WILLOW ANNOUNCES COMMERCIAL LICENSE AND ROYALTY AGREEMENT WITH KALSEC INC.

Rhea-AI Summary

Willow Biosciences Inc. (TSX: WLLW; OTCQB: CANSF) has signed a commercial license and royalty agreement with Kalsec, Inc., a leading global producer of natural ingredients for the food and beverage industry. The agreement covers the use of Willow's technology for scaling and manufacturing a natural ingredient for savory food applications. Willow anticipates receiving milestone payments for the first pilot and industrial batches, followed by tiered royalty payments on net worldwide sales after launch.

The collaboration targets an existing $200M global market segment. Willow expects the research and development phase to be completed in 2024, with regulatory and scale-up work continuing into 2025. This agreement marks another successful transition of Willow's research program to commercial reality, highlighting the company's commitment to delivering safer and more sustainable natural products to consumers.

Positive

• Commercial license and royalty agreement signed with Kalsec, a leading global ingredient producer
• Milestone payments expected for first pilot and industrial batches
• Tiered royalty payments on net worldwide sales after product launch
• Targeting an existing $200M global market segment
• Research and development phase expected to be completed in 2024

Negative

• Regulatory and scale-up work to continue into 2025, potentially delaying full commercialization
• Kalsec responsible for regulatory, manufacturing, and sales costs, limiting Willow's control over the process

The agreement with Kalsec anticipates milestone payments for finalizing research and development work and a royalty stream for Willow upon commercialization

SUNNYVALE, Calif., Sept. 5, 2024 /PRNewswire/ - Willow Biosciences Inc. ("Willow") (TSX: WLLW) (OTCQB: CANSF), a leading biotechnology company focused on revolutionizing industrial manufacturing of pure, consistent, and sustainable ingredients, announces signing a commercial license and royalty agreement with Kalsec, Inc. ("Kalsec"), a leading global producer of natural taste and sensory, food protection, colors and advanced hops ingredients for the food and beverage industry. The agreement defines the financial terms for use of Willow's technology for scaling and manufacturing of a natural ingredient that adds to Kalsec's portfolio for use in savory food applications.

Through this commercial license and royalty agreement, Willow expects to receive milestone payments for the first pilot and industrial batches followed by tiered royalty payments on net worldwide sales after launch. Kalsec will be responsible for regulatory, manufacturing, and sales and marketing costs. The natural ingredient resulting from this collaboration will allow Kalsec to pursue a larger market share in an existing $200M global segment. Willow expects the research and development phase of the agreement to be completed in 2024 with regulatory and scale-up work to continue into 2025.

"We are excited to see our technology platform continue to deliver with the transition of yet another research program to commercial reality" said Dr. Chris Savile, Willow's President & CEO. "Beyond the commercial benefits to both Willow and Kalsec under this agreement, we are proud to be partnering with an ingredient leader like Kalsec to bring safer, more sustainable natural products to consumers."

Dr. Roger Nahas, Kalsec's Chief Innovation Officer said "we remain strongly committed to the sustainability and innovation benefits of bioconversion to generate affordable, effective, and safe natural solutions to savory foods' toughest ingredient needs and challenges. We are very proud and excited to continue working with Willow and their talented and capable team."

About Willow Biosciences Inc.

Willow develops and produces precision fermented functional ingredients for the health and wellness, food and beverage and personal care markets. Willow's FutureGrown™ and BioOxi™ platforms enable large-scale production with sustainability at its core. Willow's R&D team has a proven track record of developing and commercializing bio-based manufacturing processes and products to benefit our B2B partners and their customers. For more information, or to view Willow's updated corporate presentation, visit www.willowbio.com.

FutureGrown™ and BioOxi™ are registered trademarks of Willow Biosciences Inc. All other trademarks are trademarks of their respective holders.

Forward-Looking Statements

This news release may include forward-looking statements including opinions, assumptions, estimates and the Company's assessment of future plans, platforms and operations, and, more particularly, statements concerning: the collaboration agreement and development program with Kalsec, including the ability to accommodate new programs and to expand capabilities and transition R&D programs to commercial revenue; the demand and market size potential of the synthetic ingredients industry; and the business plan of the Company, generally, including becoming a leader in precision fermentation, research and production of functional ingredients. When used in this news release, the words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Company which include, but are not limited to: the success of Willow's strategic partnerships; the financial strength of the Company; the ability of the Company to fund its business plan using cash on hand and existing resources; the market for Willow's products; the ability of the Company to obtain and retain applicable licences; the ability of the Company to obtain suitable manufacturing partners and other strategic relationships; and the successful implementation of Willow's commercialization and production strategy, generally. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results biotechnology industry in general; the success of the Company's research and development strategies; 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; competition from other industry participants; adverse U.S., Canadian and global economic conditions; adverse global events and public-health crises; failure to comply with certain regulations; departure of key management personnel or inability to attract and retain talent; and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. Please refer to the Company's most recent annual information form and management's discussion and analysis for additional risk factors relating to Willow, which can be accessed either on Willow's website at www.willowbio.com or under the Company's profile on www.sedarplus.ca.

The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

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SOURCE Willow Biosciences Inc.

FAQ

What is the nature of the agreement between Willow Biosciences (CANSF) and Kalsec?

Willow Biosciences (CANSF) and Kalsec have signed a commercial license and royalty agreement for the use of Willow's technology in scaling and manufacturing a natural ingredient for savory food applications.

When does Willow Biosciences (CANSF) expect to complete the research and development phase of the Kalsec agreement?

Willow Biosciences (CANSF) expects to complete the research and development phase of the Kalsec agreement in 2024.

What financial benefits does Willow Biosciences (CANSF) anticipate from the Kalsec agreement?

Willow Biosciences (CANSF) anticipates receiving milestone payments for the first pilot and industrial batches, followed by tiered royalty payments on net worldwide sales after product launch.

What is the market size for the natural ingredient developed under the Willow Biosciences (CANSF) and Kalsec agreement?

The natural ingredient developed under the Willow Biosciences (CANSF) and Kalsec agreement targets an existing $200M global market segment in savory food applications.