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Willow Biosciences Reports Third Quarter 2019 Results and Provides Operations Update

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Willow Biosciences Inc. (“Willow” or the “Company“) (CSE: WLLW, OTCQB: CANSF) has released its financial and operating results for the three and nine months ended September 30, 2019.

“Over the past few months, Willow has continued to advance its business strategy and achieved several important milestones,” said Trevor Peters, Willow’s President and Chief Executive Officer. “We have made meaningful progress on advancing our yeast strain performance and fully expect to meet our projected timing of scale-up development in the first half of 2020. In addition, we have completed the commissioning of our three labs and expanded our team of highly skilled scientists, preparing us for future development.  As the market for CBD and other cannabinoids continues to develop, Willow is positioned as a leader in delivering ultra-pure, pharmaceutical grade cannabinoids, at a highly competitive cost for the consumer packaged goods and pharmaceutical industries.”

Selected financial and operational information is outlined below and should be read in conjunction with Willow’s unaudited condensed consolidated interim financial statements (“Financial Statements”) and related management’s discussion and analysis (“MD&A”) which are available on SEDAR at www.sedar.com or on the Willow’s website at www.willowbio.com.

Highlights for the Quarter:

  • Willow’s science team successfully increased cannabinoid production by 25-fold and identified hundreds of beneficial genetic changes that are expected to provide additional increases.
  • Willow ended the quarter with strong liquidity, including approximately $24.0 million of cash on hand at September 30, 2019.
  • Willow continued to build out our three labs in Calgary, AlbertaBurnaby, British Columbia and Mountain View, California, spending $3.2 million in capex in the quarter ($6.4 million year to date as of September 30th). With the bulk of our capital spending to set up our labs behind us, Willow continues to focus on advancing our yeast strain to produce ultra-pure, pharmaceutical grade cannabidiol (CBD).
  • In the quarter we moved into our new facility in Calgary, Alberta located in the Life Sciences Innovation Hub at the University Research Park. The 4,000 square foot secure 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.
  • Willow continues to progress its intellectual property portfolio and expects to file five new U.S. provisional patent applications and one Patent Cooperation Treaty “PCT” conversion (which will convert an existing provisional patent application to a U.S. PCT application), all prior to the end of 2019.
  • Subsequent to the end of the quarter, the Company received its DEA Controlled Substances Registration Certificate for our Mountain View, California facility, which allows the Company to develop yeast strains which produce CBD.
  • On November 5, 2019, the Company commenced trading on the OTCQB® Venture Market under the ticker “CANSF”.
  • Willow’s directors and officers remain committed to the long-term success of the Company and since July 1, 2019, certain officers and board members of Willow have purchased approximately 1.5 million common shares and warrants of Willow in the market for aggregate proceeds of approximately $840,000.

Operational Update

During the past quarter, we have expanded our research and development team to 33 technical staff, including 21 Ph.D. level scientists, across our three sites. Our multidisciplinary team consists of plant scientists, strain engineers, analytical chemists and fermentation process engineers.  The team’s focus has now shifted from expanding its technical capabilities to program execution and operational excellence.  Our plant sciences team in Canada continues to advance its understanding of cannabinoid accumulation in C. sativa along with translation of these results in our yeast production host.  These results are further complemented by our high-throughput strain engineering capabilities in our San Francisco Bay Area labs to expand upon beneficial genetic diversity and further optimize our yeast strain toward commercial targets.  As a result of these combined efforts, we have increased cannabinoid production by 25-fold and identified hundreds of beneficial genetic changes that will provide additional increases.  These improved strains are now undergoing evaluation in fermentation tanks at our development partner’s facilities.  At our current trajectory, we anticipate delivering a strain for scale up development starting in the first half of 2020.

Financial Update

Willow ended the quarter in a strong financial position, with approximately $23.2 million in working capital and $24.0 million of cash on hand.

The Corporation’s financial results are summarized as follows:

Three months ended
September 30

Nine months ended
September 30

2019

2018

2019

2018

Balance sheet ($000’s):

Cash and cash equivalents

24,042

804

24,042

804

Total assets

38,624

1,038

38,624

1,038

Shareholder’s equity

24,727

975

24,727

975

Weighted average shares outstanding

Basic and diluted (000’s)

78,634

56,521

69,657

53,585

Year to date 2019 has been transformative for the Company. The transactions Willow has completed have had a significant impact on the comparability of the Company’s period over period results. See the Financial Statements and MD&A for further details.

Outlook

Willow will continue to focus on developing and refining our yeast-based strains that biosynthesize CBD, optimizing our production levels and improving the performance of our processes. We expect to reach a scalable production level in the first half of 2020, triggering the initiation of Noramco, Inc.’s efforts to ramp up production, file regulatory submissions and develop marketing and distribution plans. The scaling up of production to commercial levels is expected to take 12 to 18 months, followed by regulatory approval for the manufacturing process and customer sampling during 2021, and first bulk commercial sales anticipated in late 2021 or early 2022.

Following our successful financings, Willow is well positioned to fund our operations to commercialization.

Willow continues to evaluate strategic relationships with various entities in the consumer packaged goods and pharmaceutical industries. These partnerships will look to define our market participation and potentially gain entry into new global markets.

 

SOURCE Willow Biosciences Inc.

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