ArcticZymes Technologies — Investor Presentation 2014

Dec 11, 2014

DNB Markets 5 th Annual Health Care Conference Oslo, 11th December 2014

Svein W. F. Lien – CEO Børge Sørvoll - CFO

Agenda

• Overview
• Beta-Glucans
• Advanced wound care
• Enzymes
• Molecular testing
• Outlook

This is Biotec Pharmacon:

BIOGEL, a medical device for

advanced wound healing

BetaGlucans	Enzymes
• Proprietary Beta-Glucans. Immuno	• Unique Marine Enzymes business
modulatory substance activating the immune system	• Supply a portfolio of arctic, cold adapted enzymes for the life
• Supply products for Animal Health	science industry
and Nutrition. Own factory in Tromsø	• Developed and commercialized
• Promising pharmaceutical results	Shrimp Alkaline Phosphatase (SAP)
Current focus on WOULGAN® •	a gold standard in DNA/RNA sequencing

Two businesses based on a strong scientific foundation and patent protection

Financial Highlights

NOK million	Q3 2014	Q3 2013	9M 2014	9M 2013
Enzymes	3.4	4.7	11.9	11.9
Beta-Glucans	6.2	1.7	11.1	4.9
Sales revenues	9.6	6.3	23.0	16.8
Enzymes	-2.2	-0.1	-2.7	-2.1
Beta-Glucans	-3.9	-4.3	-12.7	-13.1
EBITDA	-6.0	-4.4	-15.4	-15.2
Profit before tax	-6.2	-4.8	-16.2	-16.2

* The segment figures reflect that all costs are allocated to the two operating units

Cash Flow and Cash Position

NOK million	Q3 2014	Q3 2013	9M 2014	9M 2013	2013
Operating activities	-4.1	-6.8	-22.5	-16.5	-17.4
Investing activities	0.8	0	-1.4	-0,7	-1.6
Financing activities	1.0	0	76.9	43.3	43.2
Changes in cash and cash equivalents	-2.3	-6.8	53.0	26.1	24.3
Cash and cash equivalents at the beginning of period	89.0	42.3	33.6	9.4	9.4
Cash and cash equivalents at end of period	86.7	35.5	86.7	35.5	33.7

Company is well funded throughout the Woulgan® commercialization process

Biotec BetaGlucans

Overview

• Beta-Glucans
• – advanced wound care
• Enzymes
• – molecular testing
• Outlook

Beta-glucans

• Animal health Feed additive to fish farming industry
• Nutrition Bulk substance for use in nutrition and cosmetics
• Cancer Neuroblastom project with Memorial Sloan Kettering Cancer Center in New York
• Wound Care - WOULGAN® BIOGEL, a medical device for advanced wound healing…..

Woulgan® Biogel includes Soluble Beta-Glucan (SBG®)

• Woulgan® Biogel contains:
• Hydrogel components
• Biotec's proprietary Soluble Beta-Glucan (SBG®)

Heals wounds faster

Medical device with an ancillary medicinal substance (SBG®) that specifically accelerates the wound healing process

How to create a commercial success in wound care – elements needed:

1. To be considered:

• That they have a need for new improved products
• Regulatory approval with strong marketing claims
• Positive Publications

2. To be used:

That the end user like the product

3. To be a commercial success:

• A large market
• Strong distribution partner(s)

So, what is the status for the Woulgan® Biogel product?

To get in through the door to the key customers you need:

• That they have a need for new improved products:

• Hard to heal wounds is a massive problem:
• E.g. every 30 second a diabetes related amputation takes place somewhere in the world. Only in Norway, abt. 450 and in Denmark abt. 800 amputations annually
• The Health Care Professionals and Opinion leaders are actively seeking new products to improve the treatment of hard to heal wounds
• Regulatory approval with strong marketing claims which enable you to actually claim it: …….

Through the CE-marking Woulgan® Biogel offers unique product claims:

Woulgan® Biogel:

• Has the ability to be significantly more efficacious in wound healing than a gel without SBG ®
• Supports the natural wound healing process
• Modulates the immunological system by activating macrophages
• Offers potential for reducing the risk for contamination and microbial infection

Studies show clear beneficial effects of SBG®

The positive effect of SBG in healing of diabetic foot ulcers was published in Journal of Diabetes Investigation, vol 5. July 2014.

44% healing after 8 weeks vs 17% with placebo 56% healing after 12 weeks vs 37% with placebo

How to create a commercial success in wound care – elements needed:

To be considered:

• That they have a need for new improved products
• Regulatory approval with strong marketing claims
• Positive Publications

To be used:

That the end user like the product

To be a commercial success:

• A large market
• Strong distribution partner(s)

Results from 50 patient cases all reported by HCP personnel in Norway

How often was WBG applied?

Where was the treatment conducted?

Results from 50 patient cases

Do you want to continue to use WBG?

Leg Ulcers: How would you rate WBGs effect?

A picture tells more than a 1000 words:

1 ½ year old wound. Patient diagnosed with systemic sclerosis. The ulcer had previously been treated with antibiotics and silver. Wound healed after 1 month treatment with Woulgan® Biogel applied once a week.

Reported from podiatrist specialized in wound treatment.

A picture tells more than a 1000 words:

6-7 months old leg ulcer. Debrided and treated with Woulgan® Biogel, healed in 8 days after one application with Woulgan® Biogel.

Reported from podiatrist specialized in wound treatment.

Main Message from posters presented at Wounds UK from the S&N Evaluation Study

Venous Leg Ulcers (clinic in Hull):

• All patients showed improvement or significant improvement at week 4
• Significant wound improvement at week 12
• Patients experienced less pain and improved comfort
• Exudate levels were lowered.
• Patient concordance with the treatment regime was significantly high
• 93% of patients assessed the healing as "very good", 7% assessed it as "good".

Diabetic Foot Ulcers (clinic in London):

• No adverse side effects registered
• No problems with maceration
• No ulcer deterioration
• Some wounds improved
• One «limb saving» report

How to create a commercial success in wound care – elements needed:

To be considered:

• That they have a need for new improved products
• That you have a good product
• Regulatory approval with strong marketing claims
• Positive Publications

To be used:

That the end user like the product! (looks good but not concluded)

To be a commercial success:

• A large market
• Strong distribution partner(s)!

Broad indication area -large wound healing market opportunity

• The European market counts ~9 million wounds in the initial indication areas

Diabetic ulcers, leg ulcers, pressure ulcers, burns

• Approved also for other major wound areas

Post-surgery wounds, trauma wounds, lacerations, and abrasions

Europe represents ~1/3 of the total available global wound market

The partner process

• The market evaluation study carried out by Smith & Nephew is delayed but still high interest
• The data published in the UK posters from the sites included in the Smith & Nephew evaluation study support the strong data from the Norwegian survey
• Biotec BetaGlucan continues its communication with Smith & Nephew to clarify the basis for a long term agreement while the study is being completed
• The delay means that the exclusivity agreed with Smith & Nephew expires but has no other effect on the process

How to create a commercial success in wound care – elements needed:

To be considered:

• That they have a need for new improved products
• That you have a good product
• Regulatory approval with strong marketing claims
• Positive Publications

To be used:

That the end user like the product! (looks good but not concluded)

To be a commercial success:

• A large market
• Strong distribution partner(s)!

22 On this basis it is likely we will get strong distribution partner(s)!

Overview

Beta-Glucans

– advanced wound care

• Enzymes
• – molecular testing

Broadening the distribution

• Received the award as "Supplier of the Year for Biologics" by the worlds largest company in Life Science, Thermo Fisher Scientific
• ArcticZymes continue to broadening its interaction with the largest companies in the molecular research and diagnostic industry
• China will be an important market going forward

24 From left to right: Mark O'Donnell (VP Global Operations), Svein W. F. Lien CEO ArcticZymes, Tom Fenwick (Strategic Sourcing Manager), Peter Granick (VP Global Sourcing Thermo Fisher Scientific), and Wayne Woodward (VP Global Supply Chain)

• Overview
• Beta-Glucans
• – advanced wound care
• Enzymes
• – molecular testing
• Outlook

Outlook

For Woulgan® Biogel:

• Conclude the evaluation study!
• Ensure strong distribution and launch in the major markets

Continue to expand also other opportunities in beta-glucans and in the enzyme business

Woulgan® Biogel is a an approved product with favorable documentation addressing a large market in need of new products

Questions?

Svein W. F. Lien Mob: +4792289323 Email: sl@biotec.no www.biotec.no