Arctic Bioscience — Investor Presentation 2021

Mar 10, 2021

1

Arctic Bioscience Company Presentation March 2021

Company highlights

Key value proposition

1,2

Sources: 1) Tveit KS et al. A Randomized, Double-blind, Placebo-controlled Clinical Study to Investigate the efficacy of Herring Roe Oil for treatment of Psoriasis. Acta Derm Venereol. 2020 May 28;100(10):adv00154. doi: 10.2340/00015555-3507. PMID: 32378724; 2) Tveit KS et al. Long Term Efficacy and Safety of Herring Roe Oil in the Treatment of Psoriasis, a 39-week Open-label Extension Study. International Journal of Clinical and Experimental Medical Sciences. Vol. 7, No. 1, 2021, pp. 13-20. doi: 10.11648/j.ijcems.20210701.13.

Arctic Bioscience

Two unique businesses shaped built on a single proprietary platform technology platform

Sources:1) Tveit KS, Brokstad KA, Berge RK, Sæbø PC, Hallaråker H, Brekke S, Meland N, Bjørndal B. A Randomized, Double-blind, Placebo-controlled Clinical Study to Investigate the efficacy of Herring Roe Oil for treatment of Psoriasis. Acta Derm Venereol. 2020 May 28;100(10):adv00154. doi: 10.2340/00015555-3507. PMID: 32378724; Data on file. Pictures: courtesy of Dr. Tveit.

Founding story

Arctic Bioscience was founded based on unique knowledge and know-how about the benefits of herring roe

2020	2020
First clinical study results published	Scientific Advice from the EMA
B2C subscription is launched in Norway	Dr. Mercola sales in USA pass 3m in single order
2020	2020

Significant resources deployed into R&D to enable

attractive routes to market

2019-2020: Super charging the organization to prepare for future growth

2017-2020: Building the foundation framework for a robust clinical program

Key lessons learned through nutra product enables

efficient development of the pharma product

Proprietary technology platform with control over value chain

Sustainable competitive advantage ensured through vertical integration of the value chain

Sources: 1) Until production can be moved to the Company's new factory in Norway, the Company relies on its agreement with Naturex S.A. to produce all of its nutraceutical products

Significant gross margin improvement

High barriers to entry and unique competitive position Sustainable low carbon footprint

New state-of-the-art manufacturing facility with GMP standard, enabling Arctic Bioscience to retain proprietary product know-how, IP and control the value chain 1

Exciting pharma opportunity in mild to moderate psoriasis

Targeting large patient population with mild-to-moderate psoriasis

WHO has called for new, safe, and effective medications¹

Country	Incidence rate	Prevalence rate	Prevalent pool (mill)
	0.07%	3.2%	10.5
	0.14%	2.8%	1.9
	0.52%	2.5%	2.1
	NA	5.7%	3.7
	0.23%	3.1%	1.9
	NA	2.3%	1.1
Total number of psoriasis patients			21.2

▪ The drug candidate HRO350 will be produced according to GMP and represents an attractive and differentiated asset with potentially beneficial safety profile and ease-of-use as oral treatment in mild to moderate psoriasis

▪ Potential for a first-in-class therapeutic treatment for a global population with

Unique pharma opportunity in mild-to-moderate psoriasis

EMA CHMP also supportive

Sources: Tveit KS, Brokstad KA, Berge RK, Sæbø PC, Hallaråker H, Brekke S, Meland N, Bjørndal B. A Randomized, Double-blind, Placebo-controlled Clinical Study to Investigate the efficacy of Herring Roe Oil for treatment of Psoriasis. Acta Derm Venereol. 2020 May 28;100(10):adv00154. doi: 10.2340/00015555-3507. PMID: 32378724; Tveit KS et al. Long Term Efficacy and Safety of Herring Roe Oil in the Treatment of Psoriasis, a 39-week Open-label Extension Study. International Journal of Clinical and Experimental Medical Sciences. Vol. 7, No. 1, 2021, pp. 13-20. doi: 10.11648/j.ijcems.20210701.13. 1) Data on file (PASI>5.5 week 26-15 months). HRO350 Commercial Opportunity Assessment in Psoriasis, IQVIA PASI: Psoriasis Area and Severity Index. GMP: Good Manufacturing Practice

• Trial: Randomized, placebo-controlled pilot clinical trial in patients with mild to moderate psoriasis (Psoriasis Area Severity Index, PASI <10)
• Results: Clinical signals of efficacy combined with beneficial safety profile
• few existing treatment alternatives

Randomized, double-blind placebo controlled clinical trial showed statistically significant improvement in mild to moderate psoriasis compared to placebo

Clinical trial in 64 patients with mild to moderate psoriasis (PASI<10)

Sources: Tveit KS, Brokstad KA, Berge RK, Sæbø PC, Hallaråker H, Brekke S, Meland N, Bjørndal B. A Randomized, Double-blind, Placebo-controlled Clinical Study to Investigate the efficacy of Herring Roe Oil for treatment of Psoriasis. Acta Derm Venereol. 2020 May 28;100(10):adv00154. doi: 10.2340/00015555-3507. PMID: 32378724; Tveit KS et al. Long Term Efficacy and Safety of Herring Roe Oil in the Treatment of Psoriasis, a 39-week Open-label Extension Study. International Journal of Clinical and Experimental Medical Sciences. Vol. 7, No. 1, 2021, pp. 13-20. doi: 10.11648/j.ijcems.20210701.13 . Data on file (PASI>5.5 week 26-15 months) PASI: Psoriasis Area and Severity Index; HRO: Herring Roe Oil capsules

Mean change in PASI score at week 26 estimated to -2.4 with a 95% confidence interval <-4.3, - 0.5>, p = 0.0157 (n=31 with PASI>5.5). Week 26 – 60 was an open label extension with no placebo-control (n=28 with PASI>5.5)

Greatest efficacy seen in subjects with moderate psoriasis

• Randomized, placebo-controlled pilot clinical trial in mild to moderate psoriasis (PASI<10, n=64)
• Primary end-point: Change in mean Psoriasis Area Severity Index (PASI) at week 26
• Statistically significant improvement in mean PASI with HRO versus placebo at week 26
  • Overall PASI reduction of 38% at week 26
• Greatest PASI reduction at week 26 observed in subjects with moderate psoriasis
  • Subjects with baseline PASI >5.5 showed average reduction of -2.4 PASI score
• Well tolerated, no serious adverse events were related to the administration of active treatment or placebo at week 26

Statistically significant improvement in PASI versus placebo

Efficacy is sustained and increases over time

Supported by secondary variable (PSGA) at week 65 (n=58)

	▪ All patients had PSGA scores ≥2 and
	≤4 at inclusion
▪
	40% of patients achieved clear-or almost clear skin after 65 weeks
	▪ After 65 weeks no patient had a
	PSGA score higher than 3
	▪
	In total, 46.6% of patients had a reduction in their PSGA score

Natural product with compelling safety profile

Based on unique know-how throughout proprietary production process, protected by strong IP

• ✓ Demonstrated efficacy from pilot clinical study
• ✓ First-in-class oral treatment
• ✓ Better safety profile than alternatives
• ✓ Possible prevention of disease progression
• ✓ Possible effect on comorbidities
• ✓ Low incremental health care cost
• ✓ Broad lipids patent portfolio and herring roe extracts
• ✓ Secured access to raw materials
• ✓ Unique know-how in proprietary production process
• ✓ Market protection in EU for 10 years from marketing authorization (MA)

Open market opportunity for safe and effective oral treatment

Clear need for new therapies targeting the moderate psoriasis segment

Sources: WHO Global report on psoriasis 2016, Company analysis; HRO350 Commercial Opportunity Assessment in Psoriasis, IQVIA.: Tveit KS, Brokstad KA, Berge RK, Sæbø PC, Hallaråker H, Brekke S, Meland N, Bjørndal B. A Randomized, Doubleblind, Placebo-controlled Clinical Study to Investigate the efficacy of Herring Roe Oil for treatment of Psoriasis. Acta Derm Venereol. 2020 May 28;100(10):adv00154. doi: 10.2340/00015555-3507. PMID: 32378724; Tveit KS et al. Long Term Efficacy and Safety of Herring Roe Oil in the Treatment of Psoriasis, a 39-week Open-label Extension Study. International Journal of Clinical and Experimental Medical Sciences. Vol. 7, No. 1, 2021, pp. 13-20. doi: 10.11648/j.ijcems.20210701.13 .

	Oral
Active substance	No other product with active product ingredient
Psoriasis indication	Mild to moderate disease
Severity at inclusion	Few treatment options for non-severe disease
Efficacy level	Efficacy in mild to moderate disease demonstrated in pilot clinical trial
Quality of life	Improvement in quality of life demonstrated in pilot clinical trial
Safety profile	Well tolerated in pilot clinical trial
Monitoring	50% of competitive products require monitoring – unlikely needed for HRO350

HRO350 scores well against competitors

PASI: Psoriasis Area and Severity Index

Key Opinion Leaders see significant unmet medical need

Few treatment options for mild to moderate psoriasis

– Practicing Dermatologist, US

The biggest unmet need is that of an oral therapy that is totally safe and effective. We have some terrific biologics out there, but the issue is not everybody likes to be injected, not even if it is once in 3 months."

– Senior Physician, Department of Dermatology, Germany

Otezla (apremilast) is a very expensive drug, I will use it only in exceptional cases, only on patients who have had a history of cancer or infections and need more safety, cannot tolerate MTX."

– Practicing Dermatologist, US

I don't like to use a lot of biologics for moderate patients. Each new generation coming into market is so expensive, it costs so much to the healthcare system. I would prefer non-biologic, oral treatments."

< NOK 10k per year

Large Phase IIb study to drive pharma forward

Initiating phase IIb trial to investigate efficacy, safety and dose of drug candidate HRO350 versus placebo

• Initiating large randomized Phase IIb study in 1Q 2022 in patients with mild-to-moderate psoriasis
• Given successful Phase IIb study the company plans to initiate a Phase III study, submit MMA and prepare for commercialization through partnerships
• Potential for 'first-in-class' therapeutic treatment for a global patient population with few existing treatment alternatives

Milestones overview for Phase IIb clinical trial

USD 20bn+ market opportunity in moderate psoriasis alone (USA + EU5)

USD 1bn+ per year revenue opportunity in moderate psoriasis with further substantial revenue upside in mild psoriasis

Further significant upside revenue potential in the market for mild psoriasis, where the addressable market is USD 40 billion +

Total Addressable Market in USA and EU5

Cash generating nutraceutical business with clear growth strategy

Nutraceutical business

Romega | Premium Omega-3 products extracted, produced and distributed directly to consumers and in bulk (B2B)

-

Successful launch in China through Kotler partnership

Partnership with Kotler serves as precedent for Arctic Bioscience's go-to-market strategy going forward

Tailored prenatal product launched in China together with Kotler

• Massive market Several billion dollar Omega-3 market with strong growth expected due to rising middle-class population coupled with strong underlying drivers

• Attractive selling points Unique membrane lipid Omega Premium quality made in Norway High status of caviar products in China

• Nature of partnership: Kotler taking ownership in Arctic Biosciences¹ and lead on marketing strategy – well known for its world-class marketing expertise

• Deep local market insight and resources available for sales and distribution

• Established diverse e-commerce platforms for initial market entry in 2020

• 2020 test launch: Early sales data have been positive and demonstrates great adoption in the Chinese market – the stage is set for a long-term export success story

• Model partnership: The partnership with Kotler is illustrative of the preferred B2B2C go-to-market strategy going forward.
• Further collaborations with Kotler and other partners to be explored in new geographies

China – an ideal target market for Romega

Foundation for long-term export success story set – Strategic partnership model to be replicated

Developed strong relationship with Kotler for efficient market entry and sales growth

Philip Kotler & Ole Arne Eiksund (CEO)

China is one of the largest Omega-3 markets in the world

Nutraceutical business longer-term ambitions

Metric	Outlook and Strategy
High % revenue growth	▪ Fastest growth expected in high margin finished product categories (both B2C and B2B) and protein ▪ Strategic sales and marketing partnerships in APAC and USA represent efficient routes to market
Sharp increase in gross margin	▪ Improvement driven by investment in new factory, benefits of scale and shift towards sale of higher margin B2C/B2B finished products
Increased B2C subscription revenues	▪ B2C subscription based revenues expected to 'step' increase in the coming years and comprise a relatively steady share of revenues thereafter ▪ Focus on Scandinavia, USA and selected European markets
Increased B2B2C sales through strategic partnerships	▪ Shift towards sales of higher margin finished good products over bulk ingredients in B2B strategy (new channel focus) ▪ Strategic partnerships will focus on B2B2C sales of finished goods and white label products
International focus	▪ Increased focus on the USA and APAC as the fastest growing and least price sensitive markets for nutraceuticals ▪ Expand product portfolio and upsell new products

Both businesses underpinned by proprietary technology and strong management team

State of the art manufacturing facility

Vertical integration throughout the value chain seals sustainable competitive advantage

• Investing in growth through a new state-of-the-art manufacturing facility with GMP standard
• Secures full control of value chain from proprietary know-how and IP through sustainable raw material to world-class manufacturing
• Enabling production of Phase III clinical material and drug candidate HRO350
• Leads to step improvement in margin in nutraceutical business

Strong management team

Broad experience within the pharmaceutical and nutraceutical industries

Management team with top expertise and experience

Runhild Gammelsæter, PhD

Global Medical Director

+15 years experience

Former positions include medical leadership roles in GSK, Abbvie and Abbott, as well as experience from start-up biotech

Lauren Jensen, MBA

SVP Sales and Marketing

+15 years experience Former positions within global marketing, branding and communications for mid-size and large enterprises

Daniele Mancinelli, MSc CTO

+20 years experience R&D specialist in omega -3 fatty acids and responsible for concept testing, verification and up-scaling

Yuming Feng, PhD EVP Global Business Dev +30 years experience Former positions include Procurement Manager at Campbell's, EVP at Zoneco and CEO at Holley Int.

Ole Arne Eiksund, MSc, MBA

CEO

+30 years experience Former positions include Commercial Director in GSK and VP Global Sales in Hofseth Biocare and EVP Rimfrost.

Hogne Hallaråker, MSc CSO

+15 years experience Founder of Arctic Bioscience and more than 15 years of experience from nutra industries

Per Christian Sæbø, MSc COO

+20 years experience Former positions include Lipid Development Director in Natural ASA and Site Manager at EPAX, Hovdebygda

Danielle Glenn, BA

CFO

+20 years experience

Former global macro hedge fund manager at Goldman Sachs and Caxton, CEO, CFO and CSO of multiple startups in US, UK and Norway

Advisors with long experience in pharmaceutical development

Åge Nærdal Cand. Pharm. Former positions include CEO GlaxoSmithKline AS, 30 years experience from pharmaceutical industry. Advises on pharmaceutical business development

Kari Grønås, Cand. Pharm. Broad experience from the pharmaceutical/biotech industry and securing regulatory approvals. Advises on regulatory processes and CMC development of GMP product

Knut Smerud, MSc, biochemistry. Owner of the CRO Smerud Medical Research. Advises on clinical development program, clinical trial design and regulatory processes

Kåre Steinar Tveit, MD. Dermatologist at the Haukeland University Hospital, Norway. Advises on clinical treatment of psoriasis

Investment highlights

Key value proposition

• Large target market with 21m patients across EU and the US in 2019 1 • Few and poor treatment options and a patient population with a high degree of disease-involvement

• Efficacy signals demonstrated in a completed randomized controlled clinical trial, showing sustained and

▪ Strong foundation secured through cash-generating nutraceutical business that supports

▪ Revenue of NOK 20.6m for 2020, with strong growth expected through launch in new markets

▪ In-house manufacturing facility to be constructed and an experienced R&D-team securing attractive

▪ Protected by a comprehensive portfolio of patents, technological know-how, and confirmed freedom to

▪ Sustainable end-product based on immature roe, a by-product of herring capture ▪ Strategically situated to ensure sustainable access to immature roe

▪ Executive team with an average of 20 years of relevant industry experience ▪ Broad experience within the pharmaceutical and nutraceutical industries

Sources: 1) IQVIA HRO350 Commercial opportunity assessment in psoriasis, December 2020; 2) Tveit KS et al. A Randomized, Double-blind, Placebo-controlled Clinical Study to Investigate the efficacy of Herring Roe Oil for treatment of Psoriasis. Acta Derm Venereol. 2020 May 28;100(10):adv00154. doi: 10.2340/00015555-3507. PMID: 32378724; 3) Tveit KS et al. Long Term Efficacy and Safety of Herring Roe Oil in the Treatment of Psoriasis, a 39-week Open-label Extension Study. International Journal of Clinical and Experimental Medical Sciences. Vol. 7, No. 1, 2021, pp. 13-20. doi: 10.11648/j.ijcems.20210701.13.