreciate you joining us today for the first quarter of 2022 conference call.
I will begin the call.
We're using some of the recent changes we have made to strengthen management.
Following that I want to talk at least about equal janet's underlying competition predictive biology platform.
Our suite AI technology engine.
And the business ecosystem build around each stick engine.
I will then address the matter of funding mainly for our subsidiaries.
Following that I will provide an update on the subsidiaries activities.
Recent milestones met.
Hey, Bill.
The steel Omega.
He has joined US today, and we'll give you additional color on biomarkers of activity.
We have made significant advancements there.
Joining me today also Mr. Jan Eldad <unk> new CFO .
This appointment represent part of our recent changes to our management team.
Yeah, one brings significant experience to ampligen, having skilled at various CFO position over the last 25 years in both public and private technology as well as biotechnology companies.
Trustee Rune will prove to be a key assets to ampligen and its subsidiaries.
The only real address to you in a few minutes and cover the epogen financials.
We also recently appointed assessor you might see us as the executive Vice President in charge of corporate development.
And he will be responsible for evil Genesis relationship management with its subsidiaries.
He has held various positions within epogen since 2011, most recently as Epogen Vice Presidents for legal affairs and corporate Secretary.
I congratulate team.
This promotion and I know he will be excellent in his new role.
Finally, joining the <unk> management team, we pointedly asked for Gil.
Vice President human resources, having.
Having held various positions at <unk> since 2015.
Including most recently director of human resource.
Yeah. It has proven capabilities over the years and this is a key appointment, which will ensure we retain leading talent Hewitt epogen, especially at the time of a very tight labor markets globally, including in Israel.
I believe that for a disruptive company at.
At the crossroads.
Life Science.
<unk> edge technologies. It is critical that we attract and retain the best people.
I congratulate you own <unk> for their new positions and wish Epogen management the best success.
And now to introduce some of the continued improvements we have made to our technology and business processes.
As I previously mentioned, we are uniquely positioned at the crossroads between big data AI and life Sciences, which is known as computational biology.
Epogen. His goal is to revolutionize the development process of new and novel Life Science based products.
Via our cutting edge technologies.
Our threep take engines relying on our conditional predictive biology platform.
Are the driving force behind our activities.
And they serve as the <unk>.
Underlying competitive advantage of each of our subsidiaries.
These are micro boost AI targeting to support the development of product based on macro ops.
Campus AI targeting to support the development of product based on small molecules and generator AI targeting to support the development of product based on genetic elements.
Each engine addresses multiple development challenges.
And aimed to solve the problem.
Finding the right product candidate out of multitude of potentials like finding a needle in a haystack.
Our aim is to increase the probability of product success, while reducing development time.
The risks and costs.
Over the years I have been asked.
Why don't you license out your technology.
Our goal is to maximize the value we can capture from our technology through the end product developed by us rather than became a simple technological service company.
In other words, we feel that the licensing out our solution without taking a share in the upside of the end product leaves significant value on the table.
Based on this understanding we have built around each of our tech engines and continue to build a business ecosystem.
This is primarily in the form of independent subsidiaries, each of which empowers multiple product development or through strategic collaborations focused on the development of a specific product.
Each ecosystem is both an interactive and also an iterative process work environment in which to more projects, we embarked on the more enriched our databases and analysis capabilities at Mccann.
Contributing to better predictions down the road and improve the probability of success from each product on its own.
We expect the value to be generated through our equity stake in the subsidiaries or in the case of strategic partnerships through success based payments and royalties generated from the end product.
To support the expansion of our Tic engines ecosystems.
We have recently focused on automation of processes that previously required the intervention of a barn format takes engineer to fully autonomous implementation.
This improved speed reduce erosion and most importantly allows product developers to get more objective information in the product development process.
Looking ahead, we aim to continue to invest in our tech engines addressing more potential discovery and better solution to developmental challenges.
I would now like to address the matter of funding S.
As you know global financial markets.
In the extreme at the moment, particularly in the U S for growth companies and even more so for companies in the biotech space.
That's your epogen raised some capital at a much higher market valuation to support today's advancements at our subsidiaries and thankfully we continue to maintain a solid cash position, providing stable run rate for the coming year.
As of March 31, 2022, our consolidated cash cash equivalents bank deposits and marketable securities.
Proximately $44 6 million, which included $6 6 million dollar held by <unk>.
And stay updated last quarter.
Our 2022 net burn rate is expected to be similar to that of last year.
In the range of $26 million to $28 million.
Including <unk> and $18 million to $20 million, excluding <unk>, which manages its own cash position.
While this gives us a long enough runway even in the current negative market environment. We continue to work to diversify funding sources at the subsidiary level.
Our goal is to accelerate the subsidiaries growth and to strengthen their position as independent companies.
As I will discuss in a few moments we believe that we are at an inflection point stage, whereby we are meeting critical milestones and the inherent value of our subsidiaries is becoming increasingly albeit even if the market value of epogen doesn't reflect it yet.
<unk> goal is to partner with value, adding companies and investors at the subsidiary level, who.
Who can correctly value and appreciate the potential from the products that our subsidiaries are developing.
This will allow us to demonstrate in a very public way just subsidiaries very significant untapped value.
We are currently in a number of discussions at various levels.
With potential strategic and financial investors.
Towards potential fundraising and partnering and to the extent permissible under securities laws, we intend to provide updates.
I will now move on to discuss our subsidiaries activities, we will start with our.
Our subsidiary focused on the development of drug based on the human microbiome and as mentioned I would like to introduce <unk> seal biomarker to the call.
Dan Please.
Thank you Ofer, we're very pleased with Bellamy, because recent progress, which I want to briefly cover.
In April we announced an agreement with Sheba Medical Center, a global top 10 ranked hospital by Newsweek for joined micro bumps clinical research.
Whether we will conduct distinct wincing and high resolution microbiome analysis of samples obtained from patients with inflammatory bowel disease IBD IBD represents an approximately $20 billion market opportunity.
And over the past 20 years multiple studies have shown the pivotal role of gas microbiome in the pathogenesis of IBD.
The Gulf.
Joint work will be to identify the potential profile.
Biomarkers and therapeutic entities in order to gain additional and deeper understanding of the human microbiome in IBD patients.
Our goal is to use those findings to expand our expertise in this field.
During our ability to support that.
<unk> of new Therapeutics.
We expect this analysis will be highly complementary to our previous work on IBD.
As we updated before but I'll make a reported positive preclinical results in our IBD program. Following the evaluation of BMC Creek we.
Rock candidate in DSS induced colitis model.
We demonstrated that BMT triple credibility.
To significantly reduce intestinal tissue damage from inflammation, we hope to begin to scale up development process of BMC throughput. Three later this year in preparation for an <unk> for an initial clinical best production.
Last week, we announced that the results from this work will be presented at the digestive.
Digestive disease week did Tw 2022 conference <unk> CSO professional you dialing in.
With regard to our drug candidate <unk> hundred 28, a combination of four microbes for supporting immunotherapy.
Last year, we announced positive preclinical results.
In a series of preclinical studies BMC 128, given in combination with immune checkpoint inhibitor immunotherapy.
We're able to show significantly improved antitumor activity.
Earlier this year, we received clearance from the Israeli Ministry of Health to proceed with the first in human Phase One study, which is set to be held at <unk> health care campus. The largest helps US center in northern part of Israel and we are currently advancing towards the enrollment of the FERC vision.
This phase one study will evaluate the safety and Tolerability of BMC 128 in combination with BMS Opdivo.
In patients with non small cell lung cancer melanoma or RCC renal cell carcinoma.
BMC 128 will be offered to oncology patient who have been found to be non responsive to immunotherapy treatments.
So it would be in Q1, 'twenty, so any clinical signal that would be a wonderful addition of outcome.
Earlier this week, we announced that we will be presenting at the 2022 at Commonwealth meeting and that's all work was also selected for the 2022 zero.
Advocate Choice Award.
That ends my updates so back to you Ofer.
Thank you everyone.
Moving on to the second company in the field of human has colonial our subsidiary focused on the development of medical cannabis products.
Focusing on the genetics of the cannabis plant was a good move from emergence perspective.
The cannabis plant was an overlooked planned for which even a relatively simple genetics that have made a huge impact.
And it has the characteristics we were looking for.
2021, we moved ahead with full commercialization in Israel of our first two products from domestic yield product line overall.
Over these past few months, we have seen our brand awareness increase in Israel.
Note that while it says this year in Israel are still at an early stage and we remain modest we see Israel, it's more of a test bed market for us and Europe is our main target market in the future.
As part of our preparations for the planned 2023 European commercial launch.
The first batch of unique cannabis varieties with shifts in January of this year to potential cultivate cultivation southern plateau in Portugal.
Our current goal is to test our product.
European growing conditions, as well as finding and ultimately entering into commercial agreements with local growers and manufacturers in Europe .
Canonic intend to introduce to the market additional products from the meta product line in 2022.
To this end the company employed epogen generate or AI.
Identified several genetic markers, including four increased the THC levels.
We recently showed a statistically significant increase of more than 20% in THC concentration in a target cannabis population using these genetic markers.
In parallel the company is developing its precise product line targeting specific medical indications over the past two years, we've conducted preclinical trials, which have identified cannabis varieties offering pain relief and anti inflammatory properties.
In January of this year, we announced positive results in colonic preclinical studies that support the successful identification of specific cannabis varieties with anti inflammatory and pain relief properties.
We intend to gather additional clinical information over the course of 2022 to support the commercial launch of this product in 2023.
I will now move to ACA plans.
All of our subsidiaries in the AG industry segment.
The <unk> mission is target base design of novel and sustainable crop protection products based on small molecules.
<unk> is currently working on expanding the data package regarding the company's leading herbicide product candidate a ph one as part of preparation for a potential future collaborations.
In addition, together with Amgen campus team excellence is continuously working to expand computational and validation capabilities.
To enhance the discovery of novel Pesticidal compounds.
Moving to <unk>, our second subsidiary in the AG industry, which is aiming to improve agriculture productivity and sustainability through <unk> based at the biological products.
During late 2021, let me buy a lounge is crop inoculate named result for the 2022 spring wheat season, a few weeks ago, we announced that <unk> successfully produced and fully sold explained production for that to U S customers for result.
I want to stress that this product result was launched to market a very good time, and we believe that it can help contribute to security global food supply.
Global wheat prices have recently increased significantly due to supply chain constrained and global shortages, which have been compounded by the war between Russia and Ukraine.
Well first and fifth largest wheat exporter, respectively.
Current high wheat prices has made it highly economical for growers to explore ways to increase the wheat production by increasing yields.
Our trial showed that result, potentially contribute an additional three to four bushels per acre via yield improvements.
Paired with industry benchmarks.
Just on current wheat prices for farmers. This could provide growers an average of 30 to $40 in additional revenue performed acre which is very significant.
We expect that the demand for wheat yield improvement product will remain high for the foreseeable future.
And this is the reason we are already working on expanding production for the 2023 growing season compared to our original market penetration plan.
Looking ahead, we are aiming to broaden with that says throughout north American market include.
Including Canada in the near term and later European markets. We are also working to expand our label to include additional crops, such as small grains and oilseeds.
With respect to <unk> pipeline advancement, our Biopharma side fruit wrote program is.
He is continuing to progress and during 2022, we expect to meet regulatory this year with the federal U S EPA and California, EPA for our leading candidate <unk> 311.
In summary, I hope I succeeded in demonstrating that as every quarter passes our subsidiaries are all making continued advancement, reaching and surpassing their milestones.
As you can imagine we're very pleased with this achievement, which we view as a powerful demonstration to the quality and efficacy of our underlined tech engines.
Which support the discovery and development of this product.
I hope to bring further advancements in the coming quarters, while working on demonstrating publicly the value in our equity.
Securing partners and ultimately new financing options within our subsidiaries.
With that I would now like to turn the call over to our new CFO Jan is that your own. Please go ahead.
Thank you all fir.
I would like to stop by saying I am pleased to have joined <unk>.
This is a company in which I see very significant potential.
I am very much looking forward to embarking on this journey with what I found to be very strong and positive team.
I will begin by reviewing our cash balance.
Epogen continues to maintain a strong financial position for its activities was approximately $44 $6 million in consolidated cash cash related accounts bank deposits and marketable securities.
As of March 31, 2022.
Approximately $6 $6 million of ever.
<unk> consolidated cash is appropriated to its subsidiary <unk>.
The company does not have bank debt.
During the first quarter of 2022, the consolidated cash usage was approximately $9 $3 million for.
<unk> $7 $6 million, excluding luxury buyer.
This cash usage this quarter included $1 million of foreign exchange expenses due to the dollar shekel exchange rate differences and a decrease in marketable securities value and approximately $700000 of non recurring expenses.
Such as bonus payment to epogen employees, and establishing production capability to our subsidiary <unk>.
I remind that the estimated cash usage range for 2022 is expected to be $26 million to $28 million of which approximately $7 $6 million will be used by <unk>.
Let's now turn to our income statement.
Revenues for the quarter with $237000 in comparison to $353000 in the same period for the previous year.
Revenues were primarily due to the sales of economic product and a joint research project conducted by excellence.
R&D expenses for the quarter, which are reported net of nonrefundable grants received.
$5 $6 million in comparison to $4 $3 million in the same period the previous year.
R&D expenses increased primarily due to.
One biomarker ongoing preparation, including GMP micro production for initiation of its first in human proof of concept study in the immuno oncology program.
Two <unk> activities supporting the production and commercial lounge inoculum product branded as a result.
And three to economics product commercialization efforts in Israel.
Business and development expenses were approximately $908000 for the first quarter of 2022 in comparison to $570000 in the same period the previous year.
The increase in the business development expenses was primarily due to the recruitment of business development personnel supporting the commercialization activities of our subsidiaries.
General and administrative expenses remained steady and for the first quarter of 2022 were $1 6 million.
In comparison to $1 5 million in the first quarter of 2021.
Operating expenses were $8 1 million overall in the quarter versus $6 $3 million in Q1 last year.
Overall operating expenses increased among other reasons due to an increase in the activities described earlier this call.
As well as headcount and salaries increase due to a growth in market demand for highly skilled workers.
The net loss for the quarter was $9 1 million in comparison to $7 $1 million last year.
The increase is loss in loss.
Is attributed mainly to a $1 million loss due to foreign exchange differences that I mentioned earlier.
A decrease in market, the marketable securities value and to the increase in operating expenses.
With that said, both offshore and I would now like to open the call for any questions you may have.
Thank you ladies and gentlemen at this time, we will begin the question and answer session is you have a question. Please press star one if you wish to cancel your request. Please press star two.
Speaking of our equipment kind of lift the handset before pressing the numbers questions will be pulled in the order. They are Steve. Please standby, while we poll for your questions.
My first question is from Kristen <unk> of Cantor Fitzgerald. Please go ahead.
Hi, everybody. Good morning, good afternoon, and thank you for taking my question.
First one I had was on bio Macao I was hoping to learn a little bit more about what we should expect at <unk> next week and then also as it relates to the <unk>.
Proof of concept data that's expected this year could you touch on based on when you started the trial what key questions. You believe youll have some early insight into at this time. Thank you.
And thank you for the question. So yes, we are very excited to be presenting at <unk> next week.
Yanacocha will be discussing and showing.
The work that was done.
<unk> bionics has so far regarding the discovery and secondly resolve in addition, we've discussed and demonstrated the method and design of our clinical study.
Obviously, the first and most important objective would be to monitor.
Safety and Tolerability of BMC 128 in combination with development.
Since it's an open label study, we are kind of hoping to be able to monitor and get early.
Signals from additional clinical.
Variable variable.
Through the course of the study. The study is designed as I mentioned on the call for.
<unk> tweaked nonresponsive.
Cancer patients with either in non small cell lung cancer RCC on melanoma.
We already initiated the study and hopefully very soon we will be enrolling patients. So once we enroll the first patient we will announce it obviously.
The Investor then.
Our press release.
Thank you I appreciate that and then for <unk>.
Could you talk a little bit more about the.
The rationale for conducting more work.
Ahead of us.
Additional collaborations. So is this just based off of like feedback you've received in terms of more work.
Stablish I guess I'm trying to understand what additional work you need to do in order to potentially gain more collaborations in light of what you've already reported here.
This is ofer.
And we're talking with you.
So yes, I've seen that you describe it correctly, we are in discussion with different potential collaborators and from this discussion we learn that.
And we should conduct additional work in order to address certain questions that were raised.
As much as we gather more information so our negotiation position is better.
And the interest in <unk>.
So I think as soon as they are.
The main work, we are doing and just expanding.
The world and to address additional question that well not necessarily.
We're focusing on.
Previous work.
Okay. Thanks, and then for lobbying by Al in light of the positive momentum we've seen in 2020 Q. Maybe can you talk about what where do you need to do to really scale up in order to one expand the.
Right, where this could be utilized then Q2 expand the label and then maybe Eric could you remind us.
The potential market opportunity for small grains and oils. Thank you al.
So.
According to <unk>.
I mean, it's more that we are doing there.
Production of the product itself.
Through subsequent top doors and we are working.
This year, we work with one subsequent lab store that next year, we are planning to work with.
Hey, Morgan and thank you for what it means to subcontractors.
And maybe it's also worth to mention that.
And you need to decide on how much you want to produce a year before.
Actual selling season, so the quantity that we decided to produce for 2021 and we made this decision in 2020 in 'twenty.
Yeah.
The quantity that we were planning to spend in 2022 the decision.
How much we are going to produce.
In 2021.
Now we are going to take the decision on how much we are going to produce in 2023 and <unk>.
Yes, there is enough.
Some of them can use there.
To grow.
So I think that's what we are more focusing now on.
<unk> channels to make sure that we can control.
And make sure that the product can reach to all the relevant customers and.
<unk>.
Hum.
And we're now talking with different <unk>.
And distributor and additional two United the Gummies that we're working with them already and I believe that when there will be an agreement signed we will announce it.
Publicly.
So with respect to production.
I think that we are in a good place with respect to marketing in China, we are working on it.
You know.
We are not going to jump like Crazy to me is the quantitative you're going to produce for next year, because we wanted to make sure that the quality.
And our product is according to our standards and the production would be exactly the way we want it so it's going to be.
Quite significant compared to this year, but the thing that the.
There will be a nice jump in next year.
Well I mean, I think that we can move to full scale up is going to be 2024 and <unk>.
And we intend to believe that the current market positive condition for <unk>.
Bio in England, if a wheat will continue for the next few years as opposed to take a while to close the shortage, which we seem to be there in the market.
And with respect to and with their production with grain and reflect.
Reflected in the day.
Price.
I think it was.
And everybody in the world.
The potential is quite significant I honestly I don't have the numbers here in front of me, maybe I can talk on so instead of being marketing team and we can send to you.
And separately.
More information.
On the size of.
Such a product can reach you.
Great. Thank you for taking my question.
The next question is from Nathan Weinstein of Aegis capital. Please go ahead.
Good morning, Ofer your own and thanks for taking my questions. So perhaps I'll just start with a couple on canonic.
First of all I just was curious what that was making Portugal. The interesting places maybe to begin cultivation and then would you anticipate being able to serve us European demand solely from Portugal as your production base.
So.
Well.
Habitude benefit for.
For cannabis medical cannabis production in Europe first is located in Europe , and they are far from the European Union and second they have the right climate.
Most of the year and to work on that means to me is a.
Relevant and then I bought it.
Concentration so.
Why I think that the impact to that and actually also in Spain. You can find a nice number of cannot be gora is willing to.
And grow for a company like economic are there product. So this is the first day.
And the answer to your first question.
Yes.
Our marketing.
Our end market in Germany.
The market that we're focusing on.
Our marketing team visited this country Nan conference lately, and we are starting to build relationships with local distributors.
Local advisors to assist us too.
To build.
The right marketing approach for this market and yes, we believe that Portugal and if needed.
Also Spain.
And can grow for us.
<unk> and <unk>.
And obviously for our future and marketing plan.
I think so far okay, and then maybe just staying with the theme of Europe , and selling potentially selling the Canada since you Germany like.
What are some of the features of that market, which make it attractive for you commercially and then any challenges you foresee that you'd call out.
The reason that the market is interesting from our perspective, because it spike compared to other countries advancing the regulatory process and the market is growing nicely.
Nicely.
I think that the market there.
A point of time is more focusing on medical indication and the.
It can be different from what we see here in Israel and in Germany, you need the doctor needs to give a.
Clear.
Analogies on why he recommended for a patient to use it because we cannot be certain what.
And what product is going to use it so.
It's more.
It's more close to.
The business model of drug versus.
Jim.
Uh huh.
And versus you know put supplement so I think thats any newsreels.
And it's less likely.
It's not that could do so.
And we need to prepare our.
We need to build our marketing approach.
It closed as we are launching a drug meaning you need to think about the doctors and the.
And the pharmacy and to do a lot of work over there and less on the costs on the patient without using the product while they need as well.
And the audiences that makes the decision it's more the patient while they're the doctors.
It's a different marketing approach so and of course, when you went into one of these doctors to recommend.
On your specific product.
And you need to convince them with more data and more information and this is why we are planning to launch our product. The only next year because we are now in the process of gathering relevant.
At relevant medical that that to support our product.
Okay, that's fantastic and thank you for the color. There then switching gears a question on biomarker and I'm curious about the GMP production of the microbes.
Have the infrastructure in place internally.
To produce enough quantities for your clinical plans, how do you work with outside production partners can you just kind of discuss the production side.
Sure.
So the production of <unk> therapeutics product.
So we can be complex and we currently work with external vendor with the CMO. The largest one that is based in Europe .
<unk>.
Facility is actually located in France.
Has the full experience and equipment in order to produce.
Sufficient amounts of those microbes in the strict conditions that they require.
So all of the production process is being done in Europe in France.
Under GMP conditions required for clinical production correct.
Okay. Thanks.
So I just had one final question and this is one that we've talked about before but and it may be a little early to bring it up but in the case that a subsidiary subsidiary becomes monetize them compassion and moves at its own separate company. Just hypothetically are there more technologies and potential companies coming up on the imaging platform that could take.
Their place.
The answer is yes, the only reason that we are not expanding our activities into new area.
Mainly because of focus and budget.
Constrained so when we hopefully we will.
Raise money to our subsidiaries.
And they will be completely.
Independent and they will have their own financial resources. So then we will start to expand.
Well, Jim the activity and the uses of our three tech engine into new area. We already are.
You know as preparation we are doing some early study and we start to build some ant man portable infrastructure for this expansion, but first we need to make sure that the financial resources of our subsidiaries are stable and.
You know then we can also shift our focus to new.
A new adventure.
Okay, great. Thanks, again for taking my question.
The next question is from Brett Reiss of Janney Montgomery Scott. Please go ahead.
Good morning, gentlemen.
First question you said you sold all the planned production on your spring wheat did you realize any revenues from that because I didn't see that included in the 237 revenue number.
This revenue will be recorded only in the second quarter, because we sold it only and we finished the production and we ship the product. During I think it was may may or end of April so it will be in the second and fourth quarter.
Oh great.
The 237 revenues, which was kinetic and.
Yeah.
And forgive me I don't have the release in front of it.
Right.
Yes, yes.
Are you at Liberty to give us a breakdown there how much was contributed from canonic.
Okay. So we didnt gave a breakdown.
Breakdown, but that kind of thing I can say that the majority of this came from <unk>, we had some higher expectation from revenue from <unk>, but the.
We have some limitation.
The limitation on production and we did.
With a third party that's worked for US we hope that they will start to see the revenue increase from the company activity in the second half of this year.
Oh I just wanted to make sure I understood. It. So the majority of the $2 37 was from Canonic did you did I hear you correctly, yes.
Yes.
And yet it was headwinds it could have been.
Even even more.
Yes, but they are we are.
And we work with few subcontractor that are supposed to grow for us.
The crop and one of them.
Quality of the crop wasn't and according to our expectation. So it was a little bit lower than what we expected, but I think that the second half of the year.
More and more.
There will be more.
Apply.
A new type of product that you.
We expect it to improve the performance of the economy for this year.
Right right now there's no seasonality to the canonic sales.
It should.
This baseline continue.
To ramp up.
With respect to the demand the demand is.
As we see it is growing all the time with respect with the supply so.
Thanks.
Sure.
And Susan effects on the quality of the product.
The best the best time to grow and cannot be is starting in spring and during the summertime.
So there is some effect on the quality of the product and you just end to the season, but the demand is there and the people all the time.
Looking for a high quality product, which I think that the.
Our corn products addressing this demand and the products. We are planning to launch in the second double this year will come from our breeding program. After we use our genomic markers and expecting <unk> to be better and performing which can have.
Have a better market penetration rate.
And compared to the our first two products.
One last one.
With conventional drugs that I'm more familiar with if there are reimbursement protocols in place.
And additional studies, both those things in tandem.
<unk> two.
Accelerate our sales.
Is that is it.
Does that hold true for a medical marijuana type products.
Yes, but probably not like.
S M.
The essay for drug is having an effect, but not the same level of effect and it's really changing from one market to another market and in markets like in Germany that.
Driven by the Doctor that.
And decide what product the patient is going to use so there definitely if you have a stronger abbey Dennis if we published article so definitely it would have a positive effect on the revenue.
In Israel.
Thank you.
Yes, I mean, if you will publish it.
Results coming from our survey that you conducted between patient on your product or you have some.
Preclinical data from experiments conducted in the hospital.
Good people from marketing perspective, but I think that the market to you is it mainly driven from the concentration of THC.
And this is something that the.
<unk> portion from the market.
The main the main.
Criteria. He is looking at and then of course have the the flower row Mezz debt.
So less medical indication.
Great. Thank you for taking my questions.
Thank you.
If there are any additional questions. Please press star one if you wish to cancel your request. Please press star two please stand by while we poll for more questions.
The next question is from Brian White of raw.
Please go ahead.
Thanks, Good afternoon.
Had a couple of questions.
Just wanted to start off with a lobby.
There was initial production.
Production target that you were thinking about for 2023 for resolve.
And is it kind of fair just without getting into numbers.
How do we think about the magnitude.
Are you now kind of thinking that given the market conditions and the ability to sell it out.
Real quickly here this year.
Thinking orders of magnitude two to three times, what you were originally kind of contemplating as far as production capacity or or even something beyond that or am I getting too ahead of myself there.
So firstly I would like to explain maybe this statement that we are expanding our.
Our production plan for 2023.
It's all rely on our original plan.
What we were planning.
Before we saw the interest in the <unk>.
The excitement in the market.
Product.
Increase.
And biodiesel entertain improve yield.
We had I you know.
And certainly the mountain, we're planning to produce and we decided to increase it.
Bye.
Significant anyway quantity and compare between 'twenty to 'twenty two to 2023.
And few fall, meaning more than 10 times than what we were.
You can produce this year.
So it will be significant compared to what we saw this year, which was really to make sure that we can and do the production.
Correctly to make sure that we can do the seed coating to distributed so which was the <unk>.
<unk> of concept and please remember that when we make the decision on the production it was in 2021 before.
Flattish.
Okay.
So.
And then in there.
Are we going to spend was that in 2023.
We are going to increase significantly.
Production.
So as I said, we decided even to be more aggressive and it would be a more than 10 times than what we are all this year.
Okay. So the original plan was 10 times and then now it's going to be more than that and yet to be determined on kind of the magnitude of boards that a fair summary, yes, yes, great great great. Thank you Keith can you give us a little more color on the <unk>.
<unk> just kind of.
Thinking on the timing for first enrollment and then or are you using.
Genetic kind of.
Markers as far as in the individuals' youre kind of targeting two to enroll and is that.
Part of the program.
Sure.
Regards to B and C 128.
We were previously previously announced this is a combination of four screens.
The tour close together in order to improve the antitumor activity.
Refractory.
Cancer patients.
I would say that in this study we are hoping to be able to see.
As I mentioned in the safety and Tolerability first and to see some clinical signal in regards to genetic element for inclusion criteria. We are not looking for any generic.
Criteria in order to include a patient and hopefully the first patient will be.
Enrolled in the study any day.
So that's kind of our expectations.
The first patient very soon.
Great Great and then if you could just remind me and I apologize I should remember this but I I'll stop my head I don't can you remind me kind of whats the targeted size of the trial.
The targeted side, yes, sure so altogether will be enrolling a 12.
12 patients.
Those patients would be either.
Non small cell lung cancer, RCC or melanoma all of them have been previously responding or non responding at all to immunotherapy.
Great. Thank you so much.
There are no further questions at this time before I ask Mr. Also harvest to go ahead with his closing statement I would like to remind participants that a replay of this call is scheduled to begin two hours. After the conference in the U S. Please call 18883 to six.
<unk> 310 in Israel. Please call 039 to 55901 internationally. Please call 997 to three nine to 5590 on is to have it but do you like to make your concluding statement.
Yes. Thank you I would like to thank all of you for joining us and thank you for your continued interest in <unk>. We look forward to speaking with you next quarter.
Good day.
Thank you. This concludes <unk> first quarter 2022 results conference call. Thank you for your participation you May go ahead and disconnect.
Yes.
Sure.
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