the next generation of nature. - the howard group
TRANSCRIPT
willowbio.com
The next generation of nature.
January 2020 TSX: WLLW
willowbio.com
• Produces consistent, pharmaceutical-grade cannabinoid
compounds
• Ability to reliably supply strong growth markets
• Proven team to successfully commercialize production
• Partnered with leading global pharmaceutical ingredients
provider to drive post-commercialization success
• Clear path to commercialization, scale up expected H1 2020
• Strong financial position to fund commercial production
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Positioned to be leading high-quality pharmaceutical and CPG ingredients manufacturer
Investment Highlights
Market expected to
grow 10x over the next 10
years to
$100B
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• Nature’s instructions to produce cannabinoids are coded in the cannabis plant’s genetic information
• Willow transfers the genetic information into a yeast host, creating a miniature cannabinoid factory
• Our process vastly increases cannabinoid production, enabling efficient large-scale manufacturing
• Producing life changing compounds from nature has been happening for hundreds of years
‒ Aspirin was ultimately created from the bark of a willow tree
‒ Insulin and penicillin are also manufactured using biosynthetic methods
Learning from nature and making it better
Biosynthesis: Nature’s method, industrialized
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Willow’s process results in higher production and higher purity, at lower cost, compared to plant extraction
Our Efficiency Advantage
Willow’s Manufacturing Process1
100,000 L tank @ 5g/LAnnual Production: ~13 tons
10% CBD Hemp~300 acres needed to produce ~13 tons
Plant-based Extraction1
1 . Willow management estimates
willowbio.com
• Growing knowledge and acceptance of cannabinoid benefits
‒ Epidiolex® - approved by U.S. FDA in 2018 to treat epilepsy seizures
‒ ~50 cannabinoid-based treatments currently in clinical trials
• Requires consistent, high-quality ingredients
• Early stage potential for growing range of cannabinoids for pain, anxiety, obesity, brain disorders, cancer treatments and more
Ongoing research increasing the reach of cannabinoid uses
Wide Range of Pharmaceutical Applications
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US$50B
20292020
US$2B
Projected US cannabinoid-based pharmaceuticals market growth
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• Consumer products market expected to reach $16 billion by
2025
• Opportunities with cosmetics, pain relievers, beverages and
more
• Ingredient quality and consistency is crucial to product
reputation
‒Large portion of the ~$13B opportunity to require API quality
CBD
• Reliable and scalable manufacturing process required
• Recent US de-scheduling of ultra-high purity CBD from the
Controlled Substances Act signals change in US regulatory
views
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Major global consumer brands are waiting for a consistent, scalable manufacturing process
Extensive Growth from Consumer Products
1. Cowen Research, Feb 25, 2019 Cowen Research, February 25, 2019
CBD Product categories revenues by 2025 (millions)1
Nutraceuticals
Topicals
Beverages
Food
Beauty
Vapor
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
~$13Bopportunity
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Proven scientific team
• Extensive industrial biotech expertise, leaders in capabilities essential for building successful CBD-producing yeast strain:
gene discovery and high throughput strain optimization
• Prior development of a commercial yeast strain producing a different active pharmaceutical ingredient
• Team responsible for CBD-producing yeast strain
‒35 technical staff (21 with PhDs, and prior biosynthesis experience)
Successful business team
• Management team cofounded five companies, all of which successfully sold for > $4 billion in aggregate
‒Raised more than $1 billion in equity and debt
• Board of directors cofounded seven companies, all of which successfully sold for > $8 billion in aggregate
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Willow’s team has the necessary experience needed to achieve success
Willow’s Best In Class Management & Technical Team
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• Exclusive partnership with Noramco to jointly develop and commercialize CBD
produced through biosynthesis
‒ Willow builds, optimizes CBD yeast strain
‒ Noramco manages scale up, regulatory submission and marketing and distribution
‒ Partners share equally in the profits
• Noramco is a leading global provider of specialty APIs
‒ More than 40 years of experience and expertise in controlled substances
‒ #1 supplier of controlled substance active pharmaceutical ingredients in the U.S.
• Noramco is a leader in cannabinoids
‒ Ten years of experience
‒ Demonstrated quality & capacity
‒ Broad portfolio of cannabinoid APIs
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Partnership with Noramco adds critical post-commercialization expertise
Strategic Partnership with Industry Leader
Noramco Facility (Wilmington, DE); Source: Noramco Marketing Materials
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Proximity to allied university research and biotechnology hubs
Strategically Located Facilities
Calgary, ABVancouver, BC
Mountain View, CA
Calgary, ABUses proprietary research to remove key genetic bottlenecks that slow maximum biosynthetic cannabinoid production. This facility employs cutting-edge bioassay capabilities, liquid handling robots, and analytical instrumentation and leverages access to the University of Calgary’s plant cultivation resources and growth chambers.
Vancouver, BCCorrelates the physical characteristics of cannabis plant strains with their unique genetic makeup, allowing the improvement of both plant and yeast strains. This facility houses state-of-the-art molecular biology and analytical chemistry capabilities.
Mountain View, CAIdentifies and deploys additional genetic elements and solutions to further enhance production from our working cannabinoid-producing yeast strains. This facility includes cutting-edge automated yeast colony picking, liquid handling robots, and analytical instrumentation combined with systems to rapidly evaluate high volumes of data and results.
13Science & technical staff
10Science & technical staff
12Science & technical staff
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willowbio.com
Road to Commercialization
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TITER(g/L)
0.5
1.0
3.0
5.0
Paradigm-shifting titer 1.0 g/L
Process-relevant titer 0.5 g/L
Market-owning titer 5 g/L
Lab strain producing cannabinoids
2019 2020 2021 2022
DEVELOPMENT COMMERCIALIZATION
Scale-up Development 2020-2021
First Commercial Batch & Sales2021
Entry Into Pharma Markets2022
Iterative Strain Optimization2019-2021
Expansion Across CPG Markets2021-2022
• Noramco Initiates Upstream/Downstream process optimization
• First pilot-scale batch
• Customer sampling• First commercial-scale batch• First sale (in wellness)
• Sales in cosmetics, food & beverage
• Combination of plant science and synthetic biology to improve strain performance
• Validated process under cGMP
• Initiate pharma sales
R
Willow has a clear path to achieving scale and commercial production
willowbio.com
Willow Share Capitalization (TSX: WLLW) - As at Sept 30, 2019
Basic Shares Outstanding (mm)1 78.9
Employee Options (mm)2 4.9
Financing Warrants (mm)3 15.0
Existing Warrants (mm)4 2.7
Performance Warrants (mm)5 12.1
Fully Diluted Shares Outstanding (mm) 113.5
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• Raised $37 million to support research, strain development,
scale up and commercial launch
‒Tuatara Capital - strategic investor 29% ownership
‒Directors and Officers hold 29% ownership
• Fully funded to commercialize production of CBD
• Expect to exit 2020 with $10 to $15 million cash
• Analyst coverage initiated in Sep 2019
• Moved to TSX in Dec 2019
• Continue to evaluate strategic relationships in the CPG and
pharmaceuticals industries
Strategic industry and financial partners position Willow for strong future performance
Strong Financial Position
1. Accounts for Tuatara's exercise of 9.2mm financing warrants at $0.88 per warrant announced on May 27, 2019.
2. 3.6mm options issued on May 2, 2019, with a strike price of $1.75. 1.3mm options issued on Sept 10, 2019, with a strike price of $0.60.
3. Issued in the April 12, 2019, financing to strategic investors, management and board. These warrants have a strike price of $0.88 per share.
4. Existing warrants with weighted average strike price of $3.71 per share.5. Additional warrants issued if the 20 day VWAP exceeds a share price of $3.50 per share and Willow is
listed on the TSX (or equivalent exchange).
willowbio.com
• Growing demand for high quality, cannabinoid compounds
‒ Expanding pharmaceutical use and consumer product market
• Proven ability to commercialize yeast-based pharmaceutical ingredients
• Scalable, sustainable manufacturing process to meet growing demand
• Aligned with industry leaders for successful commercialization
‒ Scale up to commence with Noramco in H1 2020
• Fully funded to commercialize production
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With Pharmaceutical Grade Cannabinoid Product
Positioned for Future Success
Source: Ackrell Capital estimates. See Chapter IV: U.S. Cannabis Market Estimates.
Total U.S. Cannabis Consumer Market ($Billions)
Recreational & Medicinal ($B)Cannabinoid-based Pharmaceuticals ($B)Number of consumers (M)
Expected market value in 10 years (10x growth)$100B
0
10
20
30
40
50
60
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Assumed End of Federal Prohibition
Appendix
willowbio.com
Development Strategy Will Enable
Hexanoic Acid
Cannabinoid Precursors
CBGA
Butyric Acid
CannabinoidPrecursors
CBGVA
THCVA CBDVA CBCVA
THC CBD CBC THCV CBDV CBCVTARGET
Other Acid
THCA CBDA CBCA
Feedstock
GPP(from yeast)
Novel Target
Naturally Occurring Compound
Yeast cell
Decarboxylation
Commercial titer target of 3-5 g/L necessary for COGS targets is a realistic objective and will be the key optimization driver
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Key Cannabinoid Intermediates
Cannabinoid Precursors
Commercial Production Of Multiple Targets
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Ongoing research increasing the reach of cannabinoid uses
Wide Range of Pharmaceutical Applications
Source: Ackrell Capital 2018 Cannabis Investment Report and other industry reports.
Indication THC CBD CBC CBG CBGA CBN THCA CBDA THCV CBDV
Alzheimer's disease ◉ ◉ ◉
Amyotrophic lateral sclerosis (ALS) ◉ ◉
Anorexia ◉
Anxiety ◉
Appetite Supressant ◉
Arthritis ◉ ◉
Bone Growth ◉
Cachexia ◉ ◉ ◉ ◉ ◉ ◉
Cancer ◉ ◉ ◉ ◉ ◉ ◉
Chronic pain ◉ ◉ ◉
Crohn's disease ◉ ◉
Diabetes ◉
Epilepsy ◉ ◉
Glaucoma ◉ ◉ ◉
Hepatitis C ◉ ◉
HIV/AIDS ◉ ◉
Inflammation ◉ ◉ ◉ ◉ ◉ ◉
Inflammatory bowel diseases ◉
Migraine ◉ ◉
Multiple sclerosis ◉ ◉
Nausea ◉ ◉
Nervous system disorders ◉
Parkinson's disease ◉
Post-traumatic stress disorder (PTSD) ◉ ◉ ◉
Spasms ◉ ◉ ◉ ◉
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Alcohol Coffee Tobacco Painkillers Anti-depressant Cannabis (future)
Primary Usage Recreational Recreational Recreational Medicinal Medicinal Recreational / Medicinal
Adult Penetration 50% 50% 17% 40% 25% 20%
Monthly Consumer Spending $45-200 $80-100 $40-80 $40-200 $40-100 $50-500
U.S. Retail Market Size $200 B $35 B $100 B $300 B $60 B $100 B
Extensive Growth from Consumer Products
Future cannabis market in-line with current levels of common stimulants and substances1
1. Ackrell Capital 2018 Cannabis Investment Report
willowbio.com
Trevor PetersCEO & Director
Experienced executive having co-founded four start-up companies in the past 15 years
Instrumental in seven public and private start-up companies in the energy industry over the past 20 years
Raised over $1 billion in equity and debt financings at various stages of corporate development
Successful transactions totalling over $4 billion on sale
Extensive intellectual property and patent prosecution background in the energy technology sector
Joseph Tucker, PhDCOO
Extensive senior leadership experience
CEO, CFO & Vice President of multiple public and private biotech companies
Holds more than 20 issued or pending patents
Member of the Board of Directors of BioAlberta
Ph.D. in Biochemistry & Molecular Biology from the University of Calgary
Peter Facchini, PhDCSO
Professor of Plant Biochemistry in the Department of Biological Sciences at the University of Calgary since 1995
Canada Research Chair in Plant Metabolic Processes Biotechnology
Received the C.D. Nelson Award from the Canadian Society of Plant Physiologists as the outstanding young plant biologist in Canada
Published over 160 research papers and scholarly articles in high-impact journals such as Nature Chemical Biology, Plant Cell, Plant Journal and the Journal of Biological Chemistry
Ph.D. from the University of Toronto in 1991 and conducted postdoctoral research at the University of Kentucky and the Université de Montréal
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Travis Doupe, CA CPACFO
CA and CPA (Illinois) with 18+ years’ experience in the international oil and gas industry
VP Finance & CFO of Suroco Energy Inc., a publicly-listed company based in Canada with operations in Colombia
Roles with PwC in Calgary, Alberta and Havana, Cuba
Served in positions of increasing importance at Sherritt Oil & Gas, including Finance Manager & Controller
VP Finance & CFO of Milagro Energy and Controller of NAL Resources
Management
Leadership
On the committed morphine pathway in the opium poppy (i.e. from reticuline to morphine), the Willow team, headed by Peter Facchini, was the first to discover 5 of the 9 genes
willowbio.com
Jerry Ericsson, MScVP Operations
Experienced clean-tech executive responsible for raising more than $25 million to commercialize thermochemical technologies
15 years’ experience in research and development of novel technologies in forestry and agricultural industries
8 years experience in integrated pest management (IPM) research in greenhouse and field crops
Authored/co-authored 3 patents and more than 10 peer-reviewed papers in international journals
Mathias Schuetz, PhDVP Research & Development
Adjunct Professor Dept of Botany UBC, researcher and plant molecular biologist with extensive expertise in plant genetics and cannabis technology
Over 14 years’ research experience and author of many peer-reviewed publications in prestigious plant science journals
Numerous citations and awards for research excellence
PhD in 2009 at Simon Fraser University
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Jill Hagel, PhDVP Applied Science
Co-authored over 35 peer-reviewed publications in high-ranking journals such as Nature Chemical Biology, Nature Communications, and Plant Cell and presented internationally
Over 17 years experience in medicinal plant biochemistry and recipient of multiple academic awards
Co-inventor on numerous patent applications
PhD in 2010 from the University of Calgary
Chris Savile, PhDVP Commercial Operations
Over 10 years in science, business development, and commercial operations roles
Highly experienced (bio)chemist, high throughput (HTP) assay scientist and protein engineer with strong technical background
R&D leader on several programs that led to commercial manufacturing processes
PhD in 2005 at McGill University
Troy Talkkari, CFAVP Corporate Development
Over 12 years’ experience in the finance industry and was most recently a Director of Institutional Equity Sales at GMP FirstEnergy
Was part of 66 M&A transactions totalling over $22 billion in value
Was part of 833 financings, including 279 as the lead dealer, totalling over $131 billion of capital raised
CFA designation and Bachelor of Commerce in Finance from the University of British Columbia
Technical
Leadership
willowbio.com
Peter Seufer-Wasserthal, PhDIndependent Director
25 years of experience in the technology and biotechnology sector
Currently Chief Commercial Officer of OrigenisGmbH
Previously VP, Business Development for Intrexon Corporation, responsible for business development in Europe and Asia for four years
Received a Ph.D. (Technical University of Graz)
Fotis Kalantzis, PhDIndependent Director
25 years experience in oil and gas exploration and development
Co-founder and senior executive of several public companies including Spartan Energy Corp., Spartan Oil Corp. and Spartan Exploration Ltd.
Holds an M.SC from the University of Saskatchewan and a PhD from the University of Alberta
Published and presented numerous papers in international journals and conferences
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Donald ArchibaldIndependent Director
Independent businessman with significant senior executive and board experience for numerous public and private companies
Previous director and audit committee member of publicly-traded Spartan Energy Corp. and Spartan Oil Corp.
Previously President of Cypress Energy Corp., Chairman & CEO of Cyries Energy Inc. and President & CEO of Cequel Energy Inc.
Holds a B.Comm (University of Alberta) and MBA (University of Western Ontario)
Sadiq LalaniIndependent Director
25 years’ experience as Chief Financial Officer of publicly-listed issuers, including current Vice President & CFO at Kelt Exploration Ltd.
C-Suite Energy Executive Awards CFO of the Year
Board of Directors
Leadership
Al ForemenDirector
Partner and Chief Investment Officer at Tuatara Capital
Previously, Managing Director at JP Morgan in the Financial Sponsors Group and Private Equity Fund Services Business
Began his career at Citigroup, and has held executive roles at several companies
Holds a B.S. Finance (University of Conneticut) and a dual J.D./MBA (Arizona State University)
Joseph Tucker, PhDCOO & Director
see bio under mgmt.
Trevor PetersCEO & Director
see bio under mgmt.
Sony GillCorporate Secretary
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Forward Looking Statements. Certain information included in this presentation constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "will", "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this presentation includes, but is not limited to, statements relating to: the business, strategies, expectations, planned operations and future actions of Willow Biosciences Inc. ("Willow" or the "Company"), including research and development programs at the facilities located in Alberta, British Columbia and California and the timing thereof; the arrangements under, and potential benefits of, the exclusive strategic partnership with Noramco, Inc. ("Noramco"); other collaborations and partnerships, including in respect of marketing and distribution; the performance of the Company’s business and operations; the Company’s ability to biosynthesize commercially and create proprietary genomes; the adequacy of current funds to achieve commercial scale production of CBD; the performance of the current science team, management and board and the ability to find other qualified personnel with operational experience; the competitive conditions of the industry in which the Company operates and the competitive advantages of the Company; and the Company’s future product offerings, including analytical testing, genetics and cannabinoid production; future production levels, quality, consistency and costs.
The forward-looking statements contained in this presentation are based on certain key expectations and assumptions made by Willow, including expectations and assumptions concerning: the future operations of, and transactions completed by, the Company; the potential for the strategic partnership with Noramco to open new and larger markets (including non-pharmaceutical markets); Willow’s ability to generate higher quality CBDs at lower costs; cost synergies created by the strategic partnership with Noramco and the successful implementation thereof; the adequacy of current capital; the availability of and access to qualified personnel; the results of scientific research; the Company’s ability to protect its intellectual property; the expected growth in the cannabis market, including demand for cultured cannabinoids; expectations regarding the regulatory framework for cultured cannabinoids; changes in prices and costs of inputs; the medical benefits, viability, safety, efficacy, dosing and social acceptance of cannabis; the securities markets and the general economy; changes to cannabis laws and regulations in Canada; the legalization of the use of cannabis for medical and/or adult use in jurisdictions outside of Canada; and applicable laws not changing in a manner that is unfavorable to the Company.
Although Willow believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Willow can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, permits, licenses and regulatory and third party approvals not being obtained in the manner or timing anticipated by the Company; the ability to implement corporate strategies; failure of counter-parties to perform contractual obligations; the state of domestic capital markets; risks associated with the cannabis industry in general; infringement on intellectual property; failure to benefit from partnerships or successfully integrate acquisitions; actions and initiatives of federal and provincial governments and changes to government policies and the execution and impact of these actions, initiatives and policies; import/export and research restrictions for cannabinoid-based operations; the size of the medical-use and adult-use cannabis market; competition from other industry participants; and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities.
Readers are cautioned that the assumptions used in the preparation of forward-looking information, although considered reasonable at the time of preparation, may prove to be imprecise. Willow's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and accordingly there can be no assurance that such expectations will be realized and/or what benefits Willow will derive therefrom. The forward-looking information contained in this presentation is made as of the date hereof and Willow undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this presentation is expressly qualified by this cautionary statement.
Certain information contained herein has been obtained from published sources prepared by independent industry analysts and third-party sources (including industry publications, surveys and forecasts), While such information is believed to be reliable for the purpose used herein, Willow does not assume any responsibility for the accuracy of such information. None of the sources cited in this presentation have consented to the inclusion of any data from their reports, nor has Willow sought their consent.
FOFI Disclosure. This presentation contains future-oriented financial information and financial outlook information (collectively, "FOFI") concerning Willow's financial position, liquidity, available funds, operations, revenue, expenses, ability to fund commercial production, market capitalization and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this presentation was approved by management as of the date of this presentation and was provided for the purpose of providing further information about Willow's anticipated future business operations. Willow disclaims any intention or obligation to update or revise any FOFI contained in this presentation, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this presentation should not be used for purposes other than for which it is disclosed herein.
Not an Offer. This presentation does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein. The sole purpose of this presentation, in paper or electronic form, is strictly for information purposes.
U.S. Registration. This presentation is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
Disclaimer
willowbio.com
Thank You
January 2020
Willow Biosciences
3655 36th Street NW
Calgary, AB, T2L 1Y8
Trevor Peters
CEO & Director
T: (403) 669-4848
Troy Talkkari, CFA
Vice President, Corporate Development
T: (403) 618-1117