ArcticZymes Technologies — Investor Presentation 2017

Apr 27, 2017

Q1 2017 Presentation

27.04.2017, Oslo

Agenda

• Highlights
• Q1 Financials
• BetaGlucans
• Animal- and Consumer health
• Cancer
• Advanced wound care

• Enzymes

• Molecular research and diagnostics
• Outlook

Highlights for Q1 2017

• Solid quarter sales of NOK 18.2 mill (NOK 17.3 mill)
• Slightly weaker EBITDA NOK -4.1 mill (NOK -3.6 mill)
• Q1 Woulgan® sales NOK 0.4 mill
• ArcticZymes sales of NOK 8.9 mill 10% above the strong Q1 2016

Q1 Financials

Financial highlights Q1 2017

NOK million	Q1 2017	Q1 2016	3M 2017	3M 2016
Sales Enzymes	8.9	8.1	8.9	8.1
Sales BetaGlucans	9.3	9.2	9.3	9.2
Other revenues	1.6	1.9	1.6	1.9
Total revenues	19.8	19.2	19.8	19.2
Enzymes	2.6	2.6	2.6	2.6
BetaGlucans	-4.6	-4.2	-4.6	-4.2
Corporate unallocated	-2.1	-1.9	-2.1	-1.9
EBITDA	-4.1	-3.5	-4.1	-3.5
EBIT	-4.6	-3.9	-4.6	-3.9

Cash flow and cash position

NOK million	Q1 2017	Q1 2016	3M 2017	3M 2016
Operating activities	-9.8	-10.7	-9.8	-10.7
Investing activities	-1.4	0	-1.4	0
Financing activities	0	0	0	0
Changes in cash and cash equivalent	-11.2	-10.7	-11.2	-10.7
Cash and cash equivalents at the beginning of period	57.7	78.3	57.7	78.3
Cash and cash equivalents at the end of period	46.5	67.7	46.5	67.7

Beta-glucans

Beta-glucans – segment numbers

NOK million	Q1 2017	Q1 2016	3M 2017	3M 2016
Sales Animal & Consumer Health	8.9	9.2	8.9	9.2
Sales Woulgan	0.4	0	0.4	0
Other revenues	0.7	0.5	0.7	0.5
Total revenues	10.0	9.7	10.0	9.7
Cost of Goods	-5.9	-4.1	-5.9	-4.1
Personnel expenses	-5.7	-5.6	-5.7	-5.6
Operating expenses	-3.1	-4.2	-3.1	-4.2
EBITDA	-4.6	-4.2	-4.6	-4.2
Depreciation & Amortization	-0.3	-0.3	-0.3	-0.3
EBIT	-4.9	-4.6	-4.9	-4.6

Activities outside Woulgan®

• Good sales in animal health products continues
• A number of commercial activities within consumer health generating leads and opportunities for the M-Gard® product
• About 120 patients treated with the vaccine/SBG combination at Memorial Sloan Kettering Cancer Center - plan to publish later this year. Ongoing discussions how to move forward

Woulgan® Positioning & Highlights

Substantial potential: ability to kick-start "stalled wounds"

Woulgan positioned for stalled wounds not closed by 40% after 4 weeks of standard care

Highlights

• Repeating Woulgan Gel sales
• Positive experiences lead to continued use
• FDA confirm Woulgan Gel as Class I
• Dry dressing product
• Testing production methods

Highlights Germany

• More Homecare companies evaluating Woulgan®
• Prepared sales campaign targeting high wound care prescribers in GP channel
• VLU case series recruiting & expert opinion progressing
• Bundestag refined definition of "dressing" for reimbursement
• Sick funds continuing to pay for Woulgan

Highlights UK

• •Replied to further questions on health economic analysis from Drug Tariff at the end of February
• •First orders via NHS supply chain (outside of Drug Tariff)
• Building sales pipeline-creating sales leads
• •UK case series published in Journal of Wound Care (JoWC) in Feb.
• •Woulgan article published in March's Diabetic Foot Journal
• •Woulgan health economic article to be published in May's JoWC

Highlights Nordics

• •2017 targeting 30% tender access

• •Most sales in Finland so far

• •Running many evaluations at county level in all countries

• •Active at wound congresses (Sweden, Finland and Norway)
• •Recruitment to the Nordic evaluation series started. Promising results so far.

Highlights Central Marketing

Brand building

• Exhibiting at EWMA (May) Europe's largest WC conference
• 3 publications
• 2 KOL webinars- Germany & UK
• Regular posting & content (Facebook, Twitter & Blog)

Sales leads

• Campaigns- Facebook (testimonials), Google Ads for EWMA & wound specialists E-blasts
• Woulgan symposium at EWMA with leading KOLs
• Developing distributor training programme

US opportunity and PMCF study

US opportunity

• FDA confirmed Woulgan Gel as class 1 exempt
• Likely 1st step towards a higher classification and reimbursement later
• Developing U.S. strategy and in parallel seeking U.S. partner for strategic alliance

PMCF (post market clinical follow up):

• Adding new UK site to accelerate progress

Business Development – other areas

•Dutch evaluation on track for summer reimbursement application

•Australia regulatory application in progress

• Canada registration analysis complete

ArcticZymes

Molecular research and diagnostics

Enzymes – segment numbers

NOK million	Q1 2017	Q1 2016	3M 2017	3M 2016
Sales enzymes	8.9	8.1	8.9	8.1
Other revenues	0.9	1.4	0.9	1.4
Total revenues	9.8	9.5	9.8	9.5
Cost of goods	0.3	-0.2	0.3	-0.2
Personnel expenses	-5.4	-5.2	-5.4	-5.2
Operating expenses	-2.1	-1.6	-2.1	-1.6
EBITDA	2.6	2.6	2.6	2.6
Depreciation & Amortization	-0.1	-0.1	-0.1	-0.1
EBIT	2.5	2.5	2.5	2.5

Commercial Update

Recently Launched Product Updates

• Heat-Labile Exonuclease I (HL-ExoI)
• Launched in Q4
• Complements our Shrimp Alkaline Phosphatase portfolio
• 1 st customer has already integrated enzyme into their sequencing kits
• Interest for use in Sanger and Next Generation Sequencing (NGS)

• Polymerases

• Continue to gain interest from other new potential partners
• Main interest so far is for utility in NGS platforms
• Potential partners identify with the unique properties the IsoPolTM enzymes can bring to their next generation technologies
• Door opener for ArcticZymes other enzymes
• On track to launch 2 new IsoPolTM enzymes during 2017

Commercial Update

New Product Developments: SAN Portfolio

• Continued growing interest in SAN for use in bio-manufacturing (e.g. production of viruses for utility in gene therapy)
• ArcticZymes will fast track 2 new product developments for 2017 launch to serve immediate commercial demands

Outlook 2017

Outlook 2017

• Woulgan: Drive commercial traction in core markets including favorable reimbursement in UK
• Retain position in the Animal Health market with a modest growth
• Build commercial platform in Consumer Health
• Launch further products in ArcticZymes including Polymerases
• Continue to widen ArcticZymes' commercial platform with new agreements, customers and markets