ArcticZymes Technologies — Investor Presentation 2015

Oct 29, 2015

Biotec Pharmacon– en nordnorsk børshistorie Sparebank 1 Nord-Norge Investorseminar

Tromsø, 29th October 2015 Svein W. F. Lien – CEO

• Company overview
• Q2 financials
• BetaGlucans
• Advanced wound care

• Enzymes

• Molecular testing
• Outlook

Overview Biotec Pharmacon ASA

• Listed on Oslo Stock Exchange (ticker: biotec)
• 2500 shareholders market cap. NOK 750M
• Headquarter in Tromsø, Norway
• 38 employees
• Annual turnover of NOK 40-50M
• 25 years of history in two focus areas:
• Beta-glucans used in a variety of immunomodulating applications
• Heat labile Enzymes used in molecular research and diagnostics

Q2 financials

Financial highlights Q2 (Q3 on Nov 3rd)

NOK million	Q2 2015	Q2 2014	6M 2015	6M 2014	2014
Enzymes	7.3	4.0	14.9	8.6	16.3
BetaGlucans	4.2	5.3	8.9	4.8	16.8
Sales revenues	11.5	9.3	23.8	13.4	33.0
EBITDA	-1.0	-2.3	-3.8	-9.4	-21.2
EBIT	-1.7	-2.9	-5.1	-10.7	-23.6
Net cash flow from operations	-4.8	-7.7	-14.0	-18.3	-21.2
Net cash end of period	78.3	89.0	78.3	89.0	88.4

Advanced wound care

One source – different products

Woulgan® Next generation, advanced wound healing product

• WOULGAN® is a CE-marked medical device, class III, rule 13, approved for a range of wound conditions including diabetic ulcers, leg ulcers, pressure ulcers, post-operative surgical wounds, 1st and 2nd degree burns, abrasions and lacerations
• WOULGAN® is a patent-protected, advanced gel containing soluble betaglucan (SBG®), an ancillary medicinal substance proven to heal wounds faster
• SBG® is a proprietary platform technology that can be extended to other product formats and can be tailor-made for new application areas
• Woulgan® has a variety of strong primary and secondary claims, thus increasing the likelihood to demand higher prices. (Full set of approved claims are enclosed)
• The product is preferably positioned towards the advanced wound care market

Woulgan® - the development history

April 2014

Received CEmark as a class lll medical device

Dec 2012 Signed evaluation agreement with Smith & Nephew

May 2014 – July 2015 Smith & Nephew evaluation study and negotiations (Had exclusivity throughout 2014)

Jan 2015 – onwards

Process with alternative regional distributors. August: Appointed H&R Healthcare for UK and Ireland as the first regional distribution partner

- 2009 Pharmaceutical Development (failed due to instability)

Biotec Pharmacon ASA 9

Advanced wound healing - market

• 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

SBG Clinical phase II

Patients with complete healing (%)

Biotec Pharmacon ASA 11 Placebo controlled double blinded study of 60 patients Statistical significant after 8 weeks (p=0.03)

• Methylcellulose (Control)
• N= 60
• Treatment schedule:
• 2-3 treatments per week
• 8 weeks treatment
• Ulcer size 1-34 cm²
• Complete healing within 8 weeks:
• SBG 45%
• Placebo 15%

Woulgan® - Clinical evaluation in Norway

• Primarily used in chronic wounds
• Variety of wound types
• 72% of clinicians rated the product good to fantastic

Health economics

• Building documentation for Diabetic Foot Ulcers (DFU)
• Important basis for marketing

	Woulgan	Std. care	Difference
Time	Average cost per healed ulcer
8 weeks 12 weeks 52 weeks*	£1890 £2260 £2760	£3885 £2660 £3542	- £1995 - £400 - £782
	Average patient cost to reach standard of care healing rate at 12 weeks (37%)
	£577	£1038	- £461

Distribution process - activities

Other areas Woulgan®

• Strengthening the commercial organization:
• Employed International Marketing Director Woulgan
• Will over time employ 6-8 marketing/product managers in local markets
• New follow-up products under development:
• Spray product
• Combination product

A number of other activities outside Woulgan®:

• New documentation in animal feed and a number of follow up opportunities in the animal health market
• Working to clarify the strategic options for the Nutrition market. Exclusivity is expiring January 2016
• The study using Biotec's SBG as an adjuvant in treatment of Neuroblastoma conducted by Memorial Sloan Kettering Cancer Center in New York are encouraging and is expanded into a phase II aiming to recruit a total of 115 patients

ArcticZymes

• unique marine enzymes for molecular DNA/RNA analysis used in research and diagnostics
• Unique enzymes based on genetic information from the marine Arctic
• In close cooperation with academic institutions in particular UiT
• ArcticZymes formulates, develops and manufacture customized applications

Business to Business (B2B) = long- term focus

• The majority of molecular biology business is related to large multinational corporations and specialised diagnostic players
• ArcticZymes shall be a creative and reliable long term partner to these companies
• The future is a mix of own unique products and customer initiated development
• ArcticZymes access to bioprospecting and library is unique and key to success

Outlook

• The primary focus of Biotec currently is to conduct a number of parallel activities to secure the full commercial potential of Woulgan®
• Biotec is currently working with potential distributors and key opinion leaders in Europe to position the product for launch
• Processes in the most important markets outside Europe have been initiated but will take time
• Keeping up the momentum on ArcticZymes continuous growth with existing products
• Close partnerships with the main life science companies secure ArcticZymes strong commercial basis for its new product developed program