The next generation of nature - January 2020 willowbio.com
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The next generation
of nature.
January 2020 TSX: WLLW
willowbio.com
Investment Highlights
Positioned to be leading high-quality pharmaceutical and CPG ingredients manufacturer
willowbio.com
• Produces consistent, pharmaceutical-grade cannabinoid
compounds Market
expected to
• Ability to reliably supply strong growth markets grow 10x over
the next 10
• Proven team to successfully commercialize production years to
• Partnered with leading global pharmaceutical ingredients $100B
provider to drive post-commercialization success
• Clear path to commercialization, scale up expected H1 2020
• Strong financial position to fund commercial production
2
Biosynthesis: Nature’s method, industrialized
Learning from nature and making it better
willowbio.com
• 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
3
Our Efficiency Advantage
Willow’s process results in higher production and higher purity, at lower cost, compared to plant extraction
willowbio.com
Willow’s Manufacturing Process1 Plant-based Extraction1
100,000 L tank @ 5g/L 10% CBD Hemp
Annual Production: ~13 tons ~300 acres needed to produce ~13 tons
1 . Willow management estimates 4
Wide Range of Pharmaceutical Applications
Ongoing research increasing the reach of cannabinoid uses
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
Projected US cannabinoid-based pharmaceuticals market growth
US$2B US$50B
2020 2029
5
Source: Ackrell Capital estimates. See Chapter IV: U.S. Cannabis Market Estimates.
Extensive Growth from Consumer Products
Major global consumer brands are waiting for a consistent, scalable manufacturing process
willowbio.com
• Consumer products market expected to reach $16 billion by CBD Product categories
revenues by 2025 (millions)1
2025
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
• Opportunities with cosmetics, pain relievers, beverages and Nutraceuticals
more Topicals ~$13B
opportunity
• Ingredient quality and consistency is crucial to product Beverages
reputation Food
‒ Large portion of the ~$13B opportunity to require API quality Beauty
CBD Vapor
• 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
1. Cowen Research, Feb 25, 2019 Cowen Research, February 25, 2019
6
Willow’s Best In Class Management & Technical Team
Willow’s team has the necessary experience needed to achieve success
willowbio.com
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
7
Strategic Partnership with Industry Leader
Partnership with Noramco adds critical post-commercialization expertise
willowbio.com
• 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
Noramco Facility (Wilmington, DE); Source: Noramco Marketing Materials
8
Strategically Located Facilities
Proximity to allied university research and biotechnology hubs
willowbio.com
Calgary, AB
Uses proprietary research to remove key Calgary, AB
genetic bottlenecks that slow maximum biosynthetic
cannabinoid production. This facility employs Science & Vancouver, BC
cutting-edge bioassay capabilities, liquid handling 13 technical staff
robots, and analytical instrumentation and leverages
access to the University of Calgary’s plant cultivation
resources and growth chambers.
Vancouver, BC
Correlates the physical characteristics
of cannabis plant strains with their unique genetic Science &
makeup, allowing the improvement of both plant 10 technical staff
and yeast strains. This facility houses
state-of-the-art molecular biology and analytical
chemistry capabilities.
Mountain View, CA
Mountain View, CA
Identifies 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 Science &
colony picking, liquid handling robots, and analytical instrumentation 12 technical staff
combined with systems to rapidly
evaluate high volumes of data and results.
9
Road to Commercialization
Willow has a clear path to achieving scale and commercial production
willowbio.com
TITER
(g/L)
Market-owning titer 5 g/L
5.0 DEVELOPMENT COMMERCIALIZATION
R
3.0
Iterative Strain Scale-up First Commercial Batch & Expansion Across CPG Entry Into
Optimization Development Sales Markets Pharma Markets
2019-2021 2020-2021 2021 2021-2022 2022
• Combination of plant science • Noramco Initiates • Customer sampling • Sales in cosmetics, food & • Validated process
and synthetic biology to improve Upstream/Downstream process • First commercial-scale batch beverage under cGMP
strain performance optimization • First sale (in wellness) • Initiate pharma sales
• First pilot-scale batch
Willow’s Willow’s
Paradigm-shifting titer 1.0 g/L Addressable CPG Addressable Pharma
1.0
Market Size1 Market Size1
Lab strain producing
0.5
cannabinoids Process-relevant titer 0.5 g/L $6B $1.5B
2019 2020 2021 2022
1. As per Eight Capital Initiating Coverage Report on September 10, 2019.
10Strong Financial Position
Strategic industry and financial partners position Willow for strong future performance
willowbio.com
• Raised $37 million to support research, strain development, Willow Share Capitalization (TSX: WLLW) - As at Sept 30, 2019
scale up and commercial launch
Basic Shares Outstanding (mm)1 78.9
‒ Tuatara Capital - strategic investor 29% ownership
Employee Options (mm)2 4.9
‒ Directors and Officers hold 29% ownership
Financing Warrants (mm)3 15.0
• Fully funded to commercialize production of CBD Existing Warrants (mm)4 2.7
Performance Warrants (mm)5 12.1
• Expect to exit 2020 with $10 to $15 million cash
Fully Diluted Shares Outstanding (mm) 113.5
• Analyst coverage initiated in Sep 2019
1. Accounts for Tuatara's exercise of 9.2mm financing warrants at $0.88 per warrant announced on May 27,
2019.
• Moved to TSX in Dec 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
• Continue to evaluate strategic relationships in the CPG and
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
pharmaceuticals industries listed on the TSX (or equivalent exchange).
11Positioned for Future Success
With Pharmaceutical Grade Cannabinoid Product
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 Expected market value in
$100B 10 years (10x growth)
• Fully funded to commercialize production
Total U.S. Cannabis Consumer Market $100.0 60
($Billions) 50
$80.0 Assumed End of
Recreational & Medicinal ($B)
Federal Prohibition 40
$60.0
Cannabinoid-based Pharmaceuticals ($B) 30
Number of consumers (M) $40.0
20
$20.0 10
$0.0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
12
Source: Ackrell Capital estimates. See Chapter IV: U.S. Cannabis Market Estimates.Appendix
Development Strategy Will Enable
Commercial Production Of Multiple Targets
willowbio.com
Feedstock Hexanoic Acid Butyric Acid Other Acid
Cannabinoid Cannabinoid Cannabinoid
Precursors GPP Precursors Precursors
Yeast cell (from yeast)
Key Cannabinoid Intermediates CBGA CBGVA
Naturally Occurring
Compound
THCA CBDA CBCA THCVA CBDVA CBCVA
Decarboxylation
TARGET THC CBD CBC THCV CBDV CBCV Novel Target
Commercial titer target of 3-5 g/L necessary for COGS targets is a realistic objective and will be the key optimization driver
14Wide Range of Pharmaceutical Applications
Ongoing research increasing the reach of cannabinoid uses
willowbio.com
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 ◉ ◉ ◉ ◉
Source: Ackrell Capital 2018 Cannabis Investment Report and other industry reports. 15Extensive Growth from Consumer Products
willowbio.com
Future cannabis market in-line with current levels of common stimulants and substances1
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
1. Ackrell Capital 2018 Cannabis Investment Report
16Leadership
Management
willowbio.com
Trevor Peters Peter Facchini, PhD Travis Doupe, CA CPA Joseph Tucker, PhD
CEO & Director CSO CFO COO & Director
Experienced executive having co-founded four start-up Professor of Plant Biochemistry in the Department of CA and CPA (Illinois) with 18+ years’ experience in the Extensive senior leadership experience
companies in the past 15 years Biological Sciences at the University of Calgary since 1995 international oil and gas industry
CEO, CFO & Vice President of multiple public and private
Instrumental in seven public and private start-up companies Canada Research Chair in Plant Metabolic Processes VP Finance & CFO of Suroco Energy Inc., a publicly-listed biotech companies
in the energy industry over the past Biotechnology company based in Canada with operations in Colombia
20 years Holds more than 20 issued or pending patents
Received the C.D. Nelson Award from the Canadian Society of Roles with PwC in Calgary, Alberta and
Raised over $1 billion in equity and debt financings at various Plant Physiologists as the outstanding young plant biologist in Havana, Cuba Ph.D. in Biochemistry & Molecular Biology from the
stages of corporate development Canada University of Calgary
Served in positions of increasing importance at Sherritt Oil &
Successful transactions totalling over Published over 160 research papers and scholarly articles in Gas, including Finance Manager & Controller
$4 billion on sale high-impact journals such as Nature Chemical Biology, Plant
Cell, Plant Journal and the Journal of Biological Chemistry VP Finance & CFO of Milagro Energy and Controller of NAL
Extensive intellectual property and patent prosecution Resources
background in the energy Ph.D. from the University of Toronto in 1991 and conducted
technology sector postdoctoral research at the University of Kentucky and the
Université de Montréal
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
17Leadership
Technical
willowbio.com
Jerry Ericsson, MSc Jill Hagel, PhD Mathias Schuetz, PhD Chris Savile, PhD Troy Talkkari, CFA
VP Operations VP Applied Science VP Research & Development VP Commercial Operations VP Corporate Development
Experienced clean-tech executive responsible Co-authored over 35 peer-reviewed publications Adjunct Professor Dept of Botany UBC, Over 10 years in science, business development, Over 12 years’ experience in the finance industry
for raising more than $25 million to in high-ranking journals such as Nature Chemical researcher and plant molecular biologist with and commercial operations roles and was most recently a Director of Institutional
commercialize thermochemical technologies Biology, Nature Communications, and Plant Cell extensive expertise in plant genetics and Equity Sales at GMP FirstEnergy
and presented internationally cannabis technology Highly experienced (bio)chemist, high
15 years’ experience in research and throughput (HTP) assay scientist and protein Was part of 66 M&A transactions totalling over
development of novel technologies in forestry Over 17 years experience in medicinal plant Over 14 years’ research experience and author of engineer with strong technical background $22 billion in value
and agricultural industries biochemistry and recipient of multiple academic many peer-reviewed publications in prestigious
awards plant science journals R&D leader on several programs that led to Was part of 833 financings, including 279 as the
8 years experience in integrated pest commercial manufacturing processes lead dealer, totalling over $131 billion of capital
management (IPM) research in greenhouse and Co-inventor on numerous patent applications Numerous citations and awards for research raised
field crops excellence PhD in 2005 at McGill University
PhD in 2010 from the University of Calgary CFA designation and Bachelor of Commerce in
Authored/co-authored 3 patents and more than PhD in 2009 at Simon Fraser University Finance from the University of British Columbia
10 peer-reviewed papers in international
journals
18Leadership
Board of Directors
willowbio.com
Peter Seufer-Wasserthal, PhD Donald Archibald Fotis Kalantzis, PhD Al Foremen Sadiq Lalani
Independent Director Independent Director Independent Director Director Independent Director
25 years of experience in the technology and Independent businessman with significant 25 years experience in oil and gas exploration Partner and Chief Investment Officer at Tuatara 25 years’ experience as Chief Financial Officer of
biotechnology sector senior executive and board experience for and development Capital publicly-listed issuers, including current Vice
numerous public and private companies President & CFO at Kelt Exploration Ltd.
Currently Chief Commercial Officer of Origenis Co-founder and senior executive of several Previously, Managing Director at JP Morgan in
GmbH Previous director and audit committee member public companies including Spartan Energy the Financial Sponsors Group and Private Equity C-Suite Energy Executive Awards CFO of the Year
of publicly-traded Spartan Energy Corp. and Corp., Spartan Oil Corp. and Spartan Exploration Fund Services Business
Previously VP, Business Development for Spartan Oil Corp. Ltd.
Intrexon Corporation, responsible for business Began his career at Citigroup, and has held
development in Europe and Asia for four years Previously President of Cypress Energy Corp., Holds an M.SC from the University of executive roles at several companies
Chairman & CEO of Cyries Energy Inc. and Saskatchewan and a PhD from the University of
Received a Ph.D. (Technical University of Graz) President & CEO of Cequel Energy Inc. Alberta Holds a B.S. Finance (University of Conneticut)
Joseph Tucker, PhD
and a dual J.D./MBA (Arizona State University)
Holds a B.Comm (University of Alberta) and Published and presented numerous papers in
COO & Director
MBA (University of Western Ontario) international journals and conferences see bio under mgmt.
Trevor Peters
CEO & Director
see bio under mgmt.
Sony Gill
Corporate Secretary
19Disclaimer
willowbio.com
Forward Looking Statements. Certain information included in this presentation Although Willow believes that the expectations and assumptions on which the FOFI Disclosure. This presentation contains future-oriented financial information and
constitutes forward-looking information under applicable securities legislation. forward-looking statements are based are reasonable, undue reliance should not be financial outlook information (collectively, "FOFI") concerning Willow's financial
Forward-looking information typically contains statements with words such as "will", placed on the forward-looking statements because Willow can give no assurance position, liquidity, available funds, operations, revenue, expenses, ability to fund
"anticipate", "believe", "expect", "plan", "intend", "estimate", "propose" or similar that they will prove to be correct. Since forward-looking statements address future commercial production, market capitalization and components thereof, all of which
words suggesting future outcomes or statements regarding an outlook. Forward- events and conditions, by their very nature they involve inherent risks and are subject to the same assumptions, risk factors, limitations and qualifications as set
looking information in this presentation includes, but is not limited to, statements uncertainties. Actual results could differ materially from those currently anticipated forth in the above paragraphs. FOFI contained in this presentation was approved by
relating to: the business, strategies, expectations, planned operations and future due to a number of factors and risks. These include, but are not limited to, permits, management as of the date of this presentation and was provided for the purpose of
actions of Willow Biosciences Inc. ("Willow" or the "Company"), including research licenses and regulatory and third party approvals not being obtained in the manner providing further information about Willow's anticipated future business operations.
and development programs at the facilities located in Alberta, British Columbia and or timing anticipated by the Company; the ability to implement corporate strategies; Willow disclaims any intention or obligation to update or revise any FOFI contained
California and the timing thereof; the arrangements under, and potential benefits of, failure of counter-parties to perform contractual obligations; the state of domestic in this presentation, whether as a result of new information, future events or
the exclusive strategic partnership with Noramco, Inc. ("Noramco"); other capital markets; risks associated with the cannabis industry in general; infringement otherwise, unless required pursuant to applicable law. Readers are cautioned that
collaborations and partnerships, including in respect of marketing and distribution; on intellectual property; failure to benefit from partnerships or successfully integrate the FOFI contained in this presentation should not be used for purposes other than
the performance of the Company’s business and operations; the Company’s ability acquisitions; actions and initiatives of federal and provincial governments and for which it is disclosed herein.
to biosynthesize commercially and create proprietary genomes; the adequacy of changes to government policies and the execution and impact of these actions,
current funds to achieve commercial scale production of CBD; the performance of initiatives and policies; import/export and research restrictions for cannabinoid- Not an Offer. This presentation does not constitute an offer to sell or solicitation of
the current science team, management and board and the ability to find other based operations; the size of the medical-use and adult-use cannabis market; an offer to buy any of the securities described herein. The sole purpose of this
qualified personnel with operational experience; the competitive conditions of the competition from other industry participants; and other factors more fully described presentation, in paper or electronic form, is strictly for information purposes.
industry in which the Company operates and the competitive advantages of the from time to time in the reports and filings made by the Company with securities U.S. Registration. This presentation is not an offer of the securities for sale in the
Company; and the Company’s future product offerings, including analytical testing, regulatory authorities. United States. The securities have not been registered under the U.S. Securities Act
genetics and cannabinoid production; future production levels, quality, consistency of 1933, as amended, and may not be offered or sold in the United States absent
and costs. Readers are cautioned that the assumptions used in the preparation of forward-
looking information, although considered reasonable at the time of preparation, may registration or an exemption from registration. This presentation shall not constitute
The forward-looking statements contained in this presentation are based on certain prove to be imprecise. Willow's actual results, performance or achievement could an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the
key expectations and assumptions made by Willow, including expectations and differ materially from those expressed in, or implied by, these forward-looking securities in any state in which such offer, solicitation or sale would be unlawful.
assumptions concerning: the future operations of, and transactions completed by, statements and accordingly there can be no assurance that such expectations will be
the Company; the potential for the strategic partnership with Noramco to open new realized and/or what benefits Willow will derive therefrom. The forward-looking
and larger markets (including non-pharmaceutical markets); Willow’s ability to information contained in this presentation is made as of the date hereof and Willow
generate higher quality CBDs at lower costs; cost synergies created by the strategic undertakes no obligation to update or revise any forward-looking information,
partnership with Noramco and the successful implementation thereof; the adequacy whether as a result of new information, future events or otherwise, unless required
of current capital; the availability of and access to qualified personnel; the results of by applicable securities laws. The forward-looking information contained in this
scientific research; the Company’s ability to protect its intellectual property; the presentation is expressly qualified by this cautionary statement.
expected growth in the cannabis market, including demand for cultured
cannabinoids; expectations regarding the regulatory framework for cultured Certain information contained herein has been obtained from published sources
cannabinoids; changes in prices and costs of inputs; the medical benefits, viability, prepared by independent industry analysts and third-party sources (including
safety, efficacy, dosing and social acceptance of cannabis; the securities markets and industry publications, surveys and forecasts), While such information is believed to
the general economy; changes to cannabis laws and regulations in Canada; the be reliable for the purpose used herein, Willow does not assume any responsibility
legalization of the use of cannabis for medical and/or adult use in jurisdictions for the accuracy of such information. None of the sources cited in this presentation
outside of Canada; and applicable laws not changing in a manner that is unfavorable have consented to the inclusion of any data from their reports, nor has Willow
to the Company. sought their consent.
20Thank You
Willow Biosciences
3655 36th Street NW
Calgary, AB, T2L 1Y8
Trevor Peters
CEO & Director
T: (403) 669-4848
E: t.peters@willowbio.com
Troy Talkkari, CFA
Vice President, Corporate Development
T: (403) 618-1117
January 2020 E: t.talkkari@willowbio.com
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