WILLOW BIOSCIENCES REPORTS SECOND QUARTER 2022 RESULTS
Willow Biosciences Inc. (OTCQB: CANSF) reported its second quarter 2022 results, showcasing operational advancements, strong leadership, and robust liquidity with $22.1 million in working capital. The company is progressing with a pharmaceutical partnership and expanding its manufacturing capabilities to support FutureGrown™ CBG production. Highlights include successful toxicological assessments, new manufacturing partnerships, and a consolidation of R&D operations in California. Despite challenges in the cannabinoid market, Willow remains focused on long-term growth and product development.
- Strong liquidity with $22.1 million in working capital.
- Successful completion of initial toxicological assessment for FutureGrown™ CBG.
- Expansion of precision fermentation manufacturing network with new CDMO.
- Engagement with a specialty pharmaceutical company for an Active Pharmaceutical Ingredient project.
- Market for biosynthetically produced cannabinoids has not materialized as anticipated.
CALGARY, AB AND MOUNTAIN VIEW, CA, Aug. 15, 2022 /PRNewswire/ - Willow Biosciences Inc. ("Willow" or the "Company") (TSX: WLLW) (OTCQB: CANSF), a leading biotechnology company focused on revolutionizing industrial manufacturing of pure, consistent and sustainable functional ingredients, has released its financial and operating results for the three months ended June 30, 2022, reporting significant progress to its operational platform, leadership and strong liquidity.
"The second quarter saw us take the next step in the evolution of our product portfolio with a new partnered pharmaceutical project", said Dr. Peter Seufer-Wasserthal, Willow's Interim President and Chief Executive Officer. "Over the last three and a half years we have built out a fully integrated team that covers the entire production spectrum from the lab to commercialization. We are in a strong position to continue product development of our FutureGrown™ CBG and add new partnerships at this time and believe that the company is set up today to be a leader in the coming bio-revolution of tomorrow."
Willow's unaudited consolidated interim financial statements and related management's discussion and analysis for the quarter ended June 30, 2022 are available on SEDAR at www.sedar.com.
- On May 11, 2022, Willow announced that it had successfully completed the initial toxicological assessment for Generally Recognized as Safe ("GRAS") for its FutureGrown™ cannabigerol ("CBG") product in the United States. An important milestone for biosynthetically produced cannabinoids, Willow has successfully completed the Stage 1 toxicological assessment of its FutureGrown™ CBG product for oral product applications. The assessment concluded that FutureGrownTM CBG caused no adverse effects and was non-mutagenic, non-clastogenic and non-genotoxic, completing the first step toward designating Willow's FutureGrown™ CBG as GRAS in the United States. Willow anticipates initiating its Stage 2 pivotal toxicological assessment in Q3 2022.
- On May 11, 2022, Willow announced the expansion of its precision fermentation manufacturing network with the signing of a Manufacturing Services Agreement ("MSA") with a second Contract Development and Manufacturing Organization ("CDMO"), increasing fermentation capacity to produce Willow's FutureGrown™ products, including CBG. Willow's new partner has a strong track record in the large-scale production of food, nutritional, and pharmaceutical products and holds all necessary certifications to serve these markets. This new CDMO partnership allows Willow to accommodate new programs, both internal and partnered, in addition to its cannabinoid portfolio.
- On May 31, 2022, Willow announced that is has been engaged by a specialty pharmaceutical company (the "Counterparty") to optimize a biosynthetic pathway vital to the development of a large volume Active Pharmaceutical Ingredient (API) used in nutraceutical and pharmaceutical products. The Counterparty is partnered with a large-cap, multi-national healthcare company. The project consists of research & development and commercialization phases, with revenue coming from both research fees and milestone payments. Following commercialization, Willow anticipates an on-going revenue stream from license payments.
- Subsequent to the quarter, on July 18, 2022, Willow appointed Dr. Peter Seufer-Wasserthal as Interim President and Chief Executive Officer, effective July 17, 2022, in connection with Trevor Peters' retirement as President and CEO. Mr. Peters continues to serve as a Director of the Company. Guided by his extensive experience in biotech, pharma, nutrition, and consumer care, the Company has already advanced several partnership discussions in the food and nutrition sectors. He will continue to build and lead the organization needed to successfully execute on the Company's mission.
- Willow ended the quarter in a strong financial position, with approximately
$22.1 million in working capital and$22.1 million of cash on hand.
Willow has begun consolidating Research & Development (R&D) at its Mountain View, California site by closing its Burnaby, British Columbia facility. Willow expects to complete the closure and relocate key personnel to Mountain View by the end of September 2022. The motivation for the consolidation is the operational benefits of having the Company's entire R&D team under one roof. Our San Francisco Bay Area site was selected because of its position as the global biotech hub, where the Company can recruit and retain top scientific talent.
Willow is positioned to become a leader in precision fermentation by capturing key intellectual property around what the Company anticipates being the most cost-effective methods to produce highly pure ingredients. The Company's operational capabilities, along with its strategic partners, span the entire product development pathway, and Willow's integrated R&D team in California has the full capabilities to deliver at all stages of the development cycle. The Company's established technology, capabilities, and manufacturing network can now enable biobased production for a diverse set of industries.
While the market for biosynthetically produced cannabinoids has not materialized to the extent originally anticipated, Willow remains optimistic about the long term market potential for these ingredients and continues to optimize its production process.
While the market for biosynthetically produced cannabinoids continues to develop, Willow will utilize it's proven FutureGrownTM platform to partner with companies in the personal care, food and beverage, and pharmaceutical markets, providing access to pure, consistent and sustainable functional ingredients. With our first non-cannabinoid program announced this year, we are excited to continue adding partnerships and products, expanding our platform and de-risking our portfolio. We look forward to updating stakeholders on our progress in the coming quarters.
Willow develops and produces high-purity ingredients for the personal care, food and beverage, and pharmaceutical markets. Willow's FutureGrownÔ biotechnology platform allows 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.
This news release may include forward-looking statements including opinions, assumptions, estimates and the Company's assessment of future plans and operations, and, more particularly, statements concerning: the MSA, including the ability to accommodate new programs and to expand capabilities; the continued development of Willow's FutureGrown™ CBG; 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, including the development of future 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; import/export and research restrictions for cannabinoid-based operations; the size of the medical-use and adult-use cannabinoid market; competition from other industry participants; adverse U.S., Canadian and global economic conditions; adverse global events and public-health crises, including the current COVID-19 outbreak; 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.sedar.com.
Any financial outlook and future-oriented financial information contained in this document regarding prospective financial performance, financial position, cash balances or revenue is based on assumptions about future events, including economic conditions and proposed courses of action based on management's assessment of the relevant information that is currently available. Projected operational information contains forward-looking information and is based on a number of material assumptions and factors, as are set out above. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of the Company's operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. Actual results will vary from projected results. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein.
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.
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