Calgary, Alberta and Mountain View, California – December 7, 2022 – Willow Biosciences Inc.(“Willow“) (TSX: WLLW; OTCQB: CANSF), a leading biotechnology company focused on revolutionizing industrial manufacturing of pure, consistent and sustainable functional ingredients announced today that it has taken additional steps to focus on near-term revenue generation, protect its balance sheet and reduce its cash burn.
Since the early part of the year, the Company has reviewed its market opportunities and its portfolio, using a rigorous evaluation process that has taken into consideration the challenges in the current operating environment. As a result of this review, the Company has taken the following proactive actions:
- The Company’s business development focus has shifted to near-term revenue generating programs. On May 31, 2022, the Company announced its first partnered program for a pharmaceutical project that has already generated revenue for the Company. A second program was announced in November with Kalsec, a leading global producer of natural taste and sensory, food protection, colors and advanced hops ingredients for the food and beverage industry. The terms for both programs include near-term research and development revenue and milestone payments with the potential for further upside after commercialization. Furthermore, the Company is optimistic that it will be able to announce at least one new additional program in 2023.
- The Company consolidated its R&D operations into one lab, located in Mountain View, California and is pleased to report that key personnel have relocated to the Mountain View site and the transfer of operations was completed with minimal downtime for operations. In addition, Willow was able to ship and repurpose a significant portion of the existing equipment from its prior Burnaby, British Columbia lab location to the Mountain View facility, thereby reducing the overall costs by centralizing lab activities. The lower overhead cost associated with operating a single lab versus two labs is expected to reduce the Company’s burn rate.
- The Company remains optimistic on the future opportunity for CBG and other cannabinoids and will be well-positioned to capture that value as the markets develop, but with its new focus on other ingredients will not invest in developing new products without partner funding.
- Willow outsourced its internal Quality Control analytical testing and release requirements, eliminating a number of full-time employee positions in Burnaby.
- The above-mentioned actions combined with an extensive review of the Company’s workflows resulted in a total reduction of non-research and development workforce of eight persons, including four management positions, resulting in a current total headcount of 31 of which 77% are in R&D and operations. Willow continues its focus on operating in a lean fashion while maintaining sufficient R&D and operational resources to execute on its partnered programs and continuing to develop its own product portfolio.
- With no debt and a significant cash balance of $18.4 million as of September 30, 2022, the Company intends to approve a fully funded budget which covers the entirety of 2023.
“By optimizing our business and reducing our cash burn we are in a strong position to pursue a strategic focus on development programs that leverage our precision fermentation technology platform for near-term revenue generation and market success,” said Dr. Peter Seufer-Wasserthal, Willow’s President and CEO. “Looking forward to 2023, we are excited about a number of new options we see to utilize the platform more broadly within the health and wellness, food and beverage and personal care markets, while working hard to realize shareholder value from our existing and future research and development programs and sale of functional ingredients to our customers.”
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 FutureGrownTM 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. For more information, visit www.willowbio.com.
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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 business plan and strategy of the Company, including becoming a leader in precision fermentation, research and production of functional ingredients; near term revenue generation and burn rate reductions; the ability to accommodate new programs and expand capabilities; the continued development of Willow’s FutureGrown™ CBG; the demand and market size potential of the synthetic ingredients industry and the ability to capture value as the market develops; and the intention to announce a fully-funded 2023 budget. 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, costs 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.