WILLOW BIOSCIENCES REPORTS FIRST QUARTER 2022 RESULTS

Vancouver, British Columbia – May 12, 2022 – Willow Biosciences Inc. (“Willow” or the “Company“) (TSX: WLLW; OTCQB: CANSF), a leading biotechnology company focused on revolutionizing industrial manufacturing of high-value molecules traditionally derived from plants, has released its financial and operating results for the three months ended March 31, 2022, reporting significant progress to its operational platform and strong liquidity.

“The first quarter this year saw us make progress on the safety and effectiveness of Willow’s FutureGrown™ CBG as a key new ingredient for skincare”, said Trevor Peters, Willow’s President and Chief Executive Officer. “We are also excited to add new manufacturing capacity to further expand our end-to-end capabilities as a complete biomanufacturng solution for prospective partners. These are challenging times in the broader markets and at Willow we want to reitertate our strong balance sheet and world class R&D team that is set up to capture value for our stakeholders in the coming biorevolution.”

Willow’s unaudited consolidated interim financial statements and related management’s discussion and analysis for the quarter ended March 31, 2022 are available on SEDAR at www.sedar.com.

Highlights for the Quarter

  • On January 13, 2022, Willow announced the results of its in vitro analysis and was the first company to report on a topical clinical study on cannabigerol (“CBG”). In collaboration with Signum Biosciences, Willow’s FutureGrownTM CBG, produced using its proprietary yeast platform at multi-kilogram scale, demonstrated antioxidant, anti-inflammatory, and skin health-boosting activity in lab assays, and provided similar benefits when applied topically to human skin. A single-blind clinical study in 20 healthy male and female volunteers conducted at Princeton Consumer Research (the “Willow Study”) showed Willow’s FutureGrown CBG clinically reduces skin inflammation, the appearance of redness, and improves barrier function. The results of the Willow Study were published in Molecules, a leading international, peer-reviewed, open access journal that can be found at https://www.mdpi.com/1420-3049/27/2/491/htm.
  • Subsequent to the quarter end, on May 11, 2022, Willow announced that it had successfully completed the initial toxicological assessment for Generally Recognized as Safe (“GRAS”) for its FutureGrown™ 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 FutureGrown™ CBG was non-mutagenic, non-clastogenic, non-genotoxic, which is the first step toward concluding Willow’s FutureGrown™ CBG as GRAS in the United States.
  • Subsequent to the quarter end, on May 11, 2022, Willow announced the expansion of its fermentation manufacturing network with the signing of a Manufacturing Services Agreement (“MSA”) with a second Contract Development and Manufacturing Organization (“CDMO”), which will offer increased fermentation capacity to produce Willow’s FutureGrown™ products, including cannabigerol (“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.
  • Willow ended the quarter in a strong financial position, with approximately $26.0 million in working capital and $26.4 million of cash on hand. As Willow transitions to a larger CDMO through the course of this 2022, revenue from product sales will continue to be limited, but will position the Company well to meet demand for CBG and other products in 2023 and beyond.

Outlook

Willow is positioned to become a leader in precision fermentation, including cannabinoid biosynthesis, 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 team in Canada and the United States has full capabilities to underpin achievement 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 is not where the Company thought it would be a year ago, Willow remains bullish at the long term market potential. While the Company waits for the cannabinoid biosynthesis market to develop, Willow will utilize the platform it has built to work with ingredient and pharmaceutical companies to provide access to technology that augments existing manufacturing techniques to build out a better supply chain for compounds that have strong market potential.

The underlying fundamentals for the global cannabis industry are trending upwards. As the future growth in the industry comes from increased product offerings, it is management’s ultimate belief that the purity, consistency, and above all else, the sustainable nature in which biosynthetically produced cannabinoids are made, will be paramount for enabling large mutli-national CPG companies to participate. While Willow can’t control the regulatory environment and ultimate timing of these companies entering the space, the Company can control the development and commercial production associated with its cannabinoids, and having all the necessary safety work needed to be a global supplier. Willow is ready when the market unfolds.

About Willow Biosciences Inc.

Willow is a leading biotechnology company that develops and produces high-purity, plant derived ingredients for the personal care, food and beverage, and pharmaceutical markets. Willow’s FutureGrown™ biotechnology platform allows large-scale production of pure, consistent, and sustainable products to benefit our B2B partners and their customers.

For further information, please visit our website at www.willowbio.com or contact:

Trevor Peters

President and Chief Executive Officer

Troy Talkkari, CFA

Vice President, Corporate Development

E: info@willowbio.com

150, 2250 Boundary Road

Burnaby, BC V5M 3Z3

Forward-Looking Statements

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 results of the Willow Study, including the clinical benefits of CBG for skincare; the MSA, including the ability to accommodate new programs and to expand capabilities; the ability to obtain GRAS certification for Willow’s FutureGrown CBG;; the demand and market size potential of the synthetic cannabinoid industry; and the business plan of the Company, generally, including becoming a leader in precision fermentation, cannabinoid research and production. 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 and, with respect to the Willow Study, Signum Biosciences which include, but are not limited to: the expectations and assumptions set forth in the published results of the Willow Study; 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 to differ materially from those in the forward-looking statements including, but not limited to, risks associated with: the cannabinoid 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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Focused on identifying and deploying additional genetic elements and solutions to further enhance production of our yeast strains and processes. This state-of-the-art R&D facility includes high-throughput molecular biology and screening technologies, high-end analytical instrumentation and fermentation capabilities along with systems to rapidly evaluate high volumes of data and results.