Willow Biosciences Inc. (TSX:WLLW, OTCQX:CANSF) has said it is in a strong financial position with $30.1 million cash on the balance sheet at the end of the year to December 31, 2021, as the company continues to progress its cannabinoid program to a state of readiness for when market opportunities open.
"2021 was both an exciting and challenging year for Willow," said Trevor Peters, Willow's president and chief executive officer in a statement. "The progress that we continue to make building out our core platform technology is setting the company up to be a leader in the bio revolution that is unfolding around us.”
Peters noted that the market for cannabinoids has seen headwinds due to the lack of clarity around the regulatory future of cannabis, predominantly in the US, which is causing larger consumer companies to remain on the sidelines until more certainty is given by lawmakers.
“Willow management believes this to only be temporary, given the bipartisan support, for instance, seen in the US toward decriminalization and ultimate legalization,” he said.
READ: Willow Biosciences announces first-ever peer reviewed study on clinical benefits of CBG for skincare
“The message for our stakeholders in 2022 is that we will continue to progress the cannabinoid program to a state of readiness for when market opportunities open, and start to leverage the platform technology to access new compounds in more well defined markets,” Peters added.
Willow said the primary counterparties for its precision fermented cannabinoids are consumer packaged goods (CPG) companies and their ingredient suppliers. Many of these companies have publicly expressed an interest in cannabinoids, but until regulations globally become clearer, they are reluctant to make new or additional commitments.
“At this time, Willow has not executed any long-term supply agreements with the large, multi-national CPG customers we are targeting,” the company said, adding that although it has begun discussions and negotiations with respect to long-term supply agreements, it cannot provide any guidance at this time.
The company completed the first commercial scale fermentation of its first cannabinoid for market, cannabigerol (CBG), at its contract manufacturing organization's (CMO) facilities in Europe in March last year.
It revealed that it has now begun to incorporate a second CMO into its manufacturing network that offers greater economies of scale and optionality regarding diversity of compounds to produce.
The addition of a second CMO will allow it to accommodate new programs, both internal and partnered, in addition to its cannabinoid portfolio, the company said.
“As Willow transitions to a larger CMO 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,” it said.
“Willow anticipates being able to add new compounds to its product offering in 2022 to generate revenue for the company.”
In January 2021, Willow engaged a regulatory consulting group to perform a comprehensive safety assessment to independently conclude that CBG is Generally Recognized As Safe (GRAS) for use as an ingredient in food and beverage applications. Since then, global demand for non-clinical contract research organization work has been “unprecedented”, Willow explained, resulting in delayed toxicology results.
It now expects its initial toxicology studies to finish in the first half of 2022 and the pivotal trial to be completed in the second half of 2022. The final conclusion by an independent panel is expected in late 2022 or early 2023.
Willow also announced that it is in discussions with multiple parties to develop precision fermentation-based processes for compounds outside of cannabis that directly leverage the R&D capabilities established on cannabinoids.
“While there is no guarantee that these will lead to partnerships, Willow is encouraged with the status of engagement,” the company said.
Willow is a leading biotechnology company that develops and produces high-purity, plant derived ingredients for the consumer care, food and beverage, and pharmaceutical markets. Willow's FutureGrown biotechnology platform allows scale production of pure, consistent, and sustainable product to benefit both B2B customers. Willow's R&D team has a proven track record of developing and commercializing bio-based manufacturing processes and products for both the consumer and pharmaceutical industries.
Contact the author at jon.hopkins@proactiveinvestors.com