Willow Biosciences Reports Fourth Quarter and 2019 Year End Results

Published: March 26, 2020

Willow Biosciences Reports Fourth Quarter and 2019 Year End Results

Willow Biosciences Inc. announced its financial and operating results for the three months and year ended December 31, 2019. Selected financial and operational information is outlined below and should be read with Willow’s audited consolidated financial statements and management’s discussion and analysis as of December 31, 2019, which are available on SEDAR at www.sedar.com and on Willow’s website at www.willowbio.com. The Company’s annual information form for the year ended December 31, 2019 has also been filed on SEDAR and is available on Willow’s website.

“We are extremely pleased with the significant scientific and commercial advancements we have made over the past few months that have allowed us to bring forward our commercialization timing by six months,” said Trevor Peters, Willow’s President and Chief Executive Officer. “While this progress has positioned us well for future success, we are also carefully monitoring the recent global outbreak of the novel coronavirus known as COVID-19. Our priority is the safety of our people and their communities and we continue to work with local authorities at all our locations to ensure we comply with all regulations and do all we can to assist during this trying time. Despite these challenges, Willow’s balance sheet remains strong and I am confident we will have ample liquidity to fund our cannabinoid program through to commercialization.”

Highlights for the Quarter

  • On October 25, 2019, Willow’s Mountain View, California, facility received its DEA Controlled Substances Registration Certificate allowing the Company to develop cannabidiol (“CBD“) producing yeast strains.
  • On November 5, 2019, the Company commenced trading on the OTCQB® Venture Exchange under the ticker “CANSF”.
  • On December 5, 2019, the Company commenced trading on the Toronto Stock Exchange under the ticker “WLLW” and concurrently delisted from the Canadian Securities Exchange.
  • Willow ended the quarter with strong liquidity, including approximately $19.6 million of cash on hand as at December 31, 2019.
  • Willow’s directors and officers remain committed to the long-term success of the Company, and in the fourth quarter certain officers and board members of Willow purchased approximately 345,000 Willow shares in the open market.

Operational Update

To date in 2020, Willow has made significant advancements in our path towards commercialization. Following the accelerated success of our scientists in developing a proprietary cannabinoid-producing yeast strain, we have started our initial development scale-up work in lab-scale fermentation vessels ahead of our original expectations. The scale-up process includes iterative strain development to increase the cannabinoid concentration of the yeast cell, fermentation optimization, and purification of the fermentation broth into the pure cannabinoid. The scale-up process, done in conjunction with our partner, Albany Molecular Research, Inc., is expected to reach a 500-litre pilot-scale demonstration by the fourth quarter of 2020, with larger, commercial-scale fermentation vessels expected as early as the first half of 2021. Our ability to begin our scale-up process earlier than expected advances our commercialization projections by six months, leading to accelerated discussions with consumer-packaged goods entities and faster revenue generation.

On February 4, 2020, Willow’s Burnaby facility received its cannabis research licence from Health Canada, which allows us to possess and produce cannabis for the purpose of conducting research at the Burnaby facility. The licence enables a broad scope of work on cannabis plants and heterologous expression systems and was issued for the maximum allowable period of five years, expiring on February 4, 2025.

On March 2, 2020, Willow’s Burnaby facility received its cannabis analytical testing licence from Health Canada, which allows us to possess and obtain cannabis by altering its chemical or physical properties, and to conduct analytical testing activities with cannabis at the Burnaby facility. The licence enables a broad scope of analytical testing services and commercial activities and was issued for a three-year period, expiring on March 2, 2023.

Effective March 15, 2020, Dr. Joseph Tucker, Chief Operating Officer and a Director, has left the Company to pursue other opportunities. Dr. Tucker commented, “I am grateful for my five years as co-founder of Epimeron Inc. (predecessor to Willow) and then Willow and am honored to have played a part in Willow’s transition from start-up, to being well on its way to achieving commercial production of synthesized cannabinoids. I remain excited for the future of Willow in the coming years as I transition from co-founder to shareholder.”

Financial Update

Willow ended the year in a strong financial position, with approximately $18.9 million in working capital and $19.6 million of cash on hand.

The Company’s financial results are summarized as follows:

Three months ended
December 31

Year ended
December 31

2019

2018

2019

2018

Balance sheet ($000’s):

Cash and cash equivalents

19,644

372

19,644

372

Total assets

33,884

967

33,884

967

Shareholder’s equity

22,008

835

22,008

835

Weighted average shares outstanding

Basic and diluted (000’s)

72,073

54,812

72,073

54,812

Outlook

While there is a significant amount of uncertainty around the global outbreak of COVID-19, Willow remains committed to ensuring the safety of our employees and the communities around them. To date, our people have been able to effectively work remotely without any impact to our timelines, but this is a dynamic situation that will be monitored closely.

Willow will continue to focus on developing and refining our yeast-based strains to biosynthesize CBD, while also optimizing our production levels and improving the performance of our processes. With our scale-up process now begun, we expect to achieve a 500-litre pilot-scale demonstration by the fourth quarter of 2020 and larger, commercial-scale fermentation vessels as early as the first half of 2021.

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

Willow is a Canadian biotechnology company based in Calgary, Alberta, that produces high purity, plant-derived compounds that provide building blocks for the global pharmaceutical, health and wellness, and consumer packaged goods industries.

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