SCIENTUS PHARMA. CORPORATE PRESENTATION October 2017

Transcription

1 SCIENTUS PHARMA CORPORATE PRESENTATION October 2017

2 FORWARD-LOOKING STATEMENTS This presentation contains certain forward looking statements and forward looking information (collectively referred to herein as forward looking statements ) within the meaning of applicable securities laws. All statements other than statements of present or historical fact are forward looking statements. Forward looking information is often, but not always, identified by the use of words such as could, should, can, anticipate, expect, believe, will, may, projected, sustain, continues, strategy, potential, projects, grow, take advantage, estimate, well positioned or similar words suggesting future outcomes. In particular, this presentation contains forward looking statements relating to the implementation of operations, licensing, stock exchange listing, production, sales and revenue generation, future opportunities, business strategies and competitive advantages. The forward looking statements regarding Scientus are based on certain key expectations and assumptions of Scientus concerning anticipated financial performance, obtaining necessary licensing to conduct the proposed business, the ability to adequately outfit its production facility, prospects, strategies, the sufficiency of budgeted capital expenditures in carrying out planned activities, that there will be no adverse regulatory or political developments with respect to medical marihuana production, sales or consumption, the ability to obtain financing on acceptable terms and the ability to achieve a listing on a recognized stock exchange, all of which are subject to change based on market conditions and potential timing delays. Although management of Scientus consider these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. By their very nature, forward looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward looking statements will not be achieved. Undue reliance should not be placed on forward looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in the forward looking statements, including among other things: general economic and market factors, including business competition, changes in government regulations; general political and social uncertainties; lack of insurance; inadequacy of the production facility or the ability to adequately outfit such facility, delay or failure to receive board or regulatory approvals including failing to obtain requisite licensing from Health Canada under the Marihuana for Medical Purposes Regulations; inability to complete an initial public offering and listing on a recognize stock exchange; changes in legislation; timing and availability of external financing on acceptable terms; and lack of qualified, skilled labour or loss of key individuals. Readers are cautioned that the foregoing list is not exhaustive. The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward looking statements included in this presentation are made as of the date of this presentation and Scientus does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws. 2

3 SCIENTUS SNAPSHOT A VERTICALLY-INTEGRATED BIOPHARMACEUTICAL COMPANY Market leader in evolution of cannabinoid products from medical-grade to pharmaceutical-grade Scientus is strictly focused on leading the medical cannabis sector towards pharmaceutical standards Differentiated from cannabis companies by our proprietary extraction process and the R&D of our products based on our unique scientific understanding of the API Near-term therapeutic focus on pain and CNS disorders Licensed Dealer under Narcotics Control Regulations of Canada and ACMPR applicant (final review stage) Large-scale manufacturing infrastructure in place; 45,000 sq. ft. sterile facility built to GMP standards, boasting three vaults which can store over $150M of narcotics inventory Meaningful barriers to entry to defend large market opportunity 3 Strong, seasoned management team coupled with thought-leading scientific advisors

4 CANNABIS IN CANADA A COMPLEX LANDSCAPE RECREATION PHARMA INTEREST SCIENCE OPIOID CRISIS POLITICS LICENSED PRODUCERS LOBBY GROUPS MEDICAL USE SPECIALIZED LICENSED DEALERS 4

5 CURRENT STATE OF INDUSTRY MEDICAL-GRADE PRODUCT FOCUS Concentrated extract DRIED CANNABIS ETHANOL DISTILLATION SFE (30 40 C) CONCENTRATED EXTRACT 5

6 ACKNOWLEDING LIMITED DATA CURRENT USE IN CLINCIAL MEDICINE 12% OF PHYSICIANS PRESCRIBED MEDICAL CANNABIS 52% 35% ARE INTERESTED BUT WOULD NOT PRESCRIBE UNDER ANY CIRCUMSTANCES HAVE NOT OR WANT MORE INFO 6

7 THE SCIENTUS OPPORTUNITY MEDICAL-GRADE TO PHARMACEUTICAL-GRADE Market Expectation & Target Market Scientus Target Market CURRENT MEDICAL MARKET FUTURE RECREATIONAL MARKET SWITCH MEDICAL MARKET Market Participants Licensed Producers Total Addressable Market $150M Market Participants Licensed Producers Total Addressable Market $1.5B - $3.0B (2018/2019) Market Participants Specialized Licensed Dealers Total Addressable Market $1.0B+ in Canada (2019) 7

8 STRONG SCIENTIFIC FOCUS NOT PARTICIPATING IN RECREATIONAL SECTOR Bringing together strengths of biotech, academic and hospital We have assembled the deepest bench of expertise in the industry MD/Ph.Ds, PhDs Manufacturing - Pilot/Commercial Scale Up: HydRx Facility 15 Staff, 4 consulting teams with significant scientific, technical experience Growing headcount to 24 in days R&D/Product Development: UHN Research Facilities Led by Lakshmi P. Kotra, B.Pharm.(Hons), Ph.D. & team of 5 scientists Clinical Studies: A Network of 5 hospitals Led by Hance Clarke, M.D., Ph.D. and a team of MDs/PhDs 8

9 CANNABIS OLD PLANT - NEW MEDICINE While the therapeutic benefits are well established, cannabis has proven to be a challenging API to harness OH OH OH COOH O O Tetrahydrocannabinolic acid (THCA) O Tetrahydrocannabinol (THC) Delta-8-tetrahydrocannabinol (delta-8-thc) OH OH OH COOH O HO HO Cannabidiolic acid (CBDA) Cannabidiol (CBD) OH OH COOH HO Cannabigerolic acid (CBGA) 9 HO Cannabigerol (CBG) Tetrahydrocannabivarin (THV)

10 PROGRESSION TO PHARMACEUTICAL-GRADE CONSISTENCY, SOLABILITY, DELIVERABILITY, STABILTY Efficient and complete activation of phytocannabinoids occurs at higher temperatures Majority of carboxylic acid forms are decarboxylated when consumed via smoking or vaping Alternative forms of delivery are possible with resin, but efficacy depends on consistency of the resin product 10 Activated resin is necessary for commercial scale dosage forms (formulations must be consistent from batch-to-batch)

11 CANNABIS RESIN FOR DOSAGE FORMS PROPRIETARY FORMULATIONS LIBRARY We have profiled >50 phytochemicals, including >20 phytocannabinoids* Proprietary methods to qualify the resin as an API-like material Chemical and biological QC appropriate for the product line *Chemical Profiling of Canadian Medical Cannabis; Lewis, Yang, Kotra, Clarke, Wasilewski,

12 PROPRIETARY EXTRACTION METHOD CANNABIS EXTRACT & PROCESSING COMPARISON Proprietary Method Supercritical Fluid Extraction (LP Method) Energy Costs Up to 70-90% savings Energy consuming processes Reagent / Solvent Costs Up to 70-90% savings (reagents recycled) Demands constant supply of liquid CO 2 Labour min. operator time 2 hour elapsed time 2 hour operator time 8-14 hour elapsed time Active Pharma Ingredient Yield Batch-to-Batch Variability 100% decarboxylation 60-95% decarboxylation Minimal due to proprietary processing method Inferior QA due to high processing variability Consistency Consistent chemical composition (1) of the resin Not Applicable Capital Equipment $800,000 $1,000,000 $400,000 $1,000,000+ Capacity Comparison Continuous Flow operation (scalable/consistent) 2 cycles/day (maintenance/replacements) (1) Due to consistent 100% decarboxylation from extraction process. 12

13 LICENSED DEALER ( LD ) UNIQUE COMPETITIVE ADVANTAGE Narcotics Control Regulations licenses are unique to the particular applicant and our LD status strategy allows for the largest scope of activities in the largest cannabinoid volumes of any LD in Canada LD-Specific Capabilities & Benefits Sell medical cannabinoid products wholesale to Canadian LP market and global markets via Export License Import, export, buy, sell, trade, store, incinerate all controlled substances High barrier to entry with 12+ month process lead time and very limited immediate competition Wholesale purchase and import of dried raw material for cannabinoid extraction activities Cultivate medical cannabis for scientific purposes Current & Future Manufacturing Extractions: Scientus cannabinoid extract in concentrate form for domestic distribution channels and for export ultimately a continuous manufacturing process (patent pending) Formulations: Capsules and oils for the current marker; Rapid Dissolving Sublingual Tablets (RDST) and Delayed Release Capsules (bypassing stomach) along with various other forms such as topical, oral and buccal spray Licensed Producer Applicant: Final review stage ACMPR applicant with level 10, 9 and 7 vaults. Scientus will transfer its LD plants for scientific purposes to the LP, prepare for first cultivation and harvest thus increasing its QA for cultivation activities 13

14 ACMPR LICENSE TIMELINE & STRATEGY APPLICATION RECEIVED PRELIMINARY SCREENING ENHANCED SCREENING INITIATION OF SECURITY CLEARING PROCESS REVIEW PRE-LICENSE INSPECTION Patient Outreach / Loyalty Program Healthcare Professional Outreach Patient support, education, insurance advocacy Dr. Clarke (Head of MAB) oversees 1,000+ eligible patients using medical cannabinoids Establish benchmark dosing and clinical observational data prescribing through a patient registry Products created through research, supported by scientific data Field presence providing multiple touch points with physicians to grow awareness, acceptance and adoption Physician and pharmacist education through CME Use patient market research data for loyalty programs 14

15 THE SCIENTUS OPPORTUNITY INTERSECTION OF REGULATION & TECHNOLOGY Canada s regulatory framework supports global leadership in drug discovery and development Natural Extract Dosing & Formulations Refined Extracts (subsets of cannabinoids) NCE Targeting specific receptors in Endocannabinoid System Scientus maintains leadership at each stage of market development Oils / Capsules (currently permitted for sale) DR Capsules /Tablets (expected to be approved in the short term) Complex Formulations Topical applications, Drug/Device Combinations NCE (2027) 15

16 SCIENTUS VALUE PROPOSITION DIFFERENTIATED Licensed Producers CO 2 Process Time, Costs, Efficiency and Consistency issues Commonly used method among LPs Commoditized Dried Cannabis Commoditized Cannabis Oils Raw Material HydRx LP license (awaiting final site inspection) ScientusPharma Differentiation Extraction Process Rapid Dissolving Sublingual Tablets (Proprietary, fast onset, quick peak, predictable duration) Buccal Delivery Topical Creams ScientusPharma Consistent extract vital for pharma-grade formulations Chemical & Biological profiling Capsules Permitted/DR/Other Supported by Clinical Trials, PK, Pharmacokinetics Transdermal Patches 16

17 SCIENTUS VALUE PROPOSITION PHARMA-GRADE FACILITY Wholly owned and operated 45,000 sq. ft. facility (45 minutes from Toronto) built out to both GMP and GPP standards Manufacturing platform for oils, capsules and tablets Cannabis resin extract from up to 20,000 kg per year using best of breed (proprietary) extraction platform 4,500 sq. ft. propagation room, 3 cultivation flowering rooms (3,500 sq. ft.) Genetics developed and mother plants produced to ensure consistent strains supply for R&D and differentiated products State-of-the art chemistry, drug formulations Equipment and personnel provides industry leading QA / QC standards UHN/MaRS provides access to leading research and products globally for in-licensing opportunities Level-10, Level-9 and Level-7 vaults with storage for $150M+ of inventory 17

18 Rx MARKET FOR CANNABIS INITIAL THERAPEUTIC FOCUS Hospice Patients Fibrous Dysplasia ALS Glaucoma Rheumatoid Arthritis Sickle Cell Disease Autism Terminal Illness Arthritis Concussions Cachexia Parkinson s Disease CIPN Muscular Dystrophy PTSD Alzheimer s Anorexia Crohn s & Colitis Nausea & Vomiting Huntington s Disease Inflammatory Bowel CNS Disorders Eating Disorders Lupus Migraines Spinal Cord Damage Pain HIV Tourette Syndrome AIDS Hepatitis C Seizures / Epilepsy Dravet Syndrome Cancer Sleep Disorders $1BILLION ADDRESSABLE MARKET BY

19 IN CONCLUSION SIGNIFICANT COMPETITIVE ADVANTAGES & BARRIERS TO ENTRY First-mover advantage in the Switch Market Novel products and technologies Deep experience in cannabinoid research Minimum 12- month lead time ahead of LPs Patent pending formulation & processing technology Proprietary patent pending technology Significant cost savings Solves resin consistency issue Highly regarded members on SAB and MAB Provides strong credibility to physicians and healthcare professionals Internationally recognized, award winning research team Leading scientific personnel (MaRS) and infrastructure Barriers to Entry & Competitive Advantage First pharmagrade products in the market Leveraging pharma industry commercialization partners Support of physicians and healthcare professionals Dosing guidelines Pharmacokinetic / Pharmacodynamic data support Clinical papers and inputs from Key Opinion Leaders 22 *UHN or University Health Network (combination of 5 major hospitals) is the leading life sciences research organization in Canada

20 APPENDIX LEADERSHIP TEAM Har Grover, Chairman and CEO Life sciences entrepreneur with track record of taking companies through all stages of growth, from startup to going public and past the $1 billion revenue mark Former public company executive with extensive strategic planning, M&A and operational roll out experience, several major medical product launches; deep public and private Board experience Phillip Hemans, Chief Business Officer Experienced financial executive (CA, CPA) with capital markets, M&A and corporate re-organizational experience A successful track record in business and corporate development as well as in-depth knowledge in pharmaceutical commercialization Rav Grover, Chief Financial Officer Successful financial professional (CA, CPA) with significant experience in corporate development, private equity, capital markets and M&A, operational and finance activities Ovidiu Purdel, MSc., Chief Technology Officer Over 20 years experience in Quality Assurance, aseptic manufacturing of sterile medicinal products (liquid and solid dose) and medical devices Lakshmi P Kotra, BPharm (Hons) PhD, Chief Scientific Officer Chair of Scientus SAB and Internationally recognized as one of Canada s top medicinal chemists; author/co-author of over 100 publications and patents Senior Scientist, Multi-Organ Transplant Program, and Director, Center for Molecular Design and Pre-formulations, TGRI, UHN; Professor of Medicinal Chemistry, U of T Hance Clarke MD PhD, Head of Medical Advisory Board Chair of Scientus Medical Advisory Board and Medical Research Department; winner of various pain related research awards; research interests primarily focused in the area of pain Principal Investigator or Co-Investigator for more than 25 industry-led and investigator-led clinical trials Staff anesthesiologist and the Medical Director of the Pain Research Unit in the Department of Anesthesia and Pain Management at the Toronto General Hospital; Assistant Professor in the Department of Anesthesia at the University of Toronto 23

21 APPENDIX SCIENTIFIC ADVISORY BOARD Dr. Eleanor Fish World-renowned immunologist and arthritis researcher at the University of Toronto Previous appointments include Director of the Arthritis and Autoimmunity Research Centre, the Canada Research Chair in Women s Health and Immunobiology, a Senior Scientist at the Division of Advanced Diagnostics at the Toronto General Research Institute, and the Associate Chair of International Collaborations and Initiatives Dr. Barry Greenberg Directly involved with Alzheimer s disease research and drug discovery since 1985 Held a series of positions internationally with the biotechnology and pharmaceutical industries with increasing supervisory and strategic responsibilities Possesses a strong international network in the Alzheimer s field throughout industry, academic and government spheres PhD in Genetics and Molecular Biology at the University of North Carolina, and his post-doctorate work at Stanford University Dr. Atul Humar Professor in the Department of Medicine, University of Toronto Director of the Multi-Organ Transplant Program at the University Health Network and the University of Toronto Transplant Institute Dr. Orlando Hung Focuses on airway management, clinical pharmacology and drug delivery systems Collaborates on research with other clinicians and scientists at Dalhousie, Stanford, and the University of Toronto Developed and patented a number of innovative drug delivery systems and medical devices Currently a professor in the Department of Pharmacology at Dalhousie University Dr. Donald Weaver Physician, researcher, drug designer, multiple patent holder, multiple award recipient, and Tier 1 Neuroscience Canada Research Chair Has held multiple positions as a professor in various departments at Dalhousie University Former Research Director for Medicine at Dalhousie Medical School and Capital Health Former Chair of the Division of Neurology and Chief of Clinical Neurology at Queen s University Currently serves as the Director of the Krembil Research Institute, the prestigious research arm of the Toronto Western Hospital 24

22 APPENDIX FINANCIAL SUMMARY PLEASE CONTACT THE COMPANY FOR FURTHER INFORMATION 25