Corporate Presentation - Winter 2019 OTCQX:VVICF
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Corporate Presentation
Winter 2019
TSXV:VIVO
OTCQX:VVICF
FORWARD-LOOKING STATEMENTS
Certain information included in this presentation, which is dated as of February 12, 2019, constitute “forward-looking statements” or “forward-looking information” as defined in applicable
Canadian securities laws. Any forward-looking statements speak only as of such date, and include any information as to future financial or operating performance and other statements
that express expectations or estimates of the future performance of VIVO Cannabis Inc. and its subsidiaries (collectively, “VIVO” or the “Company”) The words “may”, “will”, “could”,
“should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective” and “continue” (or the negative thereof), and words and
expressions of similar import, are intended to identify forward-looking statements. Forward-looking statements in this presentation include statements regarding: that the Company is well
positioned for growth; the Company’s proposed capital allocation priorities; timing of expected GMP certification; potential health benefits of cannabis; expected future growth of the
regulated cannabis market; VIVO’s product differentiation; projected revenues; VIVO’s proposed capacity and international expansion plans; the expected timing of launch of Harvest
Medicine’s telemedicine app and the expected benefits thereof; the expected benefits of VIVO’s acquisition of Canna Farms Limited (“Canna Farms”); the expected success and timing
of VIVO’s product development activities; VIVO’s proposed growth plan, including timing of international license applications; and VIVO’s potential future revenue drivers. In addition, this
presentation contains future oriented financial information (“FOFI”), including statements regarding expected capital expenditures and revenue projections, which speak only as of the
date of this presentation. The FOFI has been prepared by management based on assumptions including that the Company will be able to obtain necessary approvals to proceed with its
business plan; that the Company will follow regulatory requirements; that there will be no adverse changes to applicable laws and regulatory requirements; and that management will be
able to execute the Company’s business plan as expected. FOFI and forward-looking statements are intended to provide prospective investors with an outlook on the Company’s
activities and information pertaining to the Company’s longer-term objectives, and may not be appropriate for other purposes.
By their very nature, forward-looking statements and FOFI involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that forward-looking
statements and FOFI will not be achieved. Certain material factors or assumptions are applied in FOFI and making forward-looking statements and FOFI, and actual results may differ
materially from those expressed or implied in such statements. The Company cautions readers not to place undue reliance on these statements, as many important factors, many of
which are beyond the Company’s control, could cause actual results to differ from the expectations expressed in such forward-looking statements or FOFI. These factors include, but are
not limited to, risks related to: the future evolution of the regulated cannabis market; industry, competition, customer, legal, taxation and accounting matters; adverse industry events;
general economic conditions; loss of potential markets; future legislative and regulatory developments; that the Company may not derive the expected benefits of the Canna Farms
acquisition; inability to access sufficient capital to pursue business objectives on favorable terms or at all; the ability of the Company to implement its business plan; competition; product
liability; crop failure; and other factors beyond the control of the Company. The foregoing list of factors that may be affect future results is not exhaustive. When reviewing the Company’s
forward-looking statements and FOFI, readers should carefully consider the foregoing factors and other risks, uncertainties and potential events, including those set out in the
Company’s annual information form dated April 30, 2018. The Company does not intend, and disclaims any obligation, to update any forward-looking statements or FOFI, whether
written or oral, or whether because of new information or otherwise, except as may be required by law.
This presentation also includes information obtained by the Company from third parties, including, but not limited to, information regarding market data and the potential health benefits
of cannabis. The Company believes such information to be accurate but has not independently verified such information. There is a risk that the assumptions made, and conclusions
drawn, by the Company based on such third-party information are not accurate. Further, Health Canada has advised that cannabis is not an approved therapeutic drug in Canada and
that, at present, while pointing to some potential therapeutic benefits, the scientific evidence does not establish the safety and efficacy of cannabis to the extent required by the Food and
Drug Regulations for marketed drugs in Canada unless a specific cannabis product has received a notice of compliance from Health Canada and a Drug Identification Number (DIN).
2
CHANGING THE WAY PEOPLE VIEW CANNABIS
Premium cannabis products and services to enhance
well-being and positively impact quality of life
Increasing acceptance and recognition of
cannabis-based therapies for health and healing
66%
Consumers use cannabis to
relax, sleep, and reduce stress
and anxiety*
29% Consumers use cannabis for
medical reasons*
*Source: Deloitte 2018 cannabis report. “A Society in Transition, an industry ready to bloom.” 3
INVESTMENT HIGHLIGHTS
Premium products Innovation-driven
Medical-grade cannabis
and services product development
with award-winning quality
with health and wellness focus guided by data and insights
Focused Diverse team
Strong financial position of professionals
international growth
to act quickly on opportunities with global experience in
with Europe as primary target
regulated industries
4
PIONEERING MEDICAL-GRADE
MEDICAL-GRADE CANNABIS WITH AWARD-WINNING QUALITY
CANNABIS
VIVO is committed to:
Novel product development
A culture of quality and compliance
Leveraging knowledge and insights
Improving access and reimbursement
5
LEVERAGING
PHARMACEUTICAL
MEDICAL-GRADE CANNABIS WITH AWARD-WINNING QUALITY
EXPERIENCE
• More than 100 years combined
experience in international pharma
• Global relationships with drug retailers
and pharma industry
• Track record of successful medical
product launches in Canada and
Europe
• Deep understanding of regulatory,
reimbursement and physician
marketing
6
PREMIUM PRODUCTS AND SERVICES WITH HEALTH AND WELLNESS FOCUS
PORTFOLIO OF PREMIUM BRANDS FOCUSED ON HEALTH
AND WELLNESS
From seed to sale, VIVO is a family of premium products and services developed
to meet the needs of both medical and adult-use consumers.
7
PREMIUM PRODUCTS AND SERVICES WITH HEALTH AND WELLNESS FOCUS
PRECISELY-MONITORED SMALL-BATCHES
• First licensed producer in British Columbia
• Large selection of award-winning, hand-trimmed
cannabis for medical and adult-use
• Artisan quality that commands premium pricing
• 100% VIVO ownership (acquired in August 2018)
8
PREMIUM PRODUCTS AND SERVICES WITH HEALTH AND WELLNESS FOCUS
NAVIGATING THE PATIENT
JOURNEY
• Produced in small-batch, precisely
controlled cultivation rooms
• A customer experience
designed to simplify the
patient journey
9
PREMIUM PRODUCTS AND SERVICES WITH HEALTH AND WELLNESS FOCUS
PREMIUM ADULT-USE BRANDS
CREATED WITH VIVO’S
EXACTING STANDARDS
• Craft-produced, high-quality cannabis
products for adult-use consumers
• Brands deliver range of high potency,
full-spectrum products
• THC, CBD and balanced
cannabis oils and flower
10PREMIUM PRODUCTS AND SERVICES WITH HEALTH AND WELLNESS FOCUS
BROAD DISTRIBUTION NETWORK FOR ADULT-USE
BRANDS
Provincial and territory government listings
• Ontario
• Alberta
• British Columbia
• Manitoba
• Saskatchewan
• Yukon
Private retail partnerships
• Choom
• Westleaf (Prairie Records)
• National Access Cannabis (META and Newleaf)
11PREMIUM PRODUCTS AND SERVICES WITH HEALTH AND WELLNESS FOCUS
INDUSTRY-LEADING
MEDICAL CANNABIS CLINICS
• From six clinics in four provinces,
proven professional care for more
than 24,000 patients
• More than 45,000 patient visits
drive high-quality primary data to
steer product development and
treatment plans
• HMED Connect
• Telemedicine service developed
by Harvest Medicine
• Provides access from remote
locations and convenience of
patient’s homes
12INNOVATION-DRIVEN PRODUCT DEVELOPMENT GUIDED BY DATA AND INSIGHTS
LONG-TERM FOCUS ON HIGHER
MARGIN OPPORTUNITIES UNIQUE AND
NOVEL BRANDS
• High-quality cannabis flower provides FIRST-TO-MARKET
INCREASING MARGINS
foundation to all other products
• Unique and novel products targeted to
PHARMA-LIKE
specific market segments FORMATS
• Strongest margins achieved through
premium products and brand power EDIBLES AND
BEVERAGES
DRIED FLOWER
AND OILS
13INNOVATION-DRIVEN PRODUCT DEVELOPMENT GUIDED BY DATA AND INSIGHTS
DEVELOPMENT PARTNERSHPS WITH
ACCESS TO PHARMA NETWORKS
• Strategic partnerships accelerate product
development and broaden distribution network
• Robust pipeline of non-combustible, precisely-
dosed products in development
• Direct experience with >45,000 domestic
medical cannabis patients drives product
development
14INNOVATION-DRIVEN PRODUCT DEVELOPMENT GUIDED BY DATA AND INSIGHTS
WORLD-CLASS SCIENTIFIC ADVISORS
Raphael Mechoulam, PhD Donald I. Abrams, MD
World-renowned cannabis scientist Cancer and integrative medicine
who discovered tetrahydrocannabinol specialist. Co-author of Cannabinoids
(THC) and cannabidiol (CBD). and Cancer (chapter within Integrative
Oncology) published by the Oxford
University Press.
Mike Dixon, PhD Dr. Richa Love, MD, LMCC, CCFP
Leading globally recognized plant Industry leader in research and
scientist specializing in controlled application of cannabinoid-based
environmental systems. therapies and formulations for specific
medical conditions.
15FOCUSED INTERNATIONAL GROWTH WITH EUROPE AS PRIMARY TARGET
CANADIAN EXPERIENCE
SCALABLE BEYOND ITS
BORDERS
• Proven track-record of scaling
European medical-focused
businesses
• Experience producing medical-
grade product quality
• Proven patient-centric approach
with leading retention rates
• Leverage robust data from
>45,000 patient visits
• Greater return on investment on
medical cannabis products
16FOCUSED INTERNATIONAL GROWTH WITH EUROPE AS PRIMARY TARGET
EUROPE IS PRIMARY GLOBAL
FOCUS
Germany as point of entry into Europe
• Medical cannabis sold in pharmacies
• Costs covered by universal drug program
• 30,000 registered patients in-country* €55B
Forecast European medical
**
cannabis market for 2028
*Source: BMO Capital Markets “What Could the Global Opportunity for Cannabis Look Like,” November 2, 2018.
**Source: Prohibition Partners, 2018.
17STRONG FINANCIAL POSITION TO ACT QUICKLY ON OPPORTUNITIES
WELL-CAPITALIZED TO EXECUTE AGGRESSIVE
GROWTH PLAN
in millions
As of Ownership**
Capitalization summary Oct 25, 2018
6%
Common shares outstanding 290.0
Debentures ($3.47 weighted average exercise price) 10.9 38%
Warrants ($1.66 weighted average exercise price) 17.7
Options/RSU’s 11.6 56%
Market capitalization* ~$258
Cash balance ~$90
Management & Board Retail Institutions
*Based on share price as at February 12, 2019.
**Source: Public filings, Thomson Eikon.
18STRONG FINANCIAL POSITION TO ACT QUICKLY ON OPPORTUNITIES
MORE THAN 50,000
KILOGRAMS OF FUNDED
INTERNAL CAPACITY
Internal capacity complimented with third-party
supply agreements for more than 5,000 kg/year
Location Current Q2/Q3 2019* 2021-22**
Ontario 1,400 kg 5,000 kg 11,000 kg
British Columbia 2,600 kg 6,000 kg 32,000 kg
Other 14,000 kg
Total Forecast 4,000 kg 11,000 kg 57,000 kg
Capacity
* Targets include incremental volume from Kimmett (ON) facility
and expansion of Canna Farms (BC) facility.
** Targets include incremental volume from planned Ontario and BC-
based facilities. 19STRONG FINANCIAL POSITION TO ACT QUICKLY ON OPPORTUNITIES
REVENUE PROJECTIONS
INTERNATIONAL
MEDICAL
* 50% - $250M
$500M DOMESTIC
MEDICAL
2022 forecast revenue
30% - $150M
DOMESTIC
ADULT-USE
20% - $100M
*Based on $6.67/gram net wholesale price.
20DIVERSE TEAM OF PROFESSIONALS WITH GLOBAL EXPERIENCE IN REGULATED INDUSTRIES
SEASONED SENIOR MANAGEMENT TEAM
Barry Fishman, CEO Dr. Michael Bumby, CFO
20 years of experience in pharmaceuticals with more than 10
More than 20 years as a healthcare business leader, years spent internationally. Previously CFO of three publicly
former CEO of three pharmaceutical companies, held Canadian companies, most recently at Merus Labs.
Canadian and international experience.
Shekhar Parmer, Chief Strategy Joel Mallard, Chief Commercial Officer
Officer and CEO, Harvest Medicine 20 years of sales and marketing experience at Diageo and
Founder of Harvest Medicine. More than 10 years of Cowbell Brewing Co.
experience as an entrepreneur, lawyer and design thinker.
Andreas Sander, President,
Daniel Laflamme, COO and
European Operations
President, Canna Farms 25 years of experience in European pharmaceuticals,
Founder of Canna Farms. More than 15 years of financial, including senior management roles in several multinational
operational and regulatory business experience. pharmaceutical companies.
Ray Laflamme, Senior Vice Gary McMullen, Vice President
President, Facilities & Engineering Napanee Operations
20 years experience in premium segment of the highly
45 years of experience. Commissioned several industrial
regulated brewing industry. President and founder of Muskoka
food grade facilities, including the Canna Farms’ facility.
Brewery.
21DIVERSE TEAM OF PROFESSIONALS WITH GLOBAL EXPERIENCE IN REGULATED INDUSTRIES
BOARD OF DIRECTORS
PROVEN LEADERS IN CORPORATE GOVERNANCE
Paul Lucas, Chairman
Former CEO of Glaxo Canada with significant board experience in for-profit and non-profit sectors.
Richard Fitzgerald
Former CEO and Chairman of Diageo Canada – broad leadership experience in alcohol and tobacco.
Aaron Keay
Creative capital markets expert with deep experience in M&A and take-public transactions
Daryl Kramp
Member of Parliament, Municipal Counsellor and successful entrepreneur.
John Easson
Corporate finance and M&A advisor – experience ranging from start-ups to Canada’s largest public companies.
Barry Fishman, Chief Executive Officer
Former CEO of Merus Labs, Teva Canada and Taro Canada, Vice President of Marketing at Eli Lilly.
Daniel Laflamme
Co-founder of Canna Farms. Seasoned entrepreneur with broad cultivation and operational experience.
22CATALYSTS FOR GROWTH INCREASE PRODUCT SUPPLY AND PRODUCTION CAPABILITIES • Complete expansions in BC and Ontario • Achieve GMP certification in 2019 • Add extraction and automated packaging capabilities • Secure reliable third-party supply for domestic and international markets DRIVE CUSTOMER AWARENESS AND LOYALTY • Leverage our scalable retail medical clinic platform • Continue to secure and build retail strategic partnerships • Focus on strong go-to-market execution BUILD INNOVATION-DRIVEN PORTFOLIO • Advance partnerships to create novel products • Select niche markets and play to win • Remain focused on high-margin, high-value products ACCELERATE INTERNATIONAL MEDICAL FOCUS • Continue to secure supply and commercial partnerships • Leverage domestic learnings in select high opportunity countries • Use Germany and Australia as footholds to Europe and Asia DISCIPLINED CAPITAL ALLOCATION AND COST MANAGEMENT • Exercise strong corporate governance • Continue to evaluate strategic partnerships and M&A • Achieve positive operating cash flow in latter half of 2019 23
INVESTMENT HIGHLIGHTS
Premium products Innovation-driven
Medical-grade cannabis
and services product development
with award-winning quality
with health and wellness focus guided by data and insights
Focused Diverse team
Strong financial position of professionals
international growth
to act quickly on opportunities with global experience in
with Europe as primary target
regulated industries
24CHANGING THE WAY PEOPLE VIEW CANNABIS
For more information, please contact:
VIVO Cannabis Investor Relations
Heidi Christensen Brown Michael Bumby
hchristensenbrown@national.ca Chief Financial Officer
+1.416.848.1389 michael.bumby@vivocannabis.com TSXV:VIVO
OTCQX:VVICFYou can also read
